Lords Sitting of 24 July 1985

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

The Lord Bishop of Winchester
Colin Clement Walter, Lord Bishop of Winchester—Was (in the usual manner) introduced between the Lord Bishop of Rochester and the Lord Bishop of Oxford.
The Lord Bishop of Sheffield
David Ramsay, Lord Bishop of Sheffield—Was (in the usual manner) introduced between the Lord Bishop of Rochester and the Lord Bishop of Oxford.

Natural Medicines: Safety and Efficacy
2.47 p.m.
Baroness Sharples: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is necessary that safety tests carried out on natural medicines should also include an evaluation of their efficacy.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, where a product is put on the market as a licensed medicine, there should be adequate evidence not only that the product is safe but also that it can be of benefit. Licences issued under the Medicines Act give that assurance.
Baroness Sharples: My Lords, I thank my noble friend for that reply. Is my noble friend able to say what the Government's attitude is towards natural medicines; and can she also say whether, when there are new appointments made to the advisory boards on medicine, they will include people who are authorities on natural medicines?
Baroness Trumpington: My Lords, I thank my noble friend Lady Sharples for those supplementary questions. In answer to the first one, we wholeheartedly support the freedom of the individual to seek the benefits of alternative medicines and therapies. It is not our intention to use the Medicines Act to restrict the general availability of alternative medicines. In answer to my noble friend's second supplementary question, we do not consider it necessary now to alter the membership of the Medicines Act advisory bodies, but there are wide powers to add to the membership should the need arise.
Viscount Massereene and Ferrard: My Lords, would my noble friend not agree that in the 1960s, when the Medicines Act came about, there was in fact a representative of natural medicines on the committee to help decide whether or not any of these natural medicines should be phased out?
Baroness Trumpington: My Lords, I was not in fact in this seat in the 1960s, but I am sure that my noble friend is right.
Lord Ennals: My Lords, would the noble Baroness agree that there has been a refreshing change in medical opinion about alternative medicines? In relation to the particular Question asked by the noble Baroness, would the Minister not accept that, provided that the safety of medicines is assured, the question of efficacy is really one for the doctor and for the patient? Would the noble Baroness perhaps agree that it is a very subjective question? A natural medicine which may be very helpful for one patient may not do anything at all for another.
Baroness Trumpington: My Lords, surely it is right that practitioners and the public should have some reassurance through the licensing system that products are safe and that they work. That is why the Medicines Act was put on the statute book, and that is why, even though we support alternative medicines if people want to use them, we must be sure that no harm can ensue.
Lord Ennals: Yes, my Lords, that is quite right.

Training: Company Expenditure
2.53 p.m.
Lord Rochester: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they consider that expenditure on training by British companies is adequate in relation to that of our major international competitors.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): No, my Lords. We would welcome support for our campaign to persuade employers that training pays. This year the Government are themselves investing £1.2 billion through the Manpower Services Commission in improving our training performance.
Lord Rochester: My Lords, I am disappointed at that reply. Is the noble Lord the Minister aware that in the United States last year companies spent approximately 1 per cent. of turnover on training and that West German companies spent about 2 per cent. on it? Does the Minister not agree that the time has come for Government action rather than mere exhortation? Will the Government consider introducing a national training levy of, say, 1 per cent. of payroll which would be applicable to all companies, with remissions for companies attaining certain specified standards? How,

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otherwise, are we to ensure that once again economic recovery is not impeded by skills shortages and our international competitiveness endangered?
Lord Lucas of Chilworth: My Lords, I am aware of the figures which the noble Lord, Lord Rochester, gave when opening his supplementary question, but the noble Lord will probably recall that it was only three years ago that Parliament decided to replace 16 out of the 23 industrial training boards with voluntary arrangements. Our present view remains that a national training levy such as the noble Lord suggests is not necessarily the best way to achieve effective employer investment in training.
Lord Morris: My Lords, does my noble friend agree that the expenditure of £1.2 billion of taxpayers' money by Her Majesty's Government can hardly be described as mere exhortation?
Lord Lucas of Chilworth: My Lords, I thank my noble friend for his question. It certainly is not exhortation. It remains part of the campaign that we have started to raise the profile of the need for training which is to the benefit of the employer as well as the nation.
Baroness Seear: My Lords, even if the noble Lord does not go along with the levy that my noble friend suggested, if things stay as they are, does he agree that employers who undertake good and extremely expensive training are subsidising the large number of other employers who do nothing of the sort?
Lord Lucas of Chilworth: My Lords, I recall that the noble Baroness raised exactly that point some years ago when we discussed industrial training boards. What she said may be so to some extent; but British industry spends only £200 per employee on training, whereas our competitors both in Europe and America spend considerably more—three times as much, and sometimes seven times as much—to their benefit.
Lord Dean of Beswick: My Lords, without going into detailed figures too much, does the Minister agree that on the question of training and our competitors, we spend less than half of what West Germany spends and proportionately less than our other European competitors also? Can he say how far the recent training initiatives announced by the Government will go to make up the leeway or the deficit? Unless we do that, does he not agree that we are falling far short in providing the seed corn for our future?
Lord Lucas of Chilworth: My Lords, I accept the noble Lord's invitation not to go into specific figures. I agree that we spend considerably less than our competitors on training. For 1985–86 the Government have a planned spending programme of £1.2 billion. We expect to be able to help 220,000 people with training and retraining, which is double the number we helped in 1980–81. I think that that will go a good deal of the way towards helping to improve skills in certain industries.
Lord Kilmarnock: My Lords, the noble Lord referred to the voluntarist approach which has been the Government's line since the abolition of the industrial training boards, but do not the figures that he has given the House show that that has turned out to be inadequate in practice?
Lord Lucas of Chilworth: No, my Lords, they do not show that. We should like to step it up, and we have commissioned a report, Adult Training in Britain. Whichever way one looks at the figures, there is clear evidence that some employers have not taken on board the fact that training pays dividends to the companies.
Baroness Carnegy of Lour: My Lords, does my noble friend agree that the proportion spent on training in Germany and the United States is through arrangements by employers who want to keep the Government out of the system and not involve them in the system; and in Germany it works extremely well? Can he confirm that the adult training strategy now under way through the Manpower Services Commission is trying to get the benefit of that system rather than the levy system that was suggested in the original Question?
Lord Lucas of Chilworth: My Lords, I am grateful again to my noble friend; she is right. It is invidious to draw comparisons because they are not totally adequate. Our adult training programme offers grants to help employers with the cost of training. Some £14.3 million has been spent and 20,000 people have been helped this year through this scheme alone. There is to be a further expansion, and employers can utilise the services of the MSC to great advantage to themselves and to the nation.
Lord Cledwyn of Penrhos: My Lords, can the noble Lord explain why our performance is not as good as that of our major competitors? Will he say whether the Government are to embark on a campaign through the CBI and other agencies to persuade British industry to do better? In the event that the public sector's record on this is exemplary, can he reassure us that when industries are privatised their record will remain as good?
Lord Lucas of Chilworth: My Lords, the noble Lord asked me a number of questions. I can best answer him by again saying that we are drawing the attention of employers to the survey,Adult Training in Britain, and repeat that there is clear evidence from researches that training and retraining pay dividends. British industry has, I think, been slow to accept the necessity of retraining, particularly for adults, and some of our competitors have recognised the advantage rather more swiftly than ourselves. In so far as enjoining the CBI and other institutions is concerned, I am quite sure that they are as equally anxious as the Government to improve training. Regarding privatisation, the whole idea of returning public sector business to the private sector is to enable them to take full advantage of all that the private sector can offer outside the restrictions of Government.
Viscount Trenchard: My Lords, will my noble friend agree that the reason why our record on training is worse than that of other countries is that we had a period of the best part of two decades prior to 1979 when the atmosphere for private industry was so unfavourable and the profits were so low that research and development and training were both reduced below the level of our competitors abroad? Will he further agree that there is a danger that if the Government do too much in this now that conditions are different British industry will leave it to the Government rather than efficiently increase its training itself?
Lord Lucas of Chilworth: My Lords, my noble friend Lord Trenchard is probably quite right. I do not think that I can agree with him that the reasons he puts forward are the only reasons. I am grateful to him for his second supplementary question because I hope that this exchange of question and answer will be widely reported and that British industry will appreciate that the Government are giving considerable support but cannot do the whole job on their own, and that it is in the interests of British industry itself to invest perhaps something in the order of 3, 4 or 5 per cent. of payroll—not the 0.15 per cent. of turnover currently invested—which will return to them a dividend.
Lord Davies of Leek: My Lords, is the noble Lord aware that the implication that there is not enough training in industry does not apply to the British pottery industry, where undoubtedly training is some of the best in the world?
Lord Lucas of Chilworth: My Lords, I am quite sure that the noble Lord, Lord Davies of Leek, is right. There are some sectors of British industry where training is of a continuing high standard; there are other sectors where it lags behind.
Lord Jacques: My Lords, is the noble Lord aware that earlier this year the National Institute of Economic and Social Research published the results of some research on the differences between West German companies and British companies? They took companies of the same size, doing almost the same thing. In the case of Germany the productivity was 63 per cent. higher. Among the reasons which they found for that was a complete lack of training in the British; for example, in the case of foremen. Is the Minister aware that the results showed that not a single foreman in the British companies had a certificate for craft qualifications, whereas in the case of the German companies every one of the foremen had a craft certificate, and some of them had a master craftsman's certificate? There is the point, and the sooner we get down to it the better.
Lord Lucas of Chilworth: My Lords, I appreciate the great concern expressed by the rhetorical question of the noble Lord, Lord Jacques, and I take note of all that he said.

Blood: AIDS-Free Products
3.4 p.m.
Lord Ritchie of Dundee: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they are taking to ensure that all blood products provided to patients are free from contamination by AIDS.
Baroness Trumpington: My Lords, we are taking three complementary steps. First, we have mounted a campaign to dissuade people in AIDS high risk groups from donating blood. Secondly, we shall shortly introduce a screening test for all blood donations, once we have evaluated the test kits available. Thirdly, we are pressing ahead with heat treatment of blood products to inactivate AIDS virus where this is technically possible.
Lord Ritchie of Dundee: My Lords, I thank the noble Baroness the Minister for her encouraging reply to my Question. I should like to ask her whether she can give us any idea of what proportion of the cases of AIDS infection which have so far occurred in this country has been directly traceable to contamination from blood products.
Baroness Trumpington: No, my Lords.
Lord Ennals: My Lords, I wonder whether the noble Baroness can say to what extent Britain is now self-sufficient in blood products such as plasma and Factor 8, especially for haemophiliacs, who suffer from the double disadvantage of their own disease and the dangers that the blood which they need is not free from contamination. Does she agree that there seems to be a lower standard of blood collection in the United States, where of course payment is often made? May I ask what the Government are doing to make Britain independent of all but British blood?
Baroness Trumpington: My Lords, we are already self-sufficient as regards whole blood and blood components needed for ordinary transfusions. We are not yet self-sufficient in blood products such as Factor 8. At present, our blood products laboratory at Elstree makes about 40 per cent. of the Factor 8 required to treat haemophiliacs in England and Wales. The rest is supplied by commercial companies in the United States of America and Europe. The redevelopment at Elstree, costing over £35 million, is proceeding urgently and is on schedule. It is due to come into production in 1986, achieving full capacity by the end of 1986.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether she is aware that Scotland has a much more efficient blood transfusion service and has been self-sufficient in blood products? Will she say which regional health authorities are lagging behind in their producing of plasma so that they can be self-sufficient in Factor 8?
Baroness Trumpington: My Lords, no, I cannot give a breakdown, but I was interested to hear what the noble Baroness said about Scotland.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister whether she is aware of the very deep distress and concern felt by haemophiliac families? Is she aware that in certain areas centres of counselling have been set up but because of the lack of resources social services departments are unable to fund them?
Baroness Trumpington: My Lords, in answer to my noble friend Lady Faithfull, yes, I am aware of the situation. I have recently had talks with some of those splendid doctors who are caring for haemophiliacs. Urgent talks are about to start, which will include the matter of haemophiliacs together with other questions on AIDS.
Lord Ennals: My Lords, I am sorry to press the noble Baroness again but is it not deeply disturbing that we are only 40 per cent. independent for blood products in this country? Is there not something that the Government can do urgently now that AIDS has become really one of the most serious problems that the nation faces?
Baroness Trumpington: My Lords, I really think I have answered the noble Lord, Lord Ennals. As a past Minister for the DHSS, he should know that perhaps in his day more could have been done to bring up the amount of blood products.
Lord Ennals: My Lords, neither the noble Baroness nor I had heard of AIDS when I was Secretary of State.
Baroness Trumpington: My Lords, in answer to that, the amount of blood produced for transfusions has not altered since AIDS.
Baroness Dudley: My Lords, can my noble friend tell us whether there is yet any kind of cure or vaccine for AIDS?
Baroness Trumpington: My Lords, there is at the moment no cure, but considerable research into this disease is in progress both in this country and abroad. Research in the United Kingdom is being co-ordinated by the Medical Research Council and there are currently five projects under way.
Baroness Masham of Ilton: My Lords, may I ask the noble Baroness the Minister whether she will write to me, because her colleague said on television on Monday that he was very concerned about the regional health authorities which were lagging behind and I think he knows which ones they are?
Baroness Trumpington: Yes, my Lords.
Lord Ritchie of Dundee: My Lords, may I be permitted to ask the noble Baroness whether, in view of the urgency of the situation and the very costly enterprise that the giving of the forthcoming blood tests to any would-be donors will involve, any additional funding is to be available to the National Health Service and to the blood transfusion service?
Baroness Trumpington: My Lords, we wrote to regional health authorities on 20th February 1985
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asking them to set aside funds in 1985–86 for the introduction of the AIDS screening test in their blood transfusion centres. We would expect regional health authorities to find the money needed from within the £9,505 million made available for the hospital and community health services in 1985–86.
Lord Jenkins of Putney: My Lords, the noble Baroness has failed to answer a number of questions during the course of this period of questioning. Will she tell us whether she has not been briefed or whether she has failed to read the brief?

Female Circumcision: Minister's Comment
3.10 p.m.
Lord Kennet: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether Baroness Trumpington was speaking for the Government when on Third Reading of the Prohibition of Female Circumcision Bill (col. 1142) she said, "It is not very difficult to make up one's mind, whether one is in the Chamber or not, as to whether one is in favour of female circumcision or against it", thereby implying that those Lords who voted for Amendment No. 1 on Report were in favour of female circumcision.
Baroness Trumpington: My Lords the Government remain of the view that the noble Lord, Lord Hatch's amendment, which the House decisively rejected, would have damaged the Bill irreparably. My remarks referred to noble Lords who voted against the amendment. It is not for me to comment on the motives of those who voted for it.
Lord Kennet: My Lords, would the noble Baroness agree that she has not retracted the absurd statement that there are 14 Members of this House in favour of the atrocious mutilation known as female circumcision? Is it her own personal opinion and is it the collective opinion of the Government that not to retract an absurd and unpleasant allegation of this sort is not in accordance with the best traditions of this House?
The Lord President of the Council (Viscount Whitelaw): My Lords, it is for me to answer collectively for the Government in this matter. I consider that my noble friend Lady Trumpington has acted perfectly properly in this case. I stand fully by what she has said.
Noble Lords: Hear, hear!
Lord Boyd-Carpenter: My Lords, will my noble friend the Leader of the House say whether it is in accordance with the normal practice of this House to seek to continue by way of Starred Question a debate on which the House spent a great deal of time not very long ago?
Viscount Whitelaw: My Lords, I do not think that it would be for me to comment off the cuff on a matter like that. I certainly note that it is not desirable to use the Order Paper when a great deal of correspondence has proceeded beforehand. I quite appreciate why the noble Lord, Lord Kennet, did it. I hope that I have given him an answer which, in all the circumstances, is a fair one.
Lord Brockway: My Lords, may I ask either the Leader of the House or the noble Baroness, Lady Trumpington, whether any implication will be withdrawn that those of us who supported this amendment were in favour of women's circumcision? Are they aware that 50 years ago, H. N. Brailsford and I exposed what was termed women's circumcision? Are they aware that when I went to Kenya in the 1950s to support the African demand for independence I was in a dilemma because they were supporting women's circumcision? I opposed it when I met Jomo Kenyatta and other leaders. I had discussions with the Christian Churches about it. It is easy 40 years later in this House to oppose it. It was not easy among the Kikuyu.
Baroness Trumpington: My Lords, it is not very easy for me to answer the noble Lord's questions. I would just point out that Ministers have made it abundantly clear that they would support effective legislation to prohibit female circumcision. Previous attempts failed because, unlike the present Prohibition of Female Circumcision Act of 1985, they would not have led to effective legislation.
Lord Thorneycroft: My Lords, does my noble friend recall that it was a jolly good speech that she made and that no one capable of recognising that they were actually in this Chamber and that this Chamber was a debating society could possibly take any exception to it?
Baroness Trumpington: My Lords, I am grateful to my noble friend.
Lord Morris: My Lords, does my noble friend not agree that it is not for her to withdraw an implication that does not lie in the words quoted in the Question but rather that it is for noble Lords opposite to withdraw the totally unfounded inference?
Viscount Whitelaw: My Lords, I sense that the House probably feels that there has been sufficient discussion of this matter and that it has been fully ventilated in all the circumstances. I hope that we can now move on.
Lord Hatch of Lusby: My Lords, may I appeal—
Noble Lords: No!
Lord Hatch of Lusby: My Lords, may I appeal to the noble Viscount the Leader of the House and urge that, as this Question concerns an action of mine, I should be allowed to put a question to his noble friend Lady Trumpington? The amendment was my amendment. Those who went into the Lobby with me were supporting me.
Viscount Whitelaw: My Lords, I did not perhaps fully appreciate that. I did feel that I was giving vent to the feelings of the House in saying that this Question has been fully discussed. I hope that in those circumstances and despite his involvement in it the noble Lord will feel that honour has been satisfied on all sides by the exchanges that have taken place. I hope that he will take that view. I can only interpret the wishes of the House—that is my task—but I do feel that this is what the House as a whole feels. I would ask the noble Lord to accept it.
Lord Melchett: My Lords, as one of the other noble Lords who voted for the amendment, may I say to the noble Viscount the Leader of the House that we spent seven minutes on each of the preceding three Questions and have spent about two minutes on the substantive point of this Question? While the feelings of the House as a whole have clearly to be respected, so, I would suggest, have those of a small minority who happen to be involved in this particular Question.
Viscount Whitelaw: Yes, my Lords. I have done my best to get the feelings of the House and of all those concerned. If I have made a mistake, I can only apologise to the noble Lord. I did feel, however, that I was doing my duty to the House. We have had some 28 minutes on Question Time—
Lord Melchett: My Lords, two minutes on this.
Viscount Whitelaw—and much of that time has been spent by noble Lords asking questions about which they feel equally as strongly as noble Lords feel about this one. That must be appreciated.

Business
3.17 p.m.
Viscount Long: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Glenarthur will, with the leave of the House, repeat a Statement that is to be made in another place on the Popplewell Inquiry. This will be followed by my noble friend Lord Gray of Contin, who, again with the leave of the House, will repeat a Statement on the Chiswick Report.
It may be for the convenience of the House if I announce that the Committee stage of the Transport Bill will be adjourned at approximately 7 p.m. for about one hour, and that during this adjournment consideration of the Commons message on the Trustee Savings Banks Bill will be taken.

Foreign Affairs Council: 22nd-23rd July 1985
Viscount Long: My Lords, it has been agreed through the usual channels that the Statement that is to be made in another place on the Foreign Affairs Council should, by leave of the House, be printed in the Official Report.
Following is the Statement referred to:
"With permission, Mr. Speaker, I will make a statement on the Foreign Affairs Council held in

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Brussels on the 22nd and 23rd of July, at which my right honourable friend the Minister for Trade and I represented the United Kingdom.
"The Council discussed the arrangements for the Intergovernmental Conference called by the Milan European Council. A copy of its conclusions on that subject has been placed in the Library of the House. The conference will take place at the level of Foreign Ministers. The first meeting will be in Luxembourg on the 9th September. The Political Committee has been asked to draw up, by 15th October, a draft Treaty on Political Co-operation on the basis of our own and the Franco-German proposals. Proposals for treaty amendment will be looked at in a group which will meet at official level to prepare work for Foreign Ministers to consider.
"Agreement was reached on two directives providing for freedom of establishment for pharmacists and mutual recognition of their qualifications.
"The Council agreed a Community position on the future of the Multi-Fibre Arrangement for the GATT textiles committee meeting on 23rd July.
"The Commission reported to the Council on the negotiations between the Community and the United States on steel products not covered by the 1982 Carbon Steel Arrangement; and on the current trade dispute between the Community and the United States on citrus and pasta. The Council held a first discussion on the Commission proposals to increase the Community's tariff on video tape recorders and reduce the tariff on semi-conductors, and approved the eighth annual report on cooperation with the EFTA countries.
"The Council agreed a negotiating mandate for an EC/Central America co-operation agreement. It also reviewed progress in EC/Gulf Co-operation Council relations.
"The Council agreed arrangements for approving proposals brought forward under the Mediterranean financial protocols. It also agreed the terms to be applied to Spain's use of pre-accession aid to reduce excess fishing capacity.
"The Council formally adopted the Reference Framework for 1986 in accordance with the Council conclusions of December 1984 on controlling Community expenditure. This fixes the maximum level of permitted expenditure to finance Community policies in 1986. Following a meeting with the European Parliament, the Council also adopted the agreed regulation implementing integrated Mediterranean programmes.
"Meeting in political co-operation, the Foreign Ministers discussed the recent resurgence of terrorism and hijacking. They agreed to put urgent work in hand for joint action by the Ten to combat this problem. They also issued statements on Afghanistan and to make clear their concern at recent developments in South Africa. Texts of these statements have been placed in the Library of the House".

Business of the House
Viscount Whitelaw: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That in the event of the Consolidated Fund (Appropriation) Bill being brought from the Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with to enable all stages to be taken tomorrow.—(Viscount Whitelaw.)
On Question, Motion agreed to.

Weights and Measures Bill [H.L.]
Bill read a third time, and passed, and sent to the Commons.

Wildlife and Countryside (Service of Notices) Bill
Lord Melchett: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Melchett.)
On Question, Motion agreed to.

East Lothian District Council (Musselburgh Links, etc.) Order Confirmation Bill
Considered on Report.
Shetland Islands Council Order Confirmation Bill
Considered on Report.

Transport Bill
3.20 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 67 [Exemption for councils running small bus undertakings]:
Lord Sandford Lord Sandford moved Amendment No. 211D:
Page 69, line 8, leave out from ("exceed") to end of line 12 and insert ("fifty, that council shall be excluded from section 62(1)").
The noble Lord said: I beg to move Amendment No. 211D and at the same time I should like to speak to Amendment No. 211E.
Amendment No. 211E: Page 69, line 13, leave out subsection (2).
Perhaps I may remind the Committee that we now resume that part of the Bill which deals with the affairs of the municipal bus companies. We began to consider the dozen or so clauses dealing with those bus companies at a late stage on Thursday night. However, it is true to say that we did not do very well. We began our deliberations at 10.30 p.m. The Committee was getting bored; I was getting irritable—and for that I must apologise to my noble friends on the Front Bench—and the Chief Whip was getting impatient. So after a relatively short time we abandoned the struggle and we now resume it.
Perhaps I may also remind the Committee that the point at issue, certainly in the first of the clauses, is that one single structure has been proposed in the Bill for the municipal bus undertakings, which leaves a very great deal to be desired. The purpose of my amendments, which at this stage are only probing ones, is to try and find out what induced my right honourable friend the Secretary of State to take the decisions which he has taken, and what scope there is for persuading him to change his mind.
My own view—and I have already expressed it, but I shall express it again—is that it would have been much better if he had continued patiently the negotiations and consultations which he began with the Association of District Councils, 50 of whose members run these companies, so that we could examine together the possibilities for those companies to prepare themselves for the situation of deregulation which the Bill provides for them.
A number of possibilities were mentioned in the White Paper; however, all but one of them have been abandoned or at any rate are not addressed in the Bill. One possibility was privatisation. There are great advantages in privatisation. Privatisation, which also involved a buy-out by the employees, would in many cases probably be the best option of all, and I should have thought would be popular with the Secretary of State. Another option upon which I asked my noble friend to comment but upon which he did not do so, was that they should adopt for the purposes of this legislation the controls which are available and which are frequently applied to local authorities when one of their agencies has occasion to compete with the private sector. That is what these companies will be doing and I have received no satisfactory answer yet as to why it could not be done in this case.
One situation—and it will be a familiar one to many Members of the Committee—is where an agency or a part of the local authority competes with the private sector for, let us say, a contract to repair a council housing estate, or a contract to repair a sewer, or a contract to undertake some maintenance on a highway. In all those cases it is a requirement on the local authority, if it wants to give its direct labour organisation an opportunity to compete, to stick strictly to a number of conditions about the way in which it tenders, and so on and so forth, which puts it on a par with the private sector. That system was reviewed as recently as 1980 and it has been operated
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ever since so far as I know to the entire satisfaction of the private sector companies—the builders, etc.—on the one hand, and the local authorities on the other hand. I have had no satisfactory answer as to why that cannot be done in this case, at least for some of the local authorities.
The perverse situation is that the Department of the Environment is at this very moment extending this regime into matters like transport, maintenance, catering and so on. I cannot for the life of me understand why it was not considered as one of a number of options. It would have been much better—and we must return to this matter at the Report stage—if the Secretary of State had done in respect of the municipal bus companies what he has done with the National Bus Company—that is to say, to invite the National Bus Company to put up to him a scheme for the disposal of the enterprise. He has indicated in Clause 47 of the Bill that that is their duty. He has indicated in another clause the conditions which must be met in a programme of this kind. The National Bus Company knows his criteria and what it is that it has to do regarding disposing of its assets and breaking them up into a number of separate authorities. We could have done exactly the same. It would have been far better if we had done so because we would then have had a range of options which different authorities could have adopted according to their different circumstances.
The other issue which I raised on Thursday night—and I do not want to go into it at any great length now—was the question of pensions and superannuation. Earlier I had asked my noble friends on the Front Bench to deal with the pensions of the municipal bus companies separately from those of the PTEs and the National Bus Company because they are separate matters. The answer which I received last Thursday was more or less the same answer as had been given to the noble Lord, Lord Banks, on Clause 58 which dealt with the PTEs, and it did not address itself to any of the points which I was raising. Now I am glad to tell the Committee that I can thank my noble friend Lord Trefgarne for a very full, closely reasoned answer amounting to four pages of foolscap, which deals with the matters that I raised. However, the answers have not been given to the Committee. My noble friend and I shall have to put our heads together tomorrow or in the course of today and work out a means of putting that very full and helpful, but not entirely satisfactory, answer into the record so that we have a point from which to move forward when we reach the Report stage.
There will be a few more sets of amendments to deal with and I shall come to one of them in a moment. However, the main problem with which we are having to deal is the hybrid company which is prescribed for the municipal bus companies. It is a Company Act company at one end but controlled by the local authority at the other end, which is in turn controlled as to its capital expenditure by the Department of the Environment, which is in turn controlled by the Treasury. They are not circumstances in which a municipal bus company can operate as a piece of private enterprise in the private sector against full-blooded competition. That is the problem we have to solve.
3.30 p.m.
In these amendments, 211D and E, to Clause 67, I am probing with my noble friends on the Front Bench the question whether or not they see scope for excluding altogether from this Bill some of the smaller bus companies. The smallest bus companies of all in membership of the ADC each ran two buses only; they have decided that to do so is not worth the candle and have abandoned their operations altogether. But there are other bus companies—and my amendment suggests that they are those operating less than 50 buses—which might just as well be exempted from this Bill altogether.
I cannot believe that allowing them to operate will make any serious dent in the structure which the Secretary of State is trying to set up. A threshold of 50 buses would take 13 of the municipal undertakings out of this Bill, and would at any rate make life much easier and more straightforward for them, and do no great harm to the underlying philosophy of the Bill. Only 8 per cent . of all the revenue support from all the districts in England and Wales would be affected by that figure.
The Department of Transport say that a figure in Clause 67 might be something nearer half a dozen or 10. But I think we cannot leave it open to the Secretary of State to make up his mind where to draw the line after the legislation has been enacted. This is the moment to give this topic an airing, and the Report stage is the moment to take a decision so that we all know where we stand.
On Second Reading I indicated that there was a clear difference between the district councils, particularly those with small fleets of buses, and the large metropolitan county councils. If there is a problem of the overrunning of public expenditure, that is where it is occurring; it is certainly not occurring in these small authorities. I hope that this will produce a short debate in which my noble friend on the Front Bench will indicate his thinking and that of his right honourable friends about the scale and size of undertakings which could be excluded, and I hope that it will be nearer 50 than 10. I beg to move.
Lord Tordoff: I want to support the noble Lord, Lord Sandford, on the narrow point he made at the end of his speech in relation to those small municipal undertakings with a limited number of buses. From the information I have received, and from what I have seen in the period I have been touring around the country talking with small municipal undertakings, on the whole these are efficient undertakings. Generally speaking, they are not putting a charge on the ratepayer.
They are often sharing their overheads across a number of other municipal activities. They are providing the service for the customer. They are providing an efficient service which, on the whole, does not need any sort of subsidy. Would it be possible for the Government to find some way of excluding these smaller undertakings? I do not know where the cut-off should come. Fifty is a good round figure, but there are a number in the one to 40 area, and it would be up to the Government to say where the level should be.
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The principle enunciated by the noble Lord, Lord Sandford, is important. There ought to be a degree of flexibility in the area of those municipal undertakings which are quite small but are serving the public in a way in which I am sure the Government as well as the rest of us would wish to see.
Lord Shepherd: In regard to what the noble Lord, Lord Sandford, said of a broader nature, I hope that we shall have another opportunity to discuss the important points he raised. I share his view on what is called the hybrid approach which has been adopted by the Government in regard to these initial companies. It is a recipe for disaster. There is no clarity whatsoever because it is so involved in the normal work of a council and a municipality.
The noble Lord referred to the question—which we shall have to go into in detail—of capital expenditure. There is no way in which these initial companies will ever be able to build up their own reserves in order to purchase their own vehicles. There will have been no commercial judgment. As I see the Bill, all the profits on a yearly basis go into the coffers of the local authority, and when they want capital to replace some of their older vehicles they will have to go to the local authority and stand in the queue with all the other demands on public expenditure of the authority.
I would despair for the poor general manager—or whatever will be the name of the person responsible for operating those companies—in trying to keep those companies in a good state of performance and service to the community. However, I do not think that that is a subject which arises immediately or the amendment.
Initially, I had a good deal of sympathy for the noble Lord putting a figure into the Bill. At the moment it is merely by regulation. So much of this Bill is by regulation, and without any clarity in this Committee as to what the Secretary of State intends to do by regulation. Whether or not the Government accept the amendment of the noble Lord, Lord Sandford, I hope in this narrow issue we shall get from the Minister some indication of what the Secretary of State has in mind for exclusion from the general requirements of this Bill through this particular clause.
We had one company in Devon with some 50 vehicles. It was successful because we did not put on it all the great overheads which a typical commerical company would have. We had only one manager who was really a traffic manager. He purchased all his services including accountancy, engineering and advertising. All the knowledge and expertise available within the group he was able to purchase. But if these companies are set up as we suspect that they ought to be, then these services will have to be bought at market rates.
I suspect with a small company that the overheads per vehicle are more likely to be higher than in bigger companies. But in relation to the private sector, companies with 50 vehicles are fairly large companies. I know many of the small stage carriage private operators which have far fewer than 50 vehicles. If they are to enter into competition, and if the Government persist in their belief that size is important in terms of competition, and fair competition, then 50 would put them into serious advantage against the private independent.

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The only other difficulty I see in putting in a figure is that the Secretary of State would then lose any flexibility in this matter. One of the lessons I have had is that no one bus company, no one bus operation, is ever like another. Fifty vehcicles might be the right figure for exclusion in a particular municipality, township, in the country, yet it will be quite wrong in another.
Therefore my personal belief is that we should look for a statement from the Minister. I hope that he might say that there will not be inflexibility in the way in which orders are made because regard has to be taken of the traffic area in which the company will be operating.
My personal instincts are such that I do not like the figure 50. I think it is too rigid and I should tell the noble Lord, Lord Sandford, that in relation to the private independents it is possibly too big, but in some areas 50 may be right and in other areas a much smaller figure would be desirable.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): We have already debated the general principles behind the requirements to form companies, and I have put it to your Lordships that there are significant benefits to be had from it. It will give management clear, commercial objectives. It will also make clear that the local authority undertakings are run as free-standing trading bodies, not as a part of the local authority, where they can be readily subsidised.
We accept in principle that, for very small undertakings, the operating benefits of a clear, commercial structure might not be so great, and the arguments for establishing a clearly free-standing company on competition grounds might be less strong. But now that, as I understand it, Aberconwy's undertaking has ceased to trade, the smallest undertakings are, I believe, Islwyn and Taff Ely with 30 buses each. After that there is a steady progression of authorities with fleets of 30, 40, 50 and so on right up to Nottingham with 350 buses.
It is the Government's view that it would be wrong to exclude from the provisions of this part of the Bill undertakings of this size, with turnovers of over £1 million. I think their competitors are likely to agree with that view. I also believe it would be arbitrary to draw a line at a particular figure of, say, 50, when there are so many undertakings of roughly that size. If there is a clear distinction to be made between very small undertakings, which do not compare in size or in importance to the rest of the municipals, then this clause allows the Government to make it. But I have to be frank. We do not at this stage see any reason for an exemption for any of the existing undertakings; the Government feel that it would be wise to retain the power in this clause to make regulations on the matter should they become desirable. But I hope that your Lordships will agree with me that specifying a figure in statute would be too inflexible, and that a figure of 50 is in any event unreasonably high given the benefits which we expect to accrue from the company form.
I must also point out that the amendments would remove the Secretary of State's discretion over the period and the terms of any exemption which was granted would leave no control over the way in which
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the undertaking conducted its business and leave it quite open for the local authority to misuse the privileged position which an exemption would give to the undertaking to the real disadvantage of its competitors.
I hope that your Lordships will see the strength of these arguments and that the amendments would go a long way towards denying passengers in some areas the benefits of commercial management, and competition which the Bill is intended to promote.
I now address myself to the point raised by my noble friend about the desirability of using a direct labour organisation type of arrangement. My noble friend has referred to the fact that any undertaking exempted from the requirement to form a company in these circumstances could nonetheless adopt such a structure and thus compete in the tendering process with other operators. This was an argument which my noble friend put, if I remember rightly, during the course of our discussions on Clause 62. I do not think I may have given my noble friend as full an answer as I should have done on that occasion. The main point is that the undertakings, which we are proposing should be formed into companies, will be competing in open commercial markets with other operators who have the company structure. Unlike direct labour organisations which carry out road works or cleaning services for the council and whose activities consist almost wholly of providing services for their authority—they will be operating in the marketplace like other trading companies. They will, it is true, be providing some services under contract to the authority, and I can see why my noble friend says that it would be possible for them to tender for those in competition with other operators, if they were in the form of DLOs rather than companies. But I believe that their overall position is quite different from that of the direct labour organisations that we have been talking about.
I should also remind your Lordships that the DLO format requires fairly complex rules to be established about the organisations' accounts and rates of return. While I do not say that those do not work, I think that the company format is not only a better format here, but one which is more readily available to us. In short, while it would, I suppose, be possible to achieve financial separation for tendering purposes through a DLO structure, I do not believe that it is the most appropriate solution when the Companies Acts are available. I hope that, in the light of these considerations, my noble friend will not press his amendments.
3.45 p.m.
Lord Sandford: I am most grateful to those who have taken part in this short debate and to my noble friend on the Front Bench. It is helpful now to have on the record the remarks of the Government on what one might call the DLO option. It is true that the regimes which control direct labour organisations when they are competing and tendering in competition with the private sector are complex, but they are familiar to the local authorities and they have stood the test of time; whereas these hybrid companies are anything but familiar and they do not stand the test of close examination.

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I was grateful for the point made by the noble Lord, Lord Tordoff, about the fact that some of these 13 municipal bus companies below the threshhold of 50 manage without any subsidy and five are operating without any subsidy whatever, so the régime into which they are moving will not change from that point of view. I was grateful for what the noble Lord, Lord Shepherd, had to say about the difficulties which the hybrid municipal bus companies will face as regards the capital control to which they are subjected, but perhaps I can keep my powder dry on that until we reach Clause 72 which relates to that matter.
I am grateful to have all this on the record. Perhaps the right thing to aim for when it comes to the authorities which are to be excluded, if any are, and the criteria for judging the nature, size and their situation might best be left to a statement. A statement would be desirable rather than leaving the unfettered discretion of the Secretary of State in the Bill with no indication about how he is to exercise it. As I said at the beginning, these are probing amendments. They have achieved what I hoped they would achieve and I beg leave to withdraw Amendment No. 211D.
Amendment, by leave, withdrawn.
[Amendment No. 211E not moved.]
Clause 67 agreed to.
Clause 68 [The public transport companies and their controlling authorities]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 215A:
Page 70, line 12, leave out ("councils to whom section 63(1) of this Act applies") and insert ("such councils as are referred to in subsection (2) above").
The noble Earl said: At the same time it would be convenient if I spoke also to Amendments Nos. 218B, 218C, 218D, 218E, 223A, 224A, 229B, 229D and 229F:
Amendment No. 218B, Clause 69: Page 71, line 6, at end insert ("or permit any body corporate which is its subsidiary to engage in any such activities").
Amendment No. 218C: Page 71, leave out lines 7 to 9 and insert—
("(b) does not—

(i) borrow money from any person other than the controlling authority; or

(ii) permit any body corporate which is its subsidiary to borrow money from any person other than the company, any other subsidiary of the company, or the controlling authority; with the exception in each case of borrowing by way of temporary loan or overdraft; and").

Amendment No. 218D: Page 71, line 10, after ("not") insert ("(i)").
Amendment No. 218E: Page 71, line 11, at end insert—
("; or
(ii) permit any body corporate which is its subsidiary to raise money by the issue of shares or stock to any person other than the company.").
Amendment No. 223A: Clause 71, page 74, leave out lines 12 and 13 and insert ("such shares or other securities").
Amendment No. 224A: Page 74, line 18, leave out from beginning to ("which") in line 20 and insert—

("(a) the disposal by that company of the whole of that company's undertaking;

(b) any disposal by that company of any shares in or other securities of a body corporate which is that company's subsidiary; or

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(c) any disposal by that company of any part of that company's undertaking, or of any assets of that company (other than shares or securities within paragraph (b) above)").

Amendment No. 229B: Clause 72, page 75, line 41, leave out ("wholly-owned").
Amendment No. 229D: Clause 73, page 76, line 21, leave out ("wholly-owned").
Amendment No. 229F: Clause 74, page 76, leave out line 27 and insert (", or with any subsidiary of an associated company, for the provision by that Executive or council for that company or (as the case may be) for that subsidiary").
These amendments bring the subsidiaries of public transport companies within the scope of Clauses 69, 71, 72, 73 and 74 and make related drafting amendments. It would clearly be illogical for these provisions to apply in relation to public transport companies and not apply to any subsidiaries of those companies. These amendments put right that inconsistency. I beg to move.
On Question, amendment agreed to.
Clause 68, as amended, agreed to.
Clause 69 [Control over constitution and activities of public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 217A and 217B:
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move Amendment No. 217A and 217B together. I spoke to them at the last Sitting with Amendment No. 211CM. I beg to move.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 217A and 217B):
Page 70, leave out lines 33 to 35 and insert—
("(2) Following the transfer to a public transport company of its initial undertaking,")
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.")
The Earl of Caithness The Earl of Caithness moved Amendment No. 217C:
Page 71, line 1, at beginning insert ("Subject to subsection (5) below").
The noble Earl said: I beg to move Amendment No. 217C and at the same time speak to Amendments Nos. 218A, 219A and 219B.
Amendment No. 218A: Page 71, line 4, leave out ("other than transferred activities").
Amendment No. 219A: Page 71, line 17, leave out ("other than transferred activities").
Amendment No. 219B: Page 71, line 22, leave out subsection (5) and insert—
("(5) Subsection (3)(a) above shall not apply—

(a) in the case of a public transport company whose controlling authority are the Passenger Transport Authority for any passenger transport area, in relation to activities within the powers of the Executive for that area or activities which were formerly within those powers but have ceased to be so by virtue of any order made under section 59 of this Act;

(b) in the case of a public transport company within section 68(1)(c) of this Act, in relation to activities which were

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formerly within the powers of the council who formed or of any council who participated in forming that company, but have ceased to be so by virtue of section 62(1) of this Act.")

This is a group of amendments which corrects a technical defect in Clause 69. I beg to move.
Lord Shepherd: I accept that it is a technical amendment but could the noble Earl explain in what way it is technical and what was at fault in the Bill originally?
The Earl of Caithness: I should be very happy to do so. One of the intentions behind Clause 69 is to require the controlling authority to exercise control over its public transport company so that the company does not engage in activities which the controlling authority had no powers to engage in before it set up the company. As drafted, however, a public transport company would not be able to engage in any activity which its parent authority had had powers to engage in but had not carried out. We believe that this would be unduly restrictive on the public transport companies, and the amendments put the situation correctly. I hope that that satisfies the noble Lord, Lord Shepherd, and I am grateful to him for giving me the opportunity to explain them.
On Question, amendment agreed to.
Lord Sandford Lord Sandford moved Amendment No. 218:
Page 71, line 4, leave out paragraph (a).
The noble Lord said: I beg to move Amendment No. 218 on behalf of my noble friend Lady Vickers and at the same time to speak to Amendment No. 219.
Amendment No. 219: Page 71, leave out lines 17 to 19.
It may be that, depending upon how the amendment goes, this will save me from speaking on Clause 69 stand part. This is a clause which, following the earlier ones that prescribed that the district council municipal bus company should form a Companies Act company which, generally speaking, then is free in the private sector to operate and to govern by its own memorandum and articles, having, as it were, given a municipal bus company freedom with that hand, it takes it all away again with Clause 69 where it lays down in great detail the way in which the new-found freedom of the municipal company is to be constrained, curbed and confined by the control of the local authority.
My noble friend's amendment has the limited effect of questioning—and this is only a probing amendment—why it is really necessary for the local authority to control its company and prevent it from diversifying its activities. It is surely one of the guiding principles of operating the private sector that the managers should all the time be ensuring that all their assets, capital and labour, are fully engaged and are being used to full effect. Therefore, if, for instance, one of these new municipal bus companies finds that in order to meet the peak demands of its operation, the early morning, the late evening, the rush hour, and so on, it has spare capacity in, say, its garages, why should it not engage or be free to engage in servicing other people's vehicles, lorries, other buses belonging to other companies, and so on?
I cannot see for the life of me—or, presumably, my noble friend cannot see for the life of her—why this should not be allowed. If in answering that particular point my noble friend on the Front Bench would like to try to justify the rather wider range of controls that are provided for in this clause, it may well be that we do not have to have a separate debate on Clause 69. I do not know whether that is a convenient way for the rest of the Committee to approach the matter, but I should like to have a short examination of why all these controls are necessary once a private company is set up under the Companies Act, presumably to give it the freedom that is implied by that and then all that freedom is taken away in the clauses and subsections in this part of the Bill. I beg to move.
The Chairman of Committees (Lord Aberdare): If this amendment is agreed to, I cannot call Amendments Nos. 218A or 218B.
Lord Teviot: There is one point that I should like to raise in support of this amendment. My noble friend mentioned the fact that the peak services may provide spare capacity for maintenance. I should like to mention to him that on occasions, especially in the resorts on the coast and other places, accommodation can very usefully be acquired by private coach excursions coming in, thus keeping the vehicles away from the major car parks. Those depots could perhaps be used for garaging the coaches before they return home in the evening. I should like to ask my noble friend whether this amendment could accommodate that? If so, it would give it very much more thrust.
Lord Sandford: My noble friend is quite right. The Great Yarmouth Bus Company, with a total of 50 buses exactly, requires 24 of those at peak periods in the winter and 32 in the summer; so, at various times and seasons, there is a very considerable amount of spare capacity and it surely makes sense to use it to the full. In fact, if you do not use it to the full I cannot see how you can possibly compete in full-blooded competition.
The Earl of Caithness: I have listened very carefully to the argument which has been so well advanced by my noble friend; but, if I may say so, I think he may have given the Committee the impression—and I certainly had the impression from what he said—that the limitation on a public transport company's powers would be tighter and more significant than is the case. First of all, let me say that I think it is entirely right that, as long as the company is controlled by the local authority, it should not be allowed to diversify into completely new activities which are beyond the authority's own powers. We could not have companies effectively used as a means of extending the authority's own activities into areas which are quite beyond the proper scope of the public sector.
If a local authority want a company to diversify into something quite unrelated to its main business and quite beyond the authority's own power, such as general engineering or, say, the sale of clothes, they are free, if they would like to do so, to privatise it by divesting themselves of control. Then the company

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would be able to diversify as much as it likes subject only to the directors being able to carry the shareholders with them.
I think the Committee will agree that we should not have unlimited extension of its trading while it is in the public sector. I do not think that we need be concerned that this restriction will prevent the company from operating commercially or using the assets in its business to the full. May I remind the Committee that the previous amendment, which was agreed to, specifically extended the powers in the Bill in order to permit the companies to do things which the local authority are empowered to do but have not taken up as yet.
By virtue of Section 111 of the Local Government Act 1972 and the equivalent provision in Scotland which is Section 69 of the Local Government (Scotland) Act 1973, a local authority has the power to do anything which is calculated to facilitate or is conducive to or incidental to the discharge of any of their functions; and many bus undertakings now engage in such activities. My noble friend Lord Sandford mentioned the case of a garage. This could apply to Strathclyde, as the noble Lord, Lord Carmichael, will appreciate, with their garage at Cathcart. If it is incidental to their business, of course, they can hire it out, which they do at the moment. This Bill in no way prevents that. I think on the point raised by my noble friend Lord Teviot that if it is incidental to their running of the business, such action is not forbidden.
Clause 63(1), which defines the purposes for which the companies may be formed, will not prevent them from taking full benefit from that. It means that the company will have the proper freedom to turn its assets to account as bus undertakings now have. Engineering capacity which was needed for the main activities could be used at the margin to maintain private vehicles. The company could even provide a catering service as part of its business. So I find it difficult to accept that the provisions of this subsection will be a significant commercial restraint on the company. It will have some effect but I do not believe it will prevent the company from competing perfectly well. I hope that reply satisfies my noble friend Lord Sandford. I believe his fears are misplaced. I think this is an unnecessary amendment and I hope that what I have said also deals with his general worries about Clause 69.
Lord Sandford: I am grateful for what my noble friend has said. I shall read his reply with interest and make sure that our lawyers look at it. However, it surprises me very much indeed to hear that the servicing of private sector vehicles—lorries belonging to private companies—has ever been or could ever be construed to be an activity in which a local district council is allowed to engage. In that case I really do not see by what authority it could do that, given Clause 69(3)(a). However, as I say, I will see that what my noble friend has just said is carefully studied, and if he is right it is the case that our anxieties have no justification. But I should be rather surprised if we find that to be so. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale: I think this is a convenient moment for us to take the first Statement. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

The Popplewell Inquiry
4.2 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, with the leave of the House, I shall now repeat a Statement about the interim report of the Popplewell Inquiry which is now being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement. The Government have today published the interim report of the inquiry into safety and control at sports grounds under the chairmanship of Mr. Justice Popplewell, established following the tragic fire at Bradford City football ground and the events at Birmingham City on 11th May. My right honurable friend the Secretary of State for Scotland and I are both deeply grateful for the speedy, clear and thorough way in which the chairman and his two assessors have tackled this difficult and important task.
"The inquiry concludes that the Bradford fire was probably caused by the accidental dropping of a lighted match or cigarette or tobacco on to accumulated rubbish below the stand; that had the Guide to Safety at Sports Grounds (the 'Green Guide') been complied with, the tragedy would not have occurred and that the not at Birmingham—which the police could not reasonably have foreseen—was caused by spectators bent from the outset on violence. No one reading the report, or who followed the public hearings in Bradford, can doubt that the inquiry has investigated these matters as thoroughly as possible.
"The inquiry makes 32 recommendations, eight of which are provisional. They fall into two groups: those concerned with safety and those concerned with control. I am making available separately a written Statement dealing with each of the recommendations.
"The safety recommendations include a number designed to improve arrangements at sports grounds by, for example, improving evacuation procedures, the training of stewards, the provision of fire-fighting equipment and increasing the scope of safety certificates. In all these cases the Government will be inviting the local authorities, the police and the sports authorities to respond immediately to the spirit of the recommendations. The Government will issue a fresh edition of the Guide to Safety at Sports Grounds, the 'Green Guide,' in the light of the inquiry's final report. But they will also ask certificating authorities and the police in exercising their powers to take full account of the recommendations for amending the 'Green Guide' before the issue of the new edition of the 'Green Guide'.

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"So far as crowd control is concerned, the inquiry has made a number of important recommendations concerning membership cards and closed circuit television, the creation of new criminal offences relating to smoke bombs and the throwing of missiles and the need for a more suitable police radio.
"On membership cards, the inquiry recommends that urgent consideration be given by football clubs in England and Wales to introducing a membership system so as to exclude visiting fans. Also recommended is that closed circuit television be introduced at league football grounds. The Government strongly support the television recommendation and have also already made clear their support for a scheme of membership cards to help exclude troublemakers. A Football League working party is looking at the options and I would urge both the league and the Football Association to take heed of the recommendations of the inquiry by seeking jointly to reach positive conclusions at the earliest practicable date.
"It is also proposed that new offences should be created, making criminal the possession of smoke bombs in football grounds and the throwing of missiles. This proposal will be carefully considered for possible inclusion in the public order legislation which the Government hope to bring forward next Session. The Directorate of Telecommunications at the Home Office will also consider, as a matter of urgency, how best to meet the concern expressed about the personal police radios used at Bradford.
"In its provisional conclusions the inquiry indicates that it is minded to recommend changes to the provisions of the Fire Precautions and Safety at Sports Grounds Acts; that the police be given additional powers of search and arrest; and that consideration be given to the creation of a specific offence of chanting obscene or racialist abuse at a sports ground. We shall of course consider with care any recommendations which the inquiry makes on these and other points in the final report.
"I hope it will also be convenient for me to bring the House up to date on matters relating to safety and control since my Statement on 13th May. First, under the Safety at Sports Grounds Act I have designated all the qualifying grounds of clubs in Divisions 3 and 4 in the Football League in England and Wales, as well as in Divisions 1 and 2 of the Rugby League. The necessary orders were laid on 19th July and come into force on 9th August. From the latter date clubs will be required to apply for safety certificates before admitting any spectators. I have made it clear to the certifying authorities that the expectation is that they will work swiftly, normally by means of issuing interim certificates. In some cases the best way of providing immediate protection—while also reducing the costs of implementation—may well be to restrict attendance ceilings in grounds or parts of grounds.
"My right honourable friend the Secretary of State for Scotland has decided for his part not to proceed at present by extending designation in Scotland beyond its existing limits. However, he has arranged for all non-designated clubs and all
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governing bodies in sport in Scotland to conduct an urgent review of ground safety in co-operation with their local fire authorities.
"Secondly, all uncertificated grounds of the Third and Fourth Divisions of the Football League, of the First and Second Divisions of the Scottish Football League and of the First and Second Divisions of the Rugby League have been inspected as a result of the request that I and my right honourable friend made to Chief Fire Officers and Firemasters. In addition, accommodation for spectators at the larger cricket grounds, rugby union grounds, race courses, motor racing tracks, greyhound tracks, tennis clubs and athletics grounds has been inspected.
"Chief Fire Officers and Firemasters have sent copies of their findings to the management of the sports grounds indicating what remedial measures have to be taken. In some cases this will involve the complete closure of a stand until rebuilding or remedial work has been completed: in other cases strict limits are being placed on the number of spectators allowed into the stand. My honourable friend the Minister of Sport will be looking further at the financial implications with the interests concerned in his working group on the financing of safety improvements.
"Managements have responded in a co-operative way and have either set necessary work in hand or are considering how to comply with the requirements. Local authorities and local fire authorities have sufficient statutory powers to ensure that essential fire safety requirements are complied with. These will in no way be affected by the separate proposals directed towards streamlining the present law on fire precautions published yesterday in a consultative document and which I am inviting the inquiry also to consider in the context of their work.
"My right honourable friend the Secretary of State for Scotland and I are grateful to Chief Fire Officers and Firemasters for the prompt, efficient and careful manner in which this survey has been carried out. A digest of the reports will be submitted to the inquiry.
"Thirdly, the House will of course be aware of the rapid passage through both Houses of the Sporting Events (Control of Alcohol etc.) Bill. It will be in force by the beginning of the football season.
"Fourthly, steps have also been taken to enhance police effectiveness next season. In England and Wales the Association of Chief Police Officers has introduced a new system for exchanging information about the conduct of fans which should assist in anticipating and preventing trouble. Three of the Home Office photographic vehicles will be available to be deployed at football matches, together with two experimental high-definition tripod-mounted cameras. This is in addition to the £500,000 worth of closed circuit television equipment purchased through funds provided by the Football Trust.
"Fifthly, my honourable friend the Minister for Sport has helped to promote and draw up a Council of Europe Convention on Spectator Violence which was adopted by the Council of Europe Committee of Ministers yesterday.

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"There is no single, simple method of making sports grounds safe and free from violence, but I believe that the steps taken in the last few months, coupled with the implementation of the important recommendations of Mr. Justice Popplewell's inquiry, have already made and will make a significant contribution towards preserving football as a major spectator sport."
My Lords, that concludes the Statement.
Lord Mishcon: My Lords, the House will, as usual, be grateful to the noble Lord, Lord Glenarthur, for repeating the Statement made by his right honourable friend the Secretary of State in another place.
Mr. Justice Popplewell was appointed to conduct this important inquiry on 13th May, and here is an interim report published today, just over two months later. We on these Benches would like to associate ourselves with the expression of gratitude to the learned judge, to the assessors and to those who assisted him generally in regard to this report, for the speed with which it is before us. Those who have been able to read it will, I think, want to add to those words of gratitude appreciation for the clarity and thoroughness of this interim report. Somewhat plaintively in the introduction Mr. Justice Popplewell says:
"Even for High Court Judges there are only 24 hours in a day".
In the course of this interim report Mr. Justice Popplewell pays tribute to the heroism among all sorts of people at the Bradford tragedy. My first question to the noble Lord the Minister is: has liability been admitted by anyone to compensate the victims, or the families of victims, for what occurred on this tragic day? And if liability has not been admitted, have the Government any plan to pay compensation to cover what may be the urgent needs of some of those involved in this tragedy?
4.15 p.m.
I was a little surprised that one important element of this report was not mentioned in the Statement, although there is an oblique reference to a provisional recommendation that there should be some criminal offence put on to our statute book where abuse and racial remarks and obscenities are uttered at a football match. There is a section on political activities. I ask for the patience of the House, because of the importance of this matter, if I read the two short paragraphs involved. They are paragraphs 5.5 and 5.6 on page 39 of the report:
"There is a good deal of evidence from responsible witnesses that political activists are involved in troubles at football grounds in England, although it seems not to be a problem in Scotland. To some extent grounds are used for recruiting for these political activists. There were found on the Birmingham ground a number of leaflets belonging to the National Front. One fan—who for obvious reasons shall be nameless—said: 'Quite early on in the game I heard a rumpus behind me in the seats and turned to see two policemen escorting a teenage Pakistani youth from the stand onto the back of the stand. As this was going on I could hear about 50 of the Leeds fans chanting "Sieg Heil, Sieg Heil". They were standing up with a Nazi salute aimed towards the police. I could see that several people near me were wearing Nazi armbands, mainly teenagers, there were a few skin-heads among them. The arm-bands were with a red background, white circle and a black swastika in the middle.'
A transit van returning to Leeds after the Birmingham incident was seen to be carrying Leeds supporters, sporting swastika armbands. Sociological research on the activities of the politically far
1222
right at football matches suggests that many young fans who espouse racist views, or who join in racist chants, have little real idea of the politics of groups like the National Front and the British Movement. I shall need to inquire more deeply in due course into this aspect."
That concludes the quotation which I thought I ought to make to your Lordships in view of the obvious importance of it. One hopes that when the final report comes out, and the final thoughts of Mr. Justice Popplewell and his recommendations on this matter, it will certainly have the attention of Parliament.
That brings me to the recommendation about missiles, which seems to go a little further than the definition of "container" with which we were dealing in the recent Bill that we passed through so swiftly to try to deal with these matters. Your Lordships will no doubt agree with me when I say that if these matters are to be dealt with in a public order Bill—and I should like the Minister, if he would, to confirm that this is the intention of the Government—one would hope that that public order Bill will have some legislative priority in the next Session of Parliament.
Your Lordships will be interested to know, because of the Bill that went through this House with great speed, that Mr. Justice Popplewell, in the course of his report, at page 39, paragraph 5.2, says that no doubt drink made a substantial contribution to the violence which took place. I know that your Lordships will hope that the Bill that we passed so rapidly through this House, and which went through another place and is now on the statute book, will help considerably in regard to these matters, although all of us knew that it would not by any means be a panacea.
One noted the reference to the membership scheme. I merely ask the noble Lord the Minister if, in replying, he will in his courtesy say whether he really thinks, from the discussions that have taken place with football clubs and their representatives, that this is a practical solution or even a practical scheme. Limited progress appears to have been made on the all-important matter of universal circuit television. There is no doubt that, from the point of view of detection, prevention and evidence hereafter of who was responsible for violence, this is one of the most important matters that is dealt with in this report and it ought to be carried out.
I have two points in conclusion. The Statement refers most importantly to the fact that,
"the Minister for Sport has helped to promote and draw up a Council of Europe Convention on Spectator Violence which was adopted by the Council of Europe Committee of Ministers yesterday."
Can the Minister tell us, in general terms, what that convention was all about, and what it covers? I am sure that we shall be very interested. Finally, all this is all very well. Safety on football grounds we want. Prevention of violence we want. Prohibitions against all sorts of things and construction of all sorts of things, as recommended, we want. But are the Government prepared to put money behind what is such an essential recommendation as this report makes in regard to safety on football grounds?
Lord Wigoder: My Lords, we too are grateful to the noble Lord, Lord Glenarthur, for repeating this Statement, and, of course, to Mr. Justice Popplewell for an extremely thorough interim report which has

1223
managed to be both rapid and not hasty. The Statement that we have heard today is lengthy. It is coupled with the Government's response to the recommendations on several other sheets of paper. Unusually for a ministerial Statement, we have also had the report itself available in full for some hours today. That means that there is an enormous amount that one might be tempted to cover this afternoon. It would be easy to exceed the acceptable limits of response to a ministerial Statement, and indeed it would be easy to exceed the unacceptable limits also.
The report is divided into two quite separate sections, because it deals with two quite separate matters. As to the Bradford fire disaster, the proposals that are made there are quite clearly constructive and will no doubt meet with rapid and ready acceptance. I say that subject only to the point just made by the noble Lord, Lord Mishcon. Are the Government aware that implementing those recommendations will be an immense financial burden on many clubs, particularly the smaller ones? It would perhaps be unrealistic to ask the Government to provide much in the way of the necessary funds, particularly when all their funds are at the moment obviously committed to implementing the report of the Top Salaries Review Body.
The real issue is this. Do the Government accept that funds will be required by the clubs, and therefore that it is crucially important that the Government should not take steps to diminish the revenue upon which clubs have come to rely, unless it is absolutely necessary? This is an issue which we dealt with many times in the last few days when we were dealing with the Sporting Events (Control of Alcohol etc.) Bill.
As to the Birmingham aspect of this report, there is one perhaps inadvertent omission which I know the noble Lord, Lord Glenarthur, can remedy without difficulty. It does not disclose the date on which the report was submitted to the Home Office. Perhaps the noble Lord could help us about that, because if by any chance it was before 17th July, last Thursday, when we were debating the Sporting Events (Control of Alcohol etc.) Bill, the information in this report would indeed have been of very great assistance to us in the course of those discussions. That is because, first, this report makes clear that those of us who were arguing that it is not the sale of alcohol at the ground which is the problem, would have found very considerable support; and, secondly, because it makes clear that those of us who were arguing—and the noble Lord, Lord Mishcon, has drawn attention to the passage—that there are many sober hooligans who are the real ringleaders of this violence, would also have found their argument much assisted had the report been available.
As to the public order Act which is promised, if that is the right word, or threatened for the new Session, can the noble Lord, Lord Glenarthur, indicate that it will be wide enough to consider and encompass within itself all the various proposals that Mr. Justice Popplewell makes for amendment of the criminal law, including the amendment that my noble friend Lord Harris of Greenwich urged upon us last week to deal with making criminal offence the invasion of any sporting ground?
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The last matter to which I wish to refer is perhaps in some ways the most complicated and the most controversial in this report; that is, the recommendation that there should be membership cards or identity cards issued to football supporters. The ministerial Statement says that the Government have,
"made clear their support for a scheme of membership cards to help exclude trouble makers".
That, I think, is not really the object of Mr. Justice Popplewell's proposal. The way Mr. Justice Popplewell puts it, as I understand it, is that the only way to eliminate violence at football matches is to limit the attendance to the home supporters only, and that the only way to limit the attendance to home supporters only is to issue home supporters with a membership card or an identity card, so that admission to the ground can be limited in that way.
Do the Government accept that this is a quite draconian proposal? It may be that we shall have to come to it, but it would be helpful if the Government would at least say that it would be the very last resort in their efforts to deal with the real problem. The noble Lord, Lord Glenarthur, finished the ministerial Statement with the words that the Government wanted to make,
"a significant contribution towards preserving football as a major spectator sport".
But I am sure he will agree that it would be an unattractive solution if we could do that only by eliminating the spectators.
Lord Glenarthur: My Lords, I am grateful to both noble Lords for their comments about the Statement, and I am certainly grateful to the noble Lord, Lord Mishcon, for his tribute to Mr. Justice Popplewell and to those who helped him produce the report in such good time. Also, I entirely share his views, which have been expressed before, about the heroism which was shown by so many at the time of the fire. May I just clear up one point that the noble Lord, Lord Wigoder, asked about early on, concerning the date when the report was received. It was received late on 19th July, which answers that point.
The noble Lord, Lord Mishcon, was concerned about liability and costs. Individuals wishing to claim compensation was the theme of his question. It is, as I think he will expect, a civil matter for individuals. Liability has not, so far as I have been able to ascertain, been admitted by anybody. Individuals could, of course, take it up with the courts, so far as ownership of the Bradford Football Club and general responsibility are concerned. But as regards Government assistance, because it is a matter for civil action there is not a lot that can necessarily be done. But I have to remind the noble Lord that the Government have already given £¼ million to the Lord Mayor's Fund, which I believe is now in excess of £2 million—I do not have the precise figure—and that has helped enormously.
4.30 p.m.
I note the noble Lord's concern about racial abuse. It is difficult to measure the effect of the presence of political extremists on the level of crowd violence but we do not rule out the possibility that this is a contributory factor. Certainly, anyone with any

1225
evidence of political extremists inciting or organising violence at football matches should draw it to the attention of the police. I understand that the Football League is taking action through its ground regulations to prevent the distribution or sale of literature. In his interim report Mr. Justice Popplewell raised the possibility that it might be made an offence to chant obscene or racialist abuse at sports grounds. The Government will certainly consider any recommendation which he makes in the final report, and of course will stand by to assist the inquiry in its further consideration of this aspect.
The noble Lord, Lord Mishcon, was also concerned with missiles. No one doubts the growing menace presented by hooligans hurling missiles, and we take very seriously any suggestion that there may be gaps in the law. To the extent that there are problems of proving intent, this should be remedied by the statutory redefinitions of the public order offences which are proposed in the Government's review of public order law. If there are still gaps in the law, naturally we shall consider further amendments to ensure that missile throwers do not escape prosecution. For the moment it seems more likely that this is primarily a problem of detection and enforcement rather than of any deficiency in the law. Of course throwing a missile anyway could to some extent be caught by existing legislation.
While I am on the subject of public order law it might be helpful if I tell both the noble Lord, Lord Wigoder, and the noble Lord, Lord Mishcon, that while in regard to intent to bring forward that legislation I cannot anticipate the Queen's Speech, we hope that it will come forward with the urgency which I know your Lordships desire.
Membership cards are, I know, a matter which concerns many. The Government regret that speedier progress has not been made on the introduction of a membership card system by the football authorities. I have to say that. The noble Lord, Lord Wigoder, is concerned about practicability, but the Football League has recently established a working party to consider the options and that working party will report early in September. The Government certainly welcome that development and urge the Football League and the Football Association to make rapid progress. We are content that this matter is being taken seriously.
The difficulties which the noble Lord, Lord Wigoder, put forward are of course all bound up with the very real difficulty that football is in if the violence which we have seen is allowed to continue. Obviously the matter must be looked at with very great care. I believe that it is best looked at within the forum to which I have referred. Mr. Justice Popplewell makes it clear in his report that the current conditions cannot continue. We must all be aware that it is a great shame that decent supporters should have to suffer as a result of the firm but necessary measures which have been introduced to tackle the problem. I do not see any way in which the serious suggestions which have been put forward with such care by Mr. Justice Popplewell should not be seriously considered.
On the matter of the Council of Europe Conventions, the noble Lord, Lord Mishcon, asked
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what they all contained. I can say that as soon as an authenticated text is available—I regret that there is not one at the moment—a copy will be placed in the Library of the House. The convention was formally adopted by the Committee of Ministers yesterday and will be open for signature on 19th August. The secretariat is confident that an authenticated text can be prepared by then.
Lord Mishcon: My Lords, will the noble Lord the Minister in his kindness give way? Let me make it very clear that I gave him no notice of that question, and I apologise for it. It occurred to me almost while I was on my feet. I wonder whether he can give the House just a general idea of what the convention provides. If he cannot, I shall accept it immediately. If he finds that that is not a possibility we shall obviously wait to see the authenticated version in the Library.
Lord Glenarthur: My Lords, what I can say is that my noble friend Lord Elton listed the features of the convention in a Written Answer to a Question from my noble friend Lord Campbell of Alloway on 5th July. It is in the Official Report at columns 1471 and 1472. It is quite long and I do not think I can easily read it out now.
Lord Mishcon: My Lords, I am much obliged.
Lord Glenarthur: My Lords, we turn now to the issue of expense, which seemed to be very much the theme of the understandable concern of the noble Lord, Lord Wigoder. The financial implications of safety improvement work are being considered by the working group which was set up by my right honourable friend the Prime Minister following the Bradford tragedy. This committee is chaired by my honourable friend the Minister for Sport. A preliminary estimate of work required at newly designated Third and Fourth Division football clubs has been produced by the Football Grounds Improvement Trust. The working group will now need to consider the implications arising out of Mr. Justice Popplewell's interim report and also the chief fire officer's inspections. Until those components have been taken fully into account, it is too early to consider how much and from what source funding might be available. But I am sure your Lordships will bear in mind that it is the responsibility of football clubs, or for that matter organisers of any event, to ensure proper spectator or audience arrangements within their grounds, within cinemas or whatever they may be. This is in common with so many different parts of our world of entertainment. To mitigate the effects, clubs can always accept a lower spectator ceiling based on average attendances, rather than the full or very full attendances which they might have on special occasions. That should help to a very large degree.
I may have missed out one concern of the noble Lord, Lord Mishcon, on the specific offence of throwing a missile at a sports ground. This matter will be looked at urgently in connection with the anticipated public order legislation. I think I mentioned it earlier, but it raises one or two difficulties because one is dealing with sports grounds on some occasions where people do throw missiles. I mean that in all seriousness, because if one attempts to define it

1227
too narrowly one finds all sorts of difficulties associated with, for example, the discus and even cricket balls.
Those are the answers to the main points that have been raised. I acknowledge the concern of the noble Lord, Lord Wigoder, about finance, but on the other hand, I think that the measures which exist in other forms of entertainment adequately meet many of those concerns. But naturally we shall have to look at the situation as time goes on.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that everyone would commend both Mr. Justice Popplewell and the Government for the way in which they have reacted over recent months to the happenings which carry so much danger?
I was very relieved to hear the last part of the Statement, on the question of finance. We have to be a little careful in this respect. I rather interpreted the words of the noble Lord, Lord Mishcon, to hint, at any rate, that perhaps there should be Government money spent on dealing with the safety aspects of these important matters. I was relieved that my noble friend was aware that there are many other institutions—theatres, dance halls, hotels and restaurants—all of which are put to considerable expense as a result of the fire officer's recommendations, very properly given, but which add to the expense. If for some reason Government grant is given to football grounds and not to the others it would carry with it an element of unfairness, which would be resented and perhaps create a great deal of trouble.
With that in mind, I hope that my noble friend can look again at his answer to the noble Lord, Lord Wigoder, who referred to the Bill on the restriction of alcohol and to the orders which will be coming into operation in August. The noble Lord suggested that if by bringing in restrictions we are interfering with football clubs getting the money to look after their own safety needs, that would be wrong. Can my noble friend give an assurance that the Government will be flexible and, if they find that there is no need for rigidity, which we ought to start off with, they will relax it so that the clubs can look after themselves?
Lord Glenarthur: My Lords, I note my noble friend's concern. On the question of fire safety, there might well be an element of unfairness and I am grateful to him for pointing that out. On the question of alcohol at football grounds, we have been over this subject and we must give it time to work. As I said when the Bill was going through this House, we shall look at the effect it has on football clubs—and no doubt that effect will become apparent very quickly—when we come to consider public order legislation. I cannot go beyond that now.
Lord Denham: My Lords, I note that the noble Lord, Lord Dean, is trying to rise to his feet, but we have been 39 minutes on this Statement.
Lord Dean of Beswick: My Lords, I have to tell the Government Chief Whip that there has been only one Back Bencher to question the Minister and he was from the other side.
Lord Wigoder: My Lords, I think we were 32 minutes on the Statement and the responses from the Front Benches.
Lord Denham: My Lords, I must apologise; it shows the danger of coming in and, without having been here, then looking at the clock. Of course I am in the hands of the House. The feeling of the House is clearly that we have not quite finished on this Statement, so I apologise for my early intervention.
Lord Dean of Beswick: My Lords, first may I, too, express my appreciation to Mr. Justice Popplewell for the speed with which the report has come forward.
I hope the noble Lord will forgive me if I speak for a few minutes on Leeds United because a major part of this report relates to the incident at the match at Birmingham on 11th May. The report refers to Leeds fans travelling wearing swastikas. My noble friend Lord Mishcon also referred to this. The suggestion is that these were authorised bona fide fans of Leeds United Football Club.
I must tell your Lordships that Leeds United has a director, Mr. Maxwell Holmes, who is charged with trying to eliminate vandalism and thuggery from that club. In fact, Leeds United has spent over £200,000 in installing some of the very measures that the report calls for, such as television and various forms of crowd control. Whenever Leeds United travels away this gentleman goes to the home club a week beforehand to discuss with the club, and with the chief of police if necessary, what measures they wish the Leeds United Football Club to take in order to eliminate this awful vandalism and thuggery. Therefore, when one has reference to people wearing swastikas, one has to be a little careful as to who they really are.
We should question the Minister a little more on this problem and on the suggestion from Mr. Justice Popplewell about introducing membership cards. The report quite clearly states that:
"Urgent consideration should be given to introducing a membership system in England and Wales so as to exclude visiting fans."
That is quite clear. I should like to put a question in that respect. It is not a hypothesis; it could happen. I live in Leeds, but if I am a supporter of any football club, it is Manchester City. On Sunday a football match is taking place in Leeds between the veteran English team that won the World Cup and the old German team. It is a charity match in aid of the Bradford disaster. I have been invited. If the proposal in the report is followed through, would I be allowed to go to that match? That matter has not been thought through.
The report refers to racialist chanting. I must bring to the attention of noble Lords present that one of the worst features of the cricket season so far on certain grounds has been the racialist chanting and there has been much open comment about it. The Bill itself—which covers a part of what this report is about—states quite clearly that the measures can be extended to all other forms of sport. The report refers even to indoor sports and suggests that where there are 5,000 or more spectators that should eventually be embraced within the legislation.

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Are we as a nation going to accept such draconian proposals when it could mean, ultimately, that anyone in this country who wants to attend a spectator sport where more than 5,000 people are gathered will have to carry an identity card? I do not know of any way of killing a sport quicker than that. That is one idea in regard to which the practicalities are enormous, and it ought to be forgotten about.
Finally, I say this. Obviously there will be further legislation to deal with this problem. This is an interim report and we have had it for only a short time. There has not been sufficient time for us to digest it properly. Therefore I ask that, when the final report is completed, the Minister gives us an opportunity to debate it and to pass an opinion on it, because of what is involved for the people of this country.
4.45 p.m.
Lord Glenarthur: My Lords, I certainly note the noble Lord's concern. The question of a debate is a matter for the usual channels, not for me. The final report will come out in due course.
I realise that the noble Lord is concerned, and his is a concern which has been fairly widely expressed. The noble Lord will be aware that in the past certain clubs have attempted to introduce their own schemes to try to deal with the problems caused, in some cases, by away spectators. Certainly Mr. Justice Popplewell's suggestions go a long way, and perhaps rather further than some of the other suggestions which have been made. While being aware that we must take careful note of those considerations—and they are very much in the melting pot at the moment—and in view of the need to prevent this violence by excluding trouble makers, all I can say to the noble Lord is that the concerns which he expresses will be borne in mind.
Lord Harris of Greenwich: My Lords, may I ask one question directly on the point put by the noble Lord, Lord Dean of Beswick, relating to the membership card scheme? A moment ago, my noble friend Lord Wigoder said that, as we understood it, when this idea was propounded by the Government it was directed towards keeping out trouble makers. Is the noble Lord aware, as the noble Lord, Lord Dean, pointed out, that Mr. Justice Popplewell is going far further by excluding all visiting fans? Is he further aware that in the summary of recommendations which has been distributed by the Government this afternoon the Government say that this is a matter for the football authorities and clubs, but that the Government hope that they will be given serious consideration? Is that a neutral statement, or does it imply that the Government believe that such a scheme should be enforced? As my noble friend pointed out, it would have substantial consequences for English football, and in the view of many it would go much too far.
May I ask a second question relating to paragraph 6.60 of the report? There Mr. Justice Popplewell makes a statement which has far wider implications than the simple problem of violence on the terraces. He says:
"When people in responsible positions in public life fail to condemn violence against the police whenever it happens or worse
1230
still actually condone it, it does little to lead the young to believe that throwing pieces of concrete or other missiles at the police is other than a pretty harmless exercise".
Is he aware that many of us regard that as a wholly justified observation, which I hope will be borne in mind by all those who are involved in public life in the country?
Lord Glenarthur: My Lords, I certainly welcome the comments of the noble Lord on that paragraph. I am sure that that view is shared by many. It is certainly by me. So far as all visiting fans are concerned, I am aware that the report is far-reaching, and what is said in the Government's response to the recommendations is correct. It is essentially a matter for the football authorities to sort out and I hope, as we all hope, that at the end of the day we shall come up with a sensible and realistic solution to this problem.
Lord Mulley: My Lords, since I do not think that this should be the occasion for debate, may I just briefly say that I appreciate the tributes that have been made to Mr. Justice Popplewell and his associates for the care and speed with which he has given his report, also for the very many constructive and helpful suggestions. I shall mention and criticise only one of them, namely, the membership card proviso, and if in fact the football authorities are going to be left to devise what they deem to be practicable, then I do not think we would have any quarrel. I hope that the noble Lord can give us that assurance because Mr. Justice Popplewell's conclusion is the impeccable one, that the one way to get rid of all violence at football matches is to have no spectators there—and indeed that would be the end of football because it would not pay for the costs of running it. That is the logic. It would be immensely disappointing to all supporters of football if they could not see their own team play in key cup matches away from home.
What will happen to many friends of mine in Sheffield, for example, is that those who happen to have season tickets for both the grounds will have to opt to visit only one of the two grounds in their own city. It seems to me that this is a totally impracticable proposition propounded by Mr. Justice Popplewell, and I hope that the Government will stick to their advice—merely that the Football Association, as I know they will wish to do, will do what they can to eliminate problems by such identification processes as they deem practicable.
Lord Glenarthur: My Lords, one thing which is absolutely guaranteed to mean the end of football is the continuation of the violence that we have seen. Let there be no doubt at all about that. While the noble Lord suggests that the introduction of membership cards may be moving in that direction as well, all I can say to him is that it is a matter for the football authorities. I do not believe that it is impossible to work out some scheme, but one thing has to be balanced against another: the issue of violence on the one hand against practicability on the other hand. Those matters are being considered.
Lord Brougham and Vaux: My Lords, perhaps I may very briefly add to the tribute paid by my noble friend to Mr. Justice Popplewell for producing this

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report so quickly. Obviously, there is a lot in it which needs to be debated. There is one thing that I picked up on Chapter 7, concerning exits. My noble friend mentioned this when he spoke about cinemas. When we go to a cinema the gangways and exits are kept clear, and you can push a bar and open the door. This seems to me to be a highly desirable thing to have at football grounds so that people can get out. If this had been the case at Bradford, then that tragedy may not have happened.
Lord Glenarthur: My Lords, that is really a matter for the certificating authority to look at. As he does, I appreciate that locked turnstiles produce the sort of tragedy that we have seen. That is why it is important that these recommendations, particularly the ones relating to safety on egress from a stadium, are looked at carefully; but I believe that they are a matter for the certificating authorities to deal with rather more than me. But I note the noble Lord's point.

Transport Bill
4.54 p.m.
House again in Committee on Clause 69.
The Earl of Caithness The Earl of Caithness moved amendment No. 218A:
[Printed earlier.]
The noble Earl said: I beg to move this amendment. I spoke to this earlier, on Amendment No. 217C.
On Question, amendment agreed to.
Following is the text of the amendment (No. 218A):
Page 71, line 4, leave out ("other than transferred activities").
The Earl of Caithness The Earl of Caithness moved Amendment No. 218B:
[Printed earlier.]
The noble Lord said: With the leave of the Committee I should like to move Amendments Nos. 218B, 218C, 218D and 218E together. [Printed earlier.] I spoke to this amendment earlier, on Amendment No. 215A. I beg to move.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 218B, 218C, 218D and 218E):
Page 71, line 6, at end insert ("or permit any body corporate which is its subsidiary to engage in any such activities").
Page 71, leave out lines 7 to 9 and insert—
("(b) does not—

(i) borrow money from any person other than the controlling authority; or

(ii) permit any body corporate which is its subsidiary to borrow money from any person other than the company, any other subsidiary of the company, or the controlling authority;

with the exception in each case of borrowing by way of temporary loan or overdraft; and").
Page 71, line 10, after ("not") insert ("(i)").
Page 71, line 11, at end insert—
("; or
(ii) permit any body corporate which is its subsidiary to raise money by the issue of shares or stock to any person other than the company.").
[Amendment No. 219 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 219A and 219B.
[Printed earlier.]
The noble Lord said: I beg to move Amendments Nos. 219A and 219B. I spoke to these amendments earlier, on Amendment No. 217C.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 219A and 219B):
Page 71, line 17, leave out ("other than transferred activities").
Page 71, line 22, leave out subsection (5) and insert—
("(5) Subsection (3)(a) above shall not apply—

(a) in the case of a public transport company whose controlling authority are the Passenger Transport Authority for any passenger transport area, in relation to activities within the powers of the Executive for that area or activities which were formerly within those powers but have ceased to be so by virtue of any order made under section 59 of this Act;

(b) in the case of a public transport company within section 68(1)(c) of this Act, in relation to activities which were formerly within the powers of the council who formed, or of any council who participated in forming that company, but have ceased to be so by virtue of section 62(1) of this Act.").

[Amendment No. 220 had been withdrawn from the Marshalled List.]
On Question, Whether Clause 69, as amended, shall stand part of the Bill?
Lord Sandford: The Marshalled List indicates that I had intended to speak to the effect that this clause should not stand part of the Bill, but in the course of speaking to Amendment No. 218 I was satisfied, for the time being, by my noble friend. However, I understand that there may be other noble Lords who may wish to speak on the Motion, that this clause stand part of the Bill.
Clause 69, as amended, agreed to.
[Amendment No. 220A not moved.]
Clause 70 [Disabilities of directors of public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 220B:
Page 71, line 39, leave out ("a paid employee of the company") and insert ("paid for acting as such or is an employee of the public transport company or a subsidiary of the public transport company").
The noble Earl said: I beg to move Amendment No. 220B and at the same time, with the leave of the Committee, I should like to speak to Amendments Nos. 220C, 220D, 220E, 220F, 220G and 220H.
Amendment No. 220C: Page 72, line 6, after ("council") insert ("(a)").
Amendment No. 220D: Page 72, line 7, leave out from ("with") to ("vote") in line 9 and insert—
(", or any other matter relating to the activities of, the public transport company or a subsidiary of that company; or (b)").
Amendment No. 220E: Page 72, line 36, leave out from beginning to ("was") in line 1 of page 73 and insert (", or any other matter relating to the activities of, the company concerned").
Amendment No. 220F: Page 73, line 11, leave out from ("with") to ("is") in line 12 and insert (", or any other matter relating to the activities of, the public transport company or a subsidiary of that company").
Amendment No. 220G: Page 73, line 35, leave out from ("with") to ("by") in line 36 and insert (", or in any other matter relating to the activities of, the public transport company or a subsidiary of that company").

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Amendment No. 220H: Page 73, line 37, at end insert ("or in a subsidiary of that company.
(12) The provisions of this section shall apply in relation to a director of a subsidiary of a public transport company as they apply in relation to a director of such a company.").
These amendments have two main purposes. First, they apply the provisions of the clause to directors of any subsidiary of a public transport company. Secondly, they clarify subsection (1) of the clause to apply to all directors of public transport companies or their subsidiaries who are either paid as directors or are employees of the public transport companies or their subsidiaries. As drafted, the clause does not apply to directors of subsidiaries of public transport companies and it is not apparent on the face of the clause that a director paid as a director as distinct from a director employed by the company would be disqualified from being a member of the controlling authority. These amendments put these deficiencies right. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 220C to 220H.
[Printed above.]
The noble Earl said: I beg to move.
On Question, amendments agreed to.
Clause 70, as amended, agreed to.
[Amendment No. 221 had been withdrawn from the Marshalled List.]
Clause 71 [Powers of investment and disposal in relation to public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 221A.
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move this amendment. I spoke to it earlier on Amendment No. 211CN.
On Question, amendment agreed to.
Following is the text of the amendment (No. 221A):
Page 74, line 3, leave out from ("company") to ("any") in line 4 and insert ("so formed by way of consideration for").
[Amendments Nos. 222 and 223 had been withdrawn from the Marshalled List.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 223A and 224A:
[Printed earlier.]
The noble Earl said: I spoke to both these amendments with Amendment No. 215A. I beg to move.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 223A and 224A):
Page 74, leave out lines 12 and 13 and insert ("such shares or other securities").
Page 74, line 18, leave out from beginning to ("which") in line 20 and insert—

("(a) the disposal by that company of the whole of that company's undertaking;

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(b) any disposal by that company of any shares in or other securities of a body corporate which is that company's subsidiary; or

(c) any disposal by that company of any part of that company's undertaking, or of any assets of that company (other than shares or securities within paragraph (b) above)").

[Amendments Nos. 224 and 225 had been withdrawn from the Marshalled List.]
Clause 71, as amended, agreed to.
Clause 72 [Application of local authority financial controls to public transport companies]:
5 p.m.
Lord Sandford Lord Sandford moved Amendment No. 225A:
Page 74, line 33, leave out subsections (1) to (3).
The noble Lord said: I wish at the same time to speak to Amendment No. 229A and to try to include in my remarks the four amendments which would have been moved by my noble friend Lady Vickers, Amendments Nos. 226 to 229.
Amendment No. 226: Page 74, line 37, leave out ("any") and insert ("no").
Amendment No. 127: Page 74, line 40, leave out ("any" and insert ("no").
Amendment No. 228: Page 74, line 43, leave out ("any") and insert ("no").
Amendment No. 229: Page 75, line 1, leave out ("any") and insert ("no").
Amendment No. 229A: Page 75, line 40, leave out subsections (7) and (8).
This is the moment when we come to what one could probably regard as the worst feature of this very unsatisfactory arrangement which is proposed for the structure of the municipal bus companies in the situation created by the Bill. The bus operating body is given the status of a Companies Act company, and it might be expecting the freedom of such a company to operate according to its purposes and within the terms of its memorandum. But in fact for the purposes of capital expenditure it is still regarded as part of the local authority, and so we have a company which ends up in the worst of both worlds. While it ceases to be a department of the city council, its capital expenditure is treated as if it were.
The capital expenditure controls of a city council these days are so bizarre as to be hardly believable by people who are not familiar with the state that local government finance has got into. There was a time when one had to seek approval for the capital that one wished to borrow in order to finance the activities of a local authority. Those days are long past. Now even the capital one already has cannot be spent without the authority of the Department of the Environment, which is in turn controlled by the Treasury.
It is impossible to see how what is nominally a private company, designed to be free to enter the world of deregulation and full-blooded competition with the private sector, can possibly operate fairly and effectively in that new environment when it does not have access to any capital which it can call its own. The capital which is available in the local authority cannot be applied to it without the approval of the Secretary of State. It cannot go into the market to raise capital of it own because it is reliant on its parent local authority for that; and its local authority cannot

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provide capital for it, even when authorised to do so by the Secretary of State, without setting the needs of the bus company side by side with all the other needs of the local authority, of which probably the most important is housing. Everybody knows that all housing authorities these days have enormous priorities building up.
The municipal bus company is in an impossible situation. The amendment at this stage is not designed for pressing but just to elicit from whichever of my noble friends on the Front Bench is to answer some explanation of why the Government have landed these unfortunate municipal bus companies in this situation and how on earth they think they can operate effectively, as they obviously hope they will. I see no possibility of them being able to operate effectively in a state of deregulation and private enterprise. It may well be that this clause has been designed in order to oblige the local authorities to privatise their bus companies, but it would be much simpler to have said so on the face of the Bill and to have avoided all this complication. It simply will not work. I beg to move.
The Deputy Chairman of Committees (Lord Cullen of Ashbourne): If this amendment is agreed to, I shall not be able to call Amendments Nos. 226 to 229.
Baroness Carnegy of Lour: My noble friend said earlier that it would have been so much better to privatise the buses altogether. I do not know whether he was expressing a view held by the association which he chairs, but I do not think that the Scottish authorities which run buses—which, as it happens, are all regions—would agree to that at all. They argue that they do not want this arrangement; they want the status quo. I should have thought, though, that they would have preferred this arrangement to total privatisation. I have not consulted them about that because my noble friend's argument has been enunciated only today.
Therefore, I should have thought that this option has seriously to be explored. If one is to have a halfway house or a hybrid arrangement, where losses are covered by the ratepayer and the taxpayer, and if the bus company gets into difficulties it will be for the local authority to sort it out, one cannot give the hybrid company the freedom of an ordinary company. That simply is not possible.
I am not an expert on this at all. I am simply thinking back to my time as a councillor. The borrowing required for capital expenditure should be treated like the borrowing of a local authority and put into its capital plan forward just as any other local authority expenditure is. Losses should likewise be dealt with in the same way as any other local authority project which loses money. It seems to me that on behalf of local authorities my noble friend is trying to have his cake and eat it. I see why local authorities prefer the status quo. I am very surprised that they would want to see their bus undertakings separated completely. One cannot expect to have the advantages of a separate company in one direction and not in another.
Lord Shepherd: If I might use the jargon that has been developing in our debates on this Bill, I suspect that the noble Baroness has fallen into this trap. Some
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who use the term "privatisation" do not mean putting the service into the private sector. It is merely a changed relationship from a PTE or PTA municipal bus operation.
I support the amendment. I believe that it is necessary for the benefit of those who have to run commercial companies on a fair competitive basis. The Notes on Clauses state:
"Subsection (1) provides that payments, acquisitions, disposals, receipts, contracts, liabilities, termination of interests and repayments in relation to an undertaking or a public transport company shall be treated as if they were made by the controlling authority".
That is not what I expected when I read the White Paper regarding the setting up of these transport companies. The purpose of setting up these public transport companies was to put them at an arm's length from the authority which was the tendering authority, in other words divorcing those authorities who tendered and provided subsidy from the operational side of the business.
As I see these various clauses, I think an executive in a company will be in very great difficulties. All his revenue, his profit at the end of the year, will go direct to the authority, As a quid pro quo he will then have to look to the authority for moneys for the purchase of new vehicles and other forms of capital expenditure. Some companies may have some 50 or 60 vehicles, which seems to be about the average for the municipal authorities. These are fair assets, which not only will have to be serviced but will have to be replaced. I am quite clear that the basic principle in relation to capital expenditure is that so far as possible it should come from revenue, from profit and that the company should create profit in order to replace its assets. If it is not so, then of course there cannot be fair competition because those in the private sector will have to perform that way.
I am not sure whether the noble Lord should pursue these amendments to a division. Certainly we should like to hear from the Minister. I hope that between now and Report stage the Government, while perhaps allowing this hybrid situation to remain in the Bill, will look very carefully to see whether there are ways in which it can be made easier. Yes, maybe they can offer an inducement for local authorities to create what I call the PLC approach, which is the setting up of freestanding transport companies, as I understand them to be.
I believe that if that were done, there would be a far better performance and certainly a far better approach of management to the companies than there would be within this morass of administration. I was going to say "administrative nonsense"; however, I understand why the Government went for this hybrid approach. I think it is the least satisfactory. When the Minister replies to the noble Lord, Lord Sandford, I hope that he will at least be willing to undertake to see whether there are ways and means by which this free-standing PLC approach about which I have spoken can be achieved or, to go further, encouraged as a solution to the problem.
5.15 p.m.
Lord Trefgarne: I have listened very carefully to the arguments that my noble friend Lord Sandford,

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supported by the noble Lord, Lord Shepherd, has put forward for removing the public sector capital controls which the Bill proposes for the new public transport companies. The amendments are of course in keeping with those which were moved to Clause 69 and reflect the desire to ensure that new companies will be able to stand on their own feet and compete successfully without being hampered through capital or other controls.
I have to say that while I side with my noble friend in wanting these companies to stand on their own two feet, I do not think that we can possibly go so far as to disapply the important provisions of this clause. Nor, thankfully, do I think there is any reason for us to do so. I hope that I may be able to convince my noble friend on that.
First, I would ask the Committee to consider the status of these companies. They are, I think we will agree, in the public sector. In these circumstances, two facts must be taken into account. First, the companies will undoubtedly be regarded as contributors to public sector spending, which for reasons which we probably do not want to go into now the Government, as managers of the economy, have to see properly accounted for in the control system. Secondly, it would be quite open for the authorities effectively to have the best of both worlds if, as is proposed in the amendments of the noble Baroness, Lady Vickers, this company's profits increased the amount of prescribed expenditure which the local authority could make while the amount of capital expenditure by the company did not reduce their allocation, this would effectively allow authorities to augment their expenditure. I should not wish to precipitate a wider debate on that subject, but I hope the Committee will agree that that is not something we should want to do lightly in this Bill.
I should also like the Committee to consider the advantages for a public transport company in its relationship with the controlling authority which I mentioned on Clause 69 and which, if I may say so, I do not think we should forget. It has, for example, a ready and regular source of finance. It is also likely that its borrowing through the authority may well be at the normal rates which apply to local authority borrowing, which the Committee will know are not always available to other borrowers.
Against this, there is of course the overall limit on the local authority's capital expenditure, which the amendments we have before us seek to disapply from the companies; and I know that some people fear that the balance here may not lie in the company's favour, particularly if an irresponsible local authority seeks to deny the bus company its proper priority. I suppose we have to acknowledge that—in extreme cases—there is a possibility of this happening. But I have to say that nothing in this clause removes the control over the situation from the local authorities themselves. If they make capital resources available to their company—as they do effectively now, and as I have no doubt most will continue to do—there is no reason whatsoever why the provisions of this clause should pose any difficulty for the companies. They will have facilities which some other borrowers would dearly love to have available to them.
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Ultimately, I think we must also bear in mind again that the local authorities are always free to seek consent to dispose of their controlling shareholding and so place the company firmly outside these capital controls and into the private sector. This clause does not seek to force the local authority's hand in either direction. All it does is to say that, while the companies are in the public sector, it is inevitable that the capital controls which we have discussed should apply. I hope my noble friend will feel able to accept that. I have to tell my noble friend that I think there is a good deal between us on this matter and I do not feel that I can come towards him in any way.
Lord Sandford: No; that is certainly so. If the debate we have had for the past hour or so has achieved nothing else, it has certainly achieved that. It is because of that, coupled with the fact that the situation in which the municipal bus companies is so unsatisfactory and so different from that which they might have been led to expect by the White Paper, that inevitably—and I say this to my noble friend—it is not so much that it is their policy to privatise themselves but it is the only way in which they can extricate themselves or avoid becoming entangled in this unsatisfactory situation. It is my own, so to speak, private opinion at this stage that many of them will see this to be the case. Maybe in the long run it will be the best way for the municipal bus companies to go. However, if it is not what the Government intended, it is odd and ironic that that should be the effect.
The White Paper, if I may remind the Committee, said:
"The company will also be able to seek capital (whether equity or borrowing) from the market in the usual way".
They will not be able to do anything of the kind: and even if they got it, they would not be free to spend it. That is the situation that local government is in. You cannot spend the money you have got, and you cannot borrow what you need. To form a company in the private sector and to call it a Companies Act company and then expect it to operate effectively against full-blooded competition in that situation is absolutely absurd. We have established that there is a great gulf between us—and there certainly is. What will be the effect as municipal bus companies reflect on it during the Recess, I cannot say; but, clearly, one possibility is that set out in the White Paper. It would be open to councils to privatise the company if they wished. Of course, the Labour-controlled bus companies will not want to do any such thing. However, they may well be forced into that situation, which is an unwarranted intrusion into the independence of local government. I believe that we have exhausted the possibilities on this amendment. I beg leave to withdraw it.
Lord Trefgarne: Just before my noble friend does that, I imagine that he plans to reflect on what has been said and perhaps return to the matter at Report stage later in the year. I have to tell him in plain terms that I doubt that there will be any difference in the Government's position—in fact, I am certain there will be none—if we consider this matter at a later stage. I invite my noble friend to consider, therefore, whether he should really withdraw the amendment in those circumstances, or whether it would not be better if he sought the view of the Committee.
Lord Shepherd: I have been under some pressure from my noble friends. We have had one long Statement; we have made very little progress on the Bill; and we are now to have another statement. The noble Lord has certainly provoked me into a good deal of debate, but I had intended to restrain myself. The noble Lord wishes to withdraw the amendment. What the Minister has said is quite unsatisfactory. It will be a question for your Lordships' House at a later stage to decide whether it believes that the noble Lord, Lord Sandford, is right, or the noble Lord, Lord Trefgarne.
The threat that the noble Lord, Lord Trefgarne, puts to the Committee and to its Members is, if I may say so, a very dangerous way of going about a Committee stage. If he wishes to take that view, we shall do what occurred many years back in the past, when noble Lords were a great deal smaller in number. We divided on every amendment. If, as the noble Lord nearly suggested, we cannot withdraw amendments when we wish, we shall divide on all amendments. Were that to happen, I do not know where your Lordships' Committee would be.
Lord Sandford: I shall not respond to that, if my noble friend will forgive me. It is not the right tactics to press amendments at the Committee stage on a Bill that is so ill constructed. I do not despair at all, wide as the gulf is, of at least having some effect on the thinking of my noble friends between now and October.
Amendment, by leave, withdrawn.
[Amendments Nos. 226 to 229 not moved.]
Lord Brabazon of Tara: I beg to move that the House do now resume.
Moved accordingly, and on Question, Motion agreed to.
House resumed.

The Chiswick Report
5.25 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the report of the Working Group of Suicide Precautions at Glenochil Young Offenders Institution and Detention Centre which is published today.
"Copies have been placed in the Vote Office and in the Libraries of both Houses. I have also laid copies of the determinations of the Sheriff Principal in the cases of Angus Boyd and Derek Harris.
"In November 1984, following a recommendation by the Sheriff Principal after a fatal accident inquiry, I set up an independent working group under the chairmanship of Dr. Derek Chiswick, consultant psychiatrist at the Royal Edinburgh Hospital, with the following remit:
`To review the precautionary procedures adopted at Glenochil Young Offenders Institution and Glenochil
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Detention Centre to identify and supervise inmates who might be regarded as suicide risks; and to make recommendations.'
"I asked Dr. Chiswick and his colleagues to expedite the report and I am most grateful to them for completing their work by the end of June.
"This is an important report on a subject which has generated a good deal of understandable public concern. It makes a considerable number of recommendations, the majority of which I am ready to accept, although some will require more detailed examination. There are, however, a number of recommendations which I cannot accept. As I cannot, in the time available today, give a detailed response to all the recommendations, I have laid with the report a paper which sets out my initial response to it.
"I would remind the House that procedures to identify and care for vulnerable and inadequate offenders, who may have genuinely suicidal tendencies, must be a vitally important feature of any penal institution. Nevertheless, these are a tiny minority of the inmates. We must not lose sight of the fact that the primary purpose of custody is the deprivation of liberty as a punishment. The inmates at Glenochil are there because they have offended against society and require custodial sentences and rehabilitation. They include many hard and brutal offenders. About half of those in the young offenders institution are serving sentences of between three years and life for particularly serious offences. The authorities at Glenochil have to manage their custody as well as that of a comparatively small number of vulnerable youths.
"I now wish to refer to some of the detailed points made in the report. The report's broad conclusions are—I am pleased to note—in accord with the recent finding by the Sheriff Principal, who conducted the fatal accident inquiry into the death in April of Derek Harris, that there is no evidence that the regimes operated at Glenochil or the actions of staff were responsible for any of the seven deaths which have taken place since 1981: only three of the seven deaths were determined as deliberate suicides. In submitting this report, Dr. Chiswick states that the working group had been impressed by the dedication of the governor and his staff and that the recommendations made in the report imply no criticism of the staff at Glenochil.
"The working group acknowledge that, no matter what steps may be taken to prevent suicides, there is no guarantee that these measures will be successful. They consider that the aim should be to achieve a proper balance between procedures that reduce risk to a minimum and yet are compatible with an acceptable way of life in a penal establishment.
"The report says that, in relation to the young offenders institution, where all but two of the deaths have occurred, the majority of inmates serve their sentences in a purposeful manner and that the problems are attributable largely to a few inmates who behave aggressively towards their fellows. Such aggression is impossible to prevent, without stopping all association among young offenders who mostly serve their sentences without difficulty and co-operate with staff.

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"The working group criticise the procedures whereby inmates thought to be suicide risks are kept in what is known as strict suicide observation for lengthy periods. I should remind the House that these procedures have been in use in penal establishments in Scotland for many years. These procedures involve observation being maintained on an inmate in a cell at 15 minute intervals, day and night. All clothing, bedding and furniture which could be used to cause self-injury may be replaced with clothing and bedding of canvas and with cardboard furniture. No one likes using these measures but in Glenochil they have been effective to the extent that no inmate at. Glenochil has committed suicide while under strict observation. Indeed, the two most recent deaths at Glenochil occurred after the inmates were removed from strict suicide observation, and in the case of Angus Boyd the Sheriff Principal commented that death might have been avoided, if he had not been removed from strict suicide observation. This illustrates how delicate and complex is the question of caring for these unfortunate individuals. Nonetheless I accept that the use of these precautions for any other than very short periods is undesirable in relation to young offenders.
"The working group offer advice on identifying possible suicide risks and make a number of recommendations as to how those inmates who are mentally disturbed or who are vulnerable in some other way might be managed. I wholeheartedly accept the important recommendation of using a team approach involving all the professionals and prison staff to counsel inmates and to minimise the risks of suicide. This is the general direction in which we intend to go in the follow-up to the report. Indeed, some of the recommendations in the report have already been met in whole or in part by measures taken since the death of Derek Harris in April. Work has now been completed on a secure hospital facility at Glenochil, consisting of a ward, and a single cell, so that strict medical observation can be provided in appropriate cases. In addition, immature and vulnerable inmates requiring a more closely supervised supportive regime are now housed in `D' Hall of the young offenders institution or transferred to Carrick House at Polmont Young Offenders Institution.
"A number of the recommendations have staffing and resource implications and will require careful consideration. There will also have to be consultation with the staff associations and other interested bodies. Others create problems of adapting existing structures. Recommendations of this longer-term kind will need to be examined very carefully so that the custody and care of inmates is not put at risk in the short-term.
"In a number of respects the working group have gone beyond their remit and discussed issues affecting the overall management of establishments and the prison service as a whole which as a small specifically qualified group, they were not constituted to comment on. A minority of the working group felt that, such was the aura of suicide permeating Glenochil, the only solution lay in its
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temporary closure. I concur with the view of the majority who rejected that idea.
"I trust that the working group's findings, taken together with the determinations of Sheriff Principal Taylor, will be accepted by honourable Members and by the general public as refuting any suggestion that the unfortunate deaths which have taken place at Glenochil are attributable to the regimes, particularly that of the detention centre, or the behaviour of staff. There is not a shred of evidence to support these allegations.
"My hope now is that the governor and staff of Glenochil will be left to get on with their difficult and demanding task and that the institution will be afforded an opportunity to settle down after recent events, and to make the useful changes which I have accepted from the recommendations in this report."
My Lords, that concludes the Statement.
Lord Ross of Marnock: My Lords, we are grateful to the Minister of State for repeating the Statement made by his right honourable friend the Secretary of State in another place. There is no doubt at all about the gravity of the events which caused the establishment of Dr. Chiswick's inquiry and the working party to be set up. When one considers seven deaths, 13 self-inflicted injury cases and about 171 people at risk and under strict suicide observation in three and a half years, the importance of the matter becomes very clear indeed.
The situation has improved and of that there is no doubt. Even before this inquiry took place, and as a result of previous inquiries, the Scottish Office acted. Therefore, improvements have been made at Glenochil. However, the Minister of State must realise the anxieties and tensions which have built up since the beginning of the year. Those anxieties and tensions have been growing in the institution and are affecting the staff and the offenders who are incarcerated there, and they are also affecting the parents of youngsters who are sent there. The anxieties and tensions are very great indeed.
I did not get the impression from the Statement which has been made by the Secretary of State—and admittedly it is curtailed because of the length of the inquiry—that he has given a clear picture of what the report sets out. The report says:
"there are no instant solutions… We have proposed completely new procedures for the identification and management of those at risk of suicide. The emphasis is on the application of modem principles of medical and nursing care as opposed to the predominately physical measures which currently operate",
and which are explained in the Statement. Indeed, to spell them out, to mention what presently takes place—something which has been criticised and condemned in the report—surprises me. What is taking place at present—and it is spelt out both in the Statement and in the report—has been taking place for a long time. That means that it is antiquated, out of date, and falls behind what takes place south of the border in respect of the treatment supplied. We should look at that matter.
I should like to know whether or not any of the suggestions which are put forward in the report have been accepted. Unfortunately, there is no doubt that resource and staffing questions will arise. Expenditure and money will be involved. It is no good the

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Government saying that only a small section of people are at risk. If there is only a small section involved and you apply yourself to that section, then when you look at the figures as regards the fatalities, self-inflicted wounds and all that arises from the regime, you will get the feeling that the Government are brushing it off and missing its importance.
Do the Government accept the fact that there should be personal officers with, I was about to say, a "back-up" team, but the team is already there; it is not just called in? There is the suggestion that there should be separate psychiatric youth consultants and that there should be forensic psychological consultants as well. None of this exists at present, and it will cost money. The Government may say that money aspects require further consideration. I point out that these matters are basic to the report and to the suggestions which are being made. There is too much about what the Government do not agree with; and there is too little about what the Government do agree with, much of which is important, so far as I can see from the skimming over which I have been able to do in the past 10 minutes. I point out that the Statement has only been in the Printed Paper Office for the past 10 minutes. There is too much lacking about what the Government say at present. Do they accept the suggestion that the units should be smaller, that they should be graded and that the units should be more functional? Or is that a matter which, because it will cost money, is out of the question?
There is also the question of early release. Admittedly the Government suggest that that is a matter not for the Secretary of State, but for the courts. We could work a system of sending the matter back to the courts. There are many youngsters who, because of incapacity, inadequacy and psychological problems, should not be there at all. Admittedly, the Government put forward the suggestion that the hospital is now available, but in my view that should only be an interim measure.
There are more alternatives available within the complex and there is also the use of Polmont as well which is quite a good thing. There should be alternatives to these people going there in the first place. We are too negative in our attitude to non-custodial sentences for people who really should not be in prison. When you consider that the deterrent effect is nil, when you look at the figures of those who offend again, we are not getting much out of our penal system for offenders under 21. The Government ought to look at this.
The noble Lord questioned the remit, and suggested that the committee had gone beyond its remit. There was a certain amount of confusion about this. I understand that they were given a certain amount of latitude in this respect. The fact that this committee felt that they had to go beyond their remit pinpoints the need of a more extensive inquiry into the penal system in Scotland for our under 21s.
I share the relief of the Minister of State that they said that there was no criticism in their suggestions of the present staff, and that they were impressed by the dedication of governor and staff. That is a great relief to us all. But it is not a question of letting them get on with the job, it is a question of giving them the proper resources and back-up staff to do a decent job.
Lord Wilson of Langside: My Lords, the House will be indebted to the Minister for repeating this quite detailed Statement on a matter which has understandably caused so much public concern. I begin by saying that I share the hope expressed in the conclusion of the Statement that the governor and staff of Glenochil will be left to get on with their difficult and demanding task, and that the institution will be afforded an opportunity to settle down after these unfortunate events.
It so happens that a week or two ago I, along with the Scottish All-Party Penal Affairs Group, visited the institution. We were all of the mind that the dedication of the governor and staff was outstanding and was encouraging. But as the noble Lord, Lord Ross of Marnock, has indicated there are a number of questions not for the governor and staff at Glenochil but for the Government. These are of considerable relevance and cannot be passed over, or allowed not to have the attention of the House and others.
I was a little concerned at the expression of view that the working group had gone beyond their remit. Was that intended to be critical of them? I was concerned too that while some of the most important recommendations of the committee's report are accepted, and some have already been put into effect, there are still a number which are not accepted.
I readily appreciate that this is one of those many fields where instant comment is better avoided; but having said that, one is curious as to which of the recommendations are not being accepted. From the quick look at the report which those of us who are concerned were able to give it during the past hour or two, I find it difficult to be critical of any of these recommendations. I should have thought, at first sight, that it would be difficult to justify passing over any of them.
5.45 p.m.
It occurs to me that there might be scope for involving in this matter the Scottish All-Party Penal Affairs Group. I wonder whether the Government would be prepared to give serious consideration to this possibility, which might produce some constructive thinking in this whole area. The Minister will correct me if I am wrong, but as I recall there has been no thoroughgoing review of the criminal justice system in Scotland so far as the under-21s are concerned for many years.
We introduced this short, sharp, shock treatment many years before it was introduced in England. I do not recall any significant or profound examination of the criminal justice system in Scotland having taken place so far as the under-21s are concerned with particular reference to the short, sharp, shock treatment and its impact. I should have thought that the time was ripe, if not overipe, for such a review. The House would be interested to know what comment the Minister has to make on that possibility.
Lord Gray of Contin: My Lords, I am most grateful to the noble Lord, Lord Ross of Marnock, and the noble and learned Lord, Lord Wilson of Langside, for their remarks in connection with this report and for the constructive attitude they have adopted. I can quite appreciate the first point which the noble Lord,

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Lord Ross of Marnock, made when he described the tension which has built up in Glenochil and the concern of parents who have children there. At the same time, I think that a great deal of reassurance will now be available to those parents as a result of this report. Probably one of the most important things revealed by the report is that there is no question of any doubt, or shadow, being cast over the regime at Glenochil, and there is no question of any blame for these dreadful deaths being attached to the staff who were engaged there.
The noble Lord, Lord Ross of Marnock, asked how we were going to follow this up. I would say to him that we are going to follow the recommendation in the report to make full use of all the professionals who are available to us by adopting the team approach of the professionals in carefully watching, studying, and monitoring those of the inmates in Glenochil who are considered to be at risk.
As I indicated in my Statement, the Secretary of State has laid a paper with the report which sets out his initial response. I shall not go over the individual points which the noble Lord, Lord Ross, and the noble and learned Lord, Lord Wilson, put to me as to which of the recommendations we accept or not, because they are dealt with individually in the paper lodged by the Secretary of State.
Both the noble Lord, Lord Ross, and the noble and learned Lord, Lord Wilson, asked me about alternatives. Since the new sentencing arrangements for young offenders were introduced in November 1983, the daily population of convicted young offenders has been reduced by about 20 per cent.; 1,230 in November 1983, and 970 at the latest count. This is a substantial improvement, but we are continuing to develop alternatives to custody such as community service orders, and enforcement officers for fines.
I think that also answers the question which the noble and learned Lord, Lord Wilson, posed to me. I do not think he was quite correct in suggesting that nothing was being done in investigating alternatives to custody and particularly for under-21s. There is a considerable amount of work being done all the time on this matter.
The noble and learned Lord, Lord Wilson, also suggested to me that there might be a case for the Scottish All-Party Penal Affairs Group to have a look at this matter. I should not care to comment on that without a little thought, but I shall certainly pass his suggestion on to the Secretary of State for Scotland. I do not think that I wish to comment further on what has been said, but I am grateful to noble Lords for their contributions.
Baroness Carnegy of Lour: My Lords, may I ask my noble friend one further question? Much of the discussion has been about the longer-term recommendations, and my noble friend has spoken about the increase in alternative ways of treating offenders. My anxiety is about the short-term in Glenochil and what my noble friend referred to as the "aura" that has been created and the strain—the effect on the most vulnerable that there is when these things happen in succession in a short period. It turns their minds to something that perhaps otherwise would not be in
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front of them. Is my noble friend convinced that enough change can happen very quickly for the inmates and their parents to feel that something else is now their experience rather than that which has been the cause of the trouble?
In other words, can there be enough change in the atmosphere, perhaps in quite small ways, in the way the regime is conducted, to ensure that everybody, even the most vulnerable, feels that there has been a break with the old and that something new is going on? I do not mean the big things, but I believe that is possible as it has certainly been the experience in borstals, under the previous system. If that can be done it helps the most vulnerable. Can my noble friend give us any reassurance on that?
Lord Gray of Contin: My Lords, I am grateful to my noble friend. I can give her that assurance. I can assure her that everybody connected with Glenochil is very much aware of what has happened. They are all relieved that the report is as it is, and that the staff, and those most directly concerned with looking after those young people, are completely exonerated from any blame for what has happened. That in itself is significant, and I am sure it will give confidence both to those who work there and those who have youngsters there.
On the small matters referred to by my noble friend, it is significant to realise that we are dealing with a very small number of people. The vast majority of people at Glenochil are not at risk, and for the small number who are there, as I explained in the Statement, significant improvements have already been made. They can be monitored carefully both through hospital and through the cell. I believe that the combination of what has already been done along with the recommendations which will be implemented should go a long way towards giving reassurance to those who have young people at Glenochil.

Transport Bill
5.54 p.m.
House again in Committee on Clause 72.
Baroness Stedman Baroness Stedman moved Amendment No. 229ZA:
Page 75, line 25, leave out from ("who") to end of line 29 and insert ("are qualified in accordance with subsection (4A) below.
(4A) A person shall not be qualified for appointment under this paragraph unless he is:—

(a) a member of a body of accountants established in the United Kingdom and recognised for the purposes of section 161(1)(a) of the Companies Act 1948; or

(b) a member of the Chartered Institute of Public Finance and Accountancy; and

(c) approved for appointment as auditor by the Audit Commission for Local Authorities in England and Wales;

but a firm may be so appointed if each of its members is qualified to be so appointed.").
The noble Baroness said: In moving Amendment No. 229ZA I should also like to speak to Amendments Nos. 229C and 229E:
Amendment No. 229C: Clause 73; page 76, line 10, leave out from ("company") to end of line 14 and insert ("appoints only auditors who are qualified in accordance with subsection (2A) below.

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(2A) A person shall not be qualified for appointment under this paragraph unless he is:—

(a) a member of a body of accountants established in the United Kingdom and recognised for the purposes of section 161(1)(a) of the Companies Act 1948; or

(b) a member of the Chartered Institute of Public Finance and Accountancy; and

(c) approved for appointment as auditor by the Commission for Local Authority Accounts in Scotland;

but a firm may be so appointed if each of its members is qualified to be so appointed.").
Amendment No. 229E: After Clause 73; insert the following new clause:
("Duties of Auditor.
.—(1) The auditor appointed under section 72 or 73 of this Act shall by examination of the accounts and otherwise satisfy himself that the public transport company whose accounts are being audited has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources in carrying out its functions under Part V of this Act.
(2) The auditor shall comply with the code of audit practice applicable to local authorities as for the time being in force.
(3) The auditor shall consider whether, in the public interest, he should make a report on any matter coming to his notice in the course of the audit in order that it may be considered by the body concerned or brought to the attention of the public, and shall consider whether the public interest requires any such matter to be made the subject of an immediate report rather than of a report to be made at the conclusion of the audit.").
This is a group of amendments which, as we see it, raises three issues for our consideration. The first is, which group of accountants is most technically competent to conduct the audit of the new bus companies? If we cast our minds back to 1982, the Audit Commission was then created. It is now responsible for appointing the auditors to the local authorities and to similar bodies throughout England and Wales. What is happening is that some 70 per cent. of the total audit work load is carried out by the district auditors who are members of the Audit Commission's own staff. Some 30 per cent. of the total work load is being carried out by private auditors. As the Bill stands, the Audit Commission has the responsibility of appointing auditors to the new companies, but its own staff are not to be allowed to carry out this work. I cannot see the logic of that.
In Clause 73 the Bill stipulates that the appointed auditors have to be members of an accounting body which is recognised under the Companies Act 1948. This creates the anomaly because the Audit Commission staff are members of the Chartered Institute of Public Finance and Accountancy, or CIPFA as it is generally know in local authority circles. That body is not recognised under the Companies Act 1948. Yet it is the staff of the Audit Commission who are really most familiar with the work and the organisation of the municipal bus undertakings. The Water Act 1973 allowed for the audit of the water companies to be carried out by CIPFA accountants. It would seem that, because of their association with the municipal bus undertakings, they are the people most familiar with that sort of work. In the Water Act there is a legal precedent for their doing it for other bodies.
Therefore would it not be sensible to amend the Bill as we suggest, to enable the audit work to be carried out by an accounting body which is a member of the Consultative Committee of Accountancy Bodies or the CCAB? This would mean that the work was being
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carried out by properly qualified accountants and would enable the Audit Commission staff to continue to do that work which they are doing at present.
The second issue raised by this group of amendments is that of duplication. We see the possibility of duplication in audit effort and in costing the ratepayers more because both the local authority's auditor and the auditor to its bus company would need to satisfy themselves on some aspects of local authority systems or activities. On this CIPFA have done an exercise, and their estimate of the cost of duplication is that it could amount to anything between £25,000 and £50,000 per annum in audit fees.
Finally, we believe that it is right that the audit of the new bus companies should be broadly similar in content to the audit of the local authorities which own them. In local authorities the audit requirements cover the auditors' opinion as to whether the accounts give a true and fair view of the authority's financial position, and the auditors also have the job of monitoring the authority to see whether it is delivering value for money in terms of economy, efficiency and effectiveness in its services. Our amendments would ensure that the audit requirement covers the financial integrity and value for money in the new bus services. There should be this requirement to demonstrate that the bus undertakings provide value for money. Since the new companies will be subsidised to some extent by their local authorities then they will be spending local authority money or public money. Therefore they ought to be subject to the same degree of public scrutiny as other forms of public spending.
I hope that the Minister has given consideration to these amendments and that he might be prepared to accept them in the light of what I have said. But if not, I hope he will at least take them back and consider them before we reach the next stage of the Bill. I beg to move.
6 p.m.
Lord Tordoff: In rising to support this amendment so ably moved by my noble friend, an amendment to which I added my name, I should like to take this opportunity to make a slight diversion now that the noble Lord, Lord Belstead, is firmly in his place, for I know that he had many other things to do this afternoon. I wish just to go back to a matter which arose on Thursday evening under Amendment No. 211ZD. In column 962 of the Official Report of that day, 18th July last, talking about comprehensive competitive tendering, among a number of people that I referred to as being now in favour of this system I said, and I quote from that column in Hansard:
"The Association of County Councillors has now come round to the view that this is worth supporting".
That apparently is not true, and I wish to make it clear that I misinformed the Committee, and I regret that. I think that either I was misinformed or misinterpreted what had been said to me; but I have to say that I have a letter from the Association of County Councils which says:
"You may have seen our briefing note which on re-reading it I realise could be interpreted as expressing actual support for CCT. The intention of that note was to express the association's support for your diagnosis of the deficiencies in the Bill without committing us to the particular solution that you are advocating".

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I regret having misled your Lordships, but I think it is proper to say that I was slightly confused by the references from the ACC.
Let us come back to the matter before us, and let me repeat briefly some of the points my noble friend has made. As the Bill now stands, the Audit Commission is required to appoint auditors to the new companies but would not be allowed to allow its own staff to take part in that work. As my noble friend says, that seems to be illogical, and I hope that the Government on that ground alone would be prepared to make changes—not necessarily the change that we suggest, but perhaps they might like to come back with their own suggestions at the next stage.
As my noble friend said, there is a legal precedent for this under the Water Act 1973. Given that these people have familiarity with the work and that there is this precedent, we believe it would be foolish to allow the duplication of effort and the additional cost to the taxpayer which will accrue from the Bill as it now stands. The amendment has my full support.
The Earl of Caithness: I am grateful to the noble Baroness for so succinctly putting her case. While thanking the noble Lord, Lord Tordoff, for his apologies in getting it wrong the last time we were here, with due respect I think that he has got it wrong again, as I shall try to explain. We have heard it explained that, as the Bill stands, in many cases public transport companies will be audited by different auditors from the auditors of the parent authorities. I confirm that this will generally be the case because the CIPFA auditors, who are appointed by the Audit Commission to carry out the audit of most local authorities, would not be permitted to audit passenger transport companies under Clauses 72 and 73. The broad question of which accountancy qualifications are required for the audit of public companies is a matter for my right honourable friend the Secretary of State for Trade and Industry, and I hope that noble Lords will agree that we shall have to think very carefully before entering into changes to this Bill which effectively provided for exemptions to those qualifications, as these amendments would do.
Let me address myself to the arguments which have been put forward for allowing the same auditor to audit the accounts of both the authority and its public transport company. First, I do not believe we should agree that this would mean the audit being done any less effectively. There can be no doubt that both auditors must, and will be able to, satisfy themselves in carrying out their respective duties. Secondly, on the question of the cost of separate auditors, I think that we must make a distinction between the fact that an audit fee will fall on the company when it is separately established and the marginal increase in that fee which might be caused by appointing a separate auditor rather than the auditor appointed to audit the local authority accounts.
I believe that we are talking here in terms of an increase in the overall cost of the audit for the local authority's company of perhaps 20 per cent. to 30 per cent. of the existing figure for the local authority. That might be of the order of from £3,000 to £15,000 per bus company. Here I differ with the noble Baroness,
1250
Lady Stedman, who had a figure of from £25,000 to £50,000. Our calculations show it to be considerably cheaper than her estimation. I will re-check our figures to make sure that we are not wrong. I do not think that we should regard the Government's figures of £3,000 to £15,000 per company as an onerous burden, particularly when it is set alongside the cost savings which will result from competition.
I think it may also be worth pointing out in passing that some 17 of the 44 authorities with bus undertakings are already audited by firms appointed by the Audit Commission rather than by the district audit service. There would be no need to appoint separate auditors in those cases.
I should like to make more general points about the position of public transport companies formed under this Bill and the audit arrangements which are appropriate to them, for I think it is necessary to do so to respond to the arguments put forward, particularly in support of Amendment No. 229E, on the code of practice for the audits. I think the noble Baroness and the noble Lord, Lord Tordoff, in moving the amendment underrate the fundamental change in the nature of these former municipal undertakings. In the future the companies will be competing against other operators. They will not have access to the subsidy except through the tendering mechanism. In our view, that is very important. It will move the undertakings on to a quite different footing from local government or other monopolies, such as the regional water authorities mentioned by the noble Baroness. They are monopoly bodies, they are not subject to competition; so that the analogy that I think she gave is not quite right. The new companies will be operating in a competitive environment, and the competition itself will be the new means by which value for money will be achieved.
I would ask noble Lords whether they really think that the requirements for the auditor to report on economy, efficiency and effectiveness in the public interest as envisaged in the third of these amendments is necessary for a PTC and not for its competitors —that is, the other companies who are not in the local authority's ownership. I would suggest that it is not. Like all the other bus companies, the PTCs will receive payment of public money to support their services only if they win contracts for service subsidy in open competition. They will no longer be an integral part of the local authority for which direct support can be made available through the rates.
In the current circumstances where that is the case, we have the same audit machine for the municipal bus undertakings as we do for the local authorities themselves. But that would not be appropriate once the provisions of this Bill on company formations have taken effect. I would also suggest that this Bill should not be used to make changes for public transport companies alone. There are other local authority companies which have been formed, for example, to run theatre businesses. I must tell the Committee that they have always been audited as companies under the Companies Act, as we propose in this Bill, and not under the régime proposed in these amendments. It would be open to the directors of a public transport company or the local authority's controlling shareholder to commission a value for money audit if

1251
they felt that this was in the interests of the company. But I must ask the noble Baroness and the noble Lord, Lord Tordoff, to accept that we are requiring companies to be established under this Bill and the correct arrangements for their audit, as for their competitors, are provided for in the Companies Act without need for special provisions as proposed by the amendment.
On one particular point, if I can take up the noble Baroness, Lady Stedman, she is not quite right in saying that under the Bill as it stands the Audit Commission will appoint the PTC auditors. The position is that the controlling authority controls the appointment of the auditors. It must secure the appointment of qualified auditors, and these auditors must be approved by the commission. That is a small difference from what she said, but it is an important difference. In the light of what I have said, perhaps the noble Baroness will see fit to withdraw her amendment.
Baroness Stedman: I am grateful to the noble Earl for his full reply. I hope I was not implying that the audit would be any less effective if it were not done by CIPFA people. What we are arguing is that it would be a duplication of costs, and there is obviously a difference of opinion between us as to what that cost is—whether it is £3,000 to £15,000 per bus company of £25,000 to £50,000 per annum overall. That is something I should like to take back, as the noble Lord has offered to do, and check on those figures as well.
I do not see why it is less important not to have the same standards of value for money in the audit that is being done for the new bus companies as it is for local authorities as they stand today. I think it is just as important for the public and for the companies to know that they are getting value for money in these new services that are being set. While the noble Earl says they can have a report—pay for a report presumably for CIPFA to do a value-for-money report for them—it is not quite the same thing as having those kinds of auditors who will have those standards to work to and who are normally working to those standards. We were not suggesting that all the auditors who do the work would have to be CIPFA auditors and indeed I would remind the noble Earl that I said they do 70 per cent. of the audit work now while the other 30 per cent. they appoint outside auditors to do now. Presumably the same sort of proportions could very well apply with the new bus companies. But I think it is important that those auditors who are used to working with the local authority and used to working to those standards are the ones that are also available for choice, if wanted, even if they have to be approved by the Audit Commission and not appointed by them. There are some things here I should like to look at again, and that being so, with the leave of the Committee, I should like to withdraw the amendment tonight.
Amendment, by leave, withdrawn.
[Amendment No. 229A not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 229B:
[Printed earlier.]
The noble Earl said: I beg to move this amendment. I spoke to it with Amendment No. 215A.
On Question, amendment agreed to.
Following is the text of the amendment (No. 229B):
Page 75, line 41, leave out ("wholly-owned").
Clause 72, as amended, agreed to.
Clause 73 [Local authority financial controls in Scotland]:
[Amendment No. 229C not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 229D:
[Printed earlier.]
The noble Earl said: I beg to move this amendment. I spoke to it also with Amendment No. 215A.
On question, amendment agreed to.
Following is the text of the amendment (No. 229D):
Page 76, line 21, leave out ("wholly-owned").
Clause 73, as amended, agreed to.
[Amendment No. 229E not moved.]
Clause 74 [Provision of services for public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 229F:
[Printed earlier.]
The noble Earl said: I beg to move this amendment, which I spoke to in connection with Amendment No. 215A.
On Question, amendment agreed to.
Following is the text of the amendment (No. 229F):
Page 76, leave out line 27 and insert (", or with any subsidiary of an associated company, for the provision by that Executive or council for that company or (as the case may be) for that subsidiary").
[Amendment No. 230 had been withdrawn from the Marshalled List.]
Clause 74, as amended agreed to.
Clause 75 [Financial backing for establishment and operations of public transport companies]:
[Amendment No. 231 had been withdrawn from the Marshalled List.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 231A and 234A:
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move Amendments Nos. 231A and 234A together, with the leave of the Committee. I spoke to both these amendments in connection with Amendment No. 211CN.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 231A and 234A):
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").
Page 77, line 26, leave out ("and") and insert ("or").
[Amendments Nos. 232 to 234 had been withdrawn from the Marshalled list.]
Clause 75, as amended, agreed to,
Clause 76 [Duty of Passenger Transport Authority not to inhibit competition]:
[Amendment No. 239 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 239A:
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move this amendment. It was discussed with Amendment No. 211 CN.
On Question, amendment agreed to.
Following is the text of the amendment (No. 239A):
Page 78, line 25, leave out ("and") and insert ("or").
Clause 76, as amended, agreed to.
[Amendment No. 240 not moved.]
6.15 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 240A:
After Clause 76, insert the following new clause:
("Securing of public passenger transport services by local authorities and Passenger Transport Executives
.—(1) This section shall have effect for facilitating the carrying out by the following authorities (hereinafter referred to as "relevant authorities") of their duties to secure the provision of public passenger transport services (whether or not including railway services and ferry services) for their areas, that is to say—

(a) local authorities on whom duty is imposed under subsection (1)(a) or (2)(a) of section 61 of this Act, in respect of that duty; and

(b) Passenger Transport Executives, in respect of their duty under section 9A(1) of the 1968 Act.

(2) Each relevant authority shall prepare particulars of the services they consider it appropriate to secure to meet the public passenger transport requirements of their area, and shall from time to time, not later than every fifth year after the end of the transitional period (as defined in paragraph 1(1) of Schedule 5 to this Act), review such particulars.
(3) The preparation and review of the particulars of appropriate services under subsection (2) above shall be carried out by the relevant authority for any area in consultation with the relevant authorities for adjoining areas (and, in the case of a Passenger Transport Executive, in consultation with the Passenger Transport Authority for their area) in addition to the consultation required in pursuance of section 61(4) or any other enactment.
(4) As soon as may be after sections 6 to 9 of this Act have been brought into force, and on completion of each review of the particulars of appropriate services under subsection (2) above, each relevant authority shall publish, in one or more local newspapers circulating in their area, notice of the appropriate services within, to or from their area and, not later than the first such publication, send a copy of the notice to the traffic commissioner for their area and to all persons who have notified the relevant authority in writing that they wish to receive it.
(5) On receipt by the traffic commissioner of a copy of the particulars of appropriate services under subsection (4) above, the traffic commissioner shall, notwithstanding any limitation on his power to determine such conditions under section 7 of this Act, determine traffic regulation conditions which must be met in the provision of services in the area to which the particulars apply, being conditions regulating, as provided in section 7(6), the routes of such services, the stopping places for such services and the frequency of such services.
(6) Where a service is registered under section 6 of this Act or any such registration is varied, or cancelled, the traffic commissioner shall send notice of the registration, variation or (as the case may be) cancellation, together with particulars of the service, to every Passenger Transport Executive in whose area the service will or has run, as well as to local authorities in accordance with section 6(9) of this Act.
(7) On the receipt by a relevant authority of notice of the registration of a service, being a registration in pursuance of an application made to the traffic commissioner under section 6 within the period of 42 days beginning on the date of first publication of notice of the appropriate services under subsection(4)
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above, the relevant authority shall notify the person who has registered the service of any extension or modification of the service which they consider appropriate to meet public passenger transport requirements and may enter into agreement with him for the provision of such an extended or modified service on such terms as may be agreed.
(8) An agreement for extension or modification of a service under subsection (7) above shall not, for the purposes of this Act, be taken to be an agreement providing for service subsidies.
(9) The foregoing provisions of this section shall have effect, notwithstanding section 61(3) of this Act and section 9A(2) of the 1968 Act, and the powers of a relevant authority to enter into agreements providing for service subsidies in accordance with sections 83 to 86 of this Act shall be exercised subject to compliance with this section.").
The noble Lord said: The aim of this new clause following Clause 76 is to provide a mechanism by which services provided commercially and subsidised services secured after tendering can be drawn together by local authorities when considering the public transport requirements of the area of the local authority, looking at it as a whole. It also allows local authorities in the shires and the PTEs in the conurbations to take account of any local train or ferry service.
Perhaps I might give an idea of the philosophy behind the new clause. First, the local authority would state its views on the network required to meet the needs of its area in the judgment of the local authority. Secondly, the operators will respond by registering their commercial services, which may include services which the local authority may not have specified. It still leaves freedom to the private operator to decide whether he wishes to provide other services. Thirdly, the local authority and the operator could then negotiate on any minor amendments to the commercial network which would meet additional needs in a cost-effective manner. The authority would pay for its additional requirements at marginal cost in such areas. Fourthly, services to meet any requirements remaining unmet would be put out to competitive tender, as required in the Bill.
There are some services which are clearly commercial and others which are clearly non-commercial. However, there is another group of services in the middle which can be commercial at certain levels of frequency and at certain fares and the cost of providing them, but which at other levels would not be commercial. The commercial level of service may be adequate to meet the needs of the area, but this interface will be ever moving as the margin commercial services fluctuate. There is a grave risk of instability and of the travelling public not knowing who is going to be providing the service, what the service may be or what colour of bus they may expect to come along. Some kind of standardisation and some investigation of this from the centre is required.
Particulars of the services to be provided commercially or on a tendered-for basis would be published by the local authority as their stab at what they feel the service for the area should be. This could usefully be done in the form of a map and an accompanying schedule of frequency, and so on. In addition, this information would be sent to the appropriate traffic commissioner—or traffic commissioners, if more than one area were involved—to any existing or intending operator who required it. The publication of the map would be a

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signal to all potential operators of services in the area of the relevant authority's view of the overall requirements of the area as they saw them.
While that might influence the choice of some operators in the service registers, it has to be stressed—and I stress it again—that the idea of the clause is not in any way to inhibit the operators. They would not need to adhere to the map: they could register any service, whether or not the local authority had included it on the map. The map would also draw attention to other public transport services, such as railways or ferries, and the role which local authorities saw for them within their areas.
In effect, the new clause provides a mechanism for small variations in service: for example, to deviate from the main route to serve a hosptial or to extend a route from the town centre to a railway station, to be secured at marginal cost, rather than putting out to tender a full service specification which would be likely to be tendered for on the basis of fully-allocated costs. Any requirements of the area which were not met by commercial services or by negotiated variations on the main commercial services would then be secured through tendering under Part IV of the Bill. That is made clear in subsections (8) and (9) of the new clause.
I believe that the adoption of this procedure retains all the advantages of competitive tendering and of encouraging operators to exercise their own commercial judgments, while at the same time allowing local authorities to make clear at the outset the views they have on the sort of service they envisage for the area. I think that it would also considerably streamline the administration and the running in of the new type of service towards which the whole Bill tends to lean. I therefore hope that the Minister will give it very serious consideration at least in substance, even if some of the wording is perhaps not to his liking. I beg to move.
Earl De La Warr: I think the noble Lord, Lord Carmichael, does very well to point out the need for some mechanism, which does not appear to be in the Bill, in order to enable the commercial and the non-commercial services to mesh in with each other. I can see in this amendment nothing but a helpful suggestion. The local authority traffic departments have immense knowledge of the routes that are currently being run and I should have thought that operators and traffic commissioners would have benefited enormously from the early statements in detail of their views—the map, as the noble Lord, Lord Carmichael, says. Because it is an early statement, surely it means that difficulties which might otherwise arise, or gaps which might occur, will be pre-empted by the existence of this map and by the ability of local authorities—the traffic commissioner—to talk with operators about their plan so that as near as possible we get a smooth operation right from the start.
It seems to me, too, that although these may be on a small scale, if I may use the language of the noble Lord, Lord Carmichael, "many a mickle makes a muckle", and it may well be that this will add up to a considerable minimising of the routes which require to be subsidised, because the maximum use will be made of the commercial routes. It seems to me that this can
1256
be described as a mechanism that will do much—as I would call it—to ease the birth pains of this new arrangement.
The noble Lord, Lord Carmichael, said, too, that this would be entirely voluntary. As I see this amendment, it is important to emphasise that. I would say to my noble friend that I am somewhat doubtful about subsection (5) in this amendment because it mentions what the traffic commissioner shall do by way of determining regulation conditions. As I see the rest of the amendments it is essentially helpful and providing suggestions for voluntry implementation. I therefore commend this to the Government as being in every way something helpful in view of the fact that this is missing at the moment from the Bill.
Baroness Carnegy of Lour: I am not sure if I understood clearly what the noble Lord, Lord Carmichael, was saying. I may have misunderstood. It seems to me that this is at any rate in part, an attempt to return to the system which at the present time I think most noble Lords in the Committee agree is not working to the maximum benefit of the public. That is the system where the local authority and the existing operators can get together to make a deal; and then if some routes are left out other people come in.
The noble Lord, Lord Carmichael, said that some routes are clearly commercial and some are not. Looking at the existing system, I would agree that at one time that is how it looked. But, in the light of what the Bill is attempting to do—to provide that, where a route has very few travellers on it, it may be catered for by a minibus, a taxi or a bus operating in a quite different way with a much greater flexibility—I am not sure that the local authority is in a position to know what is commercial and what is not. The person who is in a position to know is the person who looks at it and says, "Can I do this in a way that will be attractive to the public and will leave me sufficient profit?" That is what the Bill is trying to bring about.
With the system which is being proposed now—if I understand it correctly—the local authority sits down at its transport committee and agrees a map. The map is not only the work of the director of public transport; it is also the work of the elected members. I am trying to think how the elected members will react to making that map. They will not want to be proposing a map which does not include routes which their constituents want. So there will be a political process. If I understand correctly—the noble Lord will put me right if I am wrong—there will be some political input into the drawing-up of the map for a start; and the official will be the one who is saying, "This is commercial and this is not," rather than the operators. Therefore the framework on which people come in and say they would like to operate has a political rather than a commercial basis.
Having done that, as I understand it, the operators come in by arrangement with the local authority. It is not simply a desire of those people to run a route because they think it will work. They are coming in to make an arrangement with the local authority to supply what they think they need. I should like to know whether the noble Lord thinks that that is the most cost-effective way of getting new, greatly-improved coverage of routes in the local authority and getting new operators, rather than simply the old

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discussion between the "big boys" and the local authority after the drawing up of the map. I may have misunderstood and, if so, I am sorry if I have wasted the time of the Committee. But this matter bothers me about the amendment.
Lord Tordoff: The noble Baroness is quite right. This is a complex amendment. It is perhaps not easy to see precisely what the meaning is, although the noble Lord, Lord Carmichael, has expressed it as clearly as anyone could. I wonder if I may be of some assistance to the noble Baroness, because it seems to me that what is being suggested here is a change from the rather black-and-white system which is included in the Bill at the moment and which says, "This is commercial, and this is not", to a process which is more iterative. In other words, there is a discussion period which goes on in the early stages of the formation of a new map—"map" is perhaps the wrong word—:but there is a new group of services, some of which will be commercial and some of which will be supported by the local authorities.
6.30 p.m.
The problem is that it may well be that commercial undertakings will decide that they wish to run a particular route; and one is perhaps thinking of a rural area. The local authority knows from its knowledge, and indeed from its political knowledge—I think that the word "political" is perhaps not the right one to use. But from its knowledge of its constituents, rather than from a political viewpoint in a party political sense, it knows that if a bus route were diverted through a certain village it might make it less commercial, but it might save the council from having to subsidise a much longer route from a totally subsidised service. In other words, a partial subsidy of part of a route might solve a lot of problems.
The object of this amendment, as I understand it, is to allow that negotiating process to take place at an early stage, before the whole network gets set in concrete. It is not an attempt in any way to inhibit commercial competition, but it is a way of integrating the subsidised services into the commercial services in a way which is meaningful. I do not know whether that helps the noble Baroness, but that is how I understand the purpose of this amendment.
Baroness Carnegy of Lour: Apart from publishing a map, what is different from the initial stages at the moment?
Lord Teviot: This is one of the most interesting parts of the afternoon. We are coming back to what one might call an argument. I agree with the noble Lord, Lord Tordoff, but I must turn to my noble friend Lady Carnegy. She will interrupt me if I am wrong, but I think she is saying that if we accept this amendment it will stop the new people coming in. She thinks that the new operator will not be able to look at a map or think up a new service and provide for a market which he thinks is there. On the other hand, she says that if we accept this amendment the members of a local authority will think of their constituents. She says that the new commercial man will think of what the public wants, but then the local authority will look at what
1258
the constituents want. I am not sure about that argument.
One point that my noble friend has made about the philosophy behind this Bill is that this is something which is entirely new, but is very speculative and high risk. I do not think anybody is in disagreement that this is a very high risk measure. But the Government have done many of these things in other areas and I absolutely applaud them. However, this amendment has the approval of other bodies which have gone along with the Government.
I can mention the Association of County Councils; and I am speaking on this amendment because my noble friend Lord Monk Bretton is away. The association feels that there is a very strong need for the provision to be inserted in this Bill. The present main statutory—I am sorry, but I am reading the wrong brief. However, I can say that the Association of County Councils is very much in favour of this Bill. Perhaps I can finish there and come back afterwards, because I notice that my noble friend on the Front Bench is raring to go and to tell us all.
Lord Tordoff: May I come back to the noble Baroness? She asked: what is different? As I read the Bill, the situation is that at the moment it is a two-stage process. The first stage is that competition is allowed to have its full play and then, when the local authorities see how the chips have fallen, they look at their area and say, "There are gaps here. There is a service that needs to be provided there, so we will put that out to tender on a supported basis". The danger with that is that you may have more local authority supported services than you need. This is a method by which, at an earlier stage, there can be some integration of the two types of service which will, in the end, save the taxpayer money.
Baroness Carnegy of Lour: If I may come back, my question was not, what is different about the Bill, but, what is different from the old system which does not work? That is what I was asking. It seems to me that this amendment is completely against the spirit of the Bill. Of course, the Association of County Councils would like to have it, because it is making all the decisions. I dare say that the big bus companies would like to have it, because they are making all the decisions. The truth of the matter is that when you start from that premise you do not get an improved service. That is my problem.
Lord Tordoff: The noble Baroness is surely wrong, because within the Bill there is deregulation, and this is not stopping deregulation. That is the difference between what is in the Bill and what went before and what is in the Bill with this amendment.
Earl De La Warr: I can see why my noble friend has some doubts, but may I put these two points to her? First, this is a guide prepared for all operators of the totality of services which the local authority thinks ought to be run and it is prepared, as I see it, without taking a view one way or the other as to what sort of operator is to run a service. As applications for registration come in, the map is, so to speak, marked up and the gaps emerge which can be the subject of fruitful conversations. But there is no compulsion nor,

1259
when the map is drawn up, does the local authority consider whether a service will be run non-commercially or commercially. That will emerge when the registrations are done.
So I think that my noble friend is seeing in the amendment something that does not exist. It is totally voluntary and the operator does not have to consult anybody, unless he wants to. If the local authority wants to consult an operator, it is all consultation. There is nothing in this clause which requires the operator even to take account of somebody else's views. It is purely mechanistic.
Lord Belstead: I think we ought to remember in looking at this amendment, which has been very persuasively moved by the noble Lord, Lord Carmichael, that this is a Bill which seeks to give passenger transport executives and local authorities very important functions. But the role of the local authorities is to supplement the market by using public money to secure only services which would not otherwise be available without public support. Authorities will also have powers to co-ordinate both commercial and non-commercial services, but this will be on the basis of free co-operation with operators, rather than on the basis of compulsion.
The exchanges which have been going on in the last five minutes or so have been all about whether behind this clause is the iron fist. If I may say so, it is there, for the purpose of this clause is to stand the main intention of the Bill on its head, by putting passenger transport executives and county councils in the dominant role in determining the pattern of services in their area.
Despite the arguments which the noble Lord put forward very persuasively about the desirability of having a planning map produced by the local authority, the effect of this new clause is that operators who wished to provide commercial services would be required to conform to the map published by the local authority. The authority would then secure the noncommercial services that it considered appropriate by negotiating extensions or modifications to the commercial services, without having to go out to tender at all. My conclusion, therefore, is that my noble friend Lady Carnegy is right to criticise this amendment as being a return to a planned system which has not succeeded.
My noble friend Lord Teviot said that we have come back to the meat of the Bill. Do not let us forget that we are talking about a system which, despite the devoted service of people in the bus industry all over the country, has brought us to the pass whereby the number of passengers has plummeted, the cost to the country has escalated and—my goodness me—fares over the country in the last 10 years or more have gone up by 30 per cent. above the rate of inflation. We are not talking about a system which has succeeded.
What does the amendment try to do? My noble friend Lord De La Warr says that its purpose is to provide a measure of co-ordination with the local authority at the helm, with nobody being forced to do anything and everything being done by agreement. If my noble friend cares to look at Clause 61(7) he will be reminded that there are adequate powers there for the local authority to co-ordinate services for the good of its area in the way that it thinks it ought to. If the
1260
proposition is that co-operation under this new clause is voluntary, all I can say is that the new clause is not adding very much to Clause 61(7).
With respect to my noble friend, this is not really the case. This new clause would give a very large measure of control to the local authority. At least under the present system an operator is free to apply for a road service licence, and the local authority can prevent the service only if it can demonstrate to the traffic commissioner that it would be against the interests of the public. That at least allows some scope for enterprise and initiative to operators to meet the needs of the customer.
Let us see what the new clause puts in the way of a man who simply wants to run a bus. First of all, if one looks at subsection (5) of the new clause one finds that this splended map, having been published, is then sent to the traffic commissioner. The traffic commissioner, presumably having regard to the map, will then,
"determine traffic regulation conditions which must be met in the provision of services in the area to which the particulars apply, being conditions regulating, as provided in section 7(6), the routes of such services, the stopping places for such services and the frequency of such services".
So the first hoop is that the poor old operator has to see the map which the local authority has produced going off to the traffic commissioner; and the traffic commissioner, having regard to the map and presumably only to the map and not to the desire of any of the operators whom we want to encourage under this Bill, would then be given a brand new power which is not to be found in Clause 7 of the Bill over which we spent hours earlier on. It is a brand new power. The traffic commissioner would hold up the map and say, "In the light of this splendid map which the local authority has produced, I shall now lay down where the stopping places are going to be, the frequency of the service, and, my goodness me!the routes of the service". So much for voluntary co-operation.
What about the second hoop through which the operator has to go?
Earl De La Warr: Will my noble friend give way?
Lord Belstead: No, not for a moment; not until I have gone through my second hoop.
Back comes the map. What happens then? Let us turn to subsection (7) of this little mouse of a new clause:
"On the receipt by a relevant authority of notice of the registration of a service, being a registration in pursuance of an application made to the traffic commissioner under section 6 within the period of 42 days beginning on the date of first publication of notice of the appropriate service under subsection (4) above, the relevant authority"—
that is the local authority—
"shall notify the person"—
that is the poor old operator—
"who has registered the service of any extension of modification of the service which they"—
that is the local authority—
"consider appropriate to meet public passenger transport requirements".
The local authority,
"may enter into agreement with him"—

1261
that is the operator—
"for the provision of such an extended or modified service on such terms as may be agreed".
It is absolutely clear that what is going to happen is that the local authority on the return of the map will turn to operators and say, "We are sorry, but some of the things which you want to do have slipped past the traffic commissioner and we are now going to come to you and say that there have to be further changes in the services that you wanted to run". If the operator stands up and says, "I don't agree with you", we are not told in this new clause what will happen. But presumably the local authority will go back to the traffic commissioner once again, will hold up the map for a second time and say, "Operator A refuses to agree with us and therefore will you now force him to agree with us by putting traffic regulation conditions on him which you failed to do the first time?" I do not like this clause and I hope I have given the reasons why not.
6.45 p.m.
Earl De La Warr: My noble friend wagged his finger at me as he referred to subsection (5), forgetting perhaps that I had referred him to it. I said right at the beginning that I have some doubts about subsection (5). My noble friend is quite right because in the final analysis that would happen. My commendation of this clause was clearly qualified by the fact that I did not find that acceptable, but I do find acceptable the pre-publishing of a map and all the voluntary mechanism that goes with it.
Lord Tordoff: I should like to pick up the point that the noble Lord the Minister made. The noble Lord raised a tremendous spectre in front of us, but when he was reading subsection (7) I noticed that in the last two and a half lines the word "may" appeared twice. I did not notice that the stress on the word "may" was quite so firm as the stress made on the other parts of the subsection that he was reading out.
As I see it, "may" subsumes the words "may not". There is no question but that that is permissive. It is not a great bureaucratic stick with which the poor owner, poor fellow, to whom the noble Lord keeps referring, will be beaten around the ears. It says "may", and it says "may" twice: He,
"may enter into agreement",
which presumably also means that if he so wishes, he may not enter into an agreement. The subsection also says,
"for the provision of such an extended or modified service on such terms as may be agreed".
The words "may be agreed" also in my view include "may not be agreed".
Lord Teviot: My noble friend will not be surprised if I do not let him get away entirely with his very impressive soliloquy in condemning this amendment. I want to say one or two quite minor things. My noble friend refers to the operator. I talked only this morning with the Bus and Coach Council which serves a large majority of operators. One of its largest groups happens to be the independent operators. Like my noble friend Lord De La Wan, they were a little happy about subsection (5), but only about that.
1262
They felt that if it was in the public interest and the service had to be provided, then that was absolutely fine.
Coming back to the local authority point, they are dealing with the needs of the public as they see them at the moment. They can only go so far with the spirit of the Bill. Now some splendid people are to come in. On the experiment so far, no splendid people have come in. They may come in. I am sure that if they last and are satisfactory then that will be splendid, but it is not going to be today or tomorrow. It might be in two years' time.
Lord Carmichael of Kelvingrove: I am most disappointed with the Minister. The noble Lord made the accusation that we were trying to introduce an iron fist. I had the feeling while he was speaking—and this is most unlike him—that he was using an iron fist on the amendment. He showed an aggressiveness which is most unlike him. I think that the aggressiveness clouded his thinking. Every local authority that is a traffic authority, whether it is a PTE or a county council, will need to produce a map, whether before or after. It is the only way to look at an area and get a picture of it, unless you have a particularly analytical mind and can read all these routes from a timetable. A map is needed.
What we are suggesting in the amendment—and I think that this is also an answer to the noble Baroness, Lady Carnegy of Lour—is that a network, or some sort of idea, would need to be in the local authority's mind. It will know roughly the sort of area it wants to have served. How it is served is a matter for the market. There is no question but that the market would decide it. The people who organise transport, the professionals in the transport business in every part of the country, know their jobs and they know that there are certain routes that must be followed.
I made it quite clear, and the amendment makes clear, that the map is in no way binding. At any time, right from the beginning, an operator can decide not to run a service in a certain way. He can say, "I have a better idea. I think I can serve this area in a different way." I believe that we are trying to be helpful. There is no need to adhere to the map. Anyone who has a private service operator's licence can use it on any route he likes.
The Minister made great play about the bogeyman of the traffic commissioner and the need to go back to the traffic commissioner. The noble Lord, Lord Tordoff, clearly explained that. He made it clear that we use the word "may" on every occasion—that the local authority "may" enter into agreements with an operator. Surely it is commonsense, if an operator is going within one or two miles of a village or hospital, that the local authority should be able to say to the operator, "Let us discuss this. We believe we need a service right to the hospital or right to the village." It is up to the operator whether or not he accepts it. However, the local authority—and this is perhaps where the importance of the power would come in—would then say that it still needs a service to the area concerned and some accommodation would need to be made. Either the operator would have to enter into negotiations or the local authority would need to find someone else to operate the service if it believed it to be necessary.

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I refer the Minister, as he referred me, to Clause 7(6) which contains all the powers that the Minister accused me of handing to the traffic commissioner. They are already in the Bill. Subsection (6) states:
"The purposes for which traffic regulation conditions may be determined are the regulation of—

(a) the routes of services;

(b) the stopping places for services;

(c) when vehicles used in providing services may stop at such stopping places and for how long they may do so; and

(d) such other matters as may be prescribed.".

I think that if the Minister looks again at the Association of County Councils he will see that subsection (7) provides a mechanism for local authorities to do precisely what Ministers have repeatedly argued they should do: that is, meeting social need wherever possible by cost effective augmentation of the commercial services but which, under the Bill as it stands, would be very difficult to achieve in practice. It would certainly be very difficult to achieve within the timescale that the Minister is suggesting. The new clause would streamline the procedure and when the time comes would perhaps get things moving much more smoothly than I fear will be possible if the Bill remains in its present form. I feel that we must test the Committee on this amendment.
6.54 p.m.
On Question, Whether the said amendment (No. 240A) shall be agreed to?
Their Lordships divided: Contents, 97; Not-Contents, 104.

DIVISION NO. 1

CONTENTS

Airedale, L.

Grey, E.

Ardwick, L.

Grimond, L.

Attlee, E.

Hampton, L.

Avebury, L.

Hanworth, V.

Aylestone, L.

Harris of Greenwich, L.

Bacon, B.

Hatch of Lusby, L.

Banks, L.

Hirschfield, L.

Barnett, L.

Hooson, L.

Beaumont of Whitley, L.

Houghton of Sowerby, L.

Birk, B.

Howie of Troon, L.

Blease, L.

Hughes, L.

Boston of Faversham, L.

Irving of Dartford, L.

Bottomley, L.

Jacobson, L.

Brooks of Tremorfa, L.

Jacques, L.

Caradon, L.

Jeger, B.

Carmichael of Kelvingrove, L.

John-Mackie, L.

Cledwyn of Penrhos, L.

Kilmarnock, L.

Collison, L.

Kirkhill, L.

Crawshaw of Aintree, L.

Kirkwood, L.

Darling of Hillsborough, L.

Kissin, L.

Darwen, L.

Llewelyn-Davies of Hastoe, B.

David, B.

Lloyd of Kilgerran, L.

Davies of Leek, L.

Lovell-Davis, L.

De La Warr, E.

McIntosh of Haringey, L.

Dean of Beswick, L.

Mackie of Benshie, L.

Denington, B.

McNair, L.

Diamond, L.

Mellish, L.

Elwyn-Jones, L.

Milner of Leeds, L.

Ennals, L.

Moyne, L.

Ewart-Biggs, B.

Murray of Epping Forest, L.

Falkender, B.

Nicol, B. [Teller.]

Falkland, V.

Ogmore, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L.

Gallacher, L.

Prys-Davies, L.

Galpern, L.

Roberthall, L.

Gladwyn, L.

Robson of Kiddington, B.

Graham of Edmonton, L. [Teller.]

Rochester, L.

Ross of Marnock, L.

Gregson, L.

Seear, B.

1264

Shackleton, L.

Taylor of Mansfield, L.

Shepherd, L.

Teviot, L.

Silkin of Dulwich, L.

Tordoff, L.

Simon, V.

Turner of Camden, B.

Stedman, B.

Underhill, L.

Stewart of Fulham, L.

Wallace of Coslany, L.

Stoddart of Swindon, L.

Wedderburn of Charlton, L.

Strabolgi, L.

Whaddon, L.

Taylor of Blackburn, L.

Wise, L.

Taylor of Gryfe, L.

Young of Dartington, L.

NOT-CONTENTS

Alport, L.

Layton, L.

Ampthill, L.

Lindsey and Abingdon, E.

Arran, E.

Long, V.

Atholl, D.

Lucas of Chilworth, L.

Bauer, L.

McFadzean, L.

Beloff, L.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Bessborough, E.

Margadale, L.

Bethell, L.

Marshall of Leeds, L.

Birdwood, L.

Massereene and Ferrard, V.

Brabazon of Tara, L.

Maude of Stratford-upon-Avon, L.

Brougham and Vaux, L.

Broxbourne, L.

Merrivale, L.

Bruce-Gardyne, L.

Mersey, V.

Caithness, E.

Mottistone, L.

Cameron of Lochbroom, L.

Murton of Lindisfarne, L.

Campbell of Alloway, L.

Napier and Ettrick, L.

Carnegy of Lour, B.

Newall, L.

Cathcart, E.

Norfolk, D.

Chelmer, L.

Nugent of Guildford, L.

Chelwood, L.

Orkney, E.

Coleraine, L.

Plummer of St. Marylebone, L.

Colwyn, L.

Constantine of Stanmore, L.

Poltimore, L.

Cork and Orrery, E.

Polwarth, L.

Cox, B.

Rankeillour, L.

Craigavon, V.

Reay, L.

Denham, L. [Teller.]

Rochdale, V.

Dilhorne, V.

Rodney, L.

Donegall, M.

Romney, E.

Drumalbyn, L.

Saltoun of Abernethy, Ly.

Eden of Winton, L.

Sanderson of Bowden, L.

Elliot of Harwood, B.

Sandford, L.

Elliott of Morpeth, L.

Sandys, L.

Ferrers, E.

Savile, L.

Fortescue, E.

Selkirk, E.

Fraser of Kilmorack, L.

Shannon, E.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Stockton, E.

Gowrie, E.

Suffield, L.

Gray of Contin, L.

Swinfen, L.

Greenway, L.

Swinton, E. [Teller.]

Gridley, L.

Torphichen, L.

Harmar-Nicholls, L.

Trefgarne, L.

Henley, L.

Trumpington, B.

Hives, L.

Tryon, L.

Hood, V.

Vaux of Harrowden, L.

Hooper, B.

Vivian, L.

Hylton-Foster, B.

Whitelaw, V.

Inglewood, L.

Wynford, L.

Killearn, L.

Young, B.

Kimball, L.

Young of Graffham, L.

Lane-Fox, B.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.
The Earl of Caithness: I beg to move that the House do now resume. I also confirm that we shall not come back for further consideration of the Transport Bill until 8 o'clock.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Trustee Savings Banks Bill
7.3 p.m.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): My Lords, I beg to move that the Commons amendments and Reason be now considered.
Moved, That the Commons amendments and Reason be now considered.—(The Earl of Gowrie.)
On Question, Motion agreed to.

Trustee Savings Banks Bill
  COMMONS AMENDMENTS AND REASON
  [References are to Bill (92) as first printed for the Lords. The Commons, amendments and Reason are printed in italics.]

  LORDS AMENDMENT
  1 Clause 1, page 1, line 9, after ("banks") insert ("other than Trustee Savings Bank Scotland Limited which is hereby excluded from this Act")
  The Commons disagreed to the above amendment but proposed the following amendments in lieu thereof
  2 Page 2, line 11, leave out from ("and") to end of line 13 and insert ("eligible to succeed them")
  3 Page 2, line 30, after ("business") insert ("and eligible to succeed it")
  4 Page 2, line 35, at end insert—
  ("( ) For a company to be "eligible to succeed" an existing hank it must have been, immediately before the vesting day, a subsidiary of the Central Board or the existing holding company and it must—

  (a) in the case of the company which is to succeed the existing bank for England and Wales, be registered (and accordingly have its registered office) in England and Wales;

  (b) in the case of the company which is to succeed the existing bank for Scotland, be registered (and accordingly have its registered office) in Scotland;

  (c) in the case of the company which is to succeed the existing bank for Northern Ireland, be registered (and accordingly have its registered office) in Northern Ireland; and

  (d) in the case of the company which is to succeed the existing bank for the Channel Islands, be incoroporated (and accordingly have its registered office) in any of the Channel Islands.")

  The Earl of Gowrie: My Lords, I apologise to the House. I am caught at a disadvantage. It was my understanding that I was to reply to an amendment moved by the noble Lord, Lord Banks. Am I wrong about that?
  Noble Lords: Yes!
  The Earl of Gowrie: I beg your Lordships' pardon. My Lords, after that not very auspicious beginning, may I now consider Commons Amendments Nos. 2 to 4 on Clause 1? I beg to move that this House do not insist on their Amendment No. 1 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 2 to 4 in lieu thereof.
  These amendments reflect the agreement reached between the noble Lord, Lord Taylor of Gryfe, and the chairman of the Trustee Savings Bank Central Board. This House discussed this agreement at some length at Third Reading, and the Government undertook to bring forward these amendments in another place as the rules of procedure in your Lordships' House prevented us from moving them on Third Reading here. My Lords, I beg to move.
  Moved, That this House do not insist on their Amendment No. 1 to which the Commons have disagreed and do agree to the Commons Amendments Nos. 2 to 4 in lieu thereof.—(The Earl of Gowrie.)
  Lord Stoddart of Swindon: My Lords, it seems to me that the Commons amendments in fact take care of the agreement which was set out in the Written Answer to the noble Lord, Lord Taylor of Gryfe, on the 4th July, and I think we can be satisfied that the assurances that were given have in fact been met. But I am wondering whether it would be in order for me to raise with the noble Lord a new factor which seems to have arisen since the matter was discussed in your Lordships' House, and indeed was referred to during the Commons debate on the Lords amendments. It arises from a letter which I have received and which no doubt other noble Lords have received from Mr. Mungo Bovey. Perhaps I may quote some passages from his letter. He writes:
  "I am writing to you as one of the counsel involved in the action in the Court of Session whereby a Depositor in the Trustee Savings Bank Scotland seeks a decision from the Court that the depositors are the owners of that Bank".
  He goes on to say:
  "In 1979 the Central Board of the Trustee Savings Bank took the opinion of Mr. John Murray, QC … Mr. Murray advised in unequivocal terms that in Scots Law the Bank was a voluntary unincorporated association owned by its depositors".
  At that time, apparently, the advice was accepted by the bank but subsequently the bank took a different decision.
  Noble Lords will recall that we had quite a debate on this issue during the Committee stage and many noble Lords took part. Indeed, many noble Lords, including the noble Lord, Lord Taylor of Gryfe, queried who it was who actually owned the bank, and the Minister seemed quite certain that the Bill was in order. This new element seems to raise other issues, and bearing in mind this letter and the contention that this Act could be a confiscatory Act, taking away from the depositors something which they own, I am wondering whether the noble Earl will give us the benefit of his opinion on the status of the Bill in the light of the action in the Scottish courts.
  The Earl of Gowrie: My Lords, the Government are satisfied that the legal position is as stated in the White Paper; namely, that neither depositors, staff, trustees, nor the Government themselves own the Trustee Savings Banks. The Government were aware at all material times that a Scottish QC, the Mr. John Murray who has been referred to, had given advice to the contrary in 1979, and perhaps we should note that this was prior to the legislation in 1981 which now applies. Both the Government and the TSBs have received further advice which has disagreed with Mr. Murray's opinion. In my judgment it would be quite wrong to hold up Parliament's consideration of legislation because a court was considering a case which might have some bearing on the subject before Parliament. The proposals now embodied in this Bill were announced three years ago. The House can draw its own conclusions from the fact that the attempt to test ownership in the courts was started at the very last moment and at the end of the parliamentary Session.
  If, contrary to the advice that the Government have received, the court finds against TSB Scotland, the

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  Government will consider their action in the light of the court's judgment. It would therefore be quite wrong for me to commit the Government to any particular course of action in circumstances which are wholly hypothetical.
  I understand that TSB Scotland has given an assurance that as the law stands it will not give its assets away. Clearly the trustees of TSB Scotland would not wish to do anything illegal and the Treasury would be the first to stop them doing so. The vesting operation when the time comes will involve a statutory transfer under this Bill.
  Lord Stoddart of Swindon: My Lords, may I ask one further question? I should like to thank the noble Earl for that explanation, which was most useful. I know nothing at all about Scottish law. I do not know how long courts take to make decisions. Presumably no action would be taken to issue shares in advance of the court's decision.
  The Earl of Gowrie: My Lords, I can only repeat that it is my view that it would be wrong to hold up Parliament's consideration of legislation or the consequences of that legislation.
  Lord Grimond: My Lords, let us be quite clear about this. I understood from the noble Earl's first statement that no action would be taken until the courts had given their decision—that is to say, that the Bill would not become law until after the courts had given their decision. Is that the case? If so, does that mean that it will not become law until not only has the court of first instance given a decision but any appeals have been disposed of?
  The Earl of Gowrie: My Lords, the Bill would of course become law, if it is passed, but my advice is that it would not be put into operation before the vesting day.
  Lord Grimond: My Lords, if the Court of Session were to decide that ownership rested with the present depositors, we should then be left with a Bill floating about in mid-air and with a clear court ruling that certain people owned the shares. Surely that would be wholly unsatisfactory and from a parliamentary point of view something that at all costs should be avoided.
  The Earl of Gowrie: My Lords, I think that I have answered the point about which the noble Lord is anxious. As this matter is a bit technical and I am not, alas, a Scottish lawyer, I shall repeat what I said. If, contrary to the advice that the Government have received—and I spelt out that advice earlier—the court finds against TSB Scotland, the Government will consider their action in the light of the court's judgment. I cannot commit the Government to any course of action in circumstances that are hypothetical and, based on all the advice that the Government have had, highly unlikely.
  I understand, however, that TSB Scotland has given an assurance that as the law stands it will not give its assets away. The trustees of TSB Scotland would not of course wish to do anything illegal and the Treasury would be the first to stop them doing so. The vesting operation when the time comes will involve a statutory transfer under this Bill.
  7.15 p.m.
  Lord Bruce-Gardyne: My Lords, I apologise for interrupting during this argument, though what I want to say is germane to the subject. My reason for intervening at this stage is that I feel obliged to set the record straight in one particular which referred to myself in view of what was said last week in another place.
  On Thursday last, I was rung up by the BBC and the Evening Standard, which asked for my comments on allegations which, they told me, had been carried in that morning's Guardian and Financial Times to the effect that I, as Economic Secretary to the Treasury between 1981 and 1983, had suppressed legal evidence that the Scottish TSBs belonged in whole or in part to Scottish depositors with the bank, and thus misled the House of Commons; furthermore, that my present position as a director of the Central TSB might have something to do with that suppression.
  Naturally I studied the two newspapers in question. Both reported that Mr. Gordon Wilson, the Member for Dundee, East, had on July 15th raised a Point of Order about the consideration of your Lordships' amendments to this Bill, scheduled for discussion in the Commons later that evening, precisely on this point of the advice which had apparently been received from Mr. James Murray, QC. The Guardian reported Mr. Wilson as complaining:
  "we have a situation where either the TSB senior trustees have sat on legal opinion and failed to inform the Government or the Government was informed of the legal opinion obtained in Scotland and chose to ignore the significance of it, and thus misled the House".
  Mr. Wilson, the Guardian reported, said that the affair was either a contempt of the House or a breach of privilege involving a conspiracy which might go even further than the 'Commons. I quote again from the Guardian:
  "He noted that Lord Bruce-Gardyne, who was Economic Secretary to the Treasury between 1981 and 1983, was now a director of the Central TSB. He was then the Minister originally responsible for the TSB Bill and the original assertion that there were no technical owners of the bank".
  The Financial Times of the same day quoted Mr. Wilson as saying that I had told the House of Commons in my capacity as Economic Secretary that there was a "lack of ownership" of the TSBs. It went on to say:
  "Mr. Wilson said that Lord Bruce-Gardyne was now a director of the Central TSB".
  I consulted Hansard. That showed that both newspaper reports, although mildly garbled, gave the gist of the intervention of the honourable Member of another place. I therefore wrote to Mr. Wilson to point out the highly defamatory, and, I hope That I need hardly add, wholly unfounded implication, of the juxtaposition of these two statements.
  I told him that, had he consulted me in advance of raising his Point of Order, I should have explained to him that, while I had of course been aware as Economic Secretary to the Treasury that the ownership of the "produce" of the TSBs was a matter of controversy, I had been advised very much along the lines that my noble friend has just been explaining to the House, that in the judgment of Treasury counsel there were no legal owners of the TSBs; I had therefore supervised the preparation of the legislation on that

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  basis. I should also have told him that any suggestion that I had, whether at the behest of the TSBs or for any other reason, suppressed evidence to the contrary—let alone the implication that my present position as a director of the Central TSB was in some sense a reward for such suppression—was wholly without foundation. I therefore asked him to put the record straight.
  The honourable gentleman assures me that he accepts my assurance that the implication inescapably contained in the juxtaposition of his comments is wholly without foundation, but he declines to put the record straight, and so I wish to do so tonight.
  The fact is simply as my noble friend said, and I cannot emphasise that too strongly. Like my noble friend, I am not a lawyer. One is bound in these matters by the legal advice that one receives. But the legal advice that I received and on which I was bound to act was right the way through that in the opinion of the Government's legal advisers there were no legal owners of "produce" in the TSBs. It would have been totally impossible for me to have supervised the preparation of this legislation on any other basis.
  Personally I was always brought up to believe that one of the principles of the concept of parliamentary immunity was that it should be a deterrent to innuendo which could not be substantiated, and I believe that that rule should continue to be observed. It is for that reason that I felt that I should make the intervention at this point in the debate.
  Lord Galpern: My Lords, the noble Earl has acknowledged that this very important matter is before the Scottish courts at the present time. He says that the question of what will be the decision is hypothetical. I accept that. It may be in favour of Mr. Bovey's submissions or it may be against them. If the court is in his favour, the noble Earl explains to the House that certain steps will have to be taken by the Treasury and other departments. What is the urgency that prevents us saying that we should delay the whole business until we have an opinion from the courts? After all, as the matter has been dragging on for quite a number of years, why can we not delay it a little further until the courts rule on the submission?
  The Earl of Gowrie: My Lords, perhaps I may reply, with the leave of the House. It would be an astonishing action to delay parliamentary business because some matter was before the courts. Obviously, the Government have to take into account, to put it at its mildest, any findings of the courts. No legislation, or very little, would pass at any stage if it were simply to he delayed while court hearings, for which any citizen can apply, were taking place. However, what should give the noble Lord, and indeed the House, reassurance is that my advice is that any outcome, hypothetical as it is, in favour of the appeal would delay the consequences of vesting day. Therefore that is a separate issue. The assurances which have been given by the Trustee Savings Bank (Scotland) also bear that out.
  Lord Mackie of Benshie: My Lords, may I ask the noble Earl, because I think it would be helpful to know, if the advice given by the Treasury counsel is fully cognizant of Scots law? Is there a Scottish lawyer
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  who gives advice to the Treasury counsel as well as an English one?
  The Earl of Gowrie: My Lords, remote and cut off as one sometimes suspects the Treasury may be, I do not think that they are wholly without recourse to Scottish law. I should point out to the noble Lord that my noble friend the former Economic Secretary to the Treasury, while he may not be a lawyer, is certainly a Scot, and it would not be beyond the wit of the Treasury to have access to Scots lawyers. There is a very distinguished Scots lawyer sitting beside me on the Front Bench at the moment.
  Lord Ross of Marnock: My Lords, but surely one of the points is this. We know that contrary advice was given in 1979 by Mr. Murray; that his opinion, which was sought by the TSB at that time, was to the effect that the bank was owned by the depositors or members. Since that time, of course, he has been asked to put forward a case, and as an advocate he has put forward a case for the TSB and suggested that, if anybody, it might possibly be the central board who owned the bank.
  However, it must strike the House as odd that, on the basis of not knowing whether there was any owner or who the owner was, the Government proceeded to allow this bank to be sold off. The Government are the agents here, whether they like it or not. May we he told who gave the contrary advice to Mr. Murray, and when? I think we are entitled to that piece of information.
  As to further progress, once the Bill becomes an Act it does not come into force for two months after its passing into law. But, as I understand it from information we received on yet another Scottish Act fairly recently, although the Act has not come into force the Government can produce orders. The important order here rel4tes to the fact that vesting day is decided by the Treasury and they produce an order telling us what vesting day is.
  Until that takes place there is no change in the status of the bank. Once it takes place one can argue as much as one likes about it: an Act of Parliament has made a change in the bank, which Parliament can do. But it does not end there because, as I understand it, those who are concerned that depositors are being deprived of a right can go to the European Court. If they do, bearing in mind that there will then be a new bank, who will be responsible for paying compensation if that comes about?—not the new bank, but the Government. So I think there is every reason why the Government should hesitate about this.
  Remember, we have already been told, I think it was in the letter that passed between the Treasury and Sir John Read, that no action will be taken in relation to vesting day until those concerned are satisfied that certain assurances that were given have been met. So there is to be a delay. Would it not be wise for the Government themselves to institute some action to find out who owns the bank, rather than that we get into a mess very much later? I should apologise for having said before that a certain important amendment was initiated by a Mr. James Craigen in another place; it was not, it was initiated by Mr. Gordon Wilson, the Member of Parliament mentioned by the noble Earl. By the way, Mr. Gordon Wilson is a lawyer, and a Scots lawyer.
  Lord Cameron of Lochbroom: My Lords, with the leave of the House, since there has been a suggestion that in this matter there is a peculiarity of Scots law, perhaps it would be only right at this stage to make quite clear that the existing banks are covered by legislation which applies throughout the United Kingdom. As my noble friend Lord Gowrie has already made clear, it is also an Act which was passed by Parliament in 1981. No doubt the force of that will not have escaped your Lordships—that the advice which is referred to by the Scots counsel, Mr. John Murray, was given in 1979.
  I should simply reinforce what my noble friend has already said—that the Government received legal advice on this matter following the passing of the 1981 Act. The preponderance of that advice was to the effect which my noble friend has already submitted to your Lordships. I hasten to add that it was given in the full knowledge that contrary opinion had been expressed by Mr. John Murray in an opinion in 1979. I hope that that at least clarifies the matter. There is no peculiarity so far as statutory interpretation is concerned as regards a Scots law as against the law which applies south of the border.
  Lord Ross of Marnock: My Lords, before the noble and learned Lord the Lord Advocate sits down, may I ask him this? He said "the preponderance" of the advice; so there was conflicting advice. Surely the only way to end the conflict was to ask the courts to decide. Why did not the Government proceed in that way, or invite the TSB to proceed in that way? All that we have heard about this preponderance of advice is that nobody owns the bank, which is an absurd position.
  Lord Cameron of Lochbroom: My Lords, I had hoped to make it quite clear in what I had already said that the reason why I used the phrase "preponderance of" legal advice was that it was known, at the time when advice was taken, that contrary opinion already existed in the opinion given by Mr. Murray in 1979.
  Lord Grimond: My Lords, I do not want to prolong this matter, but I understand it has been suggested that Mr. Murray withdrew his opinion on the grounds that the position had been altered by the 1981 Act. Do we understand that that is not so; that he maintained his opinion in spite of the 1981 Act, but the preponderance of the opinion of other lawyers was against him? Secondly, I should like to ask: is it alleged that the 1981 Act definitely altered the ownership of the savings bank?
  Lord Cameron of Lochbroom: My Lords, what I am saying to your Lordships is this. First, I am not aware just now that more than one opinion was given by Mr. Murray in 1979. I can only say that he appeared very recently, as one of your Lordships has remarked, on behalf of the Trustee Savings Bank in the present action. The 1981 Act deals with the question of the assets of the trustee savings banks. That is of course the issue which is raised in the current action before the Court of Session. It proceeds upon the terms of the 1981 Act. The Government have taken legal advice on that matter. They have formed a view, already expressed by my noble friend, in the full knowledge that a contrary opinion had been given in 1979 by Mr. Murray. That is why I used the expression, "the preponderance of legal advice".
  7.30 p.m.
  Lord Galpern: My Lords, is it possible that the court may decide differently on the effect of the 1981 Act, and that this is what is subject to consideration by the courts?
  The Earl of Gowrie: My Lords, with the leave of the House, I believe that we are getting very far from consideration of the Commons amendments. Because noble Lords are interested in this issue and because I am the last person to set myself up as an authority on the procedure of your Lordships, I have been listening as avidly as the rest of the House to the remarks and answers of my noble and learned friend the Lord Advocate. I think, however, that we should probably now complete this business in respect of the consideration of the Commons amendments.
  Lord Taylor of Gryfe: My Lords, I would not wish to enter into the discussion on the proceedings before the Court of Session. It would be a very interesting and somewhat extraordinary constitutional position if the Court of Session, in due course, was to rule that Parliament was acting illegally. That is a very interesting constitutional point. I await the judgment with interest. If of course the matter is taken to the European Court of Human Rights, we can expect a delay in the Bill of at least four or five years. That is the kind of time that is taken to deal with these matters before the European courts. I make no comment on that position. All that I would say to your Lordships—I am not blaming anyone—is that the matter is a major plank in the activities of the declining fortunes of the Scottish nationalists. I think that it is largely a political stunt initiated by them and supported by them in order to keep alive their political credibility in Scotland.
  My own interest in the matter is not derived from any particular Scottish nationalist affiliations. However, I should like to say a word or two about the amendments before the House. The amendments provide for the revision of the amendment carried by this House in my name. It is important to say that originally my amendment was moved in the House of Commons where it was defeated by 137 votes to 29. That was the House of Commons measure of support for my amendment. When it came to the Committee stage in the House of Lords, my amendment was defeated by 113 votes to 76. At Third Reading, I reintroduced the amendment, and it was carried by 67 votes to 54. While I was pleased to carry the amendment, I am not pretending for a moment that the voice of democracy was very strongly expressed in that decision.
  It was for that reason and at the invitation of the Government that I entered into negotiations with Sir John Read to seek certain assurances knowing, at the same time, that in the last analysis—as has just been shown in the amendments before the House—the power of Parliament and the power of the House of Commons in the matter would be paramount. Therefore, I do not propose to re-introduce my amendment by moving rejection of the amendments before us. All that I would say to the Government is that the Trustee Savings Bank gave certain important assurances to the Chancellor. It has been said, in the much debated Scottish scene, that these assurances

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  were negligible. Indeed, they were described, again by the Scottish nationalists and others, as being a spineless surrender. Just as the noble Lord, Lord Bruce-Gardyne, has to defend himself in this House tonight, I think that I should reiterate, for the sake of the record, one or two of the concessions that were made.
  I regret that the amendment before us deals simply with the constitutional position of the TSB (Scotland) and that it has not been possible to write in some of the assurances into the statute that were given. That would have strengthened the statute. It would be more reassuring. They are certainly reprinted in Hansard, and the articles of association of the new company, when they emerge, will incorporate these assurances. I welcome that, but articles of association can be changed. It would have been better if some of the assurances had been incorporated in the statute.
  There is a very interesting one. In regard to the TSB Charitable Foundations, Sir John Read, writing to the Chancellor, said:
  "I confirmed in my letter of 6th December 1984 that the TSB Group intended to proceed with the endowment of certain charitable foundations."
  Sir John went on to say:
  "We are pleased that, in the light of those debates, you have agreed that the Government will propose an amendment providing for the TSB Central Board to arrange the establishment of charitable foundations".
  That assurance was given, but I do not see the amendment in the Bill before us or in the statute at all. I would very much have welcomed that assurance in the Bill. The distribution of the charitable fund is being made not on turnover or on the number of shareholders but on the reserves contained in the separate banks. This means, in fact—since Scotland is a very healthy bank with substantial reserves—that the charitable foundation could be allocating probably 2 per cent. of its profits in a year to Scottish charitable purposes. That is substantial. It is important. While it is contained in the assurances that I have received, it would have been better if it had been incorporated in the statute.
  I should like to reiterate that the amendment provides for the separate registration of the TSB (Scotland). That is welcome. We support it. However, the assurances went further and said that each banking company shall have its own board of directors and that the directors, after the transition period will be appointed from that country and will have a special responsibility for looking after the interests of the country or territory in which the bank is established. That is important. It was at the root of my objection originally to the proposals that the Scottish TSB would be submerged in the central organisation.
  The arrangements for liaison between the separate banks and the central body must also be incorporated in the articles of association which provide for the chairman and managing director of each group to be on the central board and ensure that the interests of these separate countries will be fully expressed in the central board in its deliberations.
  Lord Ross of Marnock: My Lords, if I heard the noble Lord correctly, he said that the boards of the new banks would be elected by the new company. As
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  I read it, each banking company shall have its own board of directors drawn substantially from trustees of the present banks but thereafter each board will appoint its own members. It is a self-perpetuating oligarchy, and will be subject to the approval of the parent board. They are not elected so far as I can see.
  Lord Taylor of Gryfe: My Lords, the noble Lord, Lord Ross of Marnock, is quite right. The board will not be elected. The Scottish TSB will be a separate registered bank and, like any other plc the board will be appointed by the directors but will be subject to the approval of the shareholders. It is company law. It does not require to be incorporated in the Bill, as I understand it, but I may be corrected. It will be like any other public limited company; it will be a bank like any other bank. I see that the noble Lord, Lord Polwarth, is in the Chamber. It will be like the Bank of Scotland, Clydesdale or whatever, and it will have exactly the same status.
  I should like to raise another matter, and I shall not dwell on it. In my view, the assurances which were given were the best which could be secured and they were helpful to Scotland's position. I do not regret the debate and the amendment which was carried because we established a respect for the Scottish position and we emphasised the Scottish dimension. We constantly made the TSB central board aware of the importance of TSB Scotland to the entire affair.
  Having said that, I am not opposing these amendments at all; indeed, I wish the TSB well. It is a bank which has had strong roots in the community in Scotland and elsewhere. It should be in a very strong position. It has £700 million of reserves in the TSB. and added to that we have a flotation which might attract an even larger sum. It ought to attract an even larger sum than £700 million because that is what is being offered in the kitty. Therefore, it will be a very considerable force in banking and it will have a great deal of money to indulge in competitive lending as regards the other banks in this field. I wish it well. I wish its management well. I am quite sure that. as a result of the debates in this House, the substantial contribution of the Scottish TSB will be recognised.
  Let me say that at the end of the day this House has performed its useful and sensible function. It received a bad Bill from the House of Commons. It looked at it; it examined it and sent it back. Through the process of negotiation we have reached some degree of consensus. I hope that the TSB will continue to enjoy esteem in the community and will prosper as a bank.
  Lord Galpern: My Lords, I have listened carefully to the noble Lord's explanation regarding the satisfactory promises which he has received as a result of his amendment being rejected. However, since he received the assurances a new situation has developed because the whole matter is now before the courts in Scotland. I should like to ask the noble Lord a simple question. Is he against delaying this Bill until such time as the courts have ruled on the submissions which are now being made to them?
  Lord Taylor of Gryfe: My Lords, that question has been asked on a number of more public occasions than this, including radio and television debates involving leading Scottish nationalists. I would not care to

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  comment on the matter at all. I am content to await the judgment of the courts, and accept the assurances that, if the courts found that the Government or the TSB were disposing of assets to which they had no entitlement, then that would raise a very interesting constitutional situation.
  7.45 p.m.
  Lord Ross of Marnock: My Lords, I should like to say a few words on this matter. One of our mistakes in respect of the original amendment which was eventually passed was that we did not carry it through the Bill. As a result it made virtually nonsense of the Bill. The Government were not willing to go the whole way with us which would have meant dealing with the other aspects of the Bill which affected Scotland. They felt themselves tied by the fact that they had reached Third Reading and therefore the matter would probably have had to be recommitted, which of course they could have done in order to clear it up. However, they were not prepared to accept a completely independent Scottish bank. It would probably have meant that they would have done with this Bill what they did the other day with the Bill dealing with corporal punishment in schools—they would have forgotten about it and produced yet another one.
  I regret in many ways that the Scottish TSB is becoming part of the group and will be subject to the group. Let us face it, a measure of its independence has gone. We were told about the benefits which were contained in the letter. I was glad to hear the noble Lord, Lord Taylor of Gryfe—and I hope that my pronunciation of his name is a little better than that of the Chancellor of the Duchy—
  The Earl of Gowrie: My Lords, it was a Freudian slip.
  Lord Ross of Marnock: I am sorry my Lords?
  The Earl of Gowrie: My Lords, I inadvertently said "a Freudian slip".
  Lord Ross of Marnock: My Lords, as a matter of fact I thought that it was a Gowrie slip. It is as tangled a skein as the Bill itself to whom the grief referred, whether it was the Government or whether it was the noble Lord. However, the noble Lord, Lord Taylor, pointed out, as we have pointed out more than once and as was pointed out in another place by no less a person than a former Solicitor-General for Scotland, Mr. Nicholas Fairbairn, that unless assurances are actually in the Bill they do not mean a thing. There is no guarantee that they can be changed. Other people can come along with other ideas. Once the Bill has passed through this House, once it is a statute, it is the statute which matters. Therefore, there is no guarantee regarding the assurances in relation to the registered office of the company being in Scotland and the company holding its annual meeting there. Someone will probably suggest that it should be during the Edinburgh Festival when it would suit them all to be there.
  There are other pledges which are not worth very much from a long term point of view. I am not one who is easily satisfied with matters which are outside the statute. I regret the fact that we are not having an
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  independent Scottish bank. We have improved the situation from the point of view of Scotland by what we have done here, but there might have been more interest shown in another place at an earlier stage. I do not think that it was altogether fair of the noble Lord, Lord Taylor of Gryfe, to say that this was a political stunt. He may remember the opposition to his amendment. The noble Baroness, Lady Carnegy, was one of those who said that his amendment was a political stunt. I do not think that it was a political stunt. In my view, it was an expression of the true feeling of Scotland in respect of the bank.
  Lord Taylor of Gryfe: My Lords, I was referring to the continuing legal process as being a political stunt. That is what has been taken over as a political stunt in Scotland.
  Lord Ross of Marnock: My Lords, if you know anything about the Scots you will know that there is no more litigious race than the Scots. That is why they are doing so well in the legal profession in Scotland. I have known matters to be prompted by individuals and to be carried on by individuals for years and years. I do not think that this can just be denigrated as a political stunt any more than the noble Lord's amendment should have been. The House did not accept it as a political stunt when that was suggested from the Front Bench opposite and elsewhere. However, we have improved the Bill. It will be interesting to see what kind of mess the Government get themselves into if the matter goes for decision by Scottish law.
  I feel that they should have done it themselves before they started. Tell people that nobody owns the bank. A bank which has reserves of £710 million; assets of £637 million; a bank which has no debts. It has not been giving money away to South America, or buying banks in Chicago. It has been behaving itself. If this is to be sold off, it is an Aladdin's cave. I hope that noble Lords are listening. They can get a chance to buy themselves into this. Is it Aladdin who is going to get into this cave, or the wicked uncle? That is what matters.
  On Question, Motion agreed to.

  LORDS AMENDMENT
  5 After Clause 1, insert the following new clause:
  ("Share holdings for deposit holders and employees.
  . From the vesting day 25 per cent. of the shares in the TSB Group shall be held in trust for holders of deposits in the TSB Group and employees of the TSB Group, the trustees being elected annually in equal numbers by appropriate Associations of both groups.").
  The Commons disagreed to the above amendment for the following Reason:
  6 Because the amendment is contrary to a major element of the policy behind the Bill, which is to enable the TSB Group to achieve as wide a distribution of direct shareholding as possible among depositors and other small investors.

  MOTION TO BE MOVED ON CONSIDERATION OF COMMONS REASON
  6A Lord Banks rose to move, That this House do insist on their Amendment 5 to which the Commons have disagreed for the Reason numbered 6.
  The noble Lord said: My Lords, I beg to move that this House do insist on their Amendment No. 5 to which the Commons have disagreed for the Reason numbered 6. As the House is well aware, the Trustee

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  Savings Banks have been built up over the years by the savings of their depositors. It has been widely understood—and how correct that understanding was has been the subject of discussion already this evening—that they belonged to the depositors, for whom the trustees acted.
  The future position of the Trustees Savings Banks was considered in the early 1970s by the Page Committee on National Savings. They found that the Trustee Savings Banks, as they were then, provided an outlet for small savings, supported by a Government guarantee and subject to tight Government control, affording a limited amount of tax relief and offering limited banking facilities. In those days there were no overdrafts or personal loans available; the majority of the depositors, the committee found, were in the lower income groups, and the banks were on the fringe of commercial banking.
  The Page Committee decided to recommend that the Trustee Savings Banks should become mutual banks freed from much Government restriction and offering full banking facilities for personal accounts only. The Government of the day accepted that, and the Bill which came before Parliament in 1975–76 facilitated development on these lines, and overdrafts, personal loans, credit cards and mortgages soon followed.
  The Page Committee said this:
  "A set of mutual Banks similar in organisational form to Building Societies seems to us an excellent way of promoting a competitive service for the financial needs of the small saver and depositor".
  There were in fact to be three types of bank. There were to be commercial banks; the state bank, the GIRO; and this new set of mutual banks developed from the Trustee Savings Banks.
  The Page Committee went on to say:
  "The suggestion has been made to us that the Trustee Savings Banks should be hived off to the private sector as commercial concerns. If by this is meant that they should have shareholders and operate from the point of view of ownership like commercial banks, we see such a solution as neither practicable nor desirable in principle."
  Yet that is exactly what is now proposed.
  The concept of mutuality has been abandoned. Shares in the Trustee Savings Banks, now reduced to four, and the Central Board are to be sold to the public. The new shareholders will thus acquire the existing assets of the banks and their own purchase price. The assets built up by generations of depositors are virtually to be given away.
  It is argued that the Trustee Savings Bank Board are anxious to encourage depositors and staff to buy shares. I am quite sure that they are, and I acknowledge the efforts which they are making in order to bring that about. But if I understand the position aright, they expect that only some 10 per cent. of depositors will feel able to do so. While they could possibly constitute 50 per cent. of the shareholders, they would constitute a very much smaller proportion of the shareholding. In any case, 90 per cent. of the depositors, if that figure is correct, would be left out.
  As we have already heard this evening, in Scotland, where the Trustee Savings Banks began and where they are strong, a depositors' association opposed to the flotation has been established. They have requisi-
  1278
  tioned a meeting of depositors of the Trustee Savings Bank (Scotland), and that is to take place on 28th August in Glasgow. The depositors, of course, were not consulted about what is now proposed.
  It has been argued this evening by the Government that the ownership is obscure, or that there is no ownership at all at the present time. But we have also heard that there is strong support in legal circles in Scotland and elsewhere for the view that the banks in fact belong to their depositors. We have heard a good deal about the opinion expressed by Mr. John Murray, QC, for the TSB in 1979, when he came to the conclusion that the banks were a voluntary, unincorporated association owned by their depositors.
  Other Scottish lawyers have written to me insisting that this is the case. Some have urged that the trustees are in fact in breach of trust. In answer to the question:
  "In the event of a solvent dissolution of a Trustee Savings Bank what are the rights of the depositors?",
  Mr. Murray wrote in his opinion of 1979—and I have seen the opinion—
  "The depositors will take the whole remaining assets. Each depositor is, in my opinion, entitled to the return not only of the sum deposited by him but all his pro rata share of the produce [the reserves] earned by the deposits accumulated in so far as not withdrawn by him".
  It is clear, whatever is the legal merit, whatever is in fact the final judgment on that, that not only many ordinary men and women but also experienced legal opinion have been under the impression in the past that the depositors owned the shares. It was with this in mind, and to retain some measure of mutuality, that an amendment was put forward at the Committee stage here proposing that 49 per cent. of the shares should be held in trust for the depositors and the staff.
  That amendment was moved by my noble friend Lord Taylor of Gryfe, and it was defeated. We therefore tabled an amendment at Report, which I moved, ensuring tht 25 per cent. of the shares should be held in trust for depositors and the staff. This amendment was approved by the House and was contained in the Bill when it returned to the other place.
  At the instigation of the Government that amendment was struck out in the other place, and it is that amendment on which I am asking your Lordships to insist. The amendment provides:
  "From the vesting day 25 per cent. of the shares in the TSB Group shall be held in trust for holders of deposits in the TSB Group and employees of the TSB Group, the trustees being elected annually in equal numbers by appropriate Associations of both groups"
  The 25 per cent. share would not be owned individually. It would be held in trust collectively for the whole body of depositors and staff.
  In another place Mr. Ian Stewart, the Economic Secretary to the Treasury, described that as a hybrid arrangement. He said that we must either have an arrangement which is a 100 per cent. mutual, or an arrangement which is on the Companies Act basis as proposed in the Bill originally. He maintained that a hybrid arrangement would not work. But hybrid arrangements have worked and have been successful. If you look at the case of Kalamazoo Ltd. in Birmingham you will find that in 1947 30 per cent. of the shares, as a result of a gift or several gifts, were put in trust for the staff there. That arrangement still persists today, all these years later, and has worked

  1279
  successfully in the meantime. In fact the trustees have used some of the proceeds from shares, some of the dividends on shares, to purchase further shares. So it is possible to have a successful hybrid organisation.
  It is argued also by the Government that with 5 per cent. of the shares held in trust for charity a block of 30 per cent. would dominate. There is no reason why those representing the 5 per cent. and those representing the 25 per cent. should necessarily agree with each other rather than with those representing the remainder of the shareholders. Even if they did, 30 per cent. would scarcely dominate 70 per cent.
  It is argued that to have this arrangement would cut across the intention of the TSB to obtain a large number of the depositors as shareholders and other small shareholders. I see no reason why that should be the case. I am sure that that can still be done for the 70 per cent.
  In conclusion, here we have a set of banks built up by their depositors. The trustees, as their name implies, are the trustees for the depositors. The depositors were thought to be the legal owners, and it may be that they are. No one knows for certain. We know only what various opinions about that are. At least let us ensure that all the depositors and not just a minority who can afford to buy shares will have a stake in the future control and prosperity of the Trustee Savings Bank along with the staff. We wish the Trustee Savings Bank well. We want to see it prosper, but we want to ensure that its depositors, who provide and have provided the sinews, are not elbowed out of the way and entirely deprived of the assets built up on their behalf and which may well be theirs. I beg to move.
  Moved, That this House do insist on their Amendment 5 to which the Commons have disagreed for the Reason numbered 6.—(Lord Banks.)
  8 p.m.
  Lord Grimond: My Lords, I rise to support my noble friend Lord Banks. I hope to do so extremely briefly. I do not intend to repeat what he has said so well nor indeed to repeat what I have said so well on previous occasions! I find that the Commons Reason is wholly unconvincing. To begin with, as my noble friend Lord Banks has said, trusts for this kind of purpose are quite common and work very well. Secondly, I do not see that the setting up of such a trust would interfere with the wide distribution of direct shareholding as suggested by the Commons. I believe that the depositors should have some special recognition in this Bill. Above all I am interested in the employees, and however good the terms offered to them, this would give them a definite and long-term stake in the bank. Therefore I think that the Commons objections are unconvincing and that we should insist upon our amendment.
  Lord Mackie of Benshie: My Lords, I also should like to support my noble friend. The arguments which we heard earlier make it all the more necessary for the House carefully to consider insisting on this amendment. We have heard as I understand it—and if I am wrong perhaps the Lord Advocate can correct me—that the opinion on who owns the bank which the Government obtained after 1981 was founded on the
  1280
  Bill which reassessed the position of the TSB banks in 1981. I noticed that he did not try to contradict the opinion of 1979 and that he founded his assertion that good advice was taken on the fact that the 1981 Bill had altered the whole basis.
  If that is the case, it appears to me that the assets of the depositors in Scotland have been taken away from them by stealth. If there is anything in Mr. Murray's opinion that was altered by 1981 it does not appear to me to be a satisfactory situation. I need not enumerate again the arguments so cogently put forward by my noble friend. All I can say is that the whole thing does not look right.
  The Government could have brought forward a Bill in which they said that there was an enormous sum, £700 million or whatever it was, in the bank which would belong to the depositors. They would have shares to that, the Government would raise the additional money from the market, the depositors would have the £700 million and the investors another £700 million. That might have been a fair basis. But it must be wrong to allow the majority of the shares—and by far the majority, as I understand the opinion, is something like 90 per cent.—to pass into the hands of the new investors along with the original assets. This will only partially correct that position, but I think the House should support my noble friend's amendment.
  Lord Houghton of Sowerby: My Lords, this is very late in the day to stage a major disagreement with another place. I have no doubt that earlier when this amendment was before your Lordships' House I supported it. I supported it because at that time not only this amendment but others of importance were being put as an expression of the opinion of your Lordships' House on matters that needed more thought and attention. I was under the impression that, after having passed several amendments, and the board and the Government having had an opportunity to consider the matter further, a lot of water has gone under the bridge. I was under the impression that some kind of tolerable understanding had been reached between those who were sponsoring this and other amendments and representatives of the Treasury and the bank. I was not involved in any of those discussions.
  I hate to say that I am nearly always right, but I raised this major issue of who owned this bank right at the beginning. I made no bones about it. I said that the ownership rested where the money was and the money belonged to the depositors, therefore the ownership could not belong to anybody else. But what support did I have? I am a lone voice far too often in your Lordships' House. I did not have the support then that I thought that principle required.
  I see that as a major issue which might have had to go elsewhere so as to determine where the ownership should lie, but this has became far too complex for me to be able to suggest a way out. Now we have what I thought was the best that could be done in the circumstances. I am afraid that I shall not be able to support the Motion before your Lordships' House at the moment. I feel that all concerned, including the Trustee Savings Bank Holding Company and the chairman, have heard all the arguments and they

  1281
  know the sentiment that is widely held on this transaction. For my part, apart from the undertakings which have been given, which up to a point have satisfied certain of the earlier amendments, I am prepared to leave it to the bank now to decide what they can reasonably do, if anything at all, to meet the sentiment behind the case that the depositors have a claim to special consideration.
  At least we can be certain that this bank does not belong to a large number of people who will subscribe to the floating of the shares. They will come into it because they want to be on a good thing and they undoubtedly will, because the bank is sitting on bags of gold. When there are bags of gold around all sorts of people want to put their hands on them.
  The depositors are those who in the main have enabled the bank to reach its present position. I do not say that the depositors have actively contributed to the success of the bank. The success of the bank has been in the management of the affairs of the bank and in having a great deal of money at very competitive rates of interest. I am sorry to say that I cannot support the insistence of the Alliance on the earlier amendment, much as I had sympathy with it at the time. But now is the last hour on this Bill and we cannot keep it hanging about any longer. Otherwise, I think, it will seriously damage the prospects of the bank in making a successful launch and that, in turn, will probably depreciate the value of the investment that the depositors among others will surely wish to make.
  I hope that we can rely on the bank, and Sir John Read as chairman, to do the best that they can having regard to the fact that they want to make a successful launch in the interests of the bank and its future—and therein lies the interests of the depositors as well as others—and see what can be done to give preferential treatment to the depositors to enable them to feel that they have a fairer deal. What a pity it is that the Scottish depositors woke up too late and the English depositors never woke up at all!
  Those of us who have tried to wake them up and put their case here received little or no support. I do not think I had a single letter from any depositor supporting the stand that I took on their behalf. There are limits to how far you can go on fighting a case when you do not get the support of those who are directly concerned. There it is, I have done my bit and I have no more to say.
  Lord Stoddart of Swindon: My Lords, I have left my contribution until rather late to hear what other people had to say, particularly my noble friend Lord Houghton of Sowerby. I am somewhat surprised that he is taking the line that he is. If he will recall, when he correctly stated that the bank belonged to its depositors, he received a great deal of support. He had support from me—that is certain—and from other quarters of the House as well, certainly on this side. To say that because he has not had representation from the depositors and perhaps the staff of the Trustee Savings Bank does not necessarily mean that they are not particularly interested in what happens to them.
  We are here, I should have thought, to safeguard the interests of people whose interests we think might be being undermined, irrespective of whether the people
  1282
  come to us or understand exactly what is being done in this place in Parliament on their behalf. It is our duty to try to see that they are safeguarded. On Second Reading, and since, I have argued that the correct way forward was mutualisation. That was still possible and would have been the best safeguard for the depositors and the staff of the Trustee Savings Bank. That is still my view.
  If we had proceeded in that direction, which is supported by the noble Lord, Lord Banks, and other noble Lords, then we would not be having actions before the Scottish courts. There would be no problem at all because it would have been established that the depositors were the owners in law and that the bank would be run for their benefit.
  The amendment, I would remind your Lordships, was passed in this House without Division. It was accepted by the Government; or, at least, if they did not accept it, they did not vote against it.
  The Earl of Gowrie: My Lords, with respect, that is not the same thing at all.
  Lord Stoddart of Swindon: My Lords, they did not seek to oppose it. It may well have been that they thought they would lose; but that is another matter. The fact is that there was not a Division. The amendment sought—I think quite rightly—to give depositors and staff an interest, a real interest, in the new organisation. I believe that was correct, and indeed I have a particular interest in this amendment because, as a result of its passing, I did not move my Amendment No. 8 at Report stage, which would have sought to have given representation to the workers on the central board and on each individual board of the Trustee Savings Bank.
  As the result of the passing of this amendment, I withdrew it because I thought it was unnecessary. I thought that if the workers and the depositors had 25 per cent. they had enough interest without needing to elect additional workers to the board. Therefore, I feel affronted by the Commons decision to remove this amendment because I have now lost the opportunity of moving my amendment to put workers on the boards. Naturally, I shall certainly support the amendment of the noble Lord, Lord Banks, tonight. I hope that my noble friend Lord Houghton will reconsider his position, and I ask my other noble friends to follow me into the Lobby to support the amendment.
  8.15 p.m.
  The Earl of Gowrie: My Lords, I, for one, am not surprised that the noble Lord, Lord Houghton of Sowerby, has taken the line that we have all had a good go at the issues raised by this Motion to insist on the Lords Amendment No. 5 to the Bill. No less than three Liberal Front Bench speakers have made the case of insisting; but it is the same case that the noble Lord, Lord Banks, and some of his noble friends put forward in your Lordships' House on no less than three occasions during the passage of the Bill. I am therefore simply going to summarise very briefly the arguments that we feel there are against the case, and then we shall have to come to a view upon it.
  I think we are all agreed that the TSBs cannot sensibly continue on their present, very strange

  1283
  constitutonal basis. There are two options: to convert the TSBs into mutual organisations or to convert them into a Companies Act structure with direct shareholding. There are two key reasons why the TSBs themselves and the Government have adopted the Companies Act approach. The first is that in today's conditions it really is essential that a bank with general banking powers—and I would remind your Lordships that TSBs enjoy general banking powers at present—should have access to the capital markets if it is to prosper and if it is to survive and thrive alongside its competitors. The second is that the Companies Act solution provides for effective accountability to the bank's owners. A mutual solution, as is sought, satisfies neither of these tests.
  I accept that there are successful mutual financial institutions. It is one thing for long-established mutuals to continue in business and quite another to launch a new type of mutual organisation. Also, I think the successful mutual institutions to which some critics of the Bill refer—for example, building societies and mutual insurance companies—are much more specialised and much more closely regulated than banks. I would remind the House in this context that when the Page Committee recommended that TSBs should become mutual banks it envisaged that they would engage in a rather narrower range of business than they do now.
  The amendment on which the noble Lord, Lord Banks, wishes to insist seeks a middle course between the Companies Act approach to the Bill and the mutual bank approach, which he would prefer to see, by providing that 25 per cent. of shares should be held in trust for depositors and staff. While I appreciate that others may take a different view on the balance of advantage between mutual banks and Companies Act banks, I would ask your Lordships to accept that company status or mutual status are alternatives. It is not practical to blend the two. The amendment falls between two stools. It deprives the TSBs of most of the advantages of the Companies Act solution but bestows few, if any, of the compensating advantages of the other solution.
  As the noble Lord, Lord Houghton said—no lone voice, as so often, where I am concerned—we have had a good run over this case. The noble Lord, Lord Banks, has made his position very clear, but I hope that at this stage of the Bill, after the other place has made its views known on this amendment, the noble Lord really will reconsider his intention, which appears to be to divide the House.
  Lord Banks: My Lords, I should like first to thank those noble Lords who have expressed their support for this Motion: my noble friends and also the noble Lord, Lord Stoddart. I much appreciate their support. The noble Lord, Lord Houghton, said that it was rather a late stage at which to have a disagreement with another place and that we must not keep the Bill hanging about; but I would have thought that the new information about the possible legal position which we have had this evening, and about which we had much discussion in our earlier debates, is in itself sufficient ground for keeping things hanging about for a little longer, so that we may make sure that this legislation is not confiscatory—because that is really the issue.
  1284
  There has been no understanding on this amendment. The noble Lord, Lord Houghton, referred to discussions which had taken place. Discussions certainly did take place and I am most grateful to the noble Earl, Lord Gowrie, and to the Economic Secretary to the Treasury for the fact that they were prepared to discuss the matter with me. But we did not agree at any point and I have pressed this amendment throughout, so that I certainly do not feel like abandoning it at this stage.
  On the question of whether or not it is right for this House to return an amendment to the other place, of course we know that within the Standing Orders of the House it is certainly quite correct procedure. Whether we ought to do it at this particular juncture must be judged by the circumstances, and I think the circumstances are such that we are right, on this particular matter and in view of all that is now being said about the ownership of the deposits and the position of the depositors, to ask the other place to think again.
  The noble Earl, Lord Gowrie, said that the Trustee Savings Banks must have access to the capital market. But of course they would still have access to the capital market. They would be raising this 70 per cent. in that way. He gave arguments which were against mutuality at first but which do not necessarily apply to what he described as "the middle course". He asserted, though I do not really think he had any grounds for so doing, that one had to have one or the other: mutuality or a company structure. He said that one could not have a combination of the two. Yet, as I said myself earlier, and as my noble friend Lord Grimond also said earlier, there are hybrid examples. There are examples of a certain number of the shares being held in trust and the others being held in the ordinary way by shareholders working perfectly satisfactorily in industry. There cannot be any reason why it should not apply in the case of the Trustee Savings Banks.
  We are considering here the position of the depositors and whether these assets really belong to them, and whether they had good cause to think that they belonged to them even if in fact in law they do not belong to them. Surely the way to deal fairly with that matter is to give all depositors a stake in the control and the prosperity of the Trustee Savings Banks. That is what this amendment, which I am suggesting to the House that we should insist on, does. I feel that in all the circumstances it would right to take the opinion of the House on this matter.
  8.25 p.m.
  On Question, That this House do insist on their Amendment 5 to which the Commons have disagreed for the Reason numbered 6?
  Their Lordships divided: Contents, 47; Not-Contents, 80.

  DIVISION NO. 2

  CONTENTS

  Airedale, L.

  Cledwyn of Penrhos, L.

  Banks, L.

  Collison, L.

  Barnett, L.

  Crawshaw of Aintree, L.

  Beaumont of Whitley, L.

  Darwen, L.

  Blease, L.

  Dean of Beswick, L.

  Carmichael of Kelvingrove, L.

  Diamond, L.

  1285

  Elwyn-Jones, L.

  McNair, L.

  Ennals, L.

  Mellish, L.

  Ewart-Biggs, B.

  Murray of Epping Forest, L.

  Falkland, V.

  Nicol, B.

  Gallacher, L.

  Ogmore, L.

  Galpern, L.

  Ponsonby of Shulbrede, L.

  Graham of Edmonton, L. [Teller.]

  Robson of Kiddington, B.

  Rochester, L.

  Grey, E.

  Seear, B.

  Grimond, L.

  Shepherd, L.

  Hampton, L.

  Simon, V.

  Hanworth, V.

  Stedman, B.

  Harris of Greenwich, L.

  Stewart of Fulham, L.

  Hooson, L.

  Stoddart of Swindon, L.

  Kilmarnock, L.

  Strauss, L.

  Lloyd of Kilgerran, L.

  Taylor of Blackburn, L.

  McIntosh of Haringey, L.

  Taylor of Gryfe, L.

  Mackie of Benshie, L. [Teller.]

  Turner of Camden, B.

  NOT-CONTENTS

  Airey of Abingdon, B.

  Cameron of Lochbroom, L

  Arran, E.

  Carnegy of Lour, B.

  Belstead, L.

  Carnock, L.

  Bessborough, E.

  Coleraine, L.

  Boardman, L.

  Colwyn, L.

  Boyd-Carpenter, L.

  Cork and Orrery, E.

  Brabazon of Tara, L.

  Cox, B.

  Brougham and Vaux, L.

  Craigavon, V.

  Bruce-Gardyne, L.

  Craigmyle, L.

  Caithness, E.

  Cullen of Ashbourne, L.

  1286

  De La Warr, E.

  Mottistone, L.

  Denham, L. [Teller.]

  Murton of Lindisfarne, L

  Donegall, M.

  Napier and Ettrick, L.

  Eden of Winton, L.

  Newall, L.

  Elliot of Harwood, B.

  Norfolk, D.

  Elliott of Morpeth, L.

  Poltimore, L.

  Elton, L.

  Polwarth, L.

  Glanusk, L.

  Rankeillour, L.

  Glenarthur, L.

  Reay, L.

  Gowrie, E.

  Renwick, L.

  Gray of Contin, L.

  Rochdale, V.

  Harmar-Nicholls, L.

  Sanderson of Bowden, L.

  Henley, L.

  Sandford, L.

  Hives, L.

  Selkirk, E.

  Hood, V.

  Shannon, E.

  Hooper, B.

  Skelmersdale, L.

  Hylton-Foster, B.

  Stockton, E.

  Inglewood, L.

  Strathcarron, L.

  Killearn, L.

  Suffield, L.

  Kimball, L.

  Swinton, E. [Teller.]

  Kindersley, L.

  Teviot, L.

  Lane-Fox, B.

  Torphichen, L.

  Layton, L.

  Trefgarne, L.

  Long, V.

  Trumpington, B.

  Lucas of Chilworth, L.

  Vaux of Harrowden, L.

  McFadzean, L.

  Vinson, L.

  Macleod of Borve, B.

  Vivian, L.

  Margadale, L.

  Whitelaw, V.

  Massereene and Ferrard, V.

  Wise, L.

  Mersey, V.

  Wynford, L.

  Resolved in the negative, and Motion disagreed to accordingly.

Transport Bill
8.32 p.m.
House again in Committee.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 240B:
[Printed 18/7/85; col. 953.]
The noble Lord said: I rise to move the amendment standing in the names of the noble Lord, Lord Sandford, the noble Lord, Lord Teviot, and myself. I listened very carefully to the answers of the Minister to the preceding amendment and it seemed to me that it was at least worth setting out the arguments here for what is, after all, a very much more modest solution—or an attempt at a solution—to a major problem with this Bill.
The Bill as drafted posits a dual system for public transport in this country. On the one side there will be the commercially viable network of buses which will be privatised and which will no longer be under public control. On the other side there will be that part of the bus network which all concerned recognise cannot be profitable and must be subsidised through a tendering system.
The major problem which this Bill faces is how these two parts of the bus network now divided are to be made to work effectively together, so that passengers and operators may achieve a system which works profitably for those who are to make profits from it, efficiently for those who are to subsidise it, and effectively for those who are to ride on the buses. This amendment does not propose that there should be any delay in the implementation of the Bill, nor that there should be any new obligations of any significant character on operators, but simply that the operators of the private buses should be required to give information to the local traffic authorities who will be responsible for the other part of the network and who will have other public transport responsibilities.
Let us immediately recognise that there is a problem of the commercial confidentiality of information. Let us recognise that there are bound to be fears. Transport operators will feel if they are obliged to give certain kinds of information—not just about the timing and frequency of their services, but also about stopping places they U ill use, the scheduling of vehicles and so on—they are giving information which may be valuable to the traffic authorities and which may be used for those parts of the bus network which will still be influenced by the public sector.
The amendment makes adequate provision, in my submission, for those fears. It says that apart from those items of information which have to become public anyway, such as the timetables—because timetables are no use unless they are made public—the information shall not be dislosed to third parties without the agreement of the operators concerned. I am summarising that. But the need for somebody somewhere to know everything that is happening about the bus network, the bus services, the way in which they will work, cannot be denied.
Let me refer back to our discussion on Amendment No. 208, the amendment of the noble Lord, Lord
1288
Mottistone. In cols. 946 and 947 of the Official Report he expressed concern about the position of the Isle of Wight and the co-ordination of the public transport services of the Isle of Wight with the ferries. He was answered from the Front Bench opposite by the noble Lord, Lord Brabazon, who said that there was no problem because the ferries could be treated in the same way as cross-boundary services between different traffic areas. He said that that was covered adequately by Clause 61 of the Bill. That was not and is not the case. Clause 61 refers only to the subsidised services. What we must have is some degree of liaison—I shall not even call it co-ordination, let alone planning—between different operators who are concerned not only with the subsidised services but also with the commercial, privatised services.
I am sure that the noble Lord, Lord Mottistone, will agree that the situation about which he was afraid so far as the Isle of Wight was concerned already appears to be happening: that British Rail appear to be concentrating their services more on the Southampton-Cowes route and that the other ferry routes appear to be getting less attention. If I am wrong, I shall gladly give way. But my understanding is that already there are changes happening in the British Rail routes which will affect the subsidised services as well as the privatised bus services on the Isle of Wight.
Lord Mottistone: I have no knowledge of what the noble Lord is saying. I do not think it is very likely without going into a little geography. I think perhaps the noble Lord does not have quite the right message there. I take his point notwithstanding. But I do not think that that particular case is relevant.
Lord McIntosh of Haringey: I am glad to yield to the greater knowledge of the noble Lord, particularly since, for my sins, I have never even been to the Isle of Wight. Let me give another example of where changes have certainly happened: the example of the Irish Sea crossings and the privatisation of Sealink away from British Rail. Here there have been arrangements for sharing routes between Sealink and B. and I. Ferries on the routes to Ireland and the Isle of Man. The result of these arrangements has been that Sealink is no longer operating the route from Liverpool to the Isle of Man. That may be a perfectly proper commercial position, but the Isle of Man tourism depended very considerably on the Liverpool trade and it must be a very wrong decision which, as it takes effect, will do a great deal of damage to the Isle of Man.
Continuing with the example of Sealink—I am talking about things which have happened and not about things which may happen in the future—it is a fact that through ticketing systems between British Rail and Sealink are less effective than they were before, and that passengers are having to buy ferry tickets separately from the rail tickets which they used to buy together. It is a fact that concessionary fares, which were available on British Rail and which used to be available on Sealink as well, will no longer be available after 31st December 1985.

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So we are already seeing in practice the kind of failure of co-ordination between different operators, between the private sector and the public sector, which all of us who have expressed concern about this Bill have always been worried about. We are not talking about the future. We are talking about what we know to be the case now.
Let me give more general examples about the bus system itself. Let us suppose that we have a housing estate or a hospital which is three-quarters of a mile away from what would otherwise be a profitable route. The commercial interests of an operator are that he will pay attention to the largest number of his passengers and will run past on the main road without serving the housing estate or the hospital, as it may be, because that is the way in which he will get his passengers most directly to their destination, and that will mean that it will be left to the tendering process to provide for the housing estate or the hospital. If we take that literally, and there is no co-ordination between the subsidised services and the commercial services, what that means is that we shall have a grossly inefficient system.
We shall have buses running over the same route between the housing estate and the shire town destination, duplicating each other, rather than having a mutually agreeable arrangement, whereby some or all of the buses also serve the housing estate or the hospital. That cannot be the right way to run our bus services. Information on the timing and frequency of bus services, on stopping places, on the way in which a time-table is to be constructed and publicised—all of these are items of information which ought to be available to a democratically elected authority and to the general public. The sad fact is that if it is left to voluntary agreement between the operators and the authorities, it will not take place to the degree that it ought to take place.
The requirement for operators to give information to local authorities is surely not a very onerous requirement. There is protection for commercial confidentiality in the amendment. There is here a possibility for some co-operation to succeed in bringing together the two parts of the bus system, as the Government are proposing to establish them. I listened very carefully to the noble Lord, Lord Belstead, in his objections to the preceding amendment. It seems to me that none of the objections which he made would apply to the present amendment, and that the Government therefore ought to see this as a way, without any need for objection on anybody's part, to easing the way to the privatisation and deregulation which they require. I beg to move.
8.45 p.m.
Earl De La Warr: I have listened with great care to what the noble Lord, Lord McIntosh, said. It seems to me that this amendment achieves, in practice, a good deal of what the last amendment sought to achieve, and as he gave us its purpose with great lucidity I shall not repeat it. I really think that there can be no complaint here on the score of the complaint which was made from this side of the Committee about a
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form of backdoor opposition. As for the information getting out, the fact of the matter is that it will get out within a few months, anyhow—it has to. It probably will not go to the authorities until February or March, or even April or May, but by then we are only three months away from deregulation day.
In any case, I should have thought that the matter of confidentiality in this case had to be put in second place to what we are all seeking, which is better service for the public. So I would completely discount the dangers of that. Confidentiality in business is something which, in my experience, is the British disease. You do not get Americans refusing to tell you something. They are only too ready to tell you. But I shall not depart into a wider field.
I like this amendment because it will help, and what it will really do is allow the traffic authorities that much quicker—and it is all a matter of months—to set about identifying the routes which they will have to put out to tender. As we shall see in a later debate, this question of finding out as quickly as possible is absolutely crucial with a D-day which is dangerously close to us from the point of view of getting efficient tendering. So for those reasons I like this amendment and I support it.
Lord Brabazon of Tara: Of course we accept that co-operation between local authorities and operators can be highly desirable, and as we have explained to the Committee on earlier clauses, we have given authorities considerable powers both to subsidise public transport and to take more general measures to promote the use of public transport and the convenience of the public. There are further important provisions on tendering and concessionary fares. We have no doubt that many authorities will make extensive use of those powers and we expect that they will have a wide measure of co-operation of operators in doing so. That will often be to the mutual benefit of both sides and for the good of the general public as passengers and as ratepayers.
But this new clause would require operators to cooperate with local authorities by providing information. That, in our view, is both unnecessary and indeed potentially damaging. It will be unnecessary because authorities, in carrying out their tendering and concessionary fares functions, will have available to them very considerable amounts of information. They will certainly have no difficulty in obtaining the information that they need to carry out those particular functions. I would remind your Lordships that all particulars of registered routes which the traffic commissioner will have received will have to be passed on to the local authorities; and these include route stopping places, timetables, etc. My noble friend Lord Belstead, earlier in Committee, gave an undertaking that we would make sure that this was done as speedily as possible.
I turn to the dangers which we see in this new clause. Where there is a one-sided duty of this sort, it would be open to authorities to seek to use it to make operators complete endless forms and provide excessive and onerous amounts of information.
Lord Shepherd: Really!
Lord Brabazon of Tara: Noble Lords, will be aware of the Government's recent White Paper stressing the need to keep burdens of this kind to a minimum.
Under the powers in Clauses 57 and 61 the authorities can take measures to promote the availability of services and the convenience of the public. Incidentally, Clause 61(7) would indeed apply to the commercial services, including the ferries which serve the Isle of Wight. It is reasonable to assume that operators will wish to co-operate in many cases, and it will be in their best interests to do so. But on some occasions they may not. It is the essence of our policy that operators should make the final decisions about how to go about providing the services that they judge the travelling public want.
The noble Lord, Lord McIntosh, raised a point about co-operation between Sealink and British Rail on the Isle of Wight service. I have not noticed this matter at all. The train still meets the boat, and vice versa. There has certainly been no change in the emphasis that British Rail have put on their services. The noble Lord brought up the case of the Liverpool to the Isle of Man service. I understand that Sealink have not in recent years operated from Liverpool to the Isle of Man. They have operated from Heysham, in Lancashire. The Isle of Man Steam Packet Company, which operates from Liverpool to the Isle of Man, is to be merged with Sealink's Heysham service. I cannot believe in my own mind that if the need for the service from Liverpool to the Isle of Man was that great this company would have decided to move it from Liverpool to a nearby port.
Therefore, I would submit to the noble Lord that this clause has its dangers; but more important than that, I think it is unnecessary. I say that because the information which the local authorities require will in any case be very readily available to them.
Lord Shepherd: In some respects this amendment could be a watershed as to the way in which we proceed on this Committee stage. This amendment is not in any way a radical approach. It is not in any way seeking to undermine what the Government have in mind in terms of this legislation. The noble Lord said that if the amendment were passed one of the dangers would be that certain local authorities could well use it to ask for this information or that information, perhaps with the objective of causing difficulties for the operator. I do not know whether the noble Lord has read the amendment. The amendment says:
"such information as the authority may reasonably require for the purpose of carrying out its duties".
Those words are well known in other forms of legislation. If it were necessary for a court to decide what they mean, the noble Lord knows how the courts would judge these words. The word "reasonable" is now a very accepted word in the judgments of courts.
What are my noble friends asking for in this amendment? They are asking that the operator should provide information which the authority—the authority at the end will be politically responsible for services—may require for carrying out its duties. The noble Lord said that in his view it is solely a matter for
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the operator to decide what services are to be made available. In the end, politically, it will be for the authority to decide. All I see in this amendment is that there should be a sufficient provision of information on which the authority can make its own judgment, and in regard to tendering I should have thought that that was a crucial part of it.
If the noble Lord could say, "I accept the amendment in principle but I should like to see it drafted differently", some of us would be willing to respond. But if the noble Lord's attitude on this amendment is going to be consistent throughout the Bill, I think that some of us are going to be in a very difficult position. Most of us have been seeking to find ways and means to avoid some of the difficulties that we perceive in this Bill, but we have not had many logical or sensible responses to these amendments. I have to say to the noble Lord that I thought that his response to the speech of my noble friend on this amendment did not do well for the Government and their basic approach to this Bill.
Lord Teviot: It might surprise the noble Lord, Lord Shepherd, but I thought that on this occasion my noble friend made a clear and moderate speech. One has not heard him as much on this Bill as one should have liked. My noble friend gave the Government's view. He did not fall into the trap of going back to the old arguments. He did mention bureaucracy, and paper. Although I have my name down to this amendment I think that we have to look back to Clause 61. Perhaps the noble Lord, Lord McIntosh, has looked at it and has an excellent argument to throw back at my noble friend. In that case one can come in again. I thought that my noble friend presented his argument moderately and very well.
Lord McIntosh of Haringey: I am grateful to noble Lords who have taken part in the discussion on this amendment. I say that even to the noble Lord, Lord Teviot. I must say that to call it "moderate" when the noble Lord, Lord Brabazon, refers to endless forms and excessive and unreasonable information, when, as my noble friend points out, the amendment refers to,
"such information as the authority may reasonably require",
—the interpretation of "reasonable" has been well established in the courts—seemed to be somewhat immoderate. I also noticed that, although I am perfectly ready to be shot down on particular issues such as routes to the Isle of Wight or routes to the Isle of Man, the Minister made no attempt to answer my more important points. The privatisation of Sealink has resulted in a reduction in through-ticketing, and will result at the end of this year in the abolition of concessionary fares for the elderly and disabled on Sealink vessels. All those points were made but were not answered by the Government.
Above all, the fundamental issue was not answered by the Government. There is no clear and simple dividing line between the commercial and the subsidised services. One cannot say, "Here is one route which is entirely commercial and here is one route which is entirely subsidised". I gave an example of the extent to which, on a perfectly commercial route, there might have to be subsidised elements. Indeed, in another place the Secretary of State himself agreed

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that that might be the case. I am afraid that I do not have the reference in front of me, but I recall reading that he said that there might be a case where a commercial operator would refuse to operate concessionary fares and in those circumstances the local authority would be justified in using the subsidy and tender procedure in order to secure that those concessionary fares were obtained on that route as they were on other routes.
The fact of the matter is that our bus services are going to be intertwined as between commercial and subsidised services. The Bill is based on the supposition that they are going to be operated separately. We are trying to provide a link between the two to provide the possibility of co-ordination which will be to the benefit of both parts of the bus system. I believe that the noble Earl, Lord De La Warr, had the key to it when he said that the major issue here was timing.
I am sorry that the Government are so intransigent on this issue. I am sorry that our approach, in this respect at least and in most other respects, which has been entirely constructive, has not found any response from the Government.
Lord Mottistone: There is one small point. I do not understand why the noble Lord does not take my noble friend's point that Clause 61(7) meets his requirements. The more I read that the more it seems to answer everything that the noble Lord said.
9 p.m.
Lord McIntosh of Haringey: The answer to that was given by the noble Earl, Lord De La Wan. The fact is that one must have the information at the time when it can be used. It ought, in the Bill, to be an obligation on the operators to provide that information and not be a matter for the local authority to demand it afterwards. It is timing that is of the essence, and that is the extent to which—although the noble Lord, Lord Mottistone, is undoubtedly right about Clause 61(7), and its extent—this amendment is still necessary.
As I said, I am sorry that the Government are so intransigent on what appears to me to be a helpful amendment. It is certainly helpful in its intention. We shall need to find some other way of helping the Government on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 77 shall stand part of the Bill?
Lord Belstead: I have already spoken to this on Clause 32 stand part. I also spoke to the subsequent Amendments Nos. 24OC, 24OD and 24OE.
Clause 77 disagreed to.
Lord Belstead Lord Belstead moved Amendment No. 24OC:
[Printed 16/7/85; col. 698.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 240C):
After Clause 77, insert the following new clause:
("Provision, maintenance and operation of bus stations.
.—(1) A Passenger Transport Executive for any passenger transport area shall have power—

(a) to provide bus stations and associated facilities at any place in or in the vicinity of their area; and

(b) to maintain, repair and operate bus stations and associated facilities provided under paragraph (a) above or under their former powers.

(2) A council operating a bus undertaking who have ceased by virtue of section 62(1) of this Act to have power to provide a service for the carriage of passengers by road which requires a PSV operator's licence shall have power to maintain, repair and operate bus stations and associated facilities provided by that authority under their former powers.
(3) Any charges for the use of accommodation for public service vehicles at any bus station provided by the Passenger Transport Executive for any passenger transport area or provided by any other person under any agreement entered into by any such Executive under section 10(1)(xv) of the 1968 Act (contracting-out powers) shall be reasonable.
(4) Subsection (3) above only applies where the charges are made by the Executive in question under section 10(1)(xiii) of that Act or by a person who is operating the bus station under any such agreement otherwise than as agent for the Executive.
(5) Any such council as is mentioned in subsection (2) above shall have power—

(a) to make reasonable charges for the use of accommodation for public service vehicles at any bus station provided under their former powers; and

(b) to make reasonable charges for the use of, or let on hire to any person, any associated facilities provided by them in connection with any bus station so provided.

(6) If any person who is the holder of a PSV operator's licence in respect of any vehicles using accommodation for public service vehicles at any such bus station as is mentioned in subsection (3) or (5) above considers that charges for the use of that accommodation are unreasonable, that person may apply to the traffic commissioner for the traffic area in which the bus station is situated (or where it is situated partly in one area and partly in another, to the traffic commissioner for such of those areas as may be agreed between the traffic commissioners concerned or, in default of agreement, determined by the Secretary of State).
(7) On any application under subsection (6) above the traffic commissioner may determine the charges to be made in respect of the applicant's vehicles for such period and on such terms as he thinks fit.").
Lord Belstead Lord Belstead moved Amendment No. 240D.
[Printed 16/7/85; col. 699.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 240D):
After Clause 77, insert the following new clause:
("Bus stations: restrictions on discriminatory practices, etc.
.—(1) Neither a Passenger Transport Executive nor a local authority shall, in the exercise of any of their powers—

(a) in relation to the provision or operation of bus stations or any associated facilities; or

(b) (without prejudice to paragraph (a) above) in relation in particular to the charges to be made for the use of any accommodation at a bus station or of any associated facilities;

act in such a way as to discriminate (whether directly or indirectly) against any holder, or class of holder, of a PSV operator's licence.
(2) In relation to a local authority, the powers in question under subsection (1) above include in particular (without prejudice to the generality of that subsection) their powers under section 38 of the Road Traffic Regulation Act 1984 (appointment of parking places provided under section 32 of that Act as stations for public service vehicles and provision of accommodation in connection with places so appointed).
(3) Where under any agreement (other than an agency agreement) entered into by a Passenger Transport Executive under section 10(1)(xv) of the 1968 Act (contracting-out powers) a person is operating a bus station or any associated facilities

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provided by that Executive or provided by that or any other person under any such agreement, that person shall not—

(a) in relation to the operation of that bus station or (as the case may be) of those facilities; or

(b) (without prejudice to paragraph (a) above) in relation in particular to the charges to be made for the use of any accommodation at that station or (as the case may be) for the use of those facilities;

act in such a way as to discriminate (whether directly or indirectly) against any holder, or class of holder, of a PSV operator's licence.
(4) The reservation of the whole or any part of the accommodation for public service vehicles at any bus station for such vehicles used in providing local services or (as the case may be) for such vehicles used in providing services other than local services shall not be taken to be discrimination prohibited by subsection (1) or (3) above.
(5) Notwithstanding anything in section 8 of the Transport Act 1983 (obligation to accept tenders for carrying on activities of Executives in certain circumstances) a Passenger Transport Executive may not in exercise of their powers under section 10(1)(xv) of the 1968 Act enter into an agreement (other than an agency agreement) for—

(a) the provision of any bus station or associated facilities the Executive have power under section (Provision, maintenance and operation of bus stations) of this Act to provide; or

(b) the operation of any bus station or associated facilities provided by the Executive under that section or under their former powers or provided by any other person under any agreement entered into by the Executive under section 10(1)(xv);

(6) In this section "agency agreement" means, in relation to any agreement under section 10(1)(xv), an agreement with any person for the carrying on of activities by that person as agent for the Executive concerned.
(7) Any such agreement as is mentioned in subsection (5)(b) above entered into after this subsection comes into force shall include provision for ensuring that it will come to an end if the person who under the agreement is to operate the bus station or associated facilities to which it applies becomes the operator of any public passenger transport services or a person connected with any such operator.
(8) On and after the date on which this section comes into force, subsection (5) above shall apply in relation to any such agreement as is there mentioned entered into by the Passenger Transport Executive for any passenger transport area before that date as if this section had come into force on 11th July 1985.").
Lord Belstead Lord Belstead moved Amendment No. 240E:
[Printed 16/7/85; col. 700.]
Lord Shepherd: I am sorry that I was not in the Chamber earlier. On page 13 of the Marshalled List the amendment is referred to as No. 240E, but on page 14 it is referred to as No. 240D. Perhaps there has been a printing problem.
I should like to ask the noble Lord about subsection (5)(b), which states:
"'associated facilities' means, in relation to a bus station, any amenities or facilities provided for use in connection with that station."
This is in terms of fair competition. I can understand what is meant by "amenities". That can refer to toilets, cloakrooms and so on. However, as regards other facilities there can be, and I know that there are, in bus stations owned by authorities—certainly for the National Bus Company—booking facilities for its own stage carriage, or for National Express and others. My difficulty is this. Does the amendment as it now stands mean that if the National Bus Company, or a future offspring of it, already has established facilities for the sale of tickets and the distribution of information, and if the authority is not able to provide similar facilities to a competitor, or to an independent coming in, that
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that would be seen as discrimination as between one and another?
There may be a simple answer to this but it appears to me that where there are existing facilities for an existing operator, and if they cannot be provided for another operator who may claim the facility, it may then appear that the authority is acting in a discriminatory way in regard to the other operator. If there is not a simple answer the noble Lord may prefer to write to me, but there appears to be a potential problem.
Lord Belstead: "Associated facilities" is, I know, meant to be a catch-all phrase and helpful to that extent. However, before I offer to write to the noble Lord—because that is what I think I must do—I am not quite sure whether the noble Lord is aware that this particular amendment, on which he is querying subsection (5)(b), does not apply to the National Bus Company bus stations. It is confined to the local authority and passenger transport executive bus stations.
Lord Shepherd: These are, in fact, the bus stations that I had in mind from which various existing operators are running. Facilities have been developed over a period of time, perhaps to meet the needs of the biggest operator in the district. My only anxiety is whether that subsection would create difficulties in the future for the continuation of those facilities.
Lord Belstead: As I said, this expression was used in order to try to be helpful. It refers back to subsection (1) of Amendment No. 240C. That subsection makes it clear that,
"A Passenger Transport Executive … shall have power to provide bus stations (and) … to maintain, repair and operate bus stations and associated .facilities".
The wording is in order to ensure that the power given to the PTEs and local authorities is not drawn too tight.
Perhaps I may write to the noble Lord, having said that, because there are probably aspects of the matter that I should answer.
On Question, amendment agreed to.
Following is the text of the amendment (No. 240E):
After Clause 77, insert the following new clause:
("Supplementary provisions.
.—(1) References in section (Provisions, maintenance and operation of bus stations) of this Act to the former powers of a council operating a bus undertaking are references to any powers which have ceased to be exercisable by that council by virtue of the application to that council of section 62(1) of this Act; and references in that section and in section (Bus stations.. restrictions on discriminatory practices, etc.) of this Act to the former powers of a Passenger Transport Executive are references to any powers which have ceased to be exercisable by that Executive by virtue of any order under section 59(5) of this Act.
(2) For the purposes of section (Bus stations: restrictions on discriminatory practices, etc.) of this Act a person is a person connected with the operator of any public passenger transport services if that person is a member of a group of interconnected bodies corporate any one or more of which is such an operator.
(3) For the purposes of subsection (2) above, any two bodies corporate are to be treated as interconnected if one of them is a body corporate of which the other is a subsidiary or if both of them are subsidiaries of the same body corporate; and in that subsection "group of interconnected bodies corporate" means a group consisting of two or more bodies corporate all of which are interconnected with each other in the sense given above.
(4) In section (Bus stations: restrictions on discriminatory practices, etc.) of this Act "local authority" means—

(a) in relation to England and Wales, the council of a county, London borough or district, the Greater London Council or the Common Council of the City of London; and

(b) in relation to Scotland, a regional or islands council.

(5) In sections (Provision, maintenance and operation of bus stations) and (Bus stations: restrictions on discriminatory practices, etc.) of this Act and this section—

(a) "bus station" means a parking place which may be used by public service vehicles (including any such parking place which forms part of any interchange facilities for enabling passengers travelling by one means of transport to continue their journey by another); and

(b) "associated facilities" means, in relation to a bus station, any amenities or facilites provided for use in connection with that station.").

[Amendment No. 240F not moved.]
Clause 78 [Compensation for loss of employment, etc.]
[Amendment No. 241 had been withdrawn from the Marshalled List]
The Earl of Caithness The Earl of Caithness moved Amendment No. 241ZA.
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move this amendment.
I spoke to it with Amendment No. 211CN.
On Question, amendment agreed to.
Following is the text of the amendment (No. 241ZA):
Page 79, line 17, leave out ("or") and insert ("and")
The Earl of Caithness The Earl of Caithness moved Amendment No. 241A:
Page 80, line 2, after ("of") insert ("or, in Scotland, sequestration of the estate of, or granting of a trust deed for creditors by,").
The noble Earl said: This is a minor technical amendment. The noble Lord, Lord Carmichael, will fully appreciate this, but for the rest of the Committee may I say that it is a necessary amendment because bankruptcy does not have a legal meaning in Scotland. The terms "sequestration of the estate" and "granting of a trust deed for creditors" are used to cover both cases where a court has judged someone bankrupt and cases where a trustee has been appointed voluntarily on behalf of creditors. I beg to move.
On Question, amendment agreed to.
On Question, Whether Clause 78, as amended, shall stand part of the Bill?
Lord Sandford: At the beginning of today's proceedings I had occasion to thank my noble friend Lord Trefgarne for a long letter which he wrote to me in answer to the debate that we had on Thursday about pension arrangements for members of the municipal bus companies, but he and I were at something of a loss at that stage to know how to make that information availiable to the rest of the Committee.
May I take this opportunity of saying what we have done is this. I have put to him a Question requesting him to publish the letter that he wrote to me on 24th July, and he has answered that Parliamentary Question by agreeing to publish it. It will appear in tomorrow's Hansard, and that will deal with that problem for us.
Clause 78, as amended, agreed to.
Clause 79 [Incorporation of Passenger Transport Executives in Authorities for their area]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 241B:
[Printed 18/7/85; col. 978.]
The noble Earl said: With the leave of the Committee, we could perhaps take Amendments Nos. 241 B and 241C together. I spoke to them on Amendment No. 211CN. I beg to move.
[Amendment No. 241C.: Printed 18/7/85; col. 978.]
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 241B and 241C):
Page 80, line 44, leave out ("subsection (6) below") and insert ("the following provisions of this section").
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.").
Clause 79, as amended, agreed to.
Clause 80 agreed to.
[Amendment No. 242 not moved.]
Clause 81 [Interpretation of Part IV]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 242A:
Page 82, line 7, leave out ("(3) and").
The noble Earl said: I beg to move this amendment. I spoke to it with Amendment No. 211ZE.
On Question, amendment agreed to.
Clause 81, as amended, agreed to.
[Amendments Nos. 243 to 245 had been withdrawn from the Marshalled List.]
Clause 82 agreed to.
Clause 83 [Obligation to invite tenders for subsidised services]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 245A:
Page 83, line 37, after ("sections") insert—
("(Phased Introduction of Tendering),")
The noble Lord said: Perhaps it would be for the convenience of the Committee to take Amendment No. 249A with Amendment No. 245A.
Amendment No. 249A: After Clause 83, insert the following new clause:
("Phased Introduction of Tendering.
.—(1) The Secretary of State shall, on application from an authority responsible for expenditure on public passenger transport services, make an order suspending the provisions of Schedule 5 in respect of the introduction of tendering and substituting a scheme drawn up by the authority for the phased introduction of tendering over a period to be agreed between the authority and the Secretary of State.
(2) In drawing up a scheme for the phased introduction of tendering the authority shall have regard to the following factors:—

(a) the number of services for which tenders have to be invited;

(b) the period for which each tender shall be let when tendering is introduced in full;

(c) variation of the initial period for which each tender is let in order to avoid excessive peaks in workload;

(d) the need to take urgent action in respect of any service that may cease to operate; and

(e) the number of staff available to perform the tendering function.

(3) The scheme shall specify—

(a) a programme showing the numbers of tenders to be let in each three monthly period until the complete introduction of tendering;

(b) the date at which tendering will be fully introduced within the authority's area; and

(c) arrangements to continue the payment of service subsidies by agreement for those services the authority wishes to secure but which are not yet subject to tendering arrangements.

(4) The scheme shall not confer unfair advantage on any particular operators within the area.")
Amendment No. 245A is merely to enable the introduction of tendering to be phased over a long enough period so that local authority staff will be able to cope satisfactorily with this work. It would also be to the benefit of bus services by enabling local authorities to control the introduction of new arrangements in an orderly fashion, and so avoid many of the problems that may arise from a total and simultaneous change everywhere, tempered only to the limited extent that the transitional arrangements in Schedule 5 will secure, and the more substantial amendment, No. 249A. The reason for this is to enable regulation to be deferred in certain circumstances because of the pressure under which local authorities will find themselves. It will be most severe in major urban areas which have the densest, the most complex and the most integrated networks.
The proportion of these networks which will need to be put out to tender is largely an unknown quantity, like so much else in the Bill, and it will not be known for sure until the registration period is over and the opportunity for variation and withdrawal is ended somewhere in mid-1986. The Government have not changed their mind and have not reduced their determination to adhere to deregulation day by October 1986. The revisions tabled in Schedule 5 make 20th September 1986 the operative day—D-day I suppose you could call it. The timing is still such that there is little hope of completing tendering in the time available. In the metropolitan areas the new joint boards will not be fully effective until after 1st April 1986, and so there is little hope of having more than four effective working months in which to implement the new, untested and unfamiliar process of tendering.
9.15 p.m.
The joint boards will be trying to cope with all that is entailed in administrative reorganisation—new personnel, new policies and other such matters. The period will also coincide with the summer holidays, during which even local authority and PTA staff have the right to be away. At that period the resources on all sides are always stretched by annual leave commitments, and operators are also most heavily committed to the seasonal services, such as tours, that crop up, especially at the seaside and in the conurbations near the seaside.
On the basis of limited experience of tendering in London after the 1984 Act, one PTE estimates that if only half its services are required to go to tender—that could be a low or a high estimate; it is thought by the authority to be low—in order to complete the task in the time proposed, up to 90 additional staff would be required. Another PTE calculates its requirements at about half that number. In any event the total requirement for staff qualified in this field—and these staff do
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not grow on trees; they are highly specialised—for all PTEs will run to hundreds, with all the complications of attempting to recruit professional staff on a part-time basis. In the consultative paper on tendering issued by the Department of Transport, the Government acknowledged that longer time-scales might be needed in certain areas, and that the problems would be most severe in the metropolitan areas.
The amendment merely seeks to allow for those problems, uncertainties and differences in various parts of the country. It aims to minimise the practical difficulties and the undoubted administrative problems to smooth the transitional process and thereby ensure that the quality of the end product is as high as possible. I hope that the Minister will respond to the amendment in the spirit in which it is moved—that is, in an attempt to be helpful. I beg to move.
Earl De La Warr: I should like to support the amendment. We do not want to get too far into Schedule 5 debates, but a couple of dates are perhaps worth adding to show how acute the time factor is. As the noble Lord, Lord Carmichael, said, D-day will be September 28th. Perhaps a high proportion of applications for registration will be in the early part of the year, but throughout the spring and summer they will be coming in. Indeed, the last date is to be October 16th. Perhaps noble Lords will bear that in mind when they think of the final D-day being September 28th.
It might be useful to remind the Committee of the measure of the task that lies in front of the local authorities which have to prepare these tenders. First of all, when the registrations are done they have to analyse all the commercial routes to see where the gaps lie. At the same time they have to take big and important decisions on the priorities at which they must look. We must remember that money will not be unlimited. At least in the shire counties and probably in the metropolitan areas they have to make decisions which they cannot make without referring to the political body on the priorities as between concessionary fares and subsidised routes. They have, on a more mechanistic base, to draw up the specifications. They have to issue all the documents. Then, when the applications come in, they have to evaluate each one and see what the whole amounts to in terms of money. It really is an enormous job. When one bears in mind that in each metropolitan county anything between 500 and a thousand services are to come within the non-commercial, the tendering, orbit, I think one will see what an enormous task this is. I repeat that in the final analysis they have only six weeks to do it and up to August 16th it will be like people sitting down to do a jigsaw when they have not all the pieces, because the pieces will not all be there until the middle of August.
I suggest to Members of the Committee that they should believe the advice which is coming to me and to other noble Lords, from those people who are actually going to do the tendering, that they will not succeed in getting through in time. Whether the Government choose to say, "We do not believe you: they will succeed—they must succeed", or whether they make provision for what must be a possibility, and in my opinion is a near certainty, that there will be

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enormous overspill after D-Day of services that have not yet found a contracted operator, is for them to decide. In my opinion it is pure folly to take a rigid attitude and say, "This will be done because I say it will be done", because it cannot be done.
I should very much like to hear the Government's attitude to this situation, bearing in mind, as I am sure they will, that if hard-worked men fail to get all the routes, the would-be tendered routes, buttoned up, registered and contracted, then on D-Day plus one there will be people waiting at bus stops for buses which will not turn up.
I want my noble friend Lord Belstead to take this very seriously. I know him well enough to know that he most certainly will, because, in the final analysis, it is a human question. It is a human question and has nothing at all to do with the Minister's resolve.
Lord Teviot: My Lords, I should not normally have come in now, having listened to the noble Lord, Lord Carmichael, introduce this amendment so effectively, and to my noble friend. However, I do so only to support this amendment. I think my noble friend must think quite seriously of the restrictions of the timetable. There are only two points that I should like to make to pre-empt his remarks.
We had a similar amendment on phased deregulation on Part I. However, we are now dealing with Part V. By and large, we have progressed fairly well. I think one must be sympathetic. If this Bill is to work, I think all of us, including even those who are against the Bill, agree that we do not want it to be a botched job. At the moment, with the programme offered, it will, unless something is done, be a botched job.
Lord Belstead: I should perhaps say first, in reply to the amendment, that the consultative document put out by the Department of Transport on tendering did indeed speak of a rather longer period for tendering than is provided for now. However, it was in response to what people said during the consultation process that the Government were persuaded that tendering should be carried out fully before deregulation. I have to say that although I absolutely understand why the arguments have been put forward on the new clause—and I respect the motives for the putting forward of the amendment—I am really dismayed at what would be the effect of the amendment compared to the arrangements that are being made, particularly in Schedule 5 to the Bill.
I should like to turn to a little more of the detail. First, why do we put a firm date for deregulation in Schedule 5 and make it the same for the country as a whole? It is because it is in the nature of things that if individual authorities could choose the timescale then reasons would be found for extending it, even if we were talking about a long period of some years. I think it is probably human nature that we would find a rush towards the end. At some point, one has to have certainty. In specifying a fixed date, that has been the principle which has guided us so that local authorities and operators can start working to a common goal.
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I do not want to suggest for one minute, having listened to your Lordships, that the move to deregulation and competitive tendering will be easy. I know that it is going to mean a lot of hard work for the professionals in the bus industry. But we believe that the timescale in Schedule 5 is a realistic one. Noble Lords have said that they do not want to go into detail on Schedule 5. I would prefer not to do so either. However, as a general proposition I would say that I like to think that the amendments that we have put down to Schedule 5 will give authorities some six to seven months to complete the tendering exercise starting from the date of registration in February 1986. Many authorities will be well advanced with their preparations long before that. Indeed, some counties are already initiating the change to tendering, and in some areas, particularly the metropolitan areas, the timescale, although it will be demanding, will nonetheless be achievable.
The effect of the new clause would be to remove the link between the abolition of road service licensing and the introduction of tendering. It would mean that in many areas network subsidy would continue well beyond deregulation day. I put it to your Lordships that this would, or certainly could, have a number of serious effects. It would mean that the incumbent, largely public sector operators, would be in a very different competitive position from the independent operators seeking to start in the market. It would distort competition and the benefits which the new patterns of services and the new operators coming into the market will, we hope, bring.
Secondly, the new clause presumes that operators can readily register a network of commercial services unaffected by the continuation of network subsidy. Operators, in deciding which services to register during the transitional period, will not only have to assess what services they believe they can operate without subsidy in the open market but will also have to take into account, under the amendment, the fact that some operators would be continuing to receive network subsidy after deregulation day as well. At that stage operators would not even know how long this uncomfortable state of affairs would continue. It could be for months, but it could be for years.
The result would be that the services registered during the transitional period would, I suggest, be closer to the existing pattern of services than the sort of services that will emerge when the market is free of network subsidy. That would probably mean that authorities would be involved in extensive re-tendering over the first year or so following deregulation as the pattern of services adjusted to a market oriented one. Is this really what noble Lords who have put their names to the amendment would want—to almost certainly require or force operators to go in for a whole lot of re-tendering once the transitional year had finished? I should have thought that that was something which we should all want to avoid.
9.30 p.m.
Paradoxically, a further side effect of the new clause could well be to introduce greater pressure on local authorities during that part of the transitional period falling after deregulation, and by that I mean the initial

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period between October and December next year. Network operators would feel under commercial pressures and would very likely seek to use their dominant position to demand higher subsidy payments. Authorities would be faced with the beginnings of the effects of cross-subsidy withdrawal without the benefit of lower costs which tendering will bring about.
If I may be forgiven for saying so, I really think that with that paradox we would be getting the worst of all worlds. I am therefore suggesting to your Lordships that, although I respect the reasons for which this amendment is put forward and the care with which Amendment No. 249A has been drafted, it would lead to a great deal of uncertainty. I would go so far as to say that it would lead even to confusion.
Finally, I ask your Lordships to contrast that with the approach in the Bill which aims to make the transition a controlled one so that on deregulation day when the new pattern of services starts, the local authorities will have had an opportunity to make sure that the service subsidy contracts for the noncommercial services have been organised and everybody knows where they stand.
Earl De La Warr: I should like to ask my noble friend one particular question. In the middle of his excellent exposition he said that this might go on for years. I wondered why he said that because if he looks at the last three lines of subection (1) of the amendment he will find reference to the substitution of:
"a scheme drawn up by the authority for the phased introduction of tendering over a period to be agreed between the authority and the Secretary of State".
Therefore, it is ultimately under the control of the Secretary of State to say how long the period will be. I do not wish to be personal about the present Secretary of State, but I do not think that we need fear, under those circumstances, that it would go on for years. I should have thought that "months" was a more reasonable interpretation of the amendment. I wonder whether my noble friend would care to comment on that either now or later in the debate?
Lord Belstead: Perhaps I may reply to my noble friend on that particular point. As I understand it, my right honourable friend would be required to make an order regardless of the merits of the case. The only discretion which would be allowed to my right honourable friend would be to agree with the authority the period over which the tendering is to be phased. A refusal by my right honourable friend to agree to the authority's proposals would not necessarily lead to my right honourable friend prevailing; it would simply lead to disagreement, and in the background there would be the requirement for my right honourable friend to make an order regardless of the merits of the case.
Earl De La Wan: Would my noble friend at least agree that the Secretary of State does not have removed from him the right to say "No" to a period which he regards as unreasonably long?
Lord Belstead: My noble friend and I must not keep on having exchanges on'this matter even though this is the Committee stage, because both of us can read what is in subsection (1) of the amendment. Whereas it is for debate as to how disagreement between the authority and my right honourable friend would turn out, what is for sure is that:
"The Secretary of State shall, on application from an authority responsible for expenditure on public passenger transport services, make an order suspending the provisions of Schedule 5".
Lord Shepherd: I do not know what my noble friend has in mind in regard to this amendment. He has certainly sought to deal in—I will not say an ingenious way—a pragmatic way with what is a genuine concern throughout the bus business and the local authorities. Perhaps by Report stage there will be a great deal more information available as to what existing operators have in mind as a consequence of the passage of this Bill.
I am with the Government in that I do not want to see phasing in of deregulation. From the beginning I have taken the view that if there was to be fair competion there has to be one date applicable throughout the country. To that extent I am with Her Majesty's Government and Ministers. However, I believe that the timescale provided in this Bill is far too short.
I do not know whether the noble Lord has seen an estimate that in Merseyside there could well be over 1,000 specifications that will have to be considered. When we are talking about tendering we are not just thinking about tendering for routes, but it could be for tendering on a route between particular times of the day, and also days in the week. It is not clear-cut that one is tendering for a service. One may be tendering for portions of time on a particular route.
With the figure I have that in Merseyside there will be a thousand specifications which will have to go out for tendering and will have to be considered, even with the best will in the world I do not see how the authority will be able to deal with it correctly and adequately. There ought to be one date for deregulation, so in principle I am against phasing in as it is proposed.
However, I do not believe that the timescale in Schedule 5 is a date that, even with the best will in the world and with all the work, ingenuity and dedication, can be achieved. If the Government insist upon the timescale here you are going to have holes in the system where there will not be operators willing to come in. We ought to come back to this on Report when we have greater knowledge as to how the operators view the procedures.
It is not just the operators. The operators' task in a sense is relatively simple compared with that of the authorities who have to make their judgment as to the services they want, and the failure, shall we say, from the commercial side for the provision of services for which they will have to tender and provide subsidy. This is something to which we ought to come back with perhaps greater knowledge on Report.
Lord Carmichael of Kelvingrove: The Committee will be grateful to the Minister for the persuasive way he put his case, and also for the fact that he emphasised the difficulties if there was phasing. I agree with my

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noble friend Lord Shepherd that if we are to have this change we do not want phasing, we would rather have it all done at once.
I am a little surprised and amazed at the incredible confidence that the Minister has that it is all going to be done. No one expert in the field of running buses and operating complicated systems really believes that it is all going to be done. We may be greatly surprised by things happening much more quickly, and they may prove to be even simpler than we had originally believed. But I should have thought that the Minister would have jumped at this amendment just to give that slight fallback. If he had been in as many Scottish Committees as I have he would realise that is not unknown in Parliament. In the new clause he has used the words "the Secretary of State shall". I have spent up to two-and-a-half hours listening to Scottish honourable Members discussing "shall" and "may". Why could not the Minister have just slipped in "may" and solved the whole problem by giving the Secretary of State a possibility to meet the slight chance that this huge complicated reshuffle might not go as smoothly as he had hoped?
This amendment would give him that opportunity. In so doing, I hope the Minister will take it away and consider it. No harm is done by the amendment as it stands, I do not believe, or I would not have agreed with the alteration from "shall" to "may"; but in the meantime I wish to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sandford Lord Sandford moved Amendment No. 246:
Page 84, line 2, at end insert—
("(2A) An invitation to tender under this section may, without prejudice to the generality of subsection (2) above, include conditions requiring the tenderers to participate in a travel concession scheme provided under section 87 of this Act.").
The noble Lord said: In moving Amendment No. 246 on behalf of my noble friend Lady Vickers, I should like also to speak to Amendments Nos. 247, 248 and 249:
Amendment No 247: Page 84, line 18, at end insert—
("(4A) An authority may refuse to issue an invitation to any person who has not given to the authority a written notice indicating that they undertake not to compete on any route, or section of route subsidised under Part V of this Act.").
Amendment No. 248: Page 84, line 37, leave out subsection (7) and insert—
("(7) The authority issuing the invitation to tender under this section shall—

(a) have regard to regulations made under section 86(2) of this Act; and

(b) determine—

(i) whether to accept a tender submitted in response to the invitation; or

(ii) which (if any) of the several tenders to accept: solely by reference to what in their view is the most effective and economic application of the funds at their disposal for the payment of service subsidies.").

Amendment No. 249: Page 85, leave out lines 21 and 22 and insert—

("(i) be efficiently operated by the person proposing to provide it; and

(ii) not have an adverse effect upon existing or proposed tendered subsidised services.").

At this stage these are only probing amendments. I do not want to ask my noble friend to go into any of them in great detail. We shall return to them when we come
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to Report stage, when the noble Baroness will he here to consider the matter herself.
The broad intention, I surmise, is that the amendments together would enable authorities, when they are dealing with tenders for subsidised services, to secure some measure of protection for the services that they are proposing for tender. That is done by Amendment No. 246 adding to the end of subsection (2), Amendment No. 247 adding to the end of subsection (4), Amendment No. 248 substituting a new version of subsection (7) and Amendment No. 249 introducing some changes at the end of subsection (8).
It would be tedious to try to explain in any more detail to the Committee exactly how these amendments would work. All I should like to do at this stage is to ask my noble friend on the Front Bench to comment on their general thrust. They would operate in broadly the same way as Hereford and Worcester County Council has tried to operate its trial area in Hereford, using the power of contract with local operators to restrain them from acting to the prejudice of and in competition with other subsidised services. That is the broad intention.
Although these amendments would not impose limitations on this power of protection in the way that some other amendments have done, I suggest to the Committee that they have the great virtue of simplicity. Though at first sight one would not think that, I believe that is a claim one can make for them. May I invite other noble Lords interested in this aspect to contribute to this debate and my noble friend to comment on the general concept. I beg to move.
9.45 p.m.
The Deputy Chairman of Committees (Viscount Simon): As the noble Lord spoke to Amendment No. 248 as well as to Nos. 246 and 247, I ought to call attention to the fact that if No. 248 were to be agreed, I could not call Amendment No. 248A.
Lord Belstead: My noble friend Lord Sandford has moved three different sets of amendments on behalf of the noble Baroness, Lady Vickers. But I think that my noble friend made it clear in his remarks that what he is after is to find the Government response to the main thrust of these amendments, which is to endeavour to give, for instance, in Amendments Nos. 247 and 249 (which go together) more protection to subsidised services. I hear my noble friend say, "That's right". I feel that Amendments Nos. 246 and 248 go a little wider than that; but if that is what my noble friend is really after, may I simply say this.
I think that really the essential point about the difficult question about the protection for subsidised services is that it is terribly difficult to give some form of artificial protection to a service simply because it is subsidised without running the risk of endangering the position of passengers on commercial sectors of routes. By protecting the subsidised services, other operators on the commercial parts of the routes—and indeed adjoining routes—would be prevented from stopping up gaps in the market and seeking out ways of providing the customer with a better service or a choice of service.

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We feel that the local authorities should see what the market is going to provide and then have the right and the power to fill the gaps. The truth of the matter is that these amendments go quite a long way to standing that intention on its head. May I say at the risk of having said it many times before that we believe that competition is the key to better services for the passenger but that it is also the key to greater efficiency and lower costs. One simply cannot look at subsidised services in isolation and say, "If we can give them protection, then it is going to cost the local authority a great deal less". One has to look at the whole market and recognise that there are a number of offsetting factors at play. If I may be forgiven for saying it yet again, we take the view that the combination of various effects of competition should not change the level of local authority expenditure required for the same level of services over the country as a whole; and, of course, for passengers there will be a large net benefit in the form of lower fares and more flexible services.
If I may speak finally and particularly to Amendments Nos. 247 and 249, I realise that in looking particularly at those central amendments they do not go as far as that major amendment, Amendment No. 107, which my noble friend Lord Monk Bretton moved and which we debated about 10 days ago. These amendments would prevent only those operators with service subsidy contracts from the local authority from competing against the subsidised services. But in other respects these amendments would be far more damaging to the working of the free market (which is what the Bill is trying to bring about) than my noble friend Lord Monk Bretton's amendments tried to do some 10 days ago.
Lord Monk Bretton's amendments were very tightly drawn in the protection that they tried to give to the subsidised services and they gave a right of appeal. These amendments would provide no such limitations. In effect, they would allow a local authority to use its purchasing power in the market to inhibit the right of operators to go about their legitimate activities and it would be a kind of Hobson's choice for operators. Either they would have to forgo the possibility of a local authority subsidy or they would be stymied in serving the passengers to the best of their abilities on their commercial routes. I therefore suggest that whichever option an operator chose, it would be the public who would lose out.
I shall not go on about this. I know there is a difference of opinion in the Committee about the position of subsidised services. I would simply say that although I know the evidence is not great, what evidence there is shows that if one allows for greater competition, in the end it is the passenger who will benefit from lower fares, from more flexible services and a greater number of them. I think it is incontrovertible that the evidence that there is all tends in that direction. Certainly there is enough evidence to show that the artificial protection of subsidised services which these amendments would tend to achieve would not only go against what the Bill is trying to do but, if I may say so to my noble friend, would not be necessary.
Lord Sandford: It is of course the difficulty that we find ourselves in that we are planning and legislating very much in the dark. The extent to which the loss of cross-subsidy will be made up by increased efficiency and by competition is not something which has been studied, researched and measured. That is the whole difficulty. But when my noble friend says that such evidence as we have points in the right direction—from his point of view—I beg to differ because it was by operating just these sorts of powers that the county of Hereford and Worcester were able to achieve such success—although it was pretty limited—as they had at Hereford.
If I may say so, I think that the Government and Parliament will look rather silly if the assumptions on which this legislation is based are not fulfilled in practice and there is no power to do anything at all along the lines of these amendments. However, I am encouraged by what my noble friend said, particularly when he was referring to Amendments Nos. 247 and 249 because although he said they were defective in some respects he also said they were superior to those which had been moved earlier. He also said that although the earlier amendments were defective in other respects, they had virtues which these amendments had not; and so perhaps between us we can find a formula which will combine the virtues of these amendments and of the earlier ones which may enable us to get something into the Bill which will provide a means out of this difficulty if the Government's rather optimistic expectations are not fulfilled. With that, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 247 and 248 not moved.]
Lord Ennals Lord Ennals moved Amendment No. 248A:
Page 84, line 42, leave out ("solely") and insert ("by reference to both the manner in which and the extent to which the needs of elderly and disabled people are to be met and".").
The noble Lord said: It would be churlish of me to say that I am glad that the Government did not accept Amendment No. 248, because it was ruled that that would have made it impossible for me to move Amendment No. 248A, and I am going to do so because I think it raises an important question of principle which I should like the Minister to think about.
Earlier in the Bill, much to my pleasure and that of other Members of your Lordships' Committee, the needs of disabled people were recognised in amendments which were introduced by the noble Lord, Lord Belstead. The point here really follows on logically from what this Committee had already done. As the Bill is drafted, an authority issuing an invitation to tender has to accept that tender which in their view—and here I will quote from the bottom of page 84—
"is the most effective and economic application of the funds at their disposal …".
That means that they must be satisfied that the firm is competent and that the bid is low; if possible the lowest. I believe that that would be wrong. It does not allow them to give consideration to the facilities that an operator might offer to elderly and disabled people.
As I said, on earlier amendments the Minister accepted the need for PTEs to have regard to the needs of disabled and elderly people. I think that it would be in accordance with that principle that in determining the question of tendering and the acceptance of tenders the needs of elderly and disabled people should be a factor. The amendment therefore would ensure that authorities considered tenders by reference to the extent to which the needs of elderly and disabled people are to be met, as well as an effective and economic application of the funds available.
I think that that is a simple and logical argument, one which I hope the Minister will accept, even if he may say that the amendment could perhaps be worded in a better way. But I hope that he will want to accept the principle that I have just mentioned.
Lord Belstead: I fully appreciate the intention behind the amendment of the noble Lord, Lord Ennals. I must say that I am less certain as to the effect that it would have. It gives me the opportunity to make quite clear how the tendering system will apply to the needs of elderly and disabled people. The point to stress in reply to the noble Lord is that local authorities will, under the tendering provisions, have full discretion to specify the sort of services they require to meet the needs of elderly and disabled people. Under Clauses 57 and 61, as amended, authorities will have a duty to have regard to the needs of elderly and disabled people in securing the services that they consider appropriate. In inviting tenders for subsidised services, authorities will therefore be able to specify particular vehicle features or to specify specialised services designed for the disabled.
The noble Lord said that we had a basis to the Bill on which he would now like to build. I agree with the noble Lord so far as the basis is concerned. There are two important stages at which authorities will be considering the needs of elderly and disabled people: first, in determining their public transport policies under Clauses 57 and 61; and, secondly, in drawing up their invitations to tender under Clause 83(2) which will flow from those policies. When an authority invites tenders they must, in the words of that subsection, be tenders
"for the provision of that service for such period and on such basis as may be specified in the invitation to tender".
So the fruits of the authority's consideration of the needs of elderly and disabled people should emerge in those tender invitations.
Clause 83(7)—which the amendment of the noble Lord seeks to alter—deals with the stage at which authorities are choosing which tender to accept; and subsection (8) elaborates on that. The subsection is not primarily concerned with policy choices but with comparisons between offers to provide what an authority has already asked for. It is an essential feature of any tendering process that all those who put in offers do so on a fair and equitable basis—that is, that each has the opportunity to say at what price and at what time of day he can supply what it is that the authority wants.
That is not to say that policy choices are impossible at tender stage. An authority might decide that it will invite tenders which specify a price for, say, using a
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low-step vehicle and another price for vehicles adapted to carry wheelchairs. It might be only when the authority could see the cost of each of those options that it felt able to take its decision. But subsection (7) simply directs the authority to choose the offer which provides the best use of funds in the context of the policy that it has chosen. With respect to the noble Lord, I think that that is as far as the Bill ought to go in this respect.
10 p.m.
After all, subsection (7) does not mean that authorities must accept the lowest tender—it really does not. Nor does it mean that if they want buses with low steps they must accept a low tender from an operator whose buses do not have low steps. Nor does it mean that a local authority cannot take account of some helpful feature that an operator is able to provide over and above the specification issued and assess its value, provided all operators had the same opportunity to offer additional features. All those considerations are for the authority to address when they draw up their policies and to carry through when they issue their tender invitations. I really do not think that an amendment to subsection (7), which covers the moment when they are finally looking to see which of the tenders they will choose, is either necessary or relevant.
So this is not a difference of principle between the Government and the noble Lord, but a difference of emphasis and a difference over the construction of the Bill, for may I repeat that local authorities will have a duty to have regard to the needs of the elderly and disabled; the tendering provisions will allow them to specify services to meet those needs, and there will be full discretion for authorities to take those needs into account in inviting tenders. On that understanding, I hope that the noble Lord will feel that the amendment is not necessary.
Lord Ennals: I wish that I could be a little more impressed by the arguments put forward by the noble Lord the Minister. I should have thought that the final moment that we are now talking about, which is accepting and taking a decision on a tender that has been put forward, is precisely the moment at which the principle which is already written into the Bill should be not uppermost, but borne in mind.
I understand the Minister's argument, that of course there has already been stated to be an obligation upon the licensing authorities to "have regard to"; but they are much more likely to "have regard to" if the wording is not at least giving the impression that it is the lowest bid that has been looked for. If the Minister looks again at the words,
"the most effective and economic application of the funds",
there is no implication whatsoever that the specific needs of disabled people will be borne in mind. I think that the wording as it is now gives the impression that it is the efficiency of the service and the cheapest bid which would be uppermost, unless something were put in at this stage.
I assure the Minister that I shall not press the amendment to a Division, but I should like him to look at it again. As I have said, we have looked at them

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at other stages in the process and it is at the final stage, also, that the needs of the disabled should be brought to the attention of those who have to reach this final decision. I beg leave to withdraw the amendment.
Lord Belstead: Of course, if the noble Lord asks me to do so, I shall be only too ready to look at this amendment and, no doubt, there will be an opportunity for the noble Lord and myself to consult together between the two stages of the Bill. But I would simply repeat that in drawing up their invitations to tender under Clause 83(2) the needs of the elderly and disabled will be taken into account. If that is the case—and it is the case, because we have amended the Bill in that way—then, when one gets to the point at which this amendment is directed, when the tenders come back in, the needs of the elderly and disabled have already been taken into account in going out to the tenderers. It is at that moment, I am suggesting to the noble Lord, that the authority needs to look at the results of those tenders, without having it said again that the authority must have regard to the needs of elderly and disabled people.
Lord Ennals: I accept the logic of what the noble Lord said, but in that case why is it emphasised that there must be,
"the most economic and efficient application of the funds"?
That seems to point in a certain direction. Is it necessary to point in that direction, if all the other considerations which have already been written into the Bill are specified?
Baroness Carnegy of Lour: Before this discussion comes to an end, perhaps I may say this. When you are in a local authority looking at the tenders you have to look at them in relation to everything that they have been asked to tender for. You have to look at all the other requirements. Although I appreciate that, as ever, the noble Lord is watching to try to make sure that the legislation does the very best it can for the elderly and disabled, I think that in judging a tender you would always look at the criteria against which people tender, because otherwise it is not fair to decide which is the right one to take. You must apply all the criteria that were set out when the tender papers were issued. I think the noble Lord, Lord Ennals, will agree that that is always a condition of tendering.
I personally am not too worried about it at that stage. I accept that the other point the noble Lord is making about their being efficient is a different one; but I do not think that the elderly and disabled not being mentioned again could conceivably matter, because you always look at all the criteria.
Lord Ennals: I understand the logic of the argument presented by the noble Baroness. If there were to be written in a phrase which did not necessarily specify the elderly or the disabled but which added to this phrase "effective and economic application" and referred to all the other obligations at which an authority is obliged to look, the subsection would be clearer than it is at present. The emphasis is on efficiency and economic application. There is really something missing. It may be that my words are too
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specific, but perhaps the Minister could look at them in the context of all the other obligations. In the light of what has been said and with the assurance that the Minister will look at it again, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 249 not moved.]
Clause 83 agreed to.
[Amendment No. 249A not moved.]
Clauses 84 and 85 agreed to.
Clause 86 [General provisions with respect to the exercise of functions under sections 83 to 85]:
Lord Sandford Lord Sandford moved Amendment No. 250:
Page 87, line 43, at end insert—
(" (1A) Arrangements made in pursuance of a scheme to which section 87(4A) of this Act applies shall be deemed not to inhibit competition.")
The noble Lord said: I move this amendment on behalf of my noble friend Lady Vickers. At the same time I should like to speak to Amendments Nos. 251 and 252, as probing amendments.
Amendment No. 251: Page 88, line 1, leave out subsection (2) and insert—
(" (2) Any authority responsible for expenditure on providing public transport may, in selecting a tender have regard to—

(a) the vehicle type to be used;

(b) the ease of access to and egress from the vehicle;

(c) the arrangements to have vehicles and drivers available at short notice to replace a vehicle which is delayed in operating its service, has failed or is damaged or to replace an incapacitated driver,

(d) the fare levels and structure to be used; and

(e) the minimum run and recovery times to be operated.")

Amendment No. 252: Clause 87, page 89, line 18, at end insert—
(" (4A) Where the sole operator of a service on a section of road does not wish to participate in the scheme, the local authority may invite tenders for a subsidised service on condition that the tenderer does not enter the scheme.")
As your Lordships will see, these are fairly precisely worded amendments. Amendment No. 250 adds to subsection (1) of Clause 86; Amendment No. 251 substitutes another version of subsection (2) of Clause 86; Amendment No. 252 adds to subsection (4) of Clause 87—that is, Clause 87 as at present printed in the Bill and not the Clause 87 my noble friend Lord Belstead proposes to substitute.
I do not want to invite the Committee to look at those amendments in detail now with a view to moving them into the Bill, but I ask my noble friend once again to comment on their general thrust, which is to provide a wider scope for the local authorities to take a range of relevant factors into account when assessing the tenders rather than a narrow view concentrated exclusively on the tender price and not enough on the real value to the public of the services which that price is going to buy.
I hope that that brief explanation of the general idea behind these amendments is sufficient for my noble friend to give me, and in due course my noble friend Lady Vickers, an indication of how he regards this attempt at improving the Bill. I beg to move.
Lord Belstead: I am a little worried that I shall not be replying very effectively to my noble friend. He is dealing with Amendments Nos. 250 and 252 together.
Lord Sandford: And Amendment No. 251.
Lord Belstead: That is right; but leaving aside Amendment No. 251 for the moment, Amendments Nos. 250 and 252 bring us to a pair of amendments which, with great respect to my noble friend, do not make sense. There is one negative too many in Amendment No. 252. I think that all I wish to say to my noble friend—and I hope he will not think that I am being discourteous in replying briefly—is that it is our intention in the Bill that local authorities should, if they wish, have the power to compel operators of registered local services to take part in concessionary fare schemes. This, for the first time, is where we put our toes into concessionary fare schemes, with Amendments Nos. 250 and 252, and I do not think that these two amendments get it quite right. We shall be coming back to this in a moment.
Amendment No. 251 is completely different. It falls within the scope of what my noble friend said to me a moment ago: that he wanted to know a little more about what the Government think of the setting out of criteria when the whole question of selecting a tender is being decided by the authority. Again, to reply reasonably briefly, I think that the best value for money is a reasonable objective. It is reasonable for the same reasons as I gave to the noble Lord, Lord Ennals. As regards elderly and disabled people we have, of course, written an explicit amendment into the Bill saying that their interests shall be taken into account when deciding on subsidised services.
Talking more generally in answer to my noble friend, it is for each authority to decide what it wishes to subsidise in order to fulfil its more general duties under Clauses 57 and 61. If an authority considers it wants to subsidise services with vehicles which are, for example, particularly easy for elderly or disabled people, it is free to do so.
I should like to stress to my noble friend that when inviting tenders, authorities should, as far as possible, make clear to operators the features that they would like to see in the services offered. On the other hand, authorities will wish to bear in mind the disadvantages of specifying services so tightly that operators have no scope to use their expertise to provide the most effective service and thus achieve the most effective and economic use of the subsidy. If they are to make the best use of the advantages of tendering, authorities will want to leave themselves free to judge the relative costs and benefits of, for example, different vehicle types where these are matters on which the authorities have not chosen a clear policy line.
I am trying to show to my noble friend that I know that tendering is a skilled and specialised business and for that very reason we have deliberately drafted provisions in the Bill which allow authorities considerable flexibility. We shall be consulting authorities with a view to issuing a non-statutory code of practice once the Bill has been approved by both Houses of Parliament. We hope, if possible, to rely on the good sense of authorities, together with the code of practice, but a regulation-making power has been
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included in Clause 86(2) should it prove necessary for the Government to lay down any tighter controls; although that is not our current intention.
The thrust of my reply to my noble friend is that we believe authorities should have as much flexibility as possible in order to carry the tendering process through in the way that they wish.
10.15 p.m.
Lord Sandford: I am grateful to my noble friend for that reply. First, am I right in interpreting it to mean that the authorities are not barred by the terms of Clause 86 as at present drafted from taking into consideration the kind of things which are included in Amendment No. 251? Secondly, am I right in understanding him to say that a code of guidance which will give local authorities further indications of what they can and cannot do in this field is in course of preparation and that we shall be in a position to hear more about that from my noble friend when we come back to this clause at the Report stage?
Lord Belstead: Broadly speaking, my noble friend is absolutely right in both his questions. Looking at Amendment No. 251, I am not quite sure about paragraph (c) and I should like to think about that particular provision and perhaps have a word with my noble friend about it. Basically, however, provided that the paragraphs set out in Amendment No. 251 leave it open for all operators to be able to tender and do not exclude any particular operator, then the answer to my noble friend's first question is "yes" and the answer to his second question about the code of practice is also "yes".
Lord Sandford: I am grateful to my noble friend for that reply. I apologise to him and to the Committee if Amendments Nos. 250 and 252 are not drafted so as to make much sense, but I think the debate has achieved what my noble friend would have wanted it to achieve, and I beg leave to withdraw Amendment No. 250.
Amendment, by leave, withdrawn.
[Amendment No. 251 not moved.]
Clause 86 agreed to.
Clause 87 [Travel concession schemes]:
Baroness Stedman Baroness Stedman moved Amendment No. 251ZA:
Page 88, line 19, leave out from first ("on") to ("services") in line 20 and insert ("public passenger transport.")
The noble Baroness said: This is a very small amendment but we think it is a necessary one. At the present time many local authorities, in addition to having concessionary fares for the buses also offer concessionary fare schemes for the railways, and in many cases for the ferries, which are perhaps even more vital. We are not satisfied that the present wording of the Bill will still enable the authorities to ensure that they can obtain these concessionary fares for transport other than on buses. What we are trying to do is to safeguard the concessions that are already available to people in the area, and we hope that the Minister will either give us an assurance that this is covered in some part of the Bill although we have not been able to find it, or that he will have a look at it and

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ensure that the authorities will be legally able to extend their concessions, as they do at the moment, to the railways and to the ferries, where they deem it to be necessary.
Lord Ennals: I should like to give my full support to the amendment that has been moved by the noble Baroness, Lady Stedman. I think the section that we seek to remove, which is referring to relevant services, is really not adequate. I think it is outdated and unnecessary. I agree with the noble Baroness that we need something that quite clearly includes rail services. An area that I can easily think of—Derbyshire, for instance, and the village of Edale, which I know well—does not have a local bus service at all, but it has a local railway service. For the people of Edale concessionary fares on the railways are just as important.
The noble Baroness said that this issue may be dealt with in some other way. But the Under-Secretary of State, Mr. David Mitchell, in another place said:
"It is not the intention of the Government to extend the system of concessionary fares which applies to buses to the generality of British Rail services".
The Minister may say that it will not be extended to the generality of services but to particular places where there are no bus services, and so that deals with rail. I think that it has to be written in somewhere.
If one lives on the Isle of Wight the ferry is important, and in many other parts of the country the ferry service is absolutely essential. Also, unless some change is made, whether in this form or another, Dial-a-Ride schemes for the disabled (which we have so often discussed in this House on various Bills), if such schemes happen to lie outside a metropolitan area or the Strathclyde region, would be excluded. Therefore we must have a much broader definition.
Obviously the Minister has had these points brought to his attention. The anomaly referred to by the noble Baroness and myself has been brought to his attention by the National Advisory Council for Community Transport, British Rail, Rural Voice and the local authority associations. I hope that he will accept the amendment in the way that we have set it out, but, if not, the point certainly has to be met somewhere in the Bill. Otherwise it will discriminate against and deprive a considerable number of our elderly, disabled and other categories of the concessions that go with bus services.
Lord Mottistone: I, too, support the amendment, but I have to declare an interest. At my great age I have a concessionary fare on the boats from the Isle of Wight to the mainland, and I should hate to see that withdrawn.
With the noble Baroness, I hope that my noble friend can reassure us, but the point that I wish to make is this. On the mainland if one wants to go from one county to another one can catch a bus which is covered by the legislation as it stands; but if one wants to go to an adjacent county from the Isle of Wight, or, I would suggest, from Orkney, which is similar and the distance is not all that much more, one has to go by ferry. If it is to be fair for the people in one county it must be fair for the people in another. Those of us on
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islands find that in this respect our ferries are like bus services.
I am not arguing for the railways because the position is the same for everybody, and perhaps the Government have a policy about railways. Of course it would be nice to have the concessions on the railways, but I wish to make the point about the importance of ferries in counties cut off from the mainland.
Lord Henderson of Brompton: I am delighted that this matter has attracted the support of the noble Lord, Lord Mottistone, even though it is only a special interest that has caught his attention.
I should like at this stage to say to the Minister that I do not intend to move the unnumbered and rather garbled amendments to his amendment. I apologise for the fact that they are both garbled and unnumbered. I think that I can make the points necessary before he comes to move his amendment to insert a new clause in place of the existing clause.
At the moment I think that local authority concessionary fares apply on any public passenger transport service, whereas they appear to be restricted both under the present Clause 87 and, I believe, under the new Clause 87 which the noble Lord intends to move. We have heard about ferries, and they are important to particular people; even tramcars may be important.
My main concern has already been mentioned by the noble Lord, Lord Ennals; that is, that the clause as drafted and as proposed excludes Dial-a-Ride services for the disabled where they are set up under mini-bus permits. We have agreed under Clause 19 that permits should be available for Dial-a-Ride in respect of the use of buses by educational and other bodies, and it would be inconsistent if, having agreed that on Clause 19, it was now excluded under Clause 87. Thus, I think there is a very serious point which ought to be rectified, either in the terms of the amendment of the noble Baroness, Lady Stedman, or by the Minister being good enough to bring in a corrective amendment on Report. One or the other will do, but I think enough has been said from all sides of the Committee to, I hope, convince the Minister that there is something here which clearly ought to be put right.
Lord Belstead: I hope I shall not appear to be ungracious when I say that your Lordships are asking, and the noble Baroness in moving the amendment is asking, for something which is not in the law at the present time. At the moment we have the situation where the passenger transport authorities have the power, covering all bus services and also commuter rail services, to give concessionary fares. In the metropolitan areas the PTAs have, and will continue to have, specific responsibilities for the provision of local commuter rail services under Section 20 of the 1968 Act. It is therefore necessary that they should have the power to provide concessions on those services, and the Bill gives them that.
This Bill then took a step forward in another place in that my right honourable friends and honourable friends there thought it right that the Scottish island authorities should have the power to provide concessions on internal ferry and air services for

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precisely the reasons which my noble friend Lord Mottistone put forward and so they are included in the definition of "public passenger transport services" and therefore able to attract concessionary fares.
But the non-metropolitan authorities do not have the kind of direct responsibility for rail services that the PTAs have. The Government believe therefore that we ought to maintain the position as it stands under Section 20 of the 1968 Act, under which the metropolitan county councils have powers to fund concessions on rail services in their areas. But there is no corresponding power outside those areas.
It is for that reason that I do not agree with the main thrust of the amendment which the noble Baroness, Lady Stedman, has put forward, even though it has been put forward in a persuasive way and I shall not deny that the noble Baroness has something of a case—but only something of a case, for the reasons that I have given.
I must confess to the Committee that I had not really considered the question of mini-buses, the Dial-a-Ride point which the noble Lord, Lord Ennals, and the noble Lord, Lord Henderson of Brompton, have raised. I should like to think about that. Although the noble Lords feel that there is a difficulty here, it occurs to me that the actual fare structure of special mini-bus services for elderly or disabled people, run under permits, means that one does not have to give concessionary fares in the way that is envisaged under the Bill. The noble Lord may tell me that he does not agreee with that. If the noble Lord will allow me to do so, I should like to think about it, but I am afraid that at the moment I am not in the position to accept the point.
Lord Mottistone: My noble friend said that in another place our right honourable friend gave special concessions for the Scottish islands. Will my noble friend agree to consider that, in all fairness, the same kind of approach should be given to the English islands?
Lord Belstead: My Lords, I have been over this ground already. The difficulty here is that the shire authorities do not have the specific powers to provide concessions under the 1968 Act. Maybe I missed what the noble Baroness, Lady Stedman, was saying, but I did not hear her saying that what she had in mind, which is what I assume she had in mind, is that we would be talking about the use of the twopenny rate power in providing concessions on rail services within the area of a shire authority. If that is what the noble Baroness had in mind, that is what my noble friend Lord Mottistone would have to have in mind in talking about giving concessions from shire authorities for ferry services which are not actually run by the shire authority itself. It is a different matter when you are talking about the PTA or, indeed, the authorities in Scotland, where they are responsible.
10.30 p.m.
Baroness Stedman: The noble Lord has me quite worried as to whether my authority will end up in jail or something. My district authority in a shire county allows people to get a British Rail senior citizens' ticket
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from the town hall at a reduced rate. It had done so for some time, I gather, although I have not yet availed myself of the facility. The ratepayers, presumably under the twopenny rate, make up the difference to the railway and buy the tickets from it. Presumably, this is acting illegally, judging from what the noble Lord has said.
On the other hand, if the metropolitan areas are allowed to make these kinds of arrangements for commuters, we consider ourselves now as a commuter area for London. We have many London people, old and young, living in the new town of Peterborough. The city council, rightly or wrongly, took the view that it would help those people to keep in touch with their friends in London if they could have concessionary fares at a reduced rate. I am sorry if I am letting the cat out of the bag. I may be getting my authority into trouble. But it seems to me that it is quite a sensible attitude to make it possible for those who have moved from a nearby conurbation to be able to get back again.
Lord Belstead: With all friendliness to the noble Baroness, when she talks about British Rail services to Peterborough, the noble Baroness is stretching the principle of this amendment like a piece of elastic.
Lord McIntosh of Haringey: If any part of the noble Lord's resistance to the concern of the noble Lord, Lord Mottistone, concerning ferries to the Isle of Wight, is that an amendment might be hybrid, may I beg him on behalf of the noble Baroness to consider ferries to the Isle of Ely and for myself ferries to the Isle of Dogs?
Lord Ennals: Before the Minister responds to that dramatic intervention, an amendment that might have originally been called the Stedman amendment is now clearly the Mottistone amendment. Your Lordships have to ensure that the noble Lord is able to come to the House. Otherwise, he is isolated on his island. I was delighted that the Minister said he would look at the matter, including Dial-a-Ride and ferries, a little more widely than in relation to the Scottish islands.
When the Minister said that it was not good enough because these powers did not exist at the present time, it was one of the poorest arguments that could be used. Everything else that he has said has been very good. If, in 1985—the last Act that touched upon this was that of 1968—we cannot begin to look at one or two advantages, for elderly and disabled people in many cases, then we really are in a bad state, are we not? I am not asking the Minister to agree that we are in a bad state. But the argument that we must not do the right thing because we have not done the right thing before is one that does not stand up very well.
Lord Henderson of Brompton: I wish to support what the noble Lord, Lord Ennals, has said, but I also wish to thank the Minister for taking on board the special position of Dial-a-Ride in relation to mini-bus permits. I am grateful to him for that. I wish, too, to support the point, dramatically made by the noble Lord, Lord Mottistone, that it is odd that schemes for concessionary fares should be available in one part of the country but not in another. Whatever the law is at the moment, could it not, please, be put right?
Baroness Stedman: I am grateful to the Minister for his reply and for the fact that he is going to look at Dial-a-Ride and things like that. Perhaps at this stage the less I say about other concessionary fares the better. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 251ZB not moved.]
Baroness Stedman Baroness Stedman moved Amendment No. 251A:
Page 89, line 15, after ("shall") insert ("subject to subsection (4B) below").
The noble Baroness said: I began as one of the sponsors of this amendment, but I seem to have missed the bus en route to the various reprintings of the Marshalled List. However, I should like also to speak to Amendment No. 251B.
Amendment No. 251B: Page 89, line 18, at end insert—
(" (4B) Subsection (4) above does not apply to where an operator of a registered local service is unable to satisfy the authorities responsible for administration of the scheme that he will only use in operating the service vehicles which by virtue of their design, construction and fittings are suitable for the carriage of persons to whom the travel concession scheme applies.")
Amendments Nos. 251A and 251B seek to limit the automatic right of the operators of the registered services participating in concessionary fare schemes to those operators who are able to satisfy the authorities which have to administer the scheme that they will always use vehicles which are suitable for the carriage of the holders of concessionary fare passes. Most of the concessionary fare schemes which are operated today concentrate on providing a cheaper or a free form of travel for pensioners. Many authorities have also extended those schemes to other people with various mobility problems.
These amendments will not alter, limit or extend either the scope of those schemes which already exist or the categories of persons who are at present eligible for benefit. However, the Bill as it now stands means that new operators would be able to claim income from concessionary fare schemes without any obligation to provide vehicles which the holders of those passes could use with reasonable facility.
The concessionary fares have not only been very attractive politically while they have been in being, but they have also been very much appreciated by a substantial section of the public who are totally or mainly dependent upon public transport. Some 18 per cent. of our population qualify on age grounds alone, and that 18 per cent. comprise some 10 million people. There are another 6·5 million people who have some form of mobility handicap and of those it is estimated that something over 4 million could still use public transport if it were available. Therefore, that means that there is a real customer market, an assured customer market, of around 14 million people as against the rest of the population who tend to make increasing use of private transport rather than public transport.
However, it is no use having concessionary passes if the vehicles, and particularly the older vehicles, are not usable by the intended pass holders. What we are
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trying to ensure by these two amendments is that the income from those schemes cannot be claimed unless the vehicles are such that the intended beneficiaries from the scheme are able to use them. In other words, public expenditure should not be misdirected on concessionary schemes which the public are then not able to use. All the schemes at present operated are some charge on the rates paid for, of course, by the intended beneficiaries and other ratepayers alike. Indeed, until one becomes eligible for a concessionary fare, one will have contributed towards providing that facility for others in the past.
Many of the schemes also require that the passholders shall pay something for their pass, in the same way as we pay £3·50 for our British Rail pass in Peterborough. If, as the Bill stands, vehicles can be in operation which beneficiaries cannot use with reasonable facility, then their own payments towards the scheme will have been made futile.
There is another aspect to this problem. If the passholders are excluded in these circumstances from normal bus services, then the alternative would be that other forms of transport, such as that provided for the more severely handicapped, would have to be provided. That would mean an increased cost on public use or, alternatively, possibly a reduced availability of transport for the much more severely handicapped people. The less mobile that people are, if they mainly depend on public transport, the greater will be the cost in terms of social and other services if we do not provide it.
I hope that the noble Lord and his colleagues will see the sense of ensuring the correct matching of the concessionary fare schemes with the vehicles used by operators who claim income from those concessionary fare schemes, because anything less will not be cost-effective. Therefore, I hope that our amendments will find acceptance in the eyes of the Government. I beg to move.
Viscount Ingleby: I should like to support the amendment which has been so ably moved by the noble Baroness, Lady Stedman. Without the amendment, public money designed to facilitate travel for the elderly and disabled would be going to operators who might frustrate the whole purpose of this service by using vehicles which many elderly or disabled people could not use. This surely must be wrong, and doubly wrong if those elderly and disabled have themselves contributed and provided money through the rates for services which they themselves cannot use.
Baroness Elliot of Harwood: I should like to support this amendment. It is important. What the noble Baroness has said about the numbers of people who could claim this is remarkable. I have a note here which says that 18 per cent. of the population are of an age to qualify for concessionary fare schemes; but according to the noble Baroness it is a far greater number than that.
It is something which everybody would want to support. All of us who are fortunate enough not to have to claim for disabilities are only too happy to be able to contribute to any scheme which helps with the

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disabilities of the less fortunate. It is something which the Government should take on as an asset to the Bill, and an asset to the community. It would be enormously helpful. I cannot see that it can in any way interfere with anything in connection with this Bill. I hope that the Government will see this as something which they must put into the Bill, and which will have the support of everybody.
Baroness Carnegy of Lour: Of course this is important; of course where there are concessionary schemes one wants everybody who qualifies to be able to get on the bus. However, realism has to come into it. If there are really 10 million people who are going to qualify for this I cannot believe that it is going to be possible in rural areas—probably elsewhere too, but certainly in rural areas—to persuade enough bus operators to produce the kind of facilities that they would have to if this amendment were accepted.
Concessionary fares are not a dripping roast for bus companies in rural areas. In areas like the Borders of Scotland where my noble friend Lady Elliot lives, and in Tayside where I live, it is very difficult indeed to get a bus at all to operate on routes, with or without concessionary fares. Although the argument is that using the ratepayers' and taxpayers' money to supply the concessionary fare means you can require things of the bus operators, I do not think it is sufficiently persuasive.
It is difficult to get buses to cover school transport services, which are an even more certain job for them. One would have to be careful about putting it like this, because one would find that most of the elderly people would not have a bus at all on which to have their concessionary fares because nobody would be prepared to run it. This is urban thinking from the point of view of the operators. I do not know what way there is to try to make as sure as possible that where concessionary fares operate the people with the disabilities in that area can use the bus.
A person in a wheelchair needs the bus that can take the wheelchair. A blind person needs the right facilities. But most of the 10 million people are able to get on an ordinary bus, as we said before when we were discussing the question of the disabled. This amendment would rule out most buses where concessionary fares operate, and that would be most rural areas in Scotland. It would be very difficult to get buses to do it. I do not think that it is completely realistic in the non-urban scene.
10.45 p.m.
Baroness Stedman: The noble Baroness referred to buses which one can get wheelchairs on. I perhaps did not make myself plain. I meant them for the people who were sufficiently mobile, even with their handicap, to be able to get on to a normal bus if the steps up to it were low enough for them to be able to get on to the first step and if there was a handrail to help them on. That is the sort of help that we should insist on so that more elderly and infirm people can be assisted. It is the infirm rather than the severely handicapped who are likely to be able to use the buses if they have the kind of fixtures that will give some help in getting on and off.
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We have to accept, with all the goodwill in the world, that we cannot expect special buses on every route—the kneeling buses, those with ramps or lifts that can take wheelchairs. We have to accept as a community that those are the things that have to be provided through the social services for the more severely handicapped. But there are thousands and millions of people in this country, elderly people who are infirm, who could use a bus if they were able to get on to the bus, if they had a handrail at the side and the bottom step was low enough for them to get on to. People with heavy shopping need that sort of help to get on the bus and people with young children.
It is important that we see that the buses used are not just any old crocks that might be put on to the market because this is a chance to get a business started. If someone starts a business he must use the kinds of coaches and buses that the ordinary infirm and slightly handicapped people are able to use. Otherwise we have this chicken and egg situation that we have had all the time with the bus operators saying that there is no demand for a route there and people not able to use the buses because they cannot get on to them, because they are elderly or because they have some minor physical handicap. If we can only marry the two together it would be a much more lucrative proposition for the bus people to be able to run buses that are really being used by the people and it would allow many people to be able to get out to see their relatives or do a bit of shopping for themselves and that kind of thing. I think we have to try to match the two together.
Lord Henderson of Brompton: I should like to follow the noble Baroness, Lady Stedman, and endorse what she said to the noble Baroness, Lady Carnegy of Lour, that it is the less agile of the public of whom we are thinking, and not the severely disabled. Those very steep steps on most buses are very difficult to negotiate for a large section of the public which is less agile. Some of the handgrips are not well placed. It is small things like that with which we are concerned.
We have heard the argument of the noble Baroness before in different guises and it boils down to the fact that if a provision of this kind were made, one would find it difficult to argue with the local people in the more sparsely populated districts in the country. When they ask, "Where are our buses?" we shall have to say, "You cannot have any buses because such impossible conditions have been imposed on the operators".
That is the gist of the argument which the noble Baroness has produced before and has dished up again today in a different guise. I have some sympathy with this. I think the noble Baroness has a point. Perhaps this kind of condition should be imposed on the larger operators and there should be exemption for smaller operators. I do not see that this de minimis argument of the noble Baroness should deny the greater part of the country who do not live in the sparser populated districts the kind of benefits which we are hoping that this Bill will provide.
I do not think that this amendment is necessary, apart from the general public frustration that will arise if these provisions are made and, having obtained a concessionary ticket, they find they cannot get on to the bus. That is not very good for public relations, but

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it is not just that. It may be that under the Bill as drafted schemes may be made and payments claimed by operators whereas the vehicles are such that the intended beneficiaries cannot use them. That is a highly undesirable situation which may come about unless some change is made on the lines that this amendment proposes. That very undesirable practice may occur and the public may feel, quite rationally, defrauded. But, having said that, I recognise that the noble Baroness has a point and I think there is a case for making an exemption from such conditions for smaller operators.
Baroness Carnegy of Lour: Perhaps I may follow what the noble Lord, Lord Henderson, has said with this argument which, he says, I keep bringing up in different guises—and I am sorry he sees it in that way. I do not see why people in rural areas should be totally deprived of buses with concessionary schemes because of a blanket amendment for the sake of urban areas. There will be buses running on which you cannot have concessionary fares because they will not be able to do it if this amendment is accepted. That is why I talk about the rural areas. Blanket legislation which suits one part will not suit another. I think it is an important argument. There must be an answer, as I have said, and it should be looked for because it is very important. I do not think a blanket amendment is the way to do it.
Lord Shepherd: It may be a question of drafting. The noble Baroness, Lady Carnegy, was saying that if this amendment were passed many of the rural services would not pass muster and would not—I was about to say "have the benefit of concessionary fares", but in truth there is no profit to an operator in running a concessionary fare scheme. The amendment uses the words
"suitable for the carriage of persons to whom the travel concession scheme applies".
My noble friend Lady Stedman (if I may call her my noble friend although she sits on Benches other than those of my party) made it very clear that what she was not seeking was that vehicles should be so designed that they could carry those who are in wheelchairs.
The disabled and the aged represent a very broad spectrum of disability. At an earlier stage of our considerations I referred to what has already been done, certainly within my old company, at very little cost—handrails, for example, so that when you came into the coach you had something that you could put your hand on. They could be either vertical or horizontal; or even handrails on the seats. You can do a great deal for those who have disabilities without a great deal of cost. Therefore, this amendment is not one (I would think) that would create major difficulties for an operator other than an operator who has taken his vehicles straight out of the auction, so to speak, and put them into service.
I have one anxiety—again, it is in the drafting—and that is the phrase which says,
"that he will only use in operating the service vehicles which by virtue of their design",
and so on. It may not be necessary to meet what I think is the major thrust of what the noble Baroness has in mind here; that is, that if there is a half-hourly service
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all the vehicles used are equipped in this way. As I say, the cost is relatively small, and the truth is that most stage-carriage vehicles, certainly within the public sector, are designed and equipped in a way which makes it possible for people who have disabilities to be able to move and to find seats, although in some particlar cases you can do more.
I personally do not see any difficulty in regard to this amendment, if we take it as being what the noble Baroness has in mind. She is not asking an operator to climb Mount Everest. What she is really asking (is she not?) is that if one has concessionary fares, which is very much something for the aged—an increasing part of our population, and with age we have our different disabilities—there should be some effort made by an operator to provide these services.
I would suggest that if the Government would be willing to concede that there is a point here—I am not saying that they should accept the words as now drafted—and if they would be willing to accept that there is a spirit, a purpose and an intention behind this amendment and are willing to come back at Report stage, then we have done a good evening's work.
I would only say again that the cost of doing these things is not all that high. It is a cost—I repeat, it is a cost. It is what an operator thinks he ought to do. I suspect that in a competitive scene one will need to have some legislation to require certain minimum standards, because in a competitive scene competition tends to depress the quality—not always: but I suspect that in this particular case it will.
I therefore suggest to the Government that they should accept the spirit of this amendment; and in that case those who have moved it could withdraw it. I would say again: the cost is not all that great. What we need is to ensure that all the various operators will at least be seeking a common standard.
Lord Teviot: First may I say that I welcome talking to an amendment of the noble Baroness, Lady Stedman. The last time one spoke to her on transport, one was sitting three Benches behind her and she was sitting on the Front Bench. That was a few years ago now. However, although I do not want to introduce a dissenting note on this amendment, I feel that at this time of night we are apt to become the faintest bit too cosy. One must remember that here we are really talking about disabled people travelling on buses. I am sure that my noble friend Lady Carnegy will not mind if I slightly chide her, because she has been telling us that it is hard enough to get buses in the country now, and she has been telling us before, on all sorts of other amendments, that with deregulation and the lid off the pot, people will find competition of all kinds coming along.
I am sorry, but I have to say something that I hope your Lordships will not find distasteful, but we have to realise the fact of relevance here. One hears the noble Lord, Lord Shepherd, saying that the cost is not too high, but I can remember the situation concerning buses when I was a conductor. I have never driven a "one-person operation", which I believe is the expression: but it is very important to have handrails. When I was a conductor on a bus, it was a Bristol low-decker and one stood on the platform. Also, that

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was in an area where there were a lot of aged people, in New Church Road, Hove. There were rather a lot of elderly ladies and one always greeted them with a smile. Luckily, in those days they wore a garment called "stays", and one pressed the bottom, turned them round and rang the bell at the same time, so that one achieved one's destination in the correct time. Seriously, we have to look at this amendment in the context of the whole Bill. The Government must look at it in that light.
11 p.m.
Lord Ennals: I only want to say, in positively one sentence, since it has been so much better said by the noble Baroness, Lady Stedman, and by my noble friend Lord Shepherd, that I want to associate myself totally with this amendment. I hope that the Minister will agree to take it away and think about the principle, even though he may come back with this, either in a different form of words, or in a different place in the Bill.
Baroness Darcy (de Knayth): May I also add 60 seconds in support of this amendment. I hope that the Minister will look encouragingly on the spirit of the amendment, even if he cannot accept it as it is.
As many noble Lords have now stressed, it is the less agile for whom we want to cater, not the almost totally immobile. It is cheap, small adaptations about which we are talking. I think that it is worth stressing, therefore, what the noble Baroness, Lady Stedman, said at the end of her speech in moving the amendment: that if these less agile intended beneficiaries cannot use the schemes operated by the normal bus services then they will be forced on to the forms of special transport; and then the more severely disabled who really need that sort of transport will be deprived of it.
Lord Belstead: I think that the problem with this pair of amendments is one which we have debated before—that is, that the kind of standard which authorities should be expected to adopt under the amendments is left open and given no criteria.
The noble Lord, Lord Shepherd, reminded us in this debate of a very wide range of modifications which can be made to buses in order to make them more convenient for people who have difficulty in moving into and out of vehicles; and while some of these modifications are certainly fairly modest in cost, others would be expensive and are only feasible on new vehicles. But, I repeat, the difficulty here is that these amendments would in effect give authorities the power to require modifications up to any standards within this range before admitting an operator to their concessionary scheme. We are, therefore, on to a difficulty here. Although I think that the Government have done their best to respond to a great deal of what has been said so far as elderly and disabled people are concerned, there has been one point of difficulty between the Government and those of your Lordships who have been speaking on this subject generally—that is, that we, on the Government side, have made it clear that we are worried about putting the direct
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responsibility—particularly an undefined responsibility—on to the operator himself. The reason is that given by my noble friend Lady Carnegy of Lour; namely, that there will be the danger that one will drive operators out of the market who would otherwise be carrying passengers.
May I just put the point to your Lordships that of course operators will not get concessionary patronage if they cannot carry concessionary passengers. If it is the case—as indeed I believe absolutely that it is the case put by the noble Baroness, Lady Stedman—that a very large percentage of the travelling population are either elderly or disabled people, then it must be in the interests of operators to make adaptations, particularly minor adaptations, in order to see that people travel by their vehicles.
May I make absolutely clear the point that operators will not get payment for journeys on which they do not carry concessionary fare passengers because they are using vehicles on which the concessionary fare passengers do not choose to travel, or indeed cannot get access. Your Lordships may say to me, "All right, what do the Government intend to do if this amendment is not acceptable?" My answer to that is that we believed earlier on that we were making a step forward by saying that we were producing a code of practice which was addressed precisely to this point; namely, the conversion of older vehicles in order to make them suitable to the travelling public who find it less easy to get on and off. We hoped that in that way we were being helpful.
I must confess that we also hoped that we were being equitable in putting into the Bill that all operators of registered local services should have the right to participate in a concessionary fares scheme, matched by the right of local authorities, if they wished, to require participation. That is a principle which I think it would be very dangerous to depart from, because it is through that principle that we are trying to make a success of concessionary fares under the Bill.
I am very ready, as I said earlier on this evening, to look at this amendment—of course I will. But I do not want to mislead the Committee. There is a very real difficulty, as we see it, in concessionary fares, which are what we are discussing now, as there has been in simply providing the right facilities, in putting the responsibility, particularly if it is an undefined responsibility, slap on to the shoulders of the operators themselves.
We tried to go at this by another route earlier on, by putting the responsibility on to the local authorities, and making sure through that method that local authorities—and the noble Lord, Lord Ennals, and I discussed this at some length earlier—can make quite detailed stipulations so far as their subsidised services are concerned, and by making sure that local authorities are able to take into account the needs of people who find it difficult to travel, particularly the elderly and disabled, in generally promoting the convenience of the travelling public and securing services in their area. That is what we tried to do earlier on.
In this case, I have said that we will be trying to achieve the same objective through a code of practice. Your Lordships may say that it is not quite the same

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thing. I agree that it is not, but this is where one has finally to look at where the balance of advantage lies. I beg your Lordships in deciding on that just to heed what my noble friend Lady Carnegy said. If you put the responsibility on the shoulders of the operator, you may find at the end of the day that you will have fewer buses for everyone.
Lord Ennals: May I ask one question of the Minister? He has very kindly said that he will be willing to look at this amendment again. Of course, he gave some warnings to those who moved it that he could not commit himself. Sometimes it happens in your Lordships' debates that between Committee stage and Report stage not only does the Minister do some thinking, but a little collective thinking can be done. I wondered whether the Minister would agree that some of those who have obviously thought a lot about this subject, as well as feeling strongly about it, could have an opportunity to discuss with the Minister to see whether we can find a basis for something that will satisfy us all.
Lord Belstead: Yes, certainly.
Baroness Stedman: I am most grateful to the Minister. I understand the difficulties that he is in. Having stood in his place and been chivvied by the noble Lord, Lord Teviot, some years ago, I know exactly the problems that he is facing in trying to please everyone and do what he thinks is right. I am happy that he is taking the amendment back to have a look at it.
But may I ask whether, when the draft code of practice is ready, it will be possible for us to see a copy of it and to see exactly how the Government propose in this draft code to recommend to authorities or to operators the type of buses that they ought to be using? Will there be any mention of that in it? It would be helpful if at some stage we could see the draft code, and I shall certainly be very happy, with the other Members who have their names to this amendment, to talk to the Minister between now and the next stage.
Lord Belstead: Perhaps that is a point that we can discuss when we talk about this matter. The discussion that we have may be quite soon.
Baroness Stedman: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 251B and 252 not moved.]
Lord Belstead Lord Belstead moved Amendment No. 252ZA:
Leave out Clause 87 and insert the following new clause—
("Travel concession schemes
87.—(1) Any local authority, or any two or more local authorities acting jointly, may establish a travel concession scheme for the provision of travel concessions on journeys on relevant services—

(a) between places in the principal area covered by the scheme;

(b) between such places and places outside but in the vicinity of that area; or

(c) between places outside but in the vicinity of that area; by operators of such services participating in the scheme.

(2) For the purposes of this section, the principal area covered by a scheme under this section is—

(a) the area of the local authority concerned or, where two or more such authorities are concerned, the area comprising the areas of both or all those authorities; or

(b) if an area comprised within the area which would be the principal area under paragraph (a) above is specified in the scheme as being the principal area to which the scheme applies, the area so specified.

(3) In this section "relevant services" means, in relation to any scheme under this section—

(a) where the principal area covered by the scheme is or includes a passenger transport area or any part of a passenger transport area, or in Scotland the area of an islands council, any public passenger transport services; and

(b) in any other case—

(i) any local services registered under section 6 of this Act;

(ii) any other services for the carriage of passengers by road at separate fares which require a PSV operator's licence; and

(iii) any services provided by means of tramcars (within the meaning of the 1981 Act).

For the purposes of paragraph (b)(ii) above, a service for the carriage of passengers by road at separate fares is a service which requires a PSV operator's licence if vehicles used in providing the service are used in such circumstances that a PSV operator's licence is required in respect of that use.
(4) Any travel concession scheme established under this section shall define—

(a) the travel concessions which are for the time being to be provided by operators participating in the scheme;

(b) the description of persons eligible in accordance with subsection (8) below to receive travel concessions under any such scheme who are for the time being to qualify for travel concessions provided under the scheme; and

(c) the dates in any year currently adopted as the dates on which operators may be admitted to participate in the scheme under section(Rights of eligible service operators to participate in travel concession schemes) of this Act (referred to below in this section as the standard admission dates);

and may include particulars of any other arrangements for the time being adopted by the authority or authorities concerned in establishing the scheme with respect to the operation, scope and application of the scheme.
(5) Any such scheme may define the standard admission dates by specifying particular dates, or by referring to dates of any specified description or separated by intervals of any specified length; but those dates, however determined, must not be separated by intervals of a length exceeding such period as may be prescribed.
(6) Arrangements adopted by the authority or authorities concerned in establishing any such scheme with respect to the operation, scope and application of the scheme (including the matters specifically mentioned in paragraphs (a) to (c) to subsection (4) above) may differ for different descriptions of concessions or relevant services to which the scheme applies.
(7) Subject to section 88 of this Act, where an operator participating in any such scheme in respect of any services operated by him provides travel concessions in accordance with the scheme for persons travelling on those services, the authority responsible for administration of the scheme or (as the case may be) the authorities so responsible in such proportions respectively as they may agree among themselves shall reimburse that operator for providing those concessions.
(8) The persons eligible to receive travel concessions under any such scheme are—

(a) men over the age of sixty-five years and women over the age of sixty years;

(b) persons whose age does not exceed sixteen years;

(c) persons whose age exceeds sixteen years but does not exceed eighteen years and who are undergoing full-time education;

(d) blind persons, that is to say, persons so blind as to be unable to perform any work for which sight is essential; and

(e) persons suffering from any disability or injury which, in the opinion of the authority or any of the authorities responsible for administration of the scheme, seriously impairs their ability to walk.

(9) In this section "local authority" means the council of a county or district in England and Wales or a regional or islands council in Scotland (and accordingly includes the county or regional council which is the Passenger Transport Authority for any passenger transport area).
(10) Unless the context otherwise requires, references in this section and in the provisions of this Part of this Act relating to schemes under this section to the authority or authorities responsible for administration of a scheme under this section are references to the authority concerned in establishing the scheme or, where two or more authorities are so concerned, to both or all those authorities acting jointly, except where the authority or one of the authorities so concerned are a Passenger Transport Authority in England and Wales, in which case those references are references to the Passenger Transport Executive for that Authority's area or (as the case may require) to that Executive and the other authority or authorities so concerned acting jointly.
(11) Where a Passenger Transport Authority have established a scheme under this section, whether alone or jointly with any other authority or authorities, they shall notify the Passenger Transport Executive for their area of any proposal to vary the scheme, giving particulars of the proposed variations.")
The noble Lord said: I beg to move Amendment No. 252ZA and, with your Lordships' permission, will speak to Amendments Nos. 252AA, 252AB, 252AC, 252D, 253A, 253B, 253C, 253D and 253E.
Amendment No. 252AA: Leave out Clause 88 and insert the following new clause:—
("Reimbursement for travel concessions under schemes
88.—(1) Regulations under this section may make provisions with respect to any of the following matters—

(a) the factors to be taken into account by the authority or authorities responsible for administration of a travel concession scheme under section 87 of this Act in determining the aggregate amount that may be made available for the purpose of reimbursing operators participating in the scheme for providing travel concessions during any period;

(b) the determination by the authority or authorities so responsible of the amounts to be paid to individual operators participating in the scheme, or to any class of such operators, by way of reimbursement for providing such concessions;

(c) the manner of making any payments due to operators by way of such reimbursement; and

(d) the provisions or description of provisions that are to be or (as the case may be) may or may not be included in arrangements agreed with operators or adopted by the authority or authorities so responsible with respect to participation of operators in the scheme.

(2) Subject to any provision of regulations made by virtue of subsection (1)(d) above and to the following provisions of this section, the arrangements with respect to participation of operators in any such scheme shall be such as may be agreed between the authority or authorities responsible for administration of the scheme and individual operators on their admission to participation in the scheme.
(3) Subject to—

(a) any provision of regulations under subsection (1) above;

(b) any modifications that may by virtue of any provision of regulations made by virtue of paragraph (d) of that subsection or in accordance with section (Right of eligible service operators to participate in travel concession schemes) of this Act be agreed between the authority or authorities responsible for administration of any such scheme and any individual operator; and

(c) any modifications applied in the case of any individual operator by a direction given under section 90 of this Act;

the arrangements with respect to reimbursement and terms of withdrawal from participation in the scheme applicable to operators of eligible services participating in the scheme shall be such as the authority or authorities responsible for administration may from time to time adopt and must be the same in the case of all such operators.
(4) For the purposes of the provisions of this part of this Act relating to schemes under section 87 of this Act, a service is an eligible service if it is a service qualifying for fuel duty grant.
(5) The arrangements currently adopted by the authority or authorities responsible for administration of any such scheme with respect to reimbursement of operators of eligible services participating in the scheme are referred to below in this Part of this Act, in relation to that scheme, as the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) In relation to operators in any such scheme, references in this section to arrangements with respect to reimbursement are references to conditions of entitlement of such operators to, and the method of determination and manner of payment of, reimbursement in respect of travel concessions provided under the scheme.")
Amendment No. 252AB: After Clause 88, insert the following new clause:
("Publicity requirements for schemes and reimbursement arrangements.
.—(1) On or before the date on which a scheme under section 87 of this Act comes into operation or, where it comes into operation on different dates with respect to different concessions to be provided under the scheme, on or before the first of those dates—

(a) the authority or authorities concerned in establishing it shall publish particulars of the scheme; and

(b) the authority or authorities responsible for administration of the scheme shall publish particulars of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme;

in such manner, in either case, as the authority or authorities concerned think fit.
(2) Particulars of any subsequent variations shall be published—

(a) in the case of variations of the scheme, by the authority or authorities concerned in establishing the scheme; and

(b) in the case of variations of the arrangements, by the authority or authorities responsible for administration of the scheme.

(3) Following publication under subsection (l)(a) or (as the case may be) under subsection (1)(b) above of particulars of any scheme or arrangements—

(a) copies of the scheme or (as the case may be) of the arrangements (with any subsequent variations) shall be made available at the principal office of the authority or (as the case may be) of each authority concerned; and

(b) a copy shall be supplied to any person on request (whether at that office or by post) either free of charge or at a charge representing the cost of providing the copy.

(4) Where the authority or any of the authorities concerned in establishing a scheme under section 87 of this Act are a Passenger Transport Authority, they shall notify the Passenger Transport Executive for their area of any proposal to publish particulars of the scheme in advance of its coming into operation, giving the proposed date of publication.")
Amendment No. 252AC: After Clause 88, insert the following new clause—
("Right of eligible service operators to participate in travel concession scheme.
.—(l) Subject to the following provisions of this section, where any operator or prospective operator of an eligible service which is a relevant service for the purposes of any scheme under section 87 of this Act applies to the authority or authorities responsible for administration of that scheme to be admitted to participate in it in respect of that service, the authority or authorities in question shall be obliged to admit that operator to participation in the scheme in respect of that service as from any standard admission date under the scheme not later than the one next following—

(a) the end of such period as may be prescribed beginning with the date of his application; or

(b) the date on which the service begins;

whichever last occurs.
(2) The Secretary of State may, on the application of the authority or authorities responsible for administration of any such scheme, exempt the authority or authorities in question from the

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obligation under subsection (1) above in relation to any service or description of services; and the Secretary of State may at any time withdraw or vary any exemption granted under this subsection.
(3) An exemption may not be granted under subsection (2) above on the application of a Passenger Transport Executive, or on the joint application of authorities who include such an Executive, unless the application is made with the consent of the Passenger Transport Authority for that Executive's area.
(4) Subject to any regulations under section 88(1)(d) of this Act, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator or prospective operator of an eligible service who applies to be admitted to participate in the scheme in respect of that service, that fares currently charged or proposed to be charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question shall not be required by subsection (1) above to admit that operator to participation in the scheme in respect of that service unless that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(5) Subject to any such regulations, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator of an eligible service participating in the scheme, that fares currently charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question may by notice of not less than such period as may be prescribed exclude that operator from participation in the scheme in respect of that service unless before the end of that period that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) For the purposes of subsections (4) and (5) above, fares for relevant journeys are to be regarded as including a special amenity element if they are significantly high in relation to the general level of fares for comparable journeys in the principal area covered by the scheme (within the meaning of section 87 of this Act).
(7) References in those subsections to appropriate modifications of the reimbursement arrangements there mentioned are references to such modifications of those arrangements as the authority or authorities concerned consider appropriate for providing reimbursement in respect of travel concessions provided for relevant journeys on the service in question by reference to the general level of fares mentioned in subsection (6) above instead of by reference to the actual fares charged (or proposed to be charged) for those journeys.
(8) For the purposes of this section "relevant journeys" are journeys on which travel concessions are to be provided under the scheme in question.
(9) For the purposes of this section and section 89 of this Act, references to a prospective operator of an eligible service are references to a person who has registered a local service under section 6 of this Act but is not yet operating that service.")
Amendment No. 252D: Leave out Clause 89 and insert the following new clause:—
Compulsory participation in travel concession schemes.
(" 89.—(1) Subject to subsection (8) below, where the arrangements currently adopted by the authority or authorities responsible for administration of a scheme under section 87 of this Act with respect to the terms on which operators of eligible services may withdraw from participation in the scheme require such an operator to give notice before withdrawing from the scheme in respect of any such service, any such operator shall be obliged to provide any travel concessions required by the scheme on journeys on any such service in respect of which he is participating in the scheme until he gives the required notice of withdrawal and the period of notice has expired.
(2) Subject to the following provisions of this section, the authority or authorities responsible for administration of any such scheme may at any time by notice in writing served on any operator or prospective operator of an eligible service (including an operator already participating in the scheme) impose on him an obligation to provide travel concessions in accordance with the scheme on journeys on any such service operated by that operator to which the notice applies.
A notice under this subsection is referred to below in this Part of this Act as a participation notice.
(3) The power under subsection (2) above to serve a participation notice shall not be exercisable in relation to any such scheme until after the date (or whichever last occurs of the respective dates) of first publication under section (Publicity requirements for schemes and reimbursement arrangements) of this Act of particulars of the scheme and of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme.
(4) An obligation imposed by a participation notice shall, subject to subsection (8) below and sections 90 and (Release from compulsory participation) of this Act, be effective in relation to any service to which the obligation applies as from the appropriate commencement date for that service until the end of such period beginning with that date as may be specified in the participation notice.
(5) Subject to subsection (9) below, for the purpose of subsection (4) above the appropriate commencement date for any service to which an obligation imposed by a participation notice applies is—

(a) the date immediately following the end of such period of notice as may be specified in the participation notice; or

(b) the date when the service begins;

whichever last occurs.
(6) Where it is proposed—

(a) to vary a scheme under section 87 of this Act; or

(b) to vary the current arrangements for reimbursement of eligible service operators participating in any such scheme;

the authority or authorities responsible for administration of the scheme may, not less than such period before the variation is to take effect as may be prescribed, by notice served on any operator of any such service who is under an obligation under this section to provide travel concessions in accordance with the scheme, require him to indicate, within such period and in such manner as may be prescribed, whether or not he is willing to continue to participate in the scheme after the variation takes effect.
(7) Any notice under subsection (6) above shall give particulars of the proposed variation.
(8) Where in pursuance of subsection (6) above an operator indicates that he is not willing to continue to participate in the scheme after the variation takes effect, any obligation of that operator under this section to provide travel concessions in accordance with the scheme on journeys on any service operated by him which was current at the date of the notice under that subsection and would still apart from this subsection be in force on the date when the variation takes effect shall cease on the latter date (without prejudice, however, to the service of a new participation notice).
(9) Where in the case of any operator, notwithstanding subsection (8) above, any obligation of that operator under subsection (2) above to provide travel concessions on journeys on any service operated by him which was current at the date of the notice under subsection (6) above is still in force on the date when any such variation takes effect, the preceding provisions of this section shall apply in relation to that obligation, on and after the date when the variation takes effect, as if that date were the appropriate commencement date for the purposes of subsection (4) above for each service to which the obligation applies.
(10) The exercise of the power to serve a participation notice under this section on any person—

(a) by a Passenger Transport Executive; or

(b) by authorities responsible for administration of a scheme under section 87 of this Act who include such an Executive;

shall require the consent of the Passenger Transport Authority for the Executive's area.")
Amendment No. 253A: Leave out Clause 90 and insert the following new clause—
(Further provisions with respect to participation notices.
"90.—(1) The authority or authorities by whom a participation notice is served on any person shall send to that person together with the notice, a copy of—

(a) such particulars of the scheme to which the notice relates and of any variations of that scheme; and

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(b) such particulars of the current reimbursement arrangements for eligible service operators participating in the scheme and of any variations of those arrangements;

as have been published under section (Publicity requirements for schemes and reimbursement arrangements) of this Act before the date of the notice.
(2) Subject to the following provisions of this section, a person on whom a participation notice has been served may apply to the Secretary of State for cancellation or variation of that notice on either or both of the following grounds, that is to say—

(a) that there are special reasons why his participation in the scheme in question in respect of the service or any of the services to which the notice applies would be inappropriate; and

(b) that any provision of the scheme or of any such arrangements as are mentioned in subsection (1)(b) above are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.

(3) Subject to subsection (4) below, an application under subsection (2) above may be made by notice in writing given to the Secretary of State before the end of the period of twenty-eight days beginning with the date of the participation notice.
(4) A person may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities by whom the participation notice was served—

(a) if a period allowed for that purpose is specified in the participation notice, before the end of that period; or

(b) in any other case, at any time before the date of the notice given to the Secretary of State under subsection (3) above.

(5) On any such application the Secretary of State may—

(a) cancel the participation notice or vary it by excluding from it any service operated by the applicant; or

(b) determine that the participation notice shall have effect without variation;

and in any case where the participation notice is cancelled on the ground mentioned in subsection (2)(b) above shall give to the authority or authorities by whom the notice was served a notice in writing indicating in what respects the scheme or arrangements there mentioned are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.
(6) Where on any such application the Secretary of State does not cancel the participation notice, he may direct that the current arrangements for reimbursement of eligible service operators participating in the scheme shall apply in the case of the applicant or (as the case may be) in the case of any service operated by the applicant to which the participation notice applies with such modifications as may be specified in the direction.
(7) Any obligation under section 89(2) of this Act which has come into effect before the determination of any application under this section with respect to the participation notice by which that obligation was imposed shall—

(a) cease to have effect, if the notice is cancelled; or

(b) have effect, if the notice is varied, subject to a corresponding variation;

on such date as may be specified by the Secretary of State in determining the application.").
Amendment No. 253B: After Clause 90, insert the following new clause—
("Release from compulsory participation.
(1) The authority or authorities responsible for administration of a scheme under section 87 of this Act may at any time by notice in writing served on any operator who is under an obligation under section 89(2) of this Act to provide travel concessions in accordance with the scheme on journeys on any eligible service operated by him release him from that obligation in respect of that service.
(2) Subject to the following provisions of this section, any such operator may at any time by notice in writing apply to the Secretary of State to be released from that obligation in respect of any such service on the ground that the authority or authorities responsible for administration of the scheme have failed to comply with their obligation under section 87(7) of this Act.
(3) An operator may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities responsible for administration of the scheme not less than twenty-eight days before the date of the application.
(4) A notice under subsection (2) or (3) above shall give particulars of any alleged failures of the authority or authorities in question to comply with their obligation under section 87(7) of which the operator complains.
(5) On any such application the Secretary of State may, if he finds the applicant's ground of complaint established, determine that the applicant's obligation under section 89(2) shall cease on such date as may be specified in the determination.")
Amendment No. 253C: Leave out Clause 91 and insert the following new clause—
("Supplementary provisions.
91.—(1) Regulations under this section may make provision as to—

(a) the maximum or (as the case may be) minimum period that may for the purposes of any provision of section 89 or 90 of this Act be specified in a participation notice:

(b) the form and contents of participation notices and other notices required for any purposes of sections 89 to (Release from compulsory participation) of this Act; and

(c) the manner in which any such notice is to be served.

(2) Where the Secretary of State cancels or varies a participation notice under section 90 of this Act after the obligation imposed by that notice has come into effect he may award compensation to the applicant under subsection (4) below if it appears to him that the applicant has suffered—

(a) in a case where the notice is cancelled, any loss attributable to his participation in the scheme in question: or

(b) in a case where the notice is varied by excluding from it any service operated by the applicant, any loss attributable to his participation in that scheme in respect of that service.

(3) Where the Secretary of State determines under section (Release from compulsory participation) of this Act that an obligation imposed by a participation notice shall cease he may award compensation to the applicant under subsection (4) below if it appears to him that the applicant has suffered any loss attributable to any failure on the part of the authority or authorities responsible for administration of the scheme in question to comply with their obligation under section 87(7) of this Act.
(4) In any case to which subsection (2) or (3) above applies the Secretary of State may by notice in writing require the authority responsible for administration of the scheme in question or (as the case may be) the authorities so responsible in such proportion as may be specified in the notice to pay to the applicant such an amount by way of compensation in respect of the loss there mentioned as may be specified in the notice.
(5) The Secretary of State may if he thinks fit appoint a person to determine an application under section 90 or (Release from compulsory participation) of this Act on his behalf; and references in those sections and in subsections (2) and (4) above to the Secretary of State shall be read as including references to a person so appointed.
(6) Regulations under this section may prescribe the procedure to be followed in connection with applications under sections 90 and (Release from compulsory participation) of this Act and may in particular (but without prejudice to the generality of that) include provision—

(a) as to the conduct of any proceedings held in connection with any such application; and

(b) enabling the Secretary of State to require either the applicant or the authority or authorities responsible for administration of the scheme in question, or both or all of them, to pay such sum as the Secretary of State may determine towards any expenses incurred by him in connection with the determinaion of the application.

(7) Where a requirement under subsection (4) above is imposed on more than one authority, the liability of the authorities concerned to the applicant shall be both joint and several.
(8) Any sums paid to the Secretary of State by virtue of subsection (6)(b) above shall be paid into the Consolidated Fund.")
Amendment No. 253D: Clause 92, page 95, line 28, at end insert—
("(2) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on part of, any director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
(3) Where the affairs of a body corporate are managed by its members, subsection (2) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(4) Proceedings for an offence under this section shall not, in England and Wales, be instituted except by the authority, or any one of the authorities, responsible for administration of the scheme in question or by or with the consent of the Director of Public Prosecutions.")
Amendment No. 253E:
Clause 94
Leave out Clause 94 and insert the following new clause—
Travel concessions on services provided by Passenger Transport Executives.
("Travel concessions apart from schemes
94.—(1) The payments provided for under an agreement providing for service subsidies in respect of any service entered into by an authority responsible for expenditure on public passenger transport services may not include payments in respect of the provision of travel concessions on journeys on that service except as provided below in this section.
(2) Subject to subsection (3) below, provision may be included in any such agreement for the making of payments by the authority in question to the person providing the service to which the agreement relates in respect of the provision of travel concessions on journeys on that service or any part of it for any description of persons eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme under that section.
(3) Subsection (2) above only applies where the concessions in question are not available, or not available to that description of persons, under any such scheme administered by the authority concerned or by that authority acting jointly with any other authority or authorities.").
This is a whole list of amendments to the concessionary fares system.
When this Bill was being considered in another place, my right honourable friend undertook to provide a new discretionary power which will enable local authorities to require operators, who had declined to participate voluntarily, to provide such travel concessions. This was to ensure that the authorities could secure adequately comprehensive schemes to meet the needs of their areas. The Government acted swiftly to give effect to this undertaking and the Bill as presented to your Lordships was substantially amended in another place to make sure that there will be concessionary fare schemes and that operators, if local authorities wish, must take part in them. All that commitment remains unchanged; but I shall not conceal from the Committee that we have examined further the mechanisms of compulsion. We realise that the changed arrangements that this implies will require more sophisticated provisions in the legislation. This will allow authorities to make the system work smoothly, and to ensure that its misapplication by local authorities would not penalise operators. We have had to produce a very substantial number of technical changes. Instead of producing about 50 separate amendments, which it was decided
1336
the wording of Amendments Nos. 87 to 94 would have needed, I am bringing this group of new clauses before your Lordships.
Perhaps I may go straight to Clause 87 which is Amendment 252ZA. Clause 87 gives local authorities the basic power to establish concessionary fares schemes and reimburse operators for participating in them, defining the relevant services on which concessions may be offered. In restructuring this clause a new provision has been made for a concessionary fares scheme to cover only part of a county or district council's area. This could mean, for example that where an authority wishes to see a concession offered on an existing route covered by a commercial service—such as a half fare for children—but feels that a general scheme is unnecessary, it can set up a scheme solely for services on that route so that all operators can opt to participate in the scheme or be compelled to do so.
Clause 87 also defines the groups eligible to receive concessions and the Government have taken the opportunity of the general revision of this clause to provide a more precise definition of "children". Following representations from local authorities, it became clear that there was some uncertainty as to whether people up to their 19th birthday but still in full time secondary education could receive travel concessions. This provision in Clause 87 ensures that it will be possible.
Clause 87 also contains a new provision to allow authorities to limit the entry of operators to participation in a scheme to dates chosen by the authority. This is to allow local authorities to bring a degree of order into the way in which new operators will join their schemes and thus assist in budgeting and forward planning, However, these delays should not be such as to exclude an operator from serving this section of the market for any great length of time, since this would inhibit competition and give concessionary travellers a worse deal. Although the wording of Clause 88 has changed substantially, its purpose in providing for regulations on the reimbursement of operators and for the same treatment of all operators of eligible services remains unchanged.
Similarly, the two new clauses—Amendments Nos. 252AB and 252AC—on publicity requirements for schemes and reimbursement arrangements and the right of eligible service operators to participate in travel concessions schemes contain no new proposals other than the right of local authorities to require a period of notice from operators wishing to join the scheme. The appearance of these new clauses simply reflects the Government's wish to give a better structure to the legislation and the provisions they contain have all previously been contained in the old Clauses 87 and 88.
11.15 p.m.
The Government are intent that the terms for participation in a concessionary fares scheme should be fair and impose no burden on an operator, which might undermine his commercial position. We hope that operators will therefore feel able to participate in the provision of concessionary fares on a voluntary basis. Where operators remain reluctant to do this, there is the power of compulsion. New Clauses 89, 90

1337
and 91 and the new clause in Amendment No. 253B cover compulsory participation by operators. They provide for local authorities to serve a notice on operators requiring them to provide concessionary fares from a given date and provide that operators will receive the appropriate reimbursement. They also provide for an operator to apply to the Secretary of State for release from the obligation to participate on the ground that compulsion is not appropriate either in their own case or in general.
The other amendments will ensure that the exercise of compulsion is not too draconian and does not therefore inhibit operators from providing services. Clause 89(4) now provides that any single period of participation should be for a set duration, after which time the authority should review whether compulsion is still appropriate. If it wishes to renew the compulsion, the authority would then be able to issue a further notice to this effect. It may, however, find it possible to reach a satisfactory agreement with the operator on a voluntary basis.
Recognising a concern expressed in another place, the Government have taken the opportunity in all these clauses to provide for the compensation of an operator whose compulsory participation is found to be inappropriate. Local authorities may well wish to exercise compulsion on a particular service at an early date in order to provide for comprehensive coverage of their area. However, authorities must be willing to bear the full cost of this, and the amendments to Clause 91 provide that where an operator makes a successful application to the Secretary of State for cancellation of compulsion and can show that he has suffered a loss as a result of the compulsory participation prior to this decision the authority may be directed to pay compensation for this loss, as a civil liability.
Your Lordships will recognise from the amendments to which I have just referred that the Government are intent on securing a fair deal for both parties in the application of compulsory participation. However, as the Bill was introduced there remains a gap in the provisions for dealing with the case of an operator who does not receive proper reimbursement. The provisions did not cater for the situation where an operator finds that an initially fair level of payment becomes progressively less adequate as time goes by. This could happen if the patronage he carries grows but the sums paid by the authority do not because the authority is not monitoring as frequently as it should. The authority has a basic duty to reimburse in relation to journeys carried. The intention in proposing the new clause in Amendment No. 253B on release from compulsory participation is to allow such an operator to make a further application to the Secretary of State for release where the authority fails in this duty and compensation may, again, be awarded.
Finally—and I apologise for the length of these remarks—Amendment No. 253D concerns the enforcement of compulsory participation. Clause 92 provides for an operator who fails to comply with a participation notice to be the subject of a criminal prosecution. In the case of offences of this sort by corporate bodies it is normal practice in criminal law for the senior officers of the company or members of
1338
the board of a nationalised industry to be subject to those sanctions personally if their actions have contributed directly to the offence. Since criminal prosecutions are a serious matter and should not be undertaken lightly, the amendments to Clause 92 also restrict the power of prosecution to the authority affected by an operator's failure to provide concessions or to another person with the consent of the Director of Public Prosecutions.
I apologise for the length with which I have had to speak to these amendments. I am also sorry that we have had to bring forward this long string of amendments. I hope that in the end the Committee will feel that they have now put into reasonably clear form the basic principle of these amendments: that there shall be concessionary fares and that it will be possible for local authorities to enforce participation in such schemes. I beg to move.
The Deputy Chairman of Committees (Lord Ampthill): There are three unnumbered amendments to this amendment on page 23 of the Marshalled List. Would the noble Lord, Lord Henderson of Brompton, care to confirm to the Committee that it is not proposed to move these amendments?
Lord Henderson of Brompton: I confirm that they are not to be moved.
[Amendments to Amendment No. 252ZA not moved.]
Lord Ennals: I do not think that the noble Lord the Minister need apologise at all. He actually gave a very short speech covering a very large amount of material, and I think that the Committee is grateful to him. Perhaps I might both apologise and ask whether, in any debate that may take place on the new clauses that the noble Lord has moved, Amendment No. 252A standing in my name could be taken into consideration?
Amendment No. 252A: after Clause 87 insert the following new clause:—
Concessionary travel for handicapped persons
(" .—(1) Section 87 of this Act (travel concession schemes) shall apply in relation to handicapped persons as defined in subsection (2) below as it applies in relation to persons mentioned in subsection (7) of that section.
(2) In this section "handicapped persons" means persons who, not being eligible persons within the meaning of section 87(7)—

(a) suffer from mental disorder within the meaning, in England and Wales, of the Mental Health Act 1959 and, in Scotland, of the Mental Health (Scotland) Act 1960;

(b) are deaf or dumb; or

(c) are substantially and permanently handicapped by illness, injury, defective hearing, defective sight or congenital deformity or by such other disabilities as may be prescribed by the Secretary of State by regulations.

(3) The power to make regulations under subsection (2)(c) above shall be exercisable by statutory instrument, which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(4) In Scotland, a regional or islands council may contribute to any cost incurred by any other regional or islands council in granting travel concessions under this section.")
I owe your Lordships' Committee an apology in that this amendment was tabled before the noble Lord tabled the amendments that he has just moved. Of course, the amendment deals with the definitions of disabled people and I do not think that it would make

1339
sense to the Committee if it were to be debated quite separately. In fact, had I done my job properly—and I have not, which is why I am apologising to the Committee—I would have withdrawn this amendment and asked that the three categories set out in subsection (2) be added to subsection (8) of the new clause proposed in Amendment No. 252ZA.
Perhaps your Lordships would permit me to say a few words about that clause, which will bring it into conformity throughout the United Kingdom. It would extend the categories of disabled people who are eligible for travel concessions by adopting the definitions of the Travel Concessions for Handicapped Persons (Scotland) Act 1980 in addition to the categories already provided for in Clause 87. It means that there will be a larger number of disabilities, as any noble Lord will appreciate who looks in particular at Amendments Nos. 252A, 252B and 252C standing in my name—and I am thinking especially of the deaf and the dumb, those with defective hearing and defective sight, or with a congenital deformity, who are those who are already included in the Travel Concessions for Handicapped Persons (Scotland) Act, and whom I wish to include. It is a very simple amendment which would standardise the eligibility for concessions throughout Great Britain. It is discretionary of course and it would still be a matter for local authorities to decide which of the categories they wished to include in any scheme or schemes.
In the other place, a series of amendments seeking to clarify this matter was moved and rejected at the Committee stage. The Parliamentary Under-Secretary of State, Mr. Mitchell, maintained that in England and Wales there was a wider range of disabled persons who could be embraced in concessionary fare schemes under Section 29 of the National Assistance Act 1948, and that to amend this Bill would merely duplicate these powers. I see in the Notes on Clauses that that point is repeated. A further examination of the records shows that the Parliamentary Under-Secretary of State argued that these powers were exercised by the local authorities as social service authorities, and he claimed that they were in the best position professionally to judge in what circumstances it was appropriate to go beyond the definitions of disability already used in transport legislation. I would simply argue that it does not make much sense that one should have one definition for England and Wales and another definition for Scotland. I am certain that that is the view of disabled people.
I think that there would be sympathy in your Lordships' House for the fact that some disabled people resent the idea that there should be different patterns in different parts of the country. I am thinking of people with defective hearing who may also have defective speech, and those with defective sight who may not be able to read or speak for themselves. I hope that the Minister will feel that a definition which is already engraved in legislation could be brought into this Bill simply by adding subsection (2) to the end of his subsection (8) as paragraph (f). I hope that he feels that that is a perfectly reasonable proposition.
I apologise to the Committee for leaving my new clause on the Marshalled List and not withdrawing it to present it as an amendment to the Government's series of new clauses.
Lord Shepherd: I intervene briefly to come back to what my noble friend said in regard to subsection (8) in Amendment No. 252ZA. Is it necessary to draft paragraphs (d) and (e) so tightly? Paragraph (d) reads:
"blind persons, that is to say, persons so blind as to be unable to perform any work for which sight is essential".
I do not know whether a similar provision is in previous legislation, but it seems to me to be so very tight that persons who have a sight incapacity but who do not come within that category would not get concessionary fares.
Paragraph (e) reads:
"persons suffering from any disability or injury which, in the opinion of the authority or any of the authorities responsible for administration of the scheme, seriously impairs their ability to walk".
I suppose one could have many debates as to what the phrase, "seriously impairs", means. If one took it literally, in the eyes of certain administrations, I suspect that it could eliminate persons to whom others would give concessions.
I wonder why the two paragraphs have to be drafted so absolutely tightly. Without opening the provision too wide, could it not be opened wide enough to cover those who fall just within the two categories?
When I was with them the National Bus Company took great pride in providing concessionary fares to the unemployed, particularly the young unemployed. We did this with the Manpower Services Commission and local authorities. I do not know whether such a provision could be included in the Bill or whether a more general new paragraph could be drafted. Concessionary fares for young people seeking employment, particularly if they have no job, is worthy of consideration.
Lord Ennals: Is my noble friend aware that part of my amendment, Amendment No. 252A, is in existing legislation, though at the moment it applies only to Scotland? The definition was thought appropriate for concessions for handicapped persons in Scotland, and it seems suitable that the same should apply to England and Wales.
Lord Shepherd: I am pleased to be informed of that fact. I hope that the noble Baroness, Lady Carnegy, will be willing to support the proposition that what is available in Scotland should also be available to the less privileged who live south of the border. I am seeking a little movement within what is drafted here. Secondly, I am asking whether something could not be done about the unemployed, and particularly the unemployed youth, in that there should be concessionary fares to help them in the seeking of employment.
11.30 p.m.
Lord Henderson of Brompton: May I thank the Government for this massive rewriting of a large part of Part V of this Bill, on travel concessions, both for what they have done and for the way in which they have done it? I think the Notes on Clauses which have been made available by courtesy of the noble Lord the Minister are quite admirable, with their tables of new subsections, derivations and main changes. Thus none

1341
of us can complain about this, and we have only cause to congratulate the Government and to thank the Minister.
I should like briefly to support the noble Lord, Lord Ennals, on this Scottish/English divide, and hope that that can be, so to speak, bridged. I should also like to support what the noble Lord, Lord Shepherd, has said and to say that I hope the Minister will not take it amiss if amendments are tabled on Report to this massive rewriting of the travel concessions scheme. It will not be in any spirit of ingratitude that amendments are moved but merely because we have only recently had this rewriting to look at and clearly amendments will be required.
The first matter that occurs to anyone reading this, despite the extremely lucid way in which it is explained in the Notes on Clauses, is the massive complication of these provisions. I very much wonder whether it is possible between now and Report stage to simplify these concessionary fare clauses. One fears that the ease of operating the proposed concessionary fare arrangements presupposes a very high level of willingness on the part of operators to participate in local authority schemes. If it is possible during the long Recess for the whole of the concessionary fares clauses to be simplified, in the interests of operators and of everybody else, I am sure we should all be enormously grateful. With that, I should like to leave the subject but rehearse once again my thanks to the Government and in particular, to the Minister.
Lord Belstead: I am grateful to noble Lords for receiving this string of long amendments with comparative equanimity. The noble Lord, Lord Henderson of Brompton, put to me a question about looking at the drafting again. I know that the parliamentary draftsmen will of course always be ready to look at the drafting, although it has been a major labour to get these amendments into their present form.
The question I am really required to reply to is that of the noble Lord, Lord Ennals, when he pointed out that here is Amendment No. 252A and related amendments on special categories of handicap, and asked the Government's response. The noble Lord very fairly pointed out that these very groups of people are the same as those covered by Section 29 of the National Assistance Act 1948, which gives social services authorities in England and Wales the power to provide various services and facilities for them. Therefore, we are not talking about people who are not covered at all by the facility for concessionary fares. But the noble Lord, Lord Ennals, said that of course the situation is different each side of the English-Scottish Border. That is because in Scotland regional and islands councils are both transport and social services authorities.
Herein lies the difficulty that the Government have with this amendment. Yes, I can certainly see the attractions of the arguments that the noble Lord has put; and, indeed, he is quite right in drawing attention to the fact that social services authorities in England and Wales which have powers under the National Assistance Act will generally be different from the
1342
authorities responsible for the provision of concessionary fare schemes under the present Bill.
The noble Lord is quite right in saying that. The difficulty is that the argument, I think, does not give proper consideration to the nature and needs of the groups with whom the amendments are concerned. It is, I would suggest, a fortunate thing that it is by no means easy for a transport department to identify persons who are suffering, for instance, from mental disorder. Although noble Lords will be aware of the convention that for the purposes of legislation all Secretaries of State are the same, the reference to the Secretary of State in subsection (2)(c) of the new clause would appear to imply that my right honourable friend the Secretary of State for Transport should have the power to make regulations for an area falling much more properly within the scope of his right honourable friend the Secretary of State for Social Services. Once the categories had been prescribed, it would again be the social services department that would be likely to be in touch with the people concerned.
I suggest therefore that the social services authorities are likely to be far better qualified to identify and make proper provision for the needs of the different groups of people covered by the amendment and that it would be appropriate to leave the powers of the transport authorities as they are at present. I realise that in saying this I am disregarding what the noble Lord has said about Scotland. I have given the reason for the difference each side of the border. I really believe that to put this additional power on my right honourable friend the Secretary of State for Transport when the power already exists for the social services departments to consider the needs of these people, in thinking of concessionary fares, would be a step that would not be altogether wise.
On Question, amendment agreed to.
New Clause 87 agreed to.
Lord Ennalshad given notice of his intention to move Amendment No. 252A:
[Printed earlier.]
The noble Lord said: I am not going to move the amendment at the moment, I was not satisfied with the Minister's reply although I shall look at it very carefully in Hansard. I do not see the logic—although clearly he does—of having a different definition for Scotland from that for England and Wales. Noting that I may well return to it—with the support I hope of other noble Lords at Report stage—I shall at this stage withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 88 [Reimbursement for travel concessions under schemes]:
Lord Belstead Lord Belstead moved Amendment No. 252AA:
[Printed earlier]
On Question, amendment agreed to.
Following is the text of the amendment (No. 252AA):
Leave out Clause 88 and insert the following new clause:—
("Reimbursement for travel concessions under schemes.
88.—(1) Regulations under this section may make provision with respect to any of the following matters—

(a) the factors to be taken into account by the authority or authorities responsible for administration of a travel concession scheme under section 87 of this Act in determining the aggregate amount that may be made available for the purpose of reimbursing operators participating in the scheme for providing travel concessions during any period;

(b) the determination by the authority or authorities so responsible of the amounts to be paid to individual operators participating in the scheme, or to any class of such operators, by way of reimbursement for providing such concessions;

(c) the manner of making any payments due to operators by way of such reimbursement; and

(d) the provisions or description of provisions that are to be or (as the case may be) may or may not be included in arrangements agreed with operators or adopted by the authority or authorities so responsible with respect to participation of operators in the scheme.

(2) Subject to any provision of regulations made by virtue of subsection (1)(d) above and to the following provisions of this section, the arrangements with respect to participation of operators in any such scheme shall be such as may be agreed between the authority or authorities responsible for administration of the scheme and individual operators on their admission to participation in the scheme.
(3) Subject to—

(a) any provision of regulations under subsection (1) above;

(b) any modifications that may by virtue of any provision of regulations made by virtue of paragraph (d) of that subsection or in accordance with section (Right of eligible service operators to participate in travel concession schemes) of this Act be agreed between the authority or authorities responsible for administration of any such scheme and any individual operator, and

(c) any modifications applied in the case of any individual operator by a direction given under section 90 of this Act;

the arrangements with respect to reimbursement and terms of withdrawal from participation in the scheme applicable to operators of eligible services participating in the scheme shall be such as the authority or authorities responsible for administration may from time to time adopt and must be the same in the case of all such operators.
(4) For the purposes of the provisions of this Part of this Act relating to schemes under section 87 of this Act, a service is an eligible service if it is a service qualifying for fuel duty grant.
(5) The arrangements currently adopted by the authority or authorities responsible for administration of any such scheme with respect to reimbursement of operators of eligible services participating in the scheme are referred to below in this Part of this Act, in relation to that scheme, as the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) In relation to operators participating in any such scheme, references in this section to arrangements with respect to reimbursement are references to conditions of entitlement of such operators to, and the method of determination and manner of payment of, reimbursement in respect of travel concessions provided under the scheme.")
New Clause 88 agreed to.
Lord Belstead Lord Belstead moved Amendment No. 252AB:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 252AB):
After Clause 88, insert the following new clause:—
("Publicity requirements for schemes and reimbursement arrangements.
.—(1) On or before the date on which a scheme under section 87 of this Act comes into operation or, where it comes into operation on different dates with respect to different concessions to be provided under the scheme, on or before the first of those dates.

(a) the authority or authorities concerned in establishing it shall publish particulars of the scheme; and

(b) the authority or authorities responsible for administration of the scheme shall publish particulars of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme;

in such manner, in either case, as the authority or authorities concerned think fit.
(2) Particulars of any subsequent variations shall be published—

(a) in the case of variations of the scheme, by the authority or authorities concerned in establishing the scheme; and

(b) in the case of variations of the arrangements, by the authority or authorities responsible for administration of the scheme.

(3) Following publication under subsection (1)(a) or (as the case may be) under subsection (1)(b) above of particulars of any scheme or arrangements—

(a) copies of the scheme or (as the case may be) of the arrangements (with any subsequent variations) shall be made available at the principal office of the authority or (as the case may be) of each authority concerned; and

(b) a copy shall be supplied to any person on request (whether at that office or by post) either free of charge or at a charge representing the cost of providing the copy.

(4) Where the authority or any of the authorities concerned in establishing a scheme under section 87 of this Act are a Passenger Transport Authority, they shall notify the Passenger Transport Executive for their area of any proposal to publish particulars of the scheme in advance of its coming into operation, giving the proposed date of publication.")
Lord Ennals Lord Ennals moved Amendment No. 252B:
After Clause 88, insert the following new clause:—
("Grants from the Secretary of State for Travel Concession Schemes.
.—(1) Where a travel concession scheme is established under section 87 of this Act the authority responsible for administering the scheme shall be entitled to receive a specific grant from the Secretary of State.
(2) The specific grant referred to in subsection (1) above shall be payable under section 8 of the Local Government Act 1974 and after subsection 8(2) of that Act there shall be inserted:—
"2A. For the year 1986–87 and each subsequent year the Secretary of State shall pay to each authority responsible for administering a travel concession scheme on bus, rail and ferry services a grant equal to 90 per cent. of the aggregate amount paid in that year by the authority—

(a) to public passenger transport operators for participating in the travel concessions scheme; and

(b) to public transport operators or holders of permits under section 19 of this Act for special services provided for the use of the elderly, the disabled or mobility handicapped.".")

The noble Lord said: This is a probing amendment. Its purpose is to—
Lord Henderson of Brompton: Should we not be considering Amendment No. 252 AC?
The Deputy Chairman of Committees (Lord Ampthill): I apologise to the Committee. There are so many pages. I turned over two at the same time. Amendment No. 252 AC.
Lord Belstead Lord Belstead moved Amendment No. 252AC:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (252AC):
Insert the following new Clause—
("Right of eligible service operators to participate in travel concession schemes.
.—(1) Subject to the following provisions of this section where any operator or prospective operator of an eligible service which is a relevant service for the purposes of any scheme under section 87 of this Act applies to the authority or authorities responsible for administration of that scheme to be admitted to participate in it in respect of that service, the authority or authorities in question shall be obliged to admit that operator to participation in the scheme in respect of that service as from any standard admission date under the scheme not later than the one next following—

(a) the end of such period as may be prescribed beginning with the date of his application; or

(b) the date on which the service begins;

whichever last occurs.
(2) The Secretary of State may, on the application of the authority or authorities responsible for administration of any such scheme, exempt the authority or authorities in question from the obligation under subsection (1) above in relation to any service or description of services; and the Secretary of State may at any time withdraw or vary any exemption granted under this subsection.
(3) An exemption may not be granted under subsection (2) above on the application of a Passenger Transport Executive, or on the joint application of authorities who include such an Executive, unless the application is made with the consent of the Passenger Transport Authority for that Executive's area.
(4) Subject to any regulations under section 88(1)(d) of this Act, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator or prospective operator of an eligible service who applies to be admitted to participate in the scheme in respect of that service, that fares currently charged or proposed to be charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question shall not be required by subsection (1) above to admit that operator to participation in the scheme in respect of that service unless that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(5) Subject to any such regulations, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator of an eligible service participating in the scheme, that fares currently charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question may by notice of not less than such period as may be prescribed exclude that operator from participation in the scheme in respect of that service unless before the end of that period that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) For the purposes of subsections (4) and (5) above fares for relevant journeys are to be regarded as including a special amenity element if they are significantly high in relation to the general level of fares for comparable journeys in the principal area covered by the scheme (within the meaning of section 87 of this Act).
(7) References in those subsections to appropriate modifications of the reimbursement arrangements there mentioned are references to such modifications of those arrangements as the authority or authorities concerned consider appropriate for providing reimbursement in respect of travel concessions provided for relevant journeys on the service in question by reference to the general level of fares mentioned in subsection (6) above instead of by reference to the actual fares charged (or proposed to be charged) for those journeys.
(8) For the purposes of this section "relevant journeys" are journeys on which travel concessions are to be provided under the scheme in question.
(9) for the purposes of this section and section 89 of this Act, references to a prospective operator of an eligible service are references to a person who has registered a local service under section 6 of this Act but is not yet operating that service ")
Lord Ennals Lord Ennals moved Amendment No. 252B:
[Printed above.]
The noble Lord said: This is a probing amendment and its purpose is to suggest to the Government that there is a clear need to separate funding for concessionary travel schemes from general revenue support to uneconomic public transport services.
Concessionary travel schemes assist the mobility of those in our society who, for one reason or another—age, infirmity or the various handicaps about which we have been talking—are unable to pay the full economic cost of the transport facilities which they require. There is a great danger that the current practice of Government to support all local authority expenditure through a single grant, will lead, at a time of ever-increasing restraint on public expenditure, to squeezing the already limited resources for the elderly and the handicapped. If one takes, for example, the metropolitan areas, the Secretary of State has already said that the passenger transport joint board will be rate-capped for three years and given a single expenditure level which will include revenue support for subsidised bus services, contractual Section 20 payments for British Rail, inherited debt charges, administrative costs of the PTA and PTE, and concessionary travel. I submit to your Lordships and the Minister, that there would be a grave danger that these authorities will give priority to revenue support and, as a result, be less generous to concessionary travel schemes than would ideally be necessary.
To prove that this is a probing amendment, I flew a kite in suggesting a particular level of grant, which I think is an unreasonable one. It would have been better, and I might have received a better response—and I shall say it now, so that the Minister does not have to say it—if, instead of talking about 90 per cent., I talked about a grant at a percentage rate not less than that used nationally for the purposes of rate support grant, and that would have kept it in regular conformity.
However, the main point is to stress that the elderly and the disabled can only benefit from travel concession schemes if adequate funds are available. The purpose of this amendment is to say that these should cover both revenue expenditure, giving them access to services available generally, and also, ideally, capital funds to allow provision for specialised services and adaptation of vehicles used in general services. I should be most interested to hear the Minister's response.
Lord Belstead: The first of the new clauses—Amendment No. 252B—would introduce a novel concept, and that is 90 per cent., automatic direct grant from my right honourable friend towards the cost of any concessionary fare scheme which any local authority wishes to bring into operation under Clause 87 of the Bill. The Government fully share the importance which your Lordships attach to concessionary fare schemes for elderly and disabled people and, indeed, for children who are also covered

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by the powers conferred by Clause 87. However, we believe it is essential that local authorities, in deciding the priority to be given to concessionary fares, should be in a position to weigh the situation properly against other claims on their resources.
The second of the new clauses appears as Amendment No. 252C:
Amendment No. 252C: Insert the following new clause:—
("Continuance of Existing Travel Concession Schemes.
.—(1) Where arrangements have been made under section 138 of the 1968 Act for the provision of travel concessions in an area, those arrangements shall continue in force as if they had been made in pursuance of a scheme by the local authority or local authorities concerned in pursuance of section 87 of this Act.
(2) Where a scheme continues in force in accordance with subsection (1) above regulations made in pursuance of section 88 shall provide—

(a) that agreements already in force for the reimbursement of operators participating in the scheme and any further operators that may join it shall continue unless and until the authority or authorities concerned determine an alternative;

(b) that the factors taken into account by the authority or authorities in determining the amounts to be paid to individual operators and the aggregate amount payable under the scheme shall be those which were taken into account immediately before the coming into effect of this Act unless and until the authority or authorities shall determine otherwise.

(3) The Secretary of State shall make grants to the local authority or authorities concerned towards the costs incurred in providing those concessions and such grants shall be separate from any grants made by the Secretary of State towards the costs of service subsidies paid under section 83 of this Act.")
This would allow authorities which had established concessionary fare schemes under the 1968 Act to maintain them indefinitely in their present form. I fear that the Government would see that as undermining the whole basis of the new provision for reimbursement of concessionary fares and the way in which it will operate under deregulation. I am sorry that I cannot give a more gracious response to the noble Lord's two new clauses.
Lord Ennals: I said that it was a probing amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 252C not moved.]
Clause 89 [Compulsory participation in travel concession schemes]:
Lord Belstead Lord Belstead moved Amendment No. 252D:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 252D):
Leave out Clause 89 and insert the following new Clause:—
("Compulsory participation in travel concession schemes.
89.—(1) Subject to subsection (8) below, where the arrangements currently adopted by the authority or authorities responsible for administration of a scheme under section 87 of this Act with respect to the terms on which operators of eligible services may withdraw from participation in the scheme require such an operator to give notice before withdrawing from the scheme in respect of any such service, any such operator shall be obliged to provide any travel concessions required by the scheme on journeys on any such service in respect of which he is participating in the scheme until he gives the required notice of withdrawal and the period of notice has expired.
(2) Subject to the following provisions of this section, the authority or authorities responsible for administration of any such
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scheme may at any time by notice in writing served on any operator or prospective operator of an eligible service (including an operator already participating in the scheme) impose on him an obligation to provide travel concessions in accordance with the scheme on journeys on any such service operated by that operator to which the notice applies.
A notice under this subsection is referred to below in this Part of this Act as a participation notice.
(3) The power under subsection (2) above to serve participation notice shall not be exercisable in relation to any such scheme until after the date (or whichever last occurs of the respective dates) of first publication under section (Publicity requirements for schemes and reimbursement arrangements) of this Act of particulars of the scheme and of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme.
(4) An obligation imposed by a participation notice shall, subject to subsection (8) below and sections 90 and (Release from compulsory participation) of this Act, be effective in relation to any service to which the obligation applies as from the appropriate commencement date for that service until the end of such period beginning with that date as may be specified in the participation notice.
(5) Subject to subsection (9) below, for the purposes of subsection (4) above the appropriate commencement date for any service to which an obligation imposed by a participation notice applies is—

(a) the date immediately following the end of such period of notice as may be specified in the participation notice; or

(b) the date when the service begins;

whichever last occurs.
(6) Where it is proposed—

(a) to vary a scheme under section 87 of this Act; or

(b) to vary the current arrangements for reimbursement of eligible service operators participating in any such scheme;

the authority or authorities responsible for administration of the scheme may, not less than such period before the variation is to take effect as may be prescribed, by notice served on any operator of any such service who is under an obligation under this section to provide travel concessions in accordance with the scheme, require him to indicate, within such period and in such manner as may be prescribed, whether or not he is willing to continue to participate in the scheme after the variation takes effect.
(7) Any notice under subsection (6) above shall give particulars of the proposed variation.
(8) Where in pursuance of subsection (6) above an operator indicates that he is not willing to continue to participate in the scheme after the variation takes effect, any obligation of that operator under this section to provide travel concessions in accordance with the scheme on journeys on any service operated by him which was current at the date of the notice under that subsection and would still apart from this subsection be in force on the date when the variation takes effect shall cease on the latter date (without prejudice, however, to the service of a new participation notice).
(9) Where in the case of any operator, notwithstanding subsection (8) above, any obligation of that operator under subsection (2) above to provide travel concessions on journeys on any service operated by him which was current at the date of the notice under subsection (6) above is still in force on the date when any such variation takes effect, the preceding provisions of this section shall apply in relation to that obligation, on and after the date when the variation takes effect, as if that date were the appropriate commencement date for the puposes of subsection (4) above for each service to which the obligation applies.
(10) The exercise of the power to serve a participation notice under this section on any person—

(a) by a Passenger Transport Executive; or

(b) by authorities responsible for administration of a scheme under section 87 of this Act who include such an Executive;

shall require the consent of the Passenger Transport Authority for the Executive's area.")
New Clause 89 agreed to.
11.45 p.m.
Clause 90 [Further provisions with respect to participation notices]:
[Amendment No. 253 not moved.]
Lord Belstead Lord Belstead moved Amendment No. 253A:
Leave out Clause 90 and insert the following new clause:
("Further provisions with respect to participation notices.
90.—(1) The authority or authorities by whom a participation notice is served on any person shall send to that person, together with the notice, a copy of—

(a) such particulars of the scheme to which the notice relates and of any vairations of that scheme; and

(b) such particulars of the current reimbursement arrangements for eligible service operators participating in the scheme and of any variations of those arrangements;

as have been published under section (Publicity requirements for schemes and reimbursement arrangements) of this Act before the date of the notice.
(2) Subject to the following provisions of this section, a person on whom a participation notice has been served may apply to the Secretary of State for cancellation or variation of that notice on either or both of the following grounds, that is to say—

(a) that there are special reasons why his participation in the scheme in question in respect of the service or any of the services to which the notice applies would be inappropriate; and

(b) that any provision of the scheme or of any such arrangements as are mentioned in subsection (1)(b) above are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.

(3) Subject to subsection (4) below, an application under subsection (2) above may be made by notice in writing given to the Secretary of State before the end of the period of twenty-eight days beginning with the date of the participation notice.
(4) A person may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities by whom the participation notice was served—

(a) if a period allowed for that purpose is specified in the participation notice, before the end of that period; or

(b) in any other case, at any time before the date of the notice given to the Secretary of State under subsection (3) above.

(5) On any such application the Secretary of State may—

(a) cancel the participation notice or vary it by excluding from it any service operated by the applicant; or

(b) determine that the participation notice shall have effect without variation;

and in any case where the participation notice is cancelled on the ground mentioned in subsection (2)(b) above shall give to the authority or authorities by whom the notice was served a notice in writing indicating in what respects the scheme or arrangements there mentioned are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.
(6) Where on any such application the Secretary of State does not cancel the participation notice, he may direct that the current arrangements for reimbursement of eligible service operators participating in the scheme shall apply in the case of the applicant or (as the case may be) in the case of any service operated by the applicant to which the participation notice applies with such modifications as may be specified in the direction.
(7) Any obligation under section 89(2) of this Act which has come into effect before the determination of any application under this section with respect to the participation notice by which that obligation was imposed shall—

(a) cease to have effect, if the notice is cancelled; or

(b) have effect, if the notice is varied, subject to a corresponding variation;

on such date as may be specified by the Secretary of State in determining the application.").
On Question, amendment agreed to.
New Clause 90 agreed to.
Lord Belstead Lord Belstead moved Amendment No. 253B:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 253B):
After Clause 90 insert the following new clause:
("Release from compulsory participation.
.—(1) The authority or authorities responsible for administration of a scheme under section 87 of this Act may at any time by notice in writing served on any operator who is under an obligation under section 89(2) of this Act to provide travel concessions in accordance with the scheme on journeys on any eligible service operated by him release him from that obligation in respect of that service.
(2) Subject to the following provisions of this section, any such operator may at any time by notice in writing apply to the Secretary of State to be released from that obligation in respect of any such service on that ground that the authority or authorities responsible for administration of the scheme have failed to comply with their obligation under section 87(7) of this Act.
(3) An operator may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities responsible for administration of the scheme not less than twenty-eight days before the date of the application.
(4) A notice under subsection (2) or (3) above shall give particulars of any alleged failures of the authority or authorities in question to comply with their obligation under section 87(7) of which the operator complains.
(5) On any such application the Secretary of State may, if he finds the applicant's ground of complaint established, determine that the applicant's obligation under section 89(2) shall cease on such a date as may be specified in the determination.")
Clause 91 [Provisions supplementary to sections 89 and 90]:
Lord Belstead Lord Belstead moved Amendment No. 253C:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 253C):
Leave out Clause 91 and insert the following new clause:
("Supplementary provisions.
91.—(1) Regulations under this section may make provisions as to—

(a) the maximum or (as the case may be) the minimum period that may for the purposes of any provision of section 89 or 90 of this Act be specified in a participation notice;

(b) the form and contents of participation notices and other notices required for any purposes of sections 89 to Release from compulsory participation) of this Act; and

(c) the manner in which any such notice is to be served.

(2) Where the Secretary of State cancels or varies a participation notice under section 90 of this Act after the obligation imposed by that notice has come into effect he may award compensation to the applicant under subsection (4) below if it appears to him that he applicant has suffered—

(a) in a case where the notice is cancelled, any loss attributable to his participation in the scheme in question; or

(b) in a case where the notice is varied by excluding from it any service operated by the applicant, any loss attributable to his participation in that scheme in respect of that service.

(3) Where he Secretary of State determines under section (Release from compulsory participation) of this Act that an obligation imposed by a participation notice shall cease he may award compensation to the applicant under subsection (4) below if it appears to him that he applicant has suffered any loss attributable to any failure on the part of the authority or

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authorities responsible for administration of the scheme in question to comply with their obligation under section 87(7) of this Act.
(4) In any case to which subsection (2) or (3) above applies the Secretary of State may by notice in writing require the authority responsible for administration of the scheme in question or (as the case may be) the authorities so responsible in such proportion as may be specified in the notice to pay to the applicant such an amount by way of compensation in respect of the loss there mentioned as may be specified in the notice.
(5) The Secretary of State may if he thinks fit appoint a person to determine an application under section 90 or (Release from compulsory participation) of this Act on his behalf; and references in those sections and in subsections (2) to (4) above to the Secretary of State shall be read as including references to a person so appointed
(6) Regulations under this section may prescribe the procedure to be followed in connection with applications under sections 90 and (Release from compulsory participation) of this Act and may in particular (but without prejudice to the generality of that) include provision—

(a) as to the conduct of any proceedings held in connection with any such application; and

(b) enabling the Secretary of State to require either the applicant or the authority or authorities responsible for administration of the scheme in question, or both or all of them, to pay such sum as the Secretary of State may determine towards any expenses incurred by him in connection with the determination of the application.

(7) Where a requirement under subsection (4) above is imposed in more than one authority, the liability of the authorities concerned to the applicants shall be both joint and several.
(8) Any sums paid to the Secretary of State by virtue of subsection (6)(b) above shall be paid into the Consolidated Fund.")
New Clause 91 agreed to.
Clause 92 [Enforcement of participation in travel concession schemes]:
Lord Belstead Lord Belstead moved Amendment No. 253D:
[Printed earlier.]
On Question, amendment agreed to.
[Following is the text of the amendment (No. 253D): page 95, line 28, at end insert—
(" (2) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
(3) Where the affairs of a body corporate are managed by its members, subsection (2) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(4) Proceedings for an offence under this section shall not, in England and Wales, be instituted except by the authority, or any one of the authorities, responsible for administration of the scheme in question or by or with the consent of the Director of Public Prosecutions.")
Clause 92, as amended, agreed to.
Clause 93 agreed to.
Clause 94 [Subsidies for travel concessions]:
Lord Belstead Lord Belstead moved Amendment No. 253E:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 253E): Leave out Clause 94 and insert the following new clause:
Travel concessions on services provided by Passenger Transport Executives.
("Travel concessions apart from schemes
94.—(1) The payments provided for under an agreement providing for service subsidies in respect of any service entered into by an authority responsible for expenditure on public passenger transport services may not include payments in respect of the provision of travel concessions on journeys on that service except as provided below in this section.
(2) Subject to subsection (3) below, provision may be included in any such agreement for the making of payments by the authority in question to the person providing the service to which the agreement relates in respect of the provision of travel concessions on journeys on that service or any part of it for any description of persons eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme under that section.
(3) Subsection (2) above only applies where the concessions in question are not available, or not available to that description of persons, under any such scheme administered by the authority concerned or by that authority acting jointly with any other authority or authorities.").
New Clause 94 agreed to.
Lord Belstead Lord Belstead moved Amendment No. 253F:
After Clause 94, insert the following new clause:
("Subsidies for travel concessions.
.—(1) A Passenger Transport Executive may not in exercise of their powers under section 10(1)(xiii) of the 1968 Act (power of Passenger Transport Executive to charge for services and waive their charges, etc.) provide travel concessions for persons travelling on any public passenger transport service provided by the Executive other than persons of any description eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme established under that section, except where those concessions are provided under any agreement or arrangements under which the whole of the cost of providing those concessions is to be met by a person other than that Executive or the Passenger Transport Authority for that Executive's area.
(2) The approval of the Passenger Transport Authority for a passenger transport area under section 15(2) of the 1968 Act (approval of Passenger Transport Authority required for alterations by Executive in general level of charges and for reduction or waiver of charges by Executive) shall not be required for travel concessions granted by the Passenger Transport Executive for that area for persons travelling on any public passenger transport service provided by the Executive if those concessions are granted—

(a) in accordance with any scheme established under section 87 of this Act by any authority other than the Passenger Transport Authority for that Executive's area or (as the case may be) by authorities who do not include that Passenger Transport Authority; or

(b) where that Executive's area is in England and Wales, in pursuance of arrangements made with that Executive by any local authority within the meaning of the National Assistance Act 1948 in exercise of their powers under section 29 of that Act (welfare arrangements for handicapped persons);

or correspond to travel concessions under any scheme established under section 87 of this Act by the Passenger Transport Authority for that Executive's area.
(3) For the purposes of subsection (2) above, travel concessions granted by the Executive for a passenger transport area on any such service correspond to travel concessions under any such scheme if they are—

(a) of the same value;

(b) available subject to the same terms, limitations or conditions; and

(c) available to persons of the same description;

as the travel concessions provided under that scheme.")
The noble Lord said: I beg to move Amendment No. 253F and to speak also to Nos. 253G, 269ZB and 269ZC.
Amendment No. 253G: After Clause 94, insert the following new clause:
("Travel concessions on servicss provided by local authorities.
.—(1) Where the council of any county or district in England and Wales or of any region or islands area in Scotland are operating any public passenger transport service, they shall have power to provide travel concessions for persons travelling on that service of any description eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme established under that section.
(2) In respect of travel concessions provided under this section, any such council may, if they think fit, from time to time transfer to the credit of the account of their transport undertaking sums from the general rate fund or, where that council is the council of any region or islands area in Scotland, from the general fund (within the meaning of section 93 of the Local Government (Scotland) Act 1973).
(3) Sums so transferred must not exceed the cost to the council concerned of providing the concessions or so much of that cost as would not apart from subsection (2) above fall to be met out of the fund there mentioned.")
Amendment No. 269ZB: Schedule 6, page 146, line 1, at end insert—
(" . In section 10(1)(xiii) of the 1968 Act (power of Passenger Transport Executive to charge for services, etc.), after the word "Act" there shall be inserted the words "and section (Travel concessions on services provided by Passenger Transport Executives) of the Transport Act 1985 (travel concessions on services provided by Passenger Transport Executies)".
. In section 15(2) of that Act (approval of Passenger Transport Authority required for alterations by Executive in general level of charges and for reduction or waiver of charges by Executive), for the words "138(1) of this Act" there shall be substituted the words "(Travel concessions on services by Passenger Transport Executives) of the Transport Act 1985 (travel concessions on services provided by Passenger Transport Executives)".")
Amendment No. 269ZC: Page 146, line 2, leave out ("the 1968") and insert ("that").
These new clauses are necessary to clarify and establish the powers of PTEs and local authorities to provide travel concessions on their own services. I think of such things as the Glasgow Underground, the Tyne and Wear Metro and the Scottish ferries. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 253G.
[Printed above.]
On Question, amendment agreed to.
Lord Denham: I think by general consent we have reached as far as we usefully can this evening. I beg to moved that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Consolidated Fund (Appropriation) Bill
Brought from the Commons endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read a first time, and to be printed.
Child Abduction and Custody Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments ordered to be printed.

Oxfordshire Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
House adjourned at twelve minutes before midnight.