Transport Bill

HL Deb 18 July 1985 vol 466 cc923-79

House again in Committee on Clause 57.

Lord Tordoff moved Amendment No. 178A: Page 53, line 28, at beginning insert (" (i) ").

The noble Lord said: It may be for the convenience of the Committee if we also discuss Amendments Nos. 178B, 208Z, 208AA and 242. Amendment No. 178B: Page 53, line 30, at end insert—("; and (ii) to consult persons representing the users of passenger transport services within their area."). Amendment No. 208Z: Clause 61, page 59, line 31, at end insert—("; and (c) to consult persons representing the users of passenger transport services within their area."). Amendment No. 208AA: Page 59, line 41, at end insert—("; and (c) to consult persons representing the users of passenger transport services within their area."). Amendment No. 242:

After Clause 80 insert the following new clause

("Public Transport Consultative Committees.

.—(1) It shall be the duty of each Passenger Transport Authority, county council, regional and islands council to establish, not later than six months after the vesting date, a committee to be known as the public transport consultative committee (hereafter "the committee").

(2) The Passenger Transport Authority (or as the case may be) the county council, regional or islands council shall provide that—

1. (a) members of the committee appointed by the Passenger Transport Authority (or as the case may be) county council, regional or islands council shall not exceed one-sixth of the membership of the committee; and
2. (b) members of the committee appointed by district councils shall be equal in number to members appointed by voluntary organisations.

(3) It shall be the duty of the Passenger Transport Authority (or as the case may be) county council, regional or islands council to provide such staff, office and other accommodation and expenses as they consider necessary to enable the committee to perform its functions.

(4) It shall be the duty of the Passenger Transport Authority (or as the case may be) county council, regional or islands council to provide the committee with such information as the committee may reasonably require in order to carry out its duties.

(5) It shall be the duty of the committee to consider—

1. (i) any matter affecting the supply and use of road passenger transport services, ferry services and rail services (other than those provided by British Rail) and to make recommendations to the Secretary of State or the Traffic Commissioners or the Passenger Transport Authority or (as the case may be) county council, regional or islands council; and
924
2. (ii) any matter that has been the subject of representations (other than representations appearing to the committee to be frivolous) made to the committee by or on behalf of users of any services or facilities provided within their area; and
3. (iii) any matter referred to the committee by the Secretary of State or the Traffic Commissioners or by the Passenger Transport Authority or (as the case may be) county council, regional or islands council; and
4. (iv) any matter which otherwise appears to the committee to be a matter to which the consideration ought to be given.

(6) Copies of the minutes, conclusions and recommendations of the committee with respect to any matter shall be sent:

1. (a) in the case of any matter referred to the committee by the Secretary of State, to the Secretary of State;
2. (b) in the case of any other matter to the Passenger Transport Authority or the county council or the regional or islands council; and
3. (c) otherwise as the committee may deem appropriate.

(7) Where the Secretary of State or the Traffic Commissioners or the Passenger Transport Authority or (as the case may be) the county council or regional or islands council receives a recommendation under subsection (6) above he or they may give such directions as he or they think fit with respect to matters dealt with in the recommendation; but before giving any such direction he or they shall consult with such authorities as he or they think fit.

(8) On reaching a decision with respect to matters dealt with under subsection (6) above the Secretary of State or the Traffic Commissioners or the Passenger Transport Authority or (as the case may be) the county council or regional or islands council shall give notice in writing of that decision to the committee.

(9) The committee shall elect its Chairman and Vice Chairman from amongst the members.

(10) The committee may co-opt persons deemed by the committee to be knowledgeable in transport affairs within its area.

(11) The committee may appoint sub-committees to exercise, subject to such restrictions and conditions as the commitee thinks fit, some, but not all, of the committee's functions and such subcommittees may consist wholly or partly of persons who are members of the committee.

(12) Meetings of the committee, which shall be open to the public and the press, shall take place at least once 3in every three months, the time and place of meetings to be publicly notified.

(13) The committee shall make an annual report which shall be published.").

These amendments are not consequential upon each other, but they all touch on the question of consumer consultation. Therefore, although Amendment No. 242 is not directly related to the other four amendments, I thought that it might be for the convenience of the Committee if we discussed this whole area together. I should like to say a few words about Amendment No. 242, because it is the major amendment, and then come back to the others in a minute or two. These amendments, in particular Amendment No. 242, have the support of the National Consumer Council, the National Federation of Bus Users, the National Association of Local Councils, the National Federation of Women's Institutes, the National Association of Passenger Transport Users, Transport 2000 and Friends of the Earth. I am sure that the Government will see that as being an irresistible combination of consumers.

One important omission from the Bill is any provision for bus users to express their views through statutory consultative bodies; that is to say, ones that can officially represent their views to both the transport authorities and the providers of the services. Where consumer consultative committees have been set up on a pro tem basis they have worked well. East Sussex is one of the few shire counties to have them. We believe that bus users have benefited from that. The metropolitan counties have 10 years of experience of transport advisory committees working quite successfully with PTAs and PTEs. Drawing on this experience, the new clause in Amendment No. 242 meets this need for statutory consumer representation.

The clause requires the responsible transport authority to establish a public transport consultative committee. This committee would have the power to make recommendations to the Secretary of State, the transport authority or other appropriate bodies. Members would be appointed by the transport authority, district councils, local consumer groups and other organisations with an interest in transport matters. Such committees would enable public transport users to register complaints about all aspects of service provision, to suggest improvements, and to help influence local transport policies. There has been criticism from the Government Back-Benches during the earlier stages of the Bill that many of the speeches and many of the amendments were too producer oriented. I am glad to redress that balance with this series of amendments because quite clearly the passenger—who in this case is the consumer—is the most important factor in the whole equation of improving bus services, if that is what we are succeeding in doing; we are certainly trying to do it, but whether we succeed is a different matter.

The Government have so far implied in another place that user representation of this kind will be unnecessary in a deregulated environment. They argue that market forces will ensure that the users' needs are met. That seems to me to be a too simplistic view of the situation in what is not a perfect market. It represents a negative attitude to consumer representation which I believe is unacceptable in principle.

But there are also important practical arguments for these proposals. Public transport consultative committees are necessary because the Bill envisages enormous changes in public transport service provisions. Changes of this magnitude to existing public services, particularly those with a 50-year old history, need systematic and authoritative monitoring both before and after the event. Public transport is not like general merchandise on the supermarket shelf. This comparison is misleading. It is not possible for consumer preferences to be signalled directly through the market mechanism. Some attitudes will of course be directed through the market mechanism, particularly in those areas where the bus services are profitable. In the centres of cities choice will much more easily establish the demands of the customers, but in remote areas this is far from being true.

The existing transport users consultative committees deal with rail transport only, except in London where the bus users are included, but provincial bus users deserve no less support. The National Consumer Congress, which brings together delegates from more than 100 consumer groups, passed a resolution on bus services in March of this year. They reiterated their belief in the need for a statutory system of consumer representation covering all sectors of public transport. If the aim of the Bill is to benefit passengers, which is what the Government claim, I believe that consultative committees of this kind working alongside each passenger authority would help everybody to know quickly, accurately and systematically—"systematically" is the word to underline—how well the new system is working.

There is a danger in allowing merely the market mechanism to determine what is going to happen. One gets into a position of anecdotal evidence only when really rather more professional and scientific evidence is required by the passenger undertakings in order for them to determine how well they are meeting the needs. Therefore we certainly urge the Government to adopt a more positive approach to this issue.

Perhaps I may back track now to the shorter amendments, Amendments Nos. 178A, 178B, 208Z and 208AA. These amendments are so worded as to leave open the matter of which representatives we are talking about. In other words, it will be for the authorities and the executives concerned to decide what would be appropriate representatives. There are a number of precedents in legislation and draft legislation for employing this formula or variations of it. The Consumer Safety Act 1978, the Weights and Measures Act 1973 and the Trade Descriptions Act 1968 are worded in a similar way.

If Amendment No. 242, which provides for the establishment of consultative committees, were to be agreed to by the Government, it would be much more straightforward. But as I say, these amendments are complementary. In some ways they may be mutually exclusive, but, nevertheless, they touch on this whole area of consumer consultation which we believe needs to be regularised in a way which is not at present provided for in the Bill.

I do not intend to press this amendment to a Division, as your Lordships will understand, but it would be interesting to know the Government's most recent thoughts on this matter to see whether they can go some way towards meeting the requirements of a wide number of organisations in the country which are extremely worried about formal consultation procedures, and who are not happy about relying merely on market forces to enable the producers—in this case, the bus companies—to make sure that their needs are met.

On an individual or anecdotal basis, as I have said before, the needs of users may be met; but on a network or wider basis of knowing what the market really needs from a consumer's point of view, I believe that a structure such as that proposed is necessary and that it would be wise of the Government to go some way down that road. I beg to move.

Lord Mottistone

I understand precisely what the noble Lord has been saying, but what worries me are the words: persons representing the users". The whole object of the Bill is to encourage more people to use the buses because usage has sunk to a very low level.

We really want to make sure that people who might use the buses are consulted, rather than those who will never use the buses. The point of the exercise is to find out where the demand lies in order to expand the bus services. I am very serious about this. It could be done by having a proper inquiry—one of those silly things where they ask people how they are going to vote. The information has to be found out in that kind of way. But one has to consult the people who are not using the buses just as much as the people who are. I am not sure that having a formal body of people representing the users will give the right answers or that the proposed addition to the Bill will help. We want to get at the non-users rather than at the users.

Lord McIntosh of Haringey

I forgive the noble Lord, Lord Mottistone, his insult to the survey and research trade, in which I have earned a living for many years. In fact, his contribution was constructive. I support the noble Lord, Lord Tordoff. He makes a very valid point. Whether or not we approve of the detailed provisions of this Bill, all thinking is to persuade more people to use public transport—as has been achieved in London by better marketing and better services without privatisation. I say that as an aside.

I realise that the Government are in some difficulty about nationalised industry consumer councils. There have been attempts in your Lordships' House to press the Government to come to a conclusion in respect of their policy about such councils. Those attempts have always failed because the Government are instinctively, or so it seems to me, antagonistic towards such bodies. The Government call them quangos and other rude names.

The only other point I would add to the arguments of the noble Lord, Lord Tordoff, is that the changes proposed for the bus industry will actually increase the need for the views of consumers and potential consumers to be felt. It is proposed that there shall be an element of competition in the bus industry as a whole, but for 95 per cent. to 99 per cent. of actual bus users, perhaps after an initial period of cut throat competition, there will only be one operator supplying the need that the consumer has. Under those circumstances, there will be as much of a monopoly as if it had been a National Bus Company, London Transport or municipal public transport undertaking.

In those circumstances, the fact that the service was formerly private will not make any difference to the ordinary consumer, who will have the same needs for adequate information in the form of timetables and so on, and for adequate opportunities to complain about failure to perform, as he or she has when dealing with the water, electricity or gas industry. The noble Lord, Lord Tordoff, put a modest and fair point rather than the strong point that he might have made about the increased need for consumer protection in the industry as envisaged.

8.15 p.m.

Lord Teviot

I should like to follow the very interesting few words of the noble Lord, Lord McIntosh, but I think I had better pick up on the words of my noble friend Lord Mottistone, when he said that one should consult the non-users rather than the users. The users are in the competitive marketplace and they like to get a whole lot of other people interested. If there are all these people ready to use the buses, they should consult the users. The users are the people who know the true situation. They have been around for a long time. The users publicise their views on local radio, in the free press and everywhere else. They are surely the people in the know. The nonusers are simply uninterested.

Lord Mottistone

Not true.

Earl Attlee

I fully support my noble friend Lord Tordoff. My name would have been put to this amendment and to other amendments, but unfortunately last week I lost my voice and I did not see any point in putting my name to amendments to which I could not speak.

When I worked for British Rail, one of the worst duties we had was to to attend meetings with the consultative committees. However, they were useful in that they allowed us to talk to the actual people who caught the 6.58 p.m. from Tooting Bec to Sevenoaks. They know what they want. I feel that the noble Lord, Lord Mottistone, was splitting hairs. He said that there should be consultations with the non-users. The nonuser is someone who does not—

Lord Mottistone

If the noble Lord will allow me to intervene, I was talking about potential users. Those are the people we want to get at.

Earl Attlee

I was just coming to that point. I agree with the noble Lord that is not the captive audience one wants to attract but the people who may not go by bus and who could go by bus. There are some people who will never travel by bus. We would be wasting our time on them. One is thinking of instead of the people one could attract onto the buses. If one has been on a bus once in a lifetime, I presume one could say that one is a bus user. I am certain that almost everyone in your Lordships' Chamber has been on a bus at one time or another and could therefore say that they are bus users.

In the case of British Rail, we did not like meeting the consultative committees because quite honestly, they tended to ask awkward questions—questions which maybe we would rather they did not ask. They would ask why we did such a thing and did not do another, and then we would have to think up very good reasons or we would have to do something about it. That was a good thing. The market force is great.

As my noble friend Lord Tordoff said, whether or not one likes this Bill, the bus industry must be a success. It will only be a success if more and more people use the buses. They will only use the buses if they provide the kind of service, at the kind of intervals and serving the places, which the users want.

Lord Brabazon of Tara

These amendments suppose a bus industry very different from the one that will emerge after deregulation. If we were proposing that bus services should be protected monopolies, planned and co-ordinated by local authorities, then the elaborate consultative machinery proposed might well provide a useful means of finding out what services passengers want and how well they operate in responding to passengers' wishes. Even then, the machinery would be a very imperfect one. We are proposing something which we consider to be infinitely better; that is, that operators should be allowed to compete to provide the services people want. The incentive of competition will make the bus industry more sensitive to the demands of customers.

Both the noble Lord, Lord Tordoff, and the noble Lord, Lord McIntosh, mentioned the existing statutory transport consumer bodies—the CTCC, the area transport users' consultative committees and the London regional passenger committees. These were established by Parliament to represent the interests of users of British Rail and London Regional Transport services. They fulfil an important function, as do other nationalised industries' consultative committees, in representing the interests of customers where the industry is providing many of its services in a monopoly or near monopoly situation. I hope that the noble Lord, Lord McIntosh, hears my words because I do not in any way wish to deprecate these bodies.

It is right that there should be formal procedures for representing the views of the passengers of BR and LRT, but where a deregulated bus industry operates in a highly competitive market, where innovative and unconventional services likely to meet passengers' needs are encouraged, there is absolutely no need for the network of committees envisaged in this amendment and the elaborate bureaucracy which would be involved.

Turning now to the situation where market forces do not prevail and where subsidies are necessary, the Government fully recognise that in reaching decisions about subsidising uneconomic services the local authorities will need to be aware of the wishes of passengers and the potential passengers, to which my noble friend referred, on particular routes. Again, no network of statutory committees seems to the Government to be necessary. Indeed, it seems unjustifiable to seek to impose a statutory committee of the kind proposed between passengers and ratepayers and the councillors whose job it is to represent their interests.

Following discussion on just this issue in the Committee stage in another place my right honourable friend the Secretary of State agreed to consult the local authority associations whose members would be affected about whether they would welcome such a duty. It was clear from the response that they would not. They place considerable importance on consultation but do not see what is to be gained from a specific duty to consult persons representing, or claiming to represent, passengers.

Lord McIntosh of Haringey

The noble Lord said that there had been consultation with local authorities as to whether they would welcome such a duty. Immediately before that he referred to the alternative strategy of having local authorities taking the strain, so to speak, of representing the passengers. Does the noble Lord mean that the local authority associations said that they do not wish to represent the passengers or that they do not wish to see statutory consultative committees? That was not clear from what the noble Lord said.

Lord Brabazon of Tara

I apologise. I said that we consulted them about whether they wished to see such consultative committees established. The authorities felt that they could represent the interests of their own electors, to put it more simply, and I must say that I agree. We would encourage authorities and councillors to consult widely on their policies and nothing in the Bill prevents them from doing that. Consultation, not just of specified groups, is part and parcel of normal democratic procedures. Therefore, I think that not only is the amendment of the noble Lord, Lord Tordoff, unnecessary but that consultation through the locally elected councillors is the better way.

Lord Tordoff

I am grateful to all noble Lords who have joined in this short debate. May I say to the noble Lord, Lord Mottistone, that it seems to me that to have some kind of structure to the consultation process is more likely to involve the potential users than simple market forces. It is much more difficult in an ad hoc situation to know what potential users really want. It is easier to know what the actual users want and more difficult to know, just by studying the returns, what potential users want. By having a properly structured consultation process it is much easier to test the potential market.

To come to what the Minister said, it is quite clear that the Government are resistant to any kind of structured consultative process. I think they are making a grave mistake. I believe we are moving into a totally different situation. I suspect that, in this case, because the local authorities actually have a stake in running buses they probably do not welcome an open-ended consumer consultative system in the way in which my noble friend Lord Attlee said that British Rail did not exactly welcome it. It was uncomfortable for them. I do not expect the National Bus Company necessarily to welcome a consumer council of this kind. However, I expect that the passengers would because they would be better informed through their ability to call on the scientific, legal, or whatever support these kind of consultative committees can provide which the passengers do not have as individuals Even if one accepts that argument in relation to Amendment No. 242—which I do not for one moment accept—nevertheless the earlier amendments talk about consulting suitable bodies, whatever they are. There is a duty, for example, to consult the Women's Institute in rural areas. That does not seem to be a particularly wild suggestion to make. The WI represents people who know what bus users want, and a number of the other bodies which I have already mentioned who support these amendments involve people who know more about the overall position than do individual passengers, particularly individual potential passengers.

It was with those ideas in mind that I spoke to these amendments together because there are a number of dimensions to this series of amendments. It is sad that the Government are not prepared to give any ground or even to suggest that they might think about it again. However, time is getting on, I certainly will not drop this subject and I hope that while we are discussing all these matters, on the beaches or wherever, we can make some kind of progress before we come back on Report in October. Meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 178B not moved.]

Lord Belstead moved Amendment No. 178C:

[Printed earlier.]

The noble Lord said: I spoke to this amendment with Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 178C):

Page 53, line 30, at end insert— ("(6A) It shall be the duty both of the Authority and of the Executive for any passenger transport area, in exercising or performing any of their functions under the preceding provisions of this section, to have regard to the transport needs of members of the public who are elderly or disabled.").

Lord Brabazon of Tara moved Amendment No. 178D:

[Printed earlier.]

The noble Lord said: I spoke to this amendment with Amendment No. 174W. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 178D):

Page 54, line 31, at end insert—

(" Consultation and publicity with respect to policies as to services.

.—(1) When considering from time to time the formulation of policies for the purposes of section 9A(3) of this Act, the Authority for a passenger transport area shall consult—

1. (a) with every Passenger Transport Authority, county council or regional council whose area may be affected by those policies; and
2. (b) either with persons operating public passenger transport services within their area or with organisations appearing to the council to be representative of such persons.

(2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, the Authority concerned shall publish a statement of all policies so formulated by them on that or any previous occasion which for the time being apply in relation to the performance by the Executive for their area of their duty to secure services under section 9A(1).

(3) When the Authority publish such a statement, they shall send a copy of the statement—

1. (a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and
2. (b) to each of the persons or (as the case may be) organisations whom they consulted under subsection (1)(b) above;

in relation to the formulation of their policies on the occasion in question.

(4) The Authority shall also—

1. (a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and
2. (b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected." ").

Clause 57, as amended, agreed to.

Schedule 3 [Amendments consequential on section 57]:

Lord Teviot moved Amendment No. 179:

Page 129, line 7, at end insert— ("( ) in paragraph (i) (power to carry passengers by road), after the word "from" there shall be inserted the words "or in the vicinity of;").

The noble Lord said: With this amendment I shall speak also to Amendment No. 184: Amendment No. 184: Clause 58, page 55, line 21, after ("from") insert ("or in the vicinity of").

The object of this amendment is to make clear that it is legal for the operating companies formed by the passenger transport executives to operate services which are wholly outside the passenger transport areas. At present the executives run services entirely outside the present area for two reasons. First, the areas concerned were in these passenger transport areas between 1969 and 1974 but fell outside them as a result of local government reorganisation. However, the executives continue to hold the licences to operate those services, and they do so now. Secondly, the services were in the operating areas of undertakings acquired by executives because most of their operation was inside the passenger transport area concerned.

The most important example which comes to mind concerns the Greater Manchester PTE which operates a number of services of this nature: in the Glossop area of the High Peak of Derbyshire; in the Wilmslow area of Cheshire; in the Warrington area of Cheshire, and in Merseyside.

8.30 p.m.

However, Greater Manchester is not the only executive affected. If the Bill is not amended it will not be possible for the companies who take over from the executives' operations to run these services. The amendment therefore changes Clause 58(1)(a) by adding the words "or in the vicinity of" to the present wording. This will not therefore give these companies the right to operate anywhere in the country, although there is no reason in principle why they should not, but merely seeks to ensure the continued operation of existing services after deregulation.

In discussions with the PTE group, the Department of Transport have argued that the situation is covered by the Bill as presently drafted. I am sure that my noble friend will explain that. If, however, it is the intention not to restrict the area of operation of PTE companies, the words "within to and from the Executive's area" in the clause are superfluous and should therefore be deleted. Indeed, it can be argued with some such justification that this would place the passenger transport executive companies on an equal footing with all other bus operators who will be able to operate without geographical restriction and would therefore foster fair competition. However, the PTE group has not pressed this point with the department and merely seeks to clarify the position beyond any doubt by inserting the words, "or in the vicinity of" in the clause, which will permit operation immediately outside a passenger transport area. What the amendment will do is to correct an omission from the Local Government Act 1972 which should have recognised the position by amending the Transport Act 1968 which has been used as the basis of the Bill, and a consequential amendment to the 1968 Act is therefore proposed. I beg to move.

The Earl of Caithness

I am grateful to my noble friend for raising these amendments, which in fact arise from a misunderstanding of Clause 58(1). If he has discussed the matter with the department, which he says he has, he will of course know the answer, but for the benefit of the rest of the Committee may I just reiterate that this is an error and indeed the department has had to cross through a sentence from the Notes on Clauses circulated to your Lordships which made the same mistake.

Clause 58(1) is not a limit on the powers which the initial company may be given in its objects clause. It describes the minimum powers which the initial company will require. In complying with this clause the PTE must form a company with at least the powers to carry on the purposes specified.

While the company remains in the public sector its controlling authority is required to ensure that it does not extend the scale of any road passenger transport activities beyond those which are currently being undertaken by the controlling authority or the PTE itself. Clause 69(3)(a) requires this, but it does not prevent the transfer to the company of any operations currently entirely outside the area, or the continuing and lawful provision of those services by the company.

I hope that my noble friend will accept my assurance that no amendments to this Bill are necessary to allow the continuation of any existing bus services. He mentioned in particular the one at Glossop and this is four square within the Bill. It will not be affected. On that basis I hope that my noble friend will withdraw his amendment.

Lord Teviot

I am delighted to withdraw this amendment. In doing so I should like to say that if I had had that answer before, I would have taken this amendment off the Marshalled List. However, I am grateful to my noble friend for what he has said. I repeat, to be absolutely clear on this, that any services which now exist which are outside the area will continue to be allowed to do so. That has been agreed to and in those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 180 to 183 not moved.]

Lord Henley moved Amendment No. 183A: Page 132, line 37, leave out ("(b)").

The noble Lord said: With this amendment I should like at the same time to speak to Amendment No. 183B, which is consequential upon Amendment No. 183A. Amendment No. 183B: Page 132, line 38, leave out from ("services") to end of line 41 and insert— ("(a) for paragraph (b) there shall be substituted the following: (b) any operator of a public passenger transport service within the meaning of the Transport Act 1985; (b) in paragraph (f) after the words "in paragraph (a)" insert: or (c)"; and after the words "(whether wholly owned or not)" insert "of a body falling within paragraph (b) above or".").

May I start by apologising for putting these amendments down rather late, which was due to circumstances beyond my control. These amendments concern paragraph 22 of Schedule 3 which is about the Post Office Act of 1969. As the Committee know, two of the principal aims of this Bill are to make provision for the transfer of the NBC to the private sector and to provide for the reorganisation of passenger transport in the public sector, the latter including enabling provisions for the entry into the private sector of PTEs and local authority bus undertakings.

So far as the Post Office is concerned these provisions pose a serious threat to its counter business, given that when the provisions have been brought into effect it will cease to have statutory power, under Section 7 of the Post Office Act 1969 as amended by the British Telecommunications Act 1981, to perform services for the bodies concerned by way of the sale of tickets, travel passes, etc., and in turn will lose a significant amount of valuable business not only in respect of its Crown office but also its network of sub-post offices, of which at the moment at least 20 per cent. are involved in this type of work. This potential loss of business will therefore strike a serious blow to Post Office efforts to maintain the size of the present network through the retention of existing business and the development of new, long-term business.

My amendments seek to overcome this by making provision in Section 7(1A) of the Post Office Act 1969—that section having been added to the 1969 Act by the 1981 British Telecommunications Act—to empower the Post Office, subject to the consent of the Secretary of State, to continue to perform services at its counters for the particular bodies I have mentioned once they have entered the private sector. I beg to move.

Lord Brabazon of Tara

I am entirely in agreement with my noble friend that it would be a pity if the Post Office were no longer to be able to continue to offer the services which it gives at the present time with regard to selling bus tickets and passes and so on, and particularly so in the case of sub-post offices, which I think we would all wish to see have the opportunity of doing as much business as they can. I therefore find my noble friend's arguments very persuasive. I should just like to enter one reservation, which is that when we look at this amendment in detail we might find it more complex than it appears to be. My noble friend has said that his amendment was only put down at very short notice and I am afraid that I have not had the chance to discuss it with my department nor with Parliamentary Counsel. However, I am entirely in sympathy with his arguments and I shall give him an assurance that we shall look at this very seriously and I shall be in touch with my noble friend. I hope that on that undertaking he will be willing to withdraw the amendment for the time being.

Lord Henley

I thank my noble friend for that reply. I apologise again for putting this amendment down so late. I see his point that the Parliamentary draftsmen have not had time to look at it. I was about to say that I am not a lawyer—I am, but I have forgotten all the law that I knew. I have looked at the amendment and I suspect there may be one or two things wrong with it; but I am sure we shall be able to sort them out. On that assurance from my noble friend, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 183B not moved.]

Schedule 3 agreed to.

Clause 58 [Transfer of bus undertakings of Executives to companies owned by Authorities]:

[Amendments Nos. 184 and 185 not moved.]

The Earl of Caithness moved Amendment No. 185A: Page 55, line 33, leave out from ("theirs") to end of line 35 and insert ("which it appears to the Executive to be appropriate to transfer to that company").

The noble Earl said: With the leave of the Committee, I shall speak also to Amendments Nos. 188A, 188B, 197A, 197B, 197C, 198A, 203A, 206A and 264B. Amendment No. 188A: Page 56, line 22, leave out ("held by them"). Amendment No. 188B: Page 56, line 23, at end insert— ("(8A) Where—

1. (a) the property, rights and liabilities transferred under subsection (7) above include the whole of the undertaking of any wholly-owned subsidiary of the Executive; and
2. (b) it appears to the Executive that no further action is required on the part of that subsidiary to perfect any transfer under that subsection;

the Executive shall secure that that subsidiary is wound up."). Amendment No. 197A: Clause 60, page 57, line 45, at end insert— ("(1A) Where the initial company has any wholly-owned subsidiaries, the proposals may, instead of or (as the case may be) in addition to providing for the transfer to any one or more of those companies of the shares in or other securities of any such subsidiary comprised in the initial company's undertaking, provide for—

1. (a) the division among those companies; or
2. (b) the transfer to any one of them;

of the whole or any part of the undertaking, or of any property, rights or liabilities of, that subsidiary."). Amendment No. 197B: Page 58, line 10, leave out ("is to be divided among the transferee companies") and insert (", and the whole or any part of the undertaking of any wholly-owned subsidiary of the initial company to which the proposals relate, is to be divided among the transferee companies or (as the case may be) transferred in accordance with the proposals to any one of those companies;"). Amendment No. 197C: Page 58, line 12, leave out from ("company") to end of line 14 and insert (", and of any wholly-owned subsidiary of the initial company the whole of whose undertaking is to be transferred in accordance with the proposals to any one or more of the transferee companies, on completion of the transfer of that company's or (as the case may be) of that subsidiary's undertaking ") Amendment No. 198A: Page 58, line 20, after ("company") insert ("and of any wholly-owned subsidiary of the initial company"). Amendment No. 203A: Page 59, line 2, leave out ("comprised in the part of the initial company's undertaking") and insert (", and of any wholly-owned subsidiary of the initial company, which are"). Amendment No. 206A: Page 59, line 21, at end insert— ("(12) Subsection (11) above shall apply in relation to any subsidiary of the initial company the whole of whose undertaking is transferred under the scheme to one or more of the transferee companies as it applies in relation to the initial company.") Amendment No. 264B: Clause 113, page 111, line 15, leave out ("a") and insert ("the whole or any").

These amendments have been brought forward because the PTEs have at present powers to create subsidiary companies under Section 10(19) of the 1969 Act. The amendments are technical ones giving the necessary flexibility for the transfer schemes under this Bill. I beg to move.

On Question, amendment agreed to.

Lord Teviot moved Amendment No. 186: Page 55, line 35, at end insert— ("(3A) A scheme under subsection (3) above shall identify any liabilities retained by the Executive or any wholly-owned subsidiary of theirs on the transfer of their property, rights or liabilities to the company under the scheme, being liabilities in respect of the following matters:—

1. (a) compensation payable under section 78 or otherwise in respect of persons who suffer loss of employment or loss or diminution of emoluments by reason or in consequence of the transfer,
2. (b) the provision of funds to secure the payment of benefits and pensions of employees;
3. (c) loss arising in respect of assets held and not transferred under the scheme.").

The noble Lord said: I shall speak also to Amendment No. 187. Amendment No. 187: Page 56, line 17, at end insert— ("and the Secretary of State shall make grants to the Executive of such amounts as appear to him to be requisite for indemnifying the Executive in respect of the retained liabilities identified in the scheme.").

The need for these amendments arises because Clause 58 of the Bill provides for the transfer of the PTE bus operations to a newly created initial company which will have to act commercially. At the present time the PTEs combine both commercial and noncommercial bus operations. In future the initial company will be interested only in commercial operations and those contracts it may win under the tendering process. Even if authorities could afford to put every non-commercial service out to tender the company is unlikely to win them all. They cannot make up for this, as other operators like NBC can, by tendering for operations outside their areas, as permitted by Clause 58(1)(a).

The initial company will therefore be smaller than existing PTE operations and this gives rise to the problems my amendments seek to deal with. The company will have surplus buses, premises and staff, the disposal of which will cost substantial sums of money. These are one-off costs incurred in establishing the initial company. Amendment No. 186 provides that in the scheme for transfer of the executive's property, rights and liabilities to the initial company, these costs will be identified.

There are three possible ways of paying for these costs. First, they could become obligations on the initial company. In this case the company will be far less competitive than it should be and it will not be able to compete fairly. In the end, the passengers will pay through higher fares or less service.

Secondly, they could become obligations on the executive. In this case they will have to be funded by the authority. That is a perfectly reasonable solution perhaps, but there is a serious problem. Under the Local Government Act the expenditure of the authority during the first three years—a critical period—will be limited by the Secretary of State. Any payments of these initial costs must mean that there is less money for supporting non-commercial services, financing concessionary fares or supporting local train services, etc.

Additionally, the Department of Transport has indicated that for this period from next April the PTAs' expenditure levels will be between 5 per cent. and 15 per cent. less than this years. Thus this second option is not an option at all unless bus service levels are unacceptably reduced.

The third option is for the Secretary of State to make grants to the executives to cover these costs, and this is provided for in Amendment No. 187. This will ensure that the Government's objectives in reorganising conurbation transport will be achieved without detrimental effect on the passengers.

If my noble friend disagrees with this amendment, the Government are saying very clearly that they want the passengers and ratepayers to pay for the changes proposed in the Bill. I beg to move.

8.45 p.m.

Lord Trefgarne

With respect to my noble friend, I have to say that I think that his amendments paint a rather pessimistic picture. I urge your Lordships instead to consider that this Bill will rejuvenate the market for bus services and provide a better chance than the existing policies do that the industry will flourish. After all, I do not think that the PTEs could feel particularly happy with their position at the moment. All of them would doubtless say that they provide valuable services, and no doubt many of us would agree with that. But I am sure that many PTEs will admit that recent trends in the industry represent an unhealthy state of affairs and that greater efficiency and enterprise would provide them with better value for money.

The new companies will have every chance to share in the benefits of the change which this Bill will bring about. Management will for the first time be established in a commercial structure, able to provide all the services which it believes in its commercial judgment to be attractive. I think that it would be wrong for us to think in terms of sizeable residual liabilities falling on the PTE. Let us recall instead the benefits the company structure will bring to the PTE and the ratepayers. It is in that spirit that I ask my noble friend to reconsider Amendment No. 186.

In regard to Amendment No. 187, my noble friend is, I think, worried about liabilities which may remain with the PTE and should perhaps properly fall upon the Secretary of State. As I have said, I would ask him to consider that in the context of the Bill as a whole and the benefits that it will bring. The Government have made clear, I know, that they believe some PTE bus undertakings to have subsidy bills which are much too high. But the amendments paint the picture of an embattled Left with losses here, liabilities there, and only the Secretary of State to look to for comfort. The ratepayers will in fact derive great benefits from the Bill. They will see their bus services provided by a company with a renewed stimulus to provide what the public wants in the most efficient way.

In the light of those considerations, I invite my noble friend to withdraw his amendment.

Lord Teviot

This was a quiet amendment. My noble friend has posed all sorts of arguments which almost make me want to start a long discussion, going on for about 20 minutes. My noble friend Lord De La Warr seems to want to ask me a question, and he is perfectly able to do so before I sit down; or if he thinks that my arguments are inadequate, he can come in. If my noble friend's amendment on Clause 1 introduced a trial period for one year, or even extended it to two or three years, I should say that there was quite a lot to say for that. But this Bill is largely untried.

My noble friend's seated interjections put me straight back down to the very pleasant city of Hereford. It has a population of 48,000, with the rural area outside. This amendment deals entirely with PTEs, and their areas usually cover millions of people. Some are larger than others. That is quite a different thing. At the moment those systems carry lots of passengers. They may have a problem which could have been dealt with in the 1963 legislation, but we shall not discuss that; perhaps they take too much subsidy. But, by and large, they operate a very good service for the public. It is a very much better service than I am afraid there will be in the future. There are these areas of dense population, with the splendid routes about which we have all heard, and there are the evils of cross-subsidy. I must not go on, although I am tempted to do so.

I shall make this point. The areas that will be affected are the so-called residential areas where there are a lot of Tory voters. Those systems will either be subsidised, will not run at all or will run only on a limited service. I really must stop, but I am extremely disappointed with what my noble friend the Minister said. We have gone right back to the root of the philosophy. I have risen like a fish, but I shall not go further, unless noble Lords—no, I am withdrawing the amendment, so no one else can come in. I am very disappointed at the reply. I shall certainly come back with a much more robust amendment, probably on Report. In these circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Banks moved Amendment No. 186A:

Page 55, line 42, at end insert— ("and any such scheme shall include provision to secure the payment of benefits and pensions in accordance with the accrued rights of existing employees of the Executive or any wholly-owned subsidiary of theirs under the Local Government Superannuation Act 1972 or any customary practice in respect of the grant of gratuities.").

The noble Lord said: I beg to move Amendment No. 186A and at the same time speak to Amendment Nos. 211AB and 240F. Amendment No. 211AB: Clause 64, page 64, line 27, at end insert— ("and any such scheme shall include provision to secure the payment of benefits and pensions in accordance with the accrued rights of existing employees of the council or councils concerned under the Local Government Superannuation Act 1972 or any customary practice in respect of the grant of gratuities."). Amendment No. 240F: After Clause 77 insert the following new clause:

("Transfer pensions

. Provision shall be made in any scheme for the transfer of property, rights or liabilities under section 58 or 64 of this Act to secure the payment of benefits and pensions of persons employed in any undertaking or part of an undertaking which the subject of such a transfer in respect of their employment in the undertaking or part thereof both before and after the transfer.")

As the Committee is aware, Clause 58 transfers the operation of passenger transport executive bus fleets from the PTE to a Companies Act company, which is eventually to be divided into smaller companies under Clause 60. The shares will be held by passenger transport authorities with power to dispose of them later. Similarly, Clause 62 prevents non-metropolitan councils in England and Wales and regional councils in Scotland from operating bus servies—though some of them have been doing so for over 100 years. Clause 63 requires them to form a company to run bus undertakings.

Those employed by passenger transport executives and by municipal undertakings who will be transferred to the new companies are presently members of the local government superannuation scheme. It would seem that two main problems arise. First, the funding of Pensions (Increase) Act payments for former employees will impose a major burden on the new companies or on the funds of the passenger transport authorities who will have to fund as well the non-commercial services. All bus workers employed by a passenger transport executive or a municipal passenger transport undertaking from manual worker to management have been required to invest a proportion of their earnings in the local government superannuation scheme from 1972 and a high proportion of this number have been required to invest prior to 1972 as a result of a decision of their employing authority.

The amount of the employee contributions has been between 5 per cent. and 6 per cent. of their regular earnings with a small number paying up to 15 per cent., the statutory maximum, of their remuneration into the scheme. The employing authority has also to finance certain additional charges levied by the administering authority (normally the county council). These amount in general terms to, firstly, an amount levied by a quinquennial actuarial review to ensure the fund is financially stable; secondly, the general amount of the annual pensions increase; and, thirdly, a direct charge in respect of early retirement caused by ill-health, redundancy, or terminations of employment in the interests of the efficiency of the employing organisation.

This additional amount funded by the employer is infinitely variable between the various administering bodies. The cost appears to vary between 4 per cent. and 10 per cent. of the total gross paybill. If such costs are transferred to the new company by the authority as a liability included in the transfer order in accord with Clauses 58 and 65 of the Bill, then such a liability will materially affect the ability of the company to compete within the new deregulated situation. Conversely, the local authority or passenger transport executive, having lost its passenger transport revenue, if it retained that liability would only be able to discharge it by the use of some of its rate-funded income.

The second problem which arises is that should the companies be privatised, under Clause 71 their employees will no longer be eligible for membership of the local government superannuation scheme and their pension rights may be affected.

Amendment No. 186A lays an obligation on the Government to make provision to secure for former employees of passenger transport executives payment of pension in accordance with their accrued rights under a local government superannuation scheme at the time of transfer. It makes sure that they are no worse off. Amendment No. 211AB does the same for former employees of municipal undertakings. Amendment No. 240F obliges the Government in each case to make provision for pensions in respect of service, both before and after transfer, whether eventually privatised or not. I beg to move.

Lord Trefgarne

I am glad to have this opportunity of explaining the position of pensions for staff transferred to public transport companies. I know that pensions are a difficult issue, of concern to staff, and I hope that what I have to say will be of reassurance to those employees who may be affected by the establishment of public transport companies.

I turn first to the amendments to Clauses 58 and 64. These concern safeguards for accrued pension entitlements—that is to say, pension entitlements which have been built up because of service before transfer to the bus undertaking. As the amendment implies, these entitlements have been built up in the local government superannuation scheme.

Whatever pension arrangements are made by public transport companies for the future, the staff concerned will be free if they wish to leave their past entitlement in the local government scheme where they have accrued it, even if they do not stay in that scheme for the future. Provided they have the minimum qualifying service, the entitlement will be preserved in the local government scheme until they eventually reach retirement age; it will then be paid to them as a pension. And the preserved benefit will be increased in line with prices, both before and after the person reaches the relevant retirement age.

I hope it will be clear from this that accrued entitlements can have exactly the same security in the future as they do now. They can be kept in the local government superannuation scheme where they are now, with all the security that that implies. I would therefore suggest that the amendments to Clauses 58 and 64, whilst I understand and sympathise with them, are simply not necessary.

May I turn now to the new clause to appear after Clause 77. This speaks of security for pensions in respect of future services, after the transfer to the public transport company, as well as before. For future service we envisage the public transport company, with its parent local authority or PTE, being free to make its own decisions. After all, it is a key part of our policy that management decisions such as this should be left to the management of the bus undertaking, although of course they will want to negotiate with the staff representatives.

But the Government want to do all they can to leave options open to the parent authorities and companies in consultation with their staff, and one such option would be the continued membership of the local government superannuation scheme, where they are now. To facilitate that option, the Government have undertaken to amend the regulations for the local government scheme: that amendment will allow the parent district council or PTE, if it chooses with the company, to deem that the transferred staff remain their employees for pensions purposes. The effect could be that the staff would stay in the local government scheme, with exactly the same security as they have now, since—for this purpose only—their nominal employer would still be the parent authority. I hope that the noble Lord feels that making this option available does demonstrate the Government's wish to be helpful. In the light of these considerations, I invite him not to press these amendments.

Lord Banks

I should like just to ask the noble Lord one question arising out of that reply. What is to happen should any of these companies be privatised? May they then still remain within the local government superannuation scheme?

Lord Trefgarne

My understanding of the position is that they may. However, perhaps I may check that and, if I am wrong, I shall write to the noble Lord.

Lord Banks

I think the statement which the noble Lord has given to the Committee this evening is very reassuring. I should like to consider carefully exactly what he said. However, it seems that some of the fears which have been expressed are groundless and that steps are being taken to see that people will get their accrued entitlement within the local government superannuation scheme preserved within that scheme and that employers in the new companies will be able to continue membership in the local government superannuation scheme, which will probably be the most desirable outcome.

Subject to what the noble Lord has to say eventually on the other point, it would seem to be a satisfactory situation. However, as I say, I should like to consider it further and, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 187 and 188 not moved.]

The Earl of Caithness moved Amendments Nos. 188A and 188B:

[Printed earlier: col. 935.]

The noble Earl said: I beg to move Amendments Nos. 188A and 188B together.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 188A and 188B): Page 56, line 22, leave out ("held by them").

Page 56, line 23, at end insert— ("(8A) Where—

1. (a) the property, rights and liabilities transferred under subsection (7) above include the whole of the undertaking of any wholly-owned subsidiary of the Executive; and
2. (b) it appears to the Executive that no further action is required on the part of that subsidiary to perfect any transfer under that subsection;

the Executive shall secure that that subsidiary is wound up.").

[Amendments Nos. 189 and 190 not moved.]

Clause 58, as amended, agreed to.

[Amendments Nos. 191, 192, 193 and 194 not moved.]

Clause 59 agreed to.

Clause 60 [Division of undertakings of companies formed under section 58]:

[Amendments Nos. 195 to 197 not moved.]

9 p.m.

The Earl of Caithness moved Amendments Nos. 197A, 197B and 197C:

[Printed earlier: col. 935.]

The noble Earl said: I beg to move these amendments en bloc. I have spoken to them already.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 197A, 197B and 197C):

Page 57, line 45, at end insert— ("(1A) Where the initial company has any wholly-owned subsidiaries, the proposals may, instead of or (as the case may be) in addition to providing for the transfer to any one or more of those companies of the shares in or other securities of any such subsidiary comprised in the initial company's undertaking, provide for—

1. (a) the division among those companies; or
2. (b) the transfer to any one of them;

of the whole or any part of the undertaking, or of any property, rights or liabilities of, that subsidiary."). Page 58, line 10, leave out ("is to be divided among the transferee companies") and insert (", and the whole or any part of the undertaking of any wholly-owned subsidiary of the intial company to which the proposals relate, is to be divided among the transferee companies or (as the case may be) transferred in accordance with the proposals to any one of those companies;"). Page 58, line 12, leave out from ("company") to end of line 14 and insert (", and of any wholly-owned subsidiary of the initial company the whole of whose undertaking is to be transferred in accordance with the proposals to any one or more of the transferee companies, on completion of the transfer of that company's or (as the case may be) of that subsidiary's undertaking.").

[Amendment No. 198 not moved.]

The Earl of Caithness moved Amendment No. 198A:

[Printed earlier: col. 935.]

On Question amendment agreed to.

Following is the text of the amendment (No. 198A): Page 58, line 20, after ("company") insert ("and of any wholly-owned subsidiary of the initial company").

[Amendments Nos. 199 to 203 not moved.]

The Earl of Caithness moved Amendment No. 203A:

[Printed earlier: col. 935.]

On Question, amendment agreed to.

Following is the text of the amendment (No. 203A): Page 59, line 2, leave out ("comprised in the part of the initial company's undertaking") and insert (", and of any wholly-owned subsidiary of the initial company, which are").

[Amendments Nos. 204 to 206 not moved.]

The Earl of Caithness moved Amendment No. 206A:

[Printed earlier: col. 935.]

On Question, amendment agreed to.

Following is the text of the amendment (No. 206A):

Page 59, line 21, at end insert— ("(12) Subsection (11) above shall apply in relation to any subsidiary of the initial company the whole of whose undertaking is transferred under the scheme to one or more of the transferee companies as it applies in relation to the initial company.").

Clause 60, as amended, agreed to.

Lord Teviot moved Amendment No. 207:

After Clause 60, insert the following new clause:

("Protection of employees benefits. . Any scheme prepared by the Executive under section 58(3) of this Act or any proposals prepared by the Passenger Transport Authority under section 60(1) of this Act may, with the approval of the Secretary of State, include provision—

1. (a) for the maintenance of any concession, benefit or privilege enjoyed by persons who are or have been employed by the Executive or Company which is the subject of transfer, or
2. (b) for the making of any payment or the provision of any other concession, benefit or privilege in compensation for the loss of that concession, benefit or privilege.")

The noble Lord said: The reason for this is to afford similar protection to employees of passenger transport executives as that given to employees of the National Bus Company and National Bus Company subsidiary companies under Clause 53(6). A specific right is given here for these employees to have their concessions, benefits or privileges protected by the company. It is not obligatory but the disposal scheme may make provision for this with the consent of the Secretary of State. A similar power needs to be given in respect of passenger transport executive employees as they are in a similar position, working for a statutory corporation that is a creature of statute. It is believed that the Department of Transport feels that PTE employees were adequately protected under the local government legislation. But the executive is not a local authority and only has the powers and duties given to it under the Transport Act 1968. I beg to move.

The Earl of Caithness

I wonder whether I detect a welcome shift of policy by my noble friend. Here we have a constuctive amendment. I accept the principle. Unfortunately, it is technically defective in a number of ways. If I give the undertaking that we shall come back to it on Report, I hope that my noble friend will withdraw it.

Lord Teviot

Splendid! I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 61 [Functions of local councils with respect to passenger transport in areas other than passenger transport areas]:

Lord Teviot moved Amendment No. 207A:

Page 59, line 23, leave out subsections (1) and (2) and insert— ("(1) It shall be the duty of a non-metropolitan county council in England and Wales, or in Scotland, a regional or islands council, in relation to any part of their area which is not a passenger transport area, to take any measures that appear to them to be appropriate for the purpose of or in connection with promoting—

1. (a) the availability of public passenger transport services other than subsidised services and the operation of such services, in conjunction with each other and with any available subsidised services, so as to meet any public transport requirements the council consider it appropriate to meet;
2. (b) the securing of the provision of such public passenger transport services as the council consider appropriate to meet any public transport requirements in their area which would not otherwise be available; and
3. (c) the convenience of the public in using all available passenger transport services (whether subsidised or not).

(2) In pursuance of subsection (1) a council shall formulate and publish from time to time general policies as to the measures to be undertaken in exercising their duties under this section and the descriptions of service to be secured in pursuance of subsection (1) (b).").

The noble Lord said: Together with this, I would like to take Amendments Nos. 208B, 208F, 209B, 210A and 211ZB. Amendment No. 208B: Page 59, line 42, leave out subsection (3). Amendment No. 208F: Page 60, line 4, leave out from ("above") to end of line. Amendment No. 209B: Page 60, line 25, leave out subsection (7). Amendment No. 210A: Page 60, line 39, leave out subsection (8). Amendment No. 211ZB: Page 61, line 1, leave out ("(7)") and insert ("1").

The purpose of these amendments is not to make any dramatic change to the Bill, but merely to re-order Clause 61 so that it is in a more workable frame. I must say here that I dislike the phrase "shire county councils" because, in history, all counties were known as shires apart from Norfolk and Suffolk, but, nevertheless, shire counties is now the present term. The present duty on shire county councils under the 1978 Transport Act is to promote a co-ordinated and efficient system of public passenger transport to meet the needs of the county. Clause 61 of the Bill is a replacement of that. What it does is to give a duty to county councils which is confined to services that would not otherwise be available; that means subsidised services. The notes on clauses say that the purpose of the clause is to replace existing duties and powers with ones consistent with the principle of the Transport Bill that local authorities should supplement services provided by the market and, if they wish, promote the use of public transport rather than seeking to control it.

This amendment is not intended to give county councils control over the market. Far from it. But it is intended to acknowledge that the market exists. Recently, a local government observer commented that what this does is virtually to relegate everything other than giving financial support to a local bus service by means of subsidy into a hotch-potch under subsection (7) which is clearly detached and secondary and, as the notes on clauses make clear, totally discretionary.

This produces a total imbalance. On the Marshalled List today we have from the Government a new clause to follow Clause 61. I think that your Lordships have had little time to study it. But it does appear to add a clear responsibility on county councils to evolve policies and to consult on them with operators and district councils and then to make public what they do. All this is confined to subsidised services.

If, as I have quoted, it is the Government's intention to see commercial services as the backbone to the future of public transport, that is surely where a county council's duties should begin. County councils should have a clear idea of the total role they consider appropriate for public transport in the county in order to assess the strength of the commercial services. Only then should they look at where they need to place additional resources. This re-ordering of Clause 61 aims to achieve that emphasis. It also has several other benefits. Not only would it enable county councils to engage in a more realistic debate on policies with both operators and other authorities, but it would also be of benefit in particular to operators who would clearly see that the county council can talk positively about measures which are needed to assist all types of operation, including those which are commercial. There is a whole host of things, from the publication of comprehensive timetables, facilities on the highways such as priorities for buses and, as the third part of the amendment makes clear, facilities for passengers. It might even be part of a county council's policy that these should be provided by the operators contributing towards them. That would be a matter for local decision.

Nothing onerous is being placed on county councils by this amendment. There are, as the Committee will see from the wording, ample qualifications for local discretion as they make judgments as to what may be appropriate in their particular circumstances.

This amendment endeavours to avoid a distinct message of discouragement, which I do not believe Ministers intended, with regard to many of the useful things which shire county councils have been doing to help promote public passenger transport. The reordering of this clause also has other vital benefits. Elsewhere in the Bill there is a distinct requirement for county councils to take into account school transport services, and I notice that this is picked up at the very end of the amendment which was published today by the Government on the new arrangements that they are suggesting for Schedule 5.

In the Standing Committee in another place the Parliamentary Under-Secretary of State for Scotland, Michael Ancram, said that: nothing in the Bill at present prevents them—that is county councils—from formulating an overall policy for public transport".

However, he rejected any suggestion that policies should precede action on the grounds that county councils will not be able to tell operators what to do. This amendment does not attempt to do that. However, it does attempt to create a tidy context in which operators and the public alike can have confidence in the actions of their county council. In this way I hope that county councils will continue to do many of the good things, and indeed will do more if at all possible, and in particular will aid the disabled. I beg to move.

Lord McIntosh of Haringey

I should like to express general support for the amendment moved by the noble Lord, Lord Teviot, and in so doing say that I believe he is exactly right in pointing out the other responsibilities of county councils in addition to the operation of commercial bus services, which must be linked with them if a sensible transport policy is to be evolved and publicised.

Lord Teviot

If the noble Lord will give way, the Bill says that county councils will only be concerned with the subsidised services, not even with commercial services.

Lord McIntosh of Haringey

That is of course true, but, as I understood it—and perhaps I have misunderstood the noble Lord—the point of this amendment and certainly the point of Amendment No. 211ZCA, which is the new clause, is that the county councils are required to have and to publish some form of transport policy. I understood the noble Lord, Lord Teviot, to say that this ought to cover all the transport services provided in and for their area. I do not wish to add any more, except to say that we seem to be in the middle of a Bill which is being rewritten as the Committee proceeds. It is extraordinarily difficult for us to relate the arguments which we planned some time before to a stream of Government amendments which come through at the very last minute and which require much more attention than it is possible for those of us who have to earn our living elsewhere to give them in the way of making effective judgments as to what they mean.

Lord Belstead

My noble friend Lord Teviot presented this amendment to your Lordships as being a modest alteration to the Bill, but it is really quite a fundamental one. The duty which the Government propose for councils in the Bill is narrowly drawn to supplement services in order to meet public transport requirements which are not met commercially and which the council considers it appropriate to meet.

The powers proposed by the Bill go wider than that, and in particular Clause 61(7) confers wide powers to promote the use of public passenger transport generally. This power, which is subject to an important proviso that it should not be used in such a way as to inhibit competition between operators, will enable councils to take a wider general interest in public transport if they choose.

However, in effect, my noble friend's amendments propose that this valuable power should become a duty, and I also notice that the important restriction on its use to inhibit competition would fall. Under the terms of these amendments councils would be required to promote the availability of all services and the convenience of the public in using all services. I do not think that that would be helpful. The task of local authorities in this Bill is to supplement the market. We may disagree on that, but the Government's argument is that if authorities concentrate on the areas of real need, they will perform their task the more effectively. That is, as I say, one of the principles of the Bill, and these amendments would undermine that principle. It is for that reason that I am afraid I must resist this amendment.

Lord Teviot

Obviously there is a fundamental difference here, which perhaps we shall never get over. It is not the same sort of answer as my noble friend Lord Trefgarne's own amendment, and my noble friend's answer to this amendment does not incite me to reply in quite the same terms. I shall withdraw the amendment shortly, but I am not happy about this.

The county councils have looked after these services for all these years, and if they are to control just the subsidised services all these other things will be outwith their responsibilities, and I do not think that just to let the market forces deal with them is satisfactory. However, at this time of night I am not going to press this amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.15 p.m.

Lord Mottistone moved Amendment No. 208: Page 59, line 27, leave out ("within") and insert ("serving").

The noble Lord said: This amendment is a probing one, and it relates strictly to island councils both in England and in Scotland. So far as England is concerned, it has particular reference to the Isle of Wight. Clause 61(1) says: it shall be the duty of the county council— (a) to secure the provision of such public passenger transport services as [are] within the county".

That is seen by the Isle of Wight County Council as possibly overriding their present statutory position with regard to the ferry services which run from the islands to the mainland.

They would be keen not to lose that position. It has frequently been of importance that they should be able to have a statutory position to guide and give advice to the ferry services which are subject to a wide variety of local interests which often conflict one with the other. I think that this has been a balanced position for the whole of this century, and it would be a great pity if other considerations overthrew it inadvertently.

Therefore I propose this small amendment to widen the effect of subsection (1) of Clause 61. It is a probing amendment, and it may not be the right way of doing it. I am sure that my noble friend will have a better way of doing it. I should particulary like reassurance that this overriding of the present statutory position is not a possibility as a result of this Bill. I beg to move.

Lord Monk Bretton

I should like to say a word in support of my noble friend's amendment. I think that he has reason for it. I can understand the problems in connection with the Isle of Wight. The amendment would also be of considerable benefit to other county councils dealing with ordinary commercial bus services running across a land boundary. I mention that point in passing.

Lord Brabazon of Tara

I believe a misunderstanding has given rise to this amendment. Clause 61 requires councils to secure services they consider appropriate to meet any public transport requirements within their areas. What we are proposing is that councils should be required to secure services as they think appropriate to meet requirements which arise within their area.

The services which meet those requirements will not necessarily be linked to those running wholly within the county borders. To take an example, there may be a village on the border of Hampshire which requires a service to take its inhabitants to their nearest shopping centre over the border in Dorset. The requirement for a service arises within Hampshire, and it is for Hampshire rather than Dorset to consider if it would be right to meet the requirement. The service which will meet that requirement will indeed cross the boundary. The wording of Clauses 61(1) and (2) in no way excludes such a service, and Clause 61 provides the necessary powers for councils to secure the service. Clause 61(5) gives non-metropolitan county, and regional and islands, councils power to secure services "for their area".

Of course the situation of the Isle of Wight, in which the noble Lord, Lord Mottistone, has a special interest—and I must declare my own interest in the Isle of Wight, of which I am a resident—is unusual because it is an island. But exactly the same principle applies. This duty is concerned with services which meet the requirements arising within the county. Clearly in the case of the Isle of Wight those requirements may be for services which cross the Solent. The terms of the duty in Clause 61(1) can apply to ferry services as much as to cross-boundary bus services. I hope I have given my noble friends Lord Mottistone and Lord Monk Bretton the reassurances that they require.

Lord Mottistone

I am indeed grateful to my noble friend and thank him for his reassurances, which seem to me to be absolutely splendid. I shall consult the Isle of Wight County Council, and if they see some snag I may come back; but at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 208Z, 208AA, 208A and 208B not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 208C: Page 59, line 43, at end insert ("(except insofar as provided in subsection (7) below).").

The noble Lord said: It may be convenient to speak also to Amendment No. 210A.

[Printed earlier: col. 943.]

The first amendment is in recognition of the fact that although under the Bill there will be two groups of services, those provided by the free market and those secured by local authorities, those services must necessarily overlap. Subsection (3) restricts the policy-making duties of local authorities to those services which would not otherwise be available and the securing of such services. However, subsection (7) significantly provides powers to take measures to promote: the availability of public passenger transport services other than subsidised services and the operation of such services, in conjunction with each other and with any available subsidised services", and the convenience of the public in using all available public … transport services (whether subsidised or not)".

By amendment to subsection (3) the duties under subsections (1) and (2) and the power under subsection (7) are drawn more sensibly together. In particular, authorities would be able to take a view on the requirements of the area as a whole on formulating their policies and so, where appropriate, develop measures to promote co-ordination of services, joint publicity and marketing for services in a particular area, and so on.

Examples of where such powers might be used could involve the extension of bus services to railway stations and the co-ordination of bus and train timetables, or in rural areas the provision of subsidised feeder bus services to commercial trunk routes, perhaps with a through ticketing facility to promote interchange and through travel.

The second amendment deals with the deletion of subsection (8). This is necessary because that subsection effectively nullifies much of the potential benefit of subsection (7). If we consider an example, it might be this: if a county council decides to ask a bus operator to co-ordinate his services with a railway service to provide a link from a village to a large town or city, negotiations will take place between county officers, the bus company and British Rail. Let us suppose that the bus service is operating without subsidy and that all parties agree that the necessary changes can be introduced without cost to the council. The council therefore appears to have succeeded in properly using its powers to promote the convenience of the public and secure the operation of services in conjunction with each other.

However, another operator might complain that he already operates, or is considering operating, a direct route between the village and the large town or city without using the rail link service. In this case the county council appears, in terms of its duty under subsection (8), to have inhibited competition as it has promoted the operation of services in conjunction that threaten the success of the second operator's service or proposed service. Many authorities will therefore decide that their powers under subsection (7) are very restricted and the intended effect will not be realised. I hope the Minister will consider this carefully and give an explanation if he is not willing to agree. I beg to move.

Lord Belstead

The restriction on the scope of the duties imposed by Clause 61(3) does not in any case apply to the powers contained in subsection (7) and, for that reason, the first of the noble Lord's amendments really is not necessary. If Lord Carmichael's concern is that councils should formulate policies about the use of the power in subsection (3), then I can assure him that nothing in the Bill prevents them from doing so. Since subsection (7) is a discretionary power, it would not be appropriate to require authorities to formulate policies about its use. The sum total of that rather convoluted reply of mine is that this amendment, so far as the first of the noble Lord's amendments is concerned, really is not necessary because the duties imposed by subsection (3) do not apply to subsection (7).

The noble Lord went on and put the case that Clause 61(8) operates unfairly upon subsection (7). I think that all I can say at this stage is that I would like to look carefully at the example which the noble Lord gave. As the noble Lord will know from the Notes on Clauses, the purpose of subsections (7) and (8) of Clause 61 is to give local authorities broad powers to promote public transport provided that they do not favour one operator at the expense of another. I could think of many examples (and I am sure that other noble Lords could do so) of what would happen to jeopardise the main objectives of this Bill if we did not have subsections (7) and (8) put together.

The noble Lord gave an example of the way that he felt it would work unfairly. If the noble Lord will allow me to do so, I should like to look at the specific example that he gave, but as it stands at the moment I think that subsection (8) is necessary in conjunction with the power in subsection (7).

Lord Carmichael of Kelvingrove

I thank the Minister for that helpful answer. It appears to me from the example that there is a certain unfairness because of a lack of evenhandedness. Perhaps the Minister will look at it and come back. May I ask that, when he is looking at it, he will appreciate that this amendment and the others relating to the powers and duties of elected local authorities have been specifically related to non-metropolitan authorities pending the final passage of the Local Government Bill, and that it will be necessary for us to review at Report the corresponding provisions for the metropolitan authorities. I would let him know that this was specifically aimed at the non-metropolitan authorities at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Ampthill)

Before calling Amendment No. 208CA, I would remind the Committee that, if it is agreed to, I cannot call Nos. 208D, 208E or 208F.

Lord Brabazon of Tara moved Amendment No. 208CA:

[Printed earlier: col. 902.]

The noble Lord said: I spoke to this with Amendment No. 174W. I beg to move.

On Question, amendment agreed to.

The Deputy Chairman of Committees

I cannot call Amendments Nos. 208D, 208E or 208F.

Following is the text of the amendment (No. 208CA):

Page 60, line 1, leave out subsection (4).

Lord Brabazon of Tara moved Amendment No. 208G: Page 60, line 22, after ("provision") insert ("for their area").

The noble Lord said: This is a technical amendment. The power of PTEs and councils other than district councils to subsidise services is limited to services provided "for their area". This technical amendment places a similar limitation on district councils' powers. I can assure noble Lords who have the district councils' interests at heart, that this amendment does not limit their powers in an unfair way. No responsible council would subsidise services which were not "for their area". The amendment simply ensures consistency for all councils. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 209, 209A, and 209B not moved.]

9.30 p.m.

Lord Sandford moved Amendment No. 210: Page 60, line 25, after ("council") insert ("or a non-metropolitan district council").

The noble Lord said: On behalf of the noble Baroness, Lady Vickers, I beg to move Amendment No. 210 and at the same time to speak to Amendment No. 211. Amendment No. 211: Page 60, line 40, after ("be)") insert ("of a district council or").

I am glad to be able to tell the Committee that not only do I have the noble Baroness' amendments but I also have the reasons behind them, and as I was successful in getting one amendment accepted without having to explain the reasons, I now have very high hopes of getting the rest.

The Bill at Clause 61(6) quite properly gives concurrent powers to the district to subsidise services in the same way that the counties can. For instance, in Devon (which is where the noble Baroness has very strong interests, as I have myself) this is a power which is used at the moment because the districts do the subsidising in cities like Exeter, Plymouth and Torbay and the shires cover the rest of the county. That is successfully provided for in Clause 61(6), but if the district is to get good value for its money when placing its subsidy, it will be necessary for it to have the complementary concurrent powers which are provided for the counties in Clause 61(7), governed by Clause 61(8). The powers of Clause 61(7) are complementary to the concurrent subsidising power, and therefore it is logical for the districts, if they have the subsidising power, to have the complementary supporting power. It just seeks to ensure an even application of the Bill in shire counties where shire districts of the character of Plymouth, Exeter and Torbay, will be active in service subsidies. This is a probing amendment, and I beg to move.

Lord Belstead

I recognise, and indeed the Bill recognises, that district councils in England and Wales, notably the fifty or so with their own bus undertakings, have a special role in public transport matters. The Bill gives district councils in England and Wales the power to subsidise services, and I trust that my noble friend will note that attempts in another place to amend the Bill to bring the exercise of that power under the control of county councils has in fact been resisted by the Government. We think it right that district councils which have experience of public transport in their areas should be able to subsidise services and should not have to seek the county's permission before doing so; but I have to say that the present amendments which my noble friend Lord Sandford is dealing with go a good deal further. Indeed, they go against the established allocation of functions in public transport which was brought into existence under the Local Government Act 1972—an Act which I seem to remember passed into law at a time when my noble friend was working as Parliamentary Under-Secretary in the Department of the Environment in the Government of that day.

Since 1974 the county councils have had the primary responsibility for public transport in their areas. Accordingly, the Bill places a duty on county councils to secure services to meet public transport requirements within their area and, in addition to the subsidy power it gives, which is contained in Clause 61(5), it gives them the wide-ranging power in subsection (7) to promote the availability of services and the convenience of the public. Many district councils would doubtless welcome the power, but I think that perhaps fewer of them would welcome the duty.

We are continuing a long-established division of responsibilities in this Bill and giving the counties the powers they will need to carry out their duties. The power and the duty go together and, if my noble friend will forgive me for saying so, I do not believe it would be right to extend this wide-ranging power to district councils. My noble friend is probing and I must say, for the reason I have given, I hope that he will not press the amendment further.

Lord Sandford

I shall not take up time on it but, if I may say so, I think that my noble friend on the Front Bench has completely missed the point. The duties of the county councils are set out at Clause 61(1). The power—that is to say, something which they can exercise if they want—is properly given, and this is an innovation which is welcomed, at Clause 61(6), to the district councils in areas such as Exeter, Torbay and Plymouth and whether they run buses themselves is neither here nor there. It is any authority of that kind of substance and category which should have the power and which has been given the power in the Bill.

All these amendments are asking for is that the supplementary power contained in Clause 61(7) should be added, because just having the power to subsidise without having the additional power which the counties need to supplement it in various ways is not sensible. I shall not spend any more time on this now, but I would ask my noble friend to have a look at it between now and Report stage. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Belstead moved Amendment No. 210ZA:

[Printed earlier: col. 912.]

The noble Lord said: This amendment is consequential on Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 210ZA): Page 60, line 36, after ("public") insert ("(including persons who are elderly or disabled)")

[Amendments Nos. 210A and 211 not moved.]

Lord Belstead moved Amendment No. 211YA:

Page 60, line 43, at end insert— (8A) It shall be the duty of any council, in exercising or performing any of their functions under the preceding provisions of this section, to have regard to the transport needs of members of the public who are elderly or disabled.")

The noble Lord said: I have already spoken to this amendment on Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

Viscount Ingleby moved Amendment No. 211ZA:

Page 60, line 43, at end insert— ("(8C) It shall be the duty of the authority in exercising its duties and powers under this section to have regard to the public transport requirements of the elderly and disabled in respect of—

1. (a) the services to be provided;
2. (b) the types of vehicles to be used; and
3. (c) the facilities to be provided at stops and terminals.

(8D) It shall be the duty of each operator of registered local services in the area to co-operate with the authority in performing its duty under subsection (8C) above.")

The noble Viscount said: In moving this amendment which stands in the names of myself, the noble Baroness, Lady Elliot, the noble Lord, Lord Henderson of Brompton, and the noble Baroness, Lady Stedman, may I first apologise on behalf of the noble Baroness, Lady Elliot, who has just had to leave the Chamber in order to catch a train. This amendment spells out in a little more detail the purposes which we welcomed so much in the earlier amendment from the Government. It spells out the needs of the elderly and disabled in a little more detail, because these are very important. Perhaps at the end of the third line of the amendment, the word "including" would be better than "in respect of".

The second half of the amendment would put a duty on each bus operator to co-operate with the local authority in performing its duties towards the elderly and disabled under this clause. This would be just a gentle prod, to make sure that the needs of the elderly and disabled are not overlooked by the bus operator. It would start a dialogue between the operator and the local authority, without which the duties of the local authority, which the Government have already conceded, could be to some extent frustrated by the bus operator. Nothing at all specific is mentioned in this amendment, because what, if anything, is necessary will vary greatly from place to place and in different parts of the country.

The concept of putting a duty to co-operate on someone is not unknown to the Government. I believe that it found its way into the Local Government Act which has recently passed through your Lordships' House. So I hope that the Government will consider carefully the need to put some kind of obligation on the bus operator, just so as to give him a gentle prod and to start a dialogue, and to make sure that the needs of the elderly and disabled are not overlooked by him. I beg to move.

Lord Henderson of Brompton

Perhaps I may briefly support this amendment. I do not think that it is necessary to talk to the first part of the amendment, subsection (8C), because that has already been amply filled by the admirable amendments moved by the Minister, for which we are very grateful indeed. However, there is a point in subsection (8D) to which I hope the Minister will address himself. This is the concept of a duty on the operators to co-operate. This is very much less than we have been asking for. I wonder whether the model in the Local Government Act might be followed. I know that nothing is precisely the same, but a Government amendment imposed on the local authorities a duty to co-operate in the abolition period. I wonder whether something could be adapted from that Bill; otherwise there will not be any kind of imperative on the operators to co-operate with the local authorities.

Incidentally, Amendment No. 240B, which I suppose will be moved later on, also concerns co-operation. Amendment No. 240B: After Clause 76, insert the following new clause:

("Duty of public passenger transport operators to co-operate with local authorities.

.—(1) It shall be the duty of public passenger transport operators to supply to the authority responsible for passenger transport services in an area in accordance with the provisions of section 57 or section 61 of this Act (as may be appropriate) such information as the authority may reasonably require for the purpose of carrying out its duties.

(2) Information with respect to any particular service or business which is given to an authority in accordance with subsection (1) above shall not be disclosed except:—

1. (a) with the consent of the person for the time being carrying it on; or
2. (b) for the purpose of the discharge by any person of his functions under any enactment which also applies to the person or body which supplied the information; or
3. (c) with a view to the institution of, or otherwise for the purposes of, any legal proceedings pursuant to or arising out of any enactment (including proceedings before the Transport Tribunal),

and any person who discloses any information in contravention of this subsection shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(3) For the purposes of this section "authority" means—

1. (a) in a metropolitan county in England or the Strathclyde Passenger Transport area in Scotland, the Passenger Transport Authority and the Passenger Transport Executive for the area;
2. (b) in a non-metropolitan county in England or Wales, the County Council;
3. (c) in Scotland, otherwise than in the Strathclyde Passenger Transport Area, a Regional or Islands council.").

I wonder whether the noble Lord the Minister will kindly consider Amendment No. 240B in conjunction with the second part of this amendment, which naturally enough we do not intend to press at this stage.

I should like to bring in one matter by a side wind. It is all a package on the elderly and disabled. I know that the Minister has very kindly said that a code of practice will be issued in due course. Here again I wonder whether at the next stage of the Bill the noble Lord, Lord Belstead, will consider whether or not it is possible to make the code of practice statutory, as indeed it was made in the Food and Environment Protection Bill with which we have recently been dealing. I think that was in Clause 16. I do not think that I have had a very pleasant look from the Minister following that request, but nevertheless I shall be delighted if he will consider it.

Perhaps I may ask the Minister two questions about the operation of the amendments which he has just moved to Clause 61 and Clause 57. They are two quite simple questions. If the noble Lord finds it is too late at night to answer them now, perhaps he will be able to do so at another stage or in writing. I am slightly puzzled how the new duty imposed on the local authorities under subsection (8A), which has been inserted into the Bill under Amendment No. 211YA, can be reconciled with the existing duty of local authorities under subsection (8), so to conduct themselves as not to inhibit competition".

What will happen if there is a conflict between that duty, so to conduct themselves as not to inhibit competition", and the new duty in relation to the elderly and the disabled? Which would prevail in the event of conflict? I see that Clause 101 applies the Restrictive Trade Practices Act to road passenger transport operators. That is fine, but I assume that work of the Office of Fair Trading is not and cannot be applied to local authorities.

My second question is of the same order. The new subsection (8A) applies to previous subsections. I am not sure what would happen in the case of subsection (7). There, the new duty is imposed as it is under subsection (8A) and it applies to the preceding subsection also. Subsection (7), which is one of the preceding subsections, is permissive. It says that the county councils "shall have power" and not a duty. Subsequently, under subsection (8), the county council is given "the duty".

What happens where one has a permissive power and a duty is added? Presumably if one does not choose to exercise the permissive power then the duty does not apply. It is a puzzle to me and I am positing one possible explanation which may or may not be right. I shall be grateful if at some time, sooner or later, the Minister will kindly consider that point and give me a reply.

9.45 p.m.

Lord Belstead

The Government fully sympathise with the feeling which has been put forward by the noble Viscount, Lord Ingleby, in this amendment; that the powers of authorities to co-ordinate the provision of all services, commercial and subsidised—which, as I explained earlier this evening, is now established by the Government amendments—should be backed up by a duty for all operators to co-operate with the authorities in the use of those powers.

I believe we must ask ourselves what is the best way of achieving that objective. We have a choice. Either we make a statutory requirement, as this amendment proposes, or we can ask local authorities to secure co-operation on a voluntary basis through active promotional work and close contact with individual operators and their staff.

There are two reasons why I believe the second approach is to be preferred. The first is the very real fear, which the Government have expressed on several occasions previously, that the statutory requirement may in some cases serve to diminish the pool of resources on which public transport ought to be able to draw under deregulation. The fact is that the nature of the requirements which are being proposed in this amendment would be broad, and indeed so broad and general, as to create very real anxieties for the prospective operator—particularly the very small operator who potentially has a very important role to play in the development of services, especially in rural areas.

The search for the best in all circumstances —particularly when thinking about the needs of elderly and disabled people—could in this case indeed prove to be the enemy of the potentially good operator who feels that he simply cannot get on in the market because too much is being demanded of him so far as facilities are concerned.

Secondly, and I think more importantly, I suggest to the Committee that co-operation is likely to be more effective when it is granted on the basis of free will and mutual agreement. Operators will be very well aware of the large proportion of their potential passengers who are likely to experience difficulty in travelling by public transport. They will have every incentive to co-operate in measures designed to help such people. It has been said on more than one occasion in our debates that a considerable percentage of the travelling public are elderly or disabled.

I may add that it is not the Government's intention that authorities should be left to pursue those functions entirely alone and without any guidance. On the contrary, I have already indicated that the Government accept the need for a statutory advisory body which will have wide coverage in all fields of public transport. That was the concept discussed at the meeting which the noble Viscount, Lord Ingleby, arranged with my right honourable friend the Secretary of State, and it was the subject of the amendment which my noble friend Lady Lane-Fox succeeded in putting to the Committee at its sitting earlier this week.

We then have the undertaking of my right honourable friend that he will seek changes in the construction and use regulations, and in the driver's regulations.

There is then the question of the code of practice to try to see that operators with older buses who will not be caught by the construction and use regulations will have good guidance on what they can do—particularly in an easier way in some cases—in order to make their vehicles suitable for elderly or disabled people. The reason that I frowned when the noble Lord, Lord Henderson, made his suggestion that the code of practice should become statutory (as the one in the Food and Environment Protection Bill has become) was that I suddenly felt that there was very little which escapes the eagle eye of the noble Lord. It was for that reason only, and it is certainly a point I shall be glad to look at before the next stage of the Bill.

These add up to quite a lot of movement on the part of my right honourable friend the Secretary of State. He has tried to respond to points put to him ever since the Bill started in another place in order to endeavour to include provisions which will facilitate travel for elderly and disabled people. On top of that there are the amendments which the Government moved into the Bill earlier this evening which your Lordships have been most generous in accepting.

The noble Lord, Lord Henderson, asked two specific questions about those amendments. He first asked: how is it possible to have a duty with regard to the elderly and disabled without jeopardising the freedom for competition which is written into subsection (8)? My answer to that is that we have gone out of our way to write it into the Bill so far as the elderly and disabled are concerned. It will, of course, apply only to subsidised services and it will mean that, where a local authority is receiving tenders for a subsidised service, operators will be able to tender but in certain cases—for instance, where a service is running close to a housing estate on which there are many elderly people—all operators will have to meet certain stipulations when tendering. This will operate in the same way as if any noble Lord were to put out to tender the construction of a building and wanted the walls to be a certain colour. The invitation to tender would go to a whole raft of different builders but that stipulation would be included in all the tender documents.

The noble Lord, Lord Henderson, also asked about the relationship between subsections (7) and (8). This is ground which the noble Lord, Lord Carmichael and I trod a short while ago. I do not think that there is any difficulty in subsections (7) and (8) standing together in the Bill. The purpose of subsection (7), taken with subsection (8), is to give local authorities broad powers to promote public transport, provided they do not favour one operator at the expense of another. If I may look at what the noble Lord, Lord Henderson, said and write to him if I feel that I ought to add to that rather brief answer, perhaps he will be content for this evening.

I am saying to your Lordships' Committee that for the Government's part we believe that all the factors we have tried to promise to write into the Bill, or have promised that we will set in hand, should help authorities in carrying out their functions. We are worried about the present amendment, which calls for co-operation between operators and their authorities, for the reasons I have already given. I believe it is possible that the amendment which the noble Viscount, Lord Ingleby, has moved could be the pursuit of the best, yet finding out that, in the end, it is the enemy of us all; that it keeps operators out of public transport when what we want is to encourage operators into it.

I give the noble Viscount an undertaking because I would not wish him to feel that I am trying to brush past an important amendment. If the noble Viscount together with other noble Lords, wish to discuss this matter between the Committee and the Report stage, of course I shall be very ready to conduct further discussions. But so that I do not mislead him I must explain that this evening we have put into the Bill Government amendments which make it clear that the Government believe that they can go so far as giving authorities the right to stipulate certain provisions when they are letting their subsidised services, but they do not give authorities the right to go further than that when they are dealing with the commercial services.

That is as far as we feel that we can go at the present time. If the noble Viscount wishes to discuss the matter with me to see whether he can persuade me to go any further, I should be very ready to do so, but I warn him that I feel that we have gone just about as far as we can down this particular road.

Earl De La Warr

Before my noble friend says his final piece, perhaps I may say that it was clear to me that the Government felt really nervous about this subsection (8D). They seemed really to feel that it would inhibit small operators from coming in. I took the view that this was really taking their new doctrine to an extreme which was almost ridiculous. We know that the provision of the kind of vehicle into which at least the ambulatory disabled can enter exists to some extent, but it will be a long time before vehicles with underfloor engines and therefore high floors and three steps up will disappear. In due course we shall probably influence the manufacturers to act on this and so the time will come when the lot of the majority of the disabled is very much better. But when they say that the clause goes too far because it might interfere with this precious policy of deregulation, it seems to me that the Government are almost making fools of themselves in their obsessive regard for sticking so tightly to their Bill that they refuse even a clause such as this.

However, I am very glad that my noble friend has said that he will discuss it and I urge my noble friend Lord Ingleby to do his very best to persuade the Government out of this tight little concept to which they are wedded, because we really must try to make some gentle progress in this matter.

Viscount Ingleby

I should very much like to thank those noble Lords who have supported this amendment; namely, the noble Lord, Lord Henderson and the noble Earl, Lord De La Warr. I should also like to thank the Minister for the sympathetic way in which he has responded to this amendment. I should like to consider most carefully what he has said and almost certainly I shall take up his offer to discuss this matter further.

Perhaps I may ask just one question. The noble Lord mentioned the code of practice which obviously will be a very important factor. Can the noble Lord the Minister say whether this will be in operation by the time the Act comes into force? Having said that, I should like to withdraw this amendment, to consider carefully what has been said and possibly to come back to it at a later stage.

Lord Belstead

May I just say to the noble Viscount, Lord Ingleby that I do not think the code of practice can possibly be in operation before the beginning of the new year, which of course is when the transitional period begins—when the plans of the local authorities require to be made by my right honourable friend. As to whether the code of practice could be in effect by the beginning of October, which is the moment of deregulation, I should be more hopeful about that. But I should perhaps like to have a word about that with the noble Viscount a little later on.

Viscount Ingleby

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 21IZB not moved.]

10 p.m.

Lord Belstead moved Amendment No. 211ZBA:

[Printed earlier: col. 912.]

The noble Lord said: I spoke to this with Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211ZBA): Page 61, line 15, after ("Act") insert (", other than services provided wholly or mainly to meet the needs of members of the public who are elderly or disabled.").

Lord Brabazon of Tara moved Amendment No. 211ZC: Page 61, line 20, leave out from ("agreements") to end of line 23 and insert ("under which any person undertakes to provide a public passenger transport service of any description on terms which include provision for the making of payments to that person by that Executive or council").

The noble Lord said: This is purely a drafting amendment. Clause 94 allows the provision of travel concessions to be financed through service subsidy agreements, where there is no other travel concession scheme for the eligible group in question. That clause makes it possible to include provisions for reduced or concessionary fares to be paid for within a service subsidy agreement. The amendment we are considering here changes the definition of service subsidies so that agreements providing for such payments are governed by the provisions on tendering in Clauses 83 to 86.

This amendment is necessary to avoid any confusion arising, as otherwise Clauses 83 to 86 might apply only to that part of the agreement which secured the running of the service but not that to secure reduced or waived fares for concessionary fares, though these parts need not be separately identified. I beg to move.

On Question, amendment agreed to.

Clause 61, as amended, agreed to.

Lord Belstead moved Amendment No. 211ZCA:

[Printed earlier: col. 902.]

The noble Lord said: This is consequential on Amendment No. 174W. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211ZCA):

After Clause 61, insert the following new clause:

("Consultation and publicity with respect to policies as to services.

.—(1) When considering from time to time the formulation of policies for the purposes of section 61(1)(b) or (2)(b) of this Act, any council to whom either of those provisions applies shall consult—

1. (a) with every Passenger Transport Authority, county council or regional or islands council whose area may be affected by those policies; and
2. (b) either with persons operating public passenger transport services within their area or with organisations appearing to the council to be representative of such persons;

and where the council's area is in England and Wales the council shall also consult the councils of districts comprised in their area.

(2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, any such council shall publish a statement of all policies so formulated by them on that or any previous occasion which they propose for the time being to follow in the performance of their duty to secure services under section 61(1)(a) or (as the case may be) under section 61(2)(a).

(3) When any such council publish such a statement, they shall send a copy of the statement—

1. (a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and
2. (b) to each of the persons or (as the case may be) organisations whom they consulted under subsection (1)(b) above;

in relation to the formulation of their policies on the occasion in question.

(4) The council shall also—

1. (a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and
2. (b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected.")

Lord Tordoff moved Amendment No. 211ZD:

After Clause 61, insert the following new clause:

("Designated areas.

.—(1) Where a county council, regional council or islands council (as the case may be) in exercising its duties and powers under section 61 of this Act is satisfied that the availability of public transport services will thereby be enhanced or the expenditure on the provision of such services reduced, the council may resolve to designate the whole or any part of its area as being subject to a comprehensive service scheme (being hereinafter known as "a designated area".").

(2) Within a designated area a county council, regional or islands council shall draw up a scheme to secure the overall provision of public passenger transport services by competitive tender, and enter into such agreements under section 83 of this Act as are necessary for their comprehensive provision.

(3) A scheme made under subsection (2) above shall come into effect on such date (being not less than nine months and not more than 12 months after the date of the resolution) as shall be specified in the resolution, being either the day after the end of the transitional period or a day not earlier than 12 months after the end of the transitional period as defined in paragraph 1(1) of Schedule 5 to this Act.

(4) Where a resolution has been made in accordance with subsection (1) above—

1. (a) the authority shall within 7 days of the relevant resolution notify the traffic commissioner,
2. (b) the authority shall invite tenders under section 83 of this Act for such routes or combinations of routes within the designated area as the authority considers appropriate for the purposes of the scheme;
960
3. (c) section 61(3) shall not apply within the designated area;
4. (d) the making of a scheme by a resolution under this section shall not be taken for the purposes of this Act to be conduct on the part of the council that will inhibit competition.

(5) In drawing up a scheme the council shall take into account—

1. (a) measures to encourage innovation;
2. (b) fares, through ticketing and marketing of services; and
3. (c) the provision of services to and from the designated area and adjacent areas.

(6) Where a scheme is in force in accordance with subsection (2) above—

1. (a) an application for registration of a service under section 6 of this Act shall be accepted by the traffic commissioner only if within 21 days of his notifying the authority of the making of the application the authority gives its written consent thereto;
2. (b) where a person wishes to register a service within the designated area and the authority do not give their consent to such application in accordance with paragraph (a) above the traffic commissioner shall require the authority to make representations within two months showing why they consider that the operation of the service proposed to be registered would have an adverse effect on the availability or the cost to the authority of some or all of the services provided within the designated area wholly or partly out of the expenditure of the authority and if he is not satisfied that the grounds of objection are valid he shall direct the authority to give their consent to the registration and shall thereupon register the service.

(7) The Secretary of State may make an order containing such supplementary, incidental and consequential provisions as he thinks necessary or expedient for the purposes of the application of this section and in particular (but without prejudice to the generality of that) may include provision—

1. (a) modifying Schedule 5 to this Act in relation to schemes brought into effect under this section; and
2. (b) for the lapsing of the registration of a service made under section 6 of this Act before the scheme has effect.

(8) Regulations may be made under this section as to—

1. (a) such additional procedures as may be necessary in determining any area to be designated; and
2. (b) any procedures to be followed with regard to the implementation of a scheme.").

The noble Lord said: This amendment which stands in the names of my noble friend Lady Stedman and myself could call for a Second Reading speech, which I am sure would not be welcomed by the Chief Whip, who is looking at me in a slightly quizzical way at the moment, and I do not intend to make a Second Reading speech. But questions have been asked from the Government Back-Benches about what other options there are for people opposing the Bill and what other ideas they have. This amendment offers an alternative which can be used as an option, particularly in shire counties, for situations where the Government proposals may not fit the situation.

I do not need to rehearse the problems that we have in many ways with the Government's Bill. Many of us do not accept that market forces are necessarily the total answer to everything, and the Government's reliance on them may be taking an unnecessary risk in some areas. The Government have set their face against cross-subsidy and assume improved efficiency if cross-subsidy is got rid of. That could be wrong or it could be over-ambitous in certain areas. Nobody has been able to determine how market forces will work in meeting customers' needs. We dealt with that earlier in terms of consumer protection. It is possible that some of the cost savings offered in the Government's scenario could be offset by a fragmented approach and little bits of services which would cost a lot to provide could be left over to tender.

I emphasise that this amendment is an option. It was an option which was referred to by the Committee in another place looking at the Bill. It was an option which was put forward by one of the honourable friends of the noble Lord the Minister in another place, although I think in a slightly modified form. Perhaps I may direct the Committee's attention to the first two subsections of the amendment. If I may paraphrase it, what it tries to say is that where a county council or other similar council is satisfied that the availability of public transport will be enhanced or expenditure reduced, it may as a result designate the whole or part of its area as being subject to a comprehensive service scheme known as a designated area. Within that designated area a county council or a similar council shall draw up a scheme for the overall provision of passenger transport by competitive tender.

It is a way of ensuring competition, of which we on these Benches are not afraid, but competition through a tendering process rather than competition on the road. As we have heard so often in the earlier part of this debate, one of the problems of competition on the road is the kind of race to the bus stop that has been seen in some of the experiments that have already taken place.

The Government have put up a certain amount of attack on this comprehensive competitive tendering, as it has come to be known. It has also been attacked by those people who believe that the status quo has to be maintained under any circumstances. However, it is clear that the status quo cannot continue and there is no doubt that the threat of competition has stimulated a certain amount of cost cutting and innovation. However, the Government's paper on comprehensive competitive tendering is, I believe, disingenuous and many of the criticisms that have been ascribed to this system apply to a significant extent to the Government's own proposals for limited competitive tendering for loss-making services.

For instance, the Government say that franchises offer protection to the incumbent since it is in the local authorities' interests to maintain continuity of contract. They say that franchises are an abuse of monopoly power; that performance specifications in the contract cannot accurately reflect the customer's wishes; that invitations to tender are likely to be biased towards the incumbent; that the criterion for finally awarding the contract will be artificial and that franchises will tend to use imprecision in the contract as room for manoeuvre and/or to press for renegotiation, and so on. I hope that the Government are communicating these doubts to the DHSS because, in so far as these arguments apply at all they apply to the franchising of hospital cleaning.

However, in the case of buses the pros and cons of comprehensive competitive tendering must be balanced quantitatively against those of the present system and those of the Government's proposals. If one does that, CCT comes out as a clear winner. It ensures the benefits of competition but it minimises the dangers inherent in the Government's proposals. Furthermore, many of the problems attributed to CCT can be overcome if the contracts are not homogeneous. Thus a mosaic of short and long contracts covering large and small networks of services could be effective.

I could go on at some considerable length but I dare say that the amount of attention that I am likely to receive from the Committee at this stage of the night is not likely to be great. However, I felt that it was right to introduce this matter at this stage because I think it is a serious alternative in certain areas. I stress that it is a matter that is of interest in only certain areas and particularly in shire counties.

The Association of County Councils has now come round to the view that this is worth supporting. I was interested to receive a letter from Lancashire County Council the other day, who have taken a very fundamentalist approach to this whole problem until recently but who now feel that comprehensive competitive tendering may be the answer to their problems, where they have had an integrated network, which I have seen and I greatly admire—although I do not greatly admire some of the things that Lancashire County Council have done in the past in trying to oppose the buses Bill and in spending public money in the run up to the county councils. Nevertheless, they have now come round to the view that this is something that is worthy of consideration in preserving the integrated services which they have had across the county.

Kent County Council, as the Minister will doubtless know, has been very strongly in favour of this for some considerable time, as has Cambridgeshire. Many of my friends in Cheshire have also been pressing me to support this concept. It is a concept. It needs refining. It is however a concept that we should consider perhaps in more detail. It is an idea that is beginning to be seen as having more merit than the Government gave it credit for in the early stages. I believe that between now and Report stage it is something that we should all think about. My hope is not that this will destroy the Government's Bill. This is certainly not a wrecking amendment. It is however an option that I believe the Government should consider particularly in shire counties, but only giving the option to those shire counties that wish to adopt it. I beg to move.

Lord McIntosh of Haringey

As the noble Lord, Lord Tordoff, says, it is unfortunate that an amendment of this significance has to be debated at this time of night on the fourth day of the Committee. Perhaps it is the fault of those of us who have been putting down amendments to the Bill as it has proceeded. I hope that noble Lords will allow me to finish the sentence. It has a rather different end to that which some noble Lords on the Government Front Bench might expect. We have done the Government the credit of assuming that they took their principles seriously and that they had thought out seriously the implications of the combined deregulation and privatisation that is the theme of the Bill. We have taken those intentions at face value. In many amendments to many clauses and many subsections, we have sought to provide safeguards for the travelling public or to find out how seriously the Government had actually thought about the problems that they were getting into by this series of untested adventures into privatisation and deregulation.

I have to say that experience so far is not encouraging. Experience is that the Government have not thought about the implications of doing all these things together. They are not prepared to undertake adequate experimentation or trials. They are not prepared to do anything other than to assert that the benefits of integrated transport services are to be achieved. Indeed, this is not even as much as an assertion. It is what Bernard Shaw called mere asseveration. There is not even an attempt to put any evidence behind it other than the pathetic and usually irrelevant experiments in Hereford, Norfolk and Devon. It is for that reason—having been extremely sceptical about comprehensive competitive tendering at the outset—that I believe the noble Lord, Lord Tordoff, may be right. It may be that, not now, but at Report stage, a concerted attack may have to be mounted by those who are worried about the whole progress of the Bill and lack of adequate answers to serious questions about the Government's proposals.

The amendment, as proposed, is extremely cautious. It talks about designated areas. It leaves it to the local authorities concerned to decide whether they want to designate all or part of their areas. It is basically confined to the shire counties. It provides even for the option of comprehensive competitive tendering at the outset or of delaying it for a year, if I understand the amendment correctly. So there is not even the risk of authorities rushing into a scheme without adequate consideration. But, as the noble Lord, Lord Tordoff, has said, this is a way which might have to be the right way for some parts of the country to achieve the objectives of competition and yet maintain the benefits of integration, the benefits not of outside planning but of the use of an integrated network of transport services, not just the buses, the commercial services or the subsidised services, but all of the ways in which people seek to move about our country.

I believe that the noble Lord is right not to take the matter any further at this stage, and clearly a great deal of further thought will be required if we on these Benches are to put our names to any comparable amendment at the Report stage. However, the noble Lord is right to raise the matter now and it is right that the Government should take it seriously.

10.15 p.m.

Earl De La Warr

For all the reasons which the noble Lord, Lord McIntosh, has put forward so well, I too am extremely grateful to the noble Lord, Lord Tordoff, for putting this on the record. It is right that it should be there and we may well return to it.

Lord Monk Bretton

I also have some sympathy with this amendment. I do not know whether it is the right approach and I do not know what my noble friend the Minister will say about it in reply; but I do not think that it will be too favourable. However, it is further evidence that the Bill creates a problem for rural areas, and particularly for semi-rural areas —those rural areas that are near pretty large conurbations. Because there has been a higher degree of cross-subsidy, there are doubts whether economies in operation can fill the gap, partly because in some of those areas very substantial economies have already been made.

Therefore, the results of the Bill as it affects these rural areas are—and I am sure that I am not alone in thinking this—evidently likely to be patchy. So I trust that my noble friend the Minister will forgive my pose as a doubting Thomas because I am concerned about these rural areas. I believe that by being a doubting Thomas I am reflecting the view of the rural public about this, and I am quite sure that the more I can urge my noble friend the Minister to do by way of tackling this problem or by dispelling the doubts, the better.

We have tried various amendments on what I call the pragmatic theme. The amendments involving the pragmatic theme are those which retain a certain amount of cross-subsidy somewhere: on-route cross-subsidy or off-route cross-subsidy. This one involves some off-route cross-subsidy. We have done that because it is an approach that is cheaper from the point of view of the public purse. So far none of these proposals has found favour, but we are anxious about what my noble friend the Minister and the Government intend to do about this problem. There are the gravest doubts about the proposal to solve it: whether an extra sum of £50 million over four years is likely to be enough. Therefore, I hope that my noble friend the Minister will be able to say something on these matters when he replies to this amendment.

Lord Belstead

I understand why the noble Lord, Lord Tordoff, has moved this amendment, and I do not object at all that we should have a debate on the concept of comprehensive competitive tendering. In some respects it would be an advantage over the present arrangements under which local authorities often make bilateral arrangements with one public sector operator, often resulting in a pattern of services which makes neither commercial sense nor reflects the social needs of the area, and that sometimes happens.

However, in many respects I think that franchising would be a step back from the present system. It would put into the hands of local authorities responsibility for decisions about which services the customers should have and which they should not. It really would virtually remove the possibility of operators starting services on their own initiative in the areas which would be designated under the amendment.

My noble friend Lord Monk Bretton has been saying—and I understand his concern; he has talked to me about it so far as the rural areas are concerned—how are the Government going to overcome what my noble friend called the problem of deregulation? First, experience in just about every sector of our economy tells us that when decisions are taken by many different people in response to market pressures the customer usually does far better than when decisions are concentrated in the hands of a few people who do not have direct experience of providing the services themselves.

The sheer complexity of this concept of franchising would be enormous. Most, if not all, the franchises in a given area would have to be let simultaneously so that operators in bidding would know how the various services would relate one to another. The more comprehensive and complex it became, the more difficult it would be for planners to tailor the network to what the customer wanted.

Enlightened authorities will no doubt seek to encourage new operators into the field and encourage innovation and efficiency in the provision of services, but I do not think anyone could reasonably claim that they could do these things as effectively as the market will when operators have the freedom and incentive to seek out customers and do their utmost to serve them.

One of the main aims of this concept of franchising would be to preserve non-commercial cross-subsidy. If your Lordships will forgive my saying so (and for the record I do), it is a system which has been part and parcel of the steady downward slide of the use of public transport, of buses, in this country on local services, together with the steady increase—indeed, dramatic increase—in public subsidy, not to mention the dramatic increase in fares. I think it is fair to say that cross-subsidy is something which appears to damage the best parts of the market, and in an arbitrary way to affect passengers on different services.

I have to ask now what it is about direct competition which led my noble friend to ask me the question he did, and your Lordships to cast about for an alternative. It has been argued that competition will mean wasteful duplication of resources on the profitable services. But if there is room for more than one operator, why deny the customer that extra choice and extra service? It has been argued that competition will bring instability and unreliability in the way that services are provided. I think those with experience of existing bus services might be forgiven for asking whether that is not more likely to happen when operators have a monopoly than when they are under some competitve pressure.

In any event, the Bill contains tough sanctions to deal with operators who may run unreliable services or behave foolishly on the road. There are also measures, as we know, to sort out problems arising from severe traffic congestion. It has been suggested that competition on the road is unlikely to be fair competition, and that in a free market big operators will soon drive the little ones out of busness. While that may be a problem when competition is limited to a few trial areas, it will not be so when the major operators have a monopoly than when they are under some competitive pressure.

Many people, and your Lordships again this evening, have gone through these arguments and have turned to this concept in this amendment as being an ideal compromise. In reality, I suggest it would be a very unwieldy, centralised system which would perpetuate cross-subsidy and would discourage new thinking. I believe it would deprive the travelling public of the benefits of a free market—benefits which we already enjoy in most other sectors of the economy—and it would do all this in order to avoid competition on the road.

Yet, as I have explained, the Bill contains all the necessary safeguards to deal with any problems which might arise when operators are free to compete with one another. Those who support this amendment believe that the interests of the community will best be served by planning the provision of services and the charge to be made for them in conditions of monopoly. All that is part and parcel of this amendment. But the essence of the Bill is the belief that the community will gain most from competition in the market between operators striving to meet the needs of the passengers, subject to the proper safeguards on safety and arrangements to meet social needs. It is not surprising that, having deployed these arguments, I say on behalf of the Government that I do not like the amendment.

Lord Tordoff

Nobody is offering this as the ideal compromise. It is an option. It is an option that might be suitable in certain places. The thought that somehow the county councils of Kent, Cambridge and Cheshire are some wild militant Marxist group which is seeking to subvert the needs of the travelling public by some Marxist concept is beyond comprehension.

The problem that we are worrying about is not in the areas where competition will reduce prices and give better service. It may be that the Government's proposals will do that. It is the devil-take-the-hindmost part of this equation which is worrying. Those areas which are not in the profitable areas are the greatest worry. The idea that somehow we are on a diabolical slide into even more and more expensive subsidisation of services does not stand up in relation to this amendment. There is an element of noncommercial cross-subsidy left, but it is much more transparent under this amendment than it is at the moment. It is that transparency of cross-subsidy which I believe is the control.

It is interesting that as the debate extends on this subject of the CCT more and more people are beginning to see merit in it, not as a panacea or a total alternative to the Government's proposals, but as an option which could be useful particularly in shire counties. I hope that that learning curve will continue and that it might even take in the Government at some stage over the summer period. I have my doubts, but we can all live in hope.

It is getting late, and I do not intend to press this tonight. We shall be back at Report stage, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 [Exclusion of powers of certain councils to run bus undertakings]:

The Earl of Caithness moved Amendment No. 211ZE: Page 62, line 30, leave out ("to") and insert ("(according to the context) to— (i)").

The noble Earl said: With the leave of the Committee I shall speak to Amendments Nos. 211ZF, 211AZA, 211AZB, 211AZC, 211CB, 211CC, 211CD, 2110E, 211CF, 211CG, 211CH, 211CJ, 211CK, 211CL, 211CM and 242A: Amendment No. 211ZF: Page 62, line 35, at end insert ("; or (ii) all property of the council used or appropriated for use and all rights and liabilities of the council subsisting for the purposes of any such activities."). Amendment No. 211AZA: Clause 63, page 63, line 15, leave out subsection (3) and insert— ("(3) Subject to subsections (3A) and (3B) below, a council's bus undertaking shall be regarded for the purposes of this Part of this Act as forming part of a joint undertaking if the services for the carriage of passengers by road provided in the course of the activities of the council's bus undertaking are wholly or mainly provided under any agreement for—

1. (a) the provision or operation of those services by a body acting on the joint behalf of that council and one or more other councils; or
2. (b) the operation of those services by any company operating those services in conjunction with services for the carriage of passengers by road provided by that company.

(3A) Subsection (3)(a) above only applies where the agreement provides for the distribution among the parties on its termination of—

1. (a) all assets, or the proceeds of all assets, used or appropriated for use for the purpose of providing services for the carriage of passengers by road under the agreement; or
2. (b) all such assets or proceeds excluding only land or the proceeds of disposal of land.

(3B) Subsection (3)(b) above only applies where—

1. (a) the agreement includes provision for securing that the parties on termination of the agreement hold shares of equal value in assets required to be brought into account on termination of the agreement; and
2. (b) those assets include all assets so used or appropriated for use.").

Amendment No. 211AZB: Page 63, line 35, leave out ("or arrangements"). Amendment No. 211AZC: Clause 64, page 64, line 7, leave out ("or arrangements as are") and insert ("as is"). Amendment No. 211CB: Clause 65, page 65, line 16, leave out from beginning to end of line 17 and insert ("In any case within section 63(3)(a) of this Act both or all the councils participating in the joint undertaking may"). Amendment No. 211CC: Page 65, line 29, leave out ("or arrangements"). Amendment No, 211CD: Page 66, line 11, leave out from ("case") to second ("the") in line 13 an insert ("within section 63(3)(b) of this Act"). Amendment No. 211CE: Page 66, line 14, leave out ("that party") and insert ("the company carrying on the joint undertaking"). Amendment No. 211CF: Page 66, line 16, at end insert ("by the council concerned"). Amendment No. 211CG: Page 66, line 24, after first ("of') insert— ("(i) all property, rights and liabilities of the body carrying on that undertaking; and (ii) "). Amendment No. 211CH: Page 66, line 43, leave out from ("and") to ("share") in line 1 on page 67 and insert (", in any case within section 63(3)(b) of this Act, for the transfer to the company carrying on the joint undertaking of any property, rights and liabilities of the council concerned which are comprised in that company's"). Amendment No. 211CJ: Page 67, line 5, leave out ("any joint body established for the purposes of') and insert ("the body carrying on"). Amendment No. 211CK: Page 67, line 20, at beginning insert ("in any case within section 63(3)(a) of this Act,"). Amendment No. 211CL: Page 67, line 20, leave out ("any joint body established for the purposes of') and insert ("the body carrying on"). Amendment No. 211CM: Page 67, leave out lines 22 to 27. Amendment No. 242A: Clause 81, page 82, line 7, leave out ("(3) and ").

I am glad to say that this group of amendments is rather less formidable than it may seem. It has a very simple purpose: to clarify the meaning of "joint undertaking" in Part IV of the Bill, which I am sure can only be welcome. I beg to move.

On Question, amendment agreed to.

Lord Brabazon of Tara moved Amendment No. 211ZF:

[Printed earlier: col. 966.]

On Question, amendment agreed to.

Following is the text of the amendment (No. 211ZF): Page 62, line 35, at end insert ("; or (ii) all property of the council used or appropriated for use and all rights and liabilities of the council subsisting for the purposes of any such activities.")

10.30 p.m.

On Question, Whether Clause 62, as amended, shall stand part of the Bill?

Lord Sandford

We now come for the first time to that part of the Bill which contains the special features for the 50 bus companies run by the municipalities. I had understood earlier from the Chief Whip that he did not want to go particularly late tonight, but if it is the decision to continue I am happy to do so; although I am anxious that all of these six or seven groups of amendments should be tackled fairly thoroughly, and I hope that the Committee will understand if I take a certain amount of time about these topics as we are now reaching them for the first time.

I am moving, as a probing amendment of course since I have no intention of pressing it, the deletion of this clause and speaking at the same time to Amendment No. 211A. Amendment No. 211A:Clause 63, page 62, line 36, leave out from beginning to ("form") in line 39, and insert— ("Without prejudice to the power of a non-metropolitan district council in England and Wales to provide a service for the carriage of passengers by road which requires a PSV operator's licence, any council who, at the time this section comes into force, are providing any such service (referred to below in this Part of this Act as a council operating a bus undertaking) may at any time apply for and the Secretary of State may make an order empowering the council or (as the case may be) each of the councils to whom the order applies, before the end of the period applicable to that council under the order, to".) This is because I want to draw my noble friend on the Front Bench to say a bit more about the Government's intentions over the structure of municipal bus companies.

If I can take the Committee back to the White Paper, it stated at 5.10: The Government have therefore decided that there should be changes to the structure of public sector operation at the earliest opportunity to ensure fair competition between public sector operators and with the private sector". Then, a little further on, it says: The Government will consult those affected by these proposals about the detailed implications". Well, no sooner had the consultations begun than, as I explained at Second Reading, they were broken off. Of the three or four options that they had for making the changes which they decided were necessary, the Government have chosen easily the worst. They have proposed that any bus undertaking by a district council should be incorporated into a company owned by the district council.

The purpose of suggesting that Clause 2 should be omitted and Clause 63 should be amended with Amendment No. 211A is to give the district councils the option of retaining the powers that they use at the moment to run bus undertakings and the option to apply to the Secretary of State for an order to form a separate company if that seems the best way of dealing with the situation which is being created by deregulation. I am now asking my noble friend on the Front Bench to comment on the need to take municipal undertakings out of direct control of district councils at all and to form them into these separate companies.

The Transport Committee of the House of Commons in their Second Report of 4th March 1985, in paragraph 281 said: The formation of the companies does little to promote fair competition and the financial separation of the undertakings from their councils could be achieved without removing the undertakings from direct local control". I am not seeking on behalf of the Association of District Councils any favourable treatment for municipal operators. They are already subject to the spur of competition and we remain unconvinced by the arguments for the obligatory setting up of municipal operators as companies. But if in the circumstances of a particular area, the council should see advantage in such a course, then enabling powers should be available and that is what is sought in Amendment No. 211A.

But the decisions as to whether to go that way or another way should be taken locally in the light of the differing local circumstances. It should not, I submit, be imposed as a mandatory requirement. The Association of District Councils supports the Monopolies and Mergers Commission Report on the need for municipal managers to have the freedom to use their own professional expertise to ensure that their undertakings are managed efficiently and without excessive political interference.

Yet it has to be recognised that municipal bus services are operated to meet the needs of local communities and, more than any other type of operator, they are directly accountable under the democratic process. Local democracy is a matter of principle which cannot be subordinated to bureaucratic central government directives, as this clause would do at the moment. The style of control and the management of municipal bus services, I submit to the Committee, should remain subject to the elective local processes and control, even though a new financial framework may be necessary.

As I have said, the House of Commons Transport Committee urged that there should be an option in this matter and that it should not be mandatory; but the Government spokesman in the other place at Committee stage said: We need the companies because of deregulation. There is no other way to identify the cost benefits given to municipal undertakings as a part of a local authority. That is just not the case. My noble friend referred just now to the days when I was in the Department of the Environment. At that time the Department of Transport was in with us, and they would not have made the mistake of overlooking the existence of the direct labour organisation regime.

That is a regime specially established in order that organisations operating directly under district councils should be able to compete fairly with other organsiations in the private sector. It operates particularly in respect of direct labour building organisations, of work done on highways, of work done on sewers, water mains and so on. In all those cases, by the operation of the direct labour organisation regime the agencies working under the district councils are able to compete on a fair basis with agencies, building firms, plumbers and so on, in the private sector.

That is an organisation which has been established for four years and we have long working experience of it. There is absolutely no reason why the running of bus operations should not be controlled in the same way. This is a regime which requires a building agency working under the district council to keep separate accounts, to pay for the legal and financial advice and any other advice and assistance it gets from its parent body, and in that way to ensure that it competes on a fair basis. That whole regime of controlling direct labour organisations is in the process of being extended by the DoE into other fields such as catering, and it would be perfectly simple to extend it into transport and bus operations as well.

If that sensible alternative had been adopted for the setting up of a separate company, it would promote competition quite effectively, ensure financial separation and avoid the complex and formidable problems of company formation, such as the transfer of assets and liabilities, employee transfer, pension rights (which we discussed extensively earlier today) and expenditure and borrowing controls. All those constitute formidable problems, when one asks district councils such as those of which I am speaking to set up separate companies. That is the reason I am moving the deletion of Clause 62 and at the same time speaking to Amendment No. 211A. I should be grateful for my noble friend's comments on those points as a start.

Lord Belstead

The purpose of the clause which my noble friend is proposing should not stand part of the Bill is to ensure that district councils and, in Scotland, regional councils will not in future have powers to provide bus services directly. The clause preserves the powers of councils who are now running such undertakings until a date specified by my right honourable friend, giving them a period in which to transfer their undertaking to companies; but once that transfer has been completed the powers to provide services directly—in other words, by operating public service vehicles themselves—would be removed under this clause on a date specified by order. We propose that date should be 28th September 1986, when, as your Lordships will know, we propose that deregulation should come into force.

My noble friend has asked me one main question, which is: why form separate companies? What is the need to do so in the local authority sphere? It is a concept in Part IV which goes to the very heart of the proposals in the Bill because we believe that it is vital that bus undertakings should be placed at arm's length from their local authorities. This will enable the undertakings in future to operate entirely commercially, serving in competition with other operators the routes which they consider commercially viable and tendering, again in competition with other operators, for the service subsidies made available by their controlling authority.

I submit to my noble friend that that would not be possible without this clause. As your Lordships will know, we believe that competition is a critical step in reversing the relentless decline, which we all want to stop, in bus services. How, I would ask the Committee, could the system of tendering for subsidy, which is proposed later in this Bill, work effectively if councils retain their bus undertakings in their present form? It is a question which, if my noble friend will forgive my saying so, he did not address in his speech. If that happened, other operators would feel that they simply could not get a look in if they were trying to compete with a municipal operator who was in that sort of position.

I can see from the Marshalled List that we will be discussing the arguments for permitting companies to run bus services when we come to the next clause; and, indeed, my noble friend has moved onto Amendment No. 211A. But I hope that the answer that I have given to the main question which he has asked and which applies to the Question, That Clause 62, as amended, shall stand part of the Bill, and to his Amendment No. 211A, will suffice for the moment.

Lord Stoddart of Swindon

I must say that until I heard the Minister speaking I had absolutely no intention of saying anything at all on this clause or on any amendment. But the fact is that, having at one time been the chairman of a municipal passenger transport undertaking in Reading, I know that what the noble Lord has said is simply not true, and it is not true for this reason.

The Reading Corporation transport undertaking is under a duty from the council itself to pay all proper central charges and is, therefore, in no way—and I believe that this is true of bus undertakings up and down the country—subsidised by the ratepayers, except in the case of concessionary fares. In my experience, the municipal bus undertakings are run in that way. They receive no subsidy from the ratepayers and they pay the full central charges which are due from local authority services, like the town clerk's department and so on. It is also true of other services as well.

I certainly had the opportunity, when I was the leader of the borough council, of setting up a direct labour department and, again, it was run on commercial lines and paid the full central charges. That did not prevent the building undertaking from competing on the open market with other builders in the area. It had no concession whatsoever and it was run as a commercial organisation very successfully indeed. So successful was it that the Tory Party in Reading was unable to get rid of the department, as it would no doubt have wished to do on dogmatic political principles. I do not want to insult the Minister in any way; I do not want to be unkind to him; but he really is talking nonsense, absolute nonsense.

Lord Denham

Order!

Lord Stoddart of Swindon

If I have offended the Minister I will of course apologise. But let me say that I know from experience that what he is saying does not really apply. The district council authorities which run bus undertakings are perfectly able with their present organisation and without being hived off into separate bodies to do the job that is required of them in this Bill. As the noble Lord, Lord Sandford, has asked, I hope that the Minister and the Government will look at this problem once again. It is a serious matter. I believe that the Government are wrong. There is time for them to think about it, and if they do so I feel quite sure that they will come to the conclusion that there is no need to impose this severe re-organisation on the district councils.

10.45 p.m.

Lord Belstead

Just for once the noble Lord has not quite hit the target. I was not suggesting in my speech that there will not continue to be some financial relationship between the new companies and their authorities. This is a matter to which we shall be coming at a subsequent sitting of the Committee and in subsequent clauses when we deal with the financing of the new companies.

I was suggesting that it is essential for the concept of the Bill that the arm's length companies should be set up, because if one does not set up such companies it is simply impossible for the company—whatever one may call it; I am calling it "the company"—to tender for the local authority subsidised services in fair competition with other companies. One simply could not do it. If Parliament decided to continue to tie the bus undertaking of a local authority to the undertaking and not form an arm's length company in the future, with the best will in the world it would be impossible for that undertaking to tender fairly with other competitors for the subsidised services.

There are other reasons for the formation of the companies but, with respect to the noble Lord, it was on that ground that I was saying it was essential, and indeed vital to the concept of the Bill, for the companies to be set up. I was content to confine myself to that ground because the hour is late and I know that this is only the opening shot in a series of amendments that my noble friend Lord Sandford is going to move.

If the noble Lord will forgive me saying so, for the reason that I have just repeated, this is an important amendment as far as the concept of the Bill is concerned. I hope the noble Lord will not think that I am being deliberately obstructive when I say that there is no give in the Government's position on this point.

Lord Sandford

I see that, and I have not yet said anything about what it is that makes these hybrid arm's length companies so impossible to operate. That will come when I reach Clauses 69 and 72. My noble friend has not really answered the point that I was making about the regime that governs direct labour organisations. I am not aware that building firms, carpenters, plumbers and other people, tendering and competing with district council direct labour organisations in Reading or anywhere else, feel that they are up against impossible competition, because that is what the regime was designed to secure and to safeguard. My noble friend has not said anything to explain why a system which works well in that area has not been at least provided for as an option in this area. However, we have other matters to discuss and I do not wish to stand in the way of Clause 62 any longer.

Clause 62, as amended, agreed to.

Clause 63 [Formation of companies to run council bus undertakings]:

[Amendment No. 211A not moved.]

The Earl of Caithness moved Amendments Nos. 211AZA and 211AZB:

[Printed earlier: col. 966.]

The noble Earl said: I beg to move Amendments Nos. 211AZA and 211AZB together.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 211AZA and 211AZB):

Page 63, line 15, leave out subsection (3) and insert— ("(3) Subject to subsections (3A) and (3B) below, a council's bus undertaking shall be regarded for the purposes of this Part of this Act as forming part of a joint undertaking if the services for the carriage of passengers by road provided in the course of the activities of the council's bus undertaking are wholly or mainly provided under any agreement for—

1. (a) the provision or operation of those services by a body acting on the joint behalf of that council and one or more other councils; or
2. (b) the operation of those services by any company operating those services in conjunction with services for the carriage of passengers by road provided by that company.

(3A) Subsection (3)(a) above only applies where the agreement provides for the distribution among the parties on its termination of—

1. (a) all assets, or the proceeds of all assets, used or appropriated for use for the purpose of providing services for the carriage of passengers by road under the agreement; or
2. (b) all such assets or proceeds excluding only land or the proceeds of disposal of land.

(3B) Subsection (3)(b) above only applies where—

1. (a) the agreement includes provision for securing that the parties on termination of the agreement hold shares of equal value in assets required to be brought into account on termination of the agreement; and
2. (b) those assets include all assets so used or appropriated for use.").

Page 63, line 35, leave out ("or arrangements").

Clause 63, as amended, agreed to.

Clause 64 [Schemes for transfer of individual council bus undertakings to companies formed under section 63]:

The Earl of Caithness moved Amendment No. 211AZC:

[Printed earlier: col. 966.]

The noble Earl said: This amendment is consequential. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211AZC): Page 64, line 7, leave out ("or arrangements as are") and insert ("as is").

Lord Sandford moved Amendment No. 211AA:

Page 64, line 19, at end insert— ("(3A) A scheme under subsection (1) above shall identify any liabilities retained by the council or councils concerned on the transfer of their property, rights and liabilities to the company or companies under the scheme, being liabilities in respect of the following matters:—

1. (a) compensation payable under Section 78 or otherwise in respect of persons who suffer loss of employment or loss or diminution of emoluments by reason or in consequence of the transfer;
2. (b) the provision of funds to secure the payments of benefits and pensions of employees.").

The noble Lord said: I beg to move Amendment No. 211AA, and I shall speak also to Amendment No. 211CA. Amendment No. 211CA: Page 64, line 45, at end insert— ("and the Secretary of State shall make grants to the council or councils concerned of such amounts as appear to him to be requisite for indemnifying the council or councils concerned in respect of the retained liabilities identified in the scheme").

We come now to pensions again. We spent some time earlier today debating pensions in the case of the National Bus Company, and when we reached Clause 58 we spent some time discussing pensions as they affected the PTEs. We now deal with pensions as they affect the municipal bus companies. All three cases are different.

The point they have in common, as can be seen clearly by the Committee, is that there is no doubt that one of the areas of greatest anxiety and concern relates to the future of the superannuation liabilities for staff who are transferred—either from the nationalised National Bus Company to the privatised fragments of the National Bus Company, or from the PTEs in the public sector to the private sector, or from the district councils to the new bus operating companies in whatever form they take.

In every case, staff are being transferred from public service, with the assurance of the pensions they carry, to the risks and uncertainties of private employment in private enterprise. There is a substantial difference, and the way in which the matter has to be handled is different in every case.

The Government's proposals so far—at least until today—are not to be found on the face of the Bill. It appears that their first thoughts were that when municipal employees were transferred, they would no longer be members of a local government scheme but would just join whatever arrangements the new companies were able to set up. They will not be able to do anything very elaborate in the time that has been allowed for that process. Therefore, those arrangements will certainly be a good deal inferior to those which the employees are enjoying at the moment.

I am glad to be able to report to the Committee that the discussions going on between officials in the ADC and the DTP seem to indicate that the Government are now prepared to accept that it would be desirable as a matter of policy to enable municipal employees to retain their pension rights, and a proposal to this end will be made.

However, the problem is that this entails severe costs either for the new transport companies or for the present parent local authorities. These arise in three different ways. First, there is the annual pensions increase to update the benefits of the current pensioners—not the current employees, the current pensioners—and that, presumably, will continue to fall on district councils whatever is done for employees who are transferred. I have to point out to the Committee that this amounts to as much as £800,000 for a large municipal bus undertaking.

Secondly, the cost of future pensions increases in respect of transferred employees will fall, in whole or in part, on the new companies on top of the cost of around 10 per cent. of pay constituting the employers' contributions for those employees who are transferred. Thirdly, the liability to meet pensions costs and redundancy compensation during that transitional reorganisation, or if the company should fail, would rest with either the district council or the superannuation administering authority which, as your Lordships know, would be the county council.

If the Government accept the desirability of enabling transferred employees to retain their superannuation rights in the local government scheme and accept the need to minimise the burden on the new companies which possibly are to be privatised and will need to be in a position to find capital for themselves—and this is what flows from this policy—and if the Government accept that district councils' expenditure ought not to continue on these items after the revenues are lost, the Government should meet centrally the increased pensions costs and accept liability for debts which may be outstanding if the companies fail, as well as the once-off transitional costs.

There are precedents for this request, notably in the establishment of the National Freight Corporation—now a consortium. All this is essential if the new companies are to compete fairly with independent operators and, if they are privatised, to get access to their own capital. The Government have argued that the financial benefits of their policies will match these costs and no net increase will arise. That remains to be demonstrated. We certainly cannot let the legislation through on that assumption. At the very least there needs to be recognition in the grant-related expenditure assessments of those costs which will fall on the districts.

I have to say that originally the Department of Transport appeared to want to wash its hands of the consequences of this part of the legislation but it is clear from the earlier debates today that that is not the case. However, the way in which it proposes to deal with the pension rights in the case of the municipal bus undertakings needs to be made clear and this is the moment to do it. The danger is that the Government will claim that they have made provision for employees to remain within the schemes while the actual cost will fall locally; and I do not think that that can be accepted. We have discussed similar problems in the National Bus Company and the PTEs, but of course they are not the same as those which arise in the case of municipals.

I hope that with that explanation of the special situation my noble friend will be able to respond with the same thoroughness as he responded earlier in the day in the case of the National Bus Company and the PTEs. I beg to move.

Lord Trefgarne

I have listened very carefully to the arguments deployed by my noble friend in support of these amendments. We have of course debated a similar set of amendments to Clause 58 dealing with the PTEs and the companies that they will be forming, and while of course I appreciate that we are dealing here with rather different bodies—district councils and their undertakings—I suggest that the same principles hold good for both.

May I remind your Lordships very briefly of the main points? I hope that in the earlier debate my noble friend was reassured about the terms and conditions of the employees as they transferred to these companies. The Transfer of Undertakings (Protection of Employment) Regulations 1981 will ensure that the contracts of employees who transfer will continue to apply, with the same terms as though they had originally been made with the new company rather than the PTE or district council. If, after transfer has been effected, the company wanted to make changes in the contracts of employment, it would of course be open to it to renegotiate with the staff, but existing terms and the rights to compensation which they imply would have to be the starting point.

11 p.m.

Clause 78 of the Bill provides for the Secretary of State to make regulations providing for the payment of compensation to employees who have suffered loss or diminution as a result of the transfer, but the Government regard this very much as a reserve power for use in particular circumstances in which staff may suffer loss. We do not envisage regulations under Clause 78 requiring payments of compensation to staff generally.

These amendments suggest that my noble friend believes' that the employees of municipal bus companies will be worse off once they have been transferred to the new public transport companies, and that there will be residual liabilities remaining with the district councils which should fall on the Government. However, we believe very strongly that the Bill will rejuvenate the market for bus services and provide a better chance for the industry to flourish than existing policies do. As with the PTE's new companies, the district council companies will have every chance to share in the benefits of the change that this Bill will bring about. For the first time management will be established in a commercial structure able to provide all the services which it believes in its commercial judgment to be attractive. I suggest that it would be wrong of us to think in terms of a sizeable residual liability falling on them. Instead I ask my noble friend to recall that, as with the PTEs, the company structure will bring many benefits to the councils and their ratepayers.

My noble friend has referred specifically to the extra cost of pensions, a matter which we have of course already debated at some length. However, I would reiterate that the bus undertakings undoubtedly will already be covering their own pensions costs and that may well continue to be the case in the future, and in so far as any extra costs fall on the authorities, I do not think it would be right for them to be passed on to the Government.

Finally, let me say once again that the policy in the Bill as a whole will be to the financial benefit of local ratepayers since they will all have the advantages of efficiency and competition, with the reductions of wasteful subsidy that the Bill will bring. I suggest again to your Lordships that in these circumstances it is not right to require the taxpayer to meet any liabilities which may be left to the councils, and it would be quite inappropriate to expect that central Government should meet those transitional costs which arose from the move towards greater efficiency and cost effectiveness in the provision of services.

Lord Teviot

I had absolutely no intention of intervening at this time of night, but I must say that we are now back on to the old philosophical tack: that with the lid off the pot this Bill will be the most roaring success. However, when it comes to pensions we are discussing important areas of people's lives. I shall not say very much at all and I shall leave your Lordships to my noble friend Lord Sandford who will reply, but the Opposition might wish to come in and say one or two things. We are just back into that same old tack. This debate is sounding like a very boring old gramophone record, and it is entirely speculative.

Lord Sandford

I must say that I regard that response from the Minister as very unsatisfactory. I asked my noble friend a number of specific questions which arise in the case of the municipal undertakings and which have not arisen before in regard to either the National Bus Company or the PTEs. If I may say so, he ignored the whole lot. I know that it is late at night, but that is not my fault. We have only just arrived at the matters which concern the district councils, and I really must have them discussed properly. I am prepared to go on for as long as the Chief Whip wants me to go on, but I expect to have better answers than that. I shall not press the amendment any more tonight, but I shall certainly press it a good deal harder at Report stage. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendments Nos. 211AB, 211B, 211C and 211CA not moved.]

Clause 64, as amended, agreed to.

Clause 65 [Orders for transfer of joint undertakings to companies formed under section 63]:

The Earl of Caithness moved Amendments Nos. 211CB to 211CM.

[Printed earlier: col. 966.]

The noble Earl said: With the leave of the Committee, I should like to move Amendments Nos 211CB to 211CM en bloc. I spoke to these with Amendment No. 211ZE. I beg to move.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 211CB to 211CM): Clause 65, page 65, line 16, leave out from beginning to end of line 17 and insert ("In any case within section 63(3)(a) of this Act both or all the councils participating in the joint undertaking may") Page 65, line 29, leave out ("or arrangements") Page 66, line 11, leave out from ("case") to second ("the") in line 13 and insert ("within section 63(3)(b) of this Act") Page 66, line 14, leave out ("that party") and insert ("the company carrying on the joint undertaking") Page 66, line 16, at end insert ("by the council concerned") Page 66, line 24, after first ("of") insert— ("(i) all property, rights and liabilities of the body carrying on that undertaking; and (ii)") Page 66, line 43, leave out from ("and") to ("share") in line 1 on page 67 and insert (", in any case within section 63(3)(b) of this Act, for the transfer to the company carrying on the joint undertaking of any property, rights and liabilities of the council concerned which are comprised in that company's") Page 67, line 5, leave out ("any joint body established for the purposes of") and insert ("the body carrying on") Page 67, line 20, at beginning insert ("in any case within section 63(3)(a) of this Act,") Page 67, line 20, leave out ("any joint body established for the purposes of") and insert ("the body carrying on") Page 67, leave out lines 22 to 27.

Clause 65, as amended, agreed to.

Clause 66 [Supplementary provisions with respect to orders under section 65]:

The Earl of Caithness moved Amendment No. 211CN:

[Printed earlier.]

The noble Earl said: I should like to speak also to Amendments Nos. 211CP, 217A, 217B, 221A, 231A, 234A, 239A, 241ZA, 241B, 241C, 264A and 264C to 264G. Amendment No. 211CP: Page 68, line 28, at end insert ("; and (e) with respect to the consideration to be provided by any such person for any transfer under the order."). Amendment No. 217A: Clause 69, page 70, leave out lines 33 to 35 and insert— ("(2) Following the transfer to a public transport company of its initial undertaking,"). Amendment No. 217B: Page 70, line 41, at end insert— ("The reference above in this subsection to the transfer to a public transport company of its initial undertaking is a reference, in relation to any such company, to the transfer or (if more than one) the first transfer of property, rights and liabilities to that company under section 58(7), 60(10), 64(7) or 66(2) of this Act."). Amendment No. 221A: Clause 71, page 74, line 3, leave out from ("company") to ("any") in line 4 and insert ("so formed by way of consideration for"). Amendment No. 231A: Clause 75, page 76, line 42, leave out from ("in") to ("requires") in line 1 on page 77 and insert ("pursuance of any provision made by any scheme or order under this Part of this Act in connection with any transfer of property, rights and liabilities to the company in question for which that scheme or order provides"). Amendment No. 234A: Page 77, line 26, leave out ("and") and insert ("or"). Amendment No. 239A: Clause 76, page 78, line 25, leave out ("and") and insert ("or"). Amendment No. 241ZA: Clause 78, page 79, line 17, leave out ("or") and insert ("and"). Amendment No. 241B: Clause 79, page 80, line 44, leave out ("subsection (6) below") and insert ("the following provisions of this section"). Amendment No. 241C: Page 81, line 10, at end insert— ("(6A) Any order under this section may make modifications in Schedule 4 for the purposes of its application to a transfer effected by that order."). Amendment No. 264A: Clause 113, page 111, line 12, leave out ("and") and insert ("or"). Amendment No. 264C: Page 111, line 17, at beginning insert (" (or partly in one way and partly in the other)"). Amendment No. 264D: Page 111, line 19, at end insert ("(including in particular, but without prejudice to the generality of that, provision with respect to the consideration to be provided by the transferee for any transfer under the scheme) "). Amendment No. 264E: Page 111, line 20, leave out ("subsection (4) below") and insert ("the following provisions of this section"). Amendment No. 264F: Page 111, line 34, at end insert— ("(5) The Secretary of State may by order make modifications in Schedule 4 for the purposes of its application to tranfer under section 50(4), 58(7), 60(10) or 64(7) of this Act."). Amendment No. 264G: Clause 120, page 117, line 12, at end insert— (" "securities", in relation to a body corporate, means any shares, stock, debentures, debenture stock, and any other security of a similar nature, of the body corporate;").

This is a group of technical amendments to the provisions in the Bill relating to transfer schemes. They are needed to ensure that the scheme-making provisions will work properly. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211CN): Clause 66, page 68, line 22, leave out ("and").

The Earl of Caithness moved Amendment No. 211CP:

[Printed above.]

On Question, amendment agreed to.

Clause 66, as amended, agreed to.

Lord Denham

I am of course in the hands of your Lordships' Committee, but I feel that my noble friend Lord Sandford does not want to be hurried on these next two amendments. I think the Committee has gone beyond the time that your Lordships' House normally sits.

Lord Sandford

I should much rather stop now. Through being pushed, harassed and, I think, not really treated properly, I have missed an amendment altogether. I think it is rather unfair, after sitting here all day, that when the issues with which I am concerned come up, we are not handling them properly.

Lord Denham

I am very sorry that my noble friend feels that we are not handling things properly. We have spent quite a lot of time on his amendments as well as on those of other noble Lords. If he does not wish to move his amendment now, perhaps it is time we resumed the House. I therefore beg to move that the House do now resume.

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

House resumed.

House adjourned at ten minutes past eleven o'clock.