London Regional Transport (Amendment) Bill

HL Deb 04 March 1985 vol 460 cc1093-104

2.56 p.m.

Lord Brabazon of Tara

My Lords, I beg to move that the London Regional Transport (Amendment) Bill be read a second time.

The purpose of this Bill is to settle the amount of grant to be paid by the Greater London Council to London Regional Transport for 1984–85. There is no dispute that the GLC should finance LRT up to 31st March 1985. The Government took responsibility for LRT on 29th June—part way through the present financial year. By then, the GLC had already budgeted and precepted to support London Transport for the whole of 1984–85. So provision was made, in Section 49 of the London Regional Transport Act 1984, for the GLC to be directed to continue paying grants to LRT up to the end of the financial year. Without such a provision, ratepayers and taxpayers would have had to pay twice for the same services—once to the GLC, through their rate precept and through transport supplementary grant, and again after the GLC had lost responsibility for LRT.

Section 49 provided that the GLC should pay up to £360 million in grants for 1984–85, counting the period before the Government took over. This figure was made up of the GLC's revenue support determination for the year, which was £190 million, plus £170 million to cover LT's capital programme. Under the terms of Section 49, the Secretary of State for Transport could direct the GLC to pay up to £360 million, less any grants paid in respect of 1984–85 before the direction was made.

In the event, my right honourable friend made his direction on 29th June 1984. Acting on the information then available to him, he deducted £78.7 million in respect of grant payments made before 29th June. That left a balance of £281.3 million, to be paid in instalments up to the end of March this year. In directing the GLC to pay the full balance of £281.3 million, rather than a lesser sum, my right honourable friend had two principal considerations in mind. First, as far as revenue support was concerned, LRT were predicting a small deficit for the year, after receipt of grants, at the time the direction was made. Although the revenue outlook had been improving in the period immediately before 29th June, there was no way of knowing whether the improvement would be sustained. There were also risks which could have adversely affected the revenue account position. On balance, there was no basis at that time for assuming that LRT would need less than the full amount of revenue grant determined by the GLC.

Secondly, for capital grants the GLC had budgeted to pay £149.2 million—£20.8 million less than the amount provided for in Section 49. But that figure of £149.2 million did not represent the full cost of LT's capital programme for 1984–85, as agreed by the GLC. After the Government had fixed the GLC's capital allocation for 1984–85 on the assumption that the whole of LT's capital programme would be covered by grant (as had always been the GLC's practice in the past) the GLC had decided that LT should finance £27 million of expenditure by leasing, which is effectively a form of borrowing. There were two underlying reasons for this change of policy. First, the GLC hoped that it would enable them to evade the Government's system of capital controls, by reducing the amount of grant which they had to pay to LT for 1984–85. They would then be able to spend more in other areas. Secondly, the GLC hoped that they could escape altogether responsibility for funding part of LT's capital programme, since they knew that they might lose control of LT at some point during 1984–85, and most of the cost of the leases would then fall on LRT in future years.

My right honourable friend made it quite clear when the London Regional Transport Act was being considered in the other place that the Government did not regard the use of leasing in these circumstances as acceptable. Indeed, he said that he would require the GLC to pay the full amount of capital—£170 million—subject to the final determination and checking of figures. As I have explained, £20.8 million was available within the £170 million ceiling imposed by Section 49 of the LRT Act to help service the costs of the leases which LT had signed while under GLC control. Calculations on a reasonable range of assumptions about future real interest rates showed that, if anything, £20.8 million was somewhat less than sufficient to cover the cost of the leases. Accordingly, my right honourable friend saw no reason why the GLC should not be directed to pay the full amount of capital, and he instructed LRT to use the £20.8 million to set up a reserve to help pay for the leasing commitments.

That is the basis on which the Section 49 direction was made. My Lords, as you know, the GLC subsequently challenged the direction in the courts on a number of grounds. For one thing, the GLC claimed that the amount of grant which they had paid in respect of 1984–85 before 29th June was £88,920,412—some £10.2 million more than they had been given credit for in the direction. On the evidence available to my right honourable friend when the direction was made, it was indeed the case that the GLC had made payments to LT amounting to £10.2 million at the beginning of this financial year. But those payments had been requested by LT to settle their accounts with the GLC for the previous financial year, 1983–84. Subsequently, further evidence came to light which showed that the GLC had instead labelled the payments as being in respect of 1984–85, leaving the position for 1983–84 unresolved. While LT had disputed this decision, the GLC were in charge at that time and LT had had no alternative but to agree in the end.

Another ground of challenge concerned the GLC's Money Bill for 1984, which made provision for their capital expenditure for 1984–85. At the time the Section 49 direction was made, the other place had agreed an instruction to the Committee considering the GLC's Money Bill to the effect that, unless the GLC came forward with specific proposals for expenditure reductions, an across-the-board cut should he made, amounting to some 7½ per cent. At the time of making the direction, my right honourable friend did not feel able to take account of this prospective cut in respect of LRT's capital expenditure, first because it was still open to the GLC at that time to come forward with proposals to reduce overspending on other programmes; and, secondly, because even if the reduction were subsequently implemented, the GLC could vire between expenditure blocks. In the event, the GLC made no proposals and the 7½ per cent. reduction across the board was duly implemented, after the Section 49 direction had been made.

The Bill which is before us now takes account of both the Money Bill point and the £10.2 million paid before 29th June. Although the Government take the view that the GLC should have settled up with LT for 1983–84, we accept that it would go beyond the original intentions of Section 49 to require them now to do so. The figure of £258, 179,588 specified in the Bill therefore gives the GLC credit for the additional £10.2 million of grants paid before 29th June. Furthermore, since the GLC's Money Bill has now been enacted with the reductions imposed by the House of Commons, this Bill accordingly reduces the amount of capital grants to he paid by the GLC by £12.9 million. In total, the amount of grant which this Bill requires the GLC to pay is therefore some £23.1 million less than they would have had to pay under the original Section 49 direction. LRT will have to absorb this loss of grant.

These two points having been dealt with, there remain two substantive points at issue between the Government and the GLC. The first concerns the leasing reserve of £20.8 million, which I have already mentioned. The GLC took the view, and argued in court, that they should not be required to make any grant payments to LRT over and above what was needed to meet LRT's strict cash requirements in 1984–85. Although Government Ministers had made it absolutely clear during the passage of the LRT Act that they intended to require the GLC to cover the leasing liabilities, the courts ruled that the direction made under Section 49 should not have included the leasing reserve.

The second point at issue concerns whether the GLC should be required to meet other liabilities which LRT have accrued, and which will show in their accounts for 1984–85. Since 29th June, when the Government took control of LRT, their management have been able to generate additional fares income and to cut costs. On the latest forecasts, allowing for the effects of this Bill, LRT expect to have a cash surplus of some £30 million at the end of this year. But they also have substantial liabilities amounting in total to some £37 million which will appear in their accounts for this year.

Although the sums of money involved in the leasing reserve and the argument over the cash surplus are separate, the issue of principle is the same for both. The GLC argue that they should have a rebate of some £50 million on their grant payments to LRT—in addition to the £23 million which your Lordships will recall is already conceded by this Bill—and that the liabilities and leasing commitments should fall as a charge to LRT in future years. The Government's position is that it would be quite wrong for the GLC to be credited with £50 million to spend as they wish, while leaving LRT to carry forward unfunded liabilities which will fall as charges on passengers and ratepayers in future. This would be unfair to passengers, who have contributed a large part of LRT's expected cash surplus for this year. It would also be unfair to ratepayers who have already paid through the GLC's precept to support public transport services for this year. In fact, it would amount to asking them to pay twice for the same service. That is why the Government are not prepared to concede further sums of money to the GLC.

I have explained how the provision in the Bill has been derived and why the Government consider it to be fair and reasonable as between the parties concerned. But the Bill has also raised wider issues, one of which is recognised in the amendment tabled by the noble Lord, Lord Tordoff, and I should like now to deal with three such issues.

First, it has been alleged during the consideration of this Bill that the Government are seeking to use ratepayers' money to create a surplus which will somehow be applied, at least in part, to the benefit of the Exchequer. That is simply not true. As I have explained, although LTR expect to have a cash surplus of some £30 million this year, they have some £37 million of liabilities to set against that. So the grant which this Bill provides for is certainly not more than enough, on present forecasts, to meet LRT's needs.

I can also assure your Lordships that there is no question of any of this money benefiting the Exchequer, for example, by enabling the Exchequer contribution to LRT's grants for next year (1985–86) to be held down to below what it would otherwise be. On the contrary, the Exchequer contribution for next year has been fixed at £35 million higher than this year. It was determined using the same principles as are applied to the calculation of Exchequer support for local authority services generally, so as to be fair to ratepayers in London and elsewhere. Any further increase in the Exchequer contribution to LRT would unfairly reduce the amount of Exchequer grant available for distribution to local authorities. So if LTR did not have the cash surplus and had to carry forward unfunded liabilities into 1985–86 and future years, those costs would have to fall on passengers and ratepayers. It is therefore passengers and ratepayers who will derive the whole benefit of LTR's expected cash surplus for 1984–85.

The second point of principle concerns the passage of legislation to deal with the outcome of a decision in the courts. There are many precedents for this. One thinks immediately of the field of taxation, where it is not unusual for laws to be passed to clarify areas where the courts have brought to light what the Government regard as loopholes in existing laws. During consideration of this Bill in the other place, my right honourable friend mentioned two precedents in the field of transport legislation, both concerning travel concessions. The Public Service Vehicles (Travel Concessions) Act 1955 was passed because the Appeal Court ruled that Birmingham Corportion was in breach of its fiduciary duty to ratepayers in offering travel concessions to elderly people. The Act then gave local authorities who ran transport undertakings the power to provide such concessions. More recently, the Travel Concessions (London) Act 1982 was passed to give the GLC specific powers to finance concessionary travel schemes after legal action by the London Borough of Bromley had called their powers into question.

However, the important question is not whether there are precedents, but whether legislation is necessary and justified in this particular case. I have tried to demonstrate that it is. It is quite clear, particularly in respect of the leasing reserve issue, that the courts took a different view of the scope of Section 49 than the Government had intended in bringing the legislation before Parliament in the first place. The judgment also cast doubt on the extent to which the other liabilities which I have mentioned might be admissible within the terms of Section 49.

It is right that the amount of grant should be settled by the Government, with the approval of Parliament. I have explained to your Lordships why the Government consider that the provision in this Bill is reasonable. I am sure your Lordships will accept that the arguments which I have put forward are not legal arguments. They are policy arguments. It is not for the courts to determine the policy; nor have the courts presumed to do so in this case.

Moreover, your Lordships will appreciate, I am sure, that there is a need to settle the amount of grant to be paid once and for all, particularly now that we are fast approaching the end of the financial year. Both LRT and the GLC need to budget and plan ahead for 1985–86.

In sum, in the circumstances of this case, legislation is both necessary, to settle the matter quickly and beyond doubt, and desirable, to enable the Government and Parliament to determine the outcome on proper policy considerations.

I come last of all to the issue of retrospection. I fully recognise the strong feeling in this House against measures of a retrospective nature. That is not to say that retrospective legislation is never justified, but it should be regarded as an exceptional measure. Concern has been expressed, both in the other place and by the noble Lord, Lord Tordoff, in his amendment before us this afternoon, that this Bill is to some extent retrospective. I hesitate, in front of the legal experts in this House to be dogmatic on what is or is not technically retrospective. But I think it may be instructive to re-examine, very briefly, the circumstances surrounding this Bill.

The law as it has stood since the London Regional Transport Act received Royal Assent last June requires the GLC to pay up to £360 million in grants to LRT for 1984–85, counting the three months before the Government took control. To date the GLC has paid some £265.9 million: £88.9 million up to 29th June, when the Section 49 direction was made, and £177 million under the now void direction. There is no doubt that the potential liability of the GLC is that amount and more. The High Court judgment on 11th January opened up the question: How much more? This Bill will resolve the matter. It will make no unforeseen demands upon the GLC; nor does it seek to make lawful the original Section 49 direction which has been quashed by the courts, or to amend Section 49 with retrospective effect. In fact, the GLC's liability under this Bill will be £23 million less than it was before under the London Regional Transport Act and under the Section 49 direction. I do not believe that this measure deserves the stigma which is commonly attached to retrospective legislation. The circumstances of the case do not warrant it.

The Government did not lightly bring this new legislation before Parliament. We did so because there were issues of principle to be resolved, in the interests of passengers and ratepayers. Legislation offered the only certain prospect of resolving these issues quickly and satisfactorily. I have sought to demonstrate that the Government are simply seeking to secure an outcome which is fair and reasonable to passengers, 1099 London Regional Transport ratepayers, LRT and the GLC. I am sure that your Lordships will support that objective and on that basis I commend the Bill to this House.

My Lords, I beg to move.

Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)

3.13 p.m.

Lord Tordoff rose to move, as an amendment to the Motion that the Bill be now read a second time, at end to insert "whilst this House regrets the retrospective nature of this legislation".

The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Order Paper. We are grateful to the noble Lord, Lord Brabazon of Tara, for his clear exposition of the Government's position on this Bill. As he rightly said, we are dealing here with an amendment to Section 49 of the London Regional Transport Act, which received the Royal Assent on 26th June last year and which set up a system whereby the Secretary of State, having created a nationalised industry, to the surprise of some of his friends, was enabled in future to levy the London boroughs for two-thirds of the grant in aid which is needed to run London Regional Transport, the balance coming from the taxpayer. But there was, as the noble Lord said, special provision for the interim period—that is to say, the first year from 1st April last to 31st March this year—so that the Secretary of State could demand from the GLC that it pays to London Regional Transport the sum of £170 million plus the revenue grants as determined under the 1969 Act, which I think the Government claim is a figure of £360 million.

The new Bill, on the other hand, removes that basis of calculation and substitutes a figure of £258.2 million approximately. On 29th June, three days after the Bill became law, the Secretary of State made a direction which said that this was on the basis of "calculations attached", and this was in the sum of £281.3 million. Unfortunately, the calculations were not attached. That is a pity, because it might have been easier to follow the progress of this problem if they had been attached at the time. But we all make mistakes.

The GLC then disputed this amount and went to court for a judicial review. Mr Justice McNeill, in a long judgment of some 110 pages, said that the Secretary of State had acted unlawfully in a number of aspects and among those aspects was the seeking to achieve what he described as non-transport purposes; that is to say, he took more than he required for the running of London Transport, in order to stop the GLC from spending money in other directions. That might be something which would commend itself to noble Lords, because a number of noble Lords do not like the GLC spending money. I do not want to get into that argument today, and we all have our own views on it.

Nevertheless, Mr. Justice McNeill said that that was an unlawful act. He also said that it was unlawful to seek to establish a leasing fund of £20.8 million, to which the noble Lord the Minister has referred, because this is indeed in respect of leasing which will go on for some considerable period beyond the current year. It may be that there was, as the right honourable gentleman the Secretary of State said in another place, a certain amount of creative accounting going on in the GLC at that time. I do not dispute that. But the fact is that the judge has said that it is not lawful for the Secretary of State to provide for the leasing of buses in this way.

In conclusion, Mr. Justice McNeill used what are now becoming the immortal words—immortal because I think that they have been used in every debate in the last few weeks—that, The Secretary of State acted unlawfully, irrationally and procedurally improperly in giving a direction which exceeded his statutory powers". Your Lordships should notice that this is not just a simple misinterpretation of an Act which is less than a year old. The Secretary of State has acted ultra vires. He had asked for more from the GLC than he was entitled to ask for, and to do so was unlawful and is still unlawful at this moment, as I speak.

The Secretary of State then had a number of options open to him. He could have appealed. I believe that he did not appeal, because he knew that he would not win. He said that he did not appeal because it would have left things in a state of uncertainty. Either way, it was an option which was open to him and which would, in the end, have cleared up the matter either in his favour or in favour of the GLC. He could, more positively, have made a lawful direction, which would have left him with sufficient money to provide for London Regional Transport during the coming year—that is to say, with enough revenue to expend on its current requirements—which is what I think most of us, when this Bill went through the House previously, understood it to be about. But he failed to do that. Instead, he brings a Bill before Parliament, and takes it through the other place in two days, in order to make lawful that which at the moment is unlawful, not just from now, but back to 1st April last year.

Perhaps, in response to what the Minister has just told us, I may draw your Lordships' attention to what the Bill actually says. Clause 1(1) states: The Greater London Council shall under this section pay to London Regional Transport by way of grant for the initial year (that is to say, the financial year ending on 31st March 1985) the sum of £258,179,588". To me, the financial year starts on 1st April 1984 and clearly, on the face of the Bill, it is retrospective in form. It is certainly retrospective in effect.

Let us now come to the sum which is being demanded on the face of the Bill. It is, as the noble Lord has said, lower than the original figure, and it is lower by £23.1 million because the Secretary of State got his sums wrong. He got his sums wrong partly because he did not actually consult the GLC on the facts of the case. He says that he did not do that because he would not have got a proper answer. Again, those of us who have read the judgment by Mr. Justice McNeill will know that that got its come uppance from him. He says in fact that surely the Minister would not have gone into consultation without assuming that there could be some change on his part. But anyway he does accept now that the original figure was wrong, and that this was partly reduced because of the carry over from 1983 and partly reduced by the smaller capital needs of LRT in the current year.

At this point we have to say quite clearly that LRT is now functioning well, though not necessarily to the benefit of the fare paying passengers who are having to pay higher fares—which perhaps touches on the point made later on by the noble Lord, Lord Brabazon of Tara. Nevertheless, it is functioning, and it would be idle of us to pretend otherwise. But the new figure, the lower figure, of £258.2 million still includes £20.8 million for leasing reserve, which Mr. Justice McNeill said is at this moment unlawful.

It also includes £29.5 million surplus to the revenue needs of LRT which, we are told, is required for a number of things, including (the Minister did not mention this) redundancy payments—redundancies which have not yet been declared or asked for. In other words, these are payments into subsequent years and not part of the revenue requirement of LRT during the current 12-month period. This, again, Mr. Justice McNeill said, was unlawful and remains so.

The Secretary of State is trying to get £50 million which at this moment he is not lawfully entitled to do, and one can understand why he did not go to appeal. He has made a mistake and he seeks to cover it by an Act of Parliament, which I submit to your Lordships is operating retrospectively. Furthermore, he introduces it to your Lordships' House as a Money Bill. I may make no criticism of that because the Bill bears the Speaker's Certificate; it would be improper for me to criticise that. It is clearly a Money Bill because the Speaker says it is a Money Bill; but I think it is regrettable that the Government saw fit to bring a Bill to this House in this way, having forced it through another place in two days with a very large whip majority. The only place where it could ordinarily be amended is your Lordships' House and we are precluded from doing that by the terms of it being a Money Bill.

Perhaps I may quote my noble friend Lord Diamond on the question of retrospection. At column 592 of the Official Report of 29th January, when we were discussing a Statement from the Secretary of State which was repeated in this House by the noble Lord, Lord Brabazon of Tara, the noble Lord said: although Parliament can do a great deal, it cannot bail the Government out on every mistake they make? If the Government have made a mistake and have been supported by Parliament, and the court has drawn attention to that mistake, the law is the law as the judge has decided. That covers the period up to the date when the new legislation is brought in or is effective. In those circumstances, how can the Government possibly justify coming to Parliament with a proposal which is flatly in contradiction with what the judge has decided was the law of the land at the time the judge was asked to make the decision? That is the position we take from these Benches, and I am grateful to my noble friend for putting it so clearly.

Because it is a Money Bill we cannot effectively amend it. Retrospective legislation always causes concern in your Lordships' House. Indeed, the noble Lord, Lord Brabazon of Tara, has indicated that in some way he goes along with that. People acting lawfully should not later be penalised by their actions being made unlawful retrospectively. Nor do I believe that Ministers acting unlawfully should be able to legalise their action in retrospect.

Of course we all recognise that there are occasions when Governments have no option other than to do this, where there are extremely grave matters at risk, for the good of the nation and for the safety of the state. But these should be very few, they should be of the last resort, and they should be for serious purposes. This Bill, I submit to your Lordships, is neither. It is neither because it is not the last resort when the Minister could have made a lawful direction; nor is it a serious purpose because LRT will have sufficient money in 1984, even without the extra £50 million.

In that same discussion on the Statement, at column 591 of the Official Report of the same day, 29th January, the noble Lord, Lord Harmar-Nicholls, whom I am sorry to see is not in his place today, said: I should hate the principle of retrospection to be brought here. I think retrospective legislation is bad and unfair. Although this may have elements in it which would perhaps justify a certain element of retrospection, I hope the Government will forgo that for the benefit of the higher principle of not having retrospective legislation".

I believe that the Government should have forgone the benefit of the extra £50 million, however much they believe it is justifiably the property of London Regional Transport, for the higher principle of not having retrospective legislation. They have decided not to do so. It is a matter of regret, and I ask noble Lords to join me in saying so. I beg to move.

Moved, as an amendment to the Motion that the Bill be now read a second time, at end to insert "whilst this House regrets the retrospective nature of this legislation".—(Lord Tordoff.)

The Deputy Speaker (Lord Nugent of Guildford)

My Lords, the original Question was, That this Bill be now read a second time?, since when an amendment has been moved in the terms set out on the Order Paper.

The Question I now therefore have to put is, That this amendment be agreed to?

3.26 p.m.

Lord Boyd-Carpenter

My Lords, there appear to be three points which arise in this debate: first, the merits of the Bill; secondly, whether or not it is retrospective, which is obviously a matter on which opinions can differ, and there will no doubt be some argument; and, thirdly, the procedure which the noble Lord, Lord Tordoff, has seen fit to adopt in putting down what courtesy demands I should describe as "a reasoned amendment."

I shall comment first, if I may, on the third point. This is a Money Bill under the Parliament Act. It bears Mr. Speaker's Certificate, and as the noble Lord, Lord Tordoff, very properly said, it is not for any of us here or elsewhere to question that certificate. We are dealing with a Money Bill, and the first point that I think your Lordships will want to consider, whatever view you take on the merit, is whether it is an appropriate action for this House to append a critical amendment to the Motion that a Money Bill be read a second time.

There is a certain irony in the fact that this proposal should come from the Liberal Benches. It was, after all, the Liberal Party which some years ago passed the Parliament Act, and there are some of us here—one sitting very near to me—whose forbears did their best to prevent that coming into law. But it was passed into law, and while I do not argue to your Lordships that in any strict sense it is out of order to put down a reasoned amendment to a Money Bill, I am going to suggest that it is a very unfortunate practice; and let us see where it leads.

Your Lordships may well dislike other Money Bills that come from another place. Indeed, were there to be a change of Government, there might be intense dislike of some of those Money Bills. But accepting, as we do, the terms of the Parliament Act—that we cannot amend a Money Bill, that we cannot delay it for more than a month—are we really going to say, "But we can tag on to the Motion for Second Reading what is intended to be a critical and perhaps even an offensive amendment"? That seems to me a most unfortunate posture for your Lordships' House to adopt. It has an atmosphere of "willing to wound, but unable to strike". I suggest to your Lordships that it is an attempt to undermine the principle, which has been accepted since 1911, that your Lordships' House, though co-equal in other matters with the other place, apart from the delaying factor, does not touch Money Bills.

I suggest that whatever view your Lordships take of the merits of this proposal—and I will address a word to that aspect in a moment—it would he wrong to add an amendment of this kind to the Motion for a Second Reading. I will go further and say that such action would be harmful to the relations between this House and another place—when we should appear to be taking upon ourselves the right, although we cannot amend, to pass derogatory comments on what another place has done. I suggest to your Lordships that that is not an appropriate posture for your Lordships' House to take.

I profoundly hope that your Lordships will—whatever view you may take of the merits—hesitate to take such action. In view of the opinions held by the Official Opposition on the Benches of this House, I am bound to observe that it would be a very strange inconsistency were the Official Opposition to declare that, despite their wish to abolish this House, and despite their hostility to its powers, they would support this House coming in with a rude commentary on a matter which—under the Parliament Act—falls well within the discretion and responsibility of another place, and another place alone, to enact.

Whether or not there is retrospection here depends a good deal, I suppose, on one's philosophy. I am sure some of your Lordships could mount a perfectly good case for saying that this provision was retrospective. But is the sense of it such as to offend the reality which lies behind the dislike we all have of retrospection?

The harm of retrospection consists in changing the law so that people who have acted previously in the belief that the law was different are disadvantaged. It is difficult to establish that that is the case here. It was known very soon after the decision of Mr. Justice McNeill—and of course decorum forbids me from making any comment on the decision of the learned judge, whatever views I may hold—that the Government were intending to restore the position to what they had thought it to be. As far as I can see, no one has been prejudiced by the fact that for a matter of days, the law appears to have been different to what it will be when this Bill becomes an Act.

One can take this matter further. The GLC precepted local authorities and their ratepayers at the beginning of the year for this money for London Transport. The GLC has had this money, through the precept, for a considerable period of time. As far as the ratepayers are concerned, they have not been misled. They paid the money through their rates to the GLC, and the only question that arises now is whether the GLC—having precepted on the boroughs and on their ratepayers for this money—should keep that money and use it for other purposes. That would be an intolerable state of affairs.

The noble Lord, Lord Tordoff, sought to argue that there was retrospection because of the provision, to which he invited our attention, in Clause 1(1) of the Bill—under which payment has to be made in the current financial year and which, as he reminded us, ends on 3Ist March. We are only at the beginning of March and that subsection does not include any provision for payment of the money other than in a period, or by the end of a period, for which this Act, it is hoped, will be in force. With respect to the noble Lord, Lord Tordoff, his argument in respect of the current financial year does not carry any weight at all.

As to the merits of this matter, the arguments seem to be very simple. The GLC, whose general attitude, as your Lordships know, has been one of hostility to this measure as to all the Government's measures, has been reluctant to help in the work of London Transport. Indeed, through its representatives on LRT it has done a good deal to obstruct the improvements which are being made. Your Lordships have before you the simple fact that the GLC undertook, by the exercise of its precept, to raise funds to make the contribution to London Transport, and it would be absurd to allow the GLC to retain those funds and use them for such other purposes as they want—such as, presumably, plastering London with propaganda pointing out what wonderful people the GLC were.

The whole essence of the attack made on this Bill is that the Government, having apparently made a mistake—according to Mr. Justice McNeill—should then, instead of legislating, have accepted that mistake (leaving the GLC with what would have really been their ill-gotten gains) or should have appealed. Certainly the Government could have appealed, but your Lordships know that the appeal process—and I am very glad that the noble and learned Lord the Lord Chancellor is no longer on the Woolsack—is not always a matter of great celerity. If this matter is to be tidied up by the end of the financial year for the sake of all concerned, and particularly for those Londoners who require the efficient operation of London Transport, there would not have been time for a successful appeal.

It seems therefore that the Government are taking the only action that they can in clearing up a difficult situation, and that if the first attempt to obtain these due payments failed for whatever reason, good or bad, then the honest, sensible and practical action is to come to Parliament and ask Parliament to put that matter right. That is what this Bill seeks to do.