§ Second Reading debate resumed.
§ 3.58 p.m.
§ Lord McIntosh of Haringey
My Lords, the noble Lord, Lord Boyd-Carpenter, in a most interesting speech, chose to make the majority of his comments about the constitutional issue as between this House and another place, and on the issue of retrospection. On the first issue, I join with him whole-heartedly in feeling that this House should not in any way seek to increase its powers in relation to those of another place and in his spirited defence—perhaps somewhat belated—of the Parliament Act 1911.
It is unfortunate that the noble Lord did not find time in his speech to talk more about the merits of the issue, because this is what I wish to do, yielding to the noble Lord, Lord Tordoff, in his excellent exposition of the retrospection issue. The noble Lord, Lord Boyd-Carpenter, in his closing remarks, seemed to think that it was an open and shut case—that this Bill was the only choice open to the Government, that the Government were right to bring it forward and that it was in some way improper for this House even to comment on the Bill. I am not referring in this instance to the amendment on the Order Paper.
It is a fact that the London Regional Transport Bill was debated at considerable length in this House and assurances were given to your Lordships about the content of it. We therefore have some interest in seeing to it that its conditions, as they were explained to us by Government spokesmen, just as they were explained in another place, should be adhered to. In Committee in another place the right honourable gentleman the Secretary of State for Transport made it clear—and I believe that the assurance was repeated here, although I have not been able to find the reference—that it was the intention of the Act that the demand from the Greater London Council should be restricted to what was strictly necessary for the "operational needs" (those are the words in column 1114 of Hansard, at the Committee stage of the Bill in another place) of London Regional Transport in a particular year.
The importance of that is not just the importance of sensible year-on-year budgeting for London Regional Transport. In this case it is also a matter of there being a division of funding as between the passengers, the ratepayers and the taxpayers. Part of the Government support for London Regional Transport—a figure which can be determined by the Secretary of State and changed at will under Section 13(6) of the Act—is to come from the taxpayers.
Why is that significant? It is significant because if a surplus is to be carried forward from 1984 to 1985 it is to be carried forward at the expense of the London ratepayers only. The surplus will then be available not only for London ratepayers but also for the taxpayers in the year 1985–86. So there is a split, a change in the division, which has been determined by the Secretary of State with the authority of Parliament, as between the funding to come from the ratepayers and that to come from the taxpayers. I notice that the noble Lord, Lord Brabazon, in his opening speech, made the same mistake as that made by the Secretary' of State for 1111 Transport in another place. He repeated that the failure to pass this Bill would be at the expense of the ratepayers and passengers in a future year. He omitted to say that it would be to the benefit of the taxpayers.
The Government had three alternatives when considering the situation in which Mr. Justice McNeill found that the Secretary of State had behaved in all these terrible ways which the noble Lord, Lord Tordoff, repeated, and which I will forbear to repeat. First of all, they could have done nothing; they could have accepted that there would be a deficit carried forward. That would not have been such a terrible thing. After all, London Regional Transport is not a public service in the strict Civil Service sense. It is a business, and noble Lords who know anything about business will be aware that the accuracy of particular forecasts of cash surpluses carried forward can be very much questioned. I very well remember that when I was a member of the Greater London Council Transport Committee we were advised that to change the date of a fares change, a fares rise, by even one day, would make a difference of one and a half million pounds to the revenue of London Transport. Under those circumstances, clearly a cash surplus at March 31st of £20 million or even £30 million either way could depend on a quite a number of factors, such as changes in the weather or changes in the effectiveness of the fare rises which took place in January. Many matters of that kind could account for differences in the surplus carried forward. So it would not have been so terrible to have done nothing.
The second alternative was this Bill. I shall come back to that in a moment. The third alternative would have been to make a legal demand. The significance of a legal demand, as the judge made clear, was that that legal demand would have to be in accordance with the terms of the London Regional Transport Act. In other words, it would have to be for the operational needs of London Transport in 1984–85. The significance of the choice of the alternative of introducing a Bill is quite simply that the Government have not been prepared to make a legal demand, have not been prepared to reduce the demand for finance from the London ratepayers for the operational needs for London Transport. That is really the crux of the matter.
That is what the noble Lord, in his very lucid exposition, totally failed to make clear. He has found no way out of the dilemma that a Bill is necessary only because the Secretary of State is determined to go outside the terms of his own 1984 Act. If that were not the case, a legal demand would be entirely possible. I ask the noble Lord, in summing-up, to please get off the horns of that dilemma. Will he tell us how it is that a Bill is necessary other than to go outwith the terms of the 1984 Act?
§ 4.5 p.m.
§ Lord Teviot
My Lords, when I first saw this Bill referred to on the Order Paper, I thought that I really must try to support the Government on what is a public transport matter, especially as I fully supported the need for the original London Regional Transport Bill. I congratulate the new London Regional Transport organisation on the way that it is proceeding. Through its efforts the ratepayers of 1112 London and those of us who visit London will benefit, and, indeed, are already benefiting.
One absolutely deplored the conditions under which the professional executive had to operate under the control of the GLC in the last nine months of its reign. The board had a majority with people who propounded their doctrinal political views. Changes had to be made, and changes have happened. Fares have increased in some areas, but the increases have been not swingeing but practical.
Having said that, one cannot but feel that this Bill appears thuggish. Necessary it may be, but one may have preferred the Government to obtain the money through Section 49 and, if necessary, gone back through the courts. But time is of the essence here. Everyone needs certainty, and needs it quickly. London Regional Transport needs grant aid. It is nonsensical for it to have to borrow at expensive rates of interest. The full judicial processes, which my noble friend Lord Boyd-Carpenter has mentioned, could well extend into the next financial year and could present problems. Certainty has a price and it might be considered preferable to pay it.
I must turn to another area of this Bill about which I am not terribly happy. The premise that it is essential to secure from the GLC this money, which was earmarked for the capital's transport, and not spend it elsewhere simply does not hold water. There, I am afraid, I differ from my noble friend. Over the years London Transport Executive, and, I suppose, before it the board, received subsidy only when it needed it. There is no doubt about that. There is probably a very good case that London Regional Transport needs this money now. One can argue, "Who are the GLC to say now what LRT needs? It is divorced from them"—though I concede that the GLC are fully entitled to express their views and contest the matter.
This Bill has given cause for embarrassment to loyal supporters, especially those who belong to the minority on the GLC and who have a great deal on their plate at the moment. There is a great deal more one could say about the merits or demerits of this Bill and about its background.
I must turn to the amendment which has been proposed by the noble Lord, Lord Tordoff. It states:whilst this House regrets the retrospective nature of this legislation".I am afraid that I cannot agree that this legislation is retrospective—although I respect the arguments that he has produced—for the following reasons. The amount of money paid by LRT under the Bill was required for 1984–85 under the GLC and will be paid this year, though there are only so many days in which to do it. The GLC's position is not adversely affected at a time when they can do nothing about it. If this Bill had been introduced in 1985–86, that would have been retrospective and would have been wrong. I do not feel that a change of this kind, however unfortunate, can properly be described as retrospective. Since the Bill was first published on 1st December 1983, the GLC have known of the theoretical maximum amount which could be the subject of a direction.
It is for those reasons that I am afraid that I cannot support the noble Lord in the Division Lobby—or, at the moment, I cannot support him. One should always 1113 keep one's options open. There are more speeches to which I have to listen. However, I am most unhappy about the Bill. I join with the noble Lord and his supporters in their protest. It is only left for me to say that I wish London Regional Transport the very best in its endeavours. It has made a very good start. I hope that this type of legislation never finds its way into Parliament again.
§ 4.10 p.m.
§ Lord Diamond
My Lords, I warmly support the last sentence of the noble Lord, Lord Teviot. I want to put before your Lordships two simple propositions. The first is that this Bill is clearly retrospective. The second is that we should say so. I hope that I do not need to delay your Lordships' House by explaining how abhorrent is retrospective legislation. It is a denial of personal liberty. It is an affront to natural justice. I cannot think of cases, even though my noble ally has imagined them, where we are justified in saying to an individual or a body, "You acted lawfully, but we are going to decide that what you did lawfully shall now be deemed unlawful." That is the effect of retrospective legislation.
Why do I say that this Bill is retrospective?—simply because the Bill says so. I did not invent it, and we do not take sides on the matter here. We are concerned with the principle of retrospection. The Bill says that an amount shall he paid in respect of the year starting 1st April 1984. I do not know why anyone wants to dispute the fact that 1st April 1984 is past; it has gone. I say particularly to the noble Lord, Lord Teviot, that by the time the Bill receives Royal Assent—not the time it was introduced—the date of the 1st April 1984 will be roughly 12 months past. None of us can know the precise date on which it will receive Royal Assent. I do not know. The noble Lord, Lord Boyd-Carpenter, does not know, although he made an assertion on the assumption that it would be passed in this financial year. I am a simple kind of chap who understands that something that is 12 months past has gone and that legislation referring to it must be called retrospective.
The amount which is in dispute and which forms part of the argument concerning retrospection is approximately £50 million. That is the sum being transferred, in effect, from the ratepayers of London to the taxpayers of the United Kingdom. However cross may be the Government and some of their supporters with the electors of Greater London for having returned the kind of council that they do not like, I beg of them not to give vent to their antipathy towards individuals and the make-up of that council by attempting to pass a law that is a flagrant injustice to them. Whether or not they should be treated justly is not a matter for us. The elections have taken place. A council has been duly elected in accordance with our democratic principles. It has certain powers.
Any accountant looking at accounts he is preparing for a business for a year would say of the £50 million, "These are reserves, future leasing costs, future redundancy costs—the reserves which a wise board provides for." However, as all of us know, there are two kinds of reserves which a wise board provides for. There are reserves in respect of expenditure incurred, which must be so stated, and there are reserves which 1114 you can put on one side because you know that in future you have to meet that liability. You can reserve for that second category. You are required by law to show it separately because it is not set against current expenditure. It will be set against future expenditure when it is incurred.
That is what the £50 million is. It is not money which the recipient body, London Regional Transport, needs to fulfil its current requirements. That was the manner in which the Secretary of State said that he would decide on the amount involved, at the time the original Bill was being explained in another place. There is nothing in the amount that varies the principle that I have enunciated previously—the astonishing Diamond principle that anything referring to 1st April 1984 is past.
Before dealing with the second simple proposition, I should perhaps offer a comment on how this difficulty arose. It might affect the attitude of some of your Lordships towards the vote which I hope very much will take place on what is an important principle. Your Lordships' House is here to defend principles. It is not here necessarily to argue about the details of money. It is here to defend important principles—principles of the liberty of the subject. This is the case whether the subject is someone who is affected by Parliament, for which reason we prevent Parliament renewing itself endlessly, or whether the subject is a ratepayer in London who has exercised his democratic right to elect representatives who have made a certain decision. How did this matter arise? It arose, as we now know, because the judge has said so, from what I might call "the Cheltenham characteristic". It arose through a no-consultation "cock-up". Once more there was the avoidance of consultation. Therefore, the Secretary of State did not know all the figures, because he had not found out and had not consulted. I do not think that this should prevent us doing our duty.
I now turn to the second proposition—that having decided that the Bill is retrospective, we should say so. The Bill has been certified as a Money Bill. Why is it so certified?—because the Government of the day asked the Speaker to certify it. The initiative rests with the Government. Once it is certified by Mr Speaker, that is the end of the matter so far as your Lordships' rights are concerned. It cannot be amended. We are not seeking to amend the Bill by one comma. I should like to refresh your Lordships' memory as to what is a Money Bill. I quote from the latest edition of the Companion to the Standing Orders, which states:A Money Bill is a Bill endorsed with the certificate of the Speaker, signed by him, that it is a Money Bill because in his opinion it contains only provisions dealing with national, but not local, taxation, public money".National, but not local! This is a Bill which affects the rights of a large locality administered by a body called the Greater London Council, and so I can well imagine that those who advised Mr Speaker had to think twice before they recommended that he should certify it. But it has been so certified, and that is the end of the matter: we cannot therefore amend it.
However, we have got a month. We are entitled to one month in respect of this Bill. What are we supposed to do in that month? Are we supposed to admire the colour of the paper on which the Bill is printed? Of course not. We are supposed to use our 1115 heads. We are supposed to act as this House always feels itself entitled to act and to draw the attention of the Government, of the other place and of the country at large to the danger of an important principle of liberty being over-ridden by an unwitting Government. We are not arguing about the detail of money. I have referred to the £50 million only to describe what it is and to show that it is irrelevant to the issue of retrospection. Retrospection remains the key matter, and this House is entitled to express its view on retrospection.
I do not think that really there is anything more I need say to your Lordships. It is clearly retrospective. We are given a month in which to make up our minds whether it is retrospective. We have put on the Order Paper a form of words which does not alter the Bill by one comma and does not delay it by one second but gives your Lordships' House the opportunity to say, "We are, in the last resort, the defenders of the liberty of this country, and we shall say so".