HL Deb 08 July 1985 vol 466 cc8-63

2.58 p.m.

Lord Belstead

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

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

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 [Abolition of road service licensing]:

Lord Shepherd moved Amendment No. 1: Page 1, line 9, after ("shall") insert ("subject to subsection (2A)").

The noble Lord said: Amendment No. 1 is a paving amendment to Amendment No. 7. Therefore, I beg to move Amendment No. 1. Amendment No. 7: Page 2, line 2, at end insert— (" (2A) Subsection (1) shall not have effect until—

  1. (a) in the case of every passenger transport area a company has been formed by the Executive under section 58(1) of this Act and the property, rights and liabilities affected by the schemes under that section have been transferred and vested under section 58(7) of this Act in accordance with the schemes;
  2. (b) all shares in or other securities of the company held by each Executive have been transferred to the Passenger Transport Authority for the area under section 58(8) of this Act;
  3. (c) in the case of each passenger transport area orders have been made under section 59(2) of this Act which provide for the termination of any agreements made under section 24(2) of the 1968 Act between the Executive and any subsidiaries of the National Bus Company and orders have been made under section 59(5) of this Act;
  4. (d) in the case of every council to whom an order made under section 62(2) of this Act applies a company has been formed under section 63(1) of this Act and either—
    1. (i) the property, rights and liabilities affected by the scheme have been transferred and vested in accordance with the scheme under section 64(7) of this Act; or
    2. (ii) the provisions of an order made under section 65(7) of this Act have come into force; and
  5. (e) all directions required to be given under section 48(5) of this Act shall have been given and compliance therewith secured in so far as they relate to the promotion of sustained and fair competition both between companies which are part of the National Bus Company or former companies of the National Bus Company and between any such companies and other persons engaged in providing bus services or in carrying on any activities carried on in connection with providing bus services.").

I suspect that this amendment is one of the easier of the amendments for the Minister because I do not suppose that there is anything between us on the basic principle. It was an amendment moved in another place. It was withdrawn on certain assurances of the Minister, but in the light of certain changes I thought it right to bring this amendment before your Lordships' Committee.

When I was chairman of the National Bus Company, long before a White Paper was issued the Secretary of State made it clear to me that for deregulation an essential criterion was that there should be fair competition. We agreed on that. The purpose of this amendment is to ensure fair competition between all operators once deregulation has been brought about. The Minister will be aware that even under the present regime in the PTAs and in certain of the municipal authorities the bus operations which are owned by these various organisations receive substantial subsidy, not only in terms of the provisions of service but in keeping fares low. They have also adopted various practices, particularly in the municipal authorities, where certain of the costs of the municipal bus operator are met from the general costs of the services provided by the municipal authority. If there is to be fair competition, clearly this type of support should not be available to a particular operator.

Under the Bill deregulation will take place on 1st October 1986, and a great deal has to be achieved between the passing of this Bill and deregulation on that date. There is the question of registration. There is the assessment by local authorities of the routes that will not be covered by those services that are being offered willingly and for profitable reasons either by the established operator or by new operators. Then there will be the tendering system on which councils have to make a judgment on the sums of money available for the provision of subsidised services as a consequence of the tendering system. All those services will not be subject to what I believe is called "blanket subsidy".

The concern that I have is that there is no guarantee in the Bill which will ensure that the undertakings that the Secretary of State has given and which Ministers in another place have given that there will be fair competition between all forms of operator are enshrined in the legislation. We have only the assurances of Ministers. I am convinced that the Secretary of State would wish to see this situation dealt with as I have just mentioned. On Second Reading I expressed concern about the timescale between the passing of this Bill and deregulation. I suppose that at best noble Lords opposite will have the Bill by October of this year. At best we shall have only some 10 months in which to go through the various processes that are required.

It is interesting that Chile, which is one of the notable examples of a government in favour of deregulation, took seven years to achieve it. I suppose that while Chile may require seven years, under Nicholas Ridley it is possible to achieve it in a much shorter time. There is grave anxiety about the time factor in bringing about deregulation. A case was made that much of the detailed work would have to be done during July and August, which period conflicts with school holidays, and that this would create considerable difficulty for administrators and councils as to whether the work could be done.

My understanding is—I think I would put it even stronger, in that I have seen a letter signed by a Miss Ashmore to selected addressees, not to all—that the Government have in mind that the best way to deal with this problem is not to lengthen the period between the passing of the Bill and deregulation, but to shorten it. I do not know how shortening it will resolve what will be a severe and difficult period for the various counties and for the various operators, whether they be existing operators or new ones. But there is this letter.

I have heard through my own grapevine that there will be a considerable number of amendments to Schedule 5. Schedule 5 is essential in relation to the transitional period between the implementation of the Bill and deregulation. But there are yet no Government amendments on the Marshalled List in this regard. We have had a great deal of time between Second Reading and Committee stages. I do not know why these amendments are not yet on the Marshalled List, but the Committee is now in a difficult situation. This information is available not just to me—I have it through my own grapevine—but also to other counties and to some other operators, but apparently it is not available to your Lordships' House, as to what is the Government's intention in terms of this transitional period. There are some difficulties and this is why I have put this amendment before the Committee today.

I have no doubt that the PTAs and the municipal authorities will acknowledge the law when it is passed and will do their best to implement the provisions of the Bill, but, as I said, there will be considerable strains and pressures and there will be very little time in which to do it all.

I therefore suggest to the noble Lord, Lord Belstead, that if the Secretary of State says that there shall be fair competition and that fair competition is absolutely crucial to deregulation as envisaged in the Bill, clearly those bus operators which have a close relationship with the PTAs and the municipal authorities which provide them with subsidy and services directly should be put at arm's length and should be in the same position as any other operator, whether he be an independent operator or a National Bus Company operator. In other words, all should be equal on the day of deregulation.

My first anxiety is about the timescale which I have dwelt upon. My second anxiety is that we do not yet have any amendments to Schedule 5, which deals with the transition. So unless we hear clearly from the Minister what is the Government's intention in relation to Schedule 5 and the transition period, it will be difficult to decide how to proceed with these early clauses. That is not a threat; it is said merely to show the importance of this amendment. Therefore I hope that the Government can give us an assurance about the time which they require, which they perceive is necessary. I hope, too, that they can say whether there is broad agreement with all those who have been consulted about whether the transition period is sufficient. Is the Minister able to give a firm guarantee? I believe that only in legislation can we have a firm guarantee that in deregulation and fair competition companies shall be equal as far as that is possible in a competitive society. I beg to move.

Lord Teviot

I rise lukewarmly to support the noble Lord, Lord Shepherd. He mentioned that the National Bus Company will come into this situation, but he did not mention any amendments to Clauses 43 and 44. If he intends to table them, I shall support him. He also mentioned when deregulation should come into force. That does not mean to say that there are later amendments which will deal with certain specific problems. Clearly, he is right to be concerned that deregulation of local bus services should not come into effect until the industry has been reorganised. At the very least, the situation should have been reached from which it is clear that a proper basis is being established for the competition which may follow deregulation to be sustained on a fair basis. Fairness of competition is a major plank of Government thinking, and undoubtedly the Bill makes repeated reference to this fact.

Indeed, it is clear that the Secretary of State believes it to be necessary that changes of this nature should have taken place before deregulation. The Government's response to the consulatation paper following the White Paper on Buses, states The Secretary of State has also concluded that fair competition can only be achieved on deregulation if the separation of the district council and PTE bus operators form their parent authority and their incorporation into companies and the reorganisation of NBC companies to compete fairly, have been completed". Unfortunately, the Bill, as drafted, does not provide the necessary basis for competition to be fair and this amendment should remedy this deficiency.

It should be the Government who are introducing these amendments. They are so clearly in accord with my right honourable friend the Secretary of State's own wishes, and I hope my noble friend will accept them with gratitude.

Lord Belstead

I am grateful to the noble Lord, Lord Shepherd, for moving this amendment to begin with because it is reasonable that the noble Lord should ask for clarification on the transitional arrangements and I shall try to say something to the noble Lord on that. It is also perfectly reasonable that at the beginning of this long Bill the noble Lord should ask for the Government to underline the wish which has been expressed again and again by the Government that we believe that there must be fair competition if deregulation is to succeed.

The first words of the noble Lord in moving the amendment were that he did not think that there was any great difference between himself and the Government on the principle behind this amendment. I hope that I am making it clear in my opening words that I agree with that point of view; but, at the same time, with respect to the noble Lord, I do not think that this particular amendment is necessary or would be appropriate in the Bill. I shall try to explain why I think that. As the noble Lord said in his short speech, the Government have stressed that fair competition is essential to successful deregulation, and that the separation of district and PTE bus operations from their parent authorities is vital in achieving that objective.

I confirm that we see the establishment of companies as one of the changes which have to take place before deregulation and that my right honourable friend will issue directions to PTEs and make orders in relation to local authorities in order to ensure that this objective is achieved. The powers for my right honourable friend to do that, as I am sure your Lordships know, are in Clause 58 and Clause 62. I would also confirm that if they have not been terminated voluntarily, my right honourable friend will also make orders terminating Section 24 agreements by deregulation date. That could be done under Clause 59; and this has been made clear on more than one occasion in the debates in another place.

The difficulty about accepting the amendment and the reason why the Bill is drafted as it is without a date on the face of the Bill in relation to transfers is the possibility, albeit very remote, that some legal difficulty might rise in relation to one of the transfers to delay it beyond deregulation day. We do not believe it will be necessary or desirable if there was a problem in just one area—and I stress that we do not foresee that this will happen—to delay deregulation across the country as a whole. The noble Lord, Lord Shepherd, also stressed the need to ensure that NBC's local companies compete fairly by the time of deregulation.

Lord Shepherd

And others!

3.15 p.m.

Lord Belstead

And others, as the noble Lord has said. I would expect the noble Lord to make this point in view of the close and very successful association that he had with the NBC. Again, I assure the noble Lord, Lord Shepherd, that this is our intention. The directions referred to in paragraph (e) of the noble Lord's amendment are those which the Secretary of State may give NBC in relation to the manner in which they carry out their main objective of promoting sustained and fair competition, but the objective itself will apply as soon as Clause 47 comes into force; and that will certainly be well before deregulation.

I accept, before the noble Lord says this to me, that paragraphs (a) to (d) of the noble Lord's amendment are not tied to any particular date. They seek to defer deregulation until all the transfers are complete. But deregulation has to be planned. Nobody would understand this better than the noble Lord. Operators and local authorities are going to need some months in which to prepare, invite and place tenders for subsidised services, register them, and so on; and that is provided for in Schedule 5.

Before I finish I will just say a word in reply to the noble Lord's direct questions to me on that. Despite what I have said, the noble Lord, Lord Shepherd, is saying that although he believes that there is nothing between himself and the Government on the absolute wish to ensure fair competition going together with deregulation, this simply may not happen. I do not think that we should overlook the fact that if transfers are delayed there will be an incentive for transfers to be finished and to be concluded, because unless transfers have been completed bus undertakings will not be in a position to enter into contracts to run subsidised services. These amendments, if the Committee accepted them, would mean adding an uncertain period of perhaps many months to the timetable if just one authority failed to effect its transfer by the specified date.

Perhaps I ought to say a word to the noble Lord about the timetable because he has asked me a direct question about that. It is the case that when we were having our Second Reading debate I said, on behalf of the Government, that we were looking again at the arrangements for the transitional period in Schedule 5, not with a view to deferring deregulation but in order to see whether the detailed steps to be taken during the transition period could be improved in order to make the process smoother and to ease the task of local authorities going out to tender for subsidised services. I would say to your Lordships that we now think, having taken informal soundings, that better arrangements can be made and that the Government propose to come forward with amendments as soon as possible. I apologise to the Committee that the amendments are not in the Marshalled List, but they would relate to the very end of the Bill.

Perhaps I may now briefly say what would be the main changes which we intend to put to your Lordships in amendments. First, the stage of operators notifying county councils of their intentions early in 1986 would, if the Committee agreed, be dropped. Notification was designed to inform county councils at the earliest point of operators' commercial networks so that they could start planning their subsidised services. However, notification did not carry with it the commitment to operate, and for that reason it is the county councils, so I am advised, who have felt that the information they would have received would not have been sufficiently reliable to be a basis for their planning. So instead of notification, it is our intention to put to your Lordships a requirement for operators to register their commercial services as early as February 1986. And I think that this will be for the convenience of the local authorities. Anyway, that is my information.

It will commit operators long in advance of deregulation day in the autumn. Such a long commitment may cause difficulties: adjustments may be needed; circumstances may change. For that reason, we shall also put before the Committee a provision which would enable operators to think again during 1986, if they wanted to do so, in order to withdraw or vary their registrations, provided that they obtain the approval of the county councils. We would also intend to put before your Lordships a provision to introduce more flexibility into the period immediately following deregulation, so that counties can adjust services, particularly in order to take account of any change needed for schools' services.

I hope that the noble Lord, Lord Shepherd, may feel that this amendment has been of value and has enabled me to put on the record the changes we are intending to bring before your Lordships. It has also given me the chance to apologise to the Committee for the fact that the amendments which I have just run through are not yet on the Marshalled List. I hope that the noble Lord will not think I am being obstructive in saying that I do not feel, on behalf of the Government, that I can accept the amendment as it has been presented to us now; but certainly there is really very little between the Government and the noble Lord on this particular point.

Lord Shepherd

The noble Lord referred to the registration period but he did not touch upon the tendering period. Can he help us on that?

Lord Belstead

The tendering period, I believe, will remain as we have outlined it previously. It will run, I should think, almost certainly from the time that registration has taken place, which we intend should be by about the end of February, up to deregulation day. I would say to the noble Lord—I am sure he will be familiar with this point—that my right honourable friend and my honourable friend the Parliamentary Secretary in another place have consistently made it clear that once deregulation actually takes place we envisage, subject to the agreement of Parliament, that during the autumn of 1986 there will be a period of calm and reflection when there will not be any new applications for registration. That will give everybody time to settle down before the deregulation period, which will have started in the autumn of 1986, enters the new year of 1987.

Lord Sandford

Before the noble Lord, Lord Shepherd, decides what to do with his amendment in the light of those remarks from the Minister, I wonder whether I could put before the Committee a few considerations from the side of the municipal operators. First, may I say how welcome it is to have an indication right at the outset of the Committee's proceedings that the Government are now showing some signs of being ready to think again about some of the less practical aspects of the Bill as it is being presented to us.

If your Lordships will remember, the manifesto on this whole issue indicates that there should be some relaxation of licensing, whereas the Bill confronts us with a proposal to abolish it altogether. So we want to look very carefully at the reasons for this change; and if there is now a move back towards something which is rather more cautious it is very much to be welcomed, and I would want so to welcome it first of all.

The amendment of the noble Lord, Lord Shepherd, is of course concerned with the timing of the various transitions with regard to the things that the National Bus Company have to do. My remarks could have been the subject of a similar amendment, but with the steps having to be taken by the municipal bus operators. The object is all the same, and we are all agreed about it: namely, to ensure fairer competition between the public sector operators and the private sector as well. But the Secretary of State for Transport, in looking at the municipal bus undertakings, has expressed himself as being in a dilemma. His object in proposing the changes is that some operators should not have access to public money in ways that other operators have or have not had access to it. He argued that proposals for competitive tendering for subsidy would not work unless the municipal undertakings achieved a proper degree of financial separation from their local authority.

In respect of all other functions in which the local authorities have the option of going into the private sector or of providing the service by means of direct labour, there are rules and regulations laid down in Part III of the Local Government, Planning and Land Act 1980. Most local authorities are by now familiar with them. They have to tender, and they have accounting and reporting requirements as laid down in that legislation. The other alternative would be to privatise the existing municipal undertakings, but the option the Secretary of State has chosen is that they should form separate bus companies under the control of the district council, which is all provided for in Clauses 61, 62 and so on.

That, I think, puts the local authorities in the worst possible position. The district council will appoint the directors of a company. There is said to be an implied guarantee that the district council will meet the liabilities of the company if it is unable to do so. The district council will be able to invest in the company and the company may seek capital from the market. All that sounds fine; but any borrowing or issuing of shares for the company will be subject to the normal Government controls over local authority borrowing—and your Lordships have heard enough about that during this Session to see what an impossibly difficult position that will put the local authorities in when they are thinking about the financing of their companies. Capital expenditure by the company, for instance, will be treated as district expenditure and subject to local authority expenditure controls.

I shall mention all this in much more detail when we reach Clauses 61 to 63, but I mention these matters now only to show that there is a tremendous amount still at issue between the Association of District Councils and the Secretary of State as to how this is all going to work, which needs to be resolved. My noble friend mentioned that there might be some legal difficulties. There certainly will be, but we are not in a position to see precisely what they are going to be because the authorities concerned are not under any legal obligation even to have started this process. Of course they have begun to look into it and the difficulties are beginning to show up quite seriously. There will also be financial difficulties as to how these pseudo-Companies Act companies under local authority control are going to be audited. There will be plenty of problems, and if they have not been resolved by the time the moment is reached which the noble Lord, Lord Shepherd, is talking about it will be important to be able to delay the proceedings until they have been resolved.

That is all I want to say to the Committee at the moment. For a whole set of somewhat different reasons, but along rather similar lines to those which the noble Lord, Lord Shepherd, has just mentioned, it must be possible to delay this transition until these issues have been resolved.

Lord Lloyd of Kilgerran

I should like first of all to apologise to the noble Lord, Lord Shepherd, for not being in my place when he moved this amendment. I have listened very carefully to what the noble Lord the Minister has said: he has had to say it rather quickly, and I therefore wonder whether he could give any indication of when these new proposed amendments will be available to us.

I join the noble Lord, Lord Sandford, in congratulating the Minister and the Government on being willing to think again about certain of these matters. One of my reasons for intervening today is that I had a most moving meeting yesterday with a group of persons from Walsall. I had a letter on Saturday to say that a group would be coming down from Walsall to indicate the difficulties that would arise in that area in the West Midlands as a result of this Bill. I gave up my intention of going to Henley in order to meet them, and they came that afternoon. (I had been to Henley three days, so it did not really matter). They handed me seven personal letters addressed to me. I asked the rhetorical question: Why me? It may be because I am an ex-president of the Welsh Liberal Party or that the victory at Brecon had reached their ears and they thought that perhaps my voice might to some extent be listened to in this Chamber.

I shall not go into the detail of these letters at this stage, although I may raise them at later stages of the Bill; but I should like to know from the Minister when he proposes to put forward the amendments he has talked about, showing that the Government are going to think again on this important issue.

3.30 p.m.

Lord Belstead

The noble Lord, Lord Shepherd, I think, will decide how he wishes to proceed with this particular amendment. But perhaps I may briefly say a word in reply to my noble friend Lord Sandford. I understand the points which my noble friend is raising which relate to Part IV of the Bill. That is still quite a long way off, even though the noble Lord, Lord Shepherd, was very encouraging in saying that the Government could look forward to getting the Bill in the month of October. At this stage, on the first amendment in Committee, I would only say to my noble friend that if the municipal companies are to have the encouragement of local authority financial backing, it is hardly unreasonable that it should be within the context of the rules of local authority finance.

The noble Lord, Lord Lloyd of Kilgerran, asked me the direct question, when will the amendments be put down. It was a remarkably direct question, if I may say so, from someone who has been on such a circuitous route around Walsall, Henley, and Brecon and Radnor. As the noble Lord spoke he reminded me of the man who, left Clapham Common away on the right, And made Madagascar the following night. And lay on his oars for a fortnight or two, In the calm of the ocean of Honolulu". The answer to the question—if I may answer before I give way to the noble Lord—is that amendments on transition will be put down in good time before Schedule 5 is reached during the Committee stage.

Lord Shepherd

The noble Lord is very optimistic. He says that the amendments will be put down in good time before we take Schedule 5. I suspect there is a reasonable chance that with the co-operation of your Lordships we may well be considering Schedule 5 by the latter part of next week. Since the noble Lord is at present unable to say specifically when these amendments will be laid, I do not know whether his idea of "good time" is the same as mine, nor whether the point is as clearly understood as I would hope.

The noble Lord, Lord Sandford, raised a very important point. I believe that the problems and difficulties of national bus companies in meeting what is required in this Bill are infinitely smaller than those of the PTAs and the municipal authorities and their bus operations. It will be infinitely easier for National Bus than it will be for the PTAs and the municipals; and that has always been my anxiety in terms of the period of transition and fair competition.

If one looks at the Bill, one sees that Clause 1 says that deregulation shall take effect with the passing of the Bill and under Schedule 5 there is to be a transitional period ending on 30th September 1986. If there are major difficulties in bringing about the climate for fair competition, there is nothing in the Bill to say that the Secretary of State can extend the date of deregulation. He has taken many sweeping powers in the field of regulation, but in this one area, which, in my submission, is absolutely crucial, on the very narrow issue of fair competition, he has not taken any powers so that, if the circumstances were such, he could change the date of deregulation. I did not suggest that in my amendment.

The noble Lord then went on to say, did he not, that if one authority—I suppose he was thinking of a PTE or a municipal authority—had legal difficulties, it would be quite wrong to hold up this piece of legislation simply because of those probably short-term difficulties of one organisation. If the noble Lord, Lord Sandford, is right—and I suspect that he is closer to it than is the Minister—there will be many major legal difficulties in bringing about the transitional period, putting aside all the problems of registration and tendering. We could have a situation of considerable gravity, having been locked in on the date of deregulation of 30th September, with no power to change it. In large areas of the country powerful organisations could continue to subsidise their existing network of services and that would be an abrogation of the concept of fair competition.

I do not consider that the Minister has gone far enough. I think he understands the anxieties. I understand his difficulties also. But quite clearly, it would be wrong for us to pass a Bill that is locked in on one date with no power to move it at any stage, recognising, as we do, the many complex and very difficult things that will have to be done in the transitional period. If we cannot, through legislation, ensure fair competition, I do not think we are being fair to the operators, of whatever ilk, and from whatever source they may arrive.

Fair competition was the crucial issue—I nearly said, the cross—so far as the Secretary of State was concerned. I should have thought that the Ministers could come forward with something, indeed, I hope that they will undertake to do so, in order to see how we can resolve this particular difficulty. It is not a fundamental issue between us. What we are seeking is a smooth arrangement, which is fair to all the operators, and a recognition that the various authorities have a great deal of work to do in a very short span of time, as I say, locked in on one date.

Lord Carmichael of Kelvingrove

I rise merely perhaps to help the Minister, apart from anything else, and to give him time to get some information. I think my noble friend Lord Shepherd and the noble Lords, Lord Sandford and Lord Lloyd of Kilgerran, have made points to which the Government obviously have been paying, and will need to pay more, attention. There is a difficulty. I was not privy to any letter from any lady to which my noble friend Lord Shepherd referred. Therefore I was not even aware that there would be changes in Schedule 5, other than an assurance through the usual channels that there would be two purely technical changes. It now appears as though the changes will be more substantial than purely technical changes. It is, therefore, rather important that we have them before us as early as possible, and I think the Minister should make an effort to give us a date. For instance, we are concerned to have them well before Third Reading when further amendments may be needed. I hope that the Government will stretch the rules of the House to allow perhaps more amendments at Third Reading than is normally the case, if they are to come forward as late as that. But I certainly hope that it will be some time next week, so that we will have another two weeks of the present agreement between the two sides before we need to discuss the amendments.

This matter is important not perhaps on the basis of principle, but on the basis of a smooth transfer. It is certainly important that we have these amendments and as much information as possible on the Government's intention. Having perhaps reconsidered the matter, the Minister can now give the Committee a little more advice than he did earlier.

Lord Belstead

Perhaps I may reply to the noble Lord, Lord Shepherd, and the noble Lord, Lord Carmichael of Kelvingrove. The noble Lord, Lord Shepherd, was making the point that, whatever I have been saying on behalf of the Government, there is no assurance that what he is after in the amendment will in fact come to pass—namely, the introduction of fair competition ahead of deregulation by the setting up of arm's length companies. I think I would simply say this. Earlier in my remarks I made the point that my right honourable friend will be in a position where, if necessary, he can issue directions to passenger transport executives and make orders in relation to local authorities to ensure that what is sought comes to pass. There are of course sanctions to both of those order-making powers.

Regarding the districts—I did not wish to get into this area, but I think that I ought to do so in reply to the noble Lord, Lord Shepherd—my right honourable friend could be in the position of making an order which would lead to the districts simply losing their powers to run buses at all, and this is something which nobody would wish to see come to pass.

Turning to the PTEs, they would not be able to stop the inroads which the National Bus Company would begin to be able to make through the tendering process once deregulation had come to pass. Therefore, there are some very real sanctions here to see that the objective for which both the noble Lord and the Government not only wish but believe is absolutely essential to the Bill is achieved; namely, that there should be fair competition before deregulation day.

Lord Shepherd

I do not question at all the sincerity of the noble Lord in the case that he has made. I wonder whether, in the light of what has been said and the genuine anxiety that has been expressed—this is not a party political issue; we are debating not a question of principle, but a very essential part of the machinery under which this Bill is either to be successful or otherwise—the Minister will help me at least, if nobody else. Will he agree to consider very carefully what has been said during this short debate? Certainly, there is no commitment on his part, but if he will undertake to look at it and perhaps seek to have further consultations with various parties to see whether these anxieties can be overcome, I shall certainly not press the amendment. But if he will not give me that undertaking, it will place me in a very difficult situation.

Lord Belstead

Unhesitatingly, I give that undertaking to the noble Lord, and I go further. If the noble Lord wishes to discuss with me this particular point—and there may be some other points later on in the Bill—either alone or with others whom he may wish to accompany him, I shall be very ready to meet him.

Lord Shepherd

With that assurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Vickers moved Amendment No. 2: Page 1, line 9, at end insert ("except in a specified area").

The noble Baroness said: If it is convenient to the Committee I should like to suggest that I take Amendments Nos. 6 and 9 with this amendment. Amendment No. 6: Page 2, line 1, after ("services") insert ("in an area which is not a specified area"). Amendment No. 9: Page 2, line 5, at end insert— ("( ) In this section a specified area is an area in respect of which the following apply:

  1. (a) the area comprises the area of a non-metropolitan district council or of a non-metropolitan county council; and
  2. (b) the subsidy paid from the general rate fund or county fund or, as the case may be, of the relevant council for that area to public passengers transport services in that area (other than payments for concessionary travel under section 87 of this Act or educational travel arrangements made pursuant to section 55 of the Education Act 1944) was in the municipal year 1983 to 1984 less than the equivalent of £2.00 per head of population of that area—provided that in respect of the area of any non-metropolitan district council the said level of subsidy shall be fulfilled notwithstanding that over the area of the county of which the district is a part the said level of subsidy is not fulfilled.").

Lord Tordoff

I understood that it was the intention that it would be convenient to take Amendments Nos. 6, 9 and 39 with Amendment No. 2.

Lord Belstead

Before we go on, we did, as I think is usual, send to the Whips' Offices of the other parties the suggestions of my noble friend Lord Brabazon and myself on behalf of the Government for groupings of amendments; but of course it is entirely for my noble friend Lady Vickers to do as she thinks right. We felt that it might be possible to take Amendment No. 39 with Amendments Nos. 2, 6 and 9, but I leave it to my noble friend to decide how she wishes to take the amendments.

3.45 p.m.

Baroness Vickers

I thank my noble friend. It is very kind of him to do this. But I did not receive this paper from the Whip's Office and I should prefer not to take Amendment No. 39 now. The Explanatory and Financial Memorandum to this Bill admits, and the Secretary of State said in Committee, that some areas would be worse off under the Bill, where more efficient use of rate subsidy does not offset the need to replace cross-subsidy. Those areas are likely to be the ones where low-rate subsidy is currently applied; hence, these areas still need regulation to be able to generate cross-subsidy. This amendment, if accepted, should help to focus on the problem of increased rate expenditure to replace cross-subsidy in some areas and may force concessions on GREA targets to help with this problem.

The Bill repeals the existing legislation controlling and licensing road service licensing for stage carriers; but instead of leaving a totally free market it reinstates full control for London's services in Part II of the Bill; and, in respect of other areas, the requirements only involve the registration of services. This amendment seeks to retain the existing system of licensing in certain areas. These are areas in which there is currently a local authority bus undertaking which operates with a very low level of subsidy. The amendment that I am putting forward would achieve this by disapplying the Bill to those places. By retaining the existing licensing system in these parts, the amendment avoids the need to enact a new licensing regime for these areas.

Since the Bill excludes London from deregulation, the amendment does not fundamentally oppose the objects of the Bill, but merely extends the areas to which deregulation will not apply. The amendment therefore does not attack the principle of the clause. The Government grant and rate-related expenditure assessment (GREA) estimates what the Government feel local authorities should spend on various elements of their services.

In 1984, the Government's assessment over the country as a whole was that expenditure on bus support (excluding concession fares) should be £4.47 per head. The Government could deduce the 1983–84 figure, but it is hard to calculate from the published data. However, I understand that it will be above £4 per head. Therefore, the figure chosen for the deregulation exemption of £2 per head is less than half the Government's figure. It is local authorities that are currently spending this "low"—that is less than half—figure that will find it hard to spend more, even up to the Government's "approved" amount because of expenditure targets being based on the previously low spending below GREA.

In regard to the areas spending under/over £2 per head in 1983– 84, the following emerges. The metropolitan county areas all spend over £2 a head; some areas spend from £10 to £40 per head. Therefore, all the new successor passenger transport authorities for metropolitan areas would have to be deregulated. Of the shire areas, 39 spent on average £2.64 per head, and 19 of the 39 shire counties spent under £2 per head. In regard to the shire districts, very few of the 300-plus shire districts spent over £2 per head. There were 13 of these all told varying from £4.49 to £2.15. Some districts are in counties spending over £2 per head and others are in counties spending under £2 per head.

The intention behind the amendment is that if a county spent over £2 per head, the whole county would face deregulation. If a county spent under £2 per head, it would be exempt from deregulation, except for those districts spending over £2 per head. For example, the whole of Lincolnshire, except Lincoln, would be exempt from deregulation. Even though Devon and Plymouth each spend £1 per head, Plymouth should still be exempt. This is justifiable because Devon do not spend any of their support in Plymouth. The figures which I have just mentioned could be summarised by saying that no metropolitan areas would escape deregulation under the amendment. Half of the shire counties would, but they would contain a few deregulated districts which currently spend enough to cope with deregulation. The figure of £2 per head is modest compared with the Government's own assessment of a need to spend over £4 per head. The amendment is put forward to protect the ratepayers living in areas in which a local authority operates an efficient bus undertaking with a low level of subsidy. If deregulation were to apply to these areas, it is feared that the total cost to the ratepayer would increase.

I now turn to Amendments Nos. 6 and 9, to which I gather I may speak. I should like to refer to the House of Commons Committee stage debate on Clause 1 of the Bill. The Government argue quite correctly that local authorities which currently spend money on bus subsidy will get better value for money in the deregulated competitive market. This spending would go further; and far enough, they argue, to cover the loss of cross-subsidy. Obviously, if a local authority spends nothing or very little, then the spending will not stretch to replace cross-subsidy. Cross-subsidy arises because some journeys make a profit and some make a loss. The profit made on profitable journeys is used to make good the loss on unprofitable journeys. Further illustrations of cross-subsidy are to be found between different times of day and different days of the week. Profits are made at peak commuting time and losses are made in the provision of Sunday services.

This amendment defines those authorities which spend "very little" as those spending less than £2 a head in 1983–84. The council chose a convenient figure which was above the level of per capita spending of the city council. The council's level of spending is £1.30 per head of the population. The Government calculation of need for bus subsidy spending in Devon as reflected in GREA is £3 per head. In fact, the county spends £1 per head only. Two pounds per head is a broad compromise taking into account the various figures.

The amendment is a tactical move in the hope that the Government will follow the line of action described above. If expenditure targets are increased to accommodate extra expenditure and an understanding is given by the Government the City of Plymouth would be satisfied so far as the clause is concerned. The Government have already admitted that there will be local authorities which will be worse off. The Secretary of State said as much during the Committee stage in another place. At column 890 of the House of Commons Official Report for 2nd June 1985, when speaking of the two forces of cost reductions and ending the cross-subsidy, he said: Over the country as a whole, we therefore believe that there will be an equality between those two forces working in opposite directions. Of course that cannot necessarily be true for each and every locality—some will be better and some worse—and it is impossible to forecast accurately for a given area". The lack of an accurate forecast will be of little consolation to those worse-off local authorities. Indeed, the Explanatory and Financial Memorandum to the Bill on page ix, "Financial Effects", says that this balance will only be "over the country as a whole".

London buses can apparently have exemption to allow the correction of London's overspending on bus costs, but prudent shire counties or districts cannot have exemption to avoid their underspending problem. It may seem a little strange that underspending is a problem, and I regret that I must take the Committee into the world of Government spending controls on local authorities to explain it. Each authority has its GREA, the Government's view of its spending need, but if it is a prudent authority spending less than GREA, then its expenditure target relates to its lower historic spending. So a generally lower spending authority spending little or nothing on bus subsidy cannot get sufficient extra value for money to replace cross-subsidy and needs to increase its rate subsidy to buses to maintain services. However, that will take it into grant penalty and its ratepayers will pay twice over to replace cross-subsidy unless the service is withdrawn, which would itself be undesirable. Poor reward for a prudent authority! The Government could make this amendment unnecessary if they would only give assurances that such authorities with expenditure targets below GREA which spend less than £2 a head on bus subsidy would have their expenditure targets increased to accommodate this extra expenditure. I beg to move.

Lord Beloff

I cannot believe that my noble friend Lady Vickers is serious in her amendment, because the idea of a country which becomes a patchwork quilt of areas in one of which one regime operates and in another—possibly a district or city within the same county—a different regime operates is impossible to contemplate for the administrator, for the user of buses or for the provider of buses. Therefore the fact that London for the time being has been exempt is not really an argument. London is an identifiable area of a very large size which has other peculiarities.

Listening to my noble friend, I cannot help feeling that, like Drake in his hammock, she is thinking all the time of Plymouth Hoe. We cannot vary a major piece of national legislation to accommodate the needs, the possible needs, or the wishes of a single local authority. Most of us, I have no doubt, have had pleadings from the local authority in whose area we live to make some change or other to this Bill. But the central point of principle—this is where, again, I find it difficult to follow my noble friend—is not the question of saving money on subsidy whether from local authorities or from any other source. The central question of the Bill is the belief that bus services are declining because they are becoming more expensive and that the only way forward that the Government have been able to perceive—my noble friend has not produced another way forward—is that competition should be introduced as widely as possible.

The view about the advantages of cross-subsidy, which of course is not prohibited to a commercial undertaking, is that, where it amounts as it does in many areas to the selection of individual routes which are to be charged higher fares in order that others may travel more cheaply, this principle, which runs against the principle of fair competition, which is what we have been talking about, is one which is to be excluded from the Bill. Therefore it seems to me that, although it sounds a quite modest notion that these happy and frugal authorities should be allowed to continue in their pleasant ways and though it may suit them very well to do so, it is for the consumer—one can hardly call oneself a consumer of buses—the user of buses to ask the question: is this going to make bus services cheaper and more frequent? I see nothing in my noble friend's amendment to convince me of that.

Lord Sandford

I obviously cannot agree with both my noble friends but I have to say to my noble friend Lord Beloff that the view that we cannot have a patchwork of bus services across the country is really flying in the face of the facts, because that is what we have. There are cities which have their bus services run by PTEs; there are cities which have their bus services run by municipal operators; there are cities which have their services run by the National Bus Company; there are cities which have their services run by private operators; and there are cities which have their services run by various combinations of all those.

We are dealing with a patchwork and our very sensible manifesto commitment was to look at that patchwork and embark upon a further modest degree of deregulation. If we had stuck to that we should have been proceeding along lines on which most people would agree and which had some fair prospects of advantage not only to the users but to the ratepayers, to the British bus manufacturing industry and so on. But we have not done that. We have somehow allowed ourselves to be deflected from that sensible manifesto commitment, taken a great lunge at a complicated operation and tried to apply a standard formula right across the country. It simply cannot be done.

4 p.m.

The issue to which my noble friend has asked the Committee to address its attention is this. It ought to be possible—and Plymouth certainly would not be the only city to which this could apply—that, where the ratepayers and users are satisfied that they can do the operation by the process which operates at the moment rather better than can be achieved by the operation of market forces, they should be allowed to continue to do so. We could have a number of formulae whereby they could make application to the Secretary of State, who would give his approval only if he was satisfied that that was so. But it clearly is so.

Enough studies have been done to demonstrate that the proposals in the Bill will lead either to greater expenditure by the ratepayers or a poorer service for the users. No one disputes that. All that the Secretary of State can say is, "Bad luck; we want to have a general arrangement introducing market forces into all the towns, cities and countryside of this land, and that will be better for most people"—as indeed it might be—"and those for whom it is not will just have to put up with it as best they can". That is not a sensible way to legislate.

It is within the capacity of the Committee of this House, with the necessary co-operation from my noble friend on the Front Bench, to look at the Bill to see whether we can produce a system whereby the patchwork that we have now is transformed into a better patchwork. That is a modest objective. It was a sensible objective on which we won the last election, and we ought to get back to it as fast as we can.

Baroness Carnegy of Lour

To continue the friendly little discussion on this side of the Committee, my experience of the subject, which does not cover the past two or three years but is not as out of date as all that, is that the proposition put by my noble friend Lady Vickers on the face of it looks attractive to the local authority member. Local authorities have been struggling through the last years to make the best of an exceedingly difficult job. Where they have managed on comparatively low subsidy to keep a few buses running they feel that they have done enormously well. I was one of those councillors, and we certainly made the most of it to our electorate.

But if one looks at the figures—and I do not have the figures for the Plymouth area—of rural areas through the last few years, it may have been the best of a difficult job but it was a very difficult job indeed. Where the subsidy is low the number of bus services in rural areas has gone down and down and the costs have gone up and up. The two things are linked. The passengers who need the services so desperately are worthy of something better than that.

Two pounds or £4 a head sounds very little, but that is per head of the total population of the area, whether or not they ride on buses. If the authorities can spend that amount of money on bus services, surely they should spend it through their councillors where the social need is greatest and not on maintaining a cross-subsidy system which, as we know from experience in most areas, goes down and down and down. The proposition sounds good but it really does not work.

The noble Lord, Lord Shepherd, is not in his place, but when he was chairman of the National Bus Company he said in the annual report in 1983: In many areas cross-subsidy has been taken to the point where the benefits obtained by meeting certain social objectives have been outweighed by the long-term damage being inflicted on the future performance of routes now suffering from overpricing and going into premature decline". The area which I represented in local government was just such an area. We struggled and struggled with this on the basis that my noble friend has proposed. It does not work that way. Small operators are quite keen to have a go. They cannot get in and try it. I am sure that any noble Lord who lives in a rural area can think of people who under the Bill might have a go. Attractive as it sounds, I feel quite strongly that on purely pragmatic grounds this amendment should not be accepted.

Lord Mackie of Benshie

I hesitate to contradict my noble neighbour, who knows a great deal about running bus services in Angus, but it is a little difficult to see how the service can be improved under the Bill without enormous expense to the local authority. Services have been going down and the number of customers has been going down, but at least a service has been maintained. If under the Bill a small operator has a go and he is subsidised, he is bound to put in an enormous figure for contingencies if he knows that anyone else can have a go as well, perhaps at the best times when he may make a little money. I think that total deregulation will make it much more difficult.

The noble Lord, Lord Sandford, put it well. It is and must be a patchwork. Conditions are different all over the country. Total deregulation must make it enormously expensive in some cases without improving the service. I doubt in fact whether it will work at all. It is an impossible situation for any form of competition and private enterprise if an operator is being subsidised to provide a social service yet anyone else can come in and take away the cream, provided that he has decently maintained the vehicles.

Lord Belstead

May I just remind the Committee that the effect of the amendment would be to exempt from the Bill local authority areas in which the level of revenue support paid by the local authority is less than £2 per head of the population? My noble friend has in mind prudent, low-spending, authorities, and I have great sympathy with her point of view; but not, if I may say so with respect, with the effects of the amendment, which would drive a coach and horses through the Bill, if I may use that expression.

I was grateful to my noble friend Lord Beloff for putting his finger on why it is that we are involved in this Committee stage. This is a Bill to try to reverse many long years of decline in the use of bus services in this country with a dramatically increased cost. It is a situation which would give anyone running a company cause for great apprehension.

One of the Government's reasons is this, and I do not say that it is the only one. Whenever an operator has a bright idea and wants to introduce a new service—indeed, if a new operator wants to start providing any service at all—he is bound to fight his way through the length of a traffic commissioner's hearing, usually with representation and enormous expense, to get started in the market. If my noble friend Lord Sandford will forgive me, to that extent we do not have a patchwork. We have a rigid system which I do not believe has been to the benefit of the travelling public in recent years. If that thesis is correct, the Bill should be judged primarily on its success in bringing the benefits of competition and enterprise to the industry. We believe that they will be apparent in all areas, whatever the level of local authority spending.

That is not the case of my noble friend Lady Vickers. In speaking to the amendment she said that the removal of artificial cross-subsidy would lead to an intolerable burden on local authorities which have a low level of revenue support. However—and I say this with great respect to my noble friend—it is a misconception to do a simple sum and say that if £X million of cross-subsidy is to be lost then £X million will be the extra subsidy bill for the local authority in order to maintain non-profitable services. I make that assertion because I believe that that conclusion is to ignore very important offsetting factors in a deregulated system.

By giving the industry its head to develop and compete on profitable services, the decline of patronage will, we hope, be halted and indeed reversed. Those extra passengers who will be attracted back to buses will not just travel at the profitable times of the day. Their increased patronage is bound to spill over to other times of the day and to services which are currently unprofitable. This will mean that many of the marginal services will become profitable again and the number of services needing subsidy will be correspondingly reduced. Deregulation, allied to competitive tendering, will also have a dramatic impact on operators' costs. We believe that it will stimulate innovation and the result will be that many new ways will be found of providing services on the lightly loaded routes at much lower costs.

I venture to say these things because at Second Reading the study which was undertaken into public transport in Plymouth was mentioned by my noble friend and also by my noble friend Lord Sandford. I think it is an important study and I should like to say a few brief words about it. Although the study is important, it is a fact that it does not look in detail at the changes in cost structures of bus operations, nor at the pattern of services which will result from the removal of road service licensing. It is very difficult to do that in the absence of a free market, but the study shows the dramatic impact of cost savings which would nearly halve the deficit on the services which lose money in Plymouth to a level only slightly above the present level of external subsidy.

The difficulty of all studies of this sort is that they depend crucially on the assumptions which are used. That is why the Government attach more weight to the evidence from the trial areas where competition has actually been tried. The noble Lord, Lord Mackie of Benshie, said that he could not see how it was possible that deregulation could provide a better service for the travelling public. I put on record early in the Committee stage that the Government have never said that the few trial areas prove points without peradventure. Anyone who said that would be very unwise indeed and would not have a proper pride, as we all do in this Committee, for local history and local traditions and the different ways in which operators are plying their business in different areas. But what is for sure is that in the Hereford trial area external subsidy fell, not by just 1 per cent. or 2 per cent. but by 38 per cent. In Norfolk subsidy fell, through tendering, not by a small percentage but by 70 per cent.; yet services in the rural districts in both those areas were maintained. Indeed, in the Hereford area they were improved. When it was put to the test the subsidy gap argument was shown in those two areas to be a mirage.

I hope that my noble friend Lady Vickers will agree that although it is right that we should be concerned with what the future will be for low spending authorities in a deregulated system, there is not enough evidence to support this group of amendments.

4.15 p.m.

Lord McIntosh of Haringey

I had not intended to intervene on what appeared essentially to be a debate on the Government Benches. I accept that there are deficiencies in the amendments spoken to by the noble Baroness, Lady Vickers, and I agree with some other speakers that the idea of a patchwork of regulation and deregulation throughout the country is not a plausible alternative either to the existing system or to the system proposed by the Government in the Bill.

However, the noble Lord the Minister, in his reply to his noble friend, made very sweeping statements and broadened the argument very considerably. As he wished to put on record at this stage of the Committee proceedings that he believed there were compensatory savings which overcame the difficulties of the abolition of cross-subsidy, so I believe it should be put on record from this side of the Committee that there is no such evidence as the noble Lord wishes to adduce.

The noble Lord gave the examples of the trial areas of Norfolk and Hereford. The fact is that despite the reduction in subsidy in Hereford there is no new single rural route in the Hereford area. In the Norfolk area, which was largely a non-event as a trial area, there were reductions in subsidies but there were dramatic reductions in rural bus services. It cannot be substan-tiated that these reductions in subsidy were achieved without pain to the bus users; and we shall have to come back to this matter again on further amendments.

The Minister's assertions about the savings to be made as a result of deregulation are, with our present state of knowledge, no more than assertions. I hope that there will be a number of occasions during our Committee proceedings when counter-assertions can be made with more convincing facts than have been adduced by the Government at this stage.

Lord Mackie of Benshie

May I ask the Minister whether, concerning Norfolk and Hereford, after competition and tendering had reduced the subsidy, thereafter those who were successful in tendering were subject to open competition?

Lord Belstead

After tendering. So far as I know, that was the case.

Lord Mackie of Benshie

Were they subject to open competition?

Lord Belstead

I repeat to the noble Lord that so far as I know, that was the case.

Lord Sandford

May I say a few words before my noble friend responds? I am grateful to my noble friend the Minister for the letter he wrote to me, to which he alluded, about the difficulty of conducting studies, and his intention to rely therefore on the evidence of trials. That is important and we shall need to look very carefully at the Hereford trial in some detail, not only now but in October when it has had a little longer to run, because that cannot possibly support all the contentions that are being made. It would be useful to know that that is what we need to concentrate on.

In passing, I ask my noble friend when referring to trends in revenue support to state from which authorities these are coming. The trends are entirely different depending on whether one is talking about the GLC or the metropolitan counties, which we are now abolishing, or whether one is talking about the shire counties and districts. They differ from each other in several ways, and it will be more useful to the Committee if, whenever they are mentioned, we distinguish between the two.

Baroness Vickers

Having heard what my noble friend the Minister said, and listened to noble Lords who have either supported or not supported me, I beg leave to withdraw the amendment so that I can consider what has been said and bring forward a better amendment at a later stage.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 3: Page 1, line 9, at end insert ("except where the Secretary of State, following an application from any county, regional or islands council or from any passenger transport authority and executive for an area has made an order retaining for the time being the provisions of Part III of that Act in that area.").

The noble Lord said: It might be convenient for the Committee if I spoke also to Amendment No. 8. Amendment No. 8: Page 2, line 2, at end insert— ("( ) The Secretary of State, in deciding whether to make such an order shall take into account the views of the county, regional or islands council or of the passenger transport authority and executive of the area concerned as to how the provisions of this Act shall be varied to achieve a more effective transition to meet the transport requirements of that particular area. ( ) The date on which the provisions of subsection (1) come into effect may be different in each area and orders may vary the transitional provisions set out in Schedule 5 to this Act.").

Government Ministers have acknowledged that total deregulation is blazing a trail into the unknown. That has been said more than once by the Secretary of State himself, and certainly by the Under-Secretary of State, Mr. Mitchell, in another place. They also agree that there is a very high degree of uncertainty attached and we again heard today of trial areas being cited in support; but we also heard that there are grave doubts about the trial areas.

I think it is important to say that very few other countries in the world, and particularly the more advanced and developed countries, see this path as being the intelligent one, and in fact most of them are moving in quite the opposite direction. Because of the great dangers—the Government have not said "the great dangers", but they have said that there is a high degree of uncertainty attached to it—the opportunity should be provided, as often as possible during the early stages, to assess the results and review the policy, so that if anything unforeseen or unacceptable ensues from the operation of the deregulation, certain modifications can be applied and little adjustments made here and there, and if necessary a change of direction in certain areas can be considered.

One of the obvious examples is that a situation may arise in certain areas—I am thinking particularly of my own area of Strathclyde—where some alteration may be required in the bus services and the bus competition, should the competition prove too serious to important local rail services. This is something of which I think we should be very aware. The difference in the nature of the task in various parts of the country should also be recognised. It might be much more simple to operate the deregulation in rural areas since, in such areas, independent operators already play a quite important part in the supply of transport. But in the major cities, whether in the metropolitan areas or in the shire counties, the existing network is much more complex and dense, and in many cases co-ordination of all the services has been achieved in a very wide area over only a long period.

But the sheer scale of the task in the complicated areas of which we have been speaking demands that provision be made for a longer timescale, if this is required. Too much haste will put at risk the benefits that have been achieved up to now, such as having a balanced and integrated network and modern ticketing, which, whatever happens in the light of competition, surely we do not want to lose. Marketing initiatives have been used to a much greater extent than is given credit for by many of the shire counties and many of the metropolitan authorities. Negotiations to safeguard these achievements cannot easily be completed so early, and I believe that rushing matters will inevitably make unacceptable forms of competition much more likely.

In the metropolitan areas the process will be further complicated by the administrative upheaval which is due to take place in April next year, though it may be that the Minister has to some extent anticipated this by the amendments that he is proposing to Schedule 5. I do not know whether this is one of the difficulties which perhaps could have been avoided had we known the situation earlier, but we shall be a third of the way through the transitional period when the Local Government Act comes into effect. At this crucial time the PTAs, which are the policy-making bodies governing the PTEs, will undergo a total transformation, wherein the metropolitan counties will be replaced by a joint board of district representatives. This could result not only in policy changes, as frequently happens after an election, but also in a complete change in outlook from county-oriented to district-oriented thinking. In any event, there will be no guarantee of continuity in policy matters.

At the same time a whole new set of administrative structures will come into effect, including reorganisation of the traffic commissioners. New working arrangements, contacts and channels of communication, which constitute the oil that smoothes the working of a great many of our institutions, will need to be rethought out. New connections and contacts will be needed and in many cases the personnel involved will need to get to know each other in a way in which many of those involved in the transport world already know each other.

All this takes time and will impede the smooth progress of deregulation in the metropolitan areas. The Government have accepted that the upheaval and the changes caused by deregulation, occurring at the same time as other local authority changes, will be too much for London to handle. Therefore they are asking that there should be a deferment in the case of London, where in actual fact it will if anything be much simpler because there is still the central body. It will be much simpler to organise the boroughs in London to take the transfer than perhaps it will be in a county area, where you have a great many different operators already operating, and where it will be much more complicated.

We believe that the Government, in making an exception of London, are showing us that there is a doubt and a concern as to whether it can be transferred outside London as easily as they seem to suggest. We plead with the Government to look at it again. The whole business of gradually assimilating the changes that are going to be needed is too great for it to be done in the timescale that the Government have laid down. It was said earlier by the noble Lord, Lord Shepherd, or perhaps by someone else, that in Chile deregulation took seven years—and they had certain advantages over the Greater London Council, or the Government as it is just now. I hope that the Government realise that it is not likely that what took Chile seven years to achieve will easily or readily be accomplished here in less than 12 months. I beg to move.

Lord Belstead

I think we all share with the noble Lord, Lord Carmichael, a desire to make the interim period before deregulation workable for all concerned, including operators, local authorities and traffic commissioners. Indeed, on the first amendment of the noble Lord, Lord Shepherd, I spelled out—with apologies to your Lordships for the amendments not yet being on the Marshalled List—our intention to bring forward amendments to Schedule 5 in order to produce a more helpful framework for local authorities which have a major job of tendering to carry out before deregulation day. I very much hope that when the Committee has been able to consider those amendments, your Lordships will agree that the changes will make a considerable improvement so far as local authorities, county councils, are concerned.

I therefore say to the noble Lord, Lord Carmichael, first that the whole thrust of these two amendments is to try to make sure that any county, regional or islands council or any passenger transport authority or executive should be able to approach my right honourable friend and enable him to make orders on their application to delay deregulation in the area. The noble Lord says that one of the reasons for the amendment is that the transitional period will put an intolerable burden upon local authorities, but we are genuinely already trying to make the transitional period easier so far as they are concerned.

Secondly, may I say that I apprehend that these amendments could, by contrast, create delay, complexity and, if the noble Lord will forgive me, even confusion. A great merit in setting a date for deregulation in the Bill is the certainty that it brings; from the date of enactment everybody knows what the position is and can plan accordingly. But if the date for regulation were to depend upon individual orders for each county, region, island or PTA, the period of transition would be prolonged, not so much by the merits of the case but by the additional administrative processes which would be involved. I really cannot believe that that would be in the best interests of anybody. I very much hope that the noble Lord will not press this amendment.

4.30 p.m.

Lord Tordoff

I suppose that at the end of the day the noble Lord will not press the amendment. I had my name to the amendment of the noble Lord, Lord Shepherd, and I have my name to this. I merely want to say at this stage that, although one is hopeful that the assurances that the Minister gave in response to the noble Lord, Lord Shepherd, will fill the bill, I greatly fear that at the end of the day they will not. It seems to me that it is not a question of the Government's ideas being right and the Opposition's being wrong, or even vice versa: we are seeking a way through what is a very difficult sitution. I feel that the noble Lord the Minister understands that and is anxious to co-operate.

Perhaps I may draw his attention to the report of the consultants Steer Davies and Gleave which was made to his department and a summary of which was published in April 1985. It admittedly says that this summary was prepared by the Department of Transport and agreed with the consultants but the opinions expressed do not necessarily reflect the views of the transport department. Nevertheless, these were consultants who were asked by the department to look into the matter. In paragraphs 25 to 28, which deal with the transition period, there are questions raised which tend to underline what has already been said. For instance, in Paragraph 26 it says: A step by step approach to transition might ease the process without necessarily altering the overall timescale. The essential feature of such an approach is the decoupling of deregulation from the introduction of competitive tendering and the withdrawal of network support which allows changes to be identified in a more stable environment". These are the kinds of changes in a rather more rigid approach which we are seeking at the moment. I well understand that the Government may feel that by removing a date on which deregulation is to take place they are weakening the control that they may have over the recalcitrant people who do not wish to go along with the principle of the Bill. However, in doing so they are putting people with genuine problems into an extremely difficult position. If the Government are not prepared to accept this or other amendments in this group, I beg them, if they are able to at some stage later in the Bill, to come up with a way of building greater flexibility into the system and a way in which the Secretary of State may take powers at some time to exempt from the timescale which is laid down people who have genuine problems.

Lord Teviot

My name is also to this amendment. I can only say that one looks forward to my noble friend's assurance that there will be amendments which will make the transition period for local authorities much easier. I should like to add only this very brief comment. It is that not only should they make the transition easier for local authorities but should also do so for the general public. So far, the general public has not been mentioned. The general public may be in great confusion over this transitional period. Maybe my noble friend was thinking that the local authorities were operating on that public's behalf. With that, the noble Lord, Lord Carmichael, will have to make his assumption. We shall just have to wait to see what my noble friend offers.

Lord Peyton of Yeovil

Perhaps I may very shortly congratulate my noble friend Lord Teviot on actually making mention of the general public and the fare-paying passenger. As I have listened to these debates, it has seemed to me that so far they have been mostly concerned with authorities, owners and managers, and that squeezed out of mention and out of all thought and reflection are the general public and the fare-paying passenger—who very often lacks the opportunity to enjoy the status of a fare-paying passenger because the service is not there.

This amendment was moved, as one would expect, with grace by the noble Lord, Lord Carmichael. If it was in his hands alone, I am quite sure that it would signify no ill. It would simply be a general opportunity, if more time were required, to allow it. However, I wonder whether that really is so. If I understood my noble friend aright, I think he was quite right to express some doubts as to the effect of these amendments, which may go a very long way to preserving the present system of road service licensing contrary to the intention of the Bill. They would administer a kiss of life.

If the Committee were to agree that any council or public transport authority which was concerned about the transition period in its area could apply to the Secretary of State and the Secretary of State would be obliged to "take account"—weasel words—of the wishes of that council or authority, what does "take account of" mean? I strongly suspect that it means coming very near to meaning "bound by". In those circumstances the Secretary of State would be under very great pressure to make the necessary order to postpone the coming into effect of that part of the Bill and therefore, on the whole, wreck its operations.

I do not want to go too far in this direction. However, I believe that, faced as we are with a system which does not give general satisfaction and which imposes enormous and unacceptable burdens upon both taxpayer and ratepayer, we ought to be very careful indeed before we defend that system too fiercely.

Perhaps I may for a moment indulge in a personal reminiscence. It is not a very distant one in time. I was having lunch today with a Member of your Lordships' Chamber, the noble Lord, Lord McAlpine of West Green. He is in the business of selling antiquities. Among those antiquities he had in his shop or gallery today a number of dinosaurs' eggs. I hope that in our discussions which are to come on this Bill neither the Front Bench opposite nor anyone else will be too keen to import those dinosaurs' eggs here and sit on them in the hope that a very old and worn out system will yield useful results. I hope my noble friend will reject this amendment even if it is pressed to a Division.

Earl De La Warr

My noble friend Lord Peyton, seems to me to be reading a great deal more into the intentions behind this amendment than is proper. I have no doubt at all that this is an amendment asking for flexibility so that the very varying conditions that there are in the various authorities can be taken into account and the extent of their difficulties and the paperwork involved in registering services sympathetically looked at. That is so that there can be agreement that in some places the deregulation date should be varied. As I see it, there is no suggestion in this amendment that there should be a variable date. I think there is a rule that the date holds but that there can be exception to it if the local authority can show to the Minister's satisfaction that the public would be gravely disadvantaged if the Minister forced it to stick to a timetable to which it could not adhere, particularly that part of the timetable that deals with the findings of operators to run tendered routes that have been abandoned by the network on a specific day.

I suggest therefore that my noble friend rids his mind of these suspicions. I am not at all sure that my noble friend the Minister had these suspicions. His department may have done so, but I do not think that he did. I was slightly distressed by the fact that he fell back on the argument of paperwork. Whose paperwork? Would there be more work for the Ministry because of the quite large number of exceptions to be made and the special circumstances to be considered? He came down really to the level of saying that it was too much trouble for the men in the Ministry and could not be agreed for that reason. I do not believe that that is good enough.

Baroness Carnegy of Lour

Before the noble Lord replies, I do not know as much as I should about Strathclyde region, but it is one of the authorities to which he referred and which would be involved should the amendment be accepted. Does he have it in mind that Strathclyde with a population of 2.5 million—half that of Scotland—might make the request to the Secretary of State for Scotland that its transport executive should remain for some time while the Bill operated in the rural areas. Is that what he has in mind? Does he have it in mind that it could be suggested that half of Scotland should not deregulate at the same time as the other half? Is there to be that kind of thing?

I understood, when my noble friend on the Front Bench talked about paperwork, that he was referring to a complicated administrative period while such things happened. It seems to me that flexibility in transition is absolutely essential. There will be problems for local authorities which need to be confronted. I understood my noble friend the Minister to say that he was thinking about that. I would not have thought, considering for a moment only Strathclyde, that this would be the way to ease things forward. Certainly, if the whole of Strathclyde were to opt out while the rest of Scotland did not, I would have thought that the passengers simply would not understand. Nor would the operators. It would be extremely unfair and confusing. That is why I wonder whether this is the right way to achieve the flexibility that the noble Lord rightly seeks.

Baroness Fisher of Rednal

I should like to ask the Minister to interpret what he means when he says that he is trying to be helpful to local authorities. He has used the phrase two or three times already this afternoon. To a certain extent, this is stifling discussion. It is a nice way of saying that he will be considering all these things later. But, really, we are discussing the Bill now. One would have hoped that the Government, in bringing forward the Bill, would be able to answer those points. I hope sincerely that the Minister will explain how he is trying to be generally helpful to local authorities. While deregulation, registration and tendering are introduced, three other major events are taking place in the metropolitan areas. The effect of the ever-tightening protected expenditure limits, and in some cases rate capping, obviously require a tremendous amount of paperwork and considerable management effort to see that targets are achieved. So the local authorities will have equally as much paperwork as the Minister's men.

4.45 p.m.

Secondly, the metropolitan county councils are virtually certain to be abolished on 31st May next year. Although they remain PTAs up to that date, the joint boards will be set up in September this year prior to taking over from the PTAs in April, 1986. All this confusion in the metropolitan authorities and in their relations with the districts must obviously have some impact on the services that they can give. It is important, as the noble Lord, Lord Tordoff, says, that buses are run for the benefit of the passengers that they carry. That is why we need buses. The claim made by the Minister that deregulation will bring about more services in line with passenger demand cannot be justified in the conurbations. Indeed, the Bill will probably result in the reverse happening.

PTEs are very highly organised authorities. They are manned by experienced transport people—those who have worked in transport all their lives and who take pride in doing what they see as a good job. All of them carry out market research to see that the services being given are those that passengers want. At present, the service is provided by democratically elected councillors who run the metropolitan counties. I do not accept therefore the justification that the Minister gives for deregulation.

When he says that more passengers will travel on the buses because of deregulation, I have to say that passengers in the conurbations are normally men and women going back and forth to work, children going back and forth to school and, in Birmingham, students going back and forth to universities or colleges of further education every day. They will not be travelling to work or to school twice as often and so increase the number of bus passengers. One can only go to work in the morning and return in the afternoon unless, like your Lordships, you come in early in the morning and then again later to vote. Deregulation may therefore benefit the rural areas where the services are sparse and fares often high. But it will not meet the needs of the urban areas which, in the main, have dependable, efficient and reasonably priced travel opportunities. These are integrated through the passenger transport executives.

Lord Tordoff

Will the noble Baroness forgive me? I do not dispute a word that she says. I wonder, however, whether her remarks are entirely relevant at this stage to the amendment of the noble Lord, Lord Carmichael. The amendment deals with a rather specific point concerning delay over implementation for certain reasons.

Baroness Fisher of Rednal

With all due respect to the noble Lord, I had concluded my remarks when he stood up. I have made my statement. I have listened to many noble Lords this afternoon who have not been speaking strictly to the amendment. I was simply following suit.

Lord Nugent of Guildford

I sympathise with the noble Baroness in her description of the admirable state of affairs in Birmingham. That is a situation I would expect where she has a hand in it. We are, however, looking at a national picture. I am straying a little. But, let us face it, the noble Lord, Lord Carmichael, who moved the amendment with his usual charm and restraint, will know as well as I do that if he had put his amendment on the Order Paper of the other place, it would not have got very far because it is a wrecking amendment. It goes to the heart of the Bill. If the amendment was included in the Bill, there is no doubt that the majority of local authorities would opt out. The result would be that the Bill would be knocked to pieces. We are really addressing ourselves to this point.

Lord Tordoff

It is clearly not the case that under this amendment local authorities can opt out. Under this amendment local authorities can appeal to the Secretary of State. The decision remains with the Secretary of State, and in those circumstances it cannot be a wrecking amendment. It might be a nuisance to the Secretary of State but the power still resides in his hands and therefore still within the objects of the Bill.

Lord Nugent of Guildford

I thank the noble Lord, Lord Tordoff, for his advice, but I just do not agree with him. If this amendment went into the Bill it would put intolerable pressure on the Secretary of State. He would have to consider applications from literally hundreds of local authorities. This would make for a delay, if nothing else, of years. It would create a political situation which would be intolerable.

The noble Lord, Lord Carmichael, knows better than I do because he has only just come from the other place, but I doubt whether it would have got by the Table in the other House. However, that only justifies taking general arguments of the kind that the noble Baroness did. I make the point in return that we are looking at a system of bus operation which it is generally agreed is now unsatisfactory. It is good in some places, but taken over the country as a whole it is not.

Baroness Fisher of Rednal

I was trying to give an example of where the bus services are very satisfactory.

Lord Nugent of Guildford

I think we all got that point, and I am prepared to acknowledge it, but over the country as a whole it is not so. Over the country as a whole the cost goes up every year, services overall decline every year, the fares go up every year and the use of the buses goes down as well. That is the situation we are looking at. The Government believe that a radical change is needed, and the best one that we can conceive is to open the market of bus operation to free enterprise generally. This will give the best service to the bus travellers, and that is why the Government have brought forward this Bill. It is in that context that we have to look at this amendment.

I have no doubt that the volume of applications that would come in would be very heavy indeed, if I am only to measure it by the amount of canvassing that I have received. I have received pamphlets and letters of every sort and kind. They are only second in volume and strength to what we had on the Local Government Bill. God bless my soul, there is not much doubt as to what would happen!

There are huge financial interests here. We know that there is a running subsidy now of £500 million a year. It is obvious that a great many vested interests will be disturbed. Of course we recognise that there are great practical problems for local authorities in making these huge changes, but in the light of their judgment from the trials that they have made the Government believe that this is the change we should make and that we should face up to it. On balance they are going to give the country, the bus travellers, a better deal in this way.

It is against that background that this amendment must be judged. I must say to the noble Lord, Lord Carmichael, that I am not persuaded that this option would be workable. If it was given to the local authorities it would put the Secretary of State in an impossible position dealing with applications from all and sundry.

Lord Teviot

I hesitate to interrupt my noble friend, who is so distinguished and who has dealt with transport matters for so many years, but I must draw his attention to the amendment. The amendment says: following an application from any county, regional or islands council or from any passenger transport authority". My noble friend refers to hundreds of local authorities. What one is talking about is comparatively a few. I should like him to withdraw his statement in which he mentioned hundreds of authorities, because all the ones I have mentioned would not add up to a hundred.

Lord Nugent of Guildford

I am not going to go to the precise figure. I thank my noble friend for helping me in that regard. Perhaps my noble friend Lord Belstead will give us the precise number of applications that we might have as a result of this amendment. My guess is that it would be a very large number indeed and a quite impossible number to handle, and certainly one unacceptable to anyone who believes in the value of the Bill as a whole, which I certainly do. I hope that my noble friend will not accept this amendment. I hope that the noble Lord, Lord Carmichael, may be willing to withdraw it after the general debate we have had, because I do not believe that it is a practical way of going forward.

Lord Broxbourne

I do not propose to take up any of your Lordships' time on a dissertation on the merits of these amendments, though, for the avoidance of doubt, if this is pressed and my noble friend the Minister advises its rejection I shall support him in that regard. I rise only on a point of construction. My noble friend Lord Peyton, in a characteristically lucid and felicitous speech, said that the words "take into account the views" might be interpreted as putting an obligation of acceptance upon the Secretary of State.

With great respect, I do not think that that is so. The significance of words such as these in statute law is that the Minister, in this case the Secretary of State, must have regard to the views and consider them with an open mind without a preconceived view, and taking account of all relevant considerations. It means that, and I think it means no more than that. Therefore, although the amendment is, in my view at any rate, not a good one, it is not as bad as it would be if my noble friend's interpretation were correct.

Lord Shepherd

The Committee must be grateful for that intervention. The noble Lord, Lord Nugent, and I have participated in debates over a number of years—and hopefully we shall continue over a good number of years—on subjects other than transport. I thought that the noble Lord, Lord Nugent, put clearly the difficulty of this Bill. What he said—and the noble Lord, Lord Teviot, intervened—was that if this amendment were passed the department would be overwhelmed by authorities—I hate to use the authorities, but I shall come back to the noble Lord, Lord Peyton, in a moment—and the various traffic authorities which today have a statutory duty, who would go to the department and seek to make representations (because all this amendment requires is that they may make representations) and the Secretary of State shall take a view.

The noble Lord will remember that the 1980 Act empowered the Secretary of State to designate trial areas where counties or district councils voluntarily came forward for the establishment of trial areas. I watched this with great interest. I have no doubt that the sweeteners to the county of Devon to become a trial area were considerable. I think sweeteners were also offered in terms of Norfolk. In Hereford it was not quite so necessary.

The irony of the situation is that the 1980 Act has been there throughout this period and any authority, even the most hidebound Conservative entrepreneurial authority which passionately believed in competition within its area for the provision of bus services, could well have gone to the Secretary of State and said, "Will you please designate part, or the whole, as a trial area?" Apart from those three at the early stage, there have been no volunteers at all.

I suspect that the reason is that the statutory traffic authorities have a deep concern as to the trial area philosophy. Equally I think it is true—and I have a suspicion of this among Members of your Lordships' House—that the shire counties in particular have a real dread of the consequences of deregulation.

The noble Lord, Lord Peyton, made a very helpful intervention. I am looking forward to dealing with Tyne and Wear because the noble Lord referred to movements, did he not?—to the needs of the passengers and the best means by which people can move between their home and their work. It was the noble Lord, Lord Peyton, who gave the authority for the construction of an integrated transport service in Tyne and Wear. I hope that when we discuss it on a later clause that the noble Lord will speak in support of not only his own concept but also the way in which it has been fulfilled.

My anxiety concerns the way in which the amendment of my noble friend Lord Carmichael is drafted. This is based upon my bus experience. Buses operate within traffic catchment areas. The transport authorities, the counties, tend to be artificial. I will not say that they act as a barrier, but there is an extra-ordinary need in which various counties and the transport authorities have to co-operate together to deal with cross-boundary movements of buses and passengers. It is right that within the amendment transport authorities could go to the Secretary of State and make a case. I suspect that in quite a number of cases within the shires they would have to go together, because they would not necessarily be in conflict, but if one went without the other, there could be difficulties in getting agreement and a sensible relationship.

What my noble friend was saying to the noble Lord, Lord Belstead, was similar to what I sought to say on my Amendment No. 1—that it requires a period of time for a more cautious approach to the whole question of deregulation and the date which is proposed. I do not know what my noble friend intends to do on this amendment. I support it if only because the present statutory traffic authorities would be able officially to make representations to the Secretary of State beyond what has been done in informal discussion. There are some advantages in that.

I do not know whether my noble friend will press the noble Lord, Lord Belstead. This is not a wrecking amendment as has been suggested. I wonder whether there is a way in which we can pursue it to see whether the Government can provide some flexibility. I suspect there is hardly any flexibility in the Bill; so I should not use that phrase. But there must be some flexibility in the Bill so that these major problems that exist—I hope that the Minister will understand that they exist—can be overcome. Up to this moment all our debates have been concerned with how to overcome difficulties. I do not know how my noble friend will judge it. How my noble friend responds will depend on the Minister. How he responds will depend on how I respond in regard to a Division.

5 p.m.

Lord Belstead

Before the noble Lord, Lord Carmichael, speaks at the end of this amendment, I should reply to the noble Baroness, Lady Fisher, who asked me how I could possibly assert that the Government are being helpful to local authorities on this Bill. The claim that I made, if I have made it, derives from the small but I think significant changes which I sought to outline which will be put to your Lordship's Committee when we reach Schedule 5, which deals with the transitional provisions of the Bill. Although I was interested in the opening speech of the noble Lord, Lord Carmichael, in moving this amendment, as he spoke I could not help but reflect that the thrust of the noble Lord's amendments is to allow any local authority which wishes to be exempt from the Bill to seek to persuade my right honourable friend that it should be exempt on the grounds that for it exemption would mean a more effective transition to meet the transport requirements of its particular area. I think this is a little hard, considering what I endeavoured to say about the care which the Government are taking with Schedule 5. This was one of the reasons my noble friends Lord Peyton and Lord Nugent of Guildford expressed suspicions about the effects which the amendment would have if it were made.

However, I think that the suspicions of my two noble friends, who have enormous experience of the field of transport, went a little deeper than that. After all, it will be well over two years since the publication in July 1984 of my right honourable friend's White Paper on policy on buses before we reach deregulation date, if Parliament agrees to the passage of this Bill. Despite that substantial period of time before we go through to the autumn of next year, local authorities which are highway authorities are being invited in these amendments to say that they might wish to be totally exempt from the Bill.

We must bear in mind the timescale and the care, which I have tried to describe to your Lordships that we are taking over the transitional period. In those circumstances I think that it is not unreasonable to claim that whatever may be the interpretation of the words "taking account" or "having regard"—I take seriously what my noble friend Lord Broxbourne has said—to invite all local authorities which are highway authorities to say that they would wish to be exempt from the Bill would lead to delay, complexity and confusion.

Lord Tordoff

May I—

Lord Belstead

I will give way to the noble Lord in a moment. I ask the noble Lord, Lord Carmichael, when replying to the amendment to say whether he knows of any other major statute with the national scope of this Bill which starts—this amendment is directed to the first two lines of the Bill—by saying to those who would be affected by it that if they wish, they can be exempted.

Lord Tordoff

It is the use of the words "exempted from the provisions of the Bill" that I object to. As I understand the amendment, it is purely a delaying amendment for the implementation of the provisions of the Bill and no more than that. As I have said before, the power rests with the Secretary of State to use what I believe is a pejorative term. To use the words, "To exempt them from the provisions of the Bill", is totally to misunderstand the meaning and the intention of this amendment.

Lord Carmichael of Kelvingrove

This has been a most interesting amendment in that it has attracted so many noble Lords and noble Baronesses to discuss it. I should first clear up a point raised by the noble Baroness, Lady Carnegy, when she spoke about Strathclyde. I had said merely that it may be necessary to consider special measures to protect a local rail service in certain areas. The situation has been put to us because of bus competition. I mentioned Strathclyde as an example and said that there might be a conflict about a railway concern. It is correct to say that we are not considering this. My view is that the good traditions of the House shall be upheld. The Bill has been accepted from the other place and there will be no wrecking amendments. But we believe that the Bill is of such major importance that it is better to have a smooth transition to the system that the Government seek, despite the fact that we are not happy about the system, than that there should be a total mix up and mess when deregulation comes.

I do not believe that this is a wrecking amendment. I wonder, in fact, whether it is not an amendment to fit a circumstance in which the Secretary of State may himself want to use it in some instances: if, for example, he found that he had representations from local authorities—not in the way that I am perhaps suggesting, which is that the official local authority will make representations to him, but from the technocrats in the local authority (and I do not use those words pejoratively; I am speaking of the experts in transport)—who said, "There is a problem here". It may be in Mersey or in Tyneside, in a rural area or in any place. They may then, through their usual channels, suggest to the Secretary of State that a little alteration of time may be required before they can implement it.

I was amazed at being let into one secret. I had never imagined the noble Lord, Lord Peyton, sitting in his chair at the Ministry of Transport worried about some local authority asking him to take account of their views, and his accepting that as a diktat from that local authority. It does not fit my picture of the noble Lord, Lord Peyton.

I think it really means what it says—"shall take account of the views". I should imagine that in statutes there are many instances, as noble Lords have asked me, in which it says that the Secretary of State "shall take regard". It is not even as high as that. It is, "shall take account of" the views of the county councils or other people.

I would certainly say that in this particular Bill we are dealing with something which is different from a general matter. We are not saying, for example, that all medicines should be banned, or that a single diktat from central Government will have an even effect all over the country. We are dealing with peculiar, specific, different, local circumstances which have been built up by trial and error over the years, and therefore it is not something which can be totally and uniformly decided upon. I do not think it is asking too much to say that transport has the right to be considered since it was built up this way—not to avoid the Bill, but merely to say to the Secretary of State that we have a very peculiar situation here. I should imagine that many of the appeals could be dismissed by the Secretary of State very quickly. There will be a very few where, I believe, the Secretary of State himself would agree that certain special circumstances pertain in certain areas. I am sure that when we get to the point of implementing the Bill the Secretary of State will find this. This is not a wrecking amendment. In the interests of progress and in view of the fact that we still have other stages to go and amendments which are coming from the Government at a later stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 4: Page 1, line 9, at end insert ("—

  1. (a) in trial areas designated in accordance with section (Trial areas) of this Act; and
  2. (b) in any other area except London only after the results of monitoring of passenger transport services in trial areas have been reported to both Houses of Parliament, and the Secretary of State has made an order which shall be subject to approval by each House.").

The noble Lord said: I think it may be for the convenience of the Committee if, in moving this amendment, I speak also to Amendment No. 10. Amendment No. 10: After Clause 1, insert the following new clause:

("Trial Areas.

.— The Secretary of State may, after consultation with the relevant authority make an order (in this section referred to as a "designation order") designating as a trial area any area consisting of the whole or part of the area of that authority in which the provisions of sections 6 to 9 of this Act shall apply. (2) At least two trial areas must be designated in each of which there is a population of more than 250,000 and one or more significant urban centres. (3) The designation order shall specify the area which has been agreed with the relevant authority as being appropriate for the purposes of a trial area. (4) A designation order shall apply for a period of one year unless varied or revoked by the Secretary of State with the agreement of the relevant authority. (5) A designation order may be made either—

  1. (a) on application to the Secretary of State by the relevant authority; or
  2. (b) by the Secretary of State in pursuance of the requirements of subsection (2).
(6) For the purposes of this section a "relevant authority" is—
  1. (a) in a Metropolitan County in England or the Strathclyde Passenger Transport area in Scotland, the Passenger Transport Authority together with the Passenger Transport Executive;
  2. (b) elsewhere in England and Wales, the County Council; or
  3. (c) elsewhere in Scotland, the Regional or Islands Council.").

I seek to persuade the Committee, first of all, that there has been no adequate trial of the experiment which is proposed in this Bill and that the evidence which is adduced by the Government for deregulation cannot properly be adduced from the experience that we have had so far; and, secondly, that it is contrary to sound business principles that we should be making this very bold experiment—and I say that in no pejorative sense—without adequate evidence as to the likely effect on the operators, on the local authorities and, above all, as a number of noble Lords have said, on the passengers.

First of all, as to the validity of the existing trials, we have had trials in Hereford, a city of 47,000 people, and its contiguous rural area, and we have had trials in Devon and in Norfolk, which have both been referred to. Really, they have had virtually no effect on subsidy, but they have had damaging effects on bus services. The Transport and Road Research Laboratory, in considering those trials, has come to the conclusion that any of the changes which took place could not necessarily be associated with deregulation.

5.15 p.m.

Lord Bruce-Gardyne

Surely it would be for the assistance of the Committee if the noble Lord could spell out precisely what he meant when he said that deregulation in the case of Devon and Norfolk had had a damaging effect, a specifically damaging effect, on the availability of transport in those areas.

Lord McIntosh of Haringey

The evidence is in the reports of the Transport and Road Research Laboratory. Unfortunately—and this is a point which I wish to take in favour of the amendment and against the Bill—none of the reports from the TRRL is yet a final report. I think that the noble Lord, Lord Bruce-Gardyne—and I am sure the Government will not deny the fact—will find that in Norfolk, at any rate, there has been a significant reduction in the number of bus services. The noble Lord the Minister, in an earlier speech, made references to savings in local authority subsidies. I asked him at that time whether he could find any evidence for it. I should be interested to know whether he has yet been able to secure that evidence; but certainly the TRRL have not confirmed that the expectations of the experiment have been achieved. I have to put it in that negative way at this stage. I am sorry I cannot be more positive. The facts will be no more positive to the noble Lord.

As far as Hereford is concerned, we are talking about a city of 47,000 people with its attendant rural areas, and we are talking about an experiment which as yet has had only an interim report. It is an experiment in which there were additional resources put into the bus services in those areas, but all but one of the independent operators which entered the experiment have already withdrawn and the last independent operator, I understand, has elected to go for trial by jury on charges relating to his public service vehicle licence.

As far as one can see, it is not a particularly convincing or encouraging experience from the trial periods carried out so far. I would remind the Committee that the trial periods themselves arose from the Transport Act 1980, which was the legislation of this Government, so it is not an imposition of any wild socialist imaginings. The most important fact is that the trial periods have been only in rural areas, or relatively rural areas, whereas it is intended that without any further trial this Bill shall apply to all our urban areas and our metropolitan areas except Greater London.

I cannot imagine that any noble Lord will think that the operating conditions in our metropolitan areas can conceivably be judged from trials, however effective they may be, in rural areas. Indeed, the Government have recognised that by so far exempting London from the trials. The London experiment has been carried out with a great deal of caution. A much more limited degree of experimentation is being permitted; far less, even, than collective tendering. There is no immediate intention to speed up or overturn the London experiment. Indeed, I see on the Marshalled List an amendment from the noble Baroness, Lady Gardner of Parkes, who has a great deal of experience as a member of the GLC, proposing that there should be no further change in London for a period of five years after the passage of this Bill.

Therefore, it really cannot be argued that there has been any effective experimental work done into the likely effects in practice of the many and complex changes which are proposed as a result of this Bill. That is not only a mistake in transport terms but is also a mistake in more general business terms. I am sorry to see that the noble Lord, Lord Nelson of Stafford, my former employer, is no longer here, because I am sure he would confirm from his business experience that at least 90 per cent. of the new ventures launched on the market fail, in many cases not because they are not good ideas but because the whole process of marketing, pricing, packaging and all the steps required for a successful launch have not been adequately carried out.

I wish to urge upon your Lordships that a proper business sense would say that we should be test-marketing these proposals and that we should be looking at the experience in practice in two trial areas. I should have liked there to be more than that, but, as usual, I am modest in my demands. The two test areas should be in urban areas, and they should test the very different operating conditions which prevail in urban areas.

My professional judgment leads me to say that the period of one year, as proposed in the amendment, is not long enough. The experience of Hereford has been that after an initial period of euphoria there have been dramatic changes which are not yet complete, and the conclusions drawn from the Hereford experiment after six months, or even one year, may well be very different from the final conclusions reached at the end of the trial period.

Again in an attempt to be as helpful as possible to the Government, this amendment now says that there should be a trial period of only one year. I say with all the force at my command that unless this modest demand is agreed to the chances of a damaging unregulated experiment—of the swing of the pendulum going backwards and forwards between over-provision and under-provision and between over &-pricing and under-pricing—in our bus services are very great indeed. I do not believe it can be said that a delay of one year for this purpose is anything other than a constructive amendment. It is not a wrecking amendment, and I hope that the Government, since they set out to be a Government of sound business principles, will recognise the force of the arguments I have put forward. I beg to move.

Earl De La Warr

I am extremely grateful to the noble Lord, Lord McIntosh, for moving this amendment. It has my name to it because I believe it to be an amendment of the most fundamental importance. Let me at the start say my piece (warned, perhaps, by what my noble friend Lord Nugent said about the last amendment) about whether or not it is a wrecking amendment. However, before giving your Lordships my reasons, I would ask you to accept my assurances that had I believed it to be a wrecking amendment it would not have had my name attached to it; nor would I be speaking to it.

The noble Lord has talked in very cogent terms about the business principles that should be looked at when we are considering this Bill, which deals with the reorganisation of a whole industry; and no industrial reorganisation that I have ever come across has been done without very careful consideration of the financial and marketing implications that would stem from it. I shall try to show your Lordships a little later that, whether or not it was possible, the necessary projections of what might happen have not been made, with the result that we are taking, in my view, quite unjustifiable risks with the lives of possibly many millions of people—people who use buses every day because they have to get to work. Sometimes they are people who live in dense areas and sometimes they are people who live in areas served by buses which might be called marginal or totally loss-making. In our opinion, many of these people are going to be uncertain, to put it mildly, about when, whether and where they are going to see a bus to take them to work.

Perhaps I could sum up for your Lordships' benefit the nature of the package we are considering, which is to come into effect, unless there is any change, on 1st October 1986. What happens on that day? First, road service licensing ceases, and on the same date new competition, provided it has been registered, begins. We do not know where it will operate or how much of it there will be. We do not know whether it will affect the major routes or whether it will be a quite different type, with small men seeking to fill gaps in rural services that have recently, or indeed for some long time, been abandoned.

At the same time, on the same date the Government subsidies to the networks cease; and arising out of both those circumstances and on the same date the services that the networks have deemed to be either marginal or loss-making stop, too. They have to, because they have not been registered, and to run them would therefore be outside the law. We know enough to think we are justified in believing that in many cases up to 30 per cent. of the mileage will be abandoned by the networks. I do not say that it will be 30 per cent. of the services, but it will be a very large percentage indeed.

What else will happen on that date? By that date, we are told, there will be tendered services ready to take the place of those services which have been abandoned by the networks, because the local authorities will have fulfilled their duties and they will have made contracts with enough people to ensure that the services do not just disappear overnight. But this is where the question mark comes, and the Bill itself lays upon the local authorities the duty of filling those services which are in their opinion "appropriate".

What does that mean? It means that the local authorities have had to make a judgment between the services they would like to fill, because of their varying degrees of social priority, and the money that is available to them to fill those services. There lies, does there not, an enormous area of uncertainty? Thousands of routes all over the country may or may not be filled. The theory is that the abandoned routes will be filled by county council routes that have gone out to tender, and those which are not filled in that way will be filled by commercial operators operating without subsidy. They will not be the networks because the networks have just abandoned them. Your Lordships will see therefore that there is an enormously high degree of uncertainty and risk for a very large number of people as to whether they will see their bus after 1st October.

We do not even know how much money will be made available. We know that the Government are in the business of cutting their grants, and this must make it even more uncertain for the would-be passenger who hopes to see his bus coming along as before. It really is a leap into the unknown. We have no projections, and perhaps they are impossible to do. We have no experience; how can we have had?

5.30 p.m.

I shall not weary your Lordships by dealing with the inadequacies of Hereford. That does not count as a trial area in any sense that I understand. Dare we inflict on the public policies which can cause such massive uncertainty to their daily lives? My answer to that is quite clear: yes, we dare but on one condition and one condition only. That is that we do full-scale test trials—test marketing, if you like—in certain large urban areas and the contiguous rural areas, because the rural areas are the ones about which there is so much doubt. I hardly know a county council, whether or not it has been in favour of deregulation, that has not expressed severe doubts as to whether it would have the money to fulfil the obligations to be put on it.

Let us now for a moment consider what we can learn for the future in regard to the reorganisation which is to take place by starting test areas that are set up to be analysed with a view to seeing which parts of this Bill are good and which parts must be amended. Albeit that a year is a short time, we can get much information about how much mileage is likely to be abandoned in various types of areas. We can therefore find out how large is the duty that is to be put upon the local authorities to fill the gaps. We can find out much about the nature of the new entry. Will they be big people? Will they be small people? Will they want to take on the majors in the fat routes in the cities, or will they run on Sundays because nobody else will? We can find out a lot about the cost of tendering. That will make the job of the Government a great deal easier when they come to work out whether they can find the money, and whether the taxpayer and ratepayer together can find the money, to do these jobs. We can find out a great deal about how the traffic commissioner performs when he has these vast extra duties put upon him. We can find out about the wisdom of giving duties to the traffic commissioner which are badly wanted by the county councils which have hitherto had them but will no longer have them. This is an argument which we shall be having today. But here is one of the things that we can find out by experience. Finally, we can go some way, can we not, to measuring the real extent of the risk to rural areas which troubles so many of us so much.

I have no doubt that if the Government will accept this line of thought—that the Bill, like any Bill, can be changed, either in minute ways or even in major ways—there is everything to be gained, whereas with a leap in the dark there is so much to be lost. These are the reasons why I beg your Lordships to consider carefully the need to move, as we have done in other legislation during the lifetime of this Government, step by step, not in one gigantic leap. If the Government do not feel that they can support this, and if the noble Lord, Lord McIntosh, decides to press the amendment, I beg your Lordships to give it your support.

Lord Bruce-Gardyne

I have listened with great interest to what my noble friend Lord De La Warr has had to say in support of this amendment. He accused the Government of taking a leap in the dark. I think we have to consider the alternative. My noble friend expressed anxiety, which is obviously shared by a large number of your Lordships, about the risk involved. As he put it, if this legislation is carried without an amendment of the type which your Lordships are now discussing, those in country areas will risk the prospect of their buses disappearing. But what is the prospect that they face at present? Does not the whole trend of past experience with bus services, if we extrapolate it, suggest that those services will disappear if we continue in the way we are going? I submit that the choice is not between what my noble friend describes as a "leap in the dark" and the prospect of clear and continuing services, particularly for the rural areas. It is more a choice between what the noble Lord may wish to call a leap in the dark and a journey down a tunnel without any end and only darkness. The prospect is that, particularly in the rural areas, the bus services will softly and silently steal away.

I listened with great interest to what the noble Lord, Lord McIntosh, said in introducing this amendment. I apologise for interrupting him, but I was particularly interested by the statement he made that it was established that the trial areas which had already emerged under the 1980 Act—and I hope I am not misquoting him—had led to a diminution in services. I am still by no means clear where I can obtain that evidence.

So far as the trial area of Herefordshire is concerned, my understanding is that in the City of Hereford, after a period of very considerable and vigorous competition, there is still competition where there was none before, while in the rural areas covered by the experimental scheme the services have not diminished but have increased by some 2 per cent. I admit that it is not much, but that is against the trend of what has been happening elsewhere in the country in the rural areas.

Lord McIntosh of Haringey

If I were sitting on the Front Bench opposite I could say, very happily, that I would write to the noble Lord, and squads of civil servants would produce the evidence for me. All I can say to him is that he ought to read the reports, even the interim reports, of the Transport and Road Research Laboratory on these experiments. I was not saying that the services in Hereford had reduced. I was saying that they had reduced in Norfolk, and that not a single new bus service had been created in Hereford.

Lord Bruce-Gardyne

On the second point, my understanding is different. There has been an increase, admittedly a very small increase, in the services in the rural areas around Hereford City. So far as Norfolk is concerned, again my understanding is that what was proposed by the Eastern Counties bus service before the trial area was introduced was that if the local authorities wished the existing services, or anything like them, to be maintained, they would have to increase the scale of subsidy by£1 million. However, virtually identical services to those which Eastern Counties offered before the trial service was introduced are now in existence, but on a scale of subsidy of £650,000, which is, by any standards, a very considerable saving.

In so far as there has been a reduction in services in Norfolk, again it is my understanding—and the noble Lord can correct me if I am wrong—that the reduction in services is virtually identical to that which the Eastern Counties bus service was proposing, in any case, before the trial system was introduced, but with a vastly reduced level of subsidisation. So far as Devon is concerned, my understanding is that the impact of the trial area has been small, but there is again no evidence of which I am aware that there has been a diminution in services over and above what was expected to occur as a result of the introduction of the trial.

The noble Lord said that the trial areas are quite inadequate in scope. I readily agree with my noble friend Lord De La Warr that this could not be classified as a wrecking amendment, but more perhaps as a delaying amendment. I am bound to say that the case for a further delaying amendment, in the light of the trials that we have already had, seems to be somewhat tenuous. On the previous amendment, the noble Lord, Lord Beswick, drew attention to the fact that there had been only these three volunteers to run a trial area under the terms of the 1980 Act. I do not think it is normally in the custom of regulatory authorities voluntarily to take themselves out of regulation. I somewhat doubt, for instance, whether the noble Lord, Lord Williams, who I was happy to see with us earlier today, would still be running the Price Commission today if it had not been the decision of the Government that there was no need for, or purpose in, retaining the services of that excellent body.

5.45 p.m.

I do not see anything remotely surprising about the fact that there were so few volunteers to set up trial areas under the 1980 Act. If anything, it is rather surprising that there were even three volunteers. It is not in the nature of such bodies to surrender the powers, privileges and patronage which come with the rank that they enjoy. I do not dispute that they also believed, and believe, that, as my noble friend Lord De La Warr said, if they took the hazard of the abolition of regulation in their areas, and particularly in the rural areas, this might have alarming and disastrous effects on the services in those rural areas—

Earl De La Warr

My noble friend has been talking much about the trial areas, and about Hereford in particular. I think one point that none of us has taken is that these trial areas were not designed to be trial areas for the purposes of what is now envisaged. The main thing that we had in Hereford was that other operators were allowed to come in and run routes, but that is only part of this package which we call deregulation. It does not deal with the effect of the removal of subsidies from the networks. It does not deal with the efficacy of the tender system. So it is really only one-third of a trial, and, to that extent, whether the bit that they did succeeded is partly irrelevant, because the nature and purpose of the trial was so incomplete in terms of the purpose behind this Bill.

Lord Bruce-Gardyne

I have a nasty suspicion that we would not be able to devise a system of trial areas which was deemed to be complete to the satisfaction of those who have grave reservations about the whole concept of deregulation. All I can say is that, if one reads the evidence of the experience of the trial areas and listens to those who have operated within the trial areas and who have represented the interests of the trial areas, they seem to have been a most remarkable success, and that applies, in particular, in the case of Hereford.

I was very interested in what the noble Lord, Lord McIntosh said. He totally failed to mention what has happened to the fares. The fares are rather important to the customers. It is perfectly true, as he ponted out, that the majority in the City of Hereford, including one of those in competition with the Midland Bus Company, have withdrawn. Nevertheless, although the fares have somewhat risen, it is my understanding that they are still 25 per cent. lower in cash terms than they were before the experiment began. So, to my mind, we have already seen a comparatively wide range of trials. In fairness, under the terms of the 1980 Act I do not think we could have expected to see more trial areas coming forward. I hope very much that my noble friend will resist demands for a further delay in giving to other parts of the country the benefits which these areas have already begun to enjoy.

Lord Tordoff

Surely in those last few words the noble Lord has put his finger on the problem: that under the 1980 Act we could not have expected wider trials than we have had—and he has adduced reasons for that. But what we have to debate is whether those trials were, adequate for the purposes of this Bill, because both the noble Lord, Lord McIntosh, and the noble Earl, Lord De La Warr, have said they were not representative trial areas for the sort of deregulation which is contained in the Bill, either in the quality of the deregulation which was introduced in Hereford or in the type of area which was being dealt with. The noble Earl has also said that it was only a partial experiment, in the sense that total deregulation did not take place. It was also only a partial experiment in that the county council played a very large part in administering what was going on, which in future it will not be allowed to do.

The noble Lord, Lord Peyton of Yeovil, mentioned the amount of correspondence noble Lords have received. I have a letter here from the County of Somerset, which is worried about the bus services in the area which he used to represent. It draws attention to the Merriot/Crewkerne/Yeovil route, which is at present operated privately and for which Southern National may wish to compete. If they are successful, various villages such as Hinton St. George and Lopen, which the noble Lord well knows, might be cut off the route because it is in the interests of the operators to get as quickly as they can along as short a route as possible.

There are all these factors even in the rural areas which have had a certain amount of experimentation such as Hereford and Worcester. I do not know whether the noble Lord who has just spoken was in the Chamber for the Second Reading debate but I said then that I had received representations from councillors in Hereford city. They said that what was going on there in the early stages was like a Glasgow ice-cream war. I doubt whether we want to replicate that up and down the length and breadth of the land.

One field which has not been dealt with so far and about which I worry greatly is the suburban areas. Not only the rural areas are at risk. There are large suburban areas around all the minor and major cities and towns of this country which are at risk under the Bill and on which we have no empirical evidence at all. Nobody knows what will happen in the suburbs of Manchester, Liverpool and Sheffield and the smaller towns and cities of the country. We can make a guess about it. The guess that I would make is that a lot of services on the periphery of those cities will disappear. Parts of routes will go because they are unprofitable and because nobody wishes to tender for them. Services on Sundays will go. Services at certain times of the day and night will go. It is these things that we need to test. Noble Lords may deny that what I am saying is true but neither you nor I have the evidence on which to judge. The purpose of this amendment is to have trials so that we can have more information on which to make a decision in relation to the Bill as a whole. It has my wholehearted support.

Lord Beloff

There is something peculiar, again, about this amendment, because the noble Lord, Lord McIntosh, who moved it, began by putting forward a view of the experiments that have taken place which is obviously a view different from the view held by the Government and by my noble friend Lord Bruce-Gardyne. I would not go into that argument but what it does show is that an experiment on a relatively small scale in a limited number of areas is hound to lend itself to differences of interpretation. Yet the noble Lord goes on to suggest that the only way forward and to get over the leap in the dark, as it is called, is to have some more experiments.

Why should we believe that the results of these experiments would be so conclusive that we shall be able to project the future in a way which we now cannot? This is the more so since, as the noble Lord, Lord McIntosh, pointed out, they are to be made in major centres of population where the network of passenger transport, the nature of the demand and the nature of possible supply is bound to be more complex than in Herefordshire or in Norfolk, and are to be made for only a single year. In dealing with an experiment which, if the noble Lord is correct, will prove that the Government are wrong and that deregulation is not the answer to our ills, how is it possible or conceivable that the decisions which are taken by the possible subsidising authority can be clarified to an extent to which in a year's time the Secretary of State would know something very important which he cannot at the moment deduce from the information available to him?

It seems to me that if the noble Lord, Lord McIntosh, is serious, then this is in a sense a wrecking amendment, in that to make these experiments of even limited use they would have to be prolonged. If they were prolonged, the coming into effect of the Bill would be so postponed that we might need to rethink the whole thing. Indeed, as my noble friend Lord Bruce-Gardyne, has reminded us, we might have increasingly few services in existence to worry about. Therefore it does not seem to make a great deal of sense to say that the answer to our dispute over the existing experiments is to have new ones, particularly in the time-limited form which is proposed for them.

Furthermore, as has been pointed out, different parts of the country have different needs. When I talked about a patchwork I was talking about a legislative patchwork, not a patchwork of supplies of transport, which is bound to be the case. I find it difficult to see that two areas—that is, about 250,000 people—could be selected in such a way that their experience would be conclusive for other areas of similar size where the conditions might be different and where the needs of the passengers might be different.

I come back to the point made by the noble Earl, Lord De La Warr, when he repeated his Second Reading speech in dealing with this amendment. The noble Earl amended it in one way by talking about the needs of passengers. As someone who has all his life taken a bus to work, I still think that that is the yardstick and that the passengers should be allowed to decide.

Baroness Seear

We have had the most extraordinary arguments going on this afternoon. I would normally hesitate to challenge the logic of the noble Lord, Lord Bruce-Gardyne, but he seemed to be saying that because the present scheme is imperfect—I do not think that any of us is arguing that it is perfect—what is produced by the Government must be right, as if there were only two possible options and not a whole variety of options that could be put forward. I do not think that the noble Lord, Lord Beloff, has ever tried to sell anything, if I may say so with great respect. We are marketing a new product in this case, are we not? The purpose of this amendment—

Lord Beloff

The noble Baroness is quite wrong. I sold a new university to the British public. Anyone who can do that knows something about salesmanship.

Baroness Seear

I do not think that the noble Lord had to test-market it before he did it. What we are arguing about here is not that these experiments will show that what exists is perfect and what is proposed is wrong, but that by experimenting you will learn that some of the things in the proposal could be improved.

I was once involved in the making and selling of shoes. You do not say: "This is a rotten shoe; we are not going to make it—throw it out of the window". You say, "Because it does not fit in this place or it is a little too high there, we will adjust it". As I understand it, that is the purpose of the amendment—to find out how you can improve a scheme which is highly complex, which is making very big changes and which will affect a large number of people—to make the scheme as good as it can be. That is all we are saying. We want to find out how it can be made better by test-marketing it and seeing what happens.

Baroness Carnegy of Lour

What the noble Baroness is forgetting is the nature of these experiments. A local authority which is trying to regulate bus services in an area is dealing with the big boys and the little boys. In the Hereford area the big boy has won. I think my noble friend said that there is now only one competitor left. I think that is right. The Midland Red is reigning supreme but with a reduction of 25 per cent. in fares.

If there is an experiment, the big boys are much bigger within the small area of the experiment than they will be if the Bill becomes law, because then it will be the whole country. In that respect it simply is not legitimate to assess the experiment. The effect of the big boys on the whole system will be completely different.

The noble Earl, Lord De La Warr, who speaks with great experience from within the nationalised bus undertaking, explained to us how it seems to the undertaking; I can understand it. Of course it would love these experiments. They would prove a great many things. But what we are trying to get at is lower fares and more buses for the public. The person he mentioned who is looking for his bus to come along tomorrow, and the next day, and the next day, will certainly not see that on present trends. Quite frankly, that element in the experiments has not been spoken about at all, and from my experience it is the most important of all.

6 p.m.

Lord Shepherd

The noble Baroness referred to big boys and small boys or big girls and small girls in a competitive scene. I am certain that noble Lords on the other side of the Chamber who have been in business will know that there are occasions when a small firm has great advantages over a big company. A big company has inherited overheads. I suspect that one of the difficulties of Norfolk and Hereford is inherited overheads over many years. A big company has this competitve advantage: it can survive the times and the tensions. On the other hand, a small company operating from a close base has great advantages of costs and productivity.

I wish to refer to the noble Lord, Lord Bruce-Gardyne; I hesitate, I hope I have his name right. He referred to me as Lord Beswick. I do not think that my wife would recognise me as Lord Beswick. The noble Lord referred to savings in Norfolk of some £500,000. I think that he ought to look at that figure a little more carefully. The figure that he quoted was the figure that Eastern Counties gave to Norfolk as a whole and not for just the trial area. As chairman of the National Bus Company I required Eastern Counties in 1983–84 and 1984–85 to break even on the basis of a statutory duty imposed upon the group as a whole by the Government. I do not think that the situation in Norfolk has anything to do with the trial area. Eastern Counties withdrew from certain services with the agreement of the county. Independents came in, and they were real bus operators. What is significant is that the subsidy that they receive for running the services which Eastern Counties gave up is more than Eastern Counties received for operating those routes. But at least some savings were made.

The noble Lord is quite correct that in Hereford there has been an increase of some 2 per cent. in what might be called the country areas, but that is a marginal figure. But in Hereford they were not operating the system proposed in the Bill. Hereford county said that any operator that tendered to run subsidised routes, having been accepted, would not run on any other route that it was subsidising. In a sense it was protecting to a degree its own investment, which is quite different from the provisions in the Bill.

With regard to the city, a great deal has been said, particularly in another place, about the might of the National Bus Company. The truth is that the number of vehicles that went into Hereford within the competitive system was nine—nine!—five of which came from Midland Red (West) and were taken out of that organisation. There was never a question of subsidy being received from outside the Midland Red (West) Hereford operation. There was no way in which subsidy received in Worcester could be transferred across the boundary to support bus operations in Hereford.

A lot has been said about Hereford, and I do not want to say any more, but perhaps I may conclude with the words of Mr. Roberts, the city surveyor of Hereford. In his report he deals with the question of fares. The noble Lord, Lord Bruce-Gardyne, said that fares went down; yes, but then they went up. Our services were basically the same. There were more vehicles running, but they were running at about the same time. The independents were running on the old timetable of Midland Red (West). In other words, the passenger had available two vehicles running every 15 minutes, but those were the old timetables of Midland Red West.

The concluding remarks of Mr. Roberts are of very great importance: Deregulation in the context of the Hereford experiment has created short-term unstable benefits, has arguably put passengers at risk and created major environmental problems in the town centre. It has been wasteful of resources and as yet the outcome is difficult to determine. The experiment has little to commend it. Whatever gain can be claimed could have been achieved under the relaxed licensing laws of the 1980 Act with far fewer disadvantages". That was the judgment of the city surveyor of Hereford.

Lord Bruce-Gardyne

I immediately humbly apologise to the noble Lord for so inappropriately naming him. I shall try not to make that mistake again. He said that in the city of Hereford fares had gone down but they had then gone up, which I acknowledged. But having gone up, is it not the case that they are still 25 per cent. lower in cash terms than they were before the experiment was undertaken?

Lord Shepherd

I am not terribly sure whether it is 25 per cent., or whether Ministers have said 25 per cent. in terms of the improved productivity of Midland Red (West). There is no doubt that it achieved a 25 per cent. increase in productivity not only within the trial area but also within the whole of the area for which it is responsible.

The noble Lord, Lord Beloff, criticised my noble friend for moving the amendment proposing one year. He is quite right. But had he moved it for three years one can imagine that the noble Lords, Lord Peyton, Lord Nugent, Lord Boyd-Carpenter, and many others would have said that it was a deliberately wrecking amendment and that one was putting off a decision until the next General Election. It is one of the problems when drafting amendments that one is always open to hostage. My noble friend is seeking to establish it for one year. Here, I agree with the noble Lord, Lord Beloff, that one year is not enough. Certainly my noble friend will agree with me—and even the noble Lord, Lord Bruce-Gardyne, in quiet reflective mood, would agree—that the three trial areas bear no relation to the circumstances in many of the other urban areas of the United Kingdom; certainly the metropolitan areas.

What have the Government to offer other than their belief in competition? They can look to only three countries that have a system to which they are moving. All of them are third world countries—one of them is Chile. The noble Lord, Lord Beloff, should come with me to Hong Kong, which I know very well. It is the height of entrepreneur activity, and has regulation for the big buses. It used to have complete carte blanche for free enterprise in every respect for what were known as public light buses—small buses with 16 seats. Now they are changing, because of the circumstances, to franchising and regulation. What the Government are doing is, in truth, going against all the trends of a society similar to our own, and resting upon two third world countries—not that I am denigrating those two countries, but their circumstances are very different from our own—and three trial areas that have no connection at all.

I hope that my noble friend will press this amendment to a Division because if the amendment is passed that would at least establish an opportunity to have greater knowledge and understanding of what is involved.

Lord Teviot

I agree with every word of the outstanding speech made by the noble Lord, Lord Shepherd. Much has been mentioned by various noble Lords about the Hereford trial area. I shall concentrate on the city of Hereford. Noble Lords have mentioned the fact that there was 38 per cent. less subsidy. The noble Lord, Lord Shepherd, referred to the fact that what happens under the Bill is not the present situation. That is perfectly correct. However, I must make one or two comments as I am one of the few people who have visited Hereford; admittedly last September, but that might have been a period when there was more competition and more in line with what the Government are seeking. Since then it has very much declined.

Some of the people I visited who politicians seem to have ignored were the City Fathers of Hereford; the district council as it now is. I was given a small reception by his worship the Mayor and a few other councillors of all political persuasions. To a man they regarded the trial area as abysmal and dreadful for their town. The noble Lord, Lord Shepherd, referred to the excellent report by the surveyor so I shall not repeat exactly what he said, but there are one or two points to make. It is perfectly true that there was no competition as one might have expected or extra services. There was, instead, a 1920 situation. A competitor might have been slightly more foresighted and put in a service on the quarter-hour betweeen a half-hour service. That did not happen. Two buses came down the road exactly at the same time. In fact, one of those private operators had a timetable—it was theoretical but that is another point—but withdrew services when it suited him to do so. Hereford enjoyed a cup tie with Arsenal football club (or Spurs, I forgot which), and he withdrew his services from the town and sent the buses to the match.

6.15 p.m.

There has been much criticism, again, of the "big boy". That, also, is not entirely true. In fact, it is not true at all because if a private operator failed, he did so because of his own inefficiency. In the main their vehicles were unsafe. It was nothing to do with Midland Red (West). A certain Minister said that there was predatory pricing by Midland Red (West). That is not the case. According to the Transport and Road Research Laboratory report it was on only two routes that the Midland Red (West) lowered its fares first. In the main, the competitors lowered fares first and Midland Red followed.

A point that has not been covered is the congestion in Hereford. It is an ancient city. I was there on market day at about five o'clock. All round there were buses queueing up, exuding fumes, leap-frogging and hedge-hopping and everything else. No one seemed to know where the buses were going. There was a timetable showcase just outside the town hall which has been broken. A stranger in the area would not have a clue as to where he was going or what he was doing. There was utter chaos.

Before I sit down I must come back to the amendment. This asks for two areas of at least 250,000 people. My noble friend Lord Beloff says he cannot see much point in it. But this Bill is not dealing entirely with rural buses. There are people living in rural areas and others living in large urban areas and one cannot equate the needs of rural areas with urban areas. As my noble friend Lord De La Warr said, that is an utter leap in the dark. It must be well and truly tried. My noble friend Lord Bruce-Gardyne referred to that but I do not think he mentioned urban services.

This amendment is absolutely essential and I hope that your Lordships will be persuaded to support it.

Lord Sandford

Perhaps I may be allowed to say a few words before my noble friend replies to the debate. I start with a comment to my noble friend Lord Bruce-Gardyne. I do not think the choice is between doing nothing at all, letting these dismal trends continue, or having the Bill in its present form. The choice with which the Committee has to wrestle is whether this great lunge towards total abolition of regulation is appropriate or whether we should not stick to our manifesto commitment to embark on a further measure of relaxation, carefully tested and tried.

As I said a short while ago, my noble friend wrote to me following Second Reading describing a number of studies and pointing out their limitations. He concluded by saying that by far the most compelling evidence comes from the areas where competition has actually been tried. The only area of any substance is Hereford. I have the full report from the borough surveyor of the trial there. It has been sufficiently quoted for me not to weary the Committee with it. The fact is that it was designed for a different purpose. It took place in a town which is far too small to be representative and it has a whole number of very undesirable results. The fact that the fares went down is not of any great consequence because they are now rising and there are no competitive operators to stop them rising further. The effect of competition there shows what would happen with proper competition, but it will not last. By the time we reach the next stage fares will probably have risen still further.

The point I wish to stress is that even if this amendment is not appropriate, it shows that there is certainly not enough evidence to justify the untried and high risk policies contained in the Bill. We may not want to introduce any further doubt in an industry already suffering seriously from the uncertainty created by this legislation. It is important to look at ways in which we could proceed more carefully, step by step, testing and trying out measures as we go. I hope my noble friend on the Front Bench will be able to respond to that suggestion in terms which would not require the noble Lords whose amendment this is to press it to a Division.

Lord Belstead

I hope that my noble friend Lord Sandford will not feel that I am being unduly unhelpful when I say that I really cannot respond to that particular plea. I think that this is a fundamental amendment and, if we disagree on it, I think that we ought to go through the Division Lobby. I must say that I am surprised that the noble Lords who have moved these amendments feel that the present state of the bus industry is such that it is desirable to postpone any attempt to put right the inbuilt problems of local services. If I may say so, I think that my noble friend Lady Carnegy of Lour was absolutely justified when she said to the Committee that it was not, as my noble friend Earl De La Warr said, a question of worrying about not being able to catch the next bus which came along. It was a question of worrying about the bus service in one's area anyway.

Of course, there are some splendid exceptions around the country, but, my goodness, with the patronage of buses having gone down dramatically, the subsidy for buses having gone up astronomically, and fares over the last decade having increased over the rate of inflation by more than 30 per cent., if somebody such as my noble friend Lord Sandford says that it is not fares which matter, all I can say is that on this particular amendment my noble friend is not in very close touch with the real world. It is for that first and basic reason that we do not believe that one can go on and on having trials. In the interests of consumers one has to try to do something about the overall structure of the bus industry.

In 1980, when the Government put forward the present trial area provisions, the situation was very different from that of today. There had been virtually no scope for any competition in local services for 50 years. Since 1980 we have seen the results of express deregulation and some competition emerging, though very slowly, on local services, and that deregulation in the three trial areas has brought benefits. If I may just repeat what I ventured to say earlier, as a Government we have never said that the trial areas provide conclusive proof. Of course, they are influenced by local conditions, the existing structure of the operators, and the history of the place. The difficulty about any trial is that people feel that they are under a microscope and they are therefore inclined to behave differently.

As to the urban trials to which these amendments attach such very considerable importance—indeed, they would make those trials mandatory—they would of course be conducted in an atmosphere of great political pressure, with both advocates and opponents seeking to claim too much from every single incident. The fact that noble Lords opposite would set only a one-year time limit on those trials would make the pressure even greater, and I do not see that that would help.

I was very interested in the points that my noble friend Lord Bruce-Gardyne made about the trial areas, because it seemed to me that, though he went into some detail, my noble friend was making one basic and valuable point, which was that in both Hereford and Norfolk ever-increasing subsidy can be halted without damage to the travelling public. In Hereford the county council has spent 38 per cent. less on its support, and local services have gained 2 per cent. in bus mileage, and in the city, so I am informed, up to near the end of 1984 there was an astronomical increase of over 70 per cent. in bus mileage. I do not know the present figure, but I am informed that there are more bus miles now being covered in Hereford than there have been before.

Perhaps I may just say to my noble friend Lord Teviot, and to the noble Lord, Lord Tordoff, sitting opposite, that when both the noble Lords referred to the inability of the ancient city of Hereford to cope with the increased traffic which was engendered by deregulation, this situation is of course precisely what Clause 7 of the Bill which we will be coming to in a little while is designed to deal with.

There are two particular aspects about the trial areas to which I think I must refer before I finish. The first arises from an exchange which I had with the noble Lord, Lord Mackie of Benshie. I feel that I may have misled him, myself, and indeed the House, for which I apologise, and that I must put the right answer on the record. In essence, the noble Lord asked me whether operators who had tendered for subsidised services were afterwards open to free competition, and I said that I believed that they were indeed operating in a freely competitive market. I am advised that the county council wrote a clause into subsidy contracts restricting those operators from competing against other subsidised services, and I rather guess that this is what the noble Lord had in mind. However, I am advised that there was no restriction on any other operator who chose not to run subsidised services, and, as I understand it, Midland Red (West) themselves chose in the first tendering round not to go for subsidy. I am told that operators of subsidised services have run with competition on those parts of their routes which lead into the city of Hereford and that competition has not in fact undermined those contracts.

The other matter that I should like to refer to is the situation in both Devon and Norfolk. As I understood him, the noble Lord, Lord McIntosh, was suggesting that there is evidence that there has been damage in Devon because of the trial areas. I understand that the Transport and Road Research Laboratory report does not contain any material suggesting damage to services in either Devon or Norfolk. In Norfolk—the noble Lord, Lord Shepherd, spoke about this and I should like to have a closer look at what he said—my information is that reductions in rural services were the result not of the trial area but of what has been happening throughout the country in rural areas, where by and large we have seen this appalling spiral of decline in rural bus services.

Lord Shepherd

The point I was seeking to make was in response to the noble Lord, Lord Bruce-Gardyne, about the saving of 500,000. It was to that I was attributing it and not just the decline, though I agree that there has been a decline throughout the country unfortunately.

Lord Belstead

May I come to that in a second? I think that the noble Lord, Lord Shepherd, and I agree therefore that any decline in the Norfolk services in the past has been the result of county council decisions about which services they wished to continue supporting; this affected areas both inside and outside the trial areas and, as I have said, has been found throughout many parts of Britain. But as for the subsidy figures which have been referred to, I would just say that the 70 per cent subsidy reduction which I mentioned earlier in the debate this afternoon is not a figure which reflects service reductions to any real extent, which affects those service reductions that I have been talking about. The 70 per cent. reduction was obtained as a result of tendering for a broadly comparable group of services previously provided by one major operator under the network system.

I therefore conclude, if I may, that if we look at the Hereford trial area, the Norfolk trial area, and indeed the Devon trial area, we find evidence of a reduction in subsidy without harm to services. Indeed, in the Hereford area there is an increase in services. I think the difficulty that we are in is that many of your Lordships who are habitually objective have nonetheless paid no attention whatever in a deregulated system to the reduction in costs which will flow from fair competition, from operators great and small, with the resulting benefits for patronage which there would be in lower fares. Many of your Lordships who are habitually objective have paid no attention to the continuation of commercial cross-subsidy, no attention to advantages which there would be in more flexible use of vehicles under this Bill and, if I may say so, no attention to the evidence of the trial areas.

The main effect of these amendments, on the other hand, would be to delay deregulation, except in a very few areas which would be designated under the amendments, and so to plunge the industry into greater uncertainty once again. The cycle of declining services and rising subsidies would then continue all over again, and probably accelerate. That is something which the Government feel they cannot accept, as indeed they most certainly cannot accept this amendment.

6.30 p.m.

Lord Mackie of Benshie

Before the noble Lord replies, perhaps I may thank the Minister for his customarily courteous and generous admission of his mistake. May I ask him whether this does not prove, in fact, that the taking of tenders for subsidised routes is what has saved the money, not the open competiton, because, in effect, the county council introduced regulation?

Lord Belstead

Of course, this is a matter which we shall debate on subsequent amendments. I must say that I simply do not agree with the noble Lord in this particular case. If, as the noble Lord believes, he is right—we are in a free country, and he has every right to stick to his case—then how is it that it was possible to have a broadly comparable spread of services with a very considerable reduction in the money which had to come from the ratepayers' pockets?

Lord McIntosh of Haringey

It is perhaps unfortunate that we have spent three-quarters of this debate dealing with what ought to be one-quarter of the subject-matter. We have spent three-quarters of the time dealing with the trial areas which have taken place so far, and far less of the time dealing with the necessity for proper trials, if I may put it in that way. I have to spend a modicum of time on the existing trial areas, if only because I believe, like the noble Lord, Lord Belstead, that we in this Committee have a reputation for objectivity and that we ought to maintain that reputation as far as we can.

The evidence which we have on these trial areas comes not just from the sources quoted by my noble friend Lord Shepherd and others but principally from the report of the Transport and Road Research Laboratory. Without being tempted into reading page after page, I think something from the conclusions ought to be cited: The experience of unregulated competition in Hereford is not sufficient by itself as a basis for forecasting what might happen in urban areas generally… Any conclusions drawn from experience in the three Trial Areas must be qualified by the fact that they are based on a limited set of largely rural areas over a limited period of time. Furthermore, the trial areas have not been isolated from economic factors (e.g. pressure on financial resources, declining demand) which have influenced the provision of bus services everywhere… Deregulation … does not seem to be essential for the successful restructing of rural transport services. We heard that argument successfully put on a number of occasions at Second Reading.

At the end of the conclusions, it says: It appears that the present situation in Hereford must be unstable, although the eventual outcome is unpredictable. It is clearly too early to determine whether the public will benefit in the longer-term. Under present conditions, deregulation in itself may not be sufficient to allow small operators, however efficient, to compete successfully with established operators with greater resources". As I said in response to the intervention of the noble Lord, Lord Bruce-Gardyne, very early on, those are not firm conclusions of the kind that we should like to see out of trial areas. However, there are still things which can be said about Norfolk, for example. There was a net decrease of 1.3 million vehicle miles. Eastern Counties lost 2 million vehicle miles, and the private operators gained only 0.7 vehicle miles, so there was this net loss. Private operators tendered for only 26 of the 39 routes which were put out to tender, and on those 26 routes they provided an inferior service to that which had been provided before.

I do not think I need to launch myself into the maelstrom of Hereford traffic, so graphically described by the noble Lord, Lord Teviot. There, again, the evidence is not as some noble Lords would wish us to think. It certainly is not—and here we come back to the important three-quarters of the debate—such as to encourage the country to launch into this complicated experiment with an extremely complicated new product and with its extremely complicated new marketing concept.

I thought the noble Earl, Lord De La Warr, put it very clearly. He said that we were trying to do three things at once: on 1st October 1986 we were trying to introduce freedom into the bus services; we were trying to end subsidy; and we were trying a particular formula for tendered services for those which would not be provided for under a normal private enterprise situation. If that is a great leap forward, all I can say is that it threatens to be a great leap forward in a number of different directions at once. The risks of that kind of marketing strategy to any business enterprise and to those who need the products of such an enterprise are extremely great.

The noble Lord, Lord Belstead, in his reply, cited the success of the express services. There are two major differences with the express services. The first is that they are not essential travel for people going to work or for children going to school, or the-day-to-day business of going shopping, collecting pensions, or any of the other things for which bus services are used locally. This is a leisure market, a market where there is considerably more scope for experimental marketing in the untested sense, and where a significant part of the gains to the express services were at the expense of the existing rail network and therefore at the cost to the taxpayer in reduction of the profits of British Rail and the potential increase in the losses to British Rail. Thus, that argument, the analogy with express services, simply does not work.

The fundamental point behind this amendment is not that one has X thousand more passengers or X thousand less passengers than Hereford, Norfolk, Devon or wherever it may be. The fundamental argument is that with this extremely complex new product, which affects all our urban areas as well as our rural areas, except London, nobody has made any kind of attempt to see what will be the effect on passengers.

The noble Baroness, Lady Seear, is exactly right. If this were a wrecking amendment the amendment would say that unless the experiments were 100 per cent. successful then the Bill must be abandoned. It does not say that. It seeks to give the Government an opportunity, at the expense of only 12 months of time, to produce the best package to meet their own manifesto commitments, to meet their own ideological objectives, and to meet their own business objectives. In those circumstances, can this be a wrecking amendment? Can this amendment fail to attract those who have the best interests of the Government's own commitments at heart, as well as most of us who have more reservations?

6.39 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 121; Not-Contents, 129.

Airedale, L. Bottomley, L.
Alport, L. Brockway, L.
Amherst, E. Burton of Coventry, B.
Ardwick, L. Carmichael of Kelvingrove, L.
Attlee, E. Chandos, V.
Aylestone, L. Chitnis, L.
Banks, L. Collison, L.
Barnett, L. Crawshaw of Aintree, L.
Beaumont of Whitley, L. Darling of Hillsborough, L.
Bernstein, L. Darwen, L.
Beswick, L. David, B.
Birk, B. Davies of Leek, L.
Blyton, L. Davies of Penrhys, L.
Boston of Faversham, L. De La Warr, E.
Dean of Beswick, L. McNair, L.
Denington, B. Mayhew, L.
Diamond, L. Melchett, L.
Donaldson of Kingsbridge, L. Meston, L.
Donoughue, L. Milner of Leeds, L.
Elwyn-Jones, L. Mishcon, L.
Esher, V. Molloy, L.
Ewart-Biggs, B. Monson, L.
Ezra, L. Morton of Shuna, L.
Falkender, B. Mountevans, L.
Falkland, V. Mulley, L.
Fisher of Rednal, B. Nicol, B.
Foot, L. Northfield, L.
Gallacher, L. Ogmore, L.
Galpern, L. Oram, L.
Gladwyn, L. Phillips, B.
Graham of Edmonton, L. Pitt of Hampstead, L.
Grey, E. Ponsonby of Shulbrede, L. [Teller.]
Hacking, L.
Haig, E. Prys-Davies, L.
Hampton, L. Rathcreedan, L.
Hanworth, V. Rea, L.
Harris of Greenwich, L. Ritchie of Dundee, L.
Hatch of Lusby, L. Roberthall, L.
Hayter, L. Ross of Marnock, L.
Hooson, L. Sainsbury, L.
Houghton of Sowerby, L. Sandford, L.
Howie of Troon, L. Seear, B.
Hughes, L. Serota, B.
Hunt, L. Shepherd, L.
Hutchinson of Lullington, L. Stallard, L.
Hylton, L. Stewart of Fulham, L.
Ingleby, V. Stoddart of Swindon, L.
Irving of Dartford, L. Stone, L.
Jeger, B. Strabolgi, L.
Jenkins of Putney, L. Taylor of Gryfe, L.
John Mackie, L. Taylor of Mansfield, L.
Kennet, L. Teviot, L.
Kilbracken, L. Tordoff, L. [Teller.]
Kilmarnock, L. Turner of Camden, B.
Kirkhill, L. Underhill, L.
Leicester, Bp. Wallace of Coslany, L.
Llewelyn-Davies of Hastoe, B. Walston, L.
Lockwood, B. White, B.
Lovell-Davies, L. Williams of Elvel, L.
McIntosh of Haringey, L. Wilson of Rievaulx, L.
Mackie of Benshie, L. Winterbottom, L.
Airey of Abingdon, B. Ellenborough, L.
Ampthill, L. Elliot of Harwood, B.
Bauer, L. Elliott of Morpeth, L.
Belhaven and Stenton, L. Elton, L.
Beloff, L. Erroll, E.
Belstead, L. Erroll of Hale, L.
Bessborough, E. Fanshawe of Richmond, L.
Boardman, L. Fortescue, E.
Boyd-Carpenter, L. Fraser of Kilmorack, L.
Brabazon of Tara, L. Gainford, L.
Brookeborough, V. Gardner of Parkes, B.
Brougham and Vaux, L. Gibson-Watt, L.
Broxbourne, L. Glanusk, L.
Bruce-Gardyne, L. Gridley, L.
Buckinghamshire, E. Hailsham of Saint Marylebone, L.
Caithness, E.
Cameron of Lochbroom, L. Harmar-Nicholls, L.
Campbell of Alloway, L. Henley, L.
Campbell of Croy, L. Hives, L.
Carnegy of Lour, B. Holderness, L.
Cathcart, E. Home of the Hirsel, L.
Chelwood, L. Hood, V.
Coleraine, L. Hooper, B.
Colville of Culross, V. Hylton-Foster, B.
Colwyn, L. Jessel, L.
Constantine of Stanmore, L. Kaberry of Adel, L.
Cottesloe, L. Keyes, L.
Craigavon, V. Killearn, L.
Craigmyle, L. Kimball, L.
De Freyne, L. Kimberley, E.
Denham, L. [Teller.] Kinloss, Ly.
Dilhorne, V. Kinnaird, L.
Drumalbyn, L. Lane-Fox, B.
Lauderdale, E. Renwick, L.
Lindsey and Abingdon, E. Rodney, L.
Liverpool, E. Romney, E.
Long, V. Rugby, L.
Lucas of Chilworth, L. St. Aldwyn, E.
Lyell, L. St. Davids, V.
McAlpine of Moffat, L. Saltoun of Abernethy, Ly.
McFadzean, L. Sanderson of Bowden, L.
Macleod of Borve, B. Seebohm, L.
Mancroft, L. Shannon, E.
Margadale, L. Skelmersdale, L.
Marley, L. Soames, L.
Marshall of Leeds, L. Somers, L.
Maude of Stratford-upon- Avon, L. Stamp, L.
Stodart of Leaston, L.
Merrivale, L. Strathcona and Mount Royal, L.
Milverton, L.
Monk Bretton, L. Sudeley, L.
Morris, L. Swansea, L.
Mottistone, L. Swinfen, L.
Munster, E. Swinton, E. [Teller.]
Murton of Lindisfarne, L. Tranmire, L.
Nelson of Stafford, L. Trefgarne, L.
Newall, L. Trumpington, B.
Nugent of Guildford, L. Vaux of Harrowden, L.
Orkney, E. Vickers, B.
Orr-Ewing, L. Vivian, L.
Peyton of Yeovil, L. Whitelaw, V.
Radnor, E. Wise, L.
Rankeillour, L. Wynford, L.
Reay, L. Young, B.
Reigate, L. Young of Graffham, L.
Renton, L. Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.47 p.m.

The Deputy Chairman of Committees (Lord Alport)

Amendment No. 5. Lord Shepherd.

Lord Shepherd

The Captain of the Honourable Corps of Gentlemen-at-Arms did announce that dinner was at seven o'clock. Amendment No. 5 is one of great importance. I do not know what would he the wish of the Committee, but my feeling is that it is an amendment of such importance that we should not seek to move it this evening. I think that I would therefore propose, if the House agrees, not to move the amendment.

Lord Denham

I am not absolutely sure whether I take the noble Lord's meaning. Does he mean that he is not going to move the amendment until after the dinner adjournment? If it is an amendment of very great importance, it would seem to me wrong not to ask Members to discuss it at Committee stage. If he is intending to leave it to Report, that would be highly undesirable. It might make the Report stage even longer than the Committee stage.

Lord Shepherd

I am not sure how it is that we are having a debate merely on the fact that I have not proposed the amendment. I have merely been called. I made a short explanation of the situation as I saw it. If it is the wish, in view of the importance of the amendment, that I should formally move it and then seek the adjournment of the Committee in order to take it later, then I would be—

Noble Lords


Lord Shepherd

Some of my noble friends are shaking their heads.

Lord Denham

The noble Lord the Opposition Chief Whip will, I am sure, correct me if I am wrong. But if it seems the wish of the Committee that we should adjourn this Committee stage now and then come back to this business at, let us say, a quarter to eight, then perhaps we can do that. I was not absolutely certain what the noble Lord, Lord Shepherd, was suggesting. I have not had a chance for discussions through the usual channels. In moving, therefore, that the House do now resume, I shall say that we shall not come back to this particular Bill before a quarter to eight.

Lord Shepherd

The noble Lord is cutting the dinner hour by five minutes.

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

House resumed.