Transport Bill

HL Deb 14 October 1985 vol 467 cc345-99

3 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My Lords, I beg to move the Motion standing in my name on the Order Paper.

During the Committee stage debate on National Bus Company pensions I undertook to meet, during the week before Report stage, the Peers who had spoken on the amendment of my noble friend Lord Gridley and that if noble Lords attending that meeting wished then the clause would be recommitted at Report stage. That meeting took place on Wednesday of last week, and on request I agreed that the clause should be recommitted.

A proposal was also put at that meeting that the recommittal should be first business today, or first business on Wednesday, which would be acceptable also. On behalf of the Government, I pointed out that this would mean taking the recommittal out of order in the Bill but I undertook to consult and to let Peers know how we could proceed. As a consequence, the Motion is standing in my name on the Order Paper. If your Lordships agree to the Motion it will mean that the House will go into Committee (on Recommitment) to consider Clause 52. I beg to move.

Moved, That the Bill be recommitted to a Committee of the Whole House in respect of Clause 52; and that Standing Order No. 44 be dispensed with to enable the Report to be taken on the same day as the Committee (on Recommitment)—(Lord Belstead.)

On Question, Motion agreed to.

Lord Belstead

My Lords, I beg to move that the House do now resolve itself into Committee (on Recommitment) upon the Bill in respect of Clause 52.

Moved, That the. House do now resolve itself into Committee (on Recommitment) in respect of Clause 52.—(Lord Belstead.)

On Question, Motion agreed to.

House in Committee (on Recommitment) accordingly.

[THE LORD ABERDARE in the Chair.]

Clause 52 [Pensions for employees of related companies]:

Lord Tordoff moved the following amendment: Page 48, line 3, at end insert— ("() The Secretary of State shall guarantee that in respect of service with the National Bus Company or one of its subsidiary Companies participants shall receive at normal retirement date pensions no less than those which they were entitled to receive at normal retirement date on the day the National Bus Company and its subsidiary Companies ceased to operate.")

The noble Lord said: This is perhaps an appropriate moment before we start our formal proceedings to welcome new faces on to the Government Front Bench, two of whom I see opposite me at the moment. I wish them an interesting and entertaining stay on the Government Front Bench.

A noble Lord

A short one!

Lord Tordoff

The length of that depends on when the Prime Minister calls the next election, I suspect.

I rise to move this amendment standing in the name of my noble friend Lord Banks, and I do so because within the last hour I have heard that unfortunately my noble friend is indisposed. He offers his apologies to your Lordships for not being here to move the amendment on his own behalf. Because of the short notice that I have had of this fact, your Lordships will understand that I can do little more than move the amendment formally.

First of all, I think we ought to say that we are grateful to the Government for their agreement to recommit this clause because it is a contentious matter—some would say the most contentious matter in the Bill outside the Second Reading. I think that the principles of the problem of pensions were well discussed at Committee stage on amendments moved by the noble Lord, Lord Gridley, by my noble friend and by others. I understand, although I was not at any of the meetings that were called during the Recess, being myself out of the country at the time, that no final resolution has been reached on this issue.

The Government have made certain suggestions to the National Bus Company and the National Bus Company has made certain suggestions to the Government. They have each rejected the other's suggestions. But I think that at the root of this is an important matter of principle. As we said at the Committee stage, this is a question of whether current employees of the National Bus Company shall have the sort of guarantees which have been given in other cases when public bodies have been privatised, to secure the pensions of current employees and existing pensioners. I know that it is a matter of concern on all sides of the House and not just on the Opposition Benches that guarantees of this sort should be sought.

Your Lordships will remember that at Committee stage the Government suggested that there were possible routes through insurance methods of guaranteeing the future of these pensions. I understand that certain recommendations have been made by the Government and that certain proposals have been made by insurance companies which would go some way towards that. But I also understand that this would probably cause a change of benefit in the longer term and that the indexation of these benefits would not be the same as that expected by the employees.

Having said that, I think I must leave the Floor to other noble Lords who are much more expert in this subject than I am. I am deeply sorry that my noble friend Lord Banks is not here, because I am sure your Lordships will agree that nobody in this House is more expert than he on this subject. Therefore, I formally move the amendment to Clause 52.

Lord Belstead

May I express my regret that the noble Lord, Lord Banks, cannot be here today but may I thank the noble Lord, Lord Tordoff, for moving this amendment. It fulfils the promise to recommit the NBC pensions clause at this further stage, and I am grateful to the noble Lord, Lord Banks, for setting the matter up by tabling this amendment. It reflects the importance which the House attaches to this issue. I thought that it might be for the convenience of the Committee if early on in this discussion I said just a few words in reply to the amendment.

On the noble Lord's amendment we are talking about the two NBC pension funds, that known as the NBPF for the salaried grades and that known as BEST for the wages grade staff. We are talking about the benefits that will have accrued for staff in those funds up to the time when the National Bus Company is dissolved; that is, benefits which are accruing for staff while working for the NBC, preserved benefits for those who have left the NBC but have kept an entitlement in the funds to be paid as a pension when they retire, and, of course, benefits due to staff who have retired and are receiving pensions. And we are concerned with the security for these funds and for the security of members of the funds once NBC is dissolved.

This amendment calls for a guarantee which the Government really cannot give. It would be an open-ended commitment of taxpayers' money and in that respect it would go further than NBC does already. Rather than tie the Government to an organisation which it is intended, after all, to privatise, surely the right way to proceed is to ensure that the funds of the pension schemes are adequate to provide for the accrued benefits. That is the reason why last July I repeated the Government's clear undertaking to eliminate any deficiencies in either of the funds which a fresh actuarial valuation on a prudent, reasonable basis might reveal. At the same time, I spoke of the possibility of the trustees obtaining still further security for the funds through private sector insurance. During the Recess the Department of Transport set up a joint working party. It consisted of a representative of the department, a representative of the Government Actuary's Department, the group pensions manager of NBC and his actuarial adviser. They had discussions with no fewer than 10 insurance companies and I am very glad to say that these discussions have borne fruit. Several preliminary quotes have been submitted and it is clear that at present insurance can be purchased within the value of the funds' assets for the accrued liabilities in the funds.

I hope your Lordships will agree that the backing of a major insurance company or a group would give reassurance to members of both funds, an outcome that many of us had hoped for. That insurance cover appears to be available now, but we cannot be sure whether it might be available on anything like the same terms in three years' time when NBC comes to be wound up. NBC, however, have represented that an early settlement would create difficulties for the trustees, difficulties of realising some of their assets, especially in property; and difficulty as regards being sure of the contributions needed for the insurance cover to be extended to the entitlements which NBC employees will be accruing over the next three years right up to the time of privatisation.

We have therefore written to the National Bus Company with the following proposals, which I trust they have passed on to the trustees. First, that the trustees should, if they see fit, seek an early arrangement with an insurance company to give certainty to the beneficiaries of the funds. However, recognising the financing difficulties to which I have referred, we further propose that the NBC should agree to make a bridging loan available to the trustees. In this way, if ready cash proved to be a problem for the trustees then the NBC would solve it. Thirdly, there remains the question of paying for insurance for the three years right up to privatisation. Here we propose that the NBC should undertake to the trustees to provide whatever additional finance is needed by way of employers' contributions to buy insurance for the benefits that will accrue up to the time that staff have to leave the NBC's employment. That means that staff can be absolutely assured that their benefits for all their time with the NBC, right up to privatisation, will be insured. The insurance itself, of course, would carry on right up to the death of the very last beneficiary.

This represents a considerable financial commitment. Your Lordships will recall that some of the benefits in BEST are index-linked, not to prices but to national average earnings, which are usually higher than prices. For those benefits we propose insurance on the basis of a link with prices plus a fixed figure of 1½ per cent. This would give the certainty that a fund member's benefit would always run well ahead of inflation; and on behalf of the Government I made clear in our last debate that we would examine this possibility. On the best professional advice available to the Government, we believe that increases in benefits based on retail prices plus 1½ per cent. can properly be described as equivalent to increases linked to national average earnings.

On that point I would say this. It is worth noting that the BEST scheme was set up in 1974, and over the lifetime of that scheme there have been five years in which the increase in earnings has exceeded the increase in prices by more than 1½ per cent. and five years when prices plus 1½ per cent. have exceeded the increase in earnings. I do not pretend that those figures are conclusive although, as it happens, a pension fund member would have been marginally better off under the prices plus 1½ per cent. alternative. But I hope that your Lordships will feel, as I do, that the proposed basis for insurance really is broadly equivalent to the existing provisions in BEST. So these proposals mean that benefits linked to the retail price index—that is the basis for uprating all those who are receiving pensions in both NBPF and BEST, and it is the basis for the other benefits in NBPF—will all remain quite unchanged, covered by insurance. But those benefits in BEST which are expressed in terms of increase in average earnings can be covered by insurance in terms of the retail price index plus 1½ per cent. uprating.

When, on behalf of my right honourable friend, I put the Government's proposal verbally to the trustees, it was suggested to me that our proposal would be legally improper, and of course the Government had to delay confirming that offer until they were satisfied on this point. The Government have taken counsel's opinion, and the opinion we have is that the offer can perfectly properly be made to the trustees.

Finally, I would emphasise that it is for the trustees to take the action that they consider to be in the best interests of their members. I hope your Lordships will feel that the Government have genuinely tried to make a fair and equitable solution available. We are all aware that it is the members of the funds whose welfare we are considering. It is with them first in mind that the Government have expressed themselves willing to see the NBC (which, after all, the Government will ultimately be selling) enter into the financial commitments I have outlined. We are doing this in order to ensure that the position of members of the funds is fully safeguarded.

3.15 p.m.

Lord Shepherd

I think that, first, expressions of appreciation must be addressed to the noble Lord, Lord Belstead, for having honoured the commitment he made in Committee that this very important matter would be recommitted prior to Report stage. The noble Lord, Lord Belstead, will understand that some of us are in particular difficulties, because he himself referred to a meeting held last Wednesday, when he made it very clear to me and to others that it was not in the Government's mind to take the recommittal this day but that it was to be taken later. Therefore, some of us had put this very important matter aside, in terms of the consideration of other amendments which we are going to deal with later, when we get to the Report stage.

Our difficulties are enhanced by the very sad absence of the noble Lord, Lord Banks. We were relying on the noble Lord, Lord Banks, to make the major case in regard to the issue that is now before the Committee; but the Committee is grateful to the noble Lord, Lord Tordoff, for his exposition on behalf of the noble Lord, Lord Banks.

The proposals which the noble Lord, Lord Belstead, has put to the Committee were only available to the trustees of the two funds some time last Tuesday. I had the good fortune to see officials in that regard, but without the benefit of their advice. However, in the very short period—and this is a crucial decision for the trustees—I have had conversations with them; and they have also sought legal and actuarial advice.

I perceive in the proposal only one element of benefit to the members of the pension fund, which is that unlike their present scheme, which of course depends upon the performance of the managers of the pension fund, they can look forward to pensions based upon RPI plus 1½ per cent. However, that is very considerably less than the benefits that they could expect to receive under the very careful and responsible management of their present funds. The present funds would provide pension benefits considerably superior to those within the Government's suggestion, and it has to be a suggestion to the trustees as a solution of this matter.

Over a number of years the Government have made it very clear that they are not in the game of reducing the benefits of the pensioners or of the members of pension schemes. There was a speech in, I think, 1982 in which the Minister of State, Mrs. Lynda Chalker, said that it would be quite immoral for the Government in any way to take such action as would reduce the benefits of a scheme. Let us be very clear what we are talking about. It is a scheme of benefits for which members have paid in their period of service up to the date of the dissolution of the National Bus Company. It is no more and no less than that. The Government have repeated that from time to time.

The Minister will know that I questioned the Government actuary as to whether the Goverment's proposals were comparable to what is now available to the members of the scheme and his answer was, "Yes". I have to say that the advisers and actuaries to the pension fund take a very different view. Therefore we are in this difficulty, that professionals who advise the Government and those who advise the pension fund are in dispute. I think I can understand that because one is looking over a period of time. I have seen the Government's proposals in the letter which the noble Lord, Lord Belstead, has sent to some of your Lordships. I hope that he will make that letter available either in Hansard or in the Printed Paper Office.

Alternatively, I wonder whether it is possible between now and Third Reading for a paper to be put in the Printed Paper Office setting out the Government actuary's view, which is a clear one, and the view of one of the other actuaries, to see if there is some degree of agreement as to whether the outturn is, as the Government say, broadly equivalent. That would be very helpful and I should have thought that it could be done between now and Third Reading. But at the present moment the advisers to the trustees take the view that what the Government are proposing does not rank in any way equivalent to what the members themselves have subscribed for and would have expected to receive on the dissolution of the National Bus Company.

The noble Lord, Lord Belstead, said that various proposals have been made to the National Bus Company. I am authorised to read—with the permission of your Lordships, because this is a matter to which we shall need to come back—certain parts of a letter that has been sent to the Parliamentary Under-Secretary of State by the chairman of the National Bus Company dealing, first, with the attitude of the pensions committee and, secondly, with that of the board. This ought to be known within this Committee.

The chairman wrote as follows: I have to advise that, for the following reasons, the Pensions Committee was unable to accept your proposals.

1. 1. The proposals will not ensure payment of present accrued pension entitlements.
2. 2. Securing benefits under BEST and NBPF by insurance is an expensive means of obtaining security and an inefficient means of investing the assets. Insurance may be justified when NBC is dissolved, if at that time there are no other more efficient means of providing security for payment of benefits. Committing"—

as are the Government's proposals— the assets of the funds to such an expensive and inefficient form of investment before it has become necessary, and before knowing whether or not there are other cheaper and more efficient means of providing security, cannot be justified.

1. 3. Whether benefits linked over a period of time to RPI plus 1½%are, or are not, equivalent to benefits linked to national average 351 earnings over that period will not be known until that period of time has elapsed. Nobody can say that the two are equivalent. NBC does not have power to make alterations to the pension schemes' rules which could prejudice accrued benefits, without the consent of the Trustees and the written authority from each individual beneficiary.
2. 4. In the case of NBPF the proposals imply that employees transferred to successor companies would become entitled to leaving service deferred pensions (assuming this is what is meant by preserved benefits). In this event a transfer value paid to a new scheme, in lieu of those deferred benefits, would be insufficient to buy equivalent years of pensionable service. Assuming a new scheme identical to NBPF such arrangements could give rise to a loss of 50% or more in pensionable service.".

The letter then goes on: The proposals in your letter were then considered by the members of the National Bus Company at their meeting on Thursday. 10 October. The members had the benefit of having at their meeting:

1. 1. The Chairman of the Pensions Committee—Mr. I Dalton;
2. 2. The Chairman of the Pensions Fund Management Committees—Mr. B. C. Sellars;
3. 3. The Group Pensions Manager—Mr. W. A. Walker,
4. 4. The independent consulting Actuary—Mr. R. D. Masding. The members also had the benefit of a letter from the pension funds' lawyers—a copy of which is enclosed for your information."

That is to the Minister.

3.30 p.m.

Perhaps I may break off to read an extract of that letter which is to Mr. Sellars, chairman of the trustees of the National Bus Company's funds. It reads:

Any proposal to vary benefits must involve the trustees in assessing the value of the proposed new benefits as compared with the value of the existing benefits. Any proposal to make a fundamental change in investment policy must, even where the sponsoring employer is making the proposal, involve the trustees in assessing their ability to provide the present scale of benefits under NBPF and BEST (including the possibility of providing greater benefits) as compared with any greater security provided by insurance and the cost of that security. The commitment regarding sufficiency of resources to be received from NBC in return should be viewed in the light of the trustees' perception of the funds' ability to provide the present scale of benefits". It goes on:

I also understand that it is being suggested that the trustees should respond to this proposal and effect the insurance within a matter of a few weeks. As I have said to you previously, any proposal along these lines will require the most careful and detailed consideration by the trustees and will, in particular, require an investigation into the present financial position of the two funds". It then goes on:

I consider it would be irresponsible for the trustees to rush into a hasty and irrevocable decision on a matter of this importance especially since, on present evidence, the proposals involve no clear advantages to the beneficiaries. It would be equally wrong for the Government, NBC or any other party to pressure them into doing so". That is a very clear statement from a most reputable firm of legal advisers.

I go on with the letter from the chairman to the Minister:

The NBC members considered the proposals of your letter"— which have been set out by the noble Lord, Lord Belstead— with great care but were unable to ignore the opinion of the pension funds' lawyers that it would be irresponsible for the Trustees to pursue an early insurance solution to this problem—along the lines you propose—and wrong for NBC to put pressure on the Trustees to agree to such an arrangement. The members were also unable to accept that the accrued benefit entitlements of BEST be changed retrospectively to substitute a basis of indexing which might be prejudicial; or that the Trustees be persuaded to follow an investment policy requiring the assets to be converted to insurance policies which, in practice, would give effect to this substituted basis of indexing without the need to amend the rules; or that in the case of NBPF that active members be provided only with leaving service benefits and that the investment policy to be followed should have that as its objective". Mr. Brook, the chairman of the company, goes on: As you would expect, members were concerned at the lack of statutory protection and that NBC had been unable to give reassurances to its employees and pensioners. As an expression of good faith, the following resolution—which I am quite sure will not cause any problems for the Government and which I also believe you will agree to be the bare minimum action that any responsible employer could take, pending a solution acceptable to all concerned—was therefore passed. The National Bus Company insofar that it has rights under the Trust Deeds of the National Bus Pension Fund and the Bus Employees Superannuation Trust to give notice to terminate its contributions to those funds, hereby undertakes that it will not invoke those rights before a decision regarding the future of the funds, arising out of the provisions of the Transport Bill for the dissolution of NBC, has been reached to the satisfaction of NBC and the Trustees of the funds. This resolution was agreed only after hearing the representative of the consulting actuaries on the subject and after having had an opportunity to question him". I have read that letter out and I am glad that the Committee has borne with me in reading it but we have a situation where the Government, and in particular the noble Lord, Lord Belstead, have made their own efforts to seek a resolution to a very difficult problem. Many of us see it as an act of justice that those who are in the pension funds should be able to receive the sums and benefits for which they have paid up to and not beyond the date at which NBC becomes privatised. The Government have made their proposals. I can only say that most of us received the undertakings given by the noble Lord, Lord Belstead, quite genuinely. We believed that there was a solution to the problem and that what we were seeking to achieve in Committee could be obtained, but in truth what the Government are putting before us really means that the members—it is true that those who are already pensioned will not be in any way affected—who over the years have contributed to their pension schemes will not receive like with like under the Government's proposals. That is what we had hoped for and that is what we had expected when the noble Lord, Lord Belstead, gave his very clear assurances to us in Committee.

I do not believe that this is the end of the chapter. I believe that something can still be resolved in this matter. Whether your Lordships' Committee by a vote will help us I do not know, but I hope that the Government will understand that this is something which in honour Parliament ought to resolve and that those who have made their contributions to their funds should receive what they expected to receive when they made their contributions. It is nothing more or less than that. The Government's proposals give some certainty, but I have to say to the Government that I do not think that they balance what are the losses or will be perceived as the losses of those who are members of the pension fund. Whether we should proceed on the amendment of the noble Lord, Lord Banks, as moved by the noble Lord, Lord Tordoff, I do not know. I still hope that a resolution to this problem can be found. It must be unsatisfactory because here we have a viable and successful company being placed for political reasons in a different stance. Surely it is wrong that the employees should have to pay the price for such a move.

I cannot believe that it is beyond the wit of your Lordships' House either formally or informally with the Government to find some solution to this matter. I have to say that the Government proposals do not find support within the National Bus Company, and there is grave anxiety among those with whom I have consulted outside in that respect. How we proceed on this recommittal is entirely up to the Members of the Committee, but I hope that whatever is decided today will not be the end of the pursuit of a solution for what I would call an act of justice for the employees of the National Bus Company who are in fact employees of the state.

Lord Mottistone

Before the noble Lord sits down, can he help the Committee in one respect? I listened with great care to his splendid explanation of the situation as he saw it. As I understood him, the noble Lord was saying that if the Government's proposals are accepted then the people who are not at the moment pensioned—those who will be pensioned in the future—will be deprived of superior benefits. However, I did not receive any indication from the noble Lord's remarks of what are the superior benefits that such people would be denied. Can he clarify that point?

Lord Shepherd

My understanding is—though I may rely upon the Minister, who has a greater brief than I have—that under the Government's proposals, those who are already pensioners and those who will come within pension in the period between the passing of the Bill and three years later will have all the security and all the benefits which exist under the present scheme. Within a pension scheme it is of course the members who create the ability to pay existing pensions. It is they, according to my advice, who will be the greatest sufferers.

Perhaps I may add that the Government are proposing as a way out for the trustees to meet their scheme that the trustees should be able to borrow from the National Bus Company funds to cover those parts of their existing assets, such as property, which clearly will take time to dispose of. The trustees may borrow but they will have to pay interest. So one has a situation where the members will be paying interest on a scheme to create liquidity in order to be able to purchase through the insurance organisation at an early date the necessary benefits for the members.

The advice that I have is that the proposal will be detrimental to a very broad section of the membership of the fund—not pensioners, but members of the fund—who are contributing but who have an expectation and who, in a sense, have an investment in the pension fund.

Lord Mottistone

I understand what the noble Lord has just said but he has not really answered my question. What are the benefits which the members will be deprived of? What are the superior benefits which they would reasonably expect?

Lord Shepherd

I understand that the existing schemes are based upon national average earnings.

That is to be swept aside and the proposed scheme is now to be based upon RPI plus 1.5 per cent. That, in the judgment of actuaries, would be detrimental to the benefits for the members of the fund.

Lord Mottistone

Is the noble Lord speaking of financial benefits or benefits in kind such as the sum which a widow would receive, and so on? Or is it just the ability of the trustees to pay the members the kind of income that they could otherwise be expected to pay?

Lord Shepherd

The noble Lord has got it right in the end; it is the ability of the trustees to pay what they have agreed to pay.

3.45 p.m.

Viscount Hood

I believe we are all agreed that the National Bus Company has a fine pension plan and that a means must be found for people to enjoy it. The question is, how? At the Committee stage in July, the possibility of insurance was discussed. At that time there was no assurance that such could be achieved, bearing in mind the escalations which are built into the plan. However, the Government have now produced a plan which in their opinion and in the opinion of the Government actuary is equivalent to the specific and complicated terms of the two plans that we are at present discussing.

Equivalence is a matter of opinion. As to the technical aspects, the noble Lord, Lord Shepherd, found some difficulty in understanding it all but I certainly do not. What is clear is that the plan which the Government have offered is a very fine one. A basis of 1.5 per cent. in excess of the Retail Price Index is better than any other pension plan that I have ever known and this must be remembered. The haste is inevitable. This is a business proposition. It is a proposal made by several insurance companies, based no doubt upon the present market values in the fund. In a proposal such as this, there is of necessity a limit of time. If the funds continue to increase then no doubt the proposal can be continued—but funds do not always go up.

As to the efficiency of insuring, to say that this is a real difficulty I believe to be a nonsense. There are innumerable insured pension plans up and down the country. It is true that they are usually meant for organisations smaller than the National Bus Company and that bigger companies such as the NBC have set up an administrative fund within their own organisation. However, we have to visualise the situation three years' hence when there will be no National Bus Company and when the background and continuity which supports a pension plan will no longer be there. I suspect that the trustees may have to consider whether they insure now or whether they insure in three years' time. This is a decision for them. This is their fund. If they wish to do so, then they can continue it—but they must realise the difficulties of being, if I may use the term, a residuary body of 50 years or more.

It is for the trustees to make a choice, but what I do not consider reasonable is that Her Majesty's Government should be asked to underwrite the terms of the plan for 50 years, if the choice is to continue it. One must envisage that the trustees in futurum may not be as diligent as the trustees of today. If they choose to continue the fund for many years, they could speculate against an undertaking by the Government to pay the pensioners. For those reasons I cannot support the amendment, which I believe would make it very difficult for the Government to get rid of some of the wrinkles and difficulties in the present discussions with the company.

Lord Belstead

Perhaps the Committee would like me to say a word in reply to the noble Lord, Lord Shepherd. I am grateful for the support of my noble friend Lord Hood on the proposal which has been put forward. In reply to this brief debate, perhaps I ought to say that the position at last Wednesday's meeting was that I put forward on behalf of the Government the difficulties of recommitment now, because I thought noble Lords would assume that the recommitment would be taken at the moment in the Bill when this particular clause was due to be debated. However, it was the specific request of the noble Lord, Lord Shepherd, that we should consider holding this debate as first business today or, as the noble Lord added, first business on Wednesday. I undertook to write to noble Lords, and this I did the following day. I am sorry if the noble Lord suffered a delay in receiving his letter.

This brief debate turns on one issue and on one issue only. That issue is to be found in the first statement read out by the noble Lord, Lord Shepherd, from the letter of the NBC chairman which was sent today to my honourable friend the Parliamentary Secretary in the Department of Transport and which I first saw at noon today. Nonetheless, the first thing which is said in the letter is that, The proposals of the Government will not ensure payment of present accrued pension entitlements and it is on that point that this debate turns. All I can say is that I am surprised by that assertion. If I may add to what I said about half an hour ago to your Lordships, we are only talking about the BEST scheme. The pension proposals, the actual payments of pensions in both schemes, are uprated in line with the retail price index and the benefits in the NBPF scheme are uprated in line with the retail price index. We are only talking about benefits in BEST where they are expressed in terms of an increase in average earnings. That scheme was started in 1974, just over 10 years ago.

Let me make one thing crystal clear to your Lordships. If anyone had had a benefit worth £1,000 10 years ago, let us say, in that scheme, and it had been increased in line with national average earnings since then, that benefit would now be worth £3,560. But if that same £ 1,000 had been increased in line with the retail price index plus 1½ per cent. it would today be worth £3,700.

I really cannot see how it can possibly be asserted that this basis for uprating would be other than as equivalent as it is humanly possible to make it with the arrangements for the accrued benefits in BEST. I realise that 10 years do not provide conclusive proof, but it is noticeable—I repeat, it is noticeable—how close average earnings and the retail price index plus 1½ per cent. are now after a decade of the existence of the BEST scheme, a decade during which we have seen great changes in both rates of inflation and levels of earnings. I was very grateful to my noble friend Lord Hood for saying in a very few words that the proposal put forward by the Government was a fine plan.

Finally, I should just make it clear that no one is trying to hold a pistol to the heads of the trustees. The Government cannot require them to take any particular decision. Doubtless if the trustees decide not to secure insurance at an early date it will be because they consider they can best serve the interests of their members in some other way. I would only say, as my noble friend said in his speech, that the trustees presumably will wish to assess the risk of insurance proving not to be available at a price within the assets of the funds if they decide to postpone a decision. Again, that is inevitably a matter properly for the trustees to decide rather than the Government.

Of course, I am only too ready to respond to what the noble Lord, Lord Shepherd, said and to put into the Printed Paper Office a copy of the letter I wrote to those of your Lordships who spoke in the debate in July, so that any Member of your Lordship' House can see that letter, although I think my opening speech on behalf of the Government more or less sets that letter on the record. Nonetheless, of course I will be only too ready to put that letter into the Printed Paper Office. I do not think there is anything further that I can do except to express the hope that the noble Lord, Lord Tordoff, will not press the amendment.

Lord Shepherd

The noble Lord, Lord Belstead, I hope will be agreeable to meeting some of us to pursue this subject between now and Third Reading, or maybe the Report stage. I hope the noble Lord will respond that way because I believe there is a solution to this matter.

May I ask the noble Lord, Lord Belstead, to look at the letter he wrote to me and to others in which he says the Government propose the following outline arrangements to enable the trustees at an early stage to buy insurance policy benefits the equivalent of those accrued (we have been discussing this) and that the NBC would make the loan finance available to the trustees on the same interest terms as would be available to NBC itself. I think that is quite clear.

Supposing the trustees were to decide that what the Government are proposing here was something that they could not put to their members, that it was necessary to proceed towards another solution—and as the noble Lord, Lord Belstead, himself said, it is a matter for the trustees—can I take it that if the trustees (and these are responsible men; they are not speculators; they have done rather well as the noble Viscount, Lord Hood, himself has recognised) decided to find a longer-term solution, which it might be necessary for them to do, the NBC would still be able to make available loan finance which will permit the trustees to have liquidity—because so much of their assets are tied up in property? In other words, would that course be available to the trustees if they decided that the proposals of the Government are not those which they could accept but they wished to go a different way?

Secondly, if the NBC make available subsequently such further finance by way of employers' contributions as necessary to ensure equivalence—in other words, the board of the National Bus Company continue what is their present understanding and undertakings with the trustees—are the trustees free to make their own judgment or have they got a gun at their heads? If they do not go the Government way, is what little is being offered to be denied them, or will it still be available to them?

Lord Underhill

May I just have a brief word on this, because I am certain that, like myself, most noble Lords regard this as a human matter? We are dealing with the future financial position of 30,000 or 40,000 people arising from a decision which Parliament will be taking—and remember, it is a decision which Parliament will be taking.

Most noble Lords are in the same position as I am myself in wanting to do the best we can within proper limits. I think it would be reasonable if the noble Lord the Minister would accept the suggestion made by my noble friend Lord Shepherd and arrange for such a meeting. In addition, if we could have not only the text of the NBC letter to which my noble friend referred but, in Hansard, any additional information which ought to be supplied about the proposals of the Government, that would be a great help to us in making a decision when we return to the matter at Report stage or on Third Reading. This is such a complicated human matter that I am certain all we are doing today, which is very important, is clearing the way to obtain information in order to be able to make a firm decision at the later date.

4 p.m.

Lord Chelwood

May I speak for just 60 seconds? In Committee I put my name to the amendment of my noble friend Lord Gridley because I had some serious anxieties, but I should like to take this opportunity of telling my noble friend the Minister that I enormously appreciate the trouble that has been taken. During the Recess I wrote expressing anxieties similar to those that I outlined during the debate and I was one of the recipients of the letter dated 10th October to which my noble friend referred. It is no bad thing that I should put on record one of the sentences in that letter, although it will be made available for other noble Lords to see. My noble friend Lord Belstead said: The proposals outlined in this letter provide certainty for the members of the two NBC pension funds on a basis which is equivalent to the present benefits provided by the schemes". My noble friend said that in several different ways during his speech today. For example, he said that the new proposals mean that pension rights are fully safeguarded. Those were his exact words. I share the views very clearly and eloquently expressed by my noble friend Lord Hood. My anxieties have been set at rest. They were serious but I believe that the Government have done everything they can to meet the anxieties that have been raised, and therefore I wish to express myself contented.

Lord Belstead

Before the noble Lord, Lord Tordoff, speaks finally may I reply to the noble Lord, Lord Shepherd? The Government's offer for loan finance stays open, but of course I made clear that it was in order to buy insurance at an early stage for the benefits equivalent to those being accrued, for the reasons which I have already covered not once but, I think, twice.

That brings us to the responsibility of the trustees. It is for them to judge what their funds can afford in future. We cannot take that decision for them. The offer of employers' contributions, which is an absolutely open-ended offer, for three years would be taken only after insurance is bought. I think that we should pursue this at the discussion suggested by the noble Lord, Lord Shepherd. I am only too ready to agree to that. It would be better sooner rather than later, and although we have a fairly full diary this week with the Bill, perhaps I could get in touch with the noble Lord, Lord Shepherd, personally and in the House. That would be the best way of proceeding. I am extremely grateful for what my noble friend Lord Chelwood has just said.

Lord Tordoff

It is clear that the Government, in making the moves that they have done—and they are indeed welcome and no one in the Committee would deny it—have gone some way towards recognising the problems that were envisaged; and the noble Lord, Lord Chelwood, and the noble Viscount, Lord Hood, both expressed those problems perfectly well.

However, I do not go so far as does the noble Lord, Lord Chelwood, who said that the Government have done everything possible, because they have not. The maximum that the Government could have done would be what is asked for in the amendment, and the Government are refusing to do that. That is what the pensioners, the National Bus Company, and others, have asked for but the Government are refusing to do that. The Government are not going as far as that. They are offering a measure which is going somewhere along that line but, frankly, no one knows how far.

I am not an insurance man, an actuary, a statistician or even a mathematician. I listened to the numbers put forward from the Government Front Bench on the position over the past 10 years. I draw the attention of noble Lords to the fact that in those 10 years we have had rates of inflation—certainly in the early part of that time—which have been higher than anything we had known in this country. I hope that the Government are not expecting those rates of inflation to reappear because I thought that was the central plank of their policy. Therefore, the numbers put forward by the Government Front Bench are not altogether relevant to the debate today.

I am in considerable difficulty because I stand very ill-briefed and, as I said, I am not a person who is expert on this subject, as is my noble friend Lord Banks. However, it seems to me that the points raised by the noble Lord, Lord Shepherd, are important. The fact is that the trustees are saying to your Lordships, as they are saying to the National Bus Company, "We do not know whether the proposals put forward by the Government are as good as, better or worse than, what is already written into the pension fund. We as trustees of that fund have a duty to the members of that fund not to take risks with their pensions—save only in so far as when, actuarially and as trustee managers and experts in this field, we can put our hands on our hearts and say, 'yes, this is a better deal.' "

If the Government's offer were to put the trustees in that position I am sure that they would accept it. It is no skin off their noses to change the system if they genuinely believe that it is for the benefit of their members. Clearly, what they are saying to your Lordships, to the Government and to the National Bus Company, is, "We cannot be sure, but on balance we think it unlikely that the suggestions put forward by the Government will provide as good a guarantee of pensions for the members of the National Bus Company as exist at the moment". We cannot ignore that advice. The Government Actuary says one thing and, apparently, the trustees say something different. Clearly this is not something which can be argued on the Floor of the Committee. It is something which we must all in our consciences decide on before the Bill reaches its final stages.

I still believe that the Government have willed that at the end of the day the National Bus Company shall be privatised. One of the consequences of that privatisation is that the pensions of its members may be reduced in the long term. The Government are being asked to give guarantees to those pensioners equivalent to the guarantees at present given by the National Bus Company pension funds. I cannot understand why the Government are running away from their moral obligation to sustain that position. I have not heard from the Government at any stage why they are not prepared to do so. Is it because it would be too expensive? Or is it because they would prefer to use National Bus Company funds to back up the system through the insurance so that they can do their asset-stripping job on the National Bus Company at a later stage?

In my view, we are still in an uncertain position. I hope that the Government, and the Government supporters in particular, will read this debate and that out of the meeting suggested by the noble Lord, Lord Shepherd, which the noble Lord the Minister has accepted, some further progress can be made. Clearly, in the circumstances it would be foolish for me to press this to a Division at this moment. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 52 agreed to.

House resumed; Bill reported without amendment in respect of Clause 52.

Then, Standing Order No. 44 having been dispensed with, Report received.

4.8 p.m.

Clause 1 [Abolition of road service licensing]:

Lord McIntosh of Haringey moved Amendment No. 1:

Page 1, leave out lines 8 and 9 and insert— ("In accordance with the transitional arrangements specified in Schedule 5 to this Act, the provisions of Part III of the 1981 Act (road service licences) shall cease to have effect after 4th April 1987 so as to ensure that:

1. (a) the abolition of road service licensing is completed in an orderly manner;
360
2. (b) the reorganisation of public sector bus companies to ensure free and fair competition as required by Parts III and IV of this Act has taken place; and
3. (c) the authorities responsible for service subsidies under Part V of this Act have been able to complete their arrangements to secure services that would not otherwise be available.").

The noble Lord said: My Lords, in moving this amendment I should like to take the House back to the late evening of 29th July 1985 when the noble Lord, Lord Belstead, moved a whole series of amendments to Schedule 5 to the Bill. I had on the Marshalled List a large number of further amendments to Schedule 5. Your Lordships will recall that at approximately 10.40 that evening we were within an hour of completion of the lengthy six-day proceedings in Committee. Those who had the fortitude to stay in the Committee until that stage may further recall that I pleaded with the Government that this was an issue that deserved recommitment, just as they so properly agreed to recommitment of Clause 52.

Schedule 5 is absolutely critical to the content of the Bill and to its chance of success. To seek recommitment when such an important series of amendments came up at almost the 58th minute, at any rate, of the eleventh hour did not seem to me to be unreasonable, though that request was rejected by the Government. It was rejected on the grounds that all that we were proposing in these amendments was a series of changes to date. At the conclusion of that debate I said that, in the light of the Government's refusal to agree to recommitment, we would seek ways to have a better consideration of these important matters at Report stage, and I undertook to bring serious and constructive amendments to the House at that time.

I make no apology for the fact that the amendments in my name and the names of other noble Lords are very similar to the amendments that we moved in Committee, because after mature consideration we came to the conclusion that the amendments (to the timing, basically) were the best way in which to give the serious and constructive consideration which was required to this part of the Bill and to help the Government out of the pit which we believed, and still believe, they were digging for themselves. With Amendment No. 1, I make no apology for taking also Amendments Nos. 304, 308, 312 to 318, 320 to 324, 330, 333, 342, 344 and 346.

Amendment No. 304: Clause 131, page 134, line 2, at end insert ("save that the Secretary of State may by order extend each or any of the dates specified in that Schedule so as to ensure that the necessary arrangements are completed satisfactorily."). Amendment No. 308: Schedule 5, page 152, line 38, leave out ("with 27th September 1986") and insert ("no earlier than 4th April 1987"). Amendment No. 312: Page 155, line 10, leave out ("1st March 1986") and insert ("1st October 1986"). Amendment No. 313: Page 155, line 18, leave out ("17th August 1986") and insert ("1st January 1987"). Amendment No. 314: Page 155, line 20, leave out ("28th February 1986") and insert ("30th September 1986"). Amendment No. 315: Page 155, line 27, leave out ("1st March 1986") and insert ("1st October 1986"). Amendment No. 316: Page 155, line 28, leave out ("16th August 1986") and insert ("31st December 1986"). Amendment No. 317: Page 155, line 41, leave out ("1st March 1986") and insert ("1st October 1986"). Amendment No. 318: Page 155, line 42, leave out ("27th September 1986") and insert ("4th April 1987"). Amendment No. 320: Page 156, line 30, leave out ("1st March 1986") and insert ("1st October 1987"). Amendment No. 321: Page 156, line 38, leave out ("1st March 1986") and insert ("1st October 1986"). Amendment No. 322: Page 156, line 39, leave out ("30th June 1986") and insert ("1st January 1987"). Amendment No. 323: Page 157, line 12, leave out ("1st March 1986") and insert ("1st October 1986"). Amendment No. 324: Page 157, line 13, leave out ("27th September 1986") and insert ("4th April 1987"). Amendment No. 330: Page 158, line 29, leave out ("1st April 1986") and insert ("31st January 1987"). Amendment No. 333: Page 159, line 4, leave out ("27th September 1986") and insert ("4th April 1987"). Amendment No. 342: Page 161, line 7, leave out ("until 27th September 1986") and insert ("no earlier than 4th April 1987"). Amendment No. 344: Page 161, line 25, leave out ("1st October 1986") and insert ("5th April 1987"). Amendment No. 346: Page 161, line 26, leave out ("1st April 1986") and insert ("1st October 1986").

I would make it clear that, with the exception of Amendment No. 304, to which I shall return in a few minutes, all these amendments have the same effect, which is to delay and slightly alter the transition period, so that the final date is no longer 27th September 1986 but 4th April 1987. Since there was so little time to debate the matter, I think your Lordships will forgive me if I set out the reasons for this change and why we believe that the amendments now put forward are in fact constructive amendments in that they help the Government to implement their own policies (which are not being challenged in these amendments) in a constructive, realistic and hopeful way.

The basic starting point is that in the metropolitan areas outside London another major change is going on at this time. First, there is the organisation of the passenger transport executives and the municipal bus operations at the same time as this transition period is proposed. This involves the passenger transport executives reconstituting themselves, and it involves the local authorities who run municipal bus operations being required to set them up as initial companies in order to put them at arm's length from the local authorities themselves.

The second thing that is happening in the metropolitan areas is that the new metropolitan transport authorities, as opposed to the executives, which have to take a full part in the transition period, are themselves being reorganised. Their position now is to relate to district councils rather than to the metropolitan counties, which will go out of existence at midnight on 31st March. So, as far as the metropolitan counties are concerned, one would think that on the face of it you have the virtually impossible task of making two major changes at the same time. I am not arguing this matter purely from the point of view of staff difficulties, though of course staff difficulties are very great: it has been calculated that the amount of time involved in the tendering procedure for a single route, or for X number of passenger miles, is such that in the average passenger transport authority there would need to be a planning department of about 117 staff in order to deal with the 30 million passenger miles which are likely to be involved in the tendering procedure in the average metropolitan area.

4.15 p.m.

The planning departments of the passenger transport executives do not have that number of staff, and it would be madness for them to take on additional staff for a short period when these duties and responsibilities are intended to be, and 1 do not doubt will be, temporary. To take on highly qualified people for a period of only one year in order to accelerate a procedure and to lay them off afterwards is surely not a recipe for good management.

But it is not just a question of the metropolitan areas; it is also a question of the shire counties. The shire counties will not be undergoing the great organisational change that will happen in the metropolitan areas, but they do have to work with a two-tiered local government system, which will not be the case in the metropolitan counties. The shire counties have the additional problem of dealing with the requirements of both the county councils and the district councils, because there have been amendments at Committee stage which improve the position of local authorities and improve their chances of being consulted about the services to be provided. So it is not just in the metropolitan counties but also in the shire counties that the procedures are extremely difficult, complex, and run grave risks of leading to confusion, rush and inadequate preparation.

There are additional reasons which are not related to the organisation of the transport authorities or, indeed, of the operators. There is the question of the school year, which was debated in Committee. The Government's proposal is that the change should take place when the school year has already started and that final information about what change will take place shall be available only during the summer holidays. I sometimes wonder whether the children of some of those who take part in these debates go to boarding schools rather than to state schools, where public transport is an essential part of school life, and I sometimes wonder whether they realise how serious a matter this is.

For those entering school at the age of five and those changing schools at the age of 11, and with middle schools perhaps at the age of 13 and tertiary sixth-form colleges at the age of 16, the time you want to know what public transport facilities will be available is when you are making choices about the school to go to in September, and that time is normally after Easter. Therefore, it is essential that those who are making judgments about which school their children will attend in the following September should know by Easter what public transport facilities will be available for them. The proposed date of 4th April 1987 provides that protection. It enables parents to make judgments about schools in the full knowledge that the public transport system is the best appropriate—one hopes so, anyway—for the choice that they have made.

There is also the question of the municipal year and the fact that what is proposed comes in the middle of the municipal year, budgets having been made about six months in advance of that time. Surely it is advantageous, if it is possible, to have the deregulation day as close as possible to the municipal year so that budgeting can more rationally be carried out.

Again, it is not only the municipal year and the school term that matter. There is also the consideration of the joint passenger board which has to be set up. It has to have its budgets which will be rate capped for three years. Again, those work on a municipal year basis. It will be extremely diffcult for them to operate halfway through a financial year. It is much more rational and logical for the changeover to take place at the same time for all those reasons.

I said that I should refer at the end of my speech to Amendment No. 304. It is to Clause 161 and not to Schedule 5. It provides a safety net for the Secretary of State, enabling him to extend any of the periods concerned if he believes that rational and the best possible economic judgments cannot be made at any of those complex stages of the transitional process. I believe that any prudent Secretary of State would wish to have such a safety net incorporated in the Act. I hope that he will not find it necessary to use it. But although we are considering Amendment No. 304 together with the others, I hope that the Government will be able to respond separately to that suggestion.

We did not satisfactorily consider these matters at the Committee stage. I believe that on Report it is the duty of the House to think again, to think more deeply about these matters and to consider the best way in which the Government's own objectives can be achieved. I believe that the amendments that we are putting forward again now are the simplest and most constructive way to protect the Government from the unfortunate consequences of their own consideration. Lest I am accused of bringing forward complex amendments now, let me say that my amendments number only 19; the Government's amendments to Clause 161 and Schedule 5 number 22. In Committee in July I gave a warning that further Government amendments would be required for this part of the Bill. I am sorry that in this as in other parts of the Bill my predictions have been justified.

The Bill is virtually being made up as it goes along. The fact that we have over 300 amendments at Report stage in the spillover period at the end of the Session is clear evidence of that. The Government do not have their thoughts or procedures straight. I am not now questioning their political will, but what I am saying is that these amendments would make it a better Bill. I beg to move.

Lord Monk Bretton

My Lords, I put my name to this amendment because, quite apart from its virtues or possibly its vices, I feel that it is useful to discuss this matter before we reach Schedule 5 and certainly at this stage of the Bill. It is important in this sphere to get matters as right as possible. It will not encourage on-the-road competition so well if there is too little time left for it to appear at the outset. At the same time I am well aware that there are those who believe that we should get on with the Bill and the whole process as fast as we can if we have to do it. I tend to agree, but I am also aware of the difficulties. There are problems particularly in the urban areas and in counties like Lancashire and Cheshire which have bigger urban conurbations, and there are problems interconnected with local government reorganisation.

I should prefer it if we could avoid back-dating the whole operation, as the amendment would do. However, I am aware that that may not be so readily possible. Let me stress what I should have preferred. I should have preferred a flexible approach, leaving D-Day—deregulation day—where it is, but nevertheless getting a little nearer to the solution being all things to all men. After deregulation day we were originally to have had an initial three-month period. I wonder what chance there is that that might be resuscitated, though I realise there are difficulties over that. That period could be used to satisfy two requirements—the request of the operators for a period of reflection and for local authorities, which in the meantime have made temporary arrangements, to complete the operation of putting subsidised services out to tender. A three-month period would take them to the following school term. That is one difficulty that that may help to overcome.

I stress the importance of education authorities not being forced to take action on their own because of deregulation day anxieties. If they did that it would be expensive and a first defeat in the achievement of operating economies.

In the metropolitan counties the new authority has to be set up and to determine its policy. It could be informally set up before and do some ghosting, but it will nevertheless have a lot to do. The transport executive has to form a new company. I believe that the situation is much the same for district councils that run their own buses. Then there is tendering. I wonder whether in some districts subsidised services will have to cover a greater area than is expected. With financial stringency that may mean re-planning the routes a second time in order to cut the coat according to the cloth. It will all take time and may be more protracted than is hoped.

It all adds up to a formidable task. I shall be most interested to hear what my noble friend the Minister can tell us. There is no doubt that we still have problems.

Lord Somers

; My Lords, noble Lords have no doubt made a logical case for the amendment. I agree with what they have said, but the one aspect that I find difficult to accept is the date of 1987. We are all aware of the fact that the wheels of government grind very slowly indeed, but this is almost bringing them to a full stop. There is no doubt a great deal of reorganisation to be done, but surely we could have a slightly earlier date than 1987. Could it not be 1986, possibly later than April? If we wait until 1987 most of us will have forgotten what it is all about.

Lord Teviot

My Lords, I rise at this opportune time and begin by answering the point of the noble Lord, Lord Somers. I think that he is referring to a few dates in the amendment, but the date of April 1987 relates to only certain stages and certain cases mentioned in Schedule 5. I would advise the noble Lord, and other noble Lords who wish to take up this point, to spend, like some of us, about half an hour or an hour reading through the implications of this matter. I hope that he will reach the same conclusion as I have—that simply plucking out the odd date is not what it is all about.

4.30 p.m.

As a party to this amendment, I believe that this is an opportune moment to pay tribute to the Government, who have tried to do something about the timing aspect. It is the timing of the Bill that we are discussing in amendments to Schedule 5. Unfortunately, the schedule does not go far enough. We are coming to this afresh. Normally, there is a week or 10 days between Committee stage and Report. In this case, there has been a gap of about three months. I have taken advantage of that time to go out and about. The industry is aware, I know, that the Bill is going through largely in its present form. I am impressed by the fact that those in the industry are entirely aware of that, and that they accept it. I am afraid, however, that it is still my belief that the timescale is completely unrealistic to the majority.

Sitting here as politicians or quasi-politicians—whatever we like to call ourselves—our first consideration is the public and those who travel on public transport. This was the one point which, at Committee stage, my noble friend Lord Peyton and myself, I believe, had in common. There are, however, some operators who dislike the whole idea of road service licensing and who wish to see road service licensing over and done with as soon as possible. When one goes into this matter further, one realises that the timescale is not possible. One wants to see the whole operation work smoothly. Although one may not like the Bill, or anything about it, one wants it to work.

As my noble friend Lord Monk Bretton has mentioned, at the end of the day the bus industry is all to do with minutes and seconds. One is well aware of that. It is necessary to ensure that everyone—the manager, the driver and the fitter—knows exactly where his place is. The Government hope that new operators will emerge. They hope that, once there is competition, people will emerge from the woodwork and invest their money. I hope that this will be the case. I, personally, have seen no sign that this will happen, but I hope that such people do materialise. They will require time and encouragement. That, again, is very much the spirit of this amendment. However, the Government timetable would not permit this to happen.

There is a great risk that things will not work out as either the Government or operators desire. This is true over Great Britain as a whole, but is even more true in the case of major urban areas, where most people live and where most bus passengers are to be found. In the conurbations, the Bill will come into force concurrently with other legislation such as the Act abolishing the metropolitan counties and introducing joint boards which could be rate-capped.

The passenger transport executives are concerned that they are required to continue to implement the policies of the county councils, to introduce the new joint boards to their new responsibilities, to identify their commercial services for registration, to assess the demand for subsidised services that are put out to tender, to establish and manage the tendering system, to develop alternative concessionary fare schemes for the joint board to establish by 1st April 1986, to prepare a scheme for the division of the passenger transport executive, and to prepare the budget for the new joint board in a rate-capped situation with half the year regulated and half the year deregulated. I apologise to the Official Report writers: I have read out what is a terrible mouthful very quickly. I have done that on purpose. There are so many things to do in a short space of time.

Many of these items are interim in nature. Nearly every item is subject to either advice or to guidance from the Department of Transport. Many require the approval of the Secretary of State. Above all, passenger transport executives must continue to keep the existing services running. So the compounded effects of local government reorganisation, rate-capping and the Bill now before your Lordships—the Transport Bill—set the passenger transport executives and, I imagine, as my noble friend Lord Monk Bretton remarked, other counties which contain large urban areas—few of them do not have some urban areas—an impossible task to carry out within the 10 months allowed by the Bill. This amendment seeks to give operators and all authorities additional time, so essential if the Bill is to succeed—and this, I believe, is the wish of your Lordships.

Baroness Carnegy of Lour

My Lords, we have been talking about the difficulties of getting the Bill off the ground. The noble Lord, Lord McIntosh, with his great knowledge of how metropolitan authorities work and of how transport systems work, has indicated some of the detailed problems. We must, however, be realistic about public expectations. It has been extremely interesting during the Recess to see the enthusiasm that potential private operators and existing private operators are showing in planning how they will operate under the new system, and how they will take advantage of it.

It has also been interesting to see how, in the immediate area where I live, the public are becoming aware of the new possibilities. I can give the example of a country bus route that was discontinued because it became so expensive that no one could afford to travel. But that route, if it existed now, would be used by 14 new students attending the new college term. As there is no bus, their parents have to transport the students across country for three miles to catch a bus on another route. They are longing for the new bus system to come into operation. There are at least two bus operators, so far as I am aware, who are thinking of running that service. They do not want to see any postponement. They are extremely anxious to get on with the operation.

Knowledge of the Bill is patchy. However, in that area people are aware of it, and local bus operators are extremely keen. They are working out the steps that will have to be taken in preparation for the Bill getting off the ground. They are assessing possible routes. They are even asking themselves such details as the extent to which local groups are over-estimating the number of potential passengers. They are being very realistic. They are talking about the matter. They are working out what fuel duty rebate might be worth to them. This is the extent of the detail in which they have become involved. They are trying to come to terms with understanding the different status of running a subsidised service compared with the situation previously. All these things are going ahead while we argue. There will be great disappointment should there be a postponement.

Like many of your Lordships, I, too, have been talking to councillors. Of course, councillors—and, still more so, their staff—are still unhappy about this whole matter. I am bound to say to your Lordships that my reading of this matter is that it is not really the practical, logistical problems or the problems of dates that are worrying councillors; but I believe that they are still feeling their way to discovering how they will be able to operate as councillors and help their constituents through this system as opposed to the old system because the ability to get, for example, cross-subsidy to work for one's constituents, and so on—which all of us who have been councillors have done and it was our job to do—is changing and they will have to do this in a different way. They are very much afraid that the new system—unless they can come to terms with it in time—will cost votes. It is right and proper that they should be anxious about this. They will have to come to terms with it. But I am quite sure that they will do it in time for the Bill as it is set out at the moment.

So far as concerns the point made by the noble Lord, Lord McIntosh, about choosing a school convenient to bus services—and I quite agree with him that people do that—the free transport people will have to be transported anyway. Many authorities, particularly rural ones—I presume county councils, and certainly the Scottish regions who have more rural areas in them—already use the existing public service for school transport. They will not have so many changes to make. Others do it entirely by contract at the moment. They will have to make changes. Holidays vary in different parts of the country; but there is no reason whatever, in my view, why correspondence should not go out to schools well in advance saying, "On Friday the system will be such and such, and on Monday it will be something else". In choosing schools nobody can be sure that the same bus route will continue throughout their child's primary school or secondary school life. In busy areas those buses will continue. There may well be more bus services. I do not believe that that is a point, although it is a very good argument for postponing the implementation of the Bill.

The noble Lord, Lord McIntosh, made the other point about local government finance. There are others of your Lordships who know very much more about that than I do. However, it seems to me that making a stab at the amount of resources you are going to allocate to subsidised services will not be all that much easier for the following year than it would for the year before because so much depends on how the market works out, and that figure will not settle down for quite a long time. I am not sure therefore that that is such an important point as the noble Lord, Lord McIntosh suggested. Some other noble Lords may feel differently about that.

It seems to me therefore that people will be very impatient for the implementation of this Bill and it is amazing how quickly they are becoming keen on it. At the beginning I was none too sure whether I thought that the Bill was likely to have the effect that the Government hoped. However, as one sees it all being worked out on the ground, and the enthusiasm of the people on the ground, especially in areas like the Highlands—my own area, the borders of Scotland, Argyle—people in all these areas are getting very interested. I think it would be a great mistake to postpone the date just for the sake of the convenience of some officials.

4.45 p.m.

Lord McIntosh of Haringey

My Lords, before the noble Baroness sits down, perhaps I may say that she has made a number of points which have to be replied to later in the debate. There is one matter on which I should like to be of one mind with her. That is the example which she gave, to which I listened with great interest, of the two operators who were willing to supply a service for a number of students and did not want the final date put back because that would put back the date on which they could supply that service. Would the noble Baroness not agree with me that if the operators have road service licences, or are willing to apply for them, they could go ahead and provide that service without waiting for the provisions of this Bill to come into force?

Lord Peyton of Yeovil

My Lords, the noble Lord, Lord McIntosh, is indeed a kindly man. He invited your Lordships to accompany him back to a summer's evening in July. Tempting as it would be to be three months or so younger than one is, I am bound to say that to go back to the Committee stage of this Bill is to me an unwelcome prospect, and even the company of the noble Lord, Lord McIntosh, does not tempt me to change my mind.

I feel also that those on the Front Bench are in a better position than I am to accept the noble Lord's nobility of temperament in saying as he did, very generously, that his only aim was to help the Government out of the hole which it was mistakenly and stubbornly and obtusely digging for itself. My noble friend Lord Belstead needs no advice or warning from me; but I am bound to say that if I were in a slightly slippery, difficult hole—and I am far from admitting that the Government are—I should be a little worried if the noble Lord, Lord McIntosh, appeared on the edge of the hole and said that his only intention was to help me out, particularly within the context of this Bill. I think that for the moment at any rate I would retreat to the depth of the hole rather than risk getting a boot in the face from the noble Lord.

I wonder whether the noble Lord could genuinely assist me in explaining what he has not so far explained—and it may simply be that I have failed to catch on or understand. I would appreciate it greatly if the noble Lord can tell me what he thinks will be achieved by these amendments. I refer particularly to those to Schedule 5. As I see it, the important ones to which I am referring are those which put back the final date for registration by some six months.

The question I want to ask the noble Lord is: how would that time be used? If you put off the final date of registration nobody will know exactly what you are preparing for. As I understand it, these amendments are designed to cope with the inadequacy of the time which the Government have allowed in order to complete some very complicated arrangements. It would therefore seem to me that all that these amendments would achieve—and I hope that I am not completely in error here—would be to render six months of time completely sterile during which nothing would happen. The noble Lord shakes his head but no doubt my noble friend on the Front Bench will have some comments to make on this. If I am wrong I should be grateful to my noble friend if he would interrupt me now and put me right because I do not wish to go forward any further with some serious misunderstanding of what is intended.

I sometimes have the impression when I listen to discussions within the curtilage of the Palace of Westminster that time does not affect us as it affects other men. I do not believe that it is right simply to go on with amendments which seek to delay for, so far as I can understand it, no very good reason and no very clear understanding about how the time allegedly to be saved will in fact be usefully spent. I am always very reluctant to pass any comments on the motives of noble Lords particularly when they put their names to amendments on the Marshalled List. However, it is with great difficulty that I resist the conclusion that this amendment is yet one more of a long series of amendments designed to wreck this Bill.

The opposition to this Bill has been, as I understand it, conducted by those who are totally hostile, in this context, to innovation; who are dedicated to the rebuttal of all criticism; and who are devoted to the maintenance of the present system, our system, regardless as to whether it is serving the customers well or ill. My noble friend Lord Teviot referred to one point which he had in common with me. I was unable to hear what that point was so I am unable either to deny or to confirm it.

Lord Teviot

My Lords, we are on Report but, with the leave of the House, may I say that either on Second Reading or at Committee my noble friend said that I had said that the public was of paramount importance. He attributed that remark to me, and we had it in common.

Lord Peyton of Yeovil

My Lords, I am unusually indebted to my noble friend, who on this occasion has refreshed my memory most usefully. I must say to my noble friend Lord Teviot that during the long, protracted passage of this Bill he seems to me to have danced continually to the "Shepherd's piping", and I am sorry that the noble Lord is not in his place to hear me say that. My noble friend Lord Teviot seems to me to have achieved a good deal more footage in Hansard than he has made positive impact upon a Bill which is intended as a useful contribution to the industry.

I am sorry to say these things, but I feel that throughout our discussions on this Bill there have been those noble Lords who have resolutely refused to accept that there may be any blemishes in this industry, any slight points of weakness, to which the attention of this House could properly be focused, and as yet I have heard no proposals from them as to how the industry might be improved; merely the suggestion that what the Government are doing is wrong and a complete ignoring of the cost of supporting the industry as it is now.

May I return briefly to this amendment and ask my noble friend on the Front Bench whether he is satisfied—and time is always a valuable commodity in this world—in the light of recent events, in the light of what is now happening in the industry, that the time allowed under the Bill will give a reasonable chance to get the Government's proposals for the future of this industry on a proper footing and in the way that they themselves would wish? I have little doubt that this amendment, like others before it, is aimed at the wrecking of the Bill. The postponement in effect for six months of any action can hardly be regarded as a positive contribution even by those who put it forward.

Lord Simon of Glaisdale

My Lords, I must apologise to the noble Lord, Lord McIntosh, because I did not hear the whole of his speech. I was running around the Chamber, trying, quite unsuccessfully, to find what amendments he has grouped with this. As I was unsuccessful I can only deal with Amendment No. 1, and I have nothing to say as to its general merits and the sentiments which it expresses. As the noble Lord, Lord Peyton, put it, it expresses nobility of sentiment. However, I venture to question the desirability of trying to legislate in this way.

I cannot see that there is anything enforceable in this amendment, or any way of enforcing what it seeks to do. The nearest one would get to it is the useful new system of judicial review, but that seems to be quite inappropriate in this case. Therefore, however desirable it is to do what the noble Lord, Lord McIntosh, wishes to do—which I think can be summarised by saying that it seeks to bring the new system in in an orderly, efficient, and effective way—it cannot really be written into an Act of Parliament in this way.

Lord Sandford

My Lords, I spent some time at Second Reading of this Bill expressing the view that it went unnecessarily far beyond our manifesto commitment, it had not been properly thought out, the consultations on it were not as they should have been, and it had not been properly researched and tested. But the House clearly took a different view and embarked on the Bill in Committee with a view to improving it, and that is what we ought to be doing now. Therefore, in my view it is far too late to introduce an amendment of the kind we are discussing at the moment.

On the other hand, it would be remiss of me not to make your Lordships aware of the difficulties in responding to what is in the Bill for the local authorities, who have to do an enormous number of rather complicated things in a short time. As soon as we had finished the Committee stage I explained to Ministers concerned exactly what was involved, particularly in relation to the budgeting process, in the authorities which run bus operations, and in a number of other respects.

The difficulties are particularly acute in the case of the district councils which run bus companies, because the budgeting process leading to a rate being struck next April has now been going on for two or three months and they are having to guess such things as how much to transfer into the new companies, and what to do about their pensions. They are having to guess which routes will have to be subsidised, and by how much. Those not already running taxis are having to engage and train staff to engage in the licensing process, and so on and so forth.

What my noble friend Lady Carnegy described as enthusiasm is, in a much larger number of cases, diligence in tackling these considerable problems at such high speed. It will get done, but it will not get done well, and a considerable number of errors will occur with which the present system of local government finance is ill equipped to deal. That is all I have to say. We have to get on with it now as best we can, and the authorities with which I am in touch are doing their best, but it will not be done well. It cannot possibly be done well in the timescale provided.

Baroness Elliot of Harwood

My Lords, I shall be short. During the Recess I had the opportunity of talking to a number of people, mostly in Scotland and in the rural areas, about the Bill. I want to say at once to the noble Lord, Lord Peyton, that I am anxious that this Bill should succeed. I am not against the Bill. I think that it is a good Bill, and I think most people do.

However, I agree with those people who have said that the time for organising this is too short, and if you get a muddle instead of a planned organisation then it is going to be disastrous for the Bill.

I have a letter here from the Convention of Scottish Local Authorities in which they say: if registration for a significant number of services is achieved as a result of road service licences granted between 1st March 1986 and 16th August 1986 [then] this restricts the effective period for completion of tendering to 17th August 1986 to 27th September 1986 only six weeks in which to advertise, receive, scrutinise and award tenders. It cannot be done in that time. I want it to succeed. I want it to be a success, but if it is made as short as that it will be a muddle. I hope that the Government will realise what effect this will have if they do not make some alteration.

5 p.m.

Lord Belstead

My Lords, we have had a serious debate on an undoubtedly difficult issue. The nub of the matter brought up by this group of amendments is that there has to be a trade-off between, on the one hand, giving local authorities and passenger transport executives enough time for tendering and setting up their companies and, on the other hand, minimising the delays and uncertainties for operators, their staff and passengers. Every day that we put off deregulation we stretch out the waiting time for the operator. I think that the noble Lord, Lord Somers, was justified in putting his finger on an unconscionable period of time which the amendments would represent in putting off the coming into effect of the Bill. These amendments represent a year and a half from now before the Bill would fully come into effect, April 1987. The noble Lord, from his independent position on the Cross-Benches was perfectly fair in putting his finger on that.

I add that I think the worst thing we can do is to leave any further uncertainty in the Bill. At the end of his speech the noble Lord, Lord McIntosh, came back to one of his many amendments, Amendment No.

304. To set out a timetable stretching for a year and a half from now, but to provide—as Amendment No. 304 does—the possibility for yet further delay, provides no sensible basis for planning.

Since the Committee stage local authorities and operators have had two and a half months to think further about the work ahead, to plan and to make strategic decisions, and in some cases even to go out to consultation on their proposals and to recruit staff. They have also had the benefit of four further consultation documents from the department affecting detailed implementation requirements. This has put authorities in a much better position to judge whether the timetable in the Bill is achievable. My noble friend Lady Carnegy was right to say that both operators and authorities are viewing with considerable enthusiasm the increased competition and extra opportunities that there will be under this legislation. In that same period authorities and operators have been able to digest the amendments to the transitional period which were added by your Lordships at Committee stage and to which my noble friend Lord Teviot referred.

Your Lordships will remember that the main purpose of those amendments that we took through the House in July was to bring forward to 28th February next year the registration of commercial services to give local authorities a good six months for the tendering process. It is fair to say that there has been a general welcome for those amendments to which your Lordships agreed.

It is in the context of those transitional steps that we must judge the effect of these amendments which would put back deregulation. The amendments we are debating do not give the county councils any longer period for their work on tendering. No, my Lords, the amendments are seeking to put back all the transitional steps set out in Schedule 5. Indeed, the time which will be allowed for tendering under these amendments is to be squeezed by one month to give operators even longer to register their services, but only five months for the tendering process. What on earth is the point of that? As my noble friend Lord Peyton said, how on earth will that time be used? Do operators really need until October next year, a year from now, to register their commercial services? The intelligence the department is receiving suggests that many operators are well advanced with their plans already. I understand that some are seeking to make use of the relaxed road service licence criteria to start new and varied services as early as possible. If we were simply to defer registration of commercial services until October and deregulation until April 1987 we should no doubt see many applications within the licensing system, but I do not think that is what noble Lords intended in moving this amendment.

What is the point of these amendments? They do nothing to help the tendering authorities; indeed, they are making the period for tendering shorter. Are they perhaps intended to give time to set up the new public transport companies? I should hardly have thought that that was so. If the companies are set up before registration and before tendering their managements will be in ignorance of both the commercial and the subsidised networks. If I may say so that seems to be the worst of all possible worlds.

But I come to an important point which my noble friend Lord Sandford raised and to which the noble Lord, Lord McIntosh, referred. That is that district councils have to set their budgets early next year for 1986–87 and they will not know how much subsidy will be required or how much business their transport companies will win. I do not wish to underestimate those problems, but the budget argument has to be put in context to the extent that district companies will win less business than they anticipated. That will be because others have offered services at lower costs and in turn that will mean a lower subsidy bill for the local authority. Similarly, if competition brings lower fares that will bring a lower concessionary fare bill for the local authority. Thus there will be some pleasant surprises as well as some problems to overcome. To put the budget argument further in context, I understand that the district transport undertakings typically account for less than 5 per cent. of a district's total budget. Even in the high spending authorities we are talking about less than 20 per cent. of total spending.

In 1986–87 the transport changes will only affect half a year's budget, so typically we are looking at any unexpected results affecting perhaps 2½ per cent. of a local authority's total budget. So even a misjudgment, taking expenditure as much as 25 per cent. above budget, would typically affect less than 1 per cent. of a district's total expenditure. I do not believe that this is an argument which we could allow to assume undue significance in considering the best timetable for transition.

I strongly agree with my noble friend Lady Carnegy in that we do a disservice to operators if we hold back deregulation for a long period. I have listened carefully to noble Lords and I concede that the work which authorities have to put through between now and September is daunting and will require every effort. I believe the Schedule 5 timetable is achievable. I concede it is tight, but with a new regime the scope for mistakes is always greater. If mistakes occur the timetable could then be stretched to its very limit. I have listened carefully not only to the noble Lord, Lord McIntosh, but also to my noble friend Lady Elliot of Harwood and my noble friend Lord Peyton of Yeovil, who at the end of his speech I think was implicitly saying this.

It is because I think we need to have some more elbow room on the timetable that I say now that the Government are prepared to consider a small extension of the tendering period by putting back deregulation day by just one month—choosing a date in late October or early November as best calculated to coincide with school half-term holidays in England and Wales. The point about education provision in Scotland has been covered well by my noble friend Lady Carnegy in her speech.

Whatever suspicion some of us on this side may have about the intentions behind this amendment—I only say that because the effect of them is that there is little to be done for about a year and for deregulation to take place in a year and a half s time—the fact is that the amendments which are before your Lordships today reduce the period for the tendering process from six months to five. We say there is a case for an extension to seven months for the concession which I have just given and, as I have said, we are prepared to give just that. I hope your Lordships will see which of these courses offers real help to counties and to districts and will not agree with this amendment.

Lord McIntosh of Haringey

My Lords, I must start by expressing my appreciation to the noble Lord. Lord Belstead for the concession that he made in the last few minutes of his speech. Even one-sixth of what has been asked for must be welcomed and I believe it is in the Government's interests to make that change, which will presumably be in the form of amendments to Schedule 5 at Report stage.

Lord Belstead

Third Reading.

Lord McIntosh of Haringey

My Lords, Third Reading rather than Report stage; I am grateful to the noble Lord. However, in making that concession, I think he has shown a misunderstanding of both the purpose and the effect of these amendments, which was shared by rather too many noble Lords but ought not to have been shared by the Government. It is certainly true that our amendments do not make a major change in the period of the actual tendering period. What they are designed to achieve is that the raw material which is being worked on by the operators, by the joint boards, by the passenger transport authorities and by the traffic commissioners, is a good deal better considered, better thought out, than it would be if one used the Government's timetable. That is the purpose of the amendments, to extend the first period, the period in which tenders can be entered, rather than to try to extend the later period of the tenders.

I think I am bound to say again that the Government have paid inadequate attention to the problems which will face the authorities in this period up until 28th February 1986. This is the thrust of these amendments. If one takes the PTE areas, the authorities concerned during that period have to do this—and they cannot start yet because many of the orders are still out for consultation and will not be resolved until closer to the end of the year. They have to evaluate what commercial services are likely to be run. They have to establish the initial companies; they have to identify and evaluate the assets and liabilities of the initial companies and they have to fill out the companies' structure for them and determine their costs. They have to obtain approval of the Secretary of State for all these matters. They have to register their commercial services. Then finally they have to receive the tenders and assess and return them to the PTEs before one gets into the run-up to deregulation day.

In the shire counties it is not much less complicated. The Bill as amended now requires the authorities to complete a policy review. They have to sort out their policy on concessionary fares. This is common to all the authorities. They have to have the system set up. They have to give time to set out their own regulations and allow for responses to them. They have to set up the companies concerned. It is a huge task to be carried out between November, at the earliest, and the end of February 1986, and it is that period that we say is inadequate, not so much the further tendering period.

I may say that, so far as the tendering period is concerned, it may be that we have telescoped it a little in these amendments but we have avoided one loophole which the Government have left in the Bill, which is the 14th August date. It is, after all, possible for any smart operator to give up his road service licence just before 28th February and to apply for one again on 1st March or afterwards. That gives him the opportunity or the power to extend his final tender until 14th August rather than 30th June. That leaves only six weeks for the proper consideration of the tender, which I believe the noble Lord, Lord Belstead, on his own arguments, would agree is inadequate.

These amendments certainly do not involve a period of inaction after the passage of this Bill and before work starts on implementation. I am afraid the noble Lord, Lord Somers, has failed to appreciate that work will start, must start, as soon as the Bill has been passed. As soon as the authorities have the regulations that they need to work with, it is in their own interests to do so. The 4th April 1987—

Lord Sandford

My Lords, I wonder whether I may interrupt the noble Lord? If he is saying that work must start only when this and that has happened, I think he is in danger of misleading the House. Work started a long time ago. I have in my hand here about 100 pages of notes which the Association of District Councils issued to the districts several months ago without waiting for the Department of Transport. If we were doing that, we would never get this thing off the ground.

Lord McIntosh of Haringey

My Lords, I accept that. I think it strengthens the case I am making. The point I am making is that 4th July 1987 is deregulation day; it is the end of the procedure, not the beginning of the procedure.

While I am responding to the noble Lord, Lord Sandford, I must say that I was slightly surprised at his saying that it was too late for these amendments to be put now. I know that he was generally supportive of the case that was being put, but he did, after all, say in Committee that it was not possible to have an informed debate at 11 o'clock at night on the last day, even if we sat until breakfast time, and he volunteered, if the Government refused to recommit Schedule 5, to move recommittal himself. He seems to have changed his mind on that. However, I am grateful to him for the other things he has said.

The noble and learned Lord, Lord Simon of Glaisdale, said that Amendment No. 1 by itself was unenforceable. I think that if he had been in his seat to hear me read out the other amendments, as I did, which were being proposed at the same time, he would agree that it is complete, that it provides precise dates, just as the Government do at the moment, and that he can give the support he has given to it without worry about the amendment being legally unenforceable.

5.15 p.m.

Lord Simon of Glaisdale

My Lords, may I say that my apology was very much due?

Lord McIntosh of Haringey

My Lords, the noble Baroness, Lady Carnegy, put forward, if I may say so, a rather curious argument and she did not feel able to respond to my question to her. There is nothing to stop the operators about whom she is talking going in in advance of the Bill. They can do it without the Bill and indeed they can do so, to provide these services, with the agreement of the relevant authorities. I cannot see, from what she described, any reason why such agreement should be withheld. They can do so without fear of a predator following in and taking over their route. If they are so keen to provide this route, I am sure the Government would agree that there is nothing to stop them. It really would be nonsense to suggest that the Bill is required in order to provide that kind of additional service.

I am grateful to the noble Baroness, Lady Elliot. I think that her investigations during the last two-and-a-half months clearly have been worthwhile. They clearly have shown, that, whatever the Government's intelligence may be, there is concern. There is concern, which extends not only to these Benches, that the Government may not be doing the right thing for themselves.

The noble Lord, Lord Peyton, in his usual courteous and witty way, sought to doubt my motives in putting forward these amendments. I have no second thoughts about this. I am opposed to making these two experiments at the same time. We are opposed to the combination of privatisation and liberalisation which is the essence of this Bill. We sought amendments at Committee stage to improve the timetable but also to continue the role of local authorities in transport services and to assure some kind of democratic control through local authorities with them. Those amendments were politically unacceptable to the Government. We do not apologise in any way for putting forward a different political view from that of the Government in the consideration of legislation in this Chamber. In fact, we consider it to be our political duty to do that.

We come now to the Report stage. We ought not to have been discussing these matters in this way for the first time at Report stage; they ought to have been discussed in Committee. But I believe that it can fairly be said that the amendments proposed here involve no damage to the principle of the Bill; they involve no major difference to the internal timetable of implementation, even without the concession which the noble Lord, Lord Belstead is proposing to make at Third Reading. They ensure, I believe, that those who are burdened with the daunting task, as the noble Lord, Lord Belstead, described it, of implementing the changes in this Bill will be doing so with the best possible raw material, the best possible consideration and the best possible tenders for services that can be made available to them. Without that initial delay, without time to carry out the very complex tasks which will fall on all concerned in the early part of next year, we believe that the chance of success of this Bill is gravely damaged. For those reasons, despite the concessions offered by the Government at this stage, we believe that it is necessary to take the opinion of the House on this matter.

5.21 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 109; Not-Contents, 139.

DIVISION NO. 1
CONTENTS
Airedale, L.	Longford, E.
Aylestone, L.	Lovell-Davis, L.
Bacon, B.	McGregor of Durris, L.
Barnett, L.	McIntosh of Haringey, L.
Bernstein, L.	McNair, L.
Beswick, L.	Manchester, Bp.
Blyton, L.	Mellish, L.
Boston of Faversham, L.	Milner of Leeds, L.
Bottomley, L.	Mishcon, L.
Briginshaw, L.	Molloy, L.
Broadbridge, L.	Morton of Shuna, L.
Brockway, L.	Mountevans, L.
Bruce of Donington, L.	Mulley, L.
Carmichael of Kelvingrove, L.	Murray of Epping Forest, L.
Chitnis, L.	Nicol, B.
Cledwyn of Penrhos, L.	Oram, L.
Collison, L.	Plant, L.
Darwen, L.	Ponsonby of Shulbrede, L. [Teller.]
David, B. [Teller.]
Davies of Penrhys, L.	Prys-Davies, L.
Dean of Beswick, L.	Rea, L.
Diamond, L.	Ritchie of Dundee, L.
Donaldson of Kingsbridge, L.	Roberthall, L.
Elwyn-Jones, L.	Rochester, L.
Ewart-Biggs, B.	Ross of Marnock, L.
Ezra, L.	Sainsbury, L.
Falkender, B.	Scanlon, L.
Falkland, V.	Seear, B.
Fisher of Rednal, B.	Serota, B.
Fitt, L.	Shackleton, L.
Foot, L.	Shepherd, L.
Gallacher, L.	Shinwell, L.
Galpem, L.	Silkin of Dulwich, L.
Gladwyn, L.	Stallard, L.
Gloucester, Bp.	Stedman, B.
Graham of Edmonton, L.	Stewart of Fulham, L.
Hampton, L.	Stoddart of Swindon, L.
Hanworth, V.	Strabolgi, L.
Harris of Greenwich, L.	Taylor of Gryfe, L.
Hatch of Lusby, L.	Taylor of Mansfield, L.
Heycock, L.	Teviot, L.
Houghton of Sowerby, L.	Tordoff, L.
Hughes, L.	Turner of Camden, B.
Hunt, L.	Underhill, L.
Ingleby, V.	Wallace of Coslany, L.
Jacques, L.	Walston, L.
Jeger, B.	Wedderburn of Charlton, L.
Jenkins of Putney, L.	Wells-Pestell, L.
John-Mackie, L.	Whaddon, L.
Kaldor, L.	White, B.
Leatherland, L.	Williams of Elvel, L.
Leicester, Bp.	Wilson of Rievaulx, L.
I.istowel, E.	Winchilsea and Nottingham, E.
Llewelyn-Davies of Hastoe, B.
Lloyd of Hampstead, L.	Winterbottom, L.
Lockwood, B.

NOT-CONTENTS
Airey of Abingdon, B.	Caithness, E.
Aldington, L.	Cameron of Lochbroom, L.
Alexander of Tunis, E.	Campbell of Alloway, L.
Ampthill, L.	Carnegy of Lour, B.
Auckland, L.	Carnock, L.
Bauer, L.	Chelwood, L.
Belhaven and Stenton, L.	Chesham, L.
Beloff, L.	Coleraine, L.
Belstead, L.	Colville of Culross, V.
Bessborough, E.	Cowley, E.
Boyd-Carpenter, L.	Cox, B.
Brabazon of Tara, L.	Craigavon, V.
Brentford, V.	Craigmyle, L.
Brougham and Vaux, L.	Cullen of Ashbourne, L.
Broxbourne, L.	Daventry, V.
Bruce-Gardyne, L.	Davidson, V.
Butterworth, L.	Denning, L.

Drumalbyn, L.	Merrivale, L.
Ellenborough, L.	Mersey, V.
Elliott of Morpeth, L.	Middleton, L.
Elton, L.	Mottistone, L.
Fanshawe of Richmond, L.	Mowbray and Stourton, L.
Ferrers, E.	Munster, E.
Foley, L.	Murton of Lindisfarne, L.
Forbes, L.	Newall, L.
Fortescue, E.	Nugent of Guildford L.
Fraser of Kilmorack, L.	Onslow, E.
Gainford, L.	Orkney, E.
Gibson-Watt, L.	Pender, L.
Glanusk, L.	Penrhyn, L.
Glenarthur, L.	Peyton of Yeovil, L.
Gray of Contin, L.	Plummer of St Marylebone, L.
Greenway, L.
Gridley, L.	Porritt, L.
Grimston of Westbury, L.	Portland, D.
Hailsham of Saint Marylebone, L.	Reay, L.
	Renton, L.
Halsbury, E.	Romney, E.
Hanson, L.	St. Aldwyn, E.
Harmar-Nicholls, L.	St. Davids, V.
Harvey of Prestbury, L.	Saltoun of Abernethy. Ly.
Harvington, L.	Selkirk, E.
Hayter, L.	Sharpies, B.
Henley, L.	Simon of Glaisdale, L.
Hives, L.	Skelmersdale, L.
Holderness, L.	Somers, L.
Hood, V.	Stanley of Alderley, L.
Hooper, B.	Strathcarron, L.
Hylton, L.	Strathspey, L.
Hylton-Foster, B.	Suffield, L.
Ingrow, L.	Swansea, L.
Kaberry of Adel, L.	Swinton, E. [Teller.]
Killearn, L.	Terrington, L.
Kimball, L.	Teynham, L.
Kinloss, Ly.	Thorneycroft, L.
Kintore, E.	Tranmire, L.
Lauderdale, E.	Trefgarne, L.
Lawrence, L.	Trumpington, B.
Layton, L.	Vaux of Harrowden, L.
Liverpool, E.	Vickers, B.
Lloyd-George of Dwyfor, E.	Vivian, L.
Long, V. [Teller.]	Waldegrave, E.
Lucas of Chilworth, L.	Westbury, L.
McAlpine of Moffat, L.	Whitelaw, V.
McAlpine of West Green, L.	Wise, L.
McFadzean, L.	Wolfson, L.
Macleod of Borve, B.	Wynford, L.
Mancroft, L.	Yarborough, E.
Margadale, L.	Young of Graffham, L.
Marley, L.	Ypres, E.
Marshall of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.32 p.m.

Lord Shepherd moved Amendment No. 2: Page 2, line 2, at end insert— () This section shall only apply to a passenger transport area, in which the Executive own and operate a railway in co-ordination with local services, in respect of which system of public passenger transport services, single through journey ticketing is available, if the Secretary of State makes an order, and in this subsection "single through joumey ticketing" means the facility to use only one ticket in completing a journey from the intitial boarding point to the final destination, involving different modes of public passenger transport service or more than one boarding of the same mode of public passenger transport service. () The Secretary of State shall not make an order unless, after evaluating the benefits and costs including past expenditure, of such a system of public passenger transport services, he is satisfied that that system will not be adversely affected by the effects of such an order. () Any order made under this section may contain such supplementary incidental consequential and transitional provision as may appear to the Secretary of State to be necessary or expedient.

The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Marshalled List. It is drafted for one particular purpose, and that is the temporary initial exclusion of the Tyne and Wear PTA, the Metro, from the legislation. It is drafted in that way because it is solely related to that operation and it seeks to avoid a genuine problem of hybridity.

The noble Lord, Lord Peyton, was the Minister of the day who gave sanction and approval to a new form and concept of public transport around Tyne and Wear. It was a concept taking into account the economic and social problems of Newcastle, Tyne and Wear and the surrounding county areas. It was felt that some effort should be made to create a transport service that would breathe new life into that area. The noble Lord, Lord Peyton, as I mentioned, as Minister of Transport of the day, gave approval to it. I stress that because all successive governments since then have given support to the concept of the Metro and the integration of transport services within that area.

The Bill has exclusions. The Secretary of State has decided temporarily to exclude from the provisions of the Bill transport services within London, and I would suggest that there is a case for a pause and for consideration of the service that is now being provided. The body that has been created—the Metro was completed only in March last year, I believe—should be allowed to run for a period until judgments can be made as to whether it is sensible and whether it gives cash benefits and value for money to those who live within the region.

It is too early to say whether it is a success, but certainly all the information that is now coming forward gives one a feeling that all the expectations of the planners, those who conceived it and those who gave their approval to some £283 million of capital expenditure, were right and that one is getting value for money.

The Tyne and Wear scheme is very much based upon the Metro. The Metro is a form of underground and above-ground rail service, and it makes a great deal of use of redundant British Rail track. It has been created and has evolved. It is today carrying a very large number of the community not only from within the Newcastle area but from outside it. I believe that without any question it is creating a new sense of community and a potential for industrial development within the area.

However, the Metro was designed solely on the basis that it was part of an integrated transport system. I do not wish to go into the politics of whether one should or should not have an integrated transport system, but successive Governments, whether Conservative or Labour, have been committed to this form of integration and, as I have said, they have committed some £283 million to it.

I think it is true that nobody would ever have sanctioned, conceived or made any proposals for the creation of the Metro if it had not been part of an integrated transport system. If you had not got an integrated transport system behind you, you would never have conceived or planned the Metro, because without an integrated system any investment in the Metro scheme would have been a sheer waste of money. I think that that is fully accepted by the Government and by all those who have knowledge of the Metro and the integrated transport system.

The Metro has been established. It has great potential not only in terms of those who live within the area but, in a funny way, also for export sales. A number of overseas countries have been particularly interested in the whole concept of the Tyne and Wear operation, but the crucial factor for success has been the integration of bus, rail and the Metro itself.

The Government are concerned about the consequences of the Bill as regards the Tyne and Wear Metro, so much so that when we debated this very shortly in Committee the Minister said that there were very urgent considerations going on between the Government and the Tyne and Wear PTA as to financial assistance for the Metro in the interim period. I am sure that the House at Report stage will wish to know how far those discussions have gone, how far the Government are able to assist the authority and what is the response of the authority to the Government's proposals. But I suspect that the Government's proposals will be purely an amelioration of a delay in terms of what I believe will be the consequences of this Bill to the Metro and to the basic concept of the integrated system.

I know of two old companies in that area—United and Northern. They are in this difficulty. They are today working very happily in providing services into the interchange stations which are part of the Metro system. They are providing services by which people can move to the interchange and into the Metro, needing only one ticket to see them through. But if we perceive the Bill as it is now drafted and without the exclusion of the Tyne and Wear part there is no doubt at all that the bus companies will not see themselves as part of the integrated system.

In fact, there are no commercial reasons why they should see themselves as part of the integrated system. All the commercial arguments are that the bus companies should see themselves not as partners within the integrated scheme, which is what was perceived when the noble Lord, Lord Peyton, initially approved it, but solely as competitors to the Metro. I have to say to your Lordships that as I see the situation, after many discussions with people on both the bus and the Metro systems, if the Bill is implemented as I suspect it will be—unless your Lordships agree to this amendment—buses will be competing with the Metro, and without any question the Metro will die. I leave it to your Lordships to imagine all the financial consequences that will follow.

I know that I am in difficulty with some of my noble friends, but I have not been absolutely opposed to the Government's concept in terms of competition. But the Government have spoken many times about the need for innovation, and Tyne and Wear is probably the greatest example of innovation in public transport for the past 30 or 40 years and is gravely at risk. I believe that there is a very serious case for the Government, without in any way jeopardising the basic philosophy that lies behind this Bill, to say, as in the case of London, that there should be an exception in the case of Tyne and Wear.

5.45 p.m.

I have to say to the noble Lord, Lord Belstead, that I am in some difficulty with some of my friends in arguing the case for making an exception of Tyne and Wear, as opposed to standing solidly behind other PTAs. But I genuinely believe that the situation in Tyne and Wear justifies having a period at least to allow the experiment, which I think was commenced only in March of last year, to go through. That would show as the early figures indicate that in terms of value for money, in terms of passenger riding and in terms of the figures which indicate the success of a transport organisation, the Tyne and Wear scheme should be allowed to proceed and should be excluded from the Bill as it is now drafted. It should be open to the Secretary of State, when he so wishes, to make an order to include it. But he would then have full knowledge of the benefits and of the balance of advantage either of setting buses free to run against the Metro, or of allowing the integrated system which successive governments have supported.

I move this amendment in no politically ideological way. I move it solely on the basis that we have invested a very sizeable sum of public money—some £283 million. It is a scheme which successive political parties and Ministers have supported, but which has not yet been able to prove itself one way or another. I suggest to your Lordships that it would be pragmatical—and I have always thought that one of the virtues of the Conservative Party was its being able to take pragmatic decisions—to allow this to continue until such time as a judgment can be made not only in terms of the taxpayer, who has put the money in, but in terms of the people of that area who attach increasing importance to the ability to be able to move—perhaps less cost-effectively—with one ticket from one end of the system to the other.

These words may be very inadequate, but I hope that your Lordships will accept the amendment, let the Tyne and Wear operation continue and allow the Secretary of State, at such time as he may decide, to make an order according to the judgment on its success, its value for money and its value of service to the general community. The truth is that unless this operation is allowed to run we shall never know. My Lords, I beg to move.

Lord Auckland

My Lords, the noble Lord, Lord Shepherd, has made a very powerful case for this amendment. It is not often that I find myself in agreement with the noble Lord but I will explain briefly to your Lordships why I do so on this occasion. I have no interest to declare in that part of the world of a financial nature but I have seen the system in operation and can vouch for its undoubted success, particularly in how it copes with the disabled. In an area such as Tyne and Wear this is an especially important aspect. Six to seven thousand persons with varying disabilities travel each day on this network.

Like most of your Lordships I use public transport frequently, particularly the London Underground, and one knows the enormous handicaps which are faced in London by disabled people. This is especially so in the area around Waterloo Station, where there are large gaps. It is quite impossible for a partially disabled person, let alone somebody in a wheelchair, to mount or dismount a train easily. But the Tyne and Wear integrated system has an extremely efficient way of coping with disabled persons—right from purchasing a ticket at the ticket barrier to mounting the train or the bus. It is surely essential in an area of the density of population of Tyne and Wear—the noble Lord, Lord Shepherd, rightly mentioned its industrial significance—that this should be allowed to continue.

There is also the aspect of road safety. The building of the Metro system was supported by all parties of the local authority, and I have met representatives of all parties of the Tyne and Wear council. It has meant fewer cars on the roads and much less congestion on the motorways, on the A1(M), the A66 and other roads in the area. There is also the environmental point because we get less emission of fumes—Parliament as a whole is now very much wedded to the protection of the environment. So I believe that this is a very strong case. Had this been in its planning stage, had the system not been devised, then I believe the Goverment would have had a case but, as the noble Lord, Lord Shepherd, has rightly said, £283 million has been expended on this project with support from all political parties. Not only people in Tyne and Wear but people outside this country, delegates from Eastern Europe, delegates from Japan and all parts of the world have been to see for themselves what is a unique system.

I do believe that it is very necessary in terms of cost effectiveness to keep this system going. If it is not to be kept going, I would submit to the House that the cost to the Exchequer will be very high. Many of your Lordships will know that these trains are operated by one person, so the system is run in a very economical way. I beg my noble friend the Minister, who gives great thought to any amendments put forward to him, to pay very great heed to the mover of this amendment.

Lord Nugent of Guildford

My Lords, I should like to say a very brief word on this interesting subject and commence by thanking the noble Lord, Lord Shepherd, for kindly sending me an excellent brief which supports his case and certainly supports the splendid record which the Tyne and Wear integrated scheme has achieved. I have read it with great interest and hope that it will continue. I would make the point to my noble friend Lord Auckland that the admirable arrangements which the trains have, particularly for dealing with disabled people, will continue in any event. With regard to what the Government are proposing, which is that the bus system should be made free so that private operators can operate in the city, it seems to me perfectly possible to get the benefits of the existing system and the benefits of the Government's proposals by the operators contracting with the individual private bus operators in order to integrate as seems desirable the bus operations with rail. The noble Lord, Lord Shepherd, nods his wise head—

Lord Shepherd

My Lords, I was shaking it.

Lord Nugent of Guildford

My Lords, the noble Lord was shaking it. Perhaps he will come to nodding it later. I hope so.

Why should this not be possible? It is obviously pragmatically possible. My noble friend Lord Auckland asks the Government to be pragmatic. That is all that I am asking them to do. I believe that it is possible to combine the two schemes. I believe that the Government's broad approach is right. Something radical is needed to deal with bus services throughout the country. It would be a mistake to except this city when there is every prospect of this admirable system continuing by the rail service contracting with the bus service to integrate such bus services as it thinks desirable with the rail service. My noble friend Lord Belstead did of course expose these arguments in Committee. But I think they are valid arguments and they certainly persuaded me.

I hope that the noble Lord, Lord Shepherd, with his renowned wide vision will see that it is possible to combine the benefits of both. The noble Lord does indeed observe that there are benefits to be gained from the Government's proposals for bus services in various parts of the country and I hope he will see that this might be one of them too.

Lord Mottistone

My Lords, I should like very briefly to support strongly what my noble friend Lord Nugent has just said. It is not only true that my noble friend Lord Belstead in speaking to Amendment No. 5 in Committee made it quite clear that all the benefits of the present system will be retained: it is also the case that the Government's new proposals, will give an opportunity for improving it. After all deregulated buses in proper competition will surely provide what is necessary more accurately and better than the cost benefit analysis which is proposed in the amendment.

Cost benefit analysis always depends on clever people making assumptions. We have heard a lot of clever people in debates on this Bill who have made all sorts of assumptions, most of which are completely contradicted by other clever people with different assumptions. On the whole, the market-place is probably the best way of resolving this. The advantages about which my noble friend Lord Auckland spoke will all be there to be retained and we will get the great advantage for the customer. One must always remember that it is not really a question of whether this, that or the other bureaucracy benefits but of whether the customer benefits. That is what the Bill is all about. The customer is going to benefit the better if the noble Lord, Lord Shepherd, takes the advice which my noble friend gave him in Committee and withdraws this amendment in due course.

Lord Peyton of Yeovil

My Lords, before we part with this amendment I should like to make a few observations. I do so as one who had the privilege to be Minister of Transport at the time when approval for the Tyne and Wear scheme was first given. There are few things on which I look back with greater pleasure than having had some part in launching that scheme, for it replaced a really horrible sore in that part of the world. Environmentally it was vile and the fact that it so long survived was a lingering disgrace for all of us. Happily, the whole broken-down, filthy, dirty railway line was replaced by a very attractive modern service, and one in which the users and the operators visibly take great pride today.

6 p.m.

I have risen to my feet only to say to my noble friend Lord Auckland, who praised the scheme, that I would certainly not be prepared to go along with any proposal which put so imaginative a venture at risk. However, I fear that the noble Lord, Lord Shepherd, and others who have opposed this Bill (although not he) root and branch, are unable to place any limits on the harm which they see flowing from it. They allow their imagination to take the place of judgment. I personally see no reason to fear for the future of the Tyne and Wear service and I hope that this amendment will fail.

Baroness Carnegy of Lour

My Lords, this amendment applies not only to Tyne and Wear but also to Glasgow, which owns its own Underground and to which most of what has been said also relates—although the noble Lord, Lord Carmichael, has yet to speak on this matter. He knows the Glasgow Underground better than I do, although I know it fairly well.

Lord Shepherd

My Lords, before the noble Baroness launches forth on the situation in Glasgow, I may say that this amendment has been drafted solely for one purpose; to exclude Glasgow Strathclyde from the consequences of the amendment. Whether or not we have succeeded in that I do not know. Certainly such was the purpose of our drafting.

Baroness Carnegy of Lour

My Lords, am I to understand from the noble Lord that the amendment does not apply to Strathclyde in his view?

Lord Shepherd

It is not meant to do so, my Lords.

Baroness Carnegy of Lour

My Lords, my understanding is that it does and my noble friend on he Front Bench confirms that view. If I may continue, it seems to me that transport in Glasgow is of absolutely crucial importance. It is probably more important to people there than anywhere else in Scotland that there should be cost-effective and plentiful transport. At times, the streets of Glasgow are enormously congested. It is extremely difficult to get across the centre of the city during the rush hour even by bus, as we know is the case in other cities. In Glasgow, the best way to travel during the rush hour is by Underground. I do not have the figures, but a great many people use that form of transport.

It seems obvious to me that a deregulated bus system will mean that operators will do the maximum to arrange matters so that people can travel by bus to a convenient point on the Underground and the reverse, so that passengers can pick up a bus after using the Underground. It would be in the interests of operators to do this.

We know that Strathclyde Regional Council has worked very hard to produce a good scheme. Although the amendment does not refer to this, other regional councils in Scotland have through-ticket arrangements with British Rail. This is a different issue but the thinking is the same. It is right that people should be able to make use of such a facility. In a congested city, with a deregulated bus system the likelihood is that the Strathclyde Underground will carry more passengers and not fewer. More people will be able to travel about and they will be able to do so more cheaply. In Strathclyde it is in some ways even more important, since Strathclyde has been somewhat more moderate with its system of subsidy than has Tyne and Wear.

I too have received an extremely convincing argument from Tyne and Wear about its system. We know all the arguments. It is more a question of whether the planners, the council, the operators and the people who actually ride on the buses will arrive at the best solution. I do not believe that the Glasgow Underground will die. I believe that it will go from strength to strength and that there will be standing room only, as is often the case at the moment.

Lord Somers

My Lords, I cannot help but feel that noble Lords who believe that, once services are deregulated, operators will work harmoniously to provide a co-ordinated service are being a little optimistic. Once bus services are deregulated, the operators will take the word "competition" seriously and the one thing they will be trying to do is drive their competitors off the road. They do not really care about co-ordinating services with anybody.

I confess that I have not been to Tyne and Wear but I studied the transport problems which exist there very carefully before speaking on the subject in your Lordships' House. I entirely agree with the noble Lord, Lord Shepherd, and with his amendment. It is essential that a system such as that in Tyne and Wear should be preserved. A co-ordinated service means so much to passengers. After all, transport is not a party matter. It does not matter whether the passenger is a Conservative or a member of the Labour Party—or even a Cross-Bencher. The point is that the passenger wants to get from one place to the other and he has a perfect right to do so. If we can make that easier for him, which is what a co-ordinated service does without doubt, then we should do all that is possible to preserve such a service.

Lord Beloff

My Lords, it seems to me that the principal assumption made by the noble Lord, Lord Shepherd, is that this admirable metro system would somehow fall victim to bus competition. This seems to me to be an extraordinary improbable assumption when all over the world the congestion created by motor traffic in cities is leading to a revival of Underground and other rapid transport systems. This is simply because, as my noble friend Lady Carnegy pointed out in relation to Glasgow, it is quicker for a passenger—and as the noble Lord, Lord Somers, said, it is the passengers we are concerned with here—to travel through the centre of a major conurbation by rail (Underground or overground, as the case may be) than in a motor vehicle, which is bound to be held up for much of the day in rush-hour traffic.

Therefore, it seems to me wildly improbable that any bus entrepreneur would think that his way to profit was in trying to compete with a system which would obviously be preferred by most passengers. On the other hand, it seems to me equally, to take the point of the noble Lord, Lord Somers, that operators would wish to see how much could be derived for their firms' benefit by making the maximum use of the existence of such a system by feeding their routes into it. After all, British Rail—which has in some ways been behind in all this—now provides at railway stations interchanges with buses, coaches and taxis. Much of the transport system everywhere is now integrated and the obvious advantages of the single ticket—which I believe all of us agree speeds up travel—would be perfectly possible through the arrangements made by any bus company with the appropriate Underground metro authority. It seems to me to be a curious notion that, on the one hand, this is a marvellous system but, on the other hand, a breath of competition by a slower service would somehow ruin it.

Lord Carmichael of Kelvingrove

My Lords. I think this has all been extremely interesting. So many people have a great knowledge of the Newcastle Metro. I must confess that, although I was up there when it was starting, I have not been able to get back to Newcastle during the time that it has been running as efficiently as everyone tells me. People of all parties have told me how good it is. I have seen the videos and read the literature about it. I am also aware that a study has just been completed with the TRRL, the University of Newcastle, the Tyne and Wear County Council and the Tyne and Wear Passenger Transport Executive, and that this report is likely to be out by the end of October.

I am sure the noble Lord the Minister will already have some idea of what is in that report. In the nature of things Ministers normally know these things earlier, and I hope the noble Lord will either tell us about the findings of the report or wait until the report has been published before he gives a definitive answer on the amendments put down by my noble friend Lord Shepherd.

I would say to my noble friend Lord Shepherd that I did not realise whether or not Glasgow was included. When the noble Baroness, Lady Carnegy of Lour, asked whether Glasgow was included, there was a conflict: the Government Front Bench said "Yes", and my noble friend Lord Shepherd said "No". On the basis that Glasgow has the Underground, which is rather a small one, technically Glasgow would be included, but not because of the Clyde Rail, which would be closer to the Metro except that it is not controlled by the passenger transport authority. Nor is it one of the big breaks made by the Metro in that it started using much lighter stock than the old railway stock, to which the noble Lord, Lord Peyton, referred. This changed things considerably. I could go on for a long time talking about the Glasgow Underground, but I will not, except to say that it was wonderful in its day. It still has a great part to play; but it was built in a very tight circle when Glasgow was a city with the highest density in the world, and literally thousands of people got on at every stop, so it could not help but pay. But now it is struggling.

When discussing the question of the Tyne and Wear Metro, I hope we shall not get confused with the idea of the Glasgow Metro being part of it—not at this stage, anyway. If this can be read into my noble friend's amendment, I hope there will be alterations if the Government feel it is fitting not to include Glasgow; because from my knowledge of both—one directly and one at second-hand—they are quite different animals. One is much more a feeder in a longitudinal way, while the other is a convenience for those living in the city centre, and there is little way of comparing them.

The noble Lord, Lord Mottistone, referred to the importance of the customer. But in the area of the Metro the customer is two people—a customer and a member of the community. Perhaps he is a member of the community everywhere, but particularly in this case is he a member of the community. It irks me that sometimes we think only in terms of the immediate satisfaction of the customer, no matter what other strains are put on the life of the whole community, which will ultimately affect the customer himself.

From all the reports I have heard of the Metro, one of the great things has been the loosening up of the area for the shopkeepers, chambers of commerce and everyone. This has been a great success. It has brought more people into the centre. People come in, not by car or by bus but by Metro, to do their shopping, and the numbers are increasing fairly steadily. Asked if private buses could do the same, as I understand it the main reason why the Metro is so successful is its great flexibility of through-ticketing—something which in the whole of Britain we usually do appallingly badly. We have been appallingly late in introducing it. It is still annoying when, as has happened to me a couple of times, you are coming to, say, Euston and you get a 40p ticket, and you have to get off because you want to go to Foyle's. Then, at Tottenham Court Road you have to buy another 40p ticket to get to Euston from Foyle's. There are few cities in the world which do not have a system whereby you can buy a through ticket. We have been very bad at this in this country. Here we have the excellent example of the Tyne and Wear Metro, which has introduced this and has led the way, particularly in Britain.

My noble friend Lord Shepherd suggested that in terms of world example, the export order, there are people coming from all over the world to look at the Tyne and Wear Metro. It is very nice that people come to look at our urban transport. Our railways are better than people will admit. Here we have a good example of the beginning of a system which will be used more and more throughout the world. In his amendment all my noble friend asks is that some consideration be given to the preservation of this system, that some care be taken of the system. Perhaps he goes too far in asking for total exclusion, but I plead with the noble Lord the Minister that the department, and the TRRL, who are already involved in it, pay great attention to what is one of the gems of the British urban transport system. They should take great care that it is not destroyed. If the amendment of my noble friend is not sufficient, may I ask that, somehow or other, during the next stages of the Bill the noble Lord the Minister will take sufficient power to enable the Secretary of State to look after this system, perhaps comparing it with the other systems in the country and perhaps making this a trial area in addition to the trial areas we have already had, which were rather more disastrous.

6.15 p.m.

Viscount Ingleby

My Lords, as a disabled person, may I confirm what the noble Lord has been saying?

What a marvellous thing the Metro is for anyone in a wheelchair! I went to Newcastle a fortnight ago with the noble Baroness, Lady Darcy (de Knayth), and rode on the Metro. It was very easy to get on and off, with ramps and lifts. The Metro takes you into the city centre to do your shopping, meet your friends and so on. I hope the Government will think carefully before they do anything which might diminish the value of the service.

Lord Belstead

My Lords, the thinking behind the amendment of the noble Lord, Lord Shepherd, is that the advantages which have been obtained from the Tyne and Wear Metro can be preserved only if the Tyne and Wear PTA and their passenger transport executive continue to use direct control over every form of public transport in their area.

Like my noble friend Lord Beloff, I cannot accept that conclusion. It suggests that the benefits of this major contribution to the Tyne and Wear public transport infrastructure—your Lordships have spoken about these from many parts of the House, and the Government would be the last to deny that those benefits are very real—depend entirely on passengers being denied the right to make choices. What is more important, it ignores the very real advantages to passengers of an urban rail system, to which I have no doubt, incidentally, the report to which the noble Lord, Lord Carmichael, referred, will also draw attention.

My noble friend Lord Nugent of Guildford said that what we ought to do is to make sure we combine the benefits which there will be under the Bill with the benefits which we know there are from the Metro. I believe I can satisfy my noble friend in that particular respect. If I may repeat a point which I know I made in our earlier debate, the Tyne and Wear PTE will continue to own and operate the Metro and will continue to be able to provide revenue support for the Metro. Moreover, the right of the PTE to operate Metro services will not be affected in any way by the fact that other operators may be running services over any other similar routes.

Of course, I appreciate the concern of noble Lords about the role of feeder bus services to the Metro under deregulation. This, I know, has been discussed both inside and outside the House. There is no reason at all why the PTE should not enter into commercial agreement with bus operators to provide through-ticketing arrangements which make the best use of both bus and Metro services. The PTE will also be able to subsidise feeder bus services to Metro stations, subject to the tendering arrangements, if it considers that suitable services are not being supplied commercially.

As my noble friend Lord Nugent said, the arrangements for disabled people on the Metro itself will certainly continue. As noble Lords, including the noble Viscount, Lord Ingleby, will know from having glanced at the tendering consultation document which has been sent out by the Department of Transport (and I believe I sent a copy to the noble Viscount), the tendering arrangements specifically include the right of an authority to specify how buses which are tendering for services must provide for elderly and disabled people.

Therefore, I do not understand why the noble Lord, Lord Shepherd, moves an amendment wholly to exempt Tyne and Wear from the provisions of the Bill because in essence what I am saying is that the PTE will control the Metro, will continue to fund the Metro and will be able to make sure that there is a considerable element of integration by keeping its eye on the feeder bus services both to and from the Metro, and if necessary subsidising the services and making specific stipulations about how those services shall provide for elderly and disabled people in Tyne and Wear.

The other side of the coin is not very attractive. With great respect to the noble Lord, I am not sure that the effect of his amendment is the one that he meant. I believe that his wording brings Glasgow and perhaps the whole of Strathclyde PTA into the orbit of the amendment. Travel cards are available in Glasgow, which would appear to bring Glasgow and therefore Strathclyde within the orbit of the amendment. My noble friend Baroness Carnegy has explained very clearly how she believes that bus operators will find it in their interests to take passengers to underground stations in Glasgow.

It is for those reasons that I ask the noble Lord not to press this amendment. There is nothing between the noble Lord and the Government in wishing to see the enormous investment which has been put into the Metro in Tyne and Wear, with all the advantages there are for passengers and for the environment in general prospering in the future. I believe that, in co-ordination with the Bill, that will continue to happen.

Lord Shepherd

My Lords, governments have introduced legislation which goes to the High Court only to find that, on what was legislated for, the High Court takes a different view. When I was seeking an amendment to eliminate Tyne and Wear from the Bill for a period of time I asked that the amendment be so drafted to solely apply to Tyne and Wear. The noble Baroness and the Minister say that the amendment is so drafted that possibly Strathelyde would be included. All I can say is that, like the Government, I have it wrong. However, the purpose was solely to have a debate on the Tyne and Wear situation which in my view is unique within the United Kingdom.

I was very grateful for, and I am sure people in the North were pleased to hear, the contribution this evening from the noble Lord, Lord Peyton. I am sure that the system, which is now creating very great value, would never have got off the ground if the noble Lord, Lord Peyton, as Minister of the day, had not put his shoulders to it and found the necessary initial finance. I am sure that if he were to go to the region, as I am sure he does, he would see great satisfaction over what was a concept in 1972 and which is now coming into fruition in 1985 for the benefit of the community as a whole. There are not many Ministers who can claim that.

Lord Peyton of Yeovil

My Lords, I am grateful to the noble Lord for giving way for a moment. I should like to say that I have visited the area since then and enjoyed the benefit of a free ticket. Sadly, it lasted for only one day.

Lord Shepherd

My Lords, we might buy the noble Lord's vote by extending it. I do not know whether that would require a resolution from the county or the PTE.

The noble Lord, Lord Beloff, asked why we were worrying and said that if the rail and Metro services are good what do they have to lose against competition with the bus services. I suggest that, like the noble Lord, Lord Peyton, the noble Lord, Lord Beloff, should go to Tyne and Wear. The truth is that if one is designing a metro without an integrated system one would not design it as the Metro is now. It was not designed to stand on its own but to be part of an integrated system of buses, Metro and rail. Therefore, to say that the Metro, because it is good, can live viably in competition with the buses is to misunderstand the situation. The noble Lord, Lord Nugent—

Lord Beloff

My Lords—

Lord Shepherd

My Lords, please let me finish because I think we should like to have a solution to our problem. I can only say to the noble Lord, Lord Nugent, that if he and I were in business I do not know who would walk out of the partnership quicker. I suspect, however, that I would walk out because I do not think he fully understands the rigours of commercial need.

If we were owners of a bus company in Tyne and Wear now being set free by deregulation, would the noble Lord and I, sitting in partnership, run our buses into the Metro for the Metro to carry the passengers a fair distance but where we would receive only a marginal part of the total ticket receipts when, if we ran our buses direct from the pick-up point into the centre of Newcastle, we could take the whole? I am sure that the noble Lord and I would not be party to sharing the revenues with a competitor, the Metro.

Lord Nugent of Guildford

My Lords, as the noble Lord challenges my competence to judge the rigours of the market, I should remind him that my start in life was on a farm. I raised the money to get my own farm, I financed myself from nothing. If I do not understand the market, nobody does.

Lord Shepherd

My Lords, the noble Lord started off better than I did. The first order that I took in life was for 30 pieces of 30 yards of Tootal's Riverena haircord, which I took in Singapore. That was, if I may say so, infinitely less than being in a farming community. The point I am seeking to put to the noble Lord is that if we were in partnership we would not wish to share our revenues with a potential competitor. The Metro would always be a potential competitor to our bus company. I suspect that what we would do, and what the bus companies will do, is maximise routes into the centre of Newcastle and not participate in any sharing arrangements with the Metro. I believe that will be the situation.

I have looked at the situation of Tyne and Wear. I am in difficulties with my noble friends on some parts of the Bill and with the Government on others. I am only putting to the House that here we have a concept which all parties have supported and where some £283 million have been invested, and it is only at this very moment being discovered whether it is right and proper, whether it gives value for money, or whether it gives, as we believe, a value to the general area. I believe that under the Bill competition will destroy the whole concept of the integrated system, which has been supported by the noble Lord, Lord Peyton, and by successive governments. If the Government have their way that will be the end result, with destruction not only of the Metro but of the whole concept of integration and innovation about which the Government themselves have been speaking. I should not like to leave this assembly this evening without testing the mood of your Lordships' House.

6.31 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 109; Not-Contents, 132.

DIVISION NO. 2
CONTENTS
Airedale, L.	Kaldor, L.
Attlee, E.	Kinloss, Ly.
Auckland, L.	Leatherland, L.
Aylestone, L.	Leicester, Bp.
Bacon, B.	Llewelyn-Davies of Hastoe, B.
Barnett, L.	Lockwood, B.
Bernstein, L.	Lovell-Davis, L.
Beswick, L.	McGregor of Durris, L.
Blyton, L.	McIntosh of Haringey, L.
Boston of Faversham, L.	McNair, L.
Bottomley, L.	Manchester, Bp.
Briginshaw, L.	Masham of Ilton, B.
Brockway, L.	Mellish, L.
Bruce of Donington, L.	Milner of Leeds, L.
Carmichael of Kelvingrove, L.	Mishcon, L.
Cledwyn of Penrhos, L.	Molloy, L.
Collison, L.	Morton of shuna, L.
Darwen, L.	Mountevans, L.
David, B. [Teller.]	Mulley, L.
Davies of Penrhys, L.	Munster, E.
Dean of Beswick, L.	Murray of Epping Forest, L.
Diamond, L.	Nicol, B.
Donaldson of Kingsbridge, L.	Northfield, L.
Donoughue, L.	Ogmore, L.
Elwyn-Jones, L.	Oram, L.
Ewart-Biggs, B.	Ponsonby of Shulbrede, L. [Teller.]
Ezra, L.
Falkender, B.	Prys-Davies, L.
Falkland, V.	Rea, L.
Fisher of Rednal, B.	Rhodes, L.
Gallacher, L.	Ritchie of Dundee, L.
Galpern, L.	Roberthall, L.
Graham of Edmonton, L.	Rochester, L.
Grey, E.	Ross of Marnock, L.
Hampton, L.	Scanlon, L.
Harris of Greenwich, L.	Seear, B.
Hatch of Lusby, L.	Serota, B.
Hooson, L.	Shackleton, L.
Houghton of Sowerby, L.	Shepherd, L.
Hughes, L.	Silkin of Dulwich, L.
Hylton, L.	Somers, L.
Hylton-Foster, B.	Stallard, L.
Ingleby, V.	Stedman, B.
Jacques, L.	Stewart of Fulham, L.
Jeger, B.	Stoddart of Swindon, L.
Jenkins of Putney, L.	Strabolgi, L.
John-Mackie, L.	Taylor of Gryfe, L.
Kagan, L.	Taylor of Mansfield, L.

Teviot, L.	Whaddon, L.
Tordoff, L.	White, B.
Turner of Camden, B.	Wilson of Rievaulx, L.
Underhill, L.	Winchilsea and Nottingham, E.
Wallace of Coslany, L.
Walston, L.	Winstanley, L.
Wedderbum of Charlton, L.	Winterbottom, L.
Wells-Pestell, L.

NOT-CONTENTS
Ailesbury, M.	Inglewood, L.
Airey of Abingdon, B.	Ingrow, L.
Aldington, L.	Kaberry of Adel, L.
Alexander of Tunis, E.	Killearn, L.
Ampthill, L.	Kimball, L.
Bauer, L.	Kintore, E.
Belhaven and Stenton, L.	Lauderdale, E.
Beloff, L.	Layton, L.
Belstead, L.	Lindsey and Abingdon, E.
Bessborough, E.	Liverpool, E.
Bethell, L.	Long, V. [Teller.]
Birdwood, L.	Lucas of Chilworth, L.
Boyd-Carpenter, L.	McAlpine of Moffat, L.
Brabazon of Tara, L.	McAlpine of West Green, L.
Bridgeman, V.	McFadzean, L.
Broxbourne, L.	Macleod of Borve, B.
Bruce-Gardyne, L.	Mancroft, L.
Butterworth, L.	Margadale, L.
Caccia, L.	Marley, L.
Caithness, E.	Marshall of Leeds, L.
Cameron of Lochbroom, L.	Merrivale, L.
Camegy of Lour, B.	Mersey, V.
Carnock, L.	Middleton, L.
Chelwood, L.	Mottistone, L.
Chesham, L.	Mowbray and Stourton, L.
Coleraine, L.	Murton of Lindisfarne, L.
Colville of Culross, V.	Napier and Ettrick, L.
Colwyn, L.	Newall, L.
Cowley, E.	Norfolk, D.
Cox, B.	Nugent of Guildford, L.
Craigavon, V.	Onslow, E.
Craigmyle, L.	Orkney, E.
Cullen of Ashbourne, L.	Peel, E.
Daventry, V.	Pender, L.
Davidson, V.	Penrhyn, L.
Denning, L.	Peyton of Yeovil, L.
Digby, L.	Portland, D.
Drumalbyn, L.	Reay, L.
Eden of Winton, L.	Renton, L.
Elibank, L.	Romney, E.
Elliot of Harwood, B.	St. Aldwyn, E.
Elliott of Morpeth, L.	St. Davids, V.
Elton, L.	Sandford, L.
Faithfull, B.	Selkirk, E.
Ferrers, E.	Sharpies, B.
Foley, L.	Simon of Glaisdale, L.
Fortescue, E.	Skelmersdale, L.
Fraser of Kilmorack, L.	Stanley of Alderley, L.
Gainford, L.	Strathcarron, L.
Gibson-Watt, L.	Suffield, L.
Glanusk, L.	Swansea, L.
Glenarthur, L.	Swinfen, L.
Gray of Contin, L.	Swinton, E. [Teller.]
Greenway, L.	Thomeycroft, L.
Grimston of Westbury, L.	Tranmire, L.
Hailsham of Saint	Trumpington, B.
Marylebone, L.	Vaux of Harrowden, L.
Halsbury, E.	Vickers, B.
Hanson, L.	Vivian, L.
Harmar-Nicholls, L.	Waldegrave, E.
Harvey of Prestbury, L.	Westbury, L.
Harvington, L.	Whitelaw, V.
Henley, L.	Wise, L.
Hives, L.	Wynford, L.
Holderness, L.	Yarborough, E.
Hood, V.	Young of Graffham, L.
Hooper, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.41 p.m.

Schedule 1 [Amendments consequential on the abolition of road service licensing]:

The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness) moved Amendment No. 3: Page 135, line 5, at end insert—

("The Transport Act 1968

1. In section 159(1) of the Transport Act 1968 (interpretation)—

1. (a) for the definition of "bus service" there shall be substituted the following—

" 'bus service' means a local service other than one on which the passengers travel together on a journey, with or without breaks, from one or more places to one or more places and back"; and

1. (b) the following definition shall be inserted at the appropriate place—

" 'local service' has the same meaning as in the Transport Act 1985;" ")

The noble Earl said: My Lords, at the same time I shall speak to Amendments Nos. 12, 351, 369, 370 and 373.

Amendment No. 12: Schedule 2, page 139, line 21, at end insert—

("The Transport Act 1968

1.—(1) The Transport Act 1968 shall be amended as follows.

(2) In section 96(10)(b), there shall be substituted for the words "commissioners or licensing authority" the word "commissioner" and for the word "commissioners or authority think " the words "commissioner thinks".

(3) In section 98(3), there shall be substituted for the words "commissioners or licensing authority" in both places the word "commissioner" and for the words "commissioners or authority think" the words "commissioner thinks".

(4) In section 99, there shall be substituted for the words "commissioners or licensing authority" in subsections (1) and (8) the word "commissioner".

(5) In section 103(5), for the words "commissioners or licensing authority" there shall be substituted the word "commissioner".")

Amendment No. 351: Schedule 6, page 164, line 25, leave out from ("services") to end of line 26.

Amendment No. 369: Schedule 7, page 170, line 37, column 3, at end insert—

("In section 103(1), the definition of "licensing authority." ")

Amendment No. 370: page 170, line 39, column 3, leave out ("definition of "area bus service" ") and insert—

("definitions of the following expressions—

"area bus service"; excursion or tour"; express carriage" and "stage carriage"; and "road service licence".")

Amendment No. 373: page 171, line 34, at end insert—

("1980 c.34.

The Transport Act 1980

In Schedule 5, and in Part II, the paragraph amending the Transport Act 1968.")

These are minor technical amendments as a result of Amendment No. 3. I beg to move.

Lord Simon of Glaisdale

My Lords, may I ask a short question arising on Amendment No. 3? I attempted to give notice to the noble Earl but I am afraid in such a way that it reached him in a garbled form. It arises out of two recommendations of the Renton Report, which is the locus classicus now on preparation of legislation. The first is that amendments to an Act shall be textual amendments, as this is in Amendment No. 3. That means that the amended Act can be amended by the amending Act and the two put together by a process of scissors and paste—I suppose now by a word processor. But the Renton Report went on to recommend the rapid reprinting of the amended Act as amended in its loose copy. Today that would be the copy in the Statutes in Force.

The question that I wanted to ask—and the noble Earl may not be able to answer it because I did not make sure that it reached him in a proper form—is whether an approach has been made to the editor of the Statutes in Force for the reprinting of the mass of legislation which has been amended by reference in this Bill.

The Earl of Caithness

My Lords, I cannot give the noble and learned Lord an answer at the moment. I am seeking advice. Presumably the sooner we pass the Bill and get it on the statute book the sooner the alterations can take place.

Lord Denning

My Lords, may I just say this? At the moment when an amendment of this kind is made it is not done by the Stationery Office or anyone of that kind; it has to be done by the law publishers—Butterworth's and the like—and we have to wait till we get Halsbury's Revised Statutes before we get it in an intelligible form. So I support what my noble and learned friend says: the sooner the Government get on with it, the better.

On Question, amendment agreed to.

Lord Carmichael of Kelvingrove moved Amendment No. 4: Page 135, line 20, at end insert—

("Competition Act 1980

2A. In section 3 of the Competition Act 1980 there shall be inserted— (11) Any decision resulting from a preliminary investigation by the Office of Fair Trading concerning a complaint of anti-competitive practice in the provision of local bus services as defined by the Transport Act 1985 shall be issued no later than two months from the date of the Office of Fair Trading receiving the complaint." ").

The noble Lord said: My Lords, this amendment arises out of a meeting that the noble Baroness, Lady Elliot, and I had with the Bus and Coach Council (Private Operators Section) (Scotland)—people of high repute and great experience in the industry. They are concerned about an answer given at the Committee stage of this Bill by the noble Lord, Lord Brabazon, which did not quite fill the Bill. In answer to a similar amendment he said that the point was already covered by Clauses 100 and 101, but the representatives of this council believe that that is only partly true and that it is in a dangerous way partly not true.

Although the point may be covered ultimately, the time taken for Clauses 100 and 101 to come into operation could be sufficient for unfair competition to destroy an operator who would be quite happy with normal competition; and the representatives gave a number of examples. The noble Lord, Lord Brabazon, used the example of an operator providing a commuter service free who immediately said he would stop doing so when the Office of Fair Trading investigated the matter. That would be only if the operator was compliant or willing, but the small private bus operators in Scotland feel that it is a great threat. The operator would not need to comply. He could hold out until a full report came through from the Office of Fair Trading, by which time a smaller operator could have been forced out of business.

Amendment No. 4 asks that: Any decision … by the Office of Fair Trading…shall be issued no later than two months from the date of the Office of Fair Trading receiving the complaint".

It would be of little consolation to an operator driven out of business and forced into bankruptcy by anti-competitive practices to read that the law had ultimately succeeded in making the competition fair. Therefore the Bus and Coach Council has fairly asked that the reality be looked at and a time limit be put on the decision as to whether there is a prima facie case of anti-competitive trading.

I hope that the Minister can help. I know that he has already been approached and that the noble Baroness, Lady Elliot, will also have something to say on this point. These very good operators, who are the backbone of the small private industry in Scotland, are extremely worried. I hope that the Minister will not give us the same, perhaps misguided, reply that we had at the Committee stage. I beg to move.

Baroness Elliot of Harwood

My Lords, I should like to support the amendment, which arose out of a discussion that we had in Scotland with this independent section of bus operators, who are not at all against the Bill. They are quite prepared to operate it, but they think that certain items in it will be very detrimental to small bus operators and above all to those in rural areas, and I think that they are right. We all know that bus operations in towns or covering large districts have a great many passengers and are on the whole highly successful. But it is extremely important that we should also consider the provision of local bus services—those used every day by people going to work, to shop, to school and to hospital. That is essential. The provision of local bus services is a vital community link, a fact that the Government have already conceded in the White Paper, from which I would like to quote: Since the great majority of the population live in towns, the biggest use of public transport is also in the towns, where buses carry large numbers of people to and from work and school in the peak hours. Indeed in our biggest cities, the high level of service throughout the day means that people can get to all the facilities the city offers without needing a car and so can enjoy all the benefits of city life. But policies for public transport must also take care of the interests of country dwellers. People who live in the country without a car depend on the bus for access to the local towns and for their social activities; maintaining these links is vital for the future of rural communities". That is a quotation from the Government White Paper. Therefore, the provision of local bus services requires positive and effective protection against anti-competitive practices to ensure their continuity and stability.

This amendment carried no political overtone. It is straightforward and eminently practical. Indeed, it was not opposed by the Minister at Committee stage. It was merely suggested that it was superfluous. Noble Lords supporting the amendment clearly do not consider it superfluous. I would go further and suggest that its exclusion without sufficient reason would not augur well for the fine traditions of this House. We want a Bill that can be understood by everyone. We want it to be an asset to everyone.

I should like to remind my noble friend the Minister that competition must be fair for the Bill to succeed. It would be extraordinarily disastrous if inadvertently this Government became the authors of indirect nationalisation. Accordingly, I invite the Government and noble Lords to support the amendment together with a further consequential amendment and so positively ensure fair and sustained competition in the provision of local bus services. This is essential in rural areas. In Scotland especially there are areas that have no railways. The proposal is therefore more important to those areas which cover a vast part of Scotland. It is vital that bus services should really meet the needs of the public. I hope that the Minister realises that a great many people are affected. The amendment is not in any sense opposed to the principle of the Bill. The amendment would add to its measure and improve it in many ways.

The Earl of Caithness

My Lords, I recognise, of course, the positive intention behind the amendment which we discussed in Committee. I acknowledge the extra work that the noble Lord, Lord Carmichael, and my noble friend Lady Elliot have put into the amendment during our 10 weeks' away. As the noble Lord, Lord Carmichael, said, the point of the amendment is to ensure that the Office of Fair Trading reports quickly on complaints of anti-competitive practices so that operators are not driven out of business before any action can be taken. I have to ask the House to resist the amendment because I really do not think that it would be appropriate to make some special provision of this kind in competition legislation for the bus industry alone.

There is no such time limit in the Competition Act at present, and yet the Act applies to the whole range of British industries, from manufacturing through to the service industries. It would seem very strange, as I am sure the House will agree, to single out the bus industry for a very special arrangement. I would suggest to my noble friend Lady Elliot that not only would it be strange but it would also be unfair. A special time limit for the bus industry would tend to limit the resources available to examine complaints in other industries. I would suggest that the Office of Fair Trading should have the flexibility to decide which cases should have priority.

I take fully the point of the noble Lord, Lord Carmichael. If a particular bus service is in jeopardy—although I find it difficult at the moment to think of one service in the rural areas of Scotland that could be put in jeopardy in the circumstances we are talking about—I am sure that the Office of Fair Trading will treat it as a priority and will do its best to see that no one is put in jeopardy.

I would also point out, as my noble friend Lord Brabazon of Tara did in Committee, and, as the noble Lord, Lord Carmichael, mentioned earlier, that in cases where damage to competition is imminent or is actually taking place, the Office of Fair Trading can act very quickly and effectively. I repeat the case of January this year of the Grey Green coaches who were running a free commuter coach service. They dropped the practice very quickly—in a matter of days, let alone months—after informal discussions with the Office of Fair Trading. I would stress that the Office of Fair Trading can make it difficult and will make it difficult. So it is not necessarily a question of one operator being ready to acquiesce quietly in the demands of the Office of Fair Trading. The other side of the coin is that the Office of Fair Trading has sufficient powers to make life extremely difficult

I would stress the scope for informal discussions. Apart from any informal investigation procedures by the Office of Fair Trading, informal discussions can be very effective, as in the Grey Green case, avoiding the need for a formal investigation. But, again, I do not think that a statutory time limit would be appropriate. Apart from any other consideration, setting a completely fixed two-month limit for each and every inquiry would be unduly restrictive. As noble Lords will appreciate, cases vary. Investigations may raise complex issues. A period of two months might sometimes be too short for all the evidence to be collected and adequately assessed.

While acknowledging the intentions behind the amendment, I hope that it can be agreed that the Office of Fair Trading should be left with a flexibility of response which the present legislation gives it with regard to the bus industry as to any other industry.

Baroness Elliot of Harwood

My Lords, does the Minister realise that there is no sub-office of the Office of Fair Trading in Scotland at all? At the moment, every single application to the Office of Fair Trading has to go to London. This will delay things enormously. That is why I am so keen that we should have some provision that will not delay things; otherwise there will be no fairness because competition will have taken place long before the Office of Fair Trading has given an answer. I do not know whether the Minister is aware that this is a fact.

The Earl of Caithness

My Lords, in answer to my noble friend. I do not necessarily agree that the fact that there is not a sub-office in Scotland makes the procedure any slower. I believe that the officers within the Office of Fair Trading are responsible people. If a case is ugent, it does not matter—with modern communications—whether it is in Wick, Edinburgh, Penzance or London. They will do the job as quickly as possible. It is wrong to say that just because they are in London this will delay matters. However, on the point of a sub-office in Scotland, I hope that my noble friend Lady Elliot will take up the proposal with the Department of Trade and Industry. I am all for creating more jobs.

Lord Carmichael of Kelvingrove

My Lords, like the noble Baroness, Lady Elliot, I am disappointed, as I am sure are the people of Scotland who asked us to raise this matter. They are not destructive people. They will be rather disappointed. I was sorry that the Minister could only give the same example that he gave previously showing how the Office of Fair Trading worked expeditiously. Incidentally, he did not give us any idea of the time that the Office of Fair Trading normally takes to deal with a problem such as this. The worry expressed to us is that a bus service, particularly a local service, is unique. Unlike ordinary merchandise, it can be very easily and very quickly damaged by unfair competition. I am sorry that the Minister was not able to give us more. However, our having raised the matter may make the Office of Fair Trading more inclined to consider the importance of competition in the bus industry, particularly the local bus industry. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Caithness moved Amendment No. 5: Page 135, line 42, at end insert— ("6A. In section 53(1) of that Act (payment of expenses), for the words "II or III" there shall be substituted the words "or II" ")

The noble Earl said: My Lords, I beg to move Amendment No. 5 and at the same time speak to Amendments Nos. 358 and 374. Amendment No. 358: Schedule 6, page 167, line 9, leave out sub-paragraph (7). Amendment No. 374: Schedule 7, page 172, line 7, at end insert ("and the words "or section 45".").

These are minor technical amendments. I beg to move.

On Question, Amendment agreed to.

The Earl of Caithness moved Amendment No. 6: Page 136, line 10, after ("(a)") insert ("of that Act").

The noble Earl said: My Lords, I beg to move Amendment No. 6 and at the same time speak to Amendments Nos. 59 and 60.

Amendment No. 59: Clause 27, page 27, line 23, leave out ("the 1981 ") and insert ("that"). Amendment No. 60: Page 27, line 26, leave out ("the 1981 ") and insert ("that").

These are purely drafting improvements. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 7: Page 137, line 29, at end insert ("the provision of").

The noble Earl said: My Lords, this is another minor drafting amendment. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 8: Page 137, line 36, at end insert— (" 14.—(1) Subject to any provision made by or under this Act, in any enactment or instrument passed or made before the commencement of section 1 of this Act—

1. (a) any reference to a stage carriage service shall be construed as a reference to a local service;
2. (b) any reference to an express carriage service shall be construed as a reference to any service for the carriage of passengers for hire or reward at separate fares which is neither a local service nor one provided by a vehicle to which subparagraph (2) below applies;
3. (c) any reference to a stage carriage shall be construed as a reference to a public service vehicle being used in the provision of a local service;
4. (d) any reference to an express carriage shall be construed as a reference to a public service vehicle being used to carry passengers for hire or reward at separate fares other than one being used in the provision of a local service; and
399
5. (e) any reference to a contract carriage shall be construed as a reference to a public service vehicle being used to carry passengers for hire or reward otherwise than at separate fares.

(2) When used in circumstances in which the conditions set out in Part III of Schedule 1 to the 1981 Act are fulfilled, a public service vehicle carrying passengers at separate fares shall be treated, for the purposes of any enactment or instrument to which paragraph (d) or (e) of sub-paragraph (1) above applies, as being used to carry passengers otherwise than at separate fares.").

The noble Earl said: My Lords, the Bill gets rid of archaic terms like "stage carriage", with their Dickensian ring, and this amendment ensures that where they occur in earlier legislation, particularly in statutory instruments and local Acts, they still have a meaning until they are in the fullness of time revised and amended. I beg to move.

Lord Teviot

My Lords, if my noble friend refers to the words "stage carriage" as archaic, may I ask what they will be replaced by? We have always known the words "stage carriage" as excellent words.

On Question, amendment agreed to.

The Earl of Swinton

My Lords, I think that this might be a convenient moment at which to adjourn the Report stage of this Bill. Perhaps I may suggest that we do not return to this particular Bill before ten to eight. I beg to move that consideration of amendments on Report stage be now adjourned.

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