§ 2.55 p.m.
§ Further considered on Report.
§ Clause 47 [Transfer of operations of the Bus Company to the private sector]:
§
Lord Trefgarne moved Amendment No. 75:
Page 43,.line 13, after ("Company") insert ("(or any subsidiary of theirs)").
§
The noble Lord said: My Lords, on behalf of my noble friend Lord Belstead, I rise to move Amendment No. 75 and, with it, Amendments Nos. 76 and 77, and to speak at the same time to Amendments Nos. 86,87, 88 and 89.
Amendment No. 76: Page 43, line 13, at end insert ("or any such subsidiary").
Amendment No. 77: Page 43, line 17, leave out from ("employment") to the end of line 18.
572
Amendment No. 86: Clause 53, page 49, line 3, after ("maintenance") insert (', to any extent,").
Amendment No. 87: Page 49, line 4, leave out from ("by") to ("or") in line 6 and insert—
Amendment No. 88: Page 49, line 9, after ("loss") insert ("reduction or limitation").
Amendment No. 89: Page 49, line 11, at end insert—
("(6A) Without prejudice to the generality of section 47(1)(c) of this Act, the arrangements there mentioned may include provision for the making by the Company of payments in compensation for any loss, reduction or limitation of any such concession, benefit or privilege as is mentioned in subsection (6) above to the extent that provision in respect of the loss, reduction or limitation is not made by virtue of that subsection.").
§ These amendments deal with two separate but related subjects. The present Clause 47(2) enables the NBC to include in its disposal programme proposals for paying compensation to those of its own employees who do not take up jobs with the NBC's private sector successors. This provision applies only to the 200 or so employees of the NBC itself. The vast majority of the group's 50,000 employees work for the NBC's local operating units and the Government's clear policy is that these should be transferred to the private sector as going concerns so far as possible, but there could be isolated cases of redundancies in those subsidiaries which provide central services for the NBC group. Without Amendments Nos. 75 and 76, there could be doubt about the powers to pay compensation to those employees of subsidiaries in the period shortly before the dissolution of the NBC itself.
§ The remaining amendments deal with concessions, benefits or privileges enjoyed by NBC employees and others. The Government have in mind particularly the concessionary travel on NBC services which is available to current and former employees of the NBC group and their families. At present, Clause 53(6) provides that when an NBC subsidiary is privatised arrangements may be made to continue these concessions, or alternatively that compensation can be paid for the loss of the concession.
§ The provision has two faults. First, it covers only employees and former employees of the subsidiary which is being privatised. It does not cover other recipients of benefits, notably the families of current and former employees, including the families of deceased employees and employees of the NBC itself. Amendment No. 87 corrects that.
§ Secondly, Clause 53(6) does not recognise that it may be desirable to maintain some concessions but to compensate for the loss of others. For example, it may be possible to maintain the travel concessions on employees' own local subsidiaries after they are privatised, but there could well be problems in maintaining criss-crossing arrangements between privatised subsidiaries under various ownerships. Amendments Nos. 86 and 88 provide the flexibility to deal with this sort of situation.
§ Finally, Amendments Nos. 77 and 89 make clear that the NBC's disposal programme may include proposals for compensating those of the company's own employees or their families who on dissolution of the NBC will lose some or all of the concessions they currently enjoy. These are complex amendments but their purpose is simple: to ensure that the NBC group's 573 current and former employees and their families can be treated fairly when the NBC's operations are privatised and the company is dissolved. I beg to move.
§ 3. p.m.
§ Lord ShepherdMy Lords, I do not know whether it will help your Lordships' House if I say that I warmly welcome these amendments. They are a gesture. They certainly are complex, but I am quite sure that those who will be required to administer them will be able so to do. I welcome these amendments.
§ On Question, amendment agreed to.
§ Lord Trefgarne moved Amendments Nos. 76 and 77:
§ [Printed above.]
§ The noble Lord said: My Lords, I beg to move.
§ On Question, amendments agreed to.
§
Lord Trefgarne moved Amendment No. 78:
Page 44, line 38, after ("under") insert ("the preceding provisions of').
§
The noble Lord said: My Lords, again on behalf of my noble friend, I rise to speak to Amendments Nos. 78 and 79 together.
Amendment No. 79: Page 44, line 38, at end insert—
§ These amendments deal with some remnants of history and provide the Secretary of State with an order-making power to dissolve subsidiaries of NBC which are statutory companies constituted under local Acts of Parliament or an order under the Light Railways Act 1896. There are, I am told, three such NBC subsidiaries. All are dormant companies. It is highly unlikely that any private purchaser would want to acquire these statutory companies. The preferred solution is therefore to dissolve them by order. My Lords, I beg to move.
§ On Question, amendment agreed to.
§ Lord Trefgarne moved Amendment No. 79:
§ [Printed above.]
§ The noble Lord said: My Lords, I beg to move.
§ On Question, amendment agreed to.
§ Clause 48 [General duties of the Bus Company]:
§ [Amendments Nos. 80 to 82 had been withdrawn from the Marshalled List.]
§ Clause 49 [The Bus Company's powers of disposal]:
§
Lord Trefgarne moved Amendment No. 83:
Page 46, line 12, leave out from beginning to first ("the") in line 13 and insert ("any subsidiary of theirs")
§ The noble Lord said: My Lords, I beg to move.
§ On Question, amendment agreed to.
§
Lord Trefgarne moved Amendment No. 84:
Page 46, line 15, leave out ("any of their subsidiaries") and insert ("that subsidiary")
§ The noble Lord said: My Lords, I beg to move.
§ On Question, amendment agreed to.
§ Clause 52 [Pensions for employees of related companies]:
§ [Amendment No. 85 not moved.]
§ Clause 53 [Financial provisions]:
§ Lord Trefgarne moved Amendments Nos. 86 to 89:
§ [Printed above.]
§ The noble Lord said: My Lords, I beg to move these amendments en bloc.
§ On Question, amendments agreed to.
§ Clause 57 [Passenger Transport Areas, Authorities and Executives]:
§
Lord Brabazon of Tara moved Amendment No. 90:
Page 50, line 35, leave out from beginning to end of line 7 on page 51 and insert—
§
The noble Lord said: My Lords, with the leave of the House, I should also like to speak to Amendments Nos. 92, 102, 105 to 108, 113, 114, 366, 382 and 383.
Amendment No. 92: Page 51, line 38, leave out from beginning to ("and") in line 18 on page 52.
Amendment No. 102: After Clause 57, insert the following new clause:
("Local government reorganisation: transport functions.
.—(1) The following provisions of this section shall have effect from the abolition date within the meaning of the Local Government Act 1985 (that is to say, 1st April 1986).
(2) In section 9 of the 1968 Act (as amended by section 57(1) of this Act)—
(3) In the Local Government Act 1985—
and provisions of that Act referring generally to that Act, or to any provision made by or under that Act, shall have effect as if subsections (1) and (2) above were contained in that Act.").
Amendment No. 105: Schedule 3, page 144, line 29, after ("(4)") insert ("(i)").
Amendment No. 106: Page 144, leave out lines 31 to 33 and insert (" "The Authority for the Executive's area";
Amendment No. 107: Page 144, leave out lines 36 to 42 and insert—
("Power to make grants
13. The Authority shall have power to make grants to the Executive for any purpose.").
Amendment No. 108: Page 144, line 44, leave out from ("Wales") to end of line 46 and insert ("for the words "for the designated area and to each of the councils of constituent areas" there shall be substituted the words "and to each of the councils of the districts comprised in the county which is coterminous with or includes the Executive's area".").
Amendment No. 113: Page 147, line 17, leave out ("county council") and insert ("Authority").
Amendment No. 114: Page 148, line 14, leave out paragraph (a) and insert—
Amendment No. 366: Schedule 7, page 169, line 44, column 3, leave out from (" 14(3)") to end of line 46 and insert—
("as it applies to Scotland, the words "for the designated area".").
Amendment No. 382: Page 173, line 36, at end insert—
| ("1985 c. 51. | The Local Government Act 1985. | In section 42(1)(c), the words "which is or was coterminous with a metropolitan county". |
| In Schedule 12, paragraphs 1, 2, 3(2) and 4. | ||
| In Schedule 14, paragraph 59(1)(e)."). |
§ Amendment No. 383: Clause 132, page 134, line 14, after ("section") insert (", section (Local government reorganisation: transport functions) of this Act").
§ These amendments are consequential on the enactment of the Local Government Act 1985. Section 39 and Schedule 12 to that Act were intended to effect the transfer of passenger transport functions to the joint board PTA on 1st April 1986. My Lords, I beg to move.
§ On Question, amendment agreed to.
576§ Lord Brabazon of Tara moved Amendment No. 91:
Page 51, line 32, after ("(5)") insert (", as it applies to England and Wales").
§ The noble Lord said: My Lords, this amendment is consequential on the reinstatement of Scotland in Section 9(5) of the Transport Act 1968 with amendments now in Clause 57(1)(c). It is therefore necessary to restrict the amendment to Section 9(5) in subsection (1)(b) to England and Wales. This is a minor technical amendment. My Lords, I beg to move.
§ On Question, amendment agreed to.
§ Lord Brabazon of Tara moved Amendment No. 92:
§ [Printed earlier: col. 574.]
§ The noble Lord said: My Lords, I have spoken to this amendment with Amendment No. 90. My Lords, I beg to move.
§ On Question, amendment agreed to.
§
Following is the text of the amendment (No. 92):
Page 51, line 38, leave out from beginning to ("and") in line 18 on page 52.
§
Lord McIntosh of Haringey moved Amendment No. 93:
Page 52, line 19, at end insert—
("() Subject to the following provisions of this Act, the Executive for any passenger transport area shall continue to be responsible for the operation of public passenger transport services in accordance with general policies determined by the Authority for that area (such services being operated, as from the coming into force of a scheme under section 58 of this Act, by a company formed by the Executive under that section or, as the case may be, by companies so formed under section 60 of this Act), and the Authority shall continue to be responsible for the formulation of general policies for the provision of such services and other passenger transport services to be provided or secured by the Executive.").
§
The noble Lord said: My Lords, in moving this amendment I should like, with the leave of the House, to speak to Amendments Nos. 103 and 104, 109 to 111, 120 to 123, 128 to 132, 134 to 137, 139 to 143, 162 to 170, 186, 188 to 190, 194 to 201 and 211.
Amendment No. 103: Schedule 3, page 144, line 19, leave out ("and").
Amendment No. 104: Page 144, line 23, at end insert ("and () subsection (8) shall be omitted").
Amendment No. 109: Page 145, leave out lines 2 to 8 and insert ("subsections (1)(a), (2) and (3) shall be omitted")
Amendment No. 110: Page 145, leave out line 10.
Amendment No. 111: Page 145, leave out lines 13 and 14.
Amendment No. 120: Clause 58, page 57, line 18, leave out subsection (8).
Amendment No. 121: Page 57, line 33, at end insert ("but subject as provided in section 72(2) of this Act")
Amendment No. 122: Page 57, line 36, leave out ("otherwise than in accordance with subsection (8) above")
Amendment No. 123: Clause 59, page 58, line 18, leave out subsections (5) and (6).
Amendment No. 128: Page 58, line 35, leave out from ("Act") to end of line 36.
Amendment No. 129: Page 58, line 40, leave out ("or have the powers under section 10(1)(i) and (viii)")
Amendment No. 130: Clause 60, page 59, line 2, leave out from ("the") to ("place") in line 4 and insert ("initial company has been formed by the Executive,")
Amendment No. 131: Page 59, line 5, leave out ("that Authority") and insert ("the Executive for that area")
577
Amendment No. 132: Page 59, line 6, leave out ("Authority") and insert ("Executive")
Amendment No. 134: Page 59, line 42, leave out ("Authority") and insert ("Executive")
Amendment No. 135: Page 60, line 7, after ("the") insert ("Executive and the")
Amendment No. 136: Page 60, line 11, after ("the") insert ("Executive and the")
Amendment No. 137: Page 60, line 15, leave out ("Authority") and insert ("Executive")
Amendment No. 139: Page 60, line 26, leave out ("Authority") and insert ("Executive")
Amendment No. 140: Page 60, line 27, leave out ("Authority") and insert ("Executive")
Amendment No. 141: Page 60, line 40, leave out ("Authority") and insert ("Executive")
Amendment No. 142: Page 60, line 45, leave out ("Authority") and insert ("Executive")
Amendment No. 143: Page 61, line 1, leave out ("Authority") and insert ("Executive")
Amendment No. 162: Clause 69, page 72, line 18, leave out from ("Executive") to end of line 19.
Amendment No. 163: Page 72, line 21, leave out ("Authority") and insert ("Executive").
Amendment No. 164: Page 72, line 23, leave out ("Authority") and insert ("Executive").
Amendment No. 165: Page 72, line 40, leave out from ("Executive") to ("of) in line 41.
Amendment No. 166: Page 73, line 8, leave out paragraph (a).
Amendment No. 167: Page 73, line 12, leave out from ("Executive") to ("are") in line 13.
Amendment No. 168: Clause 70, page 74, line 24, leave out ("Authority") and insert ("Executive").
Amendment No. 169: Page 74, line 26, leave out from ("activities") to ("which") in line 27.
Amendment No. 170: Page 74, line 27, leave out ("those") and insert ("their").
Amendment No. 186: Clause 72. page 76, line 39, leave out ("a Passenger Transport Authority").
Amendment No. 188: Page 77, line 5, leave out ("Authority") and insert ("Executive").
Amendment No. 189: Page 77, line 8, leave out ("Authority") and insert ("Executive").
Amendment No. 190: Page 77, line 27, leave out ("Authority") and insert ("Executive").
Amendment No. 194: Clause 76, page 79, line 34, leave out ("Authority") and insert ("Executive").
Amendment No. 195: Page 80, line 7, leave out ("Authority") and insert ("Executive").
Amendment No. 196: Page 80, line 21, leave out ("Authority") and insert ("Executive").
Amendment No. 197: Page 80, line 24, leave out ("Authority") and insert ("Executive").
Amendment No. 198: Page 80, line 37, leave out ("Authority") and insert ("Executive").
Amendment No. 199: Page 81, line 2, leave out ("Authority") and insert ("Executive").
Amendment No. 200: Page 81, line 5, leave out ("Authority") and insert ("Executive").
Amendment No. 201: Clause 77, page 81, line 16, leave out ("Authority") and insert ("Executive").
Amendment No. 211: Clause 81, page 85, line 20, leave out ("Authority") and insert ("Executive").
§ I apologise for bringing forward 45 consequential amendments. I am sorry to say that it is not a record. The noble Earl, Lord De La Warr, in moving amendments on the same subject at Committee stage, moved no fewer than, according to his count, 50 consequential amendments. It is a measure, not, I think, of our incompetence on this side, but of the 578 complexity of the subject and the complexity of the Bill, that forces us to proceed in this way.
§ The noble Earl, Lord De La Warr, at the end of the debate on these amendments, having been refused by the noble Lord, Lord Belstead, even the possibility of consultation on the subject during the Recess—the noble Lord said that he was very pleased to meet his noble friend at any time, but not on these amendments—said that he would go away and think about the amendments and prepare the way in which they should come forward at Report stage, because he felt that the issue was one which would be argued inside the Chamber and outside the Chamber, in the regions and in Marsham Street. I have no knowledge as to whether it has been argued in Marsham Street, but it certainly needs to be argued again in this Chamber. I have now had the opportunity to study much more closely the reply of the noble Lord, Lord Belstead, and a glimmer of light has come to me. I see where the mistakes in his reasoning lie more clearly than I was able to at Committee stage.
§ Let me very briefly restate the basic argument. What the Bill provides is that there shall still be passenger transport authorities in the metropolitan areas which will become joint boards and that there will still be passenger transport executives. The role of the passenger transport authorities—and these will be bodies elected by the various district councils consisting of councillors—will be that they will have the shares in the PTE's initial bus operating company, but they will not have the responsibility for providing the service. That is the basis of this amendment, that we restore to the passenger transport authorities responsibility to the electorate for the level of service to be provided and we keep with the passenger transport executive—the bus professionals—responsibility for the operation of the public passenger transport services, in accordance with the general policies determined by the authority for the area. That seems to us to be the correct division between the role of the politicians in the passenger transport authorities and the bus professionals in the passenger transport executives.
§
In answer to that argument, put very cogently by the noble Earl, Lord De La Warr, in Committee, the Government said that they followed this as being an alternative configuration but they thought that the distinction between the politicians and the bus professionals could be achieved in a different way. What the noble Lord, Lord Belstead, said was that the role of the politicians could be achieved by their nomination to the boards of the operating company or companies even of councillors. I quote from col. 907. In proposing this the noble Lord, Lord Belstead, used words which could well have come from Bernard Shaw's Common Sense in Municipal Socialism. He said:
The Government are convinced that it is the ratepayers. through their elected representatives, who should benefit directly from any profits generated by the companies and from the proceeds of any disposals." [Official Report, 18/7/85]
§
I do not disagree in any way with that, but I disagree with the implication with regard to the responsibilities of those who have to answer to the electors and the responsibilities of those who have to make decisions about the services to be provided not just by one
579
company but, the Government hope, by a number of different companies. The noble Lord said that,
controlling the company may bring a much greater sense of reality to the PTA than might prevail under my noble friend's alternative."—[col. 907.]
§ The best way to secure a sense of reality for the passenger transport authority would be if the passenger transport authority, consisting of politicians, had at its service a body of bus professionals not merely in the boards of the operating companies but responsible for securing the effect of the policy decisions of the PTA across all companies and across all services in the area. That is the commonsense experience of everybody in local government.
§ One does not, I hope, have councillors going out and carrying administrative burdens. I know that the noble Lord, Lord Boyd-Carpenter, has on many occasions criticised Labour councillors for doing just that. I have to say that I agree with him. I do not believe in full-time councillors. I believe that councillors should be responsible for political policies, not for carrying them out. Yet that is exactly what the Government are proposing here. The Government are proposing that the PTA should own the shares in the operating companies and should indeed appoint councillors to the boards of the operating companies while the tendering procedure, the responsibility which ought to be with the bus professionals, is no longer available to the PTA as a whole across the entire area. They are missing out an important and essential link in the management of our bus services.
§ I understand the politics behind this, and I do not use "politics" as a dirty word. I understand the desire of the Secretary of State not to have the continuation of inflated bureaucracies in passenger transport executives. I am sure that that is the thinking behind it. But in Committee the noble Earl, Lord De La Warr, very adequately dealt with that. He conceded and indeed proposed that the professional staff of the PTEs should be as slim-line as possible; that they should be bodies of people not carrying out executive responsibilities but responsible for the tendering procedures and responsible for ensuring that the political policies of the authority are carried out; and that such bodies could be numbered in tens and dozens rather than in hundreds and thousands of staff.
§ The Government said that the tendering process was properly the concern of the PTE. I agree entirely. It is certainly proper that there should be a body of bus professionals who are able to look at the tenders received from the former municipal undertaking. I beg your Lordships' pardon; I should have said the former PTE operation (one gets confused, with the different terminology used in different parts of the country) now called a company, and any other operators who choose to tender for services. It is certainly correct that those should be in single hands and that the hands should be those of the PTE.
§ But how are they going to look at the tenders except from a purely financial point of view? Surely they have the responsibility of seeing to it that the tenders taken together provide the level of service which is required for the area and the level of service and the type of service which is laid down in general policy decisions by the passenger transport authority. That is the whole 580 thinking behind the Act, as I understand it, and that is exactly what will be happening outside the metropolitan areas. Why should there be only in this case, only in the metropolitan areas, the divorce between the responsibility for the tendering process and the responsibility for securing the implementation of the policy decisions of the politicians in the area?
§ 3.15 p.m.
§ I described this at the Committee stage as turning business logic on its head. I did not understand then why it was being done. I have little more understanding now of why it is being done. I have even less sympathy with the reasons for it than I did at the time. There is no threat of vastly inflated bureaucracies in the passenger transport executives. If that were to be proposed then the passenger transport authorities who would have to carry the financial burden and report back to the ratepayers would certainly see to it that that did not happen.
§ The principal failure in logic in the Government's argument is that they see the responsibility of politicians as being only to take part in the management of operating companies. It is certainly the responsibility of the management of operating companies to make a profit and to provide a decent service for those passengers on their routes. What the Government neglect in the pattern they propose is the overall responsibility for the whole area for a level of service which is acceptable to the people and for which they are prepared to pay. Such a service and such a responsibility can be achieved only by a body of bus professionals reporting to politicians who in turn report back to the electorate. That is what is proposed in these amendments. I beg to move.
§ Lord TeviotMy Lords, I utterly support the noble Lord, Lord McIntosh, who has made a most interesting and witty speech. I could rise to say just that and then sit down, but I shall go through one or two nuts and bolts. As the noble Lord rightly said, these amendments were introduced originally by my noble friend Lord De La Warr, whose idea they were. One misses very much his presence today. By no means do I consider myself a replacement for him. The idea fell as flat as a pancake at the Committee stage. I hope that it is not just one of those things that one tosses over on Shrove Tuesday but one of those pancakes that will rise today. However, from my noble friend's reply the Government are unaware of the risk of transferring ownership of passenger transport executive buses to passenger transport authorities. At the present time the PTEs have three main functions: first, bus operations; secondly, securing the provision of other bus and train services; and, thirdly, planning the integrated transport system. The most important of these and the one involving the greatest resources, both financial and manpower, is bus operations. The other two functions are complementary to bus operations.
In the last two or three weeks of the recess I have been travelling around and have visited no fewer than four PTEs. I saw that bus operation is organised in different ways in different passenger transport executives. There is no worry about that because the differences reflect the various local needs. The 581 organisational arrangements have changed from time to time, reflecting the development of individual PTEs. Bus operation in large urban areas is a highly complex matter, drawing on a wide range of professional and managerial skills.
Perhaps I may briefly colour the picture. I visited one large important city in the north. When visiting these areas one does not want to be closeted with the man at the top in the boardroom, so one asks to see all kinds of people. Those people at the top readily respond and one gets handed over. On this occasion I was handed over to the chief inspector, who was immaculately dressed and was about six feet six inches tall. He took me around on a bus service and then one saw the peak operation between 5 p.m. and 6 p.m. in the central bus station and in the high street. If this man had produced a paystick I should not have been in the least surprised. He had eyes in the back of his head. There were literally hundreds of people emerging, with buses following. It was all highly impressive. Although one wishes the Bill to come forward, your Lordships must be aware that that side of the operation in the PTEs—the bus services—is well run. I am not going to talk about fares policy or any such thing, but as far as running the services to the public are concerned, it is impossible to imagine that they could be bettered.
Back to the dull stuff—although it is not quite so dull. The Transport Bill proposes that the PTE's bus operations should be separated from the other roles of the PTE, which in future will consist of two prime functions. The first is, securing the provision of public passenger transport services that are not provided commercially, and doing this by way of a tendering process. The second is managing the concessionary fare arrangements.
The mechanics by which the PTEs are to dispose of their bus operations is by the establishment, under the Companies Acts, of an initial public transport company (the initial company). The precise scheme of arrangement is to be sent to the Secretary of State not later than 1st March 1986. The Secretary of State has power to approve or modify a PTE-submitted scheme, or he may substitute his own scheme. The PTE, having established the initial company, must, as the Bill stands, transfer that company to the PTA.
It is that latter point with which we disagree and seek by this amendment to change. At the present time most PTEs organise their operations in a delegated manner through an area, district or divisional structure. The setting up of a company structure would only be an extension of those developments. Setting up a company under companies legislation would put the company on a par with NBC or SBG subsidiaries and other bus operators. We are happy with those proposals but feel it is essential that the companies are retained under professional control as opposed to political control—as the noble Lord, Lord McIntosh, has very much emphasised.
As indicated previously, bus operation is a highly professional job—particularly in the commercial environment that will exist following the enactment of this Bill. This company will have to react quickly to the demands of the market and will have at the same time to earn profits. This will use the marketing, operating and business skills of PTE managers to the 582 full. The financial performance of both the NBC and SBG has been achieved because they are unfettered by political control and all which that implies. PTEs react to demand today but within the policies of the PTAs—currently, the metropolitan county councils. There is no doubt that in future they will react positively to market demands but they must not be fettered by political controls, which they will be as the Bill stands at the moment.
Since the initial company must trade profitably—both by successful operation of its own commercial services and by the winning of services under the tendering arrangements—it cannot take on board political matters, as PTEs have had to do previously because of their acceptance of subsidies from public funds. If the initial company is transferred to the passenger transport authority as the Bill proposes, it will have the power to appoint the directors. It is likely that some, and possibly a majority, of them will be political appointments. If that occurred the professionals would be prevented from acting commercially, as the Bill intends or the Companies Acts require. Surely this cannot be what the Government desire.
Under our proposals the roles of bus operating, on the one hand, and tendering and concessionary fare matters, on the other, would be distinct and separate. Bus operations would be transferred, as the Bill proposes, to the initial company—which would be a subsidiary company at arm's length from the PTE. The tendering and concessionary fare arrangements and the necessary financial administration would be in another and separate division. I commend this amendment to your Lordships on all sides of the House, and especially in my own part of it. I hope that all will consider this set of amendments very seriously.
§ Lord UnderhillMy Lords, I am certain it will be agreed that my noble friend, in proposing this amendment, set out very clearly the relative roles of the transport executive, as the professionals, and local councillors. I remind noble Lords of the Local Government Act. I shall not go over the arguments again because that Act is now law and we have abolition. However, it will be recalled that under the Act we now have the joint transport committees comprising representatives from district councils. It was argued that that provision would give direct contact with local communities because representatives from district councils would make up the joint transport board.
Unless this amendment is carried, nonsense will be made of the Government's desire to see to it that transport requirements rest with the joint transport authority and with the representatives of the district councils. The Government will have to tell us whether they were being sincere when they put forward their proposals for the effective operation of the joint transport boards in the metropolitan areas.
Reference has been made to the tendering process. Obviously, the transport executive, being the professionals, will play a very great part in this. But assuming that the requirements of the transport executive, in the subsidising of the tendering process, are more than the elected representatives can meet, who then will take the decision? Surely it is not a 583 decision for executive operators. It is a decision as to what is best in the interests of the community—which can only be determined by the elected representatives serving on the joint transport board.
If the Minister should say that we have to look after the question of finance, then I seem to recall that we spent hours and hours in this Chamber in 1983 discussing the principle of protected expenditure levels whereby in the metropolitan areas that expenditure is set for the authorities by the Government. Moreover, when the joint committees are established in those areas, for the first three years their expenditure and resources will be directly controlled by the Government through the Secretary of State. Therefore, there is no fear on that score.
Surely we must see to it that the elected representatives will, when it comes to matters of policy, have the final decision. The important decision will be that of determining not only transport requirements on the advice of the executive who are the professionals but also, in deciding which services will have to go out to tender, whether the tendering requirements are greater than that which the local authority has the finances to meet.
§ The Minister of State, Department of Agriculture, Fisheries and Food (Lord Belstead)My Lords, the noble Lord, Lord McIntosh, reminded the House that at the Committee stage we had a full debate on some 50 amendments moved by my noble friend Lord De La Warr on this particular subject, and we are now having a debate on the 45 amendments to which the noble Lord opposite has spoken. It is the case that, when we had the previous debate three months ago, I said on behalf of the Government that it was our view that the ownership of the shares of the new public transport companies in the metropolitan areas ought to be held by the PTAs.
The reason why I said that was that the passenger transport authorities for the future in those metropolitan areas will, as the noble Lord, Lord Underhill, has just reminded us, be made up through a joint board arrangement of district council representatives. They are representatives of the ratepayers who, over the years, have put a great deal of money into running buses in the metropolitan areas.
3.30 p.m.
The fact of the matter is that when the passenger transport executives were formed originally in those metropolitan areas each acquired by statutory transfer the assets of local municipal undertakings. Over the past 10 to 15 years these assets of course have depreciated and have had to be replaced. The cost of replacement has been an element in the calculation of revenue support paid to the passenger transport executives by their county councils, and therefore there has been a substantial and a continuous flow of funds from the ratepayers in Yorkshire, Tyneside and the West Midlands, and in the other former metropolitan areas. There has been a continuous flow of money coming from the ratepayers to the passenger transport executives which have been more or less all-powerful until now, for the purpose of maintaining bus services. I do think—and I do ask your Lordships whether you 584 do not agree—that it is surely right that the ownership of the new passenger transport companies to be set up by the Bill should remain in the hands of the representatives of the ratepayers.
In saying that, I am the first to recognise that the PTEs have employed highly competent managers and take pride in the vehicle fleets they have been controlling. But I say to my noble friend Lord Teviot that clearly many highly professional management staff are going to be transferring from the PTEs to the new companies and there is no reason to believe that the quality of management of the new passenger transport companies will be in any way reduced by the fact that the companies are actually owned by the PTAs. Indeed, Clause 70 of this Bill ensures that professional transport expertise has to be represented at board level. In this respect the role of the PTA is directly comparable to that of the district councils which will be owning the bus companies which are currently municipal operators in the shire counties.
Although I was interested to hear the speech of the noble Lord, Lord McIntosh of Haringey, and particularly also the speech of the noble Lord, Lord Underhill, because this is the first time we have welcomed him to the debates on this Bill, if I may say so I found there was something of a conflict between those two speeches. On the one hand, it seemed to me that the noble Lord, Lord Underhill, was saying that the Government in some way were going to have to answer the question, "How much control is there for the district councils representing the ratepayers of bus operations in their areas in the future?" Whereas, on the other hand, the noble Lord, Lord McIntosh, complained that the new PTAs in the metropolitan areas which will be comprised, of course, as joint boards by the district councils, are going to have too much power.
The main burden of the speech of the noble Lord, Lord McIntosh, was the argument that the public transport company in fact will be harmed by political control even if professional managers are represented on the board. But it is the company's directors who will have day-to-day control of the affairs of the company. They will have the responsibility for ensuring the company remains solvent and wherever possible that it flourishes commercially. The public transport authorities which are joint boards made up of the metropolitan district councils have nothing to gain by acting in an uncommercial way. If, after all, the company of which they are the shareholders is able to pay them substantial dividends they will have the choice of how to use that money either to ease the burdens on the ratepayers by reducing the necessary precept level to maintain service levels, or to increase service levels by making money available for extra subsidies.
It was implicit in both speeches that this will not happen because, as my noble friend Lord Teviot said, all that goes with political control—the suggestion that the companies will be forced into uncommercial policies because there is local authority ownership. Apart from the fact that I think that is hardly fair to the local authorities, what would the joint board made up of district councils possibly gain from acting in such a way? Any such action would be very short-sighted. Each year the joint board of the PTA would find an 585 increasing burden arising from the growing weakness of its companies as each year competition against them gained ground.
Before I give way to my noble friend Lord Teviot, may I say that surely it must be right that the shares of the new arm's-length companies, whether we are talking about the former metropolitan areas or the shire districts, should be held by representatives of the ratepayers who provided so much of the resources and which will be transferred to the new companies. Surely that must be common sense. Indeed, I think the noble Lord, Lord McIntosh of Haringey, said it sounded like Bernard Shaw's Common Sense in Municipal Socialism—a volume which, of course, I always keep by me!
§ Lord TeviotMy Lords, I am grateful to my noble friend Lord Belstead for giving way and for all he said in comment on my remarks. But we have recently had a rather unfortunate experience with London Transport. One must come right out in to the open. Surely we do not want any such situation; there was a body there dominated by political control. The question I would like to ask him is this: are the Government absolutely certain that that is not going to happen? Are they certain it is not going to be very damaging, because curiously enough, this whole group of amendments, which one is delighted the Opposition took on board, does show that from all sides we are trying to make this Bill work—
§ Lord Nugent of GuildfordMy Lords, may I point out that this is the Report stage, and the noble Lord, Lord Teviot, has already spoken once.
§ Lord TeviotMy Lords, my noble friend did give way.
§ Lord Nugent of GuildfordMy Lords, the noble Lord should make an intervention, not a speech.
§ Lord BelsteadMy Lords, if I may finish replying to my noble friend Lord Teviot, we are not talking about London but about areas which will have passenger transport authorities under the new Bill, and passenger transport executives still; in other words, the metropolitan areas. We are not talking about London. In distinction from my noble friend, I am afraid I am not delighted to see these amendments, although this is an interesting debate, because I think it would be clear folly for the passenger transport authorities representing the ratepayers not to hold the shares. I do not believe they would do other than make the company's success their objective in all they do.
Before I sit down, may I just add that I am sure the new companies will carry on the tradition of careful stewardship of the ratepayers' assets and that the joint boards will share our wish that the companies should flourish. The Government believe it is right that the shareholder control of public sector companies should rest with elected members, and that is what the division of responsibilities provided for in the Bill will achieve.
§ Lord McIntosh of HaringeyMy Lords, it is clearly my fault that I failed to communicate my thinking 586 adequately to the Government because the noble Lord, Lord Belstead, devoted a great part of his speech to an issue not concerned with this amendment and which I did not introduce, and on which I do not really disagree with him. I am not saying for a moment that there should not be ultimate political control over the assets of the successor operating companies. I did not disagree with the noble Lord that the investment has been made by the public through the public transport authorities, and that any profits should return to the public in that way. The noble Lord said it during Committee stage and he has said it again today. Nothing I have said in this debate has contradicted that.
I was trying to secure a quite different objective: that there should be a clear distinction between the responsibilities of the elected politicians and the bus professionals. The responsibilities of the elected politicians, in the view of those who support this amendment, should be the disbursement of public funds for the financing of socially necessary services, including community facilities, attendant services, bus stations, park-and-ride facilities, and so on—all of these are socio-political decisions which should be taken by elected members—and decisions on priorities for the allocation of resources between different worthy objectives within a total available and reasonable transport budget. The way that the public, through their elected representatives, can achieve those objectives is through an elected body—we should prefer that it should not be a joint board but Parliament has decided that is what it will be—advised by a body of professionals responsible to it: in other words, the passenger transport executive.
On the other hand, what the Government are proposing is that the passenger transport executive—the non-elected body—should have the responsibility for securing the provision of such passenger transport services as it considers appropriate to meet any public transport requirements in the area. The responsibility for deciding what are the public transport requirements of the area is a democratic responsibility. It should be the responsibility of a democratically elected body, not the bus professionals. That is our criticism of the Bill as drafted. We then say that the passenger transport executive should have the responsibility for administering the procedures for the provision of the socially necessary services which have been decided by the politicians in their wisdom or lack of wisdom, together with the proper management of the assets entrusted to it.
§ Lord BelsteadMy Lords, may I ask the noble Lord a genuine question? We have 45 amendments in front of us and I want to be absolutely certain what the effect of them will be. I understood the noble Lord, at the beginning of his wind-up speech, to say that the ownership of the new companies is not in dispute. I said, on behalf of the Government, that we felt it should lie with representatives of the ratepayers. That is the basic point—who should be the holding company? There is no difference. My understanding of the amendments is that the PTE would be responsible for both owning the bus company and, indeed. for tendering; which is a point the noble Lord was moving on to but which I will not take up with him. This is my 587 basic question: is it not the case that the effect of these amendments is that the representatives of the ratepayers would not have control of the monies which they have provided in the past for what are going to be the new bus undertakings of the future?
§ Lord McIntosh of HaringeyMy Lords, that is not my understanding and if I have drafted the amendment wrongly I apologise to the House. My understanding is that the passenger transport executive is responsible to the passenger transport authority. It is a part of prudence on the elected members that they should seek to interpose between themselves and the day-to-day managment a body of bus professionals who are responsible to them. I am saying that it is not good enough to have councillors sitting on the boards of the operating companies because the interests of the operating companies—which are perfectly proper and respectable capitalist interests—are not necessarily the interests of the passengers in the area as a whole, who want a complete network including profitable and unprofitable services.
I ask the House only two questions. First, how does the network of services—the commercial and the tendered services—best mesh? Is it to be achieved by the individual bus companies, sometimes with politicians on their boards (what happens when they disagree and the politicians are from the same party?) with the politicians in the position of directly fighting the companies; or by having bus professionals serving the interests of social policy and passenger transport policy in the area concerned? I suggest that it must be the second alternative.
Secondly, how is the public interest best protected? Is it best protected by councillors serving on the boards of operating companies, or is it by them doing what I have just proposed and setting the policy, seeing that it is implemented by a body of professionals responsible to them and, through them, to the people of the area? That is the issue to which the noble Lord, Lord Belstead, did not really address himself in his reply but chose instead to talk about assets as if that were the significant issue.
I do not claim that this is an insignificant drafting amendment simply designed to help the Government out of a self-imposed difficulty. I am saying that it is a profound misunderstanding by the Government of the relationship between ratepayers' and taxpayers' interests, public money and the services which are to be provided. I do not think that on the basis of the answer which we have been given by the Government I can possibly withdraw this amendment.
§ Baroness Carnegy of LourMy Lords, I am not clear, and I wonder whether the House is clear, on what the noble Lord is saying. As I understand it—and I listened very carefully to the noble Lord—the amendment states:
the Executive for any passenger transport area shall continue to be responsible for the operation… in accordance with general policies determined by the Authority".That does not mean that the authority is responsible; it means that the executive is responsible, if I understand the drafting correctly. It is the authority that has the elected members on it and which should, 588 my noble friend on the Front Bench is suggesting, because it has resources which come from the ratepayers, have the elected people on it. The executive would be doing the technical job. The amendment is turning the thing on its head, surely, and saying that the executive should continue to be responsible. Can the noble Lord tell us what he does mean? Is the executive to be responsible, or is it not?
§ Lord McIntosh of HaringeyMy Lords, the executive is responsible to the authority. Clearly, I am not myself this afternoon as I am not making myself understood. The authority consists of elected representatives who have the responsibility of representing the diverse interests of ratepayers in their area. They set out the policy. It is the responsibility of the executive, which has bus professionals reporting to it, to implement that policy. It implements that policy through a series of powers, some of which are given in the Bill, such as control of the tendering procedure, and some of which we propose to give them, such as the implementation of the policy to secure an adequate network. If I continue it will become more difficult. Policy is for the politicians with implementation and advice from the professionals— that is what we are about.
§ 3.47 p.m.
§ On Question, Whether the said amendment (No. 93) shall be agreed to?
§ Their Lordships divided: Contents, 93; Not-Contents, 102.
589| DIVISION NO. 1 | |
| CONTENTS | |
| Airedale, L. | Hunt, L. |
| Amherst, E. | Hunter of Newington, L. |
| Attlee, E. | Irving of Dartford, L. |
| Aylestone, L. | Jacques, L. |
| Barnett, L, | Jeger, B. |
| Beaumont of Whitley, L. | Jenkins of Putney, L. |
| Beswick, L. | John-Mackie, L. |
| Blease, L. | Kagan, L. |
| Blyton, L. | Kearton, L. |
| Boston of Faversham, L. | Kinloss, Ly. |
| Bottomley. L. | Leatherland, L. |
| Carmichael of Kelvingrove, L. | Llewelyn-Davies of Hastoe, B. |
| Clancarty, E. | Lockwood, B. |
| Cledwyn of Penrhos, L. | McIntosh of Haringey, L. |
| Collison, L. | McNair, L. |
| Crawshaw of Aintree, L. | Mellish, L. |
| David. B. | Mishcon, L. |
| Davies of Penrhys, L. | Molloy, L. |
| Dean of Beswick, L. | Morton of Shuna, L. |
| Diamond, L. | Nicol, B. |
| Donaldson of Kingsbridge, L. | Oram, L. |
| Dowding, L. | Paget of Northampton, L. |
| Elwyn-Jones, L. | Phillips, B. |
| Ezra, L. | Ponsonby of Shulbrede, L. [Teller.] |
| Fisher of Rednal, B. | |
| Fitt, L. | Prys-Davies, L. |
| Foot, L. | Rea, L. |
| Gallacher, L. | Rhodes, L. |
| Galpern, L. | Roberthall, L. |
| Gladwyn, L. | Rochester, L. |
| Glenamara, L. | Sainsbury, L. |
| Graham of Edmonton, L. | Seear, B. |
| Grey, E. | Sefton of Garston, L. |
| Hampton, L. | Serota, B. |
| Hatch of Lusby, L. | Shaughnessy, L. |
| Hayter, L. | Shepherd, L. |
| Hughes, L. | Shinwell, L. |
| Stallard, L. | Tordoff, L. [Teller.] |
| Stedman, B. | Underhill, L. |
| Stewart of Fulham, L. | Wallace of Coslany, L |
| Stoddart of Swindon, L. | Walston, L. |
| Strabolgi, L. | Wells-Pestell, L. |
| Strauss, L. | Whaddon, L. |
| Taylor, L. | White, B. |
| Taylor of Gryfe, L. | Willis, L. |
| Taylor of Mansfield, L. | Winstanley, L. |
| Teviot, L. | Winterbottom, L. |
| NOT-CONTENTS | |
| Ailesbury, M. | Hives, L. |
| Airey of Abingdon, B. | Holderness, L. |
| Aldington, L. | Hooper, B. |
| Alexander of Tunis, E. | Hylton-Foster, B. |
| Ampthill, L. | Kaberry of Adel, L. |
| Arran, E. | Kimball, L. |
| Auckland, L. | Kitchener, E. |
| Belhaven and Stenton, L. | Long, V. |
| Beloff, L. | Lucas of Chilworth, L. |
| Belstead, L. | McAlpine of Moffat, L. |
| Boyd-Carpenter, L. | McFadzean, L. |
| Brabazon of Tara, L. | MacLehose of Beoch, L. |
| Brougham and Vaux, L. | Macleod of Borve, B. |
| Broxbourne, L. | Mancroft, L. |
| Butterworth, L. | Margadale, L. |
| Caccia, L. | Marley, L. |
| Caithness, E. | Merrivale, L. |
| Cameron of Lochbroom, L. | Mersey, V. |
| Campbell of Alloway. L. | Monk Bretton, L. |
| Campbell of Croy, L. | Mottistone, L. |
| Camegy of Lour. B. | Mowbray and Stourton, |
| Chelwood, L. | Moyne, L. |
| Coleraine, L. | Norfolk, D. |
| Cottesloe, L. | Nugent of Guildford, L. |
| Cowley, E. | Porritt, L. |
| Cox, B. | Portland, D. |
| Cullen of Ashbourne, L. | Rawlinson of Ewell, L. |
| Davidson, V. | Reay, L. |
| De Freyne. L. | Rochdale, V. |
| Denham, L. [Teller.] | Rodney, L. |
| Drumalbyn, L. | St, Davids, V. |
| Ebbisham, L. | Saltoun of Abernethy, Ly |
| Ellenborough, L. | Sanderson of Bowden, L. |
| Elliot of Harwood, B. | Selkirk, E. |
| Elliott of Morpeth, L. | Simon of Glaisdale, L. |
| Elton, L. | Skelmersdale, L. |
| Faithfull, B. | Somers, L. |
| Foley, L. | Stamp, L. |
| Fortescue, E. | Sudeley, L. |
| Fraser of Kilmorack, L. | Suffield, L. |
| Gain ford, L. | Swinton, E. [Teller.] |
| Gibson-Watt, L. | Tranmire, L. |
| Glanusk, L. | Trefgarne, L. |
| Gray of Contin, L. | Trumpington, B. |
| Gridley, L. | Vaux of Harrowden, L. |
| Hailsham of Saint Marylebone. L. | Vickers, B. |
| Vivian, L. | |
| Halsbury, E. | Ward of Witley, V. |
| Harmar-Nicholls, L. | Whitelaw, V. |
| Harvey of Prestbury, L. | Wise, L. |
| Harvington, L. | Young, B. |
| Henley, L. |
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 3.56 p.m.
§
Lord Carmichael of Kelvingrove moved Amendment No. 94:
Page 52, line 26, leave out ("to meet") and insert ("in fulfilment of the Authority's policies for meeting").
§
The noble Lord said: My Lords, it may be for the convenience of the House if we take Amendments Nos. 94, 95 and 96 together.
590
Amendment No. 95: Page 52, line 33, after ("policies") insert—
Amendment No. 96: Page 52, line 37, leave out ("duty") and insert ("duties").
§ These amendments are to clarify the respective roles of the passenger transport authority and the passenger transport executive in metropolitan areas. In particular they will ensure that the elected representatives serving on the authority—at present of course this is the metropolitan county council—who, after abolition on the 1st April, will be nominees of the new district council joint boards, shall have the total responsibility for determining their area's public transport requirements, for making policies regarding the procurement of subsidised services and for determining priorities for the allocation of support in the likely event that not all services which are identified as being required could be afforded. Elected representatives serve the interests of ratepayers and passengers, who benefit from payment of revenue support and other facilities provided in furtherance of their authority's aid policies. The elected representative is accountable to the local community and of course he is also in the front line when there is any criticism of the standard of service and when complaints about the service arise. The councillors, whether elected or nominated to serve on the passenger transport authority, are the proper people to determine their area's public transport requirements.
§ The amendment ensures that elected members of the passenger transport authorities in the metropolitan area will have powers comparable with their counterparts in shire counties in respect of this question of responsibility. What is important about these amendments—so I am advised—is that without them the wording of the Bill is ambiguous. It could be taken to mean that the executive, acting on its own judgment, has final responsibility for determining any public transport requirements which must be met by subsidised services. This would be quite improper, and it would be a wrong and unfair duty to put on the members of the executive, who are people who understand transport and are experts in the running of transport but who are not elected, and whose responsibilities derive from the authority which employs their directors.
§ The task of determining the public transport requirements of an area relates to the understanding of the travel needs of the community as a whole. It involves an assessment of the social and economic characteristics in different parts of the area. It also involves perhaps periodically changing the priorities, which will be decided by the elected representatives and those responsible for raising the money to run the services which are not commercial.
§ They will also determine which locations need to be linked by public transport services. We hope that, and the Government pin a great deal of faith in the belief that, a large number of the services will be provided commercially, but it may not be possible to provide others commercially. That task involves wider considerations than those normally expected of professionals in the industry—making decisions on the non-commercial services and how much money is involved. Most county councils and PTAs employ 591 policy advisers to assist them in their work from a range of professional backgrounds and not just transport. There is access to other advice. Although the metropolitan situation will change on abolition it is essential that the expertise continues to be available.
§ It therefore follows that there are two components to the task laid down in new Section 9A(3). The first is to identify requirements which may differ among different parts of an authority's area and have different priorities attached to them. The second is describing the rules which the executive must follow in securing subsidised services under subsection (1). The officers of the executive will clearly be the main policy advisers. They are the people who know about the running and organisation of transport. They will be the main advisers to the authority and they will apply their operational and planning expertise to determine the best way to meet the requirements of the area through subsidised services once the commercial network is known.
§ However, the authority must be in a position to weigh the executive's advice against other factors and to determine its priorities on wider grounds—for instance, the money and resources that will be available and perhaps the authority's attitude to future development or protecting an existing development —and I find it difficult to understand why the Government do not accept this. We had the example on Monday of Tyne and Wear. It may be important to protect that large asset for the general good of the area.
§ Therefore I think that new Section 9A(3) must make it clear that in all it does the executive is following the policies laid down by the authority. I hope that the Government will give this careful thought, and particularly the possibility of ambiguity in the present wording. I beg to move.
§ Lord BelsteadMy Lords, I do not think that there is anything between the noble Lord and the Government on this, except that I do not think that the amendment is necessary. Under the Bill's provisions new Section 9A(3) to be inserted in the 1968 Act gives to each PTA a duty from time to time to formulate general policies about the description of services which the executive is to secure to meet the public transport requirements within its area. It is therefore quite clear in the Bill that wherever there is such a policy it is the duty of the executive to follow it. Any powers of the PTEs to secure services within their areas are therefore subject to the general policy to control of the PTA.
The noble Lord is saying that that may be so but the Bill does not say it. I think that that is his case. With respect to him, I think that the Bill says it by a cross-reference between Clauses 57 and 86. If the noble Lord cares to glance at Clause 86 he will see quite clearly there that the obligation to invite tenders for subsidised services is for the authority. Although it is true that on page 52 of the Bill, in Clause 57, new Section 9A makes it clear that it is the executive which is actually doing the work of getting the tenders in, because of Clause 86 that will be subject to the general policy on the securing of services by the PTA. I genuinely believe that the noble Lord is omitting to cross-reference between Clauses 57 and 86.
§ Lord McIntosh of HaringeyMy Lords, I should not like to abuse the procedures of Report stage, but before the noble Lord sits down may I continue to read new Section 9A(1) on page 52. It says:
to secure the provision of such public passenger transport services as the Executive consider it appropriate".We are all in agreement with that. The executive is responsible for saying what is the best way of providing services. But it goes on:to meet any public transport requirements within the area".That is quite a different matter. Public transport requirements are a matter not only for the bus professionals but also for those providing the money—the ratepayers and their representatives, the authority.I am sorry to go back to the discussion on the previous amendment, but if I have failed to convince the noble Baroness, Lady Carnegy, I must have another try at it. If this subsection were to say, "as the authority determined were the public transport requirements within the area"—which may be a simpler way to do what my noble friend has asked—I think that we should agree that there was nothing between us, but it does not say that and it is fatally confused and ambiguous, surely.
§ Lord BelsteadMy Lords, I know that it is outside the rules of order, but may I just say this? We are not talking about this on political grounds: we genuinely want to get the wording right. With respect to the noble Lord, Lord McIntosh, he in his turn is not looking at subsection (3) of new Section 9A, which makes it absolutely clear that it is the authority which shall from time to time formulate the general policies. As I said to the noble Lord, Lord Carmichael, it is Clause 86 which makes it clear that in securing services it is the authority which has the overall responsibility, although the PTE, when one goes back to Section 9A, will do the detailed work.
For those reasons I believe that the wording of the Bill achieves what I think both noble Lords opposite and the Government want to achieve. I shall be happy to look at the wording again without any commitment. I do not want noble Lords to feel that I am just going to shut the book and walk away. I shall be very happy to look at what they have said.
§ Lord Carmichael of KelvingroveMy Lords, I am grateful to the Minister for taking it in that spirit. I think that the difficulty between us may lie in the formulation of general policy. Perhaps only annually, six-monthly or every two years, in the determining of policy the authority will need to have more than a general look at transport in the area. I do not intend it to be an interfering, busybody authority, but it will need to raise the money to provide the noncommercial services and will have difficult decisions to make.
The authority will be answerable for the decisions. The Minister could make general decisions for any part of the country, but where there is the need to provide money for particular services, there will have to be the choice of which services are most necessary. The only people who can decide which services are most necessary for the majority in the area and have 593 the responsibility for it are those who provide the money. General policy is not quite enough. If the Minister thinks that over we may on Third Reading have a change.
I am grateful to him at least for agreeing to look at the matter, as he says, without commitment, and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 95 and 96 not moved.]
§
Lord Carmichael of Kelvingrove moved Amendment No. 96A:
Page 52, line 37, at end insert—
("() In formulating policies under subsection (3) above with respect to the descriptions of services they propose to secure under subsection (1) above, the Authority for any passenger transport area shall have regard to any measures that any of the borough or district councils within their area are required or propose to take for meeting any transport requirements in exercise or performance of—
§
The noble Lord said: My Lords, I am sorry that I missed the opportunity earlier today when asked about the matter, but I would hope that with this amendment we could also discuss Government Amendment No. 148. I shall try to explain my reasoning as we proceed.
Amendment No. 148: Clause 61, page 61, line 30, at end insert—
(" (3A) In formulating policies under subsection (1)(b) or (2)(b) above with respect to the descriptions of services they propose to secure under subsection (1)(a) or (2)(a) above, a council shall have regard to any measures they are required or propose to take for meeting any transport requirements in exercise or performance of—
§ The amendment that I am proposing is intended to achieve in metropolitan areas what the Government Amendment No. 148 to Clause 61 achieves in shire county areas, in Wales and in Scotland. It imposes a duty upon passenger transport authorities to have regard to the measures being taken in respect of education or social services transport. In the metropolitan areas, the associations fully support the intention behind the Government amendment. There is no reason why co-ordination of the type sought in Amendment No. 148 should not also apply in the metropolitan areas. In fact, it is very desirable.
§ In the shire counties public transport, education and social services are the responsibility of a single authority. In the metropolitan areas, after March next year, public transport will be the responsibility of a joint board while education and social services will be the responsiblity of individual districts. In these circumstances, the imposition of a duty on the transport authority to take account of education and social services is even more important. I hope that the Minister sees the connection between the two.
§ Examples of services run by social services authorities include the provision of transport for elderly people to and from day centres, often in specially adapted minibuses, the provision of transport facilities for adult training centres, and specific jobs 594 similar to that. By having regard to education and social service functions, the transport authority should be better equipped to assess the transport needs of its area, and, secondly, to identify gaps in the commercial network and the routes to be put out to tender for subsidy. I hope that the Minister sees the point I am getting at and the similarity with Amendment No. 148. I am sorry that I did not give him warning this morning when, I agree, there was the opportunity to put them together in a grouping. However, perhaps the Minister will bear the similarity in mind. The need for both types of area to be treated in the same way seems obvious. I beg to move.
§ Lord Henderson of BromptonMy Lords, may I take the opportunity of discussion on this amendment, Amendment No. 96A, to thank the noble Lord the Minister for having tabled Amendment No. 148 which is in fulfilment of an undertaking that he gave to examine a point that I raised in Committee. The noble Lord has met the point by this amendment, and I wish to express my gratitude to him for that. I should also like the Minister to consider the point made by the noble Lord, Lord Carmichael of Kelvingrove. It seems to me most reasonable that Amendment No. 148 should apply to all authorities and not just to non-metropolitan counties. With that, I should like to support what the noble Lord has said, and to thank the Minister.
§ 4.15 p.m.
§ Lord TordoffMy Lords, may I endorse what the noble Lord, Lord Henderson of Brompton, has said and, indeed, what the noble Lord, Lord Carmichael, has said. All sides of the House are, I believe, at one on this. The need for such an amendment has clearly been recognised by the Government. I hope that the Government will accept that the amendment that has been moved by the Opposition is slightly more comprehensive and, because of that, rather better. I hope therefore that the Government can, on this occasion, accept the amendment that has been proposed rather than pursue their own.
§ Lord BelsteadMy Lords, the noble Lord. Lord Carmichael, has undoubtedly got a point here; there is no question about that. The Government's amendment, Amendment No. 148, is particularly addressed to the situation in shire, regional and islands councils which combine responsibility for public transport, education and social services. Of course, in the metropolitan areas, the situation is different. The PTA and the PTEs have responsibility for public passenger transport and the district councils have their responsibility for education and social services.
Clause 85(2), as we shall be amending it as a result of Amendment No. 148, will require the PTEs and the district councils to co-operate to get best value for money from expenditure on public passenger transport, education and social transport. That sounds as though I am saying that Amendment No. 148 meets what the noble Lord has said. I have to admit that it does not fully do so. The noble Lord, Lord Carmichael, is saying, I understand, that we are not going as far in respect of his amendment as we are going in respect of the authorities which are combined 595 authorities being responsible for transport, social services and education. The noble Lord argues that where the PTAs have their transport responsibilities and the district councils in the metropolitan areas have their education and social services responsibilities, one has to provide specifically for them. We are providing specifically for them, but we are not providing for them to get together at the policy formulation stage. That is, I think, the point in the amendment of the noble Lord, Lord Carmichael.
I must come clean with your Lordships and say that there is, I believe, a problem here. I am by no means innocent in this matter of putting down amendments at a late stage. I apologise for amendments that have gone down late on behalf of the Government. All of us on all sides of the House have been working very hard on the Bill. But although this amendment has not gone down early, we have been looking at it very hard to see whether we can meet the noble Lord. We are by no means sure that simply imitating the proposed Government amendment to Clause 61—that is really what Amendment No. 96A does—is the way to do it. I do not think I can give an undertaking that I know I can come back at the next stage of the Bill with an amendment that would meet the noble Lord's. I must discuss this matter with parliamentary counsel. It is a question of how feasible it is to produce an amendment of the kind that the noble Lord wants. We do really believe that Amendment No. 96A is defective.
I hope, if I may pass briefly to Amendment No. 148, that the noble Lord, Lord Tordoff, will not vote against our putting Amendment No. 148 in the Bill. That amendment achieves something for the PTA areas. It does exactly, I believe, what the noble Lord, Lord Henderson, asked for so far as shire council areas are concerned.
§ Lord TordoffMy Lords, as the noble Lord has addressed me, may I say that it would be a temptation. Surely, a better step would be to accept the amendment of the noble Lord, Lord Carmichael, and do something about the matter at Third Reading if one is not satisfied with it then.
§ Lord BelsteadMy Lords, I shall come to that in a moment before I sit down. In Amendment No. 148, which the noble Lord, Lord Henderson, and indeed other noble Lords have been good enough to say they welcome, we are saying that councils should at least look at their transport expenditure across the board and that the relevant departments of the council should be aware of each other's transport expenditure and the opportunities for obtaining better services and better value for money.
In case any noble Lords who have not taken an interest in the Bill wonder why this is necessary so far as the shire counties are concerned, the law here, as I understand it, is strange. For an authority that has responsibility for transport, social services and education, Clause 85 of the Bill would not bite upon that. We have to provide in a special way that there shall be co-operation. The law provides that there shall be co-operation between councils but not within 596 councils. This is the problem that we are overcoming in Amendment No. 148.
I come back now to the point made by the noble Lord, Lord Carmichael. I cannot prevent the noble Lord from putting the matter to a vote. He has a point; there is no question about it. I hope that he will not proceed to a vote because I am pretty certain, on the advice of parliamentary counsel, that the odds are that the amendment is defective. But whether the noble Lord puts the matter to a vote or does not, I give an undertaking to use my best endeavours to come back with an amendment to try to meet him. I believe that this is precisely the sort of point that the House of Lords should get right.
§ Baroness Fisher of RednalMy Lords, before the noble Lord sits down, may I, as somebody who comes from a metropolitan county, say that I think it would be rather unfortunate if the metropolitan counties were dealt with in any lesser way than the shire counties or London Transport. I think that it is incumbent upon the Government to be fair in this matter. When one listens to the noble Lord, I think that that is what he is trying to say. But we have to remember that the majority of the population who are travelling on buses are living in the metropolitan counties. He is therefore not acting fairly to the metropolitan counties. He is acting unfairly to the majority of bus passengers. For that reason I would ask him to give great consideration to what my noble friend Lord Carmichael has said.
§ Lord Carmichael of KelvingroveMy Lords, again I am grateful to the Minister for his kind words, his promise to look at this, and his acceptance of the fact that there are one or two minor imperfections in the Bill that may need dusting and tidying up. However, he has put me in the position where we feel that it is important that there should be the opportunity to use every possible available means of transport in the area of public transport. Many of us have tried every way to get the most out of transport in terms of school buses, post buses and special authority buses. This amendment is merely giving the opportunity for the metropolitan authorities to be able to do this.
The Minister has made a promise. I know the difficulties of promises, particularly at so late an hour. It is perhaps unfortunate that such important legislation is crowding so close to the deadline. But I should obviously find it very difficult after what the Minister has said to ask the House to vote on an issue such as this. I say that with the proviso that we feel fairly strongly about this and that I therefore hope, if the Minister were not able to give a good explanation on Third Reading, that he would not feel it was unfair, or abusing the House, if we decided then that we might need to put the matter to a vote. On that basis, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 97 had been withdrawn from the Marshalled List.]
§
Lord Brabazon of Tara moved Amendment No. 98:
Page 54, line 34, after ("section") insert ("and section 9B of this act")
§
The noble Lord said: My Lords, with the leave of the House I speak also to Amendments Nos. 99 and 100.
597
Amendment No. 99: Page 54, line 36, leave out ("references") and insert ("(a) references in this section")
Amendment No. 100: Page 54, line 37, leave out ("to the operator of") and insert ("(b) references in this section and that section to the operator of, or to persons operating")
§ These are technical amendments needed in consequence of the amendment agreed in Committee that PTAs should publish a statement of their policies for securing public passenger transport services. They clarify that references in the new publication provision which will be inserted in the Transport Act 1968 to public passenger transport services and to operators of any public passenger transport service have the meaning given in subsection (2) of the new Clause 9 A of the 1968 Act set out in Clause 57. My Lords, I beg to move.
§ On Question, amendment agreed to.
§ Lord Brabazon of Tara moved Amendments Nos. 99 and 100:
§ [Printed above.]
§ The noble Lord said: My Lords, I beg to move Amendments Nos. 99 and 100 en bloc.
§ On Question, amendments agreed to.
§
Lord Tordoff moved Amendment No. 100A:
Page 55, line 4, at end insert ("and persons representing the users of passenger transport services within their area.")
§ The noble Lord said: My Lords, I am sorry to see the noble Lord, Lord Mottistone, leave the Chamber at this point, because he was quite helpful to us when we were debating this subject at the last stage. It will be remembered that at the Committee stage I put forward an amendment which suggested that public transport consultative committees should be set up. That was resisted by the Government on the perhaps not unreasonable grounds that it was the creation of an excessive bureaucracy; and that that was unnecessary in terms of the new pattern of bus transport that we would have in the future. However, I said then that I did not feel that I could leave the whole subject at that point because I was not happy that the views of the consumer were being properly represented under the Bill.
§ The fact is that there will be areas that will not be properly catered for simply by the operation of market forces. The Government have argued quite frequently that the way in which the consumers' interest will be represented is by market forces showing the operators where the need exists. But that cannot apply in the case of subsidised services. By definition, where subsidised services exist, market forces are not working to their full extent. It may be argued that in those cases the local authorities are the people who will represent the consumers' interest; and to a degree that is true. But the local authorities do not represent the views of the bus user only; they represent the views of the ratepayer across a whole spectrum of ratepayer issues. Indeed, they have to balance one issue with another: the needs of the bus user with the needs of the ratepayer with another hat on.
§
I should have said at the beginning that for the convenience of the House I am speaking also to Amendment No. 148A.
598
Amendment No. 148A: Page 63, line 15, at end insert—
("and () persons representing the users of passenger transport services within their area").
§ That is a similar amendment.
§ These two amendments—which are in a sense much weaker than the amendments I moved at Committee stage—I believe put forward the minimum passenger representation which is necessary to protect the passengers in these areas to which I have been referring.
§ If I may summarise, the free operation of market forces will not bear on the whole of the market. The local authority is not able to represent the consumer interest in its entirety. I say that because there have been a number of organisations which have been created in the last few months by public demand: national bus passenger councils and so on. That illustrates to me that there is a need felt by passengers for some representation. I therefore hope that the Government will accept that these modest amendments are nevertheless very important from the point of view of the consumer. I think we have all recognised that at the end of the day the consumer is the person whom we are trying to satisfy in this Bill. I beg to move.
§ Lord TeviotMy Lords, I very much agree with what the noble Lord, Lord Tordoff, has said. The Alliance Party regard the consumer body as being very important. In this area I think it is important because, as the noble Lord points out, sometimes local authority representatives do not cover every single point that people want. Nor should they necessarily. If there is an area that has been rather neglected in your Lordships' House it might be that particular area. These are very dedicated people at the grass roots. They are worried about this Bill. They are worried not so much about this Bill as about everything to do with transport. These modest amendments should be carefully considered.
§ Lord SomersMy Lords, I should like to confirm what the noble Lord, Lord Teviot, has just said. There is ample provision in this Bill for implementing what the local authorities or transport executives think is best for the public. But they are not always right. The public are really the most authoritative on what they need. There is very little opportunity, as far as I can make out, for them to say so or for their opinions to have any weight. I think that this amendment is extremely necessary.
§ 4.30 p.m.
§ Lord BeloffMy Lords, I very much hope that the Government will not be persuaded by the arguments that have been put forward, because I think that they rest upon a misconception which often arises when people are arguing the case for consumer representation. They argue as though consumers in respect of major services such as buses are a clearly identifiable body of people such as, let us say, those who play darts or bowls or indulge in some other definable minority interest.
The point is that practically everyone in the country is at one time or another a bus user to a greater or lesser 599 extent. It is difficult to see how anything but the most enormous and elaborate machinery, which would defeat the purposes of the exercise, could be devised to ensure that the interests of those who most need a hearing were given one. For example, in the city where I reside a large proportion of those who travel on the buses in the summer are young nationals of foreign countries. They have an interest and it is, on the whole, desirable that their interest should be considered as they no doubt spend money which helps our balance of payments. However, I cannot quite see how they can be represented.
Even if one does not take that extreme case, I point out that the interests of the old, the young, the active and the retired are all different. Therefore, it seems to me that if we have a machinery of this nature which purports to represent bus users, it may represent only that no doubt worthy minority in our society who take an active interest in matters of this kind. In other words, we would get a pressure group of some kind which might not represent the majority of bus users.
It seems to me that if the argument for that kind of representation is pursued, then what is being put forward—and it is surprising to hear this suggestion from the noble Lord, Lord Tordoff, who continually comes before us as a great advocate of local government—is that local government cannot fulfil one of its major objectives. Why should it not do so? It may be, of course, that the authorities—the county councils and the district councils—are too large for this purpose.
However, there are individual councillors and there is nothing to prevent them from consulting and dealing with the wards or areas which they themselves represent. There are also parish councils. There are all kinds of ways in which local government, if fully used, could surely act as a necessary sounding board for opinion on these matters, rather than building up a machinery which, whatever enthusiasm may have been shown in the last few months for this novelty, is likely very rapidly to degenerate into something totally unrepresentative. I hope that the Government will resist the amendment.
§ Lord Peyton of YeovilMy Lords, I should like to join with my noble friend Lord Beloff in expressing the hope that the Government will resist this amendment —not that I think that there is any grave danger of their accepting it. Consultation is a process which we tend to take for granted as being a good thing, without questioning either its quality or its quantity. It is at least possible that consultation can be a vehicle for very bad advice and can take up a great deal of the time of those who would be better employed trying to run an efficient service. I have sat on too many committees on Bills in another place where I have listened to discussions on amendment after amendment, such as this one, seeking the inclusion of all kinds of bodies which ought to be consulted. In the end, the whole process of management and of Government can be infinitely clogged up. I hope that the Government will have no hesitation in refusing the amendment.
§ Lord SomersMy Lords, with the leave of the House, I should like to point out that I only wish that the two noble Lords who have just spoken lived where I live. It is a highly built-up area, but the only means of transport from where I live down to the middle of the town is a bus which runs once per hour. Nobody could care less about transport of that kind than the local council. All it is interested in is how to save its own money. I am certain that some means of public representation is highly necessary.
§ Lord McIntosh of HaringeyMy Lords, it is not difficult to oppose an amendment if you take the precaution which the noble Lord, Lord Beloff, took, of rewriting it first. The amendment says nothing about elaborate machinery and there is no reason why there should be elaborate machinery. I have a great deal of experience of both good and bad consultative bodies dealing with London Transport. The London Transport Passengers' Committee has existed for a very long time and for a large part of that time it was simply appointed by official—I nearly said "officious" and that would probably have been a better word—bodies. It did not really represent anybody. It did not deal with any of the major issues confronting London Transport passengers. It did not do a great deal of good and it deserved the criticisms which the noble Lord has made.
However, in recent years—and its title has now been changed—the London Transport Passengers' Committee has been a good deal more lively, a good deal more representative and has taken much more interest, and much more public interest, in the needs of London's passengers. I remind the House that the London Standard runs a commuter club, which has something between 50,000 and 100,000 members. You will not find that number of people signing up even for a club which does not meet unless there is genuine concern about the interests of commuters in London. I believe that there are ways of making Lord Tordoffs amendment work without elaborate machinery and I believe that the Government should adopt them. Although it does not have premises, it gives people an opportunity to contribute to public debate on commuter transport in London.
§ Viscount HanworthMy Lords, I am not in favour of too much consultation. Nevertheless, in many areas one does want a watchdog who can put forward the point of view of the minority and whose existence is just to do that. Many of us are really frightened about the Bill and fear that those who will suffer, or who may suffer, simply will not have a big enough voice. It is highly desirable that some body should be in existence which, even if it does not wholly represent that minority, is nevertheless able to look after interests of this type. Indeed, the type of interests about which I have been talking can so easily be ignored when money is at stake and the council is thinking about something else. Let us not forget that it is not always so easy to take your case to a member of the council. People do not do that; it is difficult to do. People do not even know the names of their councillors—I do not. Therefore, I do not think that the arguments put forward on the other side are very convincing.
§ Baroness Carnegy of LourMy Lords, this seems to me to be a rather out-of-date argument. There are instances where consumer groups definitely have a place. However, anyone who has been involved in the kind of consultation which has to go on in towns and villages across the country when bus services are being discussed—and these are discussions which in future the private operators will be having and which the authority will be having—knows that it will not be just the county council or the regional council which will sit and decide what it thinks best; the matter will be talked about with (where they exist) parish councils, community councils and local groups of all kinds. It needs to be far more local than any consumer group can be.
The suggestion is being put forward that we set up this pressure group which talks for a minority when, as my noble friend Lord Beloff pointed out, everybody travels by public transport, and in that respect we are talking not just about buses but about public transport generally. It shows the most extraordinary lack of appreciation of the way local government can and does consult already on most things.
I know that the Convention of Scottish Local Authorities is strongly against this amendment because it reckons that local government does it very well. It would be interesting to hear from my noble friend on the Front Bench whether he knows what the other local authority associations are saying. It may be said that they have a vested interest in not having consumer groups. However, I think that the kind of consultation you need is absolutely local, as can be done by the local elected member. I did this constantly for years when I was a local councillor, and buses were one of the main subjects discussed.
Planning has to take a great deal of account of the matters we were discussing under the other amendments regarding when school pupils will ride on public transport and when they will ride in special buses. It has to take a lot of account of when social service transport is combined with public transport. All these things have to be done by the local authority. I should have thought that one should have the guts to say that in this context consumer groups are the wrong way and not feel that like Pavlov's dog we have always got to say that we are never thinking of ordinary people unless we have consumer groups.
§ Earl AttleeMy Lords, the main argument of the noble Lord, Lord Beloff, against my noble friend Lord Tordoffs amendment was that it would not work because people have different requirements. It seems to me that it is impossible to think of any consumer group where everyone has exactly the same idea. Surely the whole point of having a consumer group is that they represent differing ideas. Therefore I suggest that this is an eminently sensible amendment.
§ Baroness Fisher of RednalMy Lords, may I follow on the point mentioned by the noble Baroness, Lady Carnegy. In the metropolitan counties they are almost divorced from direct representation. In some cases there has been only one person from the local authority on the PTA, although sometimes there are two or perhaps three.
602 Birmingham City has 165 councillors and I think there are eight or 10 sitting on the PTA, but that is a big exception. That is the largest exception. It means that 10 persons represent the whole of the population of Birmingham on a PTA: a population of over 1 million people. It is going to be extremely difficult to get this direct contact with the elected body, as perhaps happens more easily with a parish council or a small local authority with a population of perhaps 100,000 or 200,000. A much more difficult problem arises in the metropolitan counties.
It is important to realise that with the co-ordination of traffic—rail, private buses and public transport—there will need to be what is called a consumer voice. I am surprised that so mam people have spoken in opposition to this amendment. When we had the British Telecom Bill we had Oftel discussed at great length, and at the present moment Oftel, on behalf of telephone users, are in conflict with British Telecom about telephone charges. When we discussed the Water Bill, consumer representation was considered at great length, as was the question whether the consumer representation should be public. It seems strange, when we get an amendment that the consumers be represented and their voices heard on a very personal matter such as riding on a bus or going on a train, which is even more direct than turning the tap on and having the water come out, that this opposition is raised against it.
§ 4.45 p.m.
§ Lord Brabazon of TaraMy Lords, when we discussed this in Committee our debate concentrated on the establishment of the formal statutory consultative committee to represent all public transport users. We did not believe that such mechanisms are necessary in a deregulated, competitive industry. I note that the noble Lord, Lord Tordoff, has not returned to quite the same thing. Instead he suggests something which sounds far less burdensome and entirely reasonable: that local authorities should consult representatives of public transport users at the time they formulate policies for subsidising services.
It sounds eminently reasonable, but is it? Of course I accept that local authorities, in deciding which additional services to secure, must be in touch with the needs of communites and passengers, but I should have thought that that is one of the most important functions of the councillors who will be responsible for formulating polices for securing services not provided by the market. They are the people who best represent the passengers who will use those services.
If councillors do not represent the views of those passengers they are likely to find themselves out of a job. That is not so with groups, however constituted, who claim they represent all passengers but who are not elected and whose membership may represent only a small proportion of passengers. That was a point made very well by my noble friends Lord Beloff and Lord Peyton. With what authority do they speak? I am not saying that there can be no useful role for such groups, but when we talk about a statutory duty to consult we must tread carefully.
We have consulted the local authority associations about whether they would welcome a statutory duty to 603 consult public transport user groups. As my noble friend Lady Carnegy said, the Scottish local authorities did not welcome this. Nor, I can tell noble Lords, did the Associations of County Councils, either. They regard it as their duty as elected representatives to represent their voters and ratepayers, and for that very good reason they see it as part and parcel of being a councillor to be aware of the views of the local electorate, not just on public transport or passenger transport but of course across the whole range of local authority services.
The noble Lord, Lord McIntosh, mentioned the London Regional Passengers Committee. Indeed, that does a valuable job. However, London is a different case. With London Transport and British Rail we are talking about a nationalised industry. Nationalised industries do not have elected councillors directly looking after them, and so the London situation is rather different. I am surprised that noble Lords opposite who believe in local democracy do not believe that the local councils should be the ones to represent the passengers' views and not some body who nobody really knows.
§ Lord TordoffMy Lords, I suppose that I should not be astonished at some of the criticism that has been heaped on this modest amendment, but I am slightly astonished. First, the noble Lord, Lord Brabazon, talked about the local authority being responsible. Of course in this clause we are talking about the Passenger Transport Authority, and one of the purposes of this Bill, it seems to me, is to hold local authorities at arm's length.
Let us look at the clause unamended and see what it is trying to say. It says:
the Authority for a passenger transport area"—when considering the formulation of policies—shall consult".And then there is a list of people that it shall consult. If noble Lords opposite object to consultation then they should have put down amendments to take out those consultations. They have not done so, so let us make sure that the list of people to be consulted on these matters is complete.I believe that it is not complete without including in those consultations the very people to be most affected and the very people whom Members on the other side of the Chamber have been so anxious to defend throughout the length and breadth of the discussions on this Bill: namely, the consumer, the bus passenger. This is a modest attempt to have some representation of his views.
In the amendments that I am putting forward today I deliberately do not set up some great statutory bureaucratic body. All I am asking is that those bodies which exist, which are various and which, as I said at the Committee stage, vary from people like the Women's Institute—I am sorry; does the noble Lord, Lord Soames, wish to intervene?
§ Lord SoamesMy Lords, no. I am so sorry; I was just welcoming my noble friend.
§ Lord TordoffMy Lords, I am sure that we all welcome the noble Lord's noble friend. Such diverse 604 groups of people as, for instance, the Women's Institute and, indeed, parent/teacher bodies may well be people who represent the views of bus passengers. Particularly in those areas where, as I said at the beginning of this debate, no true market exists, surely it is essential that some unbiased input from the bus passengers themselves is fed into the argument. Of course local councillors have a role to play in relation to their electorate, but they have other considerations when it comes to making decisions on this matter. They have to balance the expenditure over a whole series of things. It may well be that their input in representing the passengers as such is biased by the requirements of expenditure in other directions in the local authority role.
I believe that this is a fundamentally important matter and that those people who believe in the needs of the consumer, of the bus passenger, need to stand up and be counted on this matter. With that in mind, I propose to divide the House.
§ 4.52 p.m.
§ On Question, Whether the said amendment (No. 100A) shall be agreed to?
§ Their Lordships divided: Contents, 93; Not-Contents, 120.
605| DIVISION NO. 2 | |
| CONTENTS | |
| Airedale, L. | Leatherland, L. |
| Attlee, E. | Llewelyn-Davies of Hastoe, B. |
| Aylestone, L. | Lockwood, B. |
| Barnett, L. | McCarthy, L. |
| Beaumont of Whitley, L. | McIntosh of Haringey, L. |
| Beswick, L. | McNair, L. |
| Blease, L. | Meston, L. |
| Blyton, L. | Mishcon, L. |
| Bottomley, L. | Molloy, L. |
| Bruce of Donington, L. | Morton of Shuna, L. |
| Carmichael of Kelvingrove, L. | Mulley, L. |
| Cledwyn of Penrhos, L. | Nicol, B. |
| Collison, L. | Oram, L. |
| Crawshaw of Aintree, L. | Paget of Northampton, L. |
| David. B. | Phillips, B. |
| Davies of Penrhys, L. | Ponsonby of Shulbrede, L. [Teller.] |
| Dean of Beswick, L. | |
| Diamond, L. | Prys-Davies, L. |
| Donaldson of Kingsbridge, L. | Rea, L. |
| Elwyn-Jones, L. | Rhodes, L. |
| Ezra, L. | Roberthall, L. |
| Fisher of Rednal, B. | Rochester, L. |
| Fitt, L. | Seear, B. |
| Foot, L. | Sefton of Garston, L. |
| Gallacher, L. | Serota, B. |
| Galpern, L. | Shepherd, L. |
| Gladwyn, L. | Shinwell, L. |
| Glenamara, L. | Somers, L. |
| Graham of Edmonton, L. | Stallard, L. |
| Grey, E. | Stamp, L. |
| Grimond, L. | Stewart of Fulham, L. |
| Hampton, L. | Stoddart of Swindon, L. |
| Hanworth, V. | Strabolgi, L. |
| Harris of Greenwich, L. | Taylor of Blackburn, L. |
| Hatch of Lusby, L. | Taylor of Gryfe, L. |
| Houghton of Sowerby, L. | Taylor of Mansfield, L. |
| Hughes, L. | Teviot, L. |
| Hunt, L. | Tordoff, L. [Teller.] |
| Irving of Dartford, L. | Underhill, L. |
| Jacques, L. | Wallace of Coslany, L. |
| Jeger, B. | Walston, L. |
| Jenkins of Putney, L. | Wells-Pestell, L. |
| John-Mackie, L. | Whaddon, L. |
| Kagan, L. | White, B. |
| Kinloss, Ly. | Willis, L. |
| Kirkhill, L. | Wilson of Rievaulx, L. |
| Lawrence, L. | Winterbottom, L. |
| NOT-CONTENTS | |
| Airey of Abingdon, B. | Ironside, L. |
| Aldington, L. | Kaberry of Adel, L. |
| Alexander of Tunis, E. | Kimball, L. |
| Ampthill, L. | Kinnaird, L. |
| Annan, E. | Kitchener, E. |
| Belhaven and Stenton, L. | Lane-Fox, B. |
| Beloff, L. | Lauderdale, E. |
| Belstead, L. | Layton, L. |
| Bessborough, E. | Long, V. |
| Boyd-Carpenter, L. | McAlpine of Moffat, L. |
| Brabazon of Tara, L. | McFadzean, L. |
| Brougham and Vaux, L. | MacLehose of Beoch, L. |
| Broxbourne, L. | Macleod of Borve, B. |
| Bruce-Gardyne, L. | Mancroft, L. |
| Butterworth, L. | Margadale, L. |
| Caccia, L. | Marley, L. |
| Caithness. E. | Marsh, L. |
| Cameron of Lochbroom, L. | Marshall of Leeds, L. |
| Campbell of Alloway, L. | Merrivale, L. |
| Campbell of Croy, L. | Mersey, V. |
| Camegy of Lour. B. | Monk Bretton, L. |
| Chelwood, L. | Mottistone, L. |
| Cholmondeley, M. | Mowbray and Stourton, L. |
| Coleraine, L. | Norfolk, D. |
| Cottesloe, L. | Nugent of Guildford, L. |
| Cox, B. | O'Brien of Lothbury, L. |
| Cullen of Ashbourne, L. | Orkney, E. |
| Daventry, V. | Peyton of Yeovil, L. |
| Davidson, V. | Plummer of St Marylebone, L. |
| Denham, L. [Teller.] | |
| Denning, L. | Porritt, L. |
| Drumalbyn, L. | Portland, D. |
| Ellenborough, L. | Rawlinson of Ewell, L. |
| Elliot of Harwood, B. | Reay, L. |
| Elliott of Morpeth, L. | Renton, L. |
| Elton, L. | Rochdale, V. |
| Faithfull, B. | Rodney, L. |
| Foley, L. | St. Aldwyn, E. |
| Fortescue. E. | St. Davids, V. |
| Fraser of Kilmorack, L. | Saltoun of Abemethy, Ly. |
| Gainford, L. | Sanderson of Bowden, L. |
| Gibson-Watt. L. | Sandford, L. |
| Glanusk, L. | Selkirk, E. |
| Gray of Contin. L. | Sharpies, B. |
| Greenway, L. | Skelmersdale, L. |
| Gridley, L. | Soames, L. |
| Hailsham of Saint Marylebone, L. | Sudeley, L. |
| Swinton, E. [Teller.] | |
| Hanson, L. | Terrington, L. |
| Harmar-Nicholls. L. | Thomas of Swynnerton, L. |
| Harris of High Cross, L. | Tranmire, L. |
| Harvey of Prestbury, L. | Trefgarne, L. |
| Harvington, L. | Trumpington, B. |
| Henley, L. | Vaux of Harrowden, L. |
| Hives, L. | Vickers, B. |
| Holderness, L. | Vivian, L. |
| Hood, V. | Ward of Witley, V. |
| Hooper, B. | Westbury, L. |
| Hunter of Newington, L. | Whitelaw, V. |
| Hylton-Foster, B. | Wise, L. |
| Inglewood, L. | Young, B. |
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 5 p.m.
§
Lord Brabazon of Tara moved Amendment No. 101:
Page 55, line 41, leave out from ("apply") to end of line 42.
§ The noble Lord said: My Lords, this is a simple technical amendment which removes some words in brackets, with modifications consequent on the amendments made above in this clause, originally included to clarify the position but which in fact are superfluous and might be misconstrued as actually intended to have some effect. I beg to move.
§ On Question, amendment agreed to.
606§ [Amendment No. 101A had been withdrawn from the Marshalled List.]
§ Lord Brabazon of Tara moved Amendment No. 102:
§ [Printed earlier: col. 574.]
§ The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 90. I beg to move.
§ On Question, amendment agreed to.
§
Following is the text of the amendment (No. 102):
After Clause 57, insert the following new clause:
("Local government reorganisation: transport functions.
.—(1) The following provisions of this section shall have effect from the abolition date within the meaning of the Local Government Act 1985 (that is to say, 1st April 1986).
(2) In section 9 of the 1968 Act (as amended by section 57(1) of this Act)—
(3) In the Local Government Act 1985—
and provisions of that Act referring generally to that Act, or to any provision made by or under that Act, shall have effect as if subsections (1) and (2) above were contained in that Act.").
§ Schedule 3 [Amendments consequential on section 57]:
§
Lord Teviot moved Amendment No. 102A:
Page 144, line 10, at end insert—
("() in paragraph (i) (power to carry passengers by road), after the word ("from") there shall be inserted the words ("or in the vicinity of).
§
The noble Lord said: My Lords, I beg to move Amendment No. 102A and in doing so to speak to Amendment No. 116A.
Amendment No. 116A: Clause 58, page 56, line 21. after ("from") insert ("or in the vicinity of").
§ At Committee stage I introduced an amendment to what is now Clause 58(1) (a) which sought to establish beyond doubt that where the passenger transport executive operated services outside the transport area the initial company and transferee companies will continue to have the right to do so. My concern was raised by the drafting of Clause 58 which required the executive to establish a company for the purpose of carrying passengers within, to and from the area. This did not, on the face of it, cover operation entirely outside the area which some executives, notably Greater Manchester, now undertake.
607§ In order to give credence to what seems a perfectly ordinary sort of amendment, perhaps it would be helpful to give an example. I have mentioned Greater Manchester. The town of Glossop is at the north-west end of Derbyshire and is bordered by Greater Manchester, West Yorkshire and what used to be the panhandle of Cheshire. I am not quite sure where in that area it might come now; but probably it would be Greater Manchester. However, I mention Glossop as an example. The Greater Manchester PTE have a garage in Glossop and they have services running in and out of it which are wholly in Glossop and also remain wholly in the County of Derbyshire and not the county to which they belong. I believe that they can carry on the services as they are now, but with the possibility of bus services changing as they may well change they may no longer be able to do so.
§ I bring it out this time only to give it a place on the map. Other examples we have used in the course of this Bill have referred to the county of Barset, but of course Barset cannot be looked for on a map other than those perhaps in some editions of Trollope. Therefore I have instanced this particular town of Glossop.
§ I withdrew the amendment in Committee on being given an assurance by my noble friend Lord Brabazon that the Government had no intention of placing this restriction on companies by the Bill as it was drafted and as it is drafted. However, during the recess the passenger transport executives have discussed the issue with the Department of Transport. The PTEs and I were by no means happy with my noble friend's interpretation of the Bill and, as a result, consulted learned counsel on the matter. Counsel's opinion is that while the Bill may give the company the power to continue to operate services which it now runs it could do so only in the same form as they were operated by the PTE. No new services in these areas could be run even if they were won in a competitive tender from the shire county council. Nor could the frequency in routes of existing services be altered to reflect changing market demand.
§ Although learned counsel's opinion has been given to the department, they have not responded to it, I am afraid. As there was no difference between my noble friend and myself on the principle involved, I feel it would be much more satisfactory to clarify the matter once and for all by amending the Bill by adding the words "in the vicinity of" to the company's operating powers in Clause 51(1)(a). This will establish beyond all doubt (which clearly exists among learned counsel) that the Bill will have the effect that the Government and I wish it to have. I beg to move.
§ Lord TordoffMy Lords, as one of the few people in the House who has ever been to Glossop I thought that I might just add a word or two. The position at the moment, as the noble Lord, Lord Teviot, has said, is that there is a series of bus services based on Glossop which are run by the Greater Manchester PTE. Derbyshire County Council is currently paying over £300,000 in road use support, of which one-third relates to services wholly contained within Derbyshire. The PTE has a garage there and about a dozen buses are based there.
608 This position can continue, as I understand it, while no changes are made under the Bill. Many of the routes do not cross boundaries and therefore they do not stand economically on their own because most of them are devoted to use with local schools. What will happen under the Bill is that, although they can register the existing services, if there are any changes—and I believe that there are changes in the pipeline now, particularly in regard to schools—then these will fall outside the terns of the Bill.
It seems to be an anomaly which is specific to a very few places, but I think that Glossop is a specific example of that. We must bear in mind that whereas many routes are self-contained, buses are not; and buses move from route to route. The Greater Manchester PTE is faced with a genuine problem here. It may be that the Government have some problem with the wording of this, but I think that they have to come up with a very clear indication of how they are going to get round this particular problem for Glossop and similar areas, of which, as I say, there are quite a few. It seems to me that the wording of the amendment of the noble Lord, Lord Teviot, covers the point, and I hope the Government will support it.
The Earl of CaithnessMy Lords, it remains our view that the Bill as it stands would not prevent the continued operation of the services to which my noble friend Lord Teviot and the noble Lord, Lord Tordoff, have referred.
§ Lord TordoffMy Lords, I am sorry to intervene at this point, but we are not saying that it would affect the continuation of the present services. We are saying that it would affect the operation of the buses if those services had to be changed for reasons which are outside the control of the PTE.
The Earl of CaithnessMy Lords, the noble Lord, Lord Tordoff, interrupted me just at the point where I was going to go on to clarify the first part of that sentence. If I may start again, it is our view that the Bill as it stands would not prevent the continued operation of these services since the objective of carrying passengers within, to or from the area referred to in Clause 58(1)(a) is not necessarily exclusive. Furthermore, in our opinion it need not prevent the company from carrying on any activity in the fields of bus operations which could properly be carried on by its predecessors, the PTEs. I think that that covers the point of the noble Lord, Lord Tordoff.
I have to say, however, that we have reflected on this and are very grateful for the efforts which my noble friend Lord Teviot has put into this and for the very good arguments that he has put forward. We appreciate that the interpretation of the position might be open to some doubt and I am happy now to give an undertaking that we shall be prepared to look at this again and bring back our own amendment at Third Reading to meet the point behind Amendment No. 116A. I am afraid, however, that we cannot accept the existing amendments in their present form because we do not believe that it would be appropriate to extend the powers of the PTEs to operate buses at the very time when these powers are about to be removed.
609 We would see it as more appropriate to think in terms of bringing Clause 58(1) more closely into line with Clause 64(1), dealing with the formation of PTCs from district council operations. Our intention therefore would be to make it quite clear that the new PTCs will have the power to do anything in the way of carrying passengers by road that can now be undertaken by the PTEs. I hope that with that assurance my noble friend will be satisfied, as will be the noble Lord, Lord Tordoff, and that we can come back on Third Reading to clarify the matter once and for all.
§ Lord TeviotMy Lords, I am most grateful, and in the circumstances I can do no other than beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 103 and 104 not moved.]
§ Lord Brabazon of Tara moved Amendments Nos. 105 to 108:
§ [Printed earlier: col. 575.]
§ The noble Lord said: My Lords, I spoke to these amendments with Amendment No. 90. I should like to move Amendments Nos. 105 to 108 en bloc:
§ On Question, amendments agreed to.
§
Following is the text of the amendments (Nos. 105 to 108):
Page 144, line 29, after ("(4)") insert ("(i)").
Page 144, leave out lines 31 to 33 and insert (" " The Authority for the Executive's area";
Page 144. leave out lines 36 to 42 and insert—
("Power to make grants
13. The Authority shall have power to make grants to the Executive for any purpose.").
Page 144, line 44, leave out from ("Wales") to end of line 46 and insert ("for the words "for the designated area and to each of the councils of constituent areas" there shall be substituted the words "and to each of the councils of the districts comprised in the county which is coterminous with or includes the Executive's area".").
§ [Amendments Nos. 109 to 111 not moved.]
§
Lord Brabazon of Tara moved Amendment No. 111A:
Page 145, line 15, leave out paragraph 11 and insert—
("11. In section 15A of that Act (control of Executive by Authority) subsection (1) shall be omitted.").
§
The noble Lord said: My Lords, with the leave of the House, I should like to speak also to Amendments Nos. 112, 366A and 367.
Amendment No. 112: Page 146, line 9, leave out sub-paragraphs (b) and (c) and insert—
("and
Amendment No. 366A: Schedule 7, page 170, line 5, column 3, at end insert—
("Section 15A(1).").
Amendment No. 367: Page 170, line 19, column 3, leave out from ("and") to the end of line 21 and insert ("subsections (3) to (6).").
§ These are consequential amendments which flow from a closer consideration of the implications of Clause 57. As the new Section 9A gives the PTAs a duty to formulate general powers, this effectively 610 replaces Section 15(a)(1) of the 1968 Act. Similarly, as the matters covered by an order under the new Section 9 of the 1968 Act are now much restricted, the provisions of Sections 22(3) to 22(6) of that Act are no longer needed in relation to such an order. These amendments therefore repeal those provisions, and I beg to move.
§ On Question, amendment agreed to.
§ Lord Brabazon of Tara moved Amendment No. 112:
§ [Printed above.]
§ The noble Lord said: My Lords, I beg to move Amendment No. 112, spoken to with Amendment No. 111.
§ On Question, amendment agreed to.
§ Lord Brabazon of Tara moved Amendments Nos. 113 and 114:
§ [Printed earlier: col. 575.]
§ The noble Lord said: My Lords, I beg to move these two amendments together. I spoke to them with Amendment No. 90. I beg to move.
§ On Question, amendments agreed to.
§
Following is the text of the amendments (Nos. 113 and 114):
Page 147, line 17, leave out ("county council") and insert ("Authority").
Page 148, line 14, leave out paragraph (a) and insert—
§
The Earl of Caithness moved Amendments Nos. 115 and 116:
Page 148, line 34, leave out (" "9(3)" there shall be substituted "9A(1)" ") and insert ("the words "general duty of the Authority and the Executive under section 9(3)" there shall be substituted the words "duty of the Executive under section 9A(1)".").
Page 148, line 37, at end insert—
("The Road Traffic Regulation Act 1984.
.In paragraph 31(b) of Schedule 9 to the Road Traffic Regulation Act 1984 (local authority to consult Passenger Transport Executive before making certain orders) for the words from "designated under section 9(1)" to the end there shall be substituted the words "which is a passenger transport area for the purposes of Part II of the Transport Act 1968, shall consult with the Passenger Transport Executive for that passenger transport area.".").
§ The noble Earl said: My Lords, I beg to move these two amendments together, as they are closely related. These amendments are technical, designed solely to clarify wording.
§ On Question, amendments agreed to.
§ Clause 58 [Transfer of bus undertakings of Executives to companies owned by Authorities]:
§ [Amendment No. 116A not moved.]
§
The Earl of Caithness moved Amendment No. 117:
Page 56, line 26, leave out ("1948") and insert ("1985").
§
The noble Earl said: My Lords, I beg to move Amendment No. 117 and at the same time to speak to Amendments Nos. 133, 138, 153, 191, 193,299,302 and 360.
Amendment No. 133: Clause 60, page 59, line 27, leave out ("1948") and insert ("1985").
Amendment No. 138: Page 60, line 19, leave out ("1948") and insert ("1985").
Amendment No. 153: Clause 64, page 65, line 40, leave out ("1948") and insert ("1985").
Amendment No. 191: Clause 73, page 78, line 30, leave out ("161 of the Companies Act 1948") and insert ("389 of the Companies Act 1985").
Amendment No. 193: Clause 74, page 79, line 13, leave out ("161 of the Companies Act 1948") and insert ("389 of the Companies Act 1985").
Amendment No. 299: Clause 129, page 131, line 6, leave out from ("in") to the end of line 8 and insert ("the Companies Act 1985").
Amendment No. 302: page 132, line 12, leave out ("154 of the Companies Act 1948") and insert ("736 of the Companies Act 1985").
Amendment No. 360: Schedule 6, page 167, line 35, leave out ("161 of the Companies Act 1948") and insert ("389 of the Companies Act 1985").
§ These amendments simply update references in the Bill to the Companies Act 1948 as a result of the enactment and coming into force of the new consolidated Companies Act 1985. I beg to move.
§ On Question, amendment agreed to.
§ 5.15 p.m.
§ Lord Carmichael of Kelvingrove moved Amendment No. 118:
Page 56, line 42, at end insert ("and shall identify any liabilities retained by the Executive, or any wholly-owned subsidiary of theirs, on the transfer of property, rights or liabilities to the company under the scheme, being liabilities in respect of the following matters:—
- (a) compensation payable under section 81 or otherwise in respect of persons who suffer loss of employment or loss or diminution of emoluments by reason or in consequence of the transfer;
- (b) provision of funds to secure the payment of benefits and pensions of employees;
- (c) loss arising in respect of assets held and not transferred under the scheme; and
- (d) costs incurred in assessing the commercial viability of the business to be carried on by the company and other costs incurred in the formulation of the scheme.").
§
The noble Lord said: My Lords, this is an amendment which we consider to be of great importance. Perhaps it would help the House if with this amendment we were to take Amendments Nos. 119 and 303.
Amendment No. 119: Page 57, line 17, at end insert ("and the Secretary of State shall make grants to the Executive of such amounts as appear to him to be requisite for indemnifying the Executive in respect of the retained liabilities identified in the scheme.").
Amendment No. 303: Clause 130, page 133, line 31, after ("section") insert ("58,").
§ The object of the amendment is to ensure that neither the passengers of the authorities in the metropolitan areas nor the ratepayers are disadvantaged by the proposals contained in the Bill. The House will be very much aware that in the metropolitan areas the effects of the last Session's work—the abolition of the metropolitan counties, the rate-capping of the joint boards and now the Transport Bill—will all come together. In spite of the very strenuous efforts that have been made from this 612 side of the House to try to get a more intelligent timescale for the Transport Bill, we accept that the timetable will be much as the Government wish it to be. But under the existing legislation of the 1968 Transport Act, with which I had something to do in the other place, all passenger transport executives have been successful in implementing the policies of the respective PTEs. Whether or not one agrees with the policies, they have done a professional job extremely well—some perhaps more expansively than others.
§ It does not matter whether or not Members agree with the policies: the fact is that the experts and the professionals have done this job and the PTEs have a statutory obligation to follow them. This directly affects the current levels of resources employed in the provision of public transport. The Bill requires that a PTE divides itself into two parts. The first part is the initial operating company, and the other part that the PTE will need to look after will be the responsibility for tendering and also for concessionary fares.
§ The costs of implementing the new arrangements required by the Bill are several. First, there will be just the basic cost of establishing the new company. There will be redundancy costs, because if outside people are coming in to do the same jobs there must be redundancy costs; and there will be the cost of surplus assets, because if the competition lives up to what the Government expect there will be people coming in and not requiring to use all the assets that are at present used, owned and operated by the PTEs. Those will not be required. Since not all the present services can be provided commercially and the company is unlikely to win all the tenders it submits, there will be these surpluses.
§ There is a fourth cost, of course, to which the House has given a great deal of thought. I think that the Government have also given thought to this, without coming up with any firm ideas yet. That cost, of course, is pensions. It has been estimated that for a typical PTE the cost of establishing a new company will be about £1 million. On the assumption contained in the PTE three-year plans, 60 per cent. of present services can be provided commercially. They also believe that perhaps they can win in the open market about 75 per cent. of the non-commercial tender services. But this still implies a surplus of something like 500 staff and perhaps up to 200 buses. The timescale imposed is too short, as the House will realise, for staff redundancies to be met by natural wastage and therefore the only way is by forced redundancy.
§ Of course, it so happens that in the areas of the metropolitan counties and in Strathclyde unemployment is higher than elsewhere; and, also, any buses that are going to be purchased by anyone from the surplus will naturally be bought in what is quite clearly a depressed market. It is estimated that redundancy payments are likely to be around £3 million and surplus assets are likely to be valued at about £7 million. Obviously, I assume that the Government have looked at this fairly closely, and they may be able to produce other figures; but this gives a cost for a typical passenger transport executive of about £ 11 million to which, as I said earlier, the cost of whatever pension arrangements are finally agreed will have to be added. Based on previous assumptions, 613 these are likely to be in the range of £5 million to £10 million.
§ Therefore, the total costs for each passenger transport executive could reach about £20 million and these costs, because of the Bill, are unavoidable. If the Government do not accept these amendments, then either the passenger transport executive's initial operating company will have to bear the costs—making it less competitive when registered in commercial services and putting the community which has paid for all this at a disadvantage, as well as the company being at a disadvantage in tendering for other services—or, alternatively, the costs will fall on the passenger transport executive and will thus be a call upon the Government's imposed expenditure limits.
§ These one-off costs of about £20 million would require an increase in expenditure limits of between 30 and 40 per cent. The expenditure limits arrangement was just not designed for a situation such as this and the Minister is certainly familiar with that fact. So we should like to ask that the Government accept the idea of increasing the expenditure limits to allow for this transition. Those are the reasons behind Amendments Nos. 118 and 119 which I am proposing. Carrying a debt such as this will be very crucial in the passenger transport executives, particularly at the beginning. I hope that the Government will be able to give some help and will give them an opportunity of finding a way through this very difficult problem. My Lords, I beg to move.
§ Lord TeviotMy Lords, at the Committee stage I moved a similar amendment, when I had a most surprising response from the Government. I felt that this amendment was of sufficient importance for me to recommend to the noble Lord, Lord Carmichael, that he should take it on as the official leader of the Opposition on this Bill, rather than leave it to an old "funny" sitting on the Government Back-Benches and on a Government Bill.
My noble friend criticised me and the passenger transport executives for painting an unusually pessimistic picture. He said;
I think that it would be wrong for us to think in terms of sizeable residual liabilities falling on the PTE. Let us recall instead the benefits the company structure will bring to the PTE and the ratepayers."—[Official Report, 18/7/85; col. 937.]As I said on the first day of Report, I am impressed by the way in which the PTEs are well on with their preparations for the new road. I shall reiterate that. Your Lordships may think that they might be digging their heels in, but I know that they are getting on with the business ahead very satisfactorily. I agree entirely with my noble friend Lady Camegy (who, sadly, is not in her seat) that there is excitement as industry rises to the opportunity and challenges. However, my noble friend Lord Trefgarne missed the essential point of the argument, which is that unless all PTE services can be operated commercially, or unless they are successful in winning all the services put out to tender, their initial operating company will have surplus assets. The financing of these assets will fall either upon the initial operating company, giving them an unfair competitive disadvantage, or will fall upon the PTE, in which case it will have to be financed out of the Government's 614 imposed expenditure limit. This will have the effect of reducing the total monies available for public transport and concessionary fares.The amendment standing in the name of the noble Lord, Lord Carmichael, and myself seeks to have the initial one-off costs identified and financed by the Government as they arise as a direct result of this legislation. There have been numerous precedents for this, notably when the London Transport Executive, as it then was, was transferred to Greater London Council control under the Transport (London) Act 1969, thus ensuring that the GLC took over London Transport with a clean slate.
Since the Committee stage, the seven passenger transport executives have submitted their three-year plan to the Department of Transport as required by the 1983 Transport Act. These have identified costs of about £50 million. The pensions issue, so far unresolved and subject to further amendments, could double this figure. These costs are unavoidable. By accepting these amendments, I feel that the Government could give their policy the chance of success in the metropolitan areas.
§ Lord TrefgarneMy Lords, I am grateful to the noble Lord, Lord Carmichael, for explaining the position of the passenger transport executives, as he sees it in this context, and I hope that I shall be able to reassure him and my noble friend about some of the fears which have been expressed. But I have to say that I disagree with the view which has been expressed about the prospects of the new PTE bus companies.
The difference between myself and the noble Lord, Lord Carmichael, and my noble friend is that the Government believe that the major changes proposed in the Bill will give the PTE bus undertaking every chance of a healthy commercial future when it is formed into a company. Management will, for the first time,have freedom to provide the services which the public demand in the way it thinks best. It wili also be able to tender for service subsidies made available by the PTA. Competition will reduce costs. It will be possible to provide more services for every pound spent. The Government have made clear that they believe expenditure in the metropolitan areas should be reduced, and I do not therefore believe that we should be thinking in terms of a smaller PTE undertaking with residual liabilities of the kind described by my noble friend, in particular, remaining with the executive itself.
I am not suggesting that the changes which the Bill proposes can be achieved without incurring any costs in the process. We have heard explained how some of the expenditure may arise. Much of what was said reflects the different view—I think particularly of the noble Lord, Lord Carmichael, and perhaps also of my noble friend—of the prospects for services in the PTA areas. But I agree that, as in any process of change, there is work to be done in planning the change and that work will cost money.
But I ask your Lordships to consider this in its proper context. This Bill will bring benefits for travellers and ratepayers in the passenger transport areas. Competition will make services more responsive to demand and bring costs down. The tendering system will produce better value for the 615 ratepayers' money. The move to company form for the PTE undertaking will mean a keener eye on efficiency. There are costs in bringing these major changes about, but there will none the less be substantial overall benefits for the authority and the ratepayers in its area.
Is it really appropriate in these circumstances to require the Government and the taxpayer to meet costs which may remain with the executive as part of the process? I really cannot believe that it is. It would be quite inappropriate to expect that central Government should meet transitional costs which arise from the move towards greater efficiency and cost-effectiveness in the provision of services, when that move will be to the benefit of ratepayers and passengers in these areas.
I am quite properly reminded not by the noble Lord, Lord Carmichael, but certainly by others, that the expenditure of the PTAs, and therefore the revenue grants which they may make to PTEs, will be limited in 1986–87 and succeeding years by the Secretary of State for Transport. Indeed, my right honourable friend has already announced his proposals for expenditure limits, but I can give your Lordships a clear reassurance on this point. It is open to PTAs to apply for a redetermination of the limit proposed by my right honourable friend. The Secretary of State would of course give full consideration, in considering any application for redetermination, to any costs in relation to its PTE's transfer scheme which an authority had asked him to take into account.
I believe that that is my response in a nutshell. If any of the PTAs do feel especially aggrieved in this matter they are entitled to apply to my right honourable friend for a redetermination, and I invite them to do so.
§ 5.30 p.m.
§ Lord Carmichael of KelvingroveMy Lords, I am sure that the Minister will realise that that is a very disappointing reply. The noble Lord has given very little. I took notes of what he was suggesting. He said that competition will reduce costs. That is always the case in this Bill, and it may be true, but we are talking about very large initial costs to be carried by these PTEs. The Minister says that there is a different view of services in the PTE areas, but surely he does not believe that the points I made—the cost of establishing new companies, redundancy costs, the costs of the surplus assets—can be just wished away. They are very important things. If there are surplus assets, the problem will be trying to realise them in a depressed market.
§ Lord TrefgarneMy Lords, if I may have your Lordships' permission to speak again, I did say that if any of the PTAs have a real difficulty in this area, they can apply to my right honourable friend for a redetermination of their expenditure limit.
§ Lord Carmichael of KelvingroveMy Lords, we are grateful for that but the whole tenor of the rest of the speech of the noble Lord, Lord Trefgarne, was rather negative. In order to give him an opportunity to look again at the detailed points I have made I would rather 616 negative this amendment than withdraw it. Therefore I should like to test the opinion of the House on it.
§ On Question, amendment negatived.
§ [Amendments Nos. 119 to 123 not moved.]
§ Clause 59 [Exclusion of public sector co-operation requirements and bus operating powers]:
§
Lord Teviot moved Amendment No. 124:
Page 58, line 22, leave out ("on a day specified in the order").
§
The noble Lord said: My Lords, with this amendment, I should like to speak to Amendments Nos. 125, 126 and 127.
Amendment No. 125: Page 58, line 23, after ("under") insert ("any of the provisions of").
Amendment No. 126: Page 58, line 26, leave out ("in relation to the Executive") and insert ("providing for the cessation of the Executive's powers under the said section 10(1)(i)").
Amendment No. 127: Page 58, line 32, leave out ("day specified in the order") and insert ("date of the cessation of those powers").
§ This amendment is on a topic that has been under discussion between the officials of the Department of Transport and the passenger transport executives but because of time constraints no decision has been taken by the department whether or not to pursue it. The passenger transport executives have therefore prepared this amendment, which I hope will be acceptable to the Government either in this form or in their own.
§ The amendment is very simple in that it would allow the Secretary of State to make an order removing the powers of passenger transport executives to hire out vehicles at a different time from the order that removes their powers to carry passengers by road. Under the Bill as currently drafted in Clause 59 the Secretary of State only has power to make these orders at the same time. The reason for wanting this alteration is so that the Secretary of State can postpone, indefinitely if need be, the making of an order to remove a passenger transport executive's power to hire out vehicles.
§ Executives, following the transfer of assets to the company, may be left with a considerable number of vehicles, currently estimated at a minimum of 1,000 and a maximum of 3,000. If this amendment is not made, or if a similar amendment is not made, these vehicles could probably be sold only at a considerable loss, particularly if this volume of vehicles came on to the market at the same time. If passenger transport executives were left with the power to hire out vehicles, they could offer them on hire to those wishing to tender for services. This could encourage competition as the availability of vehicles for hire might encourage small operators to tender as they would not have to raise capital to purchase suitable buses.
§ The executives may also not be free to dispose of vehicles or even to transfer them to the initial company. This is because many of the vehicles are leased and are therefore in the ownership of a leasing company, which may not be willing to agree to a disposal as it would adversely affect the security of its contract. Approximately 60 per cent. of the total fleet of executives is leased, so this could be a significant problem. This could be avoided if the amendment is made. The amendment has been professionally 617 prepared in the form that passenger transport executives understand the department were considering and is, I hope, acceptable. I beg to move.
§ Lord TordoffMy Lords, I should like to support this amendment moved by the noble Lord, Lord Teviot. It is an important amendment, although it is really rather a technical one. It is important to minimise the cost to the executives of surplus assets and it is also important not to waste assets which exist on the ground at the moment. This may happen if the Bill passes in its present form.
All the amendment does, and I stress this, is to give the Secretary of State some flexibility. As the noble Lord, Lord Teviot, has said, it is to divide the decision-making process so that he does not have to bring the second part into operation until it makes sense to do so. The Secretary of State could thus postpone the making or an order to remove the power of the executives to hire out vehicles. He would still retain the power to make that order at such time as he deems appropriate. The Government ought seriously to consider this because it would involve no matter of principle if they conceded the amendment or something like it.
There is a concern that executives may be left with a significant number of leased vehicles following the transfer of assets to the companies. They could even be in a position where they could do nothing with the vehicles save put them in to a large car park. Many of these vehicles are modern ones which may be better than some of the vehicles which the enterpreneurial private operator can buy on the open market second-hand. So it is doubly a waste of assets, particularly when many of these vehicles are adapted for use by disabled people and are up to very modern standards. If the executives have no power to hire them out they can only allow them to stand idle and rot, or make use of terms within their contracts and buy themselves out of these contracts, probably at very high cost. Again, as the noble Lord has said, at a time when the market could well be flooded with vehicles, it is likely that it would be very expensive to go down that route.
The number of vehicles is considerable. Out of a total of all PTE bus fleets of 9,300 plus, some 5,436 are leased—that is almost 60 per cent. of the total PTE bus force, if I may use that word. As with all averages this conceals wide variations. The figures range from only 21 per cent. leased in Tyne and Wear, to 83 per cent. in South Yorkshire, and 79 per cent. in Greater Manchester. The scale of the problem could obviously vary from one PTE to another.
All that is being asked for in this case is a degree of flexibility. I hope that the Government will accept that they are not being asked to concede some high principle, but this is important because it will considerably reduce the cost to the PTEs of the consequences of this Bill. I beg to support the amendment.
§ Lord Carmichael of KelvingroveMy Lords, I also support this amendment, which does not demand any new power but would merely give the Secretary of State the opportunity of using the powers he has. It has been pointed out by the noble Lords, Lord Teviot and Lord Tordoff, that there is a problem concerning the 618 leasing of buses. A very large number of buses are leased. As the noble Lord, Lord Tordoff, mentioned, many of them are fairly new. A difficulty would arise if leasing companies decided that they were unwilling to continue leasing those vehicles to smaller concerns or to the companies which are to be formed, because of the possibility that they may go bankrupt, whereas there is not the same risk in respect of PTEs.
The noble Lord, Lord Tordoff, made an important point when he stated that many such buses arc fairly new and are among the best in the country. The difficulty is that if people wishing to enter the market for the first time, and not just those wishing to renew their fleets, turn to the ex-coach market, where they will find the cheapest vehicles, such vehicles arc in fact quite unsuitable for the type of work involved in regular bus services involving frequent stopping.
I would point out to the Minister that it is suggested in the draft code of practice for tendering (and I thank the Government for providing me with a copy this week) that the new authorities should bear in mind not only features designed for the convenience of blind and other disabled passengers who have difficulties with mobility but also those likely to be of assistance to mothers with young children or passengers with heavy luggage or shopping.
I hope that the Minister, when he replies, will acknowledge that in order to make use of these buses, rather than have them lying idle in garages or parking places, this amendment seeks merely that the Secretary of State should have the opportunity of using his powers. That is not asking too much and it could be rather helpful.
The Earl of CaithnessMy Lords, despite the very clear exposition and arguments put forward by my noble friend Lord Teviot, I must take issue with him straight away and say that I do not agree with his assumption that the PTEs will have the vast problems he has portrayed.
We have discussed this matter in connection with earlier amendments; my noble friend Lord Trefgarne did so in relation to Clause 58. I repeat the Government's view that companies will have every chance of competing in the new market. The Government have made clear that they expect reductions in revenue support in the metropolitan areas; but at the same time this Bill will provoke new approaches to provide more services and better value for money. It would be wrong to expect significant reductions in services; I truly believe that.
I have serious reservations about the suggested way of dealing with this issue, even assuming that such a problem does arise. It seems to me that if the PTEs were to retain powers to hire out vehicles, even for only a transitional period, this would give the executives an undisputed interest in whether or not operators who submitted tenders propose to hire the vehicles held by the executive. That challenges one of the fundamental concepts of this Bill.
Finally, I believe that if there are problems in relation to surplus assets then they are likely to be short-lived and could be tackled in other ways. As I understand it, there is nothing to prevent the initial company itself from reaching agreements to hire any vehicles it does not immediately require as operators. 619 There will be plenty of operators in other parts of the country who pose no competitive threat to the initial company and who may well value the flexibility which hiring vehicles will allow them.
5.45 p.m.
The noble Lord, Lord Carmichael, said that a small PTC is not the same as a PTA and that it could go bankrupt. I have to tell the noble Lord that the PTC will have the backing of the PTA, who are the shareholders. I do not believe that an organisation which intends to lease a bus to a PTC will be concerned about bankruptcy to the same extent that it would be in relation to an ordinary company. The noble Lord, Lord Tordoff, is being terribly gloomy. On his figures, he claims that there are 5,400 buses leased out of a total of 9,000. Does the noble Lord really anticipate that the remaining 3,600 buses will be surplus? Does he expect that degree of reduction in services? I do not believe that there will be. I foresee many opportunities ahead in the bus field.
My noble friend Lord Teviot argued that the release of a substantial number of vehicles for sale would seriously distort the second-hand bus market. I understand that argument, that such distortions are undesirable, and that the situation could be cushioned by hiring rather than selling buses. I—
§ Lord McIntosh of HaringeyMy Lords, if the noble Earl will allow me to interrupt, he is challenging the noble Lord, Lord Tordoff, over the figures he gave in relation to a reduction in services by the original operators, by those who have these vehicles. It is surely the responsibility of the Government to give their estimates. Can the noble Earl not give the House his own figures?
The Earl of CaithnessMy Lords, I do not have the figures with me at the moment. However, I do not anticipate a reduction, if any reduction there be, of the order forecast by the noble Lord, Lord Tordoff. That is my point. To return to my comments in reply to my noble friend Lord Teviot——
§ Lord TordoffMy Lords, I am in some considerable difficulty because this is Report stage. However, I am being challenged directly. If the Government are saying that the executives will be running exactly the same number of services as they are at the moment, using exactly the same number of buses as they are at the moment, then where is all the entrepreneurial effort to come from? Is it all to be channelled into the new services? If all that the Government seek to achieve is achieved, then clearly there will be a reduction in the number of buses needed by the PTEs. In that case there will be surplus buses, which will be hired from companies which have no incentive whatsoever to terminate those hire agreements.
The Earl of CaithnessMy Lords, with respect to the noble Lord, I did not challenge his figures. I accept his figures. I only questioned whether he expected a reduction in services of 3,600 buses out of a total of 9,000 buses. That is the question I put to the noble Lord.
620 I have dealt with the point concerning the leasing of buses. The company that is leasing the buses at present can continue to lease the buses to the PTCs. This brings me back to the point I was trying to make in dealing with the arguments put by my noble friend Lord Teviot. If there are surplus buses (although I do not necessarily agree that there will be) then I and the Government believe very firmly that it is better that those surplus buses should be with the PTCs rather than with the PTEs.
We are trying to separate the functions. Therefore, if there are surplus buses then they should go to the PTCs. A principle of the Bill is being challenged by this amendment. I feel very strongly that my noble friend is emphasising a point that might arise but that he is misconstruing where the buses might go. We believe that the buses should go to the PTCs. That is a natural extension of the Government's philosophy.
To summarise, I am not convinced that these amendments are needed. In some respects they are undesirable. They would weaken the distinction we propose to draw between the PTE which administers tendering and the company which provides services and operates vehicles. That is fundamental. The function of hiring out vehicles, if it is needed for the reasons explained by my noble friend and by the noble Lord, Lord Tordoff, should surely rest with the company and not with the PTE. That is the principle.
§ Lord TeviotMy Lords, this amendment has taken off on a very different tack than I ever thought possible. I should like to ask my noble friend about the PTC he is talking about. This is a new dimension. He has spoken about PTAs, but what is a PTC? I imagine my noble friend means passenger transport authorities. What are PTCs, please?
The Earl of CaithnessPassenger transport companies, my Lords. I thought my noble friend had taken that on board. He has been on this Bill for a long time.
§ Lord TeviotMy Lords, I do like these things spelt out. I loathe initials. I am a little more stupid about this because some initials can mean umpteen things. However, I do not want to be pedantic about this. But on the question of whether or not this amendment is important, it is a simple amendment, rather stuck in the back of the Bill, and I was rather concerned about the fact that there will be lots of vehicles which will not be needed because the PTEs or the PTCs (now we know what they are) can be competitive, and so on. I agree that competition is absolutely lovely, but I said earlier on a previous amendment that I had visited various PTEs, and I saw that there are times when you just cannot put another bus on the road. I do not think you can query their operation, or their operational achievement. No form of competition could really better their service. What can be achieved, perhaps, is not to give them the amount of subsidy—and here I am getting into quite a grey area, but I will go on—not only revenue support grant from rates but revenue support grant from the taxpayer. But on the very point my noble friend was bringing out about this competition and the Government's approach, I do not believe it will have a significant effect on the PTE areas where services are excellent and it would be found very difficult to improve them.
621 I do not want to say much more except that one does not want to see these buses—and I explained the amendment—some of which are on lease and cannot be shoved away, because the leasing companies will not like it. The PTCs might have to get rid of these buses at great cost, or have an option for early withdrawal, which seems very unsatisfactory. Equally, one does not want to see rows of old buses in yet another Welsh valley where only a few decades ago splendid steam engines were struck down in their prime.
My Lords, what started to be a simple amendment has mushroomed into a rather complicated one. But in my heart of hearts I do not see that I can possibly divide on it, so I shall have to withdraw the amendment, unless your Lordships think otherwise.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 125 to 132 not moved.]
§ Clause 60 [Division of undertakings of companies formed under section 58]:
§ Lord Belstead moved Amendment No. 133:
§ [Printed earlier: col. 611.]
§ The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 117. I beg to move.
§ On Question, amendment agreed to.
§
Following is the text of the amendment (No. 117):
Page 56, line 26, leave out ("1948") and insert ("1985").
§ [Amendments Nos. 134 to 137 not moved.]
§ Lord Belstead moved Amendment No. 138:
§ [Printed earlier: col. 611.]
§ The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Marshalled List.
§ On Question, amendment agreed to,
§
Following is the text of the amendment (No. 138):
Page 60, line 19, leave out ("1948") and insert ("1985").
§ [Amendments Nos. 139 to 143 not moved.]
§
Lord Trefgarne moved Amendment No. 144:
After Clause 60, insert the following new clause:
("Protection of employee benefits on transfer and division of bus undertakings.
.—(1) In this section, as it applies in relation to the Passenger Transport Executive or (as the case may be) in relation to the Passenger Transport Authority for any passenger transport area—
and "the first transfer date" and "the second transfer date" mean respectively the date on which the first transfer and the date on which the second transfer takes effect.
(2) The Passenger Transport Executive for any passenger transport area shall have power to make, in such manner as they think fit, such provision as appears to them to be appropriate in connection with either the first or the second transfer for the maintenance to any extent of any concession, benefit or privilege of a description enjoyed immediately before the first transfer date by—
(3) Subject to subsection (4) below, the Passenger Transport Authority for any passenger transport area shall have power to make, in such manner as they think fit, such provision as appears to them to be appropriate in connection with the second transfer for the maintenance to any extent of any concession, benefit or privilege of a description enjoyed immediately before the second transfer date by—
(4) Subsection (3) above shall not apply to any concession, benefit or privilege of a description to which subsection (2) above applies.
(5) Where provision for the maintenance of a concession, benefit or privilege of any description may be made under subsection (2) or (3) above provision may instead be made, in any cases or classes of case to which that subsection applies, for the making of any payment or the provision of any other concession, benefit or privilege in compensation for the loss or (as the case may be) for any reduction or limitation of concessions, benefits or privileges of that description.").
§ The noble Lord said: My Lords, on behalf of my noble friend I rise to move Amendment No. 144. At Committee stage we debated a new clause tabled by my noble friend Lord Teviot which aimed to give similar protection to or compensation for any loss of staff benefits enjoyed by PTE staff transferring to the PTCs as that afforded to present employees of the National Bus Company. We were not able to accept the amendment of my noble friend then for technical reasons, but did accept the principle underlying it. Therefore, I am now pleased to move this new clause. I hope my noble friend will agree that this meets his intentions, and that your Lordships will agree to it. I beg to move.
§ Lord TeviotMy Lords, I should like to say that I am very grateful to my noble friend for producing this amendment. It was something which in Committee rolled off the tip of my tongue, and I was very surprised that it was accepted with the alacrity that it received. But I am delighted to see the amendment.
§ On Question, amendment agreed to.
§
Lord Tordoff moved amendment No. 145:
After Clause 60, insert the following new clause:
("Superannuation rights of transferred employees.
.—( ) On the coming into force of any scheme under section 58 of this Act, every person then employed by a Passenger Transport Executive or any wholly-owned subsidiary of theirs, in respect of whom rights and liabilities under an agreement for the rendering of personal services are transferred to an initial company by the scheme, shall have the right exercisable by him by notice to the initial company within three months of the coming into force of the scheme, to continue to participate in a Superannuation Scheme under the Local Government Superannuation Act 1972 as if his employment by the company, or any transferee company referred to in section 60 of this Act, was employment by the Executive or, on their incorporation in a Passenger Transport Authority under section 82, by the Authority.").
§
The noble Lord said: My Lords, I rise to move this amendment, No. 145, in place of my noble friend Lord Banks, who is still indisposed. I should say also that, if it is for the convenience of the House, in speaking to this amendment I shall speak to Amendment No. 172 at the same time, because the principle is exactly the same
623
Amendment No. 172: After Clause 70, insert the following new clause:
("Superannuation rights of transferred employees.
On the coming into force of any scheme under sections 64 and 65 of this Act, all persons transferred from the employ of the authority into the employ of a public transport company, in respect of whom rights and liabilities under an agreement for the rendering of personal services are transferred to an initial company by the scheme, shall have the right exercisable by the employee by notice to the initial company within three months of the coming into force of the scheme, to continue to participate in a Superannuation Scheme under the Local Government Superannuation Act 1972 as if employment by the company was employment by the authority who employed that person up to the date the aforesaid scheme came into force.").
§ As noble Lords will be aware, amendments have been tabled at previous stages of the Bill covering several aspects of superannuation. I am glad to say that as a result of discussions which have gone on during the course of the Bill various accommodations have been made, and the PTE group and others affected have been satisfied by the response of the Government on all but the most critical issue, the protection of the position of the individual within the local government superannuation scheme—and I emphasise "the position of the individual".
§ Under Clause 58 of the Bill a passenger transport executive is required to form a company and transfer to it the assets and liabilities, including staff, necessary for the operation of all the executive's bus services. These staff, as we know, are currently within the local government superannuation scheme.
§ The Government have indicated their intention of amending the local government superannuation regulations to provide a deeming option whereby the passenger transport executive and the directors of the company will have the option, in consultation with employees' representatives, of deciding whether transferred employees are taken into a new pension scheme or whether they remain within the local government superannuation scheme by being deemed to remain employees of the passenger transport executive for pension purposes. This is a big step forward, because in the initial stages I think it was thought by the Government that it would not be possible to do this; so I think everyone concerned is grateful that we have at least got that far. This option is to the employer and not to the employee. Thus, if the employer does not exercise the option in favour of the local government superannuation scheme the employee's position could be adversely affected through no fault of his own.
§ The new scheme may not be as good as the local government superannuation scheme and may not be prepared to admit the employee on grounds of health or age. An employee so affected may be quite unable to make up for what he has lost by private arrangements.
§ The employees concerned have in the past managed their personal affairs on the basis of the Local Government Superannuation Scheme secure in the knowledge that this would provide adequately for their retirement. There is a particular point here, when one is referring to, as it were, the Civil Service, whether national or local, for people do feel that they have the strength of something better than perhaps a building society round them in terms of their future security. So 624 it is most unfair to deprive them of this and leave them in a position where in some cases they cannot protect themselves.
§ The amendment proposed is designed to give the employee the option, which must be exercised within three months of transfer, of remaining within the local government superannuation scheme or transferring to a new pension scheme which the company will need to establish for new employees. It is suggested that such an option is fair to both the employee and to the company as the employee has a choice and the company may be able to persuade some employees to transfer if the new scheme is attractive enough and satisfies the individual's expectations.
§ This is an important defence of the individual's rights and, as I said on another matter, it seems to me that if the country, Parliament and the Government will that these schemes should go through then our most important consideration—perhaps of equal importance to the consumer but certainly one of the most important moral considerations—is the welfare of the current employees and their entrenched pension rights. I hope that the Government will accept both these amendments. I beg to move.
§ 6 p.m.
§ Lord TrefgarneMy Lords, we made clear in earlier debates that it is our intention that there should be a choice of options where staff are transferred from a PTE to the employment of the initial company—the PTC which will take over responsibility for the running of bus services. It would be possible either for the staff transferred to be deemed to remain employees of the PTE so that they could remain members of the local government superannuation scheme (LGSS) or for the company to set up an entirely new scheme to which all employees would belong. This would be a decision for the PTE to take acting, of course, in consultation with the management of the new company. The object of the present amendment is to take this decision out of the hands of the PTE—and the company— and give an option of remaining in the LGSS in the hands of every individual employee of the new company.
The major objection to this is that it would be quite contrary to the spirit and practice of the local government superannuation scheme. It is an essential feature of that scheme that all the pensionable staff of any body which is a member of the scheme—whether it be a local authority or some other body—should be members of the scheme. The scheme, in other words, is comprehensive. But the present amendment would breach that principle by giving individual members of staff a choice as to whether or not they wished to belong to it. This would undermine the whole basis on which the scheme is organised and financed. It is not designed to take account of a system of individual membership by particular employees.
I think that the noble Lord, Lord Tordoff, was particularly anxious about the position of an employee of an existing PTE who wanted to transfer to a new scheme but for some reason was not eligible for the new scheme. I do not believe that that will arise in practice. There are provisions within the LGSS which ensure that that cannot happen so I do not think that the noble Lord need have any anxiety on that count. In 625 the light of those considerations I invite the noble Lord not to pursue Amendment No. 145.
I turn now to Amendment No. 172 to which the noble Lord also spoke. That amendment parallels Amendment No. 145 which, as I have already said, would give the staff transferred from a PTE to the new initial company an individual option of remaining members of the LGSS. Amendment No. 172 would confer a similar individual choice on employees of a former district council bus operation who were transferred to the PTC. However, as I explained a moment ago such a course, if adopted, would undermine the whole basis of the LGSS which is that all members of staff and any body which is included in the scheme should be covered by a pension scheme. In other words, the arguments in relation to Amendment No. 172 are broadly similar to those which I deployed in reply to Amendment No. 145. In the light of those considerations, therefore, I invite the noble Lord not to pursue either of these amendments.
§ Lord BarnettMy Lords, I am surprised at the Minister. I thought that the noble Lord, Lord Tordoff, made a straightforward and fairly simple case for which I should have hoped noble Lords on all sides, including Ministers, would have had a great deal of sympathy; namely, the interests of employees some of whose rights are being removed by the Bill unless the amendment is carried.
It is a very simple amendment and was explained very clearly by the noble Lord, Lord Tordoff. All it seeks to do is to give to employees the option to stay within a scheme they were in, or would have been in, before this Bill. We are not now talking about whether we should, or should not, have the Bill. We have it and want to make it as sensible and as fair as possible to the employees concerned.
It is no use the Minister saying that it undermines a particular basis. The fact is that if the amendment is not accepted it will undermine the moral right of employees to choose whether or not they stay within a system they thought they were in before the Bill. That is all that the noble Lord is asking for with his amendment. It is a perfectly reasonable proposition. It is not harming the Government, the new companies or the new transport executives because they would have the option to choose to try to convince the employees that the scheme they are proposing as an alternative is just as good. If they cannot so persuade them then the employees, under the amendment, would have the right to stay in the local government superannuation scheme. What on earth is wrong with that proposition? I should have thought that all noble Lords in this House could have accepted that simple proposition and moral right of employees to stay within a local government scheme.
I hope that the Minister will change his mind and accept what is not an onerous amendment but a simple and perfectly reasonable attempt to protect the interests of employees who have been put in this position through no fault of their own.
§ Lord SandfordMy Lords, may I say a few words before my noble friend replies? There is some force in what has just been said. It may well be that within local government and within the local government 626 superannuation scheme there is force in the argument that everybody must be in it. But that is not the situation here. Here we are creating private sector companies and leaving an option to the local authority which is creating the new company on whether to deem their employees to remain in local government or to go into the private sector.
If there is a case for the local authorities having an option—and I am very keen to preserve the situation where they have not only that option but a number of other discretions but I shall be coming to that on a later amendment—there is a strong case for individual employees to have the option, too. Further, I should have thought it entirely inconsistent from the Government's own developing policy about portable pensions, and so on, to be as rigid on this point as my noble friend seems to be. I am surprised at the line he is taking.
§ Lord McIntosh of HaringeyMy Lords, I should like to add one simple point. If anyone should think that the amendment would cause increased complication in pension schemes I remind the House that the new companies have to set up pension schemes for their new employees anyway, so there is always the possibility of people working side by side and being in two schemes.
There is no magic in a local government superannuation scheme being comprehensive. What is important is that the obligation should be calculable actuarially. There is no reason why, the decision being taken at one time, the actuaries should not compute the results for individual entrants as they would compute the results for entrants, en bloc.
§ Lord TrefgarneMy Lords, I shall try to help your Lordships. It is, of course, the case that the benefits which employees under existing arrangements will have accrued for themselves under the existing local government scheme will remain. Those arrangements will be enshrined and employees will have this particular option to decide for themselves whether their accrued benefits should remain in the local government scheme or, if they prefer, be transferred to whatever new scheme is devised by the company. That specific right will exist for individual employees.
However, I am afraid I must come back to the point that it would present enormous difficulties for the local government scheme if individual members were allowed to opt in or out. My noble friend Lord Sandford particularly referred to the proposals about portable pensions which are now being developed by the Government. But there is an essential difference, in that those proposals are designed to allow employees to opt out of a scheme of which they are members. The purpose of the present amendment is quite different from that of course. It will allow the new employee to compel his employer, as it were, to opt into the local government scheme when that employer might believe that that scheme was not the most appropriate to his needs as an independent operator of bus services.
I think that the noble Lord, Lord Tordoff, in his opening remarks put his finger on an anxiety which he was entitled to express but which I think was not well founded, and that was the case of the individual who, for some reason, did not find himself eligible to join a 627 new scheme devised by his new employer. I believed that I could give the noble Lord a categoric assurance on that fact and I hoped that the noble Lord would be reassured.
§ Lord BarnettMy Lords, perhaps the noble Lord would care to deal with this particular point: he has talked about the great difficulties that there would be if employees exercised the option of this amendment, but if there were such great difficulties about exercising the option, why have the Government agreed to give that option to employers, who may equally exercise it?
§ Lord TrefgarneBecause, my Lords, the option we are giving to employers will be to decide that all their employees—not individual employees separately, but all the employees of the organisation—should remain part of the LGSS as they are at present.
§ Lord Nugent of GuildfordMy Lords, I should like to make one point before the noble Lord, Lord Tordoff, replies. There seems to me to be a real technical difficulty here, in that if this option were allowed to the employee—and I quite understand that he may wish to have such an option and obviously he may be concerned to try to preserve as good a pension position for the future as he has now—when the local government body was no longer his employer, then the body responsible for the pension scheme (that is to say, the local government body) would have no control over his contributions. This is the point behind what my noble friend is saying, which is that the employer should have such an option as to whether he will allow any particular employee to come from outside into the schemes but normally, if an employee is to continue inside an existing scheme and is going off to work for someone else, it would have to be on a secondment basis so that the contributions can be controlled. I think that my noble friend is on a perfectly sound point, which is that no pension scheme could be run like this.
§ Lord TordoffMy Lords, perhaps I may deal with that point first. If that were true surely it would destroy the arrangement which the Government has already agreed to? I cannot believe that, if the position is possible for the whole of the undertaking, it is not possible to administer it for the individual. I really have rarely been so angry in this House. I feel that the Government have turned a very blank face to the genuine worries of individual people who are being used as shuttlecocks in this game that is being played. I am really extremely angry about this.
The Government say that the Local Government Superannuation Scheme benefits will be enshrined and that means frozen. That is not the same at all. The fact is that they will not take account of future promotions. They will not take account of a number of other factors which would have been taken care of if these people had remained within the scheme. The fact of the matter is that once again the Government are determining what the final position will be and they are refusing to pick up the tab for it.
I believe that in this case the needs and the demands of the individual are really of paramount importance. 628 I am not prepared to allow them to be left to the whim of the PTE, the local authority or anybody else, and I am determined to divide the House on this issue.
§ 6.14 p.m.
§ On Question, Whether the said amendment (No. 145) shall be agreed to?
§ Their Lordships divided: Contents, 85; Not-Contents, 104.
629| DIVISION NO. 3 | |
| CONTENTS | |
| Airedale, L. | McCarthy, L. |
| Attlee, E. | McIntosh of Haringey, L. |
| Aylestone, L. | McNair, L. |
| Barnett, L. | Meston, L. |
| Beaumont of Whitley, L. | Milner of Leeds, L. |
| Bernstein, L. | Morton of Shuna, L. |
| Blease, L. | Mountevans, L. |
| Blyton, L. | Mulley, L. |
| Briginshaw, L. | Nicol, B. |
| Carmichael of Kelvingrove, L. | Ogmore, L. |
| Cledwyn of Penrhos, L. | Oram, L. |
| Crawshaw of Aintree, L. | Perry of Walton, L. |
| David, B. | Phillips, B. |
| Davies of Penrhys, L. | Ponsonby of Shulbrede, L. [Teller.] |
| Dean of Beswick, L. | |
| Diamond, L. | Roberthall, L. |
| Donoughue, L. | Rochester, L. |
| Elwyn-Jones, L. | Seear, B. |
| Fisher of Rednal, B. | Sefton of Garston, L. |
| Galpern, L. | Serota, B. |
| Glenamara, L. | Shepherd, L. |
| Graham of Edmonton, L. | Silkin of Dulwich, L. |
| Grey, E. | Stallard, L. |
| Grimond, L. | Stedman, B. |
| Hampton, L. | Stewart of Fulham, L. |
| Hanworth, V. | Stoddart of Swindon, L. |
| Harris of Greenwich, L. | Strabolgi, L. |
| Hatch of Lusby, L. | Taylor of Blackburn, L. |
| Houghton of Sowerby, L. | Taylor of Gryfe, L. |
| Howie of Troon, L. | Taylor of Mansfield, L. |
| Hughes, L. | Teviot, L. |
| Hunt, L. | Tordoff, L. [Teller.] |
| Irving of Dartford, L. | Underhill, L. |
| Jacques, L. | Wallace of Coslany, L. |
| Jeger, B. | Walston, L. |
| Jenkins of Putney, L. | Whaddon, L. |
| John-Mackie, L. | White, B. |
| Kagan, L. | Williams of Elvel, L. |
| Kirkhill, L. | Willis, L. |
| Lawrence, L. | Wilson of Rievaulx, L. |
| Llewelyn-Davies of Hastoe, B. | Winstanley, L. |
| Lockwood, B. | Young of Dartington, L. |
| Lovell-Davis, L. | Ypres, E. |
| NOT-CONTENTS | |
| Airey of Abingdon, B. | Cox, B. |
| Aldington, L. | Craigavon, V. |
| Alexander of Tunis, E. | Cullen of Ashbourne, L. |
| Belhaven and Stenton, L. | Daventry, V. |
| Beloff, L. | Davidson, V. |
| Belstead, L. | Denham, L. [Teller.] |
| Bessborough, E. | Drumalbyn, L. |
| Blake, L. | Eden of Winton, L. |
| Brabazon of Tara, L. | Elibank, L. |
| Brougham and Vaux, L. | Elliot of Harwood, B. |
| Broxbourne, L. | Elliott of Morpeth, L. |
| Bruce-Gardyne, L. | Fortescue, E. |
| Butterworth, L. | Fraser of Kilmorack, L. |
| Caccia, L. | Gibson-Watt, L. |
| Caithness, E. | Glanusk, L. |
| Cameron of Lochbroom, L. | Gray of Contin, L. |
| Carnegy of Lour, B. | Hailsham of Saint Marylebone, L. |
| Chelwood, L. | |
| Coleraine, L. | Hanson, L. |
| Colwyn, L. | Harmar-Nicholls, L. |
| Harris of High Cross, L. | Mowbray and Stourton, L. |
| Harvington, L. | Napier and Ettrick, L. |
| Henley, L. | Nugent of Guildford, L. |
| Hives, L. | O'Brien of Lothbury, L. |
| Holderness, L. | Orkney, E. |
| Hood, V. | Orr-Ewing, L. |
| Hooper, B. | Pender, L. |
| Hunter of Newington, L. | Peyton of Yeovil, L. |
| Hylton-Foster, B. | Portland, D. |
| Ironside, L. | Rawlinson of Ewell, L. |
| Kaberry of Adel, L. | Rochdale, V. |
| Kimball, L. | Rodney, L. |
| Kinloss, Ly. | St. Davids, V. |
| Kinnaird, L. | Saltoun of Abernethy, Ly. |
| Kitchener, E. | Sanderson of Bowden, L. |
| Lane-Fox, B. | Selkirk, E. |
| Lauderdale, E. | Shannon, E. |
| Layton, L. | Skelmersdale, L. |
| Lindsey and Abingdon, E. | Somers, L. |
| Long, V. | Sudeley, L. |
| Lucas of Chilworth, L. | Swinton, E. [Teller.] |
| McAlpine of Moffat, L. | Thomas of Swynnerton, L. |
| McAlpine of West Green, L. | Tranmire, L. |
| McFadzean, L. | Trefgarne, L. |
| Macleod of Borve, B. | Trumpington, B. |
| Mancroft, L. | Vaux of Harrowden, L. |
| Margadale, L. | Vickers, B. |
| Marley, L. | Vivian, L. |
| Marshall of Leeds, L. | Ward of Witley, V. |
| Merrivale, L. | Whitelaw, V. |
| Mersey, V. | Windlesham, L. |
| Monk Bretton, L. | Young, B. |
| Mottistone, L. |
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 6.22 p.m.
§ Clause 61 [Functions of local councils with respect to passenger transport in areas other than passenger transport areas]:
§ [Amendments Nos. 146 and 147 had been withdrawn from the Marshalled List.]
§ Lord Belstead moved Amendment No. 148:
§ [Printed earlier.]
§ The noble Lord said: My Lords, I have already spoken to this. I beg to move.
§ On Question, amendment agreed to.
§
Following is the text of the amendment (No. 148):
Page 61, line 30, at end insert—
("(3A) In formulating policies under subsection (1)(b) or (2(b) above with respect to the descriptions of services they propose to secure under subsection (l)(a) or (2)(a) above, a council shall have regard to any measures they are required or propose to take for meeting any transport requirements in exercise or performance of—
§ [Amendment No. 148A not moved.]
§
Lord Brabazon of Tara moved Amendment No. 149:
After Clause 62, insert the following new clause:
("Co-operation between certain councils and London Regional Transport.
.—(1) Subject to the following provisions of this section, any non-metropolitan county or district council in England and Wales and London Regional Transport shall each have power to enter into any agreement or arrangements with the other under which that council or (as the case may be) London Regional Transport undertake to contribute towards any expenditure incurred by the other party to the agreement or arrangements in
630
making payments to a person providing a public passenger transport service under any agreement entered into by that other party in exercise of any power that other party may have to secure the provision of that service.
(2) The agreement under which the payments are made must have been entered into in pursuance of the agreement or arrangements between the council in question and London Regional Transport.
(3) The power of London Regional Transport under section 3(2) of the London Regional Transport Act 1984 (contracting-out powers) to enter into and carry out agreements with any person for the provision by that person of any public passenger transport service, if exercised in pursuance of any agreement or arrangements entered into under this section, shall be limited to securing the provision of public passenger transport services which would not otherwise be available and shall also be subject to sections 86 to 89 of this Act.
(4) Section 28 of the London Regional Transport Act 1984 (agreements with respect to the provision by London Regional Transport of extra services and facilities financed by certain other authorities) shall cease to apply in relation to agreements with district councils, and accordingly—
(5) Subsection (3) above is without prejudice to section 6 of the London Regional Transport Act 1984 (obligation of London Regional Transport to invite tenders for carrying on activities in certain circumstances).").
§
The noble Lord said: My Lords, with this I shall speak to Amendments Nos. 215, 319 and 378.
Amendment No. 215: Clause 85, page 89, line 43, at end insert ("and in sections 86 to 89 of this Act include references to London Regional Transport in relation to any exercise of their power under section 3(2) of the London Regional Transport Act 1984 (contracting-out powers) which by virtue of section (Co-operation between certain councils and London Regional Transport) (3) of this Act is subject to those sections.").
Amendment No. 319: Schedule 5, page 156, line 15, at end insert ("; or
(4) The conditions are that—
Amendment No. 378: Schedule 7, page 173, line 31, column 3, at beginning insert—
| ("In section 28, in subsection (1) paragraph (d) and the word "or" immediately preceding it. and in subsection (2) the words "and the council of any district".") |
§ One of our main objectives is to ensure that local authorities co-operate with one another to achieve the most effective use of public funds. This co-operation will be particularly important in the case of cross-boundary services because of course patterns of travel do not always respect administrative boundaries.
§ In the Bill as it stands there is no provision for this kind of arrangement between London Regional Transport, which is of course not a local authority, and adjoining county and district councils in subsidising services in which they both have an interest. These amendments put that right. They enable LRT to take the lead with a contribution from the council, or vice versa. When LRT takes the lead in securing services 631 under such an arrangement it will be bound by the Bill's tendering provisions for local bus services in the same way as local authorities. I beg to move.
§ On Question, amendment agreed to.
§ Clause 63 [Exclusion of powers of certain councils to run bus undertakings]:
§ The Earl of Caithness moved Amendment No. 150:
Page 64, line 9, leave out from ("service") to ("until") in line 10.
§
The noble Earl said: My Lords, at the same time I shall speak to Amendments Nos. 151, 204 and 207.
Amendment No. 151: Page 64, line 12, at end insert—
("References below in this Part of this Act to a council operating a bus undertaking are references to any council to whom this subsection applies.").
Amendment No. 204: Clause 78, page 81, line 43, leave out subsection (2) and insert—
("(2) Where a council who, at the time when section 63 of this Act comes into force, are providing a service for the carriage of passengers by road which requires a PSV operator's licence, have ceased by virtue of subsection (1) of that section to have power to provide such a service, that council shall have power to maintain, repair and operate bus stations and associated facilities provided by them under their former powers.").
Amendment No. 207: Clause 80, page 84, line 20, leave out ("a council operating a bus undertaking") and insert ("any such council as is mentioned in sub-section (2) of that section").
§
These amendments are solely technical and are designed to clarify wording. Clause 63 refers, and needs to refer, to councils which at a particular time are, or could be, running a bus service. But the phrase,
a council operating a bus undertaking",
is also used in Clauses 78 and 80, and those provisions are actually intended to include councils which have lost the power to run a bus undertaking. The present drafting uses words which are inappropriate to the context of Clauses 78 and 80. The amendments are therefore designed to clarify the distinction between Clause 63 on the one hand and Clauses 78 and 80 on the other. I beg to move.
§ On Question, amendment agreed to.
§ The Earl of Caithness moved Amendment No. 151:
§ [Printed above.]
§ On Question, amendment agreed to.
§
Lord Sandford moved Amendment No. 152:
Page 64, line 30, at end insert—
("but no such order shall specify a preparatory period ending before 1st April 1986").
§ The noble Lord said: My Lords, in view of the concession made by the Government on the very first amendment of this Report stage, I move this amendment with some confidence that at least the idea behind it will be acceptable to my noble friends on the Front Bench.
§ Perhaps I should preface my remarks by reminding the House that the preparatory period to which my amendment refers is the period within the period between Royal Assent and deregulation day in which the municipal bus operating authorities have to form a private sector company and draft a scheme for transferring the assets of their existing company to that new company and submit that transfer scheme to the 632 Secretary of State. There is a lot to be done in that short period, and there would not be the slightest prospect of getting it done in the time allotted after Royal Assent unless a good deal of it was already under way.
§ In another place (at col. 1454) Mr. Mitchell assumed that Royal Assent would be in October. It will not, because on 31st October we shall be considering the Commons amendments. In another place he also assumed that schemes would be relatively simple. I assure the House that they are far from being relatively simple.
§ The Association of District Councils, which has been preparing and drafting guidance notes on these schemes and on the formation of these companies, and which began to issue them as soon as the Committee stage of the Bill was over at the end of July, has already found it necessary to issue 50 pages of notes. The reason for that is that the work that the local authorities are being required to do is entirely novel to them. None of them is trained to operate private sector companies. It is a different system of accounting and a different legal system, and there is a good deal of difficulty in it. Furthermore, guidance notes are required and expected from the department and the first of those appeared only at the end of August; and that was only for consultation and they referred only to the transfer schemes.
§ There are all these difficulties, and they are compounded by the fact that these schemes must contain the business projections of the new companies, which business projections have to be prepared as the new company is being formed, as registration is going on and before tendering has even begun, though of course they have to take the tendering into account to have any idea of the scale of their operations.
§ For all those reasons I submit to the House that the preparatory period which was originally intended to end on 1st March is far too short. Even with the kind of extension that my amendment argues for, it will be impossible to make a proper job of the formation of these companies, the transfer schemes, and so on and so forth.
§ 6.30 p.m.
§ I should like to make one further small point to my noble friend and ask him to respond to it. We have heard in earlier debates of the amount of work and midnight oil that has to be expended in order to effect all these changes. The same amount of midnight oil and hard work has to be undertaken whether you are running 14 buses or 400 buses. I would put it to my noble friend that it really is high time that we heard from him which size of bus company is to be excluded under Clause 68. At the moment all, down to the very smallest, are having to prepare themselves for the formation of these companies, the preparation of the transfer schemes and so on. It will be an absurd waste of time if at some later stage the Secretary of State gives an indication—an indication that I asked for at Committee stage but did not get—as to where he will draw the line on small companies.
§ In moving the amendment, I am reasonably confident that my noble friend will be able to accept, if not the amendment, at least the intention behind it. This is a case where I put it to the House that a firm 633 assurance to the same effect as the amendment will be acceptable because the date in question is only a few months ahead. I beg to move.
The Earl of CaithnessMy Lords, I have listened carefully to my noble friend's explanation of the work that district councils must complete in order to form public transport companies and to draw up proposals for the transfer of property rights and liabilities. I am not going to disagree with his view that the work involved is substantial; I know that it is. I would also like to acknowledge that many district councils are already approaching the task constructively and that the Association of District Councils has done a great deal in attempting to assist their planning. I can say on behalf of the Government that we are very grateful to the ADC. I hope that my noble friend will pass on those remarks.
I have no doubt that some councils and PTEs will still feel that it is in their interests to submit a scheme to the Secretary of State as soon as they can, that they are already well on the road and that there is no cause for delay. I am in full agreement with my noble friend who has spoken on the importance of getting this work right—some of the work is new—and on the importance of a reasonable preparatory period.
We have, of course, been considering the comments that the Association of District Councils made on this in its response to the Department of Transport's consultation paper on transfer schemes to which my noble friend has referred. It is clear that many people in this sector of the industry believe that an extra month would be helpful. We have already agreed that deregulation should not now take place until late October or early November. In view of the feelings expressed by the authorities concerned, the Government believe that it would be right to make the change of about a month in the timetable which my noble friend is proposing. However, I cannot recommend the House to accept an amendment on this subject. The Bill itself does not now state dates in this process, and it is not intended to do so. There are adequate powers to do so in orders and directions. In principle, it is right that the flexibility of those powers should be maintained.
There is also the fact that the amendment relates only to district and regional councils. This Government would want to be fair and equitable. It is only right to make the same timetable available to PTEs. I can, however, give the clear assurance that the Government will not now require councils or PTEs to submit their schemes to the Secretary of State before the end of March. That will give an extra month on the present timetable. It will not, of course, force people to delay. We shall be very happy and, indeed, we encourage schemes to be submitted so that we can consider any such schemes that are submitted well before then. I hope, however, that the House will welcome this move as something which will help a number of authorities who feel hard pressed. and therefore enable them to produce better end results.
My noble friend Lord Sandford asked about the exempted districts. I can only repeat the figure that we have, I believe, already given him, which the Association of District Councils knows. It is that we will exempt districts with fewer than 10 buses. I hope 634 that with the assurance I have given my noble friend will be able to withdraw the amendment.
§ Lord SandfordMy Lords, I am most grateful to my noble friend for both those assurances. I would suggest to the House, as I did in my preliminary remarks, that with a date only six months ahead, we can in these circumstances rely on the assurance of Ministers and not require anything on the face of the Bill. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 64 [Formation of companies to run council bus undertakings]:
§ The Earl of Caithness moved Amendment No. 153:
§ [Printed earlier: col. 611.]
§ The noble Earl said: My Lords, I spoke to this with Amendment No. 117. I beg to move.
§ On Question, amendment agreed to.
§
Following is the text of the amendment (No 153):
Page 65, line 40, leave out ("1948") and insert ("1985").
§ Clause 65 [Schemes for transfer of individual council bus undertakings to companies formed under section 64]:
§
Lord Sandford moved Amendment No. 154:
Page 67, line 15, at end insert—
("()A scheme under subsection (1) above shall identify any liabilities retained by the council or councils concerned on the transfer of their property, rights and liabilities to the company or companies under the scheme, being liabilities in respect of the following matters—
§
The noble Lord said: My Lords, I should like at the same time to speak to Amendments Nos. 156, 159 and 161 which only differ in that they relate to the work of joint companies.
Amendment No. 156: Page 67, line 41, at end insert—
("and the Secretary of State shall make grants to the council or councils concerned of such amounts as appear to him to be requisite for indemnifying the council or councils concerned in respect of the retained liabilities identified in the scheme").
Amendment No. 159: Clause 66, page 68, line 21, at end insert—
("() The written proposals under subsection (2) above shall identify any liabilities retained by the council or councils. concerned on the transfer of their property, rights and liabilities to the company or companies under the proposals, being liabilities in respect of the following matters:—
Amendment No. 161: Page 69, line 3, at end insert—
("and the Secretary of State shall make grants to the council or councils concerned of such amounts as appear to him to be requisite for indemnifying the council or councils concerned in respect of the retained liabilities identified in the proposals").
§ I wish also to refer back to Amendments Nos. 118 and 119, discussed a short time ago, which referred to PTEs and which your Lordships will see are drafted in more or less the same form. In discussing Amendments Nos. 118 and 119 the House heard, on 635 the one hand, the gloom and pessimism expressed by the noble Lord, Lord Carmichael, and, on the other hand, the heroic optimism of the Secretary of State as expressed by my noble friend on the Front Bench. As this whole Bill is a proposal that is unresearched, untested and untried, except in Hereford, it is very difficult to know where the truth lies between the two. All one can say is that if it turns out as it did in Hereford, the thing will be an utter disaster for the Secretary of State and a lot of other people. So let us hope that it does not.
§ The fact is that we are very much in the dark. I am not going to bring to these amendments, although they are very similar, the arguments brought forward by the noble Lords, Lord McIntosh and Lord Carmichael, because I want to argue rather different points and ask for rather different assurances. I want to relate all my discussion to the matter of pensions and not to the costs of redundancy and the costs of preparing transfer schemes, forming companies and so on. I want to ask my noble friend whether he will extend in a number of ways the answers he gave to me when we were discussing pensions at Committee stage, as a result of which he wrote to me a long letter that has been reprinted in Hansard and is now the definitive position of the Government in respect of pensions and the cost of pensions.
§ The position, broadly speaking—this has been stated in so many words in paragraphs 42 and 43 of the department's consultation paper on transfer schemes—is that the liability in respect of existing pensioners should remain with the local authority. It is the meeting of those liabilities to which I want to address most of my remarks.
§ May I ask a preliminary question? When my noble friend replies, can he confirm that he will be leaving to the discretion of the local authority concerned the further question which arises from this point: whether the responsibility for an employee who retires after X years in the service of the authority and Y years in the service of the company should be shared in that proportion as between the company and the authority when he retires, or whether that matter should be left to the discretion of the local authorities? Although there is an obvious case for its being divided up like that, there is also quite a strong case for that matter to be left to the discretion of the local authorities. But that is a further liability which we have to have in mind. I was going to ask the question about the employees exercising their own individual options; but we have dealt with that on the previous amendment, although not to my satisfaction.
§ In his letter to me in the course of the Committee stage my noble friend indicated his firm rejection of any payment by the Government in respect of these liabilities. Although my amendment asks for that again, the purpose of the amendment is not to do that so much as to have a discussion of some further points on this matter. It is essential that the cost of these residual liabilities should somehow be reflected in the formula for the grant-related expenditure assessment.
§ If your Lordships were listening to the latest rate support grant settlement you will remember that this is now the primary formula for rate support grant. It has never been satisfactory. All one can say about it is 636 that it is not so unsatisfactory as targets which have been abandoned. But they are constantly needing to be refined and they will have to be refined in order to reflect this liability, this cost, this expenditure by local authorities which is not recognised in GREA at the moment and cannot possibly have been budgeted for in the financial year which starts next April and in which year this will all come into force.
§ I should be particularly grateful if my noble friend could reassure me on those two points: namely, the discretion of local authorities about the way in which the liability for the pension costs of employees who retire in future is calculated and whether the GREA formula will be able to reflect these liabilities. I beg to move.
§ Lord TrefgarneMy Lords, as my noble friend said, we have already debated some of the issues which he has raised on the amendments to Clause 58 moved earlier by the noble Lord, Lord Carmichael, and my noble friend Lord Teviot. I said in response to those amendments that the Government could not accept that any transitional costs arising from the transfer of bus undertakings to the new companies should be met by Government, and before responding to the detailed points made by my noble friend Lord Sandford I think that I should state our position on that very clearly.
The change into company form is an essential part of the move towards greater efficiency and flexibility in the provision of services. This move will bring substantial benefits to ratepayers and passengers in those areas. It would be quite inappropriate in the circumstances to expect that central Government should meet any costs which arise as an integral part of making those changes.
My noble friend has said that he is particularly concerned about pension costs. I think that the first point I want to make is that the Bill will not increase pension costs. We are after all talking here about pension benefits arising from service before transfer to the public transport company which by definition will have already accrued. Furthermore, as my noble friend will know—and I acknowledge that he has considerable expertise in these matters—the basic pension under the local government superannuation scheme will already have been provided for through contributions made to the pension fund in advance; so the only future payments needed by the district council will be the payments in respect of pension increases, the inflation proofing or index linking element of the scheme. As I have said, those payments are not being increased.
Sometimes it is suggested that the present municipal bus undertaking generates the revenue to meet those payments. In that case the district council may want to recover the costs for the company by contract. The Government will leave that to local decision since we do not think that it is right to impose one financial arrangement or another in respect of pension costs arising from past service before staff transfer to the company. Of course it is open to the district council not to seek reimbursement of the pension increase costs from the company but to carry them itself. Even then it must be remembered that the district council will continue to own the company and will therefore stand to receive dividends from it to set against any continuing pension costs.
637 6.45 p.m.
I hope that my noble friend will find these arguments at least partly persuasive. I must remind him that the Government believe that the policy in the Bill, taken as a whole, will bring benefits to local government: for example, through a reduced subsidy bill. Any costs which he feels will be incurred must be seen in the context of these savings. I make this point not to retreat behind generalities but because the Government believe that this is a point of substance.
I hope that I can give my noble friend the reassurance he is seeking about the way in which block grant is distributed to local authorities through the grant-related expenditure assessment. The Government firmly believe, as I have already said, that the Bill will lead to improvements in bus services at no extra cost to local authorities, but we recognise that there may well be changes in the pattern of expenditure between individual authorities. This could occur next year and in future years where local authorities who retain responsibility for the pension increase costs of former employees had previously met that expenditure from the revenue of their bus undertaking.
I can see that there might also be differences between individual authorities if some councils face higher costs than others as part of the transition to the new company structure and if the overall benefits which these changes will bring about are not in those cases fully realised in the first year. To some extent such changes in individual authorities' patterns of expenditure are already taken into account in the current GRE methodology and thus in the distribution of the block grant.
County councils' public transport GRE is assigned on a formula which assesses the overall need for expenditure on public transport in the county; but district councils' shares of the county total depend upon their actual expenditure in the past. Therefore changes in the pattern of expenditure will work through in succeeding years.
We are of course in regular discussion with the local authority associations about GRE methodology. My right honourable friend the Secretary of State for the Environment will shortly be announcing the provisional 1986–87 GREs and the formulae that will be used in the final 1986–87 GRE settlement at the end of a long process of consultation. But I can say that the Government have always been willing, and remain so, to discuss with the associations any changes which they feel should be made to the GRE for future years to produce a grant distribution to individual councils which more accurately reflects any changes in the relative levels of expenditure which actually occur following the enactment of this Bill. I hope that this gives my noble friend the reassurance that he is looking for.
My noble friend also asked me about the question of the allocation of pension costs to those who retire after transfer to the company: that is to say, the allocation as between the local authority and the new company. We leave to local discretion the allocation of costs for those who retire in these circumstances, except that the company must pay its portion of the costs. However, costs arising from local authority service 638 are, of course, for local decision. I hope that I have been able to reassure my noble friend. I have tried very hard to do so and I hope, therefore, that he will feel able not to press his amendments.
§ Lord McIntosh of HaringeyMy Lords, that was in part a very interesting reply. However, in part it was not so interesting because the noble Lord. Lord Trefgarne, used the phrase, "retreat into generalities". I fear that that is exactly what he did. When I hear the general Second Reading statement that liberalisation and privatisation will bring benefits to passengers and ratepayers alike expressed in those simplistic terms, I know that the Government do not have a very strong argument at Report stage about the particular amendment with which we are concerned.
The Government have really got themselves into a bit of a muddle on this matter. On the one hand, they say that there is to be no central Government financial support for any costs which are incurred in the progress towards implementation of this Bill because the ultimate benefits will be so great. On the other hand, the actual implementation of the Bill, the creation of a real competitive situation, surely requires that all of the operators, whether they be ex-municipal operators or ex-PTEs or new entrants to bus passenger transport, should be on an equal footing. If the Government are to give no financial support to reduce or to eliminate the financial burdens of the ex-municipal operators or the ex-PTEs, in contrast to the new operators who have no such burdens, then these new operators will be favoured against the ex-PTEs and the ex-municipal operators. Therefore, we shall not have all of the competitors for the provision of transport services on an equal footing.
The Government cannot have it both ways. Either they are to provide the means to ensure that there is equality when liberalisation comes, or they are to accept that there is no equality in the end. Having willed the end, they must will the means. I hope that the noble Lord, Lord Sandford, will not agree that he has been given a satisfactory answer to his question.
The noble Lord, Lord Sandford, also asked whether there would be a specific amendment to the calculation of GREA. I have never heard a weaker commitment than that given by the noble Lord, Lord Trefgarne, when he said that, of course, the composition of GREA is always under discussion, this is a continuing process, and it may well be that if the local authority associations make representations, this matter may well be part of the considerations. That is about as feeble an answer as you could get, and I hope that the Association of District Councils will not be satisfied with it.
§ Lord SandfordMy Lords, perhaps I may put it this way: my noble friend's answer in general was no more unsatisfactory than his answer to me in Committee. As I said at the beginning, the fact of the matter is that the Secretary of State is supremely optimistic about the upshot of all this, and expresses tremendous confidence about the results. He has no evidence to support that view. All I have to say is that if he has the confidence which he and his Ministers express, then they really ought not to have any difficulty in accepting at least Amendments Nos. 156 and 159, which do not 639 ask the Government to meet the costs involved here, but ask them to indemnify the local authorities if the costs and the liabilities turn out to be worse than they expected. If there really is all that confidence around, then the amendment should not give them any trouble.
However, we discussed this matter at length in Committee and I do not want to go over it all again. I am grateful—even if the noble Lord, Lord McIntosh, is not—for the assurances about GREA and about the discretion that is being left to the local authorities as to how to apportion these costs as between themselves and the companies. I beg leave to withdraw the amendment.
§ Lord TordoffMy Lords, before the noble Lord sits down, I wonder whether he would care to comment on the point which the noble Lord, Lord McIntosh of Haringey, made about the fact that the municipalities are being put in an unfair competitive position in relation to the private operators? It is an important point. The Government are really not playing fair with the municipalities on this matter. The municipalities are left with a large number of overheads which the new operators will not have. Does not the noble Lord, Lord Sandford, agree that that is a very unfair position in which they should be left?
§ Lord SandfordMy Lords, I am not sure that I really agree with that. The local authorities have some discretion as to how many of these liabilities they will assume—or rather their ratepayers will assume—and how many they will load on to their new companies. How they will apportion the costs and the liabilities of all this is an extremely difficult business upon which I wish they would have several months to reflect, instead of having to cobble the whole thing together in a matter of a few months. That is what I meant when I said that it will be almost impossible to come to the right judgments or for the right people to make the right judgments. Most of the judgments will have to be made before the companies are formed, and the companies will have to begin with the key decisions about the size of their operations, their business projections having already been taken for them. That certainly does put them at a considerable advantage as compared with the existing private operators. Nevertheless, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Brabazon of TaraMy Lords, I think that we have reached a suitable moment to adjourn further consideration on Report until 8 o'clock. I beg to move.
§ Moved accordingly, and, on Question, Motion agreed to.