Transport Bill

HL Deb 08 July 1985 vol 466 cc83-118

8.17 p.m.

House again in Committee on Clause 1.

Lord Shepherd moved Amendment No. 5:

Page 1, line 9, at end insert— ("( ) Subsections (1) and (2)(b) of this section shall apply only to an area designated as a passenger transport area for the purposes of Part II of the Transport Act 1968, in which the Executive own and operate a railway, whether underground or not, in co-ordination with local services, if the Secretary of State makes an order. ( ) The Secretary of State shall not make such an order unless, after evaluating the benefits and costs of a co-ordinated system of public passenger transport services, he is satisfied that that system will not be adversely affected by the provisions of this Act. ( ) Any order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. ( ) Any order made under this section may contain such supplementary, incidental, consequential and transitional provisions as may appear to the Secretary of State to be necessary or expedient.").

The noble Lord said: Shortly before we adjourned we had a brief discussion about the time of resuming and I made a small complaint that the Government Chief Whip was cutting our dinner adjournment by some five minutes from the normal—I shall not say statutory—period of one hour. I see we are now resuming at shortly before twenty minutes past eight. I have no doubt at all that Irish issues are of great importance—and the Government Chief Whip cannot be what he thinks he is from time to time, the master of all things—but I hope the noble Lord, Lord Belstead, will have a word with the Chief Whip and ask him whether he can exercise, shall I say, a little more generous approach in terms of time.

Amendment No. 5 is drafted in the way it is so as to avoid the problem of hybridity. If we were to put in the Bill an amendment to exclude Tyne and Wear or Strathclyde, we would run into great difficulties with hybridity, and that is the last thing I wish to see. Therefore, we have drafted the amendment to cover these two authorities—one in particular on which I would have argued the case—because they are very different from all the other PTAs in that they have a railway or, in the case of Tyne and Wear, a metro. Also to Tyne and Wear the Metro is infinitely more important than the underground railway is to Strathclyde. I have to be careful here because I can see the hackles of my noble friend Lord Carmichael rising, because he comes from north of the Border; I have a Scottish wife but I do not understand a great deal of what goes on there, though I like it. The purpose of this amendment was to establish that Tyne and Wear was a special case and, if I may say so, not too dissimilar from London. The Secretary of State has made it very clear that he would prefer deregulation to apply throughout the United Kingdom, but he has decided, has he not, that London should be excluded?

A Select Committee of the House of Commons has taken evidence on this matter, and the paper became available some 10 days ago. I managed to get the response of the Secretary of State to this report of the House of Commons Select Committee on Transport, which was in the press on Wednesday and which I received through the Printed Paper Office on Friday. There is a paragraph relevant to the Tyne and Wear situation which I should like to put to the noble Lord, Lord Belstead, if it is the noble Lord, Lord Belstead, who is dealing with this matter. On page 19, in paragraph 68, the Secretary of State says: The Government does not accept that any such exemption is necessary."— that is the exemption of Tyne and Wear from Clause 1 of the Bill. They believe that passengers in Tyne and Wear should have the same freedom of choice between modes as in any other areas. They accept, however, that there is good sense in having fare and ticketing arrangements that make the best possible use of opportunities for travel using both bus and Metro. The best way of achieving this is through agreements freely entered into on a commercial basis between the PTE and bus operators, some of whose services will of course be under contract to the PTE".

Then follow the words to which I wish to draw particular attention: The Department of Transport's Ministers have made it clear in evidence to the Committee that they have asked officials to discuss the question of the kind of support that the Metro will need after deregulation, and the nature of the arrangements that could be made with bus operators, with the County Council and the PTE".

There is a very clear statement here from the Secretary of State that officials are urgently considering the importance of the Metro and the way in which it can be supported in a competitive scene. I do not know how far the Minister can help us, because there is no point in having any big debate unless the Minister can go further than what is said in this document. I do not know whether the noble Lord, Lord Belstead, can help us in this respect. I beg to move.

Lord Mountevans

I support Lord Shepherd in this amendment, very largely for the reasons that he has already given us. I realise that, like others which have come before your Lordships' Committee today, it seeks to buy time. But this amendment does not seek to buy time because we are unsure of the future; it relates not to trial areas, nor to conclusions which can be drawn from incomplete experiments. Rather, it seeks to create a breathing space for systems which are already tried and proven, and one in particular, which is Tyne and Wear. It seeks to create a breathing space for those public transport operations which have invested heavily in integrated systems using rail as their backbone.

It seems to me that at this time breathing space is justified. After all, we are in a context in which we know that the Local Government Bill, which was recently before your Lordships' House, the Transport Supplementary Grant Order, which we approved last autumn, rates policy, ratecapping and this very Bill itself, all interrelate but we cannot be absolutely certain how they will eventually do so. I think the noble Baroness, Lady Fisher of Rednal, touched on this when she was speaking to an earlier amendment.

As I said, this amendment is about investments which have already been made. It is about transport plans and policies which are already in situ and which, in the case of Tyne and Wear, I feel are already proven. Though it touches on several areas, I should like, as did the noble Lord, Lord Shepherd, to concentrate on only two: Tyne and Wear and London. If I may, I shall join these two together in urging acceptance of this amendment. Tyne and Wear has demonstrated that investment in a rail backbone, allied with carefully conceived integrated scheduling, with good interchange facilities and good and thorough system-wide through-ticketing, allied also with the avoidance of parallel road and rail services and in fact with the co-ordination of these services, can bring customers back to public transport at a cost which is acceptable not only to the users of the system but also to those who, as ratepayers or taxpayers, fund the protected expenditure limit. In this instance, Tyne and Wear has managed to keep fair and steady for a number of years. Usage is increasing by some 2 per cent. per annum, which is not perhaps a sensationally large figure but which I feel is an impressive figure, in terms both of the dreadful economic situation prevailing in the North-East at the moment and of the national trends about which we have been speaking earlier today.

Not only that, but I feel that Tyne and Wear, having bucked the national trends, has succeeded in achieving the objectives which the Government are seeking by means of this Bill. It has demonstrated that integration works. It has proved that integration can reduce the need for subsidy by improving performance. It has also proved that an attractive product will generate increased patronage.

London shares with Tyne and Wear a massive investment in railways—the Underground. We know that London lies outside the scope of this Bill, but as the noble Lord, Lord Shepherd, has reminded us, we also know that it is the Government's intention that a London version of this Bill will be introduced at an appropriate time. Meanwhile London Regional Transport, in the Secretary of State's letter, which is not perhaps a gospel but certainly an epistle for integrationists, has been told to put its house in order by pursuing integration. If the Government feel that the Tyne and Wear concept is the way ahead for London, it seems to me to be logical that Tyne and Wear too should be given the time to breathe that the Government have given London Regional Transport.

In asking your Lordships to support this amendment, I seek only parity of treatment. I hope the noble Lord the Minister will accept that railway systems are a special case and that Tyne and Wear and London both have a part to play in resolving the problems posed by railway systems and the massive investments that have been made in them.

Lord Teviot

Following the noble Lord, Lord Mountevans, I rather think that it is opportune for my noble friend Lord Belstead to answer the question of the noble Lord, Lord Shepherd. I am perfectly happy to continue with saying a few words on this amendment myself, but before I do so I think that my noble friend should say a few words to answer the point of the noble Lord, Lord Shepherd.

8.30 p.m.

Lord Belstead

I should like to say merely a word or two more in answering the noble Lord's point. The additional observations that I should like to make are these. Perhaps I may say to the noble Lord, Lord Shepherd, that although I realise this amendment is first and foremost to extract an answer from me as to how the discussions referred to in paragraph 68 of the Government's response to the House of Commons Transport Select Committee's report are going, in addition to that the thinking of the noble Lord, Lord Shepherd, in this amendment, is that the very real advantages that the citizens of Tyne and Wear, and indeed Glasgow, have derived from the Metro and the Strathclyde Underground can be preserved only if the PTEs and the PTAs for those areas continue to exercise direct control over all forms of public transport within their areas.

If the noble Lord will forgive my saying so, I think that really is a rather depressing conclusion. It suggests that the benefits of these two major transport undertakings—and, indeed, the Government would be the last to deny that the benefits are very real—depend entirely on passengers in their areas being denied the right to make their own free choices about the way in which they wish to travel. I must say that I think the Government have more faith in both the Tyne and Wear Metro and the Glasgow Underground than that.

Let us be absolutely clear about one matter—and this is why I wanted to go a little wider. Both systems will continue to be operated directly by the PTE as at present, and in both cases, under the Bill, it will continue to be possible for the PTEs to provide direct revenue support. We of course recognise that there are special problems deriving from the capital intensive nature of railway operations which make such support essential. I should also make it clear that the right of the PTEs to operate these services will not be affected in any way by the fact that other operators may be running services over the same or similar routes.

In addition to that, I should make the point that there is no reason at all why the Tyne and Wear PTE, if I may just concentrate on that, should not continue to enter into agreements with bus operators to preserve the kind of fare and ticketing arrangements that make it possible for the best use to be made of both bus and Metro services. Those arrangements will have to be made on a commercial basis, and I do not think they will be any the worse for that. Of course, it will also be possible for the joint board and the PTE to provide subsidies for bus services running to Metro stations through the new tendering arrangements in cases where they believe that there is a need for such services which is not being supplied through commercial channels.

Perhaps I may turn aside to Glasgow for a moment. My advice is that the Underground in Glasgow, because it operates below often congested streets, is unlikely to be affected by greater competition among buses, and, indeed, I am advised it is very likely that bus operators will find it very much in their interests to feed their passengers into the Underground. But the noble Lord, Lord Carmichael, may have views on that.

Before I come to the main question, perhaps I may say a word to the noble Lord, Lord Mountevans. Yes, it is true that London is at the moment exempt from the provisions of the Bill. However, my right honourable friend has made it quite clear that it is his intention to extend the benefits of deregulation to London once the immediate tasks involved in the creation of London Regional Transport have been completed. I do not think that there has been any corresponding upheaval in Tyne and Wear or in Strathclyde which could be a justification for further delay in those two areas as we believe there ought to be so far as London is concerned.

Perhaps I may summarise what I have endeavoured to say. The Government indeed recognise that there are special considerations attaching to the part which the Tyne and Wear Metro and indeed the Glasgow Underground play in the public transport systems of Tyne and Wear and for the people of Glasgow. It may be worthwhile to mention that the Metro has received very substantial support from central Government. In fact, over two-thirds of the capital cost of the system has been met by central grants, thus freeing the authority from what would otherwise have been a heavy burden of interest payments. I can assure the Committee that the Government have no desire to see the value of that investment destroyed. As I have explained, the Bill provides for the system to continue to be operated directly by the PTE and to receive revenue support without having to go through the tendering process. It also makes it possible for the PTE to continue to support feeder bus services, either by way of commercial agreements or through subsidies awarded on the basis of open tendering.

Thus, if it is the case, as the noble Lord, Lord Mountevans, has said, that the fare structure of Tyne and Wear has been pretty stable for some time now—and I recognise how important that is in an area of high unemployment—then all I should say is that there is nothing in this Bill which would force Tyne and Wear to alter its policy so far as that is concerned.

Nonetheless, the noble Lord, Lord Shepherd, asked me a question in the context of paragraph 68 of the Government's response to the Select Committee report, where it says that the Department of Transport's Ministers have made it clear in evidence to the Committee that they have asked officials to discuss the question of the kind of support that the Metro will need after deregulation and the nature of the arrangements that could be made with bus operators, with the county council and with the PTE. The noble Lord, Lord Shepherd, asked whether there was anything I could add to that. I have to say that discussions are still in progress. I am told that the PTE are at present providing further information, and it is therefore not yet possible to reach any positive conclusion about that part of paragraph 68.

I apologise for going wider than the noble Lord, Lord Shepherd, wished me to do, but I was anxious to make the point which the noble Lord, Lord Shepherd, and other noble Lords may not agree with but about which the Government feel very strongly—that is, that there are good, solid reasons in the whole structure of the Tyne and Wear PTE why under the Bill there should continue to be a bright future for the Tyne and Wear Metro and a bright future for the Glasgow Underground.

Lord Shepherd

This is a very big issue. The noble Lord, Lord Belstead, needs to make no apology that he speaks, shall we say, further than the debate went. I quoted to him paragraph 68, which is the Secretary of State's response to the House of Commons Select Committee on Transport. I gave the date when the paper was issued and the date that I received it. I can well understand the Minister's difficulties in going further. As he said, it is subject to further discussion both in the department and elsewhere. In these circumstances, I think it would be wise for me to seek to withdraw this amendment.

Lord Teviot

Before the noble Lord sits down and the Question is put, perhaps I may say that I absolutely agree with what he said, and I enjoyed the speech of my noble friend the Minister. However, when he talks about keeping the Tyne and Wear Metro and the Glasgow Underground, I cannot speak for Strathclyde but I certainly can speak for Tyne and Wear. The only point I wish to add is that I hope that the bus services which so essentially serve the Tyne and Wear Metro, which are a central and integral part of it, will be in his considerations.

Lord Shepherd

The noble Lord has reminded me of an important point. I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 6 to 9 not moved.]

Clause 1 agreed to.

[Amendment No. 10 not moved.]

Schedule 1 agreed to.

Clause 2 [Local services]:

Lord Shepherd moved Amendment No. 11: Page 2, line 14, at end insert ("and except in the case of excursions or tours particulars of the service have been notified in accordance with subsection (3A)").

The noble Lord said: This is an amendment similar to that introduced in another place. On that occasion the Parliamentary Under-Secretary said: The Government's position on the amendments can be briefly stated. The experience of the past five years since express coaches were deregulated"— That was 1980— has shown that notification is unnecessary. It is an unnecessary bureaucratic burden on the industry. The early anxieties about the prospect of a multitude of fly-by-night cowboy operators have proved totally ill-founded. After an initial transitional period, services have proved stable and operators have shown commitment to them. There has been good behaviour. In so far as any controls are necessary, they come through operators' licences, and they will continue".

From my knowledge of the express services, either those provided by National Express or by private independent operators, they have been of the very highest quality. There are a number of reasons. One of those reasons, I believe, is that there was a requirement in the 1980 legislation that the operator should notify the traffic commissioners as to the services which he would run on an express service. That is quite different from running tours and the like. The noble Lord, Lord Peyton, who is returning to his place, takes a strong view about what is in the interests of the consumer and the traveller, does he not? The prime intention of the amendment—I cannot stress it too much—is to afford protection to the consumer. A notification procedure imposed upon an operator provides for an obligation upon him to maintain a service that he has notified. It is important that passengers should not have their travel plans frustrated by any sudden non-operating of a particular service.

There should remain, I believe, a notification procedure for all services other than excursions and tours that do not fall within the definition of local services. The current notification of the starting, varying and ending of express services is regarded as necessary, I believe, throughout the whole of the coach industry, as being in the interests of passengers as consumers. It is important that they should be able to depend upon a reliable and proper operation of those services. Moreover, it is perhaps more desirable that traffic commissioners, county councils and other interested bodies should have knowledge of the overall pattern of such services. Notification of express services is not required as an alternative to road service licensing. In the future, the broadly comparable services that will not require to be registered should continue to be subject to the notification procedure.

I took a great joy during my period as chairman of the NBC in the creation of the National Express service. I am convinced that for the NBC, as operators, together with all those against whom we compete and with whom we co-operated, there was a discipline that you registered your services and that you matched the services that you registered. If in 1980 it had not been so, I do not believe, in all honesty, that you would have had the same high standard recognised by the public of reliability and service.

There may be a degree of bureaucracy involved. That may be the case that the Minister puts. The noble Lord may say that this is such a good organisation and such a well run part of the industry that this is a price that you could well do without. I believe, however, that the need for notification of the services that you intend to run and for which you are answerable if they do not run is a major discipline of which the present express services are a consequence. I beg to move.

8.45 p.m.

Lord Carmichael of Kelvingrove

I wish to support my noble friend. I cannot see anything to which the Minister or the Government are likely to take exception. There is only the point made by my noble friend that this might be considered slightly bureaucratic. I believe, however, that those people who wait at places such as Russell Square to catch night buses to Scotland and the north would feel a great deal more secure that the bus would start at the right time if a timetable was published that could be relied upon. They would be happier if the organisation running the coach service was responsible to some official authority for providing services leaving at, say, 10.15 or 10.30 p.m. in order to reach their destination at a certain time the next day. The passengers would know that this was not simply a matter left in the hands of the bus company. They would know that if something went wrong, there would be some body to which they could make representation. It would not merely be the case of an inspector saying, "I am sorry. The bus has broken down. There is no alternative. You will just have to wait another day or travel up during the day". That could perhaps upset some important domestic or working arrangements.

A notification procedure would give the user a certain degree of confidence. It would give the bus operators—the good ones would certainly want this—the feeling that they had a certain responsibility. It would also give them a status. What obligations would exist on the bus operator if there was no need to notify? For the bus passenger travelling perhaps once or twice a year on a long distance coach it would not be enough to say that market forces operate. That would be too late for them. I believe, therefore, that there should be some external force, some moral obligation, if nothing else, on the operator. I hope that the Minister will take this in the spirit that it is given. There is nothing underhand about it. It is a clear case of people who should be given some protection. I believe that the good operators would welcome it and the bad operators would be chased out of the business rather more quickly. I hope that the Minister will pay attention to what my noble friend has said or at least take away the matter to examine it.

Lord Tordoff

I would not want it to be thought that everybody on this side of the Committee assumes that because regulations are made buses are always going to run on time. I am sure that noble Lords are not suggesting that for a minute. But what is worrying noble Lords in many parts of the Committee is the sort of situation where people who are supposed to be running bus services suddenly find that there is a football match at the other end of the county or the country. They take the buses off for that day and send them on excursions to the football match. So the services which are supposed to be running do not because market forces are operating freely and operators are making a greater profit by taking people to see Hereford United wherever they are playing. That seems to me to be the purpose of this amendment, and in so far as that is the case, I support it.

Lord Belstead

This amendment has been taken by the noble Lord, Lord Shepherd, from the 1981 Act. It would continue the shadow of express service licensing that was left in 1980 because of a fear that without some formal commitment pirate operators might run, or not run, at their whim. I would repeat the view expressed by my honourable friend the Parliamentary Secretary in another place that experience has shown that it was unnecessary. Competition on long-distance routes was fierce for a time and it has remained active with great benefit to the passengers, but there has been no sign of pirates. Commitment there has been, but because of the need to notify passengers and run as notified if one is going to make a success of the business, not because of any statutory requirement. No one ought to know more about that story of success than the noble Lord, Lord Shepherd, under whose chairmanship NBC express services have operated in the past.

I hope that my noble friend Lord De La Warr will forgive me if I suggest that the time has come here to abolish the requirement and save a little paper work which really benefited only Ministers by enabling them to know how many new services had been introduced. But even that benefit has been limited because of the absence of any requirement to notify discontinuations. Far be it for me to accuse the noble Lord, Lord Carmichael, of being bureaucratic, and indeed I do not, but I think that this is a bit of bureaucracy that we could consider doing without.

The difficulty I find myself in is that this really comes from the horse's mouth in the sense that it is the noble Lord, Lord Shepherd, who is moving the amendment, supported by the noble Lord, Lord Carmichael, with considerable experience of transport, and supported from the Liberal Front Bench as well, but my difficulty is that none of the three noble Lords has put his finger on the problem which has to be solved.

If I may for a moment turn aside, I would say, in addition to repeating the view expressed in another place about finding that pirates have not invaded the deregulated long-distance services, that I went only recently to meet someone who was travelling into London on one of the National Bus Company coaches at the Victoria coach station, which I confess I had not before visited for that purpose. It was a long journey on a difficult day with heavy traffic, but in came the coach on time.

Of course I shall take this amendment away and have a look at it. I am very ready to do that. But I should like to see whether I or any of the noble Lords who have spoken to it can find that there is real evidence for it. Let us have a think before the next stage of the Bill. I have staked out what the Government feel about it. I hope that the noble Lord will feel that he does not need to press the amendment this evening.

Lord McIntosh of Haringey

I am sure that my noble friend will be as grateful as I am that the Minister is prepared to think again about the issue. Before my noble friend responds, let me say two things. First, I am as opposed as he is to bureaucracy, and the need to notify Ministers about services is the last thing in my mind and I am sure the last thing in the mind of my noble friend Lord Shepherd. That is not the point at all. The point is what security can be given to passengers.

There is a second point which I would add to this and I should like to see in what direction it influences my noble friend in his decision as to whether or not to seek the opinion of the Committee. The point is that these services, however free they may be, however deregulated they may be, however entrepreneurial they may be, require—that horrible word—infrastructure. They require coach stations, they require access to the centres of cities, they require stopping places.

The problems of such city governments as will be left to us after the passage of the Local Government Bill do not go away just because the Government say that you do not have a city government in, for example, London. I know that the City of Westminster is deeply concerned with these issues, and there are amendments which will come before your Lordships' Committee in due course. There must be some security of continuity which enables people to plan the bus garages, the bus stations, the stopping places, the bus lanes which give adequate priority, and the facilities for passengers which are required when they are waiting.

Those of us who have children who use long-distance buses as the only form of transport they can afford know what it means to arrive in Paris and suddenly to find that due to there being no notification the bus they had expected to go on to the south—I am talking about an instance involving my own son only two days ago—is not there and they have to wait 8½ hours in a city in which they have no accommodation.

A free-for-all is not just a free-for-all for operators. A free-for-all for operators means that somebody has to take the responsibility for those who would otherwise be stranded unless there is an adequate degree of prior notification. It does not matter whether you notify Ministers or not. I do not give tuppence for what Ministers know. What I want to be sure about, and what I want the noble Lord to assure the Committee about, is how the passengers are going to be given that assurance.

Lord Shepherd

The noble Lord, Lord Belstead, made an overture to which I shall naturally respond; let us have further talks about it. Before I withdraw the amendment perhaps I may put all this in its proper context. In the stage carnage, or local services, as it is now defined in the Bill, the operator will have to register with the traffic commissioner. If he fails to maintain a proper service within the notification which is part of his registration, he can be held to account.

In the case of British Rail there is—and I was trying to think of the title—the Transport Users Consultative Committee which can take up on behalf of the consumer any failure on the part of British Rail in maintaining the service that it offers. In terms of National Express we carry some 16 million passengers. I suppose that the independents may be carrying another 2, 3, or 4 million. We are talking of some 20 million passengers who rely throughout the year on express coaches for moving from one place to another.

The purpose of my amendment is, first, to have a discipline on the operator, but it is for the purpose of the passengers. In the case of coach passengers, whether National Express or the independents, there is no body which can speak for them. Therefore, the discipline of having to notify to the traffic commissioner the express services that one intends to run is at the moment at least the best safeguard that we can give to a large number of our community who use express coaches. I am most happy to withdraw the amendment. I gathered that the noble Lord, Lord Belstead, was willing to consult. Is that so?

Lord Belstead

I said that I would be happy to look at it, and of course if I look at it, I shall be happy to consult the noble Lord and noble Lords opposite. But I gave warning that I had not discerned from the debate any evidence to the contrary, that the assertion of my honourable friend the Parliamentary Secretary in another place was not correct—namely, that notification was necessary. I should be looking for that kind of evidence.

9 p.m.

Lord Shepherd

If the noble Lord has not ascertained—or discerned I think was the expression he used—from what I have just said, I think that I shall leave my noble friends to decide how this amendment should best be dealt with.

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

Their Lordships divided: Contents, 37; Not-Contents, 77.

DIVISION NO. 2
CONTENTS
Airedale, L.	Kilbracken, L.
Attlee, E.	McIntosh of Haringey, L.
Barnett, L.	Mackie of Benshie, L
Brockway, L.	McNair, L.
Carmichael of Kelvingrove, L.	Mountevans, L.
Crawshaw of Aintree, L.	Nicol, B.
David, B. [Teller.]	Prys-Davies, L.
Dean of Beswick, L.	Rea, L.
Elwyn-Jones, L.	Ritchie of Dundee, L
Ennals, L.	Roberthall, L.
Foot, L.	Rochester, L.
Gallacher, L. [Teller.]	Seear, B.
Grey, E.	Shepherd, L.
Hall, V.	Stewart of Fulham, L
Hampton, L.	Stoddart of Swindon, L.
Harris of Greenwich, L.	Taylor of Gryfe, L.
Hooson, L.	Tordoff, L.
Houghton of Sowerby, L.	White, B.
Hylton, L.

NOT-CONTENTS
Airey of Abingdon, B.	Jessel, L.
Ampthill, L.	Kaberry of Adel, L.
Bauer, L.	Killearn, L.
Belhaven and Stenton, L.	Liverpool, E.
Beloff, L.	Long, V.
Belstead, L.	Lothian, M.
Brabazon of Tara, L.	Lucas of Chilworth, L
Brookeborough, V.	Lyell, L.
Brougham and Vaux, L.	McFadzean, L.
Buckmaster, V.	Macleod of Borve, B.
Caithness, E.	Marley, L.
Cameron of Lochbroom, L.	Monk Bretton, L.
Campbell of Croy, L.	Morris, L.
Carnegy of Lour, B.	Mottistone, L.
Cathcart, E.	Murton of Lindisfarne, L.
Chelwood, L.	Orr-Ewing, L.
Colwyn, L.	Peyton of Yeovil, L.
Cox, B.	Radnor, E.
Craigavon, V.	Rankeillour, L.
Craigmyle, L.	Renton, L.
De La Warr, E.	Renwick, L.
Denham, L. [Teller.]	Rugby, L.
Elliot of Harwood, B.	St. Aldwyn, E.
Elliott of Morpeth, L.	Sanderson of Bowden, L.
Elton, L.	Sandford, L.
Erroll of Hale, L.	Sharples, B.
Fortescue, E.	Skelmersdale, L.
Gardner of Parkes, B.	Stodart of Leaston, L
Gibson-Watt, L.	Swinton, E. [Teller.]
Gray of Contin, L.	Tranmire, L.
Haig, E.	Trefgarne, L.
Hailsham of Saint Marylebone, L.	Trumpington, B.
	Vaux of Harrowden, L.
Harmar-Nicholls, L.	Vickers, B.
Henley, L.	Vinson, L.
Hives, L.	Wise, L.
Hood, V.	Wynford, L.
Hooper, B.	Young of Graffham, L.
Hylton-Foster, B.	Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

9.8 p.m.

Lord Shepherd moved Amendment No. 12: Page 2, line 16, leave out ("fifteen") and insert ("thirty").

The noble Lord said: I am going to move Amendment No. 12 and to speak to Amendment No. 13. Amendment No. 13: page 2, line 19, leave out ("fifteen") and insert ("thirty"). In present legislation, the definition of "express services", which are deregulated under the 1980 Act, is that they may not convey any passengers whose journeys are less than 30 miles in a straight line—that is, a 30-miles radius in the case of excursions and tours. There was seen to be no good reason why the proposed definition of "local services" should not replace the existing definition of stage carriage services without any alteration in the conditions with regard to the minimum distance which may be travelled by passengers.

The Department of Transport's consultation paper on the registration and control of bus operations which followed the White Paper on Buses (Cmnd. 9300) suggested that a suitable definition of "local services" might be those on which passengers were carried at separate fares and on which they might all alight at stops less than five miles apart as the crow flies. My old group, the National Bus Company, pointed out in its response to the White Paper that there seemed to be no good reason why the present categories could not remain except that stage carriage services would become services requiring registration. It is understood that other responses from other organisations also addressed this point.

Therefore, it would seem that the use of 15 miles in the conditions contained in Clause 2(2) of the Bill may be little more than a compromise following a consultation exercise as it seems difficult to see the valid reason for its selection within the Bill in preference to the existing acceptance which so far has gone very well indeed after the 1980 Act of 30 miles as the appropriate distance. The use of 15 miles, as opposed to 30 miles, has also led to some services ceasing to be subject to quality control and I am sure that that is something that the noble Lord, Lord Belstead, himself will be concerned about.

It is essential that the consumer interest and the public should be protected by the reliable and proper operation of all services. It is a matter of regret that the protection in this direction which registration and enforcement would give could not extend fully to all services now subject to road service licensing; as those with the minimum passenger journeys, about 15 miles, would be excluded. Moreover, it is perhaps more than desirable that the traffic commissioners, county councils and other interested bodies should have some knowledge of the overall pattern of such services. There is a further point that much of the potential services would not be qualified for fuel duty rebate under the revised qualifications for such rebates which are contained in Clause 96. This could lead to the probability that some which would serve a valuable public service would not be so provided.

I suspect that the Government will claim that services more than 15 miles between stops cannot be regarded as local. But there are instances of local bus services, for example, where sections of motorway are used or where routes pass through sparsely-populated areas (and perhaps Cambridge and Norfolk can be given some regard here) having more than 15 miles between stops. The future viability of this type of local service could be jeopardised. I think this is an amendment of some merit and I shall be interested to know why the Government have departed from the 30-mile figure which is in the 1980 Act and which has stood the test of time so well; and also why they have brought the figure of 15 miles within the compass of this Bill. I beg to move.

Lord Teviot

I want to say very little about this amendment. I, too, like the noble Lord, Lord Shepherd, shall be interested to hear the Government's response. I do not think that Cambridge and Norfolk would be quite the examples to use: I should think that perhaps the Highlands of Scotland might be one example where it is possible to have 15 miles between bus stops. I think that probably my noble friends from north of the Border might be able to help me by saying that if there are 15 miles between bus stops you can call it a bus stop if it is at some bothy which is only used in the summer. If that is so, it is not a credible bus stop: it is what might be called fudging.

Another point concerns the commuter bus services. The noble Lord, Lord Shepherd, will correct me if I am wrong but I should have thought that local bus services would not be eligible for a fuel tax rebate. That comes right at the end of the Bill; and that must be in one's mind in this connection. It is a very important consideration and I am sure everybody is thinking along that line.

Bearing that in mind, there will be the commuter bus services which are in competition with British Rail. Commuter bus services must often be more used if, unfortunately, there are industrial disputes on the railways. Also, as regards the 1980 Act, one can argue logically that 30 miles is very much better than 15 because, if British Rail do get a substantial fuel rebate, why should not buses get it also? I have made just a few esoteric points, if that is the right word, and I will say no more.

9.15 p.m.

Lord Carmichael of Kelvingrove

I should like to support my noble friend Lord Shepherd and the noble Lord, Lord Teviot, on this amendment. I should like particularly to speak about commuter services, partly because the Scottish Peers were approached by a group of operators, many of them private and very good and long established. One of them appealed to me and to the noble Baroness, Lady Elliott of Harwood, over the problems of people commuting from Lanark to Glasgow. That is a good example of 25 miles, and for many years now these people have provided a good and reliable service if part of it can be done on the motorway, which fits in with the argument put forward earlier by my noble friend Lord Shepherd. But at 25 miles—probably something like 20 or 21 in a straight line, which I believe is the definition that is used—it would mean that they would still not qualify for a fuel rebate or qualify as being a local operator. They make many stops on the road, although, in fairness, a number of them are classed as limited stops. That is merely to speed up things a little; but they still have many stops on the road.

I wonder whether the Minister can tell us whether these operators would qualify if, instead of running a service from Lanark to Glasgow, they ran a service from Lanark to Motherwell, which is perhaps half way, and if everyone got out of the bus, ran round the bus station and got back on to the bus. Would that qualify as two local services? Would that allow the operators to claim the bus fuel rebate and be classed as local operators? A cause of great worry is the feeling of isolation that occurs in a place like Lanark. There is a rail service there but because the buses work as a local as well as a commuter service, people have a greater flexibility. I think the noble Baroness, Lady Elliot, would agree that there is considerable worry on the part of the people who came to see us. Can the Minister say why there should be this gap of 15 to 30 miles? I do not think that anything is lost by increasing the distance from 15 to 30 miles, when it then quite clearly becomes an express coach service. I hope the Minister will give some thought to these points.

Lord Mackie of Benshie

I must say that talking about 15 miles as being "local" appears to me to be terribly suburban. Thirty miles is a mere spit in many parts of Scotland and I really think we should consider the country instead of this wholly suburban attitude which appears to have affected the Government today.

Lord McIntosh of Haringey

May we just come south of the Border for a moment? I realise that the Government must have severe psychological objections to thinking about the Brecon and Radnor area and I am sure that the noble Lord, Lord Mackie, would agree with that. But there is also Penrith and the Border. There are large constituencies and large rural areas in England and Wales in which, as the noble Lord says, 15 miles is not a particularly magical figure. Is there any reason why the two sets of regulations should not butt up one against the other?

Lord Belstead

It is not unusual, I think, for noble Lords speaking on amendments to ask the Government to give replies, but I think I shall turn the tables and ask your Lordships, if I may, whether noble Lords would give me their advice to a question which I have to ask on this amendment. It is indeed the fact, as my noble friend Lord Teviot so shrewdly said, that the effect of designation as local services is the reception of fuel duty rebate. There is, therefore, a potent incentive for operators to ensure that their services are eligible for the rebate. There is nothing wrong with that, and I entirely understand it. But it means that those services must have the right number of stopping places in order to qualify, because (if I may answer the question put to me by the noble Lord, Lord Carmichael) it is the distance individual passengers may travel, which is in most cases the distance between stops.

If that distance is never less than 15 miles as the crow flies, then the service is not a local one; but, provided the distance between one stop and another is less than 15 miles, then, under this definition, that part of the service will be a local service. If the whole of the service has stops within 15 miles as the crow flies, then the service is a local service. This means that an operator whose service would otherwise run for 29½ miles without picking up or setting down a single passenger will be encouraged by the 15-mile definition to put in additional stops, which may prove especially valuable to those living in our more remote areas. I am sure that your Lordships ought to be aware that if the change proposed in this amendment were made we should see fewer picking up points, and not more.

The question I should like to put to your Lordships is: is it not almost inevitable that if one extends the definition to 30 miles we might run the very real danger of finding that services which go from A to B but which could so easily take in the villages at C, D, E and F, and would do so if they were having to conform to the 15 miles, might well go straight from A to B if it is a 30-mile limit because they would know that they could get their fuel duty rebate without having to put in the additional stops? I am genuinely asking your Lordships, when one thinks of this simple question, whether by agreeing to this amendment—this is a matter of judgment, I absolutely agree, if I am not being too southern in my attitude—one would not be encouraging operators to put in stops at villages and pick up additional passengers. That is the difficulty which I want to put to your Lordships. I think it is a genuine one.

Lord Mackie of Benshie

The answer is that the noble Lord really must believe in private enterprise. If there are people to be picked up in the villages in between, of course the operator will stop there. It is as simple as that. This argument has been used time and again in this Bill. I am surprised that the Minister will not accept it.

Lord Belstead

The noble Lord makes his points with great attraction, but for once the noble Lord is being a little less than fair. On this Bill my right honourable friend has never said that this is a Bill which relies wholly upon the market. It relies on the market in the first instance. When the local authority finds what the market will produce, my right honourable friend has always been at great pains to say that it is then that subsidy must continue to come into play. My right honourable friend in another place has always said that there was no intention in this Bill to cut away at subsidy. What he wanted to see was better value for money.

It is concomitant with that philosophy that it would be unwise deliberately to agree to an amendment. I am not saying on behalf of the Government that I have disagreed with it yet, but I am saying that it would not be wise to agree to an amendment which, arguably, could push operators into not putting in additional stops in rural areas which they might otherwise put in. This is a genuine problem—

Lord Mackie of Benshie

If I may continue my argument, surely once an operator has tendered for the subsidised service, everything extra which he can pick up, or which can be insisted on by the authority which is putting out the tender, would cover the points made.

Lord Belstead

If the Committee will allow me, we are not necessarily talking about a subsidised service. Again, the whole point is to find what the market will bear. We shall be aided in finding what the market will bear if we do not drive operators away from looking at stops which they might otherwise put in by making the picking up of fuel duty rebate too easy by giving a 30-mile limit.

If I may, while I am on my feet, so that I do not keep popping up, I should like to say on behalf of the Government that it is right also to think why we are having registration of local services. Local services under this Bill are there in order that the operator shall be committed to running the service. That is the first point. Secondly, registration is there so that local services shall be subjected to traffic regulation conditions. It is surely, quintessentially, stopping places that may need regulations in congested areas.

A service on which every passenger must travel at least 15 miles will not have all that many stopping places and can be expected to run less frequently than even more local services; and if we make it a 30-mile limit, once again, we are going to be talking about services which can hardly be thought of as being local. I think that I had better sit back and see whether there are any more views from the opposite side. This is genuinely a matter of judgment. I have not said that the Government are rejecting or will not consider further the amendment, but I think that the Government's worries are genuine ones.

Lord Teviot

I do not wish to interrupt my noble friend Lady Elliot, but my noble friend has referred to me and has touched on a point which I never even thought of mentioning. He has talked about encouraging operators to go around villages. I think that operators will be delighted to go around many villages so long as the people are there. I should also like to tell him about my experience as an operative many years ago. The public are very trying in this respect. If they are made to go around lots of villages or to do many detours, they will say, "I can't be bothered to do this". They will find some alternative form of transport and will not support a service.

There have been experiments in the past with services which have gone everywhere. Some were successful, but others were not supported because people did not want to go around too many villages. My noble friend did not reply to the point made by the noble Lords, Lord Shepherd and Lord Carmichael, and myself about going around villages and then popping down a motorway for 15 miles. That gets over the problem of going around everywhere for a year and a day. My noble friend has said he will look at this point again and if he will do that, and will consider everything that we have said, I am sure that we shall be on the right lines.

Baroness Elliot of Harwood

I do not understand why the Minister does not think it would be much more economical and much better for the bus people if the 30 miles were there, because 30 miles is a very short distance in rural areas where there is no railway transport at all and no other transport of any kind. I should have thought it would have been much better to extend the distance to 30 miles, as is suggested here, because that would cover areas where there were not many villages, but where people could be picked up because they were going to a centre where they wanted to do their shopping. Therefore it would be very much better to cover a wider area.

I agree with the noble Lord, Lord Mackie of Benshie, that one is not running an express service; one is running a service for the rural community. The rural community will want to have as much opportunity as possible to use the bus services which will also help the bus drivers and the people who own the buses. I think that it would be very unwise not to take the 30-mile limit as one which would bring in far more people, would be far better to run and on the whole would be much more satisfactory.

9.30 p.m.

Lord McIntosh of Haringey

We would all agree with the Minister that this is a matter of judgment and that there are opposing considerations which the Committee ought to take into account. It must be said that it is a derogation of the Government's duty for the Minister, however charmingly, to say that he is going to ask the questions instead of answering the questions and to say it is up to us to show the balance of advantage between fewer bus stops and the benefits of the fuel rebate. That is not the case. It is the Government's responsibility to inform the Committee to the best of their ability what part the fuel rebate plays in the running costs of a bus service and to indicate the Government's judgment, the Government's best informed view, of the balance of advantage for an operator between that saving on fuel rebate and the likely additional benefit in terms of extra customers by having more stops or going by a more circuitous route.

It was a charming gesture on the part of the Minister. It enlivened the debate on something that might be thought to be a technicality, but it is the Government's responsibility to advise the Committee to the best of their knowledge. The Government have not done so and I do not think, although I can predict with some confidence that my noble friend will not wish to pursue the amendment, that the Committee ought to be satisfied with the tables being turned in that way.

Lord Shepherd

My noble friend must not assume in any way that I have changed from the days in your Lordships' House when I was very much younger.

Lord McIntosh of Haringey

I beg my noble friend's pardon.

Lord Shepherd

If one was dissatisfied with the Government there was only one solution—one divided. The only question now—and I have more grey hair than I used to have—is what is the merit of doing so.

The Minister said that he had yet to be persuaded. The noble Lord would agree that there are many subjects—certainly ones of complexity—where it is not all that easy to convince a Minister who no doubt at the top of his brief has the word "resist". The noble Lord says it is asking a little too much to say that he will go away because he has been persuaded. I think a case has been made this evening, particularly by the noble Baroness, Lady Elliot, from—I was going to say from Scotland but we must not have divisions between the United Kingdom. A case has been made, and if the noble Lord will undertake to look at it, I shall be most ready to withdraw the amendment and have further discussions with him.

Lord Belstead

I am very ready to do that. I should like to look at the Scottish point which my noble friend Lady Elliot of Harwood has put forward. My noble friend does not need to worry about 15 miles if that is what stays in the Bill. That will in no way prevent anyone being picked up in an area where the villages are rather further apart.

Nonetheless, I think that this is the moment to draw this to a conclusion. If I may, I shall accept the offer of the noble Lord, Lord Shepherd. I should like to talk to him, to the Opposition and Liberal Front Benches, if they would care to—there is no political point; it is just a question of getting it right—and to my noble friend Lady Elliot. If the noble Lord would like to withdraw the amendment on that understanding, I shall be ready to agree to that.

Lord Shepherd

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 13 and 14 not moved.]

Clause 2 agreed to.

Clause 3 agreed to.

Schedule 2 [Amendments consequential on section 3]:

The Deputy Chairman of Committees (Lord Ampthill)

I should tell the Committee that there is a correction to be made to the Marshalled List. Amendment No. 15 should read: Page 124, line 8, leave out ('Subject to the approval of the Treasury')".

Lord Shepherd moved Amendment No. 15: Page 124, line 8, leave out ("Subject to the approval of the Treasury").

The noble Lord said: I should like also to speak to Amendments Nos. 16, 17 and 18. Amendment No. 16: Page 124, line 9, leave out ("may") and insert ("shall"). Amendment No. 17: Page 124, line 10, leave out ("he considers") and insert ("are"). Amendment No. 18: Page 124, line 10, at end insert ("and shall report annually to Parliament upon the discharge by him of his duty").

We have been on this Committee stage for a few hours. With some of the amendments, if I may say so, we have adroitly avoided this issue. I think that it was President Truman who had a plaque on his desk saying: "The buck stops here". I say to the noble Lord who is to reply—it looks as if it will be the noble Lord, Lord Brabazon, who is looking at me rather intently—that so far as quality is concerned the buck stops here tonight.

In a few moments I shall deal with the various reports of traffic commissioners. I share the anxiety of nearly all operators—certainly the most responsible ones, whether in the public or private sector—about the quality and standard of maintenance of their vehicles. There are exceptions. I say quite deliberately that they are not the normal bus-coach operators. That is one of the difficulties in the Hereford scene. The disasters there were caused by organisations which were not normally bus-coach operators running services.

Stage carriage or coach vehicles do many miles in a year. A few moments ago I was given the figure for one of my old coaches on the commuter service from Oxford to London of some 200,000 miles a year. I suspect that some of the express coaches on the Birmingham-to-London, Manchester-to-London or Newcastle-to-London run may do half that because of the distance. On the other hand, they may operate under different schedules. For instance, Oxford is a high density run.

Those vehicles are inspected thoroughly whether they belong to the NBC or to private operators. Without question, the quality of the vehicles has been of the highest order. I think it is of great interest that where there have been accidents which have attracted public attention the question of faulty vehicles has hardly ever appeared. I put that down to the quality of the inspectorate in the organisations and also to the inspectorate of the traffic commissioners.

We are now moving into a new field in stage carriages. Taking my old company, at peak those vehicles that ran at peak were running some 60,000 to 70,000 miles a year with an average of perhaps 40,000 to 50,000 a year. Those are fairly big mileages, usually operated with a great deal of gear changing and stopping. The wear and tear on a stage carriage vehicle could well be more than that on a long distance coach. At present I would not be too—I stress the word "too"—worried about the state of the vehicles in the public sector and certain companies in the private sector. I shall not mention names but there are a number that ring a bell with all of us.

We are now moving into deregulation, in which we shall see vehicles quite different from the vehicles that are now operated by the public sector and the present independents. Whatever one may say about Hereford, the coaches that are operating there I could have purchased in the market, as they stood, for about £1,000 each. Compare that with the price of £40,000 to £60,000 which is normal for a traditional stage carriage vehicle. The price that I gave for the Hereford scheme resulted not only from the inability of the operator to provide maintenance, and the financial support for that maintenance, but I think it stemmed from the initial investment into the vehicles.

I think that it is highly possible that in deregulation the early operators will be buying coaches; not stage carriage vehicles as we know them but coaches which one can buy in the market for £1,000. I do not know how many noble Lords have purchased a motorcar for £1,000, but one does not get much; so operators will not get much when they buy a coach for £1,000. That is my estimate of the cost of the vehicles used in the Hereford scheme.

However, we come to the question of the traffic commissioners and their duty. I very much welcome the very strong and, I believe, sincere, words of the Secretary of State in terms of ensuring quality standards throughout the industry. But words are one thing and practice is another. The inspectorate plays a vital role not only in the annual inspection of vehicles but in the spot checking of vehicles on the roads.

9.45 p.m.

So if the traffic commissioners and their inspectorate are to deal with a new breed of vehicles on the roads, competition will certainly increase. I think the Ministers themselves have said that the competition will create new services and new opportunities, and that therefore the present normal fleet is bound to be increased. So you would expect, would you not, that some improvement would be made in terms of vehicle examiners? That is the purpose behind my amendment.

I am sorry to detain your Lordships, but I believe this is crucial to my argument. Let us take the reports of the traffic commissioners to the Secretary of State for Transport for 1983–84 regarding the vehicle examiners. The traffic commissioner, West Midlands: Because of the lack of recruitment of Vehicle Examiners, who have to conduct all statutory PSV tests, this activity has dominated their programmes of work and caused many cancellations of other duties, often at short notice.

The traffic commissioner, Eastern: Unscheduled Examinations—592 vehicles were given a partial or spot inspection compared to 745 vehicles last year—a 20 per cent. decrease which reflects the continuing shortage of vehicle examiners in our Traffic Area.

The traffic commissioner, South Wales: A further decline in the number of spot checks carried out was directly attributable to the reduced number of vehicle examiners and the level of this activity is now below that necessary to effectively monitor maintenance standards.

The traffic commissioner, Western: Maintaining the test programme placed heavy demands on vehicle examiner capacity and resulted in a reduction in the scale of certain other activities, notably the spot checking of PSVs.

The traffic commissioner, South Eastern: Shortage of Vehicle Examiners remained a problem and hindered the achievement of an acceptable level of enforcement.

The traffic commissioner, Metropolitan: Shortage of vehicle examiners has continued to limit the level of technical support that has been available for the assessment of PSV operators. VI Division have launched a major recruitment of vehicle examiners as a result of which an increase in the various activities will arise as the recruits become fully trained and effective.

The traffic commissioner, Scotland: Despite the disquiet we have expressed in recent years the serious shortage of vehicle inspecting staff continues to limit—dangerously in our view— the work of control on standards of vehicle safety. Recruitment has not even kept pace with new vacancies in the area, much less to make up the back log.

I am sorry that I have spoken at length, but I thought it was right to draw attention to the views of all the traffic commissioners of the United Kingdom, who have a statutory duty for the safety standards of public transport vehicles in this country. They all speak of grave shortages of vehicle examiners. The Minister in another place has acknowledged this and said that steps are being taken to deal with the situation. I do not know the reason. Is it that the pay is not sufficient? Have we lost inspectorates because of the Government's earlier understanding in regard to privatising this aspect? Is it truthfully that there are not enough men with the necessary skills for this important task?

I do not believe that this evening this Committee should lightly merely accept undertakings from Ministers. I shall try to explain what I have sought to establish in this amendment. Yes, I can understand why the Treasury is involved in the Bill. However, the quality of the safety of the travelling public surely involves other than mere Treasury standards. The Secretary of State has created a new situation with new colours in an entrepreneurial scene, running vehicles, carrying passengers. Have we not a duty to say to the Secretary of State, "We insist upon the necessary staff to see that these vehicles are maintained and are checked and you shall come to Parliament to give an assurance to Parliament that you have so done"? I beg to move.

Lord Tordoff

In supporting this amendment perhaps I may say first of all that I am sure that the noble Lord, Lord Peyton of Yeovil, will be pleased to hear that the only reference to cowboys came in a quotation from the Secretary of State. Nevertheless, this bears on the problems that could accrue from individual operators coming onto the scene with little or no experience of the art of running the kind of buses referred to in this Bill.

There is no doubt that the Government have set out in words to reassure the travelling public that safety standards will be maintained. As I understand it, this amendment seeks to enshrine in the schedule the need for the Government to ensure that the traffic commissioners are properly staffed. This is certainly a worry that many of us have. Many people who know much more about the running of public transport than I do are worried about it.

For the benefit of noble Lords, I shall read the provision as it would be if amended. I think that noble Lords will find it on the whole inoffensive. It would read: The Secretary of State shall appoint such persons to act as officers and servants of a traffic commissioner as are appropriate and shall report annually to Parliament upon the discharge by him of his duty". This does not seem to me to be a wild and destructive amendment. It seems to enshrine in the Bill the spirit of what the Government have said in relation to safety on the roads.

I should like to return to a point that I made at Second Reading. I believe it is more difficult to ensure that operators are operating in a safe manner when there is a plethora of operators than when there is a small number of large operators. In other words, inspectors tend to get to know organisations. They know the people to talk to. They know the general standards of operation of the large operators over a period of time. But if individual operators are coming in and out of the market regularly, it seems to me that the workload will increase. One has to start from scratch with a new operator. Obviously, with the free market that the Government are hoping to introduce, there will be a degree of flexibility in the operation which has not been known before.

Admittedly, with large operators it is possible to turn a blind eye to bad practices. However, I think it is true to say that although large operators need to be checked basically from time to time, nevertheless they build up a standard over a period of time which the authorities can accept as being their norm. It is much more difficult with a large number of small operators. It seems to me—this is why I have put my name to the amendment—that there is need for a greater emphasis and a greater number of people involved in checking these matters than there is at the moment. It seems to me that the schedule needs to be tightened up. The words in these amendments do precisely that.

Lord Peyton of Yeovil

I was not at all sure why the noble Lord, Lord Tordoff, saw fit to refer to me. It did not seem to have any particular bearing on the amendment which we are discussing. The noble Lord has said, if I may say so, quite a few things, and I intend to say one now. It is simply this. I could not help noticing in passing this addiction of the modern Liberal spokesman, so rapidly developing, for the big operator, the big man. They feel happier with the big person than with the small one. If the noble Lord's speech meant anything, he was saying how much easier it was to get along with, and to inspect, the operations of large concerns.

Lord Tordoff

The noble Lord should not draw the general from the particular. There is no doubt, I believe, in this case, that inspectors going regularly into a garage that has a number of buses will find it easier and quicker to deal with a significant number than to go round a large number of single buses. To go back to the original point that the noble Lord made, I think I recall that at Second Reading he objected to the use of the word "cowboys". That is the only reason why I mentioned it. The noble Lord may have forgotten it. I have not.

Earl De La Warr

This is a sensible and important amendment. The only point I would add is that the noble Lord, Lord Shepherd, has very properly majored on the safety factor and on the need to have a first class maintenance staff of the right size. Do not let us forget, however, all the other things that are being thrust on the traffic commissioners. The registrations of services will be a tremendous burden both to start with and thereafter. There will be a constant flow of new people requiring operators' licences. They have to be investigated. It is because of those factors, too, that I support the sense, and almost totally the wording, of the amendment.

If by any chance my noble friend was considering accepting the wording as it stands, I am not sure that I would leave out "considers" and put in "are". To say what is appropriate is really like defining the length of a piece of string. The Secretary of State is perhaps entitled to decide for himself. That is a small matter. On the major point, I agree totally with the amendment.

Lord Mottistone

I wonder whether it is necessary to have this amendment or these amendments to achieve the purpose that the noble Lord, Lord Shepherd, has rightly said is very important—namely, to make sure that maintenance is of a high quality. If you compare the wording as it stands and how it would stand—even I can work that out for myself without being helped by the noble Lord, Lord Tordoff—about the only significant difference is the question of reporting annually to Parliament. If you are intending to have the Secretary of State reporting annually to Parliament, it has to be remembered that the Secretary of State is responsible for all sorts of things quite as important as the maintenance of buses. You might just as well say that he has to report on all those, too.

I do not believe that, in the event, if the amendment was accepted by your Lordships, it would make one ha'porth of difference to whether the Secretary of State will appoint "such persons as he considers appropriate." If he is in any way responsible—and one trusts that he is and always will be, even if he comes from the party opposite, though that is very doubtful—he will work out what is appropriate in order to meet the real problem that the noble Lord, Lord Shepherd, poses, and with which I entirely agree, that the buses have to be maintained properly. He will do that. To underline it with these amendments seems a total waste of time. I hope that your Lordships will not support the amendment, if it ever gets that far.

10 p.m.

Lord Teviot

We have now got to a stage where we are considering a whole series of amendments on which one has to decide whether to speak or not to speak. I had decided the latter, but I have now come to speak. One must support anything to do with safety. My noble friend Lord De La Warr mentioned the traffic commissioners' staff. I hope that the people who are going to inspect the vehicles are not going to be the same staff who report the faults. That would be dreadful.

My noble friend said that a lot of work was being put on the traffic commissioners. The industry wishes this. This group of amendments was presented by the noble Lord, Lord Shepherd, in not a long time. Considering the subject, and going through it thoroughly, 16 minutes, or whatever it was, is minor compared to other amendments which some of us will have to put forward on this Bill. We should all be conscious of the importance of safety. It will become even more important following deregulation of local bus services.

One recalls what one said previously on the position of the Hereford trial area. One does not want to go back over that. There it has taken the commissioners up to 18 months to eliminate operators whose vehicles were patently unsafe. We cannot go on with this situation. The Government have stressed the commitment to safety standards. If they will the ends they must will the means. There must be no compromise in this respect. The commissioners must be given the staff necessary to carry out their duties.

Lord Hylton

I speak as someone who was not able to attend the Second Reading debate of this Bill and also as someone with no direct experience of bus operation. However, I live in Somerset and I am aware that there is considerable concern about this Bill, not only among the county councils of both Somerset and Avon but also among the voluntary bodies.

The noble Lord, Lord Shepherd, and the noble Lord, Lord Tordoff, in moving the amendment, have rightly drawn attention to the matter of safety, inspections, and checking. It would take only one horrible, major accident to bring this whole Bill into total disrepute. That is why I ask the Government to take this seriously. I hope that the noble Lords who moved this amendment will come back to this matter at the next stage if they do not get satisfaction tonight.

Lord Brabazon of Tara

I am most grateful to the noble Lords, Lord Shepherd and Lord Tordoff, for bringing this amendment forward, because it allows me to repeat the Government's intention that safety should be preserved and enhanced in this Bill. If I could explain the role of the vehicle examiners to noble Lords, among other duties they will enforce the law relating to the construction and safety of goods and passenger vehicles; conduct annual tests on public service vehicles; and have under Sections 8 and 9 of the 1981 Act, as extended by Clause 33 of the Bill, power to prohibit unsafe public service vehicles and, in future, unsafe large passenger vehicles, even if they are not public service vehicles.

At present there are the equivalent of 91 vehicle examiners employed on public service vehicles work. We are well aware that the abolition of road service licensing and the increased number of bus operators, perhaps many of them small and new to the industry—and that is what we hope deregulation will encourage—will require more effort to be put into enforcement. We have therefore decided to recruit an additional 24 people for public service vehicle examination work. I am confident that this will not only enable present standards to be maintained in the new environment, but will enable them to be improved to the benefit of the industry and the travelling public generally.

The noble Lord, Lord Shepherd, has correctly pointed out that the traffic commissioners in their last annual report were critical of the number of vehicle examiners. The shortage of vehicle examiners was caused by the suspension of recruitment of staff while detailed investigations were carried out on the feasibility of transferring heavy goods and public service vehicle testing to the private sector. When the decision not to proceed with this transfer was announced in July 1983 a recruitment campaign was immediately organised. This deficiency has now been remedied. The 24 new posts are in addition to the previous complement. My noble friend Lord De La Wan also mentioned the need to have adequate traffic examiners to help the traffic commissioners in matters relating to the registration and traffic regulation conditions. We believe that careful deployment of the current complement will be adequate, but we shall keep the situation under review.

As for the office staff, the abolition of road service licensing will release staff who will then be available to work on registration and traffic regulation conditions. I am confident that the numbers will be adequate for that purpose. I hope that what I have said will convince noble Lords that this amendment is unnecessary. We intend to provide adequate staff for the implementation of this Bill. The amendment would have little practical force since appointment of staff specifically as officers or servants of the traffic commissioners is not made. Staff are appointed to the traffic area offices or to the vehicle inspectorate as ordinary civil servants. Nor do I think that the requirement on the Secretary of State to report to Parliament is useful. The important reports, as the noble Lord, Lord Shepherd, has drawn to our attention, are those made by the traffic commissioners themselves and they have shown themselves prepared to comment publicly if they think that they have an inadequate number of staff available. They have not been backward in criticising us when that has happened.

Therefore I hope that what I that what I have said, particularly the commitment to recruit an additional 24 people, will satisfy the noble Lord.

Lord Shepherd

I am not sure how satisfied or assured I should be in the light of that reply. I read all the traffic commissioners' reports which all indicated a shortage of staff. Am I to presume that the 24 people that the noble Lord is talking about are in addition to the present establishment? If that is so even then I wonder whether the figure of 24—which I suppose, working it out very quickly, is two examiners per traffic area—is not exactly in line with the growth that one is expecting in new vehicles or new operators coming into service.

The noble Lord has repeated very much what Ministers have said in another place. The noble Lord, Lord Mottistone, said that the amendment is quite useless: what benefit is there in requiring the Secretary of State to report? I am not expecting him to come to the Dispatch Box every year to make a statement. That is not what is envisaged in the amendment, but what is envisaged in the amendment is that the Secretary of State will take a view as to the generality of what traffic commissioners have said, what they believe is required to do the job, what is the shortage at present, and what the Secretary of State intends to do about it. I asked a series of questions of the Minister as to why we had a shortage. He touched on one. I suspect that there is another. It is that there is a real shortage of individuals with all these skills for dealing with the inspection of public service vehicles. I suspect that that is the greatest of his problems. If it is then he will have to do something more than merely carrying out advertising.

Safety is vital. The noble Lord has given his response. I suppose in the circumstances it is the best that he could do for us. I think we ought to have a look at it and see whether we should pursue it. I think we ought to pursue it at some stage or in some form because I think that, whatever the views we may have, between us we can in our unity, determine that the Government shall provide the greatest degree of safety in standards of maintenance of public service vehicles. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 16, 17 and 18 not moved.]

Lord Brabazon of Tara moved Amendment No. 19: Page 124, line 12, after ("conmmissioner") insert ("and deputy traffic commissioner")

The noble Lord said: With the leave of the Committee, I should like to move this amendment and to speak to Amendment No. 20. Amendment No. 20: page 124, line 13, leave out ("salaries or remuneration") and insert ("remuneration and allowances") These are small technical amendments which merely repair an omission in the Bill to give it explicit power to pay remuneration and allowances to deputy traffic commissioners. I beg to move.

On Question, amendment agreed to.

Lord Brabazon of Tara moved Amendment No. 20:

[Printed above.]

On Question, amendment agreed to.

Lord Brabazon of Tara moved Amendment No. 21:

Page 124, leave out lines 22 to 25.

The noble Lord said: I beg to move this amendment, and with the leave of the Committee to speak to Amendments Nos. 22 to 36 inclusive. Amendment No. 22: Page 125, line 30, at end insert ("(other than where it first occurs in subsection (3))"). Amendment No. 23: Page 125, leave out lines 36 to 41 and insert—

1. ("(a) in subsection (1), for the word "commissioners" the word "commissioner" and for the word "consider" the word "considers";
2. (b) in subsection (2), for the words "Traffic commissioners" the words "A traffic commissioner", for the word "commissioners", in the second place where it occurs, the word "commissioner" and for the words "the commissioners", where they last occur, the word "him";
3. (c) in subsection (3), for the word "commissioners" the word "commissioner"; and
4. (d) in subsection (4), for the word "commissioners", where it first occurs, the word "commissioner" for the words "commissioners decide" the words "commissioner decides" and for the words "they" and "them" the words "he" and "him".")

Amendment No. 24: Page 126, line 3, leave out (" "they" the word "he" ") and insert (" "them" the word "him" and for the words "they think" the words "he thinks";") Amendment No. 25: Page 126, line 5, leave out ("word "they" the word "he" ") and insert ("words "they think" the words "he thinks":") Amendment No. 26: Page 126, line 13, after ("commissioners") insert ("in both places") Amendment No. 27: Page 126, line 19, leave out from (" "commissioners" ") to end of line 20 and insert ("where it first occurs the word "commissioner" and for the words "the commissioners direct" the words "he directs";") Amendment No. 28: Page 126, line 35, leave out ("and") Amendment No. 29: Page 126, line 36, at end insert ("and for the word "his" the words "the holder's" "). Amendment No. 30: Page 126, line 42, leave out ("and"). Amendment No. 31: Page 126, line 43, after (" "he" ") insert ("for the word "him", in both places in paragraph (a), the words "the holder" and for the word "him", in paragraph (b), the words "the holder or former holder" "). Amendment No. 32: Page 127, line 1, leave out sub-paragraphs (b) and (c) and insert— ("(b) in subsection (2), for the words "they" and "their" the words "he" and "his"; and (c) in subsection (3), for the words "they are satisfied they" the words "he is satisfied he" and for the word "them" the word "the commissioner".") Amendment No. 33: Page 127, line 4, leave out sub-paragraph (13). Amendment No. 34: Page 127, line 10, leave out from (and") to ("and") in line 11 and insert ("for the word "them," the word "him";") Amendment No. 35: Page 127, line 42, leave out sub-paragraph (22). Amendment No. 36: Page 128, line 4 after (" "commissioners" ") insert ("in both places").

Noble Lords will realise that there are a large number of amendments to be made to other Acts which are consequential upon the changes from a body of three traffic commissioners in each traffic area to a single commissioner. Close scrutiny of the statute book is continuing and these amendments are part of that process. I beg to move.

On Question, amendment agreed to.

Lord Brabazon of Tara moved Amendments Nos. 22 to 36 inclusive:

[Printed above.]

On Question, amendments agreed to.

Schedule 2, as amended, agreed to.

Clause 4 [Inquiries held by traffic commissioners]:

10.15 p.m.

Viscount Colville of Culross moved Amendment No. 37:

Page 5, line 4, at end insert— ("(8) The Secretary of State may from time to time make rules which provide for the payment and securing of the costs incurred by a traffic commissioner in holding an inquiry and the costs of the parties thereto, and the person by whom and to whom the costs shall be paid. (9) Costs awarded under the above rules may, on the application of the person entitled thereto be made a rule of the High Court or, as the case may be, recorded for execution in the books of council and session. (10) A traffic commissioner shall not be liable to any costs of or incidental to any inquiry held by him.")

The noble Viscount said: I have a friend who is a traffic commissioner, and he has told me something about what it is like to be a traffic commissioner and has caused me to put down this amendment and also Amendment No. 255, which has nothing to do with it but I might as well give my noble friends on the Front Bench warning that it comes from the same source. Amendment No. 255: Schedule 4, page 136, line 41, at end insert— ("(3) The tribunal shall require the assistance of the Secretary of State where, in its opinion, an appeal involves or may involve a decision on an issue of exceptional public importance.")

The background to all this is that the hearings by a traffic commissioner are one example of what is by now a very large number of quasi-judicial proceedings which occur under a number of different statutes. Like most of them, the parties to the proceedings behave in different ways on different occasions. One of the things they do, as do parties in front of most tribunals on this sort of occasion, is to waste a great deal of time or to cause adjournments to take place either because they have not taken the trouble to get ready or, worse, because they do not want the hearing to take place and it is to their advantage to cause delay. Tribunals of this particular sort, such as a traffic commissioner's hearing, are not at the moment able to deal with this by an award of costs against a party to the proceedings in front of the tribunal who is in fact wasting time. I have given some examples of this to my noble friends on the Front Bench and, in order to keep up the momentum which the Committee has recently acquired, I will not go into details of them tonight, but perhaps my noble friends may wish to study them in a little more detail.

I have no particular affection for the way in which this is drafted. It could be done in many ways. I appreciate that the Bill applies to Scotland as well as to England and Wales: therefore one has to pay a proper tribute to the judicial system in Scotland. No doubt this could be drafted in many other ways, and I hope that my noble friend Lord Brabazon will not take points on the drafting. It is the substance of the thing that I want to get at.

In Schedule 4 the Bill is providing for costs to be awarded in suitable cases in front of the appeal tribunal but not, as the Bill stands, in front of the traffic commissioner himself. I would suggest to my noble friends that, on an analogy with a number of other examples—for instance, all procedures under the planning Acts, all compulsory purchase procedures and, if the Department of Transport wants something which is right down its own street, centre-line orders for highways and any compulsory purchase order for highway purposes—there is provision for an award of costs in suitable cases. "Suitable cases" is the point. These costs are never awarded unless one of the parties has misbehaved in the sort of way I have indicated, and one needs to have somebody to adjudicate upon that. My amendment suggests that it should be the traffic commissioner himself, but it does not matter. If my noble friends would prefer it to go in the way in which the Department of the Environment deals with it at the moment, or to the Department of Transport, to the Secretary of State, they can certainly deal with it in that way and no harm will be done.

The point is that people's time is wasted, public money is wasted and, in the extreme case under this Bill where somebody is engaged in proceedings which could lead to the removal of a licence, he may delay them so that the licence simply continues because the hearing never comes to a conclusion, or at any rate is greatly delayed. These are abuses. They are well known in all sorts of tribunals—in proper courts, quasi-judicial tribunals of this sort and in many other fields. I would suggest that, in order to avoid the abuses which I have demonstrated by factual evidence to my noble friends on the Front Bench, we should think about this and extend the award of costs downwards from the tribunal to the cases at first instance in front of the traffic commissioner or now, as a result of the amendments that we have just dealt with, his deputy. In order that I may invite my noble friend to comment on this as a matter of principle without necessarily going into the detail, I beg to move.

Lord Brabazon of Tara

I am most grateful to my noble friend for having brought this to my attention and for having shown me some of the details to which he has referred. I fully sympathise, of course, with his desire to discourage operators from playing fast and loose with the licensing system. It is important that operators who fall down on the job should have their licences revoked or the number of vehicles they can run reduced. It will be important after deregulation that conditions under Clause 25 should, where necessary, be imposed speedily. Would not these operators who fail to turn up at inquiries also fail to pay costs? The result would simply be a need for more action to be taken against them. Nevertheless, I would very much like to take this away and think about it and see whether we can come to some agreement with my noble friend. I hope that with that assurance he will withdraw his amendment.

It is also important, as I am sure your Lordships will all agree, that an operator who is having disciplinary action taken against his licence should be able to defend himself. That must, I fear, give some opportunities for delay. Obviously those opportunities for delay must be minimised and I therefore sympathise greatly with my noble friend's desires. I beg leave to doubt, however, whether charging costs would achieve this aim.

Viscount Colville of Culross

I am very grateful to my noble friend. I do not think that his objections to this stand up because if he is providing in the Bill for costs to be awarded at the appellate stage in front of the tribunal, I do not think that he can really object in principle to them being awarded when the hearing is in front of the traffic commissioner. I do not think he would find that in any proceedings, whether truly judicial or quasi-judicial, the possibility of having costs awarded against you either prevents you defending yourself in a proper case or has any other effect upon the proceedings, except to stop people wasting time. It has proved to be remarkably effective in a large number of other areas of the law and in hearings and inquiries of this sort. I hope therefore that my noble friend will look at this again.

I think that enforcement is not a great problem. I have in fact provided for it in this amendment, but there are many other ways of it being done. If my noble friend wants a parallel, in the Department of Environment field they have adapted the procedure under the Local Government Act and that provides for enforcement. It provides for taxation of the costs if there is a dispute, and the whole thing is perfectly straightforward and very well established. There are no technical difficulties about it. It is simply a matter of seeing whether this is a right case for a little extension of the principle that is already in the Bill. I am grateful to my noble friend. Of course I shall discuss this with him, if he will be good enough. For the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 agreed to.

Lord Peyton of Yeovil moved Amendment No. 38:

After Clause 5, insert the following new clause

("Information as to financial standing. .—(1) A person applying for a PSV operator's licence pursuant to section 12 of the Act of 1981 shall give to the traffic commissioner to whom the application is made—

1. (a) if the application is by a person who does not at the time of the application hold a current operator's licence—
113
1. (i) information as to his financial position including details of funds to be made available to him by others; and
2. (ii) a statement of projected costs and revenue in the first year of operation following the grant of such licence; and
2. (b) if the application is by a person who at the time of the application holds a current operator's licence, audited accounts for the last preceding financial year or lesser period for which audited accounts could then reasonably be expected to be available,

in such form as shall be prescribed together with such other information as may be prescribed for the purposes of this section. (2) It shall be a condition for every PSV operator's licence granted under section 12 of the Act 1981 that the holder of the licence shall within 6 months (or such other period as may be prescribed) of the end of each accounting period terminating during the currency of the licence, lodge with the traffic commissioner by whom the licence is granted a copy of the audited accounts for that period prepared in such form as shall be prescribed.")

The noble Lord said: With this amendment I should like briefly to speak to Amendment No. 38A, since the one standing in my name only is grouped with that which is also in the name of my noble friend Lord De La Warr. Amendment No. 38A: After Clause 5, insert the following new clause.

("Information as to bankruptcies. At the end of section 12(4) of the 1981 Act there shall be added the words, "and that information shall include information as to any previous bankruptcies or disqualifications under section 296 to 300 of the Companies Act 1985." ") First, I want to say how relieved I am to find myself in a substantial measure of agreement on this Bill for the first time with my noble friend Lord De La Warr. Secondly, I wish to say that in moving this amendment it is my hope to emulate the example of my noble friend who moved the last amendment. He did so with commendable brevity and without making a heavy meal of it.

It is axiomatic, and must be the intention of every member of your Lordships' House, that when this Bill becomes an Act it will be a means of providing for the public a reliable and safe service, with stable employment to those who work in it. It is, therefore, necessary to ensure that whoever applies for an operator's licence must have adequate backing and must be able also to prove it. These amendments are put forward by my noble friend and myself not, so far as I am concerned, with any pride of authorship. Such consideration certainly need not stand between myself and my noble friend on the Front Bench. I simply hope that he will take it as an indication of a very strong belief on my part, and I am sure on the part of my noble friend Lord De La Warr, that any applicant must be required to show at an early stage that he has beyond all doubt the necessary financial backing and resources which will enable him to conduct a transport operation which will not be subject to any unnecessary or avoidable interruption on this score. I beg to move.

Earl De La Warr

As might be expected, my noble friend Lord Peyton has said everything there is to be said in the most remarkably short time. I am extremely grateful to him for covering both these amendments in a way of which I fully approve. I think we can all agree, whatever arguments we have had up till now, that new competition coming into this industry is desirable, and if it is to come in and be a success then it must fulfil certain obvious criteria.

First, it goes without saying that it must be safe. Secondly, it must be reliable, so that the passenger when waiting for his bus knows that it will be there on time, which it will not be if it has not been well enough maintained and is apt to break down. Thirdly, we must ensure that the new operator who comes in to provide these services is in for keeps and is not a fly-by-night with too little money to sustain the services that he is offering to the public. It is for those reasons that it is so important that we investigate extremely carefully his financial standing. These amendments knit very closely with the new clause that was brought in by the Government, giving the traffic commissioner the benefit of assessors to help him do precisely these things.

Lord Tordoff

It is, even at this late hour, a pleasure to be on the same side as the noble Lord, Lord Peyton of Yeovil—

Lord Peyton of Yeovil

I wish I thought the same.

Lord Tordoff

I doubt whether his remark will reach the official record, but I take it as read. This is not simply a matter about financial considerations: it is a matter about standards as a whole. If the financial considerations are not adequate at the start of the operation, then it is very possible that maintenance standards will suffer. Considerations of safety of the sort that we have been discussing earlier will then come under pressure, because once financial standing goes short-cuts are taken by operators in order to keep their operation going and maintenance and safety are things which can suffer. It is on those grounds, as well as on the ground of wishing to maintain stability of operations in general, that I thoroughly applaud the idea of having financial control before the operator is allowed to go into action. Certainly there are checks on people's safety standards retrospectively, but this provides a degree of control from the very start of the operation and therefore it is to be commended.

Lord McIntosh of Haringey

I do not wish in any way to seem ungracious. I, too, am pleased to be roughly on the same side as the noble Lord, Lord Peyton of Yeovil, but there are differences between these amendments to which it is only right to refer. The noble Lord's amendment refers to bankruptcies or disqualifications under sections of the Companies Act. But there are many ways in which the financial standing of potential operators could be subjected to positive vetting, rather than the kind of negative vetting to which the noble Lord refers.

There are many ways in which people, with the utmost of good intentions, could be misled into thinking that there is a quick killing to be made in the small bus operator business, without having any adverse financial record of any kind. They may be taking redundancy money, they may be taking early retirement, they may find themselves with a small legacy or a win on the football pools, or they may have the illusion that all you have to do is to acquire a vehicle and you have a guaranteed income of £40, £50 or £100 a day from running on a successful route. I am not entirely convinced that the amendment of the noble Lord, Lord Peyton, would cover those circumstances.

Lord Peyton of Yeovil

I put down this amendment simply as a means of indicating concern that those applying for an operator's licence should be called on to prove that they have the necessary financial resources. I am not in any way wedded to the wording of the amendment or to its general sense. What I am really asking is for my noble friend on the Front Bench to take this matter away and produce an amendment which covers the points we have in mind.

10.30 p.m.

Lord McIntosh of Haringey

I am grateful to the noble Lord. I appreciate and share his concern. In pointing out the differences in wording, I was attempting only to extend that concern and to extend the range of options, possibilities and dangers to which the Government should reply in response to the amendments moved by the noble Earl, Lord De La Warr, and by the noble Lord, Lord Peyton of Yeovil. It was in a desire to be helpful to the Government in what I believe to be a completely non-party matter that I thought it was desirable to spell out some of the other difficulties that arise and not in any sense of contention with the noble Lord.

Lord Sandford

When my noble friend replies to the amendment I wonder whether he can bear in mind the sentence in the report of the Hereford trial which reads: Of the four companies, all small independents, who have actively provided competition in Hereford, the first had their operator's licence revoked, and during the past two months two of the others have withdrawn". My noble friend will know the circumstances which led to that. When he replies, can he say whether he holds the view that the Bill as drafted would have avoided that instability if it had been in force; or that it needs these amendments and that they would have dealt with the matter; or that some other different amendment is needed to avoid that kind of instability in the future?

Lord Belstead

I very much agree with the thinking behind these two amendments. Obviously the safety of vehicles is a prime consideration. Indeed we are strengthening the powers of the traffic commissioners and providing more vehicle examiners, as my noble friend Lord Brabazon said in answer to the noble Lord, Lord Shepherd, on a previous amendment. But it is also important that bus and coach operators should be financially sound and that fly-by-nights should be deterred. It is going to do no one any good at all if bus services come and go, and do so because of unsound vehicles and unsound operations.

I would remind the Committee that, under the Public Passenger Vehicles Act 1981, the traffic commissioner has to be satisfied that an applicant for, or the holder of, an operator's licence meets the requirement to have sufficient financial resources to ensure the establishment and proper administration of the business. This of course goes well beyond any requirement for almost all other sections of the economy. The traffic commissioners take this very seriously, and the Bill will assist them in this task by providing in Clause 5 for the appointment of assessors for financial matters, a point which my noble friend Lord De La Warr mentioned. I am sure that, following the passage of the Bill, and in the light of what noble Lords have said, the traffic commissioners will be even more vigilant.

I would however emphasise that the Government would not wish traffic commissioners to put new applicants through the sort of grilling which would deter not only a disreputable applicant but also genuine small operators whose personal commitment and enthusiasm mean that they will succeed. All of us who are interested in the industry and established bus operators large and small might consider carefully whether the founders of many very successful businesses today would, many years ago when the businesses were orginally founded, have got through the financial constraints about which we are thinking in our debate.

In addition, the new clause goes further by requiring not only the applicants for licences but also existing operators to submit outline accounts both when licences are renewed and annually during the term of the licence. If I may say so, that is excessive. We all know that many private companies do not produce their audited accounts when they should. If audited accounts were required before an existing licence holder could get a new licence on the expiry of his old one, the result could be quite lengthy delays during which under the general provisions of the 1981 Act the existing licence would continue in force. Some operators might spin out that period for a very long time. In this industry we are dealing with a large number of sole traders, partnerships and private companies and with relatively few public limited companies. The new clause which my noble friends moved would put quite a burden on them as well as on the traffic area offices.

What we need to do is to build on the 1981 Act. Your Lordships may be interested in some of the questions asked in the form which is already in use in goods vehicle operator licensing. There are searching questions about what funds are available, what costs the operator will have to meet and what expenditure he expects to have to undertake. It is our intention that there should be a similar form on the passenger side. I believe that that would meet the concerns behind the amendment without unreasonable deterrence to new operators and without burdens on the existing ones.

However, I must confess that the sudden alliance between my noble friends Lord Peyton and Lord De La Warr with the Liberal Bench and the Front Bench opposite has rather confronted me with a phalanx of views that what is needed is to have on the face of the Bill something which will give the House the assurance that we really mean business in looking at the definition of "financial standing". I give my noble friends Lord Peyton and Lord De La Warr the assurance that in response to Amendment No. 38 the Government will consider sympathetically before the next stage of the Bill the definition in the 1981 Act to see whether it can be strengthened.

Before I reply to my noble friend Lord Peyton much more briefly on Amendment No. 38A, let me reply to my noble friend Lord Sandford, who spoke of low standards in the Hereford area. As I understand it, the percentage of operators in Great Britain which passed the annual tests in 1983–84 is: PTE operators 49 per cent.; London Transport Executive 47 per cent.; and private operators 56 per cent. My noble friend may have extracted what he heard from Hereford, but I do not think that it is reflected in the national figures.

Lord Carmichael of Kelvingrove

I understand that a passenger transport vehicle may fail its first test on quite minor matters, such as the bell not working or even two or three interior bulbs not working. But the vital part is the mechanical side. I wonder whether the Minister can say either now or later whether we are comparing like with like. We are really concerned with faults affecting the safety of the vehicle and its passengers.

Lord Belstead

I am not entirely surprised that the noble Lord, Lord Carmichael, raises that point, but we are in fact comparing like with like. We are comparing the pass rate by the vehicle examiners for those three different sets of operators. If I can find out anything more for the noble Lord about what those passing and failing figures represent in regard to the reasons for passing and failing, I shall, of course, endeavour to do so, but I am not confident that I shall be able to go much further.

I should like, much more briefly, to deal with Amendment No. 38A, in the name of my noble friend Lord Peyton. My noble friend explained the concerns which led him to table this amendment. In doing so my noble friend has raised an important point and I sympathise with it. It is important that traffic commissioners should know when they have before them applicants with a financial history that is unfortunate, or even worse. I give my noble friend an undertaking that the operator's licence application form will include suitable questions.

Taking the point made by the noble Lord, Lord McIntosh, it is possible that these two criteria of bankruptcies or disqualifications may not be exhaustive, and we may want to look a little wider. It is just conceivable that my noble friend's drafting is not quite right. I think that it would be better for me not to say that I want to put this amendment on the face of the Bill. However, I want to give an absolute assurance to my noble friend that we shall do what he wishes in regard to the application form. I hope that my noble friend feels that he has made his point by putting forward Amendment No. 38A.

Earl De La Warr

I am grateful to my noble friend for saying that he will take away my amendment and look at it, despite the qualifications that he made. If it is of any help to him, I can tell him that I, too, am more concerned with the first part of my amendment than the second. It is in the first part that there is reference to the would-be operator's financial standing. If my noble friend will think of it in those terms, for myself I shall be satisfied. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 38A not moved.]

Lord Denham

I think that we have progressed as far as we can usefully go tonight. I therefore beg to move that the House do now resume.

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

House resumed.