British Coal and British Rail (Transfer Proposals) Bill

HL Deb 01 December 1992 vol 540 cc1256-303

3.4 p.m.

The Minister of State, Department of Transport (The Earl of Caithness)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

Clause 1 [Power to act in relation to proposals for transfer of functions, property etc.]:

Lord Clinton-Davis moved Amendment No. 27:

Page 1, line 14, at end insert: ("(1N) The British Railways Board shall ensure that in exercising the powers conferred upon it in subsection (1) above it shall—

1. (a) consider the effect of any actions on services currently provided in rural areas; and
2. (b) publish a statement explaining such effects.").

The noble Lord said: I beg to move the amendment standing in my name and also those of my noble friend Lord Underhill and the noble Lord, Lord Ezra. The debate concerns rural transport. Perhaps I may say at the outset that the Minister will know that concerns have been expressed to his department about the effects of privatisation on rural services. The Bill sets the tone and to some degree our debates enable anxieties to be expressed and, we hope, allayed by the Government. I hope that the Minister will not say in response that this is a purely technical privatisation Bill, because the issues are real.

No one should underestimate the value of rural rail services. Sometimes they represent the only link for thousands of people living in isolated communities. The anxieties to which I have already referred which pervade a number of rural communities—and a considerable number of representations have been made to me about the matter—relate to the fact, or at least the suspicion, that rural lines will become unattractive for private investors and therefore those services will be at risk.

Rural lines are at present subsidised through a public service obligation grant, as well as being cross-subsidised by other BR sectors. The anxiety is that since rural services will continue to require subsidy, with BR providing a service of last resort, presumably those lines could well be exposed to Treasury cost-cutting exercises.

Considerable interest has been evinced in the matter by the Central Transport Consultative Committee's report; with which, again, the Minister will be familiar. I wish to refer to one or two passages relating to rural transport in that report. Paragraph 23.4 states: There is one particular aspect of charging policy on which we do wish to comment at this stage and this concerns rural lines. The cost of running a train over a heavily trafficked route will inevitably be lower than that of operating a small number of trains per day over a single track line. There are high fixed costs, irrespective of how many trains are run and unless rail track cross-subsidises a large number of routes it seems unlikely that any company will be able to afford to bid for a franchise in rural Wales or northern Scotland without a very large subsidy or by proposing to charge higher fares. We trust that the charging rules will not result in pressure for higher fares on relatively lightly-used rural routes". I, and I am sure the Committee, would like to know the Government's thinking about that representation. What response have the Government given so far, and if they have not given a response what response are they contemplating? Will the regulator be sensitive to these concerns? Will he be guided by an overall objective of ensuring that the interests of rail users—that should certainly include those using rural lines—are paramount? I am not altogether encouraged in that regard as I noted that in another place reference was made to an advertisement, published by the Department of Transport for the regulator, which specified, knowledge of public transport not essential". That is a rather strange concept for the regulator who is supposed to be in charge of, or at least invigilating, our rail services in the future.

I also express concern that rail privatisation may have results comparable to those that occurred with bus deregulation. That was another point made by the Central Transport Consultative Committee, which is certainly not a Labour Party organisation. I have referred to this matter previously. What happened there—contrary to what was suggested would be the case—were reduced bus services and in some cases no services at all in rural areas. There have been increased fares and the abandonment of joint ticketing schemes which are of particular importance to rural communities. There is even the strange situation that where the better operators have tried to co-operate together in such joint ticketing schemes, the Office of Fair Trading has intervened and caused them to abandon those passenger-friendly amenities.

I realise that in the Government's calculations environmental costs simply do not figure. They do not appear on any balance sheet. Consequently, road traffic forecasts, which suggest a massive increase in car usage on country roads over the next 30 years—the estimate is for a quadrupling of car usage—have not been addressed in the White Paper. It should have addressed that issue.

I believe that there is another oversight. Community groups and individuals have helped to maintain railway infrastructures, notably stations, in rural areas. They have helped to refurbish station buildings; they have even printed extra timetables. They have maintained station gardens. They have raised money to cover maintenance and improvement costs. None of those community efforts can be valued simply in terms of assessing rural railways in a conventional business sense. I realise that the Government have undertaken to support by way of grant what they call socially necessary services. The White Paper states: There is no reason to believe that the proposals will lead to the closure of services". However, that was said about bus privatisation. I refer again to the CTCC report. It states at paragraph 71.2, with regard to closures: It should not be for the franchising authority to determine that a service is no longer socially necessary. This would present a prima facie case for closure which the Secretary of State would find hard to overrule. The franchising authority should be required to make a case for closure but it should not be permitted to conclude that a service is no longer socially necessary". That committee has expressed a positive view to the Government. I should be interested to know what the Government have to say to allay that particular anxiety. However, the committee also make the point that closures could occur regardless of social need. The committee states at paragraph 71.1 of the report: We feel that the Government need to make a stronger commitment about the size of the rail network". The committee is referring particularly to rural services in that context.

This is an issue where the Government need to be much clearer than they have been in the White Paper. They say very little about rural services in the White Paper. I believe the Minister would have to concede that. I imagine he would say that it is all caught within the umbrella of social service provision that would be made in relation to privatisation. However, he needs to be much more specific. I await with interest what he has to say. I beg to move.

3.15 p.m.

Lord Ezra

I wish to support the amendment, as moved by the noble Lord, Lord Clinton-Davis. It may well be argued that this is a matter which could be more exhaustively debated—as no doubt it will be—when the privatisation measures are put forward. Nonetheless it is a matter of such importance and of such concern for so many people in this country that an early statement of reassurance seems desirable.

The Committee will recall that in discussing previous privatisation measures, particularly those relating to telecommunications and electricity, the question of the maintenance of rural services loomed large. It is undoubtedly a matter of great concern. I hope that the Minister in replying to the amendment will give us the reassurance that we need.

The Lord Bishop of Norwich

I speak not only as the bishop of a rural diocese but as the former vice-chairman of the Archbishops' Commission on Rural Areas. The report of that commission, entitled Faith in the Countryside, continues, three years on from its publication, to be widely used as an authoritative account of the factors which affect community life in rural areas. The decline in public transport services in rural areas has been well documented in the report and elsewhere. Its effects on the rural economy and the quality of life, especially for the young, the old and young families, are serious and well known. But because deprivation in rural areas is often masked by beautiful surroundings the uncomfortable facts tend to be quickly forgotten.

I remind the Committee that in rural areas 22 per cent. of households have no car. In 44 per cent. of households there is only one car which is usually not available during the day for members of the household other than the main user. Following the Transport Act 1985 and the deregulation of bus services, as the noble Lord, Lord Clinton-Davis, has pointed out, the trend in this area has continued downward at an accelerating pace as county councils in particular have reduced their support of private initiatives. The rail services have already been cut almost to the bone. If there is any possibility of further cuts, it is vital that this is known because it will add yet another factor which is undermining or making impossible life in a village for all but the prosperous who can afford to be independent of public provision.

Transport is a key element in the viability of rural communities. It is wrong that economic arguments alone should be brought to bear in formulating policy which affects communities. We must ask ourselves what kind of society we want in the countryside. If we believe, as I hope we do, that villages should be balanced communities with a place for the young as well as the old and for those at work as well as the retired, the provision of public transport in rural areas will have to be given a far higher priority than it has been given so far. This amendment is a modest one: it seeks only that those important questions should be asked. I hope that the Committee agrees with me that the amendment deserves our wholehearted support.

Lord Taylor of Gryfe

I very much wish to support what has been said. Living as I do in Scotland I realise the importance of the survival of rural communities. That applies not only to my interest in railways but also to my interest in forestry, which is well known. Has the Minister taken into account the importance to rural communities of feeder rail services which are connected to the InterCity lines? If the feeder services are withdrawn those communities are isolated from the InterCity network and main railway services.

I should also like to ask the Minister whether the existing procedures in respect of the closure of lines will apply under the new arrangements? I see that the noble Lord, Lord Marsh, who was my chairman when I served on the British Rail Board, is in his seat. As I understand it, there had to be a public inquiry into the closure of any branch station or branch line. I should like an assurance from the Minister that those provisions will continue. That is the purpose of the amendment before the Committee.

The existence of a healthy rural community is important to the balance of our general life in this country. I do not believe that one can have a healthy society when people are concentrated in cities and the opportunity for the kind of lifestyle which some people enjoy outside those heavy concentrations is neglected. That provides an important balance in our society. Therefore, I hope that the amendment will be accepted or that the Minister will give an assurance that communities will not be increasingly isolated and that services will be available.

The Earl of Caithness

As usual, the noble Lord, Lord Ezra, was right. The amendment is essentially one for the main privatisation Bill. However, it raises an issue of great concern to Members of the Committee and it is only right that I should go into some detail as to our thinking on the matter.

I have to declare an interest to the right reverend Prelate the Bishop of Norwich and the noble Lord, Lord Taylor of Gryfe. The noble Lord, Lord Taylor of Gryfe, will know full well that I was brought up in a part of Scotland which is probably as far away from a mainline station as it is possible to be. I know the importance of feeder services to local communities. I say to the right reverend Prelate that there is no chance of my being able to ignore the question of transport in the rural areas of Norfolk. My parents-in-law live there. I shall be going there this weekend and I am sure that I shall be reminded forcefully of that point once again.

I say to the right reverend Prelate, however, that as a result of bus deregulation the bus service in the area of the Cotswolds where I live has improved out of all recognition. Villages which did not have bus services now have a service through the Villager bus service, which has linked villages and communities which were previously excluded from any possibility of a bus service under the old regime. There were considerable benefits from bus deregulation, not only in the area in which I am lucky enough to live but also in other parts of the country.

Without doubt, the question of rural services is a cause of concern to people living in the country who are affected by them. They rely on rural rail services and wish to see a modern and efficient railway with a sound and long-term future. The progressive franchising of passenger services, including rural rail services, will enable the efficiencies and flexibility of the private sector to be brought to bear on the operation of services.

When the privatisation of the railways was first being discussed many people were naturally worried that privatisation would lead to the closure of a large number of lines and fears were raised that services in rural areas, many of which are loss-making, would suffer most. However, we shall not just be franchising those passenger services which make a profit. There is no reason why only the profitable services should benefit from the improvements we believe the private sector will bring. We recognise that there are many services which are important locally but which do not make money, including many rural services. The noble Lord, Lord Clinton-Davis, rightly reminded the Committee that the taxpayer, through the Government, provides a subsidy for those services now. In fact, the PSO grant to regional railways in 1991–92 was £550 million. The rail privatisation White Paper makes clear that the Government are committed to providing continuing subsidy to support those services, whoever operates them.

I believe that it would be for the benefit of the Committee if I were to read paragraph 71 of the White Paper. The noble Lord, Lord Clinton-Davis, read just one sentence; I think that it would be helpful if I were to read the whole of it. It says: The Government has made clear that it will continue to make grant available to support socially necessary services. The fact that a service is operated by a franchisee will not affect the availability of grant". I hope that that this is reassuring to the right reverend Prelate. It continues: There is no reason to believe that the Government's proposals will lead to closures of services. But if in future, as a result of change in demand, the Franchising Authority decided that a service was no longer socially necessary and there was no case for continuing that service then the same statutory closure procedures would apply as now". I am glad to see that the noble Lord, Lord Taylor of Gryfe, nods in appreciation at that.

I also wish to draw the Committee's attention to the last sentence of that paragraph, which reads: In such cases the final decision about whether a service should be retained or withdrawn will continue to be taken by the Secretary of State". That is a firm commitment in the White Paper, which I hope allays the anxieties of many Members of the Committee.

I also take this opportunity to consider for a moment the existing closure procedures, which was an issue raised by the noble Lord, Lord Taylor of Gryfe. Currently, to withdraw completely a passenger service, either on a stretch of track or to a particular station, British Rail must comply with the closure provisions of the Transport Acts 1962 and 1968. That procedure requires that: British Rail publishes an advance notice of intent concerning the proposed closure; British Rail publishes the proposal for closure itself stating that objections may be lodged with the area Transport Users' Consultative Committee (the TUCC); any objection to the proposal must be sent to the relevant TUCC within six months; British Rail provides the TUCC with information on the proposal under a heads of information document and can make additional representations; the TUCC considers them and may hold a public hearing; BR is given an opportunity to comment on any objections and the objectors receive copies of BR's heads of information and comments; the TUCC reports to the Secretary of State on any hardship the proposed closure would cause and how it might be alleviated; the Secretary of State considers the TUCC report and any other relevant matters, including economic and social factors, before reaching a decision on whether to give his consent to closure.

Consent may be given with or without conditions, although the Transport Act 1985 empowers the Secretary of State to require BR to arrange a substitute bus service which would be paid for by BR. Such bus services are then also subject to the rail service closure procedure. There has been only one bus substitution condition to date, concerning the Tilbury Riverside service. By convention BR does not run down the level of service after giving notice of the intention to stop supporting a service. There is no statutory obligation to maintain the level of service after proposing closure but any reduction in frequency may result in a challenge to the validity of the proposal.

That is a comprehensive summary of the Transport Acts 1962 and 1968. I repeat that in the main Bill which will come before your Lordships, I hope in the not too distant future, similar provisions will be made. I hope that that will allay the justifiable anxieties of the Committee.

It is fair to point out in summary that there are enormous benefits to be achieved through the franchising of rail services, not only for the profit-making lines but also for rural lines. Subsidy will continue to be paid where there is a need for it. As I said, the public service obligation grant for 1991–92 was £550 million. We have also written into the White Paper, as we shall into the main Bill, protection for those rural lines on a basis similar to the existing provisions.

Lord Clinton-Davis

The noble Lord was emollient. He is not always but he was on this occasion. Perhaps it was because of the presence of the right reverend Prelate the Bishop of Norwich. But the fact is that he has not really answered some major points that I put to him, and most particularly the points that were raised in the consultative document of the Central Transport Consultative Committee itself or the representations that it made.

Specifically, in answer to the suggestion that the Secretary of State would be ultimately responsible, the committee said that the problem was that, because the franchising authority determines that a service is no longer socially necessary, that represents a prima facie case and it would be very difficult for the Secretary of State to overrule it. That may or may not be right. But it is a perfectly reasonable protestation made on behalf of an organisation with which it is to be hoped the Government have very close links. If it expresses that concern, then I do not believe that such fears will be totally allayed by what the Minister has said this afternoon.

The right reverend Prelate made a very strong case about rural services, but in particular he took the view, contrary to that of the Minister, that there has been a decline in the value of bus services so far as rural communities are concerned. This may not be the situation all over the country. But there is a very widespread anxiety about what has been happening. It is not good enough for the Minister to say, "Well, I am perfectly satisfied because in the Cotswolds things are different". I can assure the Minister from my peregrinations around the country during the general election that views expressed to me by people involved on both sides of the industry and by local authorities were far removed—not in all instances, but in many—from the point of view that has been expressed by the Minister.

Assurances have been given before. I am sure they were all given in good faith. But unfortunately perhaps the facts of life in the bus transport industry have done something to undermine the practicability of those assurances being brought into proper effect.

My noble friend Lord Taylor of Gryfe speaks with a considerable amount of experience in this industry. He raised certain issues. I just happen to believe that the Minister, despite the assurances he gave, has not answered those points. I fear that, while he is right and we shall come back to them later on, he has missed the opportunity to be much more specific. I do not feel that the Minister has carried conviction in the way in which he answered the debate. Consequently I think it appropriate that we should test the opinion of the Committee on this amendment.

3.34 p.m.

On Question, Whether the said amendment (No. 27) shall be agreed to?

Their Lordships divided: Contents, 113; Not-Contents, 162.

Division No. 1
CONTENTS
Addington, L.	Jacques, L.
Airedale, L.	Jay, L.
Ardwick, L.	Jay of Paddington, B.
Ashley of Stoke, L.	Jeger, B.
Attlee, E.	Jenkins of Hillhead, L.
Aylestone, L.	Jenkins of Putney, L.
Banks, L.	John-Mackie, L.
Beaumont of Whitley, L.	Judd, L.
Birk, B.	Kilbracken, L.
Blackstone, B.	Llewelyn-Davies of Hastoe, B.
Blease, L.	Lockwood, B.
Bonham-Carter, L.	Longford, E.
Boston of Faversham, L.	Lovell-Davis, L.
Bottomley, L.	McNair, L.
Broadbridge, L.	Mar, C.
Brooks of Tremorfa, L.	Mason of Barnsley, L.
Callaghan of Cardiff, L.	Merlyn-Rees, L.
Campbell of Eskan, L.	Milner of Leeds, L.
Carmichael of Kelvingrove, L.	Mishcon, L.
Carter, L.	Molloy, L.
Castle of Blackburn, B.	Monson, L.
Cledwyn of Penrhos, L.	Morris of Castle Morris, L.
Clinton-Davis, L.	Mulley, L.
Crook, L.	Murray of Epping Forest, L.
David, B.	Nathan, L.
Dean of Beswick, L.	Nicol, B.
Desai, L.	Norwich, Bp.
Donaldson of Kingsbridge, L.	Ogmore, L.
Donoughue, L.	Parry, L.
Dormand of Easington, L.	Peston, L.
Ennals, L.	Ponsonby of Shulbrede, L.
Ewing of Kirkford, L.	Prys-Davies, L.
Ezra, L.	Richard, L.
Falkender, B.	Robson of Kiddington, B.
Falkland, V.	Rochester, L.
Fisher of Rednal, B.	Sainsbury, L.
Fitt, L.	Seear, B.
Gallacher, L.	Serota, B.
Galpern, L.	Shackleton, L.
Gladwyn, L.	Stallard, L.
Glasgow, E.	Stedman, B.
Graham of Edmonton, L. [Teller.]	Stoddart of Swindon, L.
	Strabolgi, L.
Greene of Harrow Weald, L.	Taylor of Blackburn, L.
Gregson, L.	Taylor of Gryfe, L.
Grey, E.	Thomson of Monifieth, L.
Grimond, L.	Thurlow, L.
Hampton, L.	Tordoff, L. [Teller.]
Hamwee, B.	Turner of Camden, B.
Harris of Greenwich, L.	Varley, L.
Healey, L.	Wallace of Coslany, L.
Hilton of Eggardon, B.	White, B.
Hollis of Heigham, B.	Wigoder, L.
Hooson, L.	Williams of Elvel, L.
Howie of Troon, L.	Wilson of Langside, L.
Hunt, L.	Wilson of Rievaulx, L.
Ingleby, V.	Winchilsea and Nottingham, E.
NOT-CONTENTS
Aberdare, L.	Allenby of Megiddo, V.
Addison, V.	Alport, L.
Aldington, L.	Archer of Weston-Super-Mare, L.
Alexander of Tunis, E.

Arran, E.	Kinloss, Ly.
Astor, V.	Kinnaird, L.
Astor of Hever, L.	Kintore, E.
Barber, L.	Knollys, V.
Belhaven and Stenton, L.	Knutsford, V.
Bellwin, L.	Laing of Dunphail, L.
Beloff, L.	Lauderdale, E.
Bessborough, E.	Lloyd-George of Dwyfor, E.
Blatch, B.	Long, V.
Blyth, L.	Lucas of Chilworth, L.
Boardman, L.	Lyell, L.
Borthwick, L.	McColl of Dulwich, L.
Boyd-Carpenter, L.	Mackay of Ardbrecknish, L.
Brabazon of Tara, L.	Mackay of Clashfern, L.
Braine of Wheatley, L.	Macleod of Borve, B.
Bridgeman, V.	Manton, L.
Brightman, L.	Margadale, L.
Brookeborough, V.	Marlesford, L.
Brougham and Vaux, L.	Marsh, L.
Butterworth, L.	Merrivale, L.
Cadman, L.	Mersey, V.
Caithness, E.	Morris, L.
Caldecote, V.	Mottistone, L.
Campbell of Alloway, L.	Mowbray and Stourton, L.
Campbell of Croy, L.	Moyne, L.
Carnegy of Lour, B.	Munster, E.
Cawley, L.	Murton of Lindisfarne, L.
Cayzer, L.	Nelson, E.
Charteris of Amisfield, L.	Norfolk, D.
Clark of Kempston, L.	Oppenheim-Barnes, B.
Cochrane of Cults, L.	Orkney, E.
Cockfield, L.	Orr-Ewing, L.
Colnbrook, L.	Oxfuird, V.
Cox, B.	Park or Monmouth, B.
Cumberlege, B.	Pender, L.
Davidson, V.	Peyton of Yeovil, L.
Denton of Wakefield, B.	Plummer of St. Marylebone, L.
Downshire, M.	Porritt, L.
Eccles of Moulton, B.	Prentice, L.
Effingham, E.	Pym, L.
Elibank, L.	Rankeillour, L.
Elles, B.	Reay, L.
Elliot of Harwood, B.	Renfrew of Kaimsthorn, L.
Erne, E.	Renton, L.
Erroll of Hale, L.	Richardson, L.
Faithfull, B.	Rippon of Hexham, L.
Ferrers, E.	Rodger of Earlsferry, L.
Fraser of Carmyllie, L.	Roskill, L.
Gainford, L.	St. Davids, V.
Gardner of Parkes, B.	Sanderson of Bowden, L.
Gisborough, L.	Seccombe, B.
Glenarthur, L.	Shannon, E.
Goold, L.	Sharples, B.
Goschen, V.	Shrewsbury, E.
Gridley, L.	Simon of Glaisdale, L.
Grimston of Westbury, L.	Soulsby of Swaffham Prior, L.
Grimthorpe, L.	Stanley of Alderley, L.
Hailsham of Saint Marylebone, L.	Stodart of Leaston, L.
	Strange, B.
Halsbury, E.	Strathcarron, L.
Harding of Petherton, L.	Strathclyde, L.
Hardinge of Penshurst, L.	Strathmore and Kinghorne, E. [Teller.]
Harmar-Nicholls, L.
Harmsworth, L.	Swansea, L.
Haslam, L.	Terrington, L.
Hayhoe, L.	Teviot, L.
Henley, L.	Thomas of Gwydir, L.
Hesketh, L. [Teller.]	Thorneycroft, L.
Holderness, L.	Trefgarne, L.
HolmPatrick, L.	Trumpington, B.
Hood, V.	Ullswater, V.
Hothfield, L.	Vaux of Harrowden, L.
Howe, E.	Vivian, L.
Hunter of Newington, L.	Wade of Chorlton, L.
Huntly, M.	Wakeham, L.
Hylton-Foster, B.	Whitelaw, V.
Inchyra, L.	Wise, L.
Ironside, L.	Wynford, L.
Johnston of Rockport, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.44 p.m.

[Amendment No. 28 not moved.]

Lord Clinton-Davis moved Amendment No. 29:

Page 1, line 14, at end insert: ("(1Q) Powers exercised under subsection (1) in so far as they relate to safety shall be exercised by the Secretary of State or relevant corporation in full and open consultation with representatives of the workforce and, in the case of railways, of passengers, and all advice received by any relevant corporation or the Secretary of State on safety shall be made available within one week to representatives of such workforce or passengers.").

The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 30 and 35. Amendment No. 29 relates to consultation with passengers and the workforce. Amendment No. 30 deals with recognition of the Health and Safety Executive as the independent safety regulatory authority. Amendment No. 35, standing in the name of my noble friend Lord Donoughue, deals with the record of transferees in relation to employment, health and safety and public safety. My noble friend will deal with the amendment as regards coal mines and I will deal with the rail issues.

No one can doubt the significance of safety issues. Despite accidents on the railways the safety record is good overall because British Rail has applied itself to high safety standards. I appreciate that the Government too have applied their mind to that issue in the White Paper. Contrary to what the Minister said yesterday I have never suggested otherwise. It would be ridiculous for me to do so. Notwithstanding the fact that safety issues are referred to in the White Paper, we are addressing them because we believe that some need a different emphasis and approach.

I wish to refer again to the representations of the Central Transport Consultative Committee on the basis of the White Paper. Paragraph 8(a), which deals with safety, states: There are fears that standards could decline under the proposals. For example, a franchisee facing possible loss of franchise for failure to achieve quality standards could be tempted to take risks with safety to attain those quality standards. With the different foci of responsibility under the White Paper's proposals, safety could come to be seen as one factor among many others". It is clear that constant vigilance and effective enforcement is required in dealing with the matter. Furthermore, the involvement of the workforce and passengers is a paramount necessity. The effective involvement of the workforce depends largely on the way in which it is treated generally. That is an issue about which in relation to some franchisees we expressed some anxiety, and I dealt with that in part yesterday.

Past experience suggests that some operators confronted by financial pressures would be prepared to ignore safety regulations and try to get away with it. They may not succeed; the Government may mount a successful enforcement process. But the risk exists and it is not without precedent. The CTCC introduced the experience of the bus industry and stated: Experience in that industry suggests that some operators faced with financial pressures are prepared to ignore some of the safety regulations governing road vehicles. Similar deficiencies in a rail operation could have dire consequences". That is the view of an enlightened committee and the Government must take strong account of it. But safety is costly and the Government must be prepared to put their money where their mouth is in order to ensure enhanced safety on the railways. Safety is contingent on the existence of effective co-ordination between track, signalling, trains and crew. The discipline of one operator with prime responsibility in this area will in future be divided between a number of different bodies. Again, the CTCC views that fragmentation with "grave misgivings", which was the phrase it used at paragraph 78. All that requires the clearest statutory undertaking for full and open consultation with trade unions and user organisations concerning safety.

I turn to the Health and Safety Executive. The White Paper indicated that there was to be an examination of the safety implications of rail privatisation which it vested with the Health and Safety Commission. Our view is that if we are to proceed with the legislation a safety framework should emerge which would recognise the HSE as the independent safety regulatory authority. But, more than that, the HSE would require a commitment from government that it would not be starved of adequate resources to carry out the effective enforcement of safety regulations. There is no such commitment in the White Paper. Perhaps the Minister will allude to that point in his reply. In parenthesis, I add that we should strongly oppose any form of privatisation of the HSE, which has been subject to close invigilation and has stood up very well to it.

I come to the subject of transferees' records of employment, health and safety practices. Fragmentation causes anxiety, as I have already said. Consequently, we require close investigation of the issues to which I am referring and which are contained in the amendment before the franchises are granted, and transparency is critical in that regard. There should be no doubt as to the validity of the records of anyone seeking to exercise a franchise in this area.

Finally, with regard to health issues, I should like to know whether the new undertakings will be responsible for past liabilities. I am aware that that involves primarily the point about the coal industry to which my noble friend will refer later, but it is a matter which also affects the railway industry. I hope that the Minister will be able to reply to the point. I beg to move.

The Earl of Caithness

The amendments raise the extremely important issue of safety in the rail and coal industries. I can assure the Committee that there is absolutely no issue of principle between the noble Lord, Lord Clinton-Davis, and the Government as far as safety is concerned. Safety issues must be paramount in preparing for the future of both the coal and rail industries. The Committee will recall I had a great deal to say about that yesterday when we discussed Amendment No. 3. I have rather more to say now. The amendments seek to impose requirements on the Secretary of State and the relevant corporations to ensure that no new owner or operator can come into those industries without demonstrating that they can do so safely and that there is full and open consultation on safety matters.

In both industries safety standards and investment in safety are given the highest priority. I am happy to reaffirm today, and I know that my noble friend Lady Denton concurs, that we regard safety as a matter of the highest importance in both the coal and the rail industries. The Government have made that clear on many occasions. The safety record of the British coal-mining industry is among the best in the world and rail travel remains one of the safest of all forms of surface transport. We intend that the present high levels of safety in both industries are maintained after privatisation. Indeed, that is critical. Safety considerations are therefore paramount.

There is no question of an operator being allowed to disregard established safety policies in either industry. That would not be tolerated today and it will not be tolerated in future. All new operators will therefore have to ensure that their approach to safety will fulfil high current standards. Simply because potential operators have a good safety record elsewhere does not mean that their methods of working will be subject to any less scrutiny than that of another operator with an inferior record. That clearly would be foolhardy. The essential issue is to ensure that we continue with the uniformly rigorous standards that apply to both industries.

The Government have been and will continue to be guided by advice from the Health and Safety Executive. When the rail privatisation White Paper was published, the HSC was invited to undertake a thorough study of the safety implications of our proposals and to make detailed recommendations. We await the findings of that study, but the Government have already given a commitment that the advice will he published (paragraph 77 of the White Paper). Our proposals for rail privatisation set out the framework for safety and made it clear that safety validation of all operators would be required. We have welcomed the comments that we have received on safety aspects.

Amendment No. 30 asks the Secretary of State to recognise the Health and Safety Executive as the independent safety regulatory authority. That is already the case for the coal and rail industries and I am not saying anything new when I say that that will continue to be so in the future. Indeed, the rail privatisation White Paper says so explicitly (paragraph 78(b)).

As far as the future of the coal industry is concerned, my honourable friend the Minister for Energy, Mr. Eggar, wrote to a number of interested parties, including representatives of the workforce, earlier in the year to seek their views. My honourable friend also wrote to the chairman of the Health and Safety Commission to seek its advice on safety matters in the context of coal privatisation. The commission was therefore given an early opportunity to consider that important issue. The chairman's reply is available in the Library. The commission is of course a tripartite body, with representatives from business, trade unions and local authorities. Proposed regulations, approved codes of practice, industry-wide committees or any other important safety initiatives that are approved by the commission are always issued to interested third parties as part of formal consultation. Trade unions are included in those formal consultations.

Anyone who becomes involved in operating mines or running rail services must have proper safety policies which will ensure that they meet the high standards of safety required for both industries. Of course we should not want anyone to become involved in those industries who disregards or seeks to undermine the vital role of safety and I can assure the Committee that we will not let that happen.

However, we are not at that stage yet. It would be premature to specify the mechanisms we need to put in place to ensure that only those able to meet the highest safety standards can become involved in the running and operation of coal and rail activities. It would not therefore be appropriate to have the amendments on the face of the paving Bill, although I hope that I have demonstrated that the Government are in sympathy with their spirit.

I hope I have also been able to demonstrate that the consultations that have taken place have been extensive and are continuing. Those consultations are valuable because the Government attach the highest importance to safety in the coal and rail industries and recognise that that issue is of general interest. The consultation process is open and has provided opportunities for trade unions, passenger representatives and others to express their views. I know that my right honourable friends the Secretary of State for Transport and the President of the Board of Trade will read with interest what the Committee has had to say on that matter and other matters connected with these industries. Our formal consultations with the HSC and HSE, our direct invitation to the coal trade unions, this summer's rail White Paper and the accompanying invitations to meetings with the rail trade unions and passenger representatives have enabled all interested parties to express their views on the proposals.

Lord Ezra

I was pleased to hear from the Minister the importance the Government attach to safety in both industries which are the subject of the Bill. It is clear that in relation to the railways the Government, as the Minister pointed out, in paragraph 77 of the White Paper have asked the HSC to arrange for a thorough study of the safety implications of the proposals set out in the White Paper for the privatisation of the railways. Will the Government be asking the HSC to conduct a similar inquiry in relation to coal once the privatisation measures are known?

4 p.m.

Lord Donoughue

I wish specifically to speak to Amendment No. 35 in my name, which requires that the Secretary of State obtain and publish records of potential purchasers in the areas of employment, and health and safety, both internationally as well as domestically. It asks that those records be examined and approved by the Health and Safety Executive.

I welcome the large number of assurances the Minister has given, many of them inevitably in general terms at this stage. I should, however, like the assurance that international as well as domestic safety records will be included. Some potential purchasers may be personally resident in this country but operate internationally in the mining area. It is most important that their records of safety and health overseas be examined.

The basic concern of the amendment is a fear that safety standards will inevitably fall after privatisation. We believe that that danger arises for two reasons. The first is the dominance of the profit motivation above the priority of safety. Secondly, the structure of safety regulation could be dangerously fragmented. I do not say that it will be, but much will depend on the structure of the industry after privatisation.

I should like to say a brief word on each of those aspects. With regard to profit motivation, the view that safety standards will fall after privatisation is not a doctrinal view. It is based on the evidence that faces us in the world. For example, in the mining world the private mines have the worst safety record. If one looks at the world's private mines with the best record—I am informed that they are in Australia—the fatal accident rate is double what it has been in the UK's nationalised mines. In the UK the accident rate in the private mines, over a longish period and omitting the odd year, is much worse than it is in the public sector. We are therefore concerned that after privatisation profit motivation will come before safety. We will look at the details of the relevant Bill when it comes before us to try to ensure that that is not the case.

The threat to the safety structure is the possible fragmentation of the industry after privatisation. Many Members of the Committee who know the industry well will know that the efficiency of the safety structure of the coal industry is, and has been for a long time, dependent upon the fact that it is nationally integrated. It is a complex organisation containing the national Health and Safety Commission, the Health and Safety Executive, the employers, who are national, the unions, which are national, the rescue services and the medical services. Altogether, it is nationally focused.

The role of that national structure is the establishment of general national safety policy and the exchange of information. It is within that national context that local pits have their own individual safety committees and the key body, the mines inspectorate, operates. The amendments collectively seek to establish that the national integrated safety structure be maintained. If possible we should like some assurance of that. We know that it is subject to the structure of the industry. I should like to know the Minister's reaction to that. We ask that it be statutorily entrenched. It would be helpful if the Minister could give some commitment in that direction.

Finally, I turn to a specific point on the historic health liabilities for compensation in the mining industry. We know that large numbers of ex-miners are suffering especially from emphysema, bronchitis and diseases related to the lungs. Many test cases are either before or about to be brought before the courts. That could involve thousands or tens of thousands of claimants and liabilities running up to an estimated £1 billion. Can the Minister say who, after privatisation, statutorily will carry the liability for compensation on that scale?

Lord Boyd-Carpenter

The noble Lord suggests that privatisation would be likely to result in a diminution of safety standards. A number of industries in this country have been privatised in recent years. I am glad to see that we are proposing to privatise more. Can the noble Lord point to any of the industries of this country where, following privatisation, safety standards diminished? If the noble Lord cannot give those figures, it would seem that his apprehensions in that respect are not acute. I ask the noble Lord also to consider this. We have a private sector of British civil aviation and it is one of the safest in the world

Lord Donoughue

I am happy to answer that question. Much of the privatisation has been too recent for proper figures to be provided. The figures produced on bus privatisation suggest that safety standards have in fact declined. My basic point relates to coal. I am sure that Members of the Committee, if not the noble Lord, Lord Boyd-Carpenter, appreciate that coal is and always has been a special industry in relation to safety. This country has a magnificent record of which it can be proud. I was arguing solely in relation to the coal mining industry that according to facts and figures known from the world private industries have a worse record. In this country also private industries have a worse record of safety. That is the basis of our concern. I am sure that the Minister and the Government share that concern. The positive manner of his earlier response suggests that. Together we can approach the issue. But we need to look at it. It is a serious point.

Lord Boyd-Carpenter

Can the noble Lord quote the figures in respect of the bus industry on which he relies?

Lord Clinton-Davis

Perhaps the noble Lord will take the trouble to look at the report from which I quoted extensively. He will see the deep concerns expressed by an independent objective organisation—even the noble Lord, I believe, will not dispute that it comes within that category—which has expressed deep concern in regard to the way in which the bus industry has developed.

Lord Boyd-Carpenter

But with no figures.

Lord Clinton-Davis

The noble Lord is saying that it is invalid. I suggest that he takes the trouble to read the report and then to consult with the organisation. I believe he will see that his concerns in that respect are not made out.

Lord Boyd-Carpenter

But still no figures.

Lord Haslam

Perhaps I can return to coal. While I understand the Committee's concern with regard to safety, I do not believe that safety standards will fall. I have worked in many industries in my life. The commitment to safety in British Coal is outstanding. Further, it is a safety record which, as has been said, compares favourably with that of any mining operation in the world. It may be said that I am praising British Coal. But one must recognise that the safety factor is so inculcated into the management and the miners that it will survive any kind of change thrown at it. It is extremely positive.

We must recognise also that we have a fine mining inspectorate in this country which shares those high standards. I am sure that it will continue to administer the mining laws in a meticulous way. I believe that that too will not change following privatisation.

Much has been said about profitability leading to a falling-off in safety standards. That has not been true of British Coal where the level of profits has improved over the recent period, and with it in fact the safety standards have also improved. The reason is that it reflects two things happening. First, is mechanisation of the mining industry itself and, secondly, the productivity that flows from that development.

At the time I entered the mines there would be a coalface 200 metres long with 40 miners exposed to the roof, each of them filling off 10 or 15 tonnes of coal a day. They would have to set their own roof supports and as the face advanced they would have to withdraw progressively some of the roof supports, which was a dangerous operation. All that has now gone. There are small teams of men, five or six in number, working a 200 metre coalface. The supports are massive chocks which are moved forward hydraulically, so that miners are working in the safest possible conditions that can be devised; and one cannot see that changing.

The noble Lord, Lord Donoughue, referred to the situation in the UK private mines. The private mines have not advanced to the stage that British Coal mines have in relation to mechanisation. If the new owners are interested in profitability they must embrace more mechanisation. That will improve safety standards. The noble Lord referred to the situation in Australia. In Australia most of the coal mining up to now has been opencast mines. They are only recently learning to work coal mines underground in Australia, whereas we have a long history of so doing. Therefore, I do not have the concerns that are being expressed under these various amendments.

Lord Ezra

The noble Lord, Lord Haslam, is right that the standards of safety in British mining as carried out in British Coal, previously in my time the National Coal Board, are very great indeed. It is difficult to consider that, with any change of ownership, that attention to safety would diminish. Nevertheless there are going to be structural changes, and it lends point to the question I asked the Minister earlier on; namely, would the Government be minded to ask the Health and Safety Commission to arrange the same sort of inquiry into the safety implications of the changes proposed on the privatisation of coal as they have in fact done in the case of the railways?

The Earl of Caithness

I think that the additional contributions to the debate have been most worthwhile. I am particularly grateful to my noble friend Lord Boyd-Carpenter for balancing some of the remarks and statements that have alluded to the private sector being less safety conscious than the public sector. There are many instances where the private sector has shown the way, and particularly where privatisations have taken place. An area I know well is the aviation industry, where the private sector continues to set a high standard and a lead throughout the world.

In answer to the noble Lord, Lord Ezra, we are determined that, in consultation with the Health and Safety Commission and its executive, the current high standards and improvements to health and safety in the industry will be maintained after privatisation. That is why we have already formally approached the HSC to enable it to give early consideration to this important issue, and to ensure that a comprehensive and effective safety regime continues to operate in the British coal industry. As the noble Lord will be aware, the initial advice has been received and is available. The HSC has affirmed its commitment to the continuation of the strong safety culture in the British coal industry and the need to maintain and strengthen the existing regime where necessary.

The noble Lord, Lord Donoughue, asked about compensation. I can give the noble Lord the assurance that privatisation of the coal industry will not affect the rights of current and former employees to claim compensation for ill health or other industrial injuries that have occurred during their employment with British Coal. We have made no decisions on the detail of privatisation, including the allocation of liability for meeting such claims, but just to repeat my assurance, there will be no effect on their rights. I am sure we shall wish to come back to that point at a future date.

The noble Lord, Lord Donoughue, also asked whether we would publish information about the safety standards that occurred overseas, or apper-tained overseas, to any purchaser wishing to purchase either into British Coal or British Rail. Of course we will look at those standards, but the safety standards, as we have just been discussing, in each country tend to vary. What is important is that the safety standards we set in this country will have to be met by every purchaser.

4.15 p.m.

Lord Donoughue

It is not the standards but the record; in other words, whether potential purchasers have a track record that is good or bad in their international operations.

The Earl of Caithness

To some extent the record depends on the standard, but on this issue of safety, raised by the noble Lord, there are three important points that I want to make. First, there is the question of standards. Those vary from country to country depending on the part of the world in which one lives; but, of course, one must set the highest standards. One must not skimp when it comes to safety.

But standards alone are not good enough. It comes to the question of enforcement. Here the British system is an effective system and leads the way. In answer to the noble Lord, Lord Donoughue, it is not only the setting of standards but the enforcement thereof in this country that matters. Any purchasers of either a rail operation or a coal operation will know quite clearly from the beginning that they will have to meet a certain standard and, in addition, that the standard will be enforced regardless of what they have done in the past either here or overseas.

There is a third point, in regard to safety, which was brought out clearly by my noble friend Lord Haslam, with all his practical experience from which the Committee undoubtedly benefited in this debate; that is, the need to engender the notion of safety into all those who work in the industry. That is the key requirement for every operation. It is true not only in the case of coal and rail but also, as I can attest, in the aviation and shipping fields, with which I am well acquainted. Safety is now a culture that flows through the whole operation and in every person who works in those industries.

Safety needs to be encouraged and pursued. We are extremely grateful for the work that has been undertaken already, particularly in the coal-mining industry, which has set such a good example and which my noble friend knows so well. I believe that my noble friend was right when he said that it is now so ingrained into all those who work in the industry that it will not be shaken in the future, and we will not let it be.

Lord Clinton-Davis

The Committee acknowledges that in his two contributions the Minister has made positive comments about the issue of safety in both industries. I am the first to acknowledge that. I agree with him that no issue of principle divides us on that, and also on the point of enforcement. Of course, the question of enforcement in a changing situation could be quite different. As was pointed out by the noble Lord, Lord Haslam, and, indeed, the noble Lord, Lord Ezra, who held such distinguished offices in the coal industry and have vast experience in it, a culture of safety operates in the industry. Indeed, it also operates in the railway industry.

The problem is that with greater fragmentation there may be a possibility of attempts being made by some—I sincerely hope that it will not be the case—to cut corners, particularly when they are encountering financial difficulties. However effective an enforcement agency may be, and however well equipped in terms of resources it may be, unless that culture can be evinced in the industry as a whole to avoid the possibility of accidents, all it can do is to investigate the situation after the event.

What I want to see, and what I know the Minister wants to see, is that there is a deterrent value established so far as an effective enforcement agency is concerned, and that requires constant invigilation. Nothing can be taken for granted. In that way the culture of safety in the industry can be built up regardless of ownership. Nonetheless, we have these apprehensions. I was pleased to hear what the Minister said with regard to responsibility for past liabilities. The Committee will feel that that assurance is worthwhile, and I am glad that the point was raised.

I come back to the last point which was raised emphatically by my noble friend Lord Donoughue. It relates to the track records on safety of organisations which may have been established outside this country. I feel that the Minister has again given us assurances which are worth while. There have been serious breaches in certain instances in the United States, Canada and elsewhere. Therefore I hope that the Health and Safety Executive will ensure that those track records are not only investigated but, where appropriate, are made known to the public. Again, I feel that transparency is critically important in these matters. The workforce and the public are entitled to know. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 30 not moved.]

Lord Clinton-Davis moved Amendment No. 31:

Page 1, line 14, at end insert: ("(1 S) Before the British Railways Board shall exercise any of the powers vested in it in subsection (1) above, it shall consult the Central Transport Consultative Committee, Regional Transport Consultative Committees, local authorities, its workforce and such other organisations as the Secretary of State deems appropriate.").

The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendments Nos. 34 and 36. Amendment No. 31 relates to consultation concerning the railways, Amendment No. 34 concerns consultation with the coal industry and Amendment No. 36, which in many ways is the most critical, deals with consultation affecting the new undertakings.

Salutary lessons have to be learnt from the recent pit closures fiasco, particularly on the issue of consultation. Evidently it was deemed to be of little or no consequence so far as the President of the Board of Trade was concerned, together with others of authority. I suppose I ought not to say any more about that because so far as British Coal is concerned the matter is sub judice. However, it is of major importance that the duty of consultation in relation to this privatisation exercise and its consequences should be undertaken before it is too late. That duty should extend to all those referred to in Amendments Nos. 31 and 34.

I should not have to underline to your Lordships that, when it conies to people who have given long service to the industries, whether rail or coal, they are obviously intimately concerned with the need for consultation. But privatisation would also affect communities, local authorities and the users of railways. Consequently we believe that consultation is particularly important in these regards. Unless the duty to consult is made mandatory, I do not believe that it will always be observed. Apparently it is not always observed where it is already mandatory, but it is more likely to be observed in that instance. I do not propose to say anything more about this issue, but my noble friend may wish to say something about consultation in relation to the coal industry. I beg to move.

The Earl of Caithness

These amendments refer to consultation, but I do not think this is something that needs to be imposed on either British Rail or British Coal because they will be fully aware of their obligations in this respect. I am sure that both organisations will accept the spirit of the amendments, but I do not believe that as a general principle amendments which are too prescriptive or exclusive should commend themselves to the Committee. It is also the case that the Bill enables both corporations to consult anybody they consider appropriate for the purposes of facilitating the implementation of these proposals. I am sure they will do so. Let me reassure the Committee that we too are aware of the importance of consultation in such circumstances.

On rail privatisation, I can tell the Committee that there have already been meetings between my right honourable friend the Secretary of State and my honourable friend the Minister for Transport with the CTCCs and the RTCCs, specifically mentioned in the amendment. They have the important role of representing the interests of rail users. At the time of the publication of the White Paper, my right honourable friend offered to meet the three main rail unions to discuss the privatisation proposals and what they mean for the employees they represent. Those meetings have now taken place. My right honourable friend and my honourable friend have also met with representatives of the PTAs and the PTEs. This consultation is a very important part of the process of working up the details of proposals for the main privatisation legislation which we shall introduce as soon as we are in a position to do so. Publication of the rail privatisation White Paper, setting out the Government's proposals for the privatisation of British Rail, has provided an opportunity for all interested parties to make their views known on the proposals, and we value this input.

The amendment of the noble Lord, Lord Donoughue, also emphasises the importance of consultation in ensuring that appropriate machinery is put in place for the settlement of terms and conditions of employment and questions relating to safety, health and welfare of employees likely to be involved in transfers. I am probably going to pre-empt the questions the noble Lord has in mind, but it might save him asking me those questions. These are key issues, the importance of which we have recognised in the earlier debates in this Committee. The rail privatisation White Paper emphasised that employees' rights and terms and conditions of employment, including pensions and concessionary travel, will be safeguarded on their transfer to new employment. That is in paragraph 86 of the White Paper.

On coal privatisation, I know that there has been extensive consultation, and this will no doubt continue. My honourable friend the Minister for Energy wrote to a number of organisations with an interest in the coal industry, including the Health and Safety Commission, to seek their views on privatisation. Replies were requested by the 22nd June. A list of the organisations written to is in the Libraries of both Houses, and a list of those who responded was given in another place in response to a question from the honourable Member for Sherwood. We are grateful for the replies that have been received and we are considering all the submissions carefully. We have also agreed to make public the details of all communications from the chairman of the Health and Safety Council on the safety consequences of rail privatisation, which we discussed at length earlier.

I hope I have been able to demonstrate to the Committee that we realise the importance of consultation. It is not lost on the Government, on British Coal or on British Rail.

Lord Donoughue

I wish to speak to Amendments Nos. 34 and 36 standing in my name which relate to coal. If I may say so, I thought the Minister was a little complacent perhaps in what he has just said in the light of recent experience. The background to what we are seeking here is well known to all, and to some in the industry it is very painfully known.

As regards the recent proposals to close a large section of the coal industry, I accept that there was proper consultation earlier in the summer, but that was not about the closure of these mines. The proposals to throw tens of thousands of miners who have given years of service and commitment to the industry on to the industrial scrapheap were put forward with a deplorable lack of consultation, in my view and in the view of the miners and their representatives. Existing arrangements and understandings about consultation were ignored by British Coal. The modified colliery review procedure was brushed aside unilaterally. The understandings on voluntary redundancy policy were unilaterally broken. A compulsory redundancy programme, never agreed with the workers, was declared unilaterally. I think that experience is somewhat different from the tone of what the Minister said.

This recent appalling experience of what I think we must call mismanagement—it was temporary, and there have been many years of good management—appeared to abandon 50 years of progress on consultation and joint agreements in industry. British Coal suddenly began to behave as we fear private management might behave after privatisation, and it is after privatisation we are concerned with. I am not sure that the Minister's replies dealt with that.

The purpose of these amendments is to ensure that after privatisation at least the basic standards of management good practice in the modern world will be maintained in the private coal industry. In particular, under Amendment No. 36 we seek to ensure that the new owner has a statutory duty to have joint machinery for consulting on terms and conditions of employment, health and safety. The amendment also puts British Coal under a prior duty to consult the workforce on its proposals. These amendments are probing. I should like to ask the Minister what assurances we have for the future after privatisation and whether he thinks that within British Coal in the past two months best practices have been followed.

4.30 p.m.

The Earl of Caithness

The noble Lord, Lord Donoughue, went into a little bit of history with regard to British Coal. As your Lordships will know, in this country legal advice is very expensive. When one is offered it freely one grabs it with both hands. I am grateful to the noble Lord, Lord Clinton-Davis, for saying that these matters are sub judice and it would be wrong for him to comment further. I follow the noble Lord and say that it would be wrong for me to comment further.

As to the future, I know that the noble Lord, Lord Donoughue, will, with his usual care, read what I have said. I commented on the future and the consultations that my honourable friend the Minister for Energy had undertaken and the representations received. Those are being carefully considered. When one is carefully considering replies to questions it would be wrong to comment any further. I understand the concern that exists. Undoubtedly this is a matter to which we will return.

Lord Clinton-Davis

I do not propose to trespass on ground that is being covered by the courts at the present time, but I think it is wrong for the Minister to assert—because implicitly that is what he is doing—that British Coal needs no reminders about this. That is a matter upon which the courts will adjudicate.

I indicated that I thought Amendment No. 36 was in many ways the most important because it dealt with the new private sector interests that would evolve in the coal and rail industries. I know perfectly well that the Government have given an undertaking in paragraph 86 of the White Paper on the railways that trade unions will be consulted about matters affecting their members' employment. That is an undertaking which covers the Government in relation to the privatisation proposals. But the Minister does not go further than that: he does not indicate whether or not there will be a condition in relation to the franchises that will require such consultation to take place as far as the successor companies are concerned. That is what the Committee needs to hear from the Government. Since there was nothing said about it by the Minister I ask him to reply to that particular point.

There are quite a number of private employers who today do not recognise trade unions and who perhaps have their own in-house tame employee organisations. In the private sector there are some who take consultation very seriously, as I well know, but others do not. To give chapter and verse, I visited a plant in Plymouth where the question of consultation was dealt with in a rather derisory manner by the managing director of a very large group. He said, "Minister, I do not know why you are so concerned about consultation and participation because those people would not be where they are if they were of any value." That cannot be a proper or representative view of British industry. It was however a salutary thing for me to hear from the lips of someone who should have known a great deal better and whom I reported to his head office.

Unless there is a mandatory duty provided by the Bill for consultation it will not always be observed. I should like to hear from the Government their thinking on that point. I am not saying that we need to deal with the specific point now, but some assurances from the Minister need to be forthcoming. The matter is causing some concern.

The Earl of Caithness

The noble Lord, Lord Clinton-Davis, takes us back to a point we discussed in part yesterday, and it is appropriate to mention it again. In the White Paper we said that employees' rights and terms and conditions of employment would be safeguarded on the transfer to new employment. I can give an assurance to the noble Lord that we are currently working up the details of that. As he knows, the Transfer of Undertakings (Protection of Employment) Regulations (colloquially known as TUPE) have to be considered. That is exactly what we are considering at the moment, and until we have finished that consideration it would be wrong for me to say anything further.

Lord Clinton-Davis

We shall obviously need to come back to this issue later, perhaps not necessarily within the scope of this Bill. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 32 to 36 not moved.]

Lord Ezra moved Amendment No. 37:

Page 1, line 14, at end insert: ("() In exercising the powers conferred by this section special regard shall be paid to the need—

1. (a) to safeguard the interests of present and future pensioners;
2. (b) to maintain standards of health and safety in the industry; and
3. (c) (in the case of coal) to maintain adequate facilities for continuing research into clean coal technology.").

The noble Lord said: This amendment covers three issues: safeguarding the interests of pensioners; maintaining standards of health and safety; and, in the case of coal, maintaining adequate facilities for continuing research into clean coal technology. I do not intend to say anything on the first two issues because they have already been dealt with under other amendments. I should like to spend a moment on research into clean coal technology. The future of the British coal industry, however it may be owned in future, depends upon two things: its competitiveness and the ability to burn or use coal in a way that is acceptable in the light of increasingly stringent environmental standards. Clean coal technology is intended to achieve that purpose.

When I was in the coal industry—I am sure that this applied also to the noble Lord, Lord Haslam—a lot of effort was put into developing those technologies. However, they were of such a long-term and wide-ranging nature that even with the concentration of coal mining within a single enterprise it was felt that they were too costly to be financed entirely by the coal industry. A degree of government support was therefore asked for and forthcoming; indeed, there was also some support from other enterprises and international organisations.

The risk as I see it under privatisation, particularly if it leads to a degree of fragmentation, is that the new owners may feel even less able than the old coal board entirely to finance this kind of research. They may even want to give it up all together. Therefore, I should like to ask what the Government have in mind in the case of this very basic and important research from the point of view of safeguarding the British coal industry—I do not use the expressions "British Coal" or "National Coal Board" because I am talking about the British coal industry—because its future depends essentially on the successful development of clean coal technologies. So, what sort of provision do the Government contemplate making when the privatisation Bill finally appears for ensuring that a satisfactory degree of resource is devoted to that sort of research? I feel that, unless it is continued on a combined basis (however much the industry might be fragmented at the time of privatisation), it is unlikely that the necessary effort could be put into it. This is a very important question for the future of the industry and I shall be glad to hear what the Minister has to say about it.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield)

As has been made clear on a number of occasions, the basic purpose of this Bill is to enable British Coal and British Railways to do no more than act in relation to the proposals for the transfer of their functions, but the noble Lord, Lord Ezra, raises an issue about which I know that he has considerable anxiety. I am pleased to assure him that the Government also recognise the importance of the development of clean coal technology. We shall give careful consideration at a future date to the future of British Coal's research in this area. Perhaps I may point out that development work on the other key feature of the topping cycle technology—the partial gasification stage—is continuing at the moment. Obviously, all these matters will be considered at the appropriate time when the privatisation Bill is introduced.

Lord Ezra

I thank the noble Baroness for that reply and look forward to seeing how this issue will be dealt with when we see the draft legislation. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Donoughue moved Amendment No. 38:

Page 1, line 22, at end insert: ("() Every proposal made under subsection (1) above shall provide that all mineral rights shall revert to the Crown.").

The noble Lord said: Amendment No. 38 which stands also in the name of the noble Lord, Lord Ezra, concerns mineral rights and seeks to provide that those rights be returned to the Crown. At present, as I understand it, under the 1946 Coal Industry Nationalisation Act, the National Coal Board as it then was—now British Coal—owns all coal reserves, assets and mineral rights. In other words, a public corporation accountable to Parliament holds those rights. That will change on privatisation, especially the accountability element.

We are proposing that the right to ownership of the mineral coal is retained as Crown property. Obviously how that will operate is open to discussion. We might suggest for consideration that an independent agency be established which, on behalf of the Crown, might issue licences to let, lease or license the right to extract coal (deep or open cast). It is quite possible that the residual rump of British Coal could be retained in order to be involved in this activity. However, I believe that the agency's independence and its public accountability are very important and I look for firm assurances now on those matters.

Lord Boyd-Carpenter

I can well understand why the noble Lord, Lord Ezra, declined to move this quite astonishing amendment. I do not think that I am using excessive language when I say that it could be described as a "wrecking amendment". It apparently means that, where a privatisation takes place, the mineral rights in respect of which the privatisation is being arranged shall revert to the Crown—in other words, shall be renationalised. It is a most astonishing amendment. We have had no explanation of it from the noble Lord opposite. He has not agreed or disagreed with the interpretation which on reading the amendment I have put on it. As it stands, it seems to me a most damaging and very extreme amendment. Like the noble Lord, Lord Ezra, I feel no enthusiasm for it.

4.45 p.m.

Lord Ezra

It was not because I felt no enthusiasm for the amendment that I did not speak; it was simply because I thought that it was the turn of the noble Lord, Lord Donoughue, to move an amendment. I certainly support the amendment. I am a little surprised at the remarks of the noble Lord, Lord Boyd-Carpenter, because if he throws his mind back to the period before 1946 he will no doubt recall that the mineral rights in coal were owned by a body known as the Coal Commission. The commission operated the licences for extracting coal in exactly the same way as at the moment licences are granted by the Crown for the exploitation for oil and gas reserves in the North Sea. It seemed to me to be an eminently sensible proposition that, now that the privatisation of the mines is contemplated, the Crown should take back the ownership of these mineral rights and should license their operation according to the same sort of conditions as in the case of oil and gas (given the different circumstances of the North Sea). I must repeat that I am very surprised that the noble Lord, Lord Boyd-Carpenter, has objected to this. I normally listen with great attention to his words of wisdom.

Lord Boyd-Carpenter

I am interested in what the noble Lord says because I spoke in another place—although technically another place was in this place—against the nationalisation of the coal industry when this issue arose, as the noble Lord with his admirable memory will recall. Therefore, I have been not unfamiliar with this for quite a number of years.

If, when one is privatising an industry which has proceeded on the basis that the mineral rights belong not to the Crown but to a state organisation, one then makes the mineral rights on privatisation revert to the Crown, it seems to me that one is removing quite a large part of the privatisation which we are going to some trouble to legislate for. Therefore, I shall be interested to hear what my noble friend the Minister says. On the face of it, I find this the most surprising amendment that has been moved this afternoon.

Lord Swinfen

I wonder whether the noble Lord, Lord Donoughue, can enlighten me when he responds. I assume that his amendment is intended to relate only to coal, but it refers to "all mineral rights". Does that include copper, lead, gravel or anything else of a mineral nature that might be mined?

Lord Donoughue

Perhaps I can help the noble Lord. I was referring to the mineral coal. I repeat that I was referring to coal, not to other minerals.

Lord Swinfen

I believe that the noble Lord's amendment covers all minerals rather than just mineral coal.

Lord Hylton

Under the precedent of the Crichel Down case, is there not an argument that these redundant assets that are now held by the state should be offered back to their former owners—that is, their former owners even before the Coal Commission came into being? I suppose that I should declare a mild interest as the grandson of a former very small mineral owner.

Baroness Denton of Wakefield

Whatever else we may say about this amendment, it seems to have attracted considerable interest. Perhaps I may assure the noble Lord, Lord Donoughue, that we recognise the importance of the issue of the ownership of mineral resources which is raised in the amendment and we had assumed that the noble Lord meant coal. However, my amazement is that the amendment would require that every proposal for a transfer of functions, rights and liabilities should also include proposals concerning the reversion of mineral rights to the Crown. As worded, the amendment would therefore mean that even a proposal relating to the interests of British Rail, or one concerning a coal issue unrelated to mineral rights, such as pensions, would have to include proposals relating to mineral ownership. I am sure that that is not what the noble Lord intended.

It is not possible for us to accept the amendment. The Bill allows no transfer not permitted under current powers. The time and place to bring about major changes in the ownership of coal would be in a comprehensive Bill designed to bring about the restructuring of the present framework of the coal industry. It is at that point that the issues of ownership would be discussed. However, I can perhaps give comfort to the noble Lord by saying that we recognise the need to avoid the potential conflict of interests inherent in the present system where British Coal owns a resource which it licenses to its own competitors. We will be coming forward with details of our plans in conjunction with the passage of the coal Bill planned for the future. I hope therefore that the noble Lord will be content to wait for those to be brought forward.

Lord Donoughue

I thank the Minister for showing a constructiveness and positiveness towards the amendment which was not necessarily 100 per cent. apparent elsewhere. The amendment is not dissimilar to an amendment moved in another place which led to a constructive discussion on the issue. That is what we were seeking. I take on board what the Minister says. The Government are obviously considering this matter seriously. At the appropriate time we will scrutinise the Bill very closely because, as the Minister quite rightly said, the potential conflict of interests is basically what concerns us. On that basis, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Clinton-Davis moved Amendment No. 39:

Page 2, line 10, at end insert: ("() Before exercising the powers contained in this section the British Railways Board shall in respect of any matter relating to rail services provided under or in accordance with section 20 of the Transport Act 1968 consult any organisation representative or Passenger Transport Authorities and Passenger Transport Executives in the metropolitan areas.").

The noble Lord said: I propose to take a little time developing the arguments on this issue because it is extremely important. Amendment No. 39 deals with the question of consultation with the PTAs and PTEs. Amendment No. 40 deals with their assets. At the outset I must declare an interest. I am the president of the Association of Metropolitan Authorities. The AMA has made substantial representations to me, and, as the Minister is aware, it has had discussions with the Secretary of State. The AMA is not satisfied with the outcome of those discussions. So this is a useful opportunity to ventilate the issue here. I hope that the Minister can say that he will encourage further discussions. I am not proposing at this moment to do more than probe the matter; so the Minister can tell his Back-Benchers that they can go home, regardless of any other business.

The meeting that took place on 10th November with the Secretary of State was perfećtly friendly but there was no meeting of minds. The argument advanced by the AMA on behalf of the metropolitan authorities was that PTAs and PTEs should become local franchising authorities. The Secretary of State has not been able to accept that argument. He has said that he envisages a major continuing role for those bodies and that he wants the discussions to be continued in that context. But he has rejected the basic submission that they should become local franchising authorities. The association does not understand what precise role the Secretary of State envisages for the PTAs and PTEs other than as a kind of conduit for setting the subsidy for local rail services. I hope that the Minister will be able to clarify the situation more than the Secretary of State was able to do.

Perhaps I may now turn to the arguments in favour of enabling the PTAs and PTEs to become the local franchising authorities. Under Section 20 of the Transport Act 1968 the seven PTAs and PTEs specify and finance urban rail services. As a result such services have certainly grown over the years and plans are well advanced to continue that growth into the next century. In 1991 the authorities directly supported more than 150 million passenger journeys, 1,695,400 train journeys, more than 955 miles of track, 516 stations and 1,320 rail carriages. The contribution that they have made to the development of the rail industry in this country is very considerable indeed. In urban areas—this is the purpose of the provisions of Section 20—rail policy is part and parcel of what is known as a unitary development process; an integrated transport system within the areas concerned. Policies in relation to buses, public transport and highway authorities as well as rail are taken in conjunction. That is an extremely good precedent which ought to be followed nationally.

Section 20 provision ensures that a locally accountable authority is responsible for decisions concerning the levels of service and the conditions and the decisions relating to investment. Those concerns were acknowledged as very important indeed and thoroughly legitimate by Mr. Freeman, the Minister of State, during the course of the Committee stage in another place.

What the Government have said is that these authorities will continue to be responsible for specifying and financing urban rail services but that it is the franchising authority that will have responsibility for deciding how to franchise services to private sector operators. Along with the AMA, we believe—it is also, I understand, the view of the Liberal Democrats—that this would erode the accountability of the PTAs and PTEs for their expenditure on local rail services. They would have no direct relationship with the operator. All negotiations over service specifications and delivery would have to be undertaken at arm's length and the ability of these authorities to be proactive in developing local rail services and to support wider objectives—local transport, social, economic and environmental—would be impaired.

I believe that a single franchising authority gives rise to considerable problems. Local needs and opportunities could be overlooked. One can conceive of different operational arrangements on local rail within a single PTA area. The PTAs' and the PTEs' monitoring of local rail performance and the ability to influence this area would be substantially reduced.

A franchising authority, without the local knowledge that those authorities currently possess, would be unlikely to take full or proper account of changing local needs and circumstances. It would not have the same accountability, or anything like it. Moreover, without that interface from the PTAs and PTEs, a franchising authority is likely to encounter difficulties when dealing with short-term marketing and ticketing initiatives.

So we argue that those authorities should become the local franchising authorities based on, among other things, their experience, local accountability and the need for integrated policies in the areas which relate to them. So far as concerns discussions with the Secretary of State, as I have indicated, the AMA has not been satisfied. It has submitted a note setting out its detailed concerns. I am sure that the Minister will agree that this is a matter of public importance. Perhaps I should just recount those essential concerns. The AMA believes that the expertise and experience of the PTAs and PTEs would be maximised if they could participate in decisions by the franchising authority as to how Section 20 services are to be grouped in franchises; if they were able to participate in the shortlisting of respondents to invitations of interest in franchising; if they could be involved in the negotiations with the franchising authority, Railtrack and the regulator, about train paths, timetabling and other such issues; and if they could specify in detail the services that they wished to support and determine precisely how they would feature in franchises. In addition, they should have a right to determine all fares on the services that they subsidise; they should have responsibility for setting performance standards for services that they support, monitoring performance on those services and imposing penalties where appropriate; they should have the right to agree any service developments and enhancements involving the services which they support. Finally, they should have a right of appeal against any decision by the franchising authority or regulator affecting local rail services. As I have said, the AMA has requested another meeting with the Secretary of State. I am sure that the Minister will agree that that would be desirable. At least, I hope so.

I come to the next amendment, which relates to the assets of PTAs and PTEs. It is important that past investments should be protected, but the authorities are also keen to ensure that passengers should continue to receive the benefit of publicly financed infrastructure and rolling stock investment. I hope that the Minister will be able to say whether the PTAs and PTEs will be able to insist that franchisees will be required to use new rolling stock now allocated to PTA services, especially when it is owned or used by a PTA.

Secondly, the franchising document, with respect, reveals a lack of clarity in the Government's thinking about the future role of PTAs and PTEs in grant-aiding rail investment. Paragraph 2.7 refers to PTEs continuing to have powers: to make capital grants, for infrastructuring projects such as station improvements or the purchase of assets such as new rolling stock". Paragraph 2.11 cites Railtrack's continuing role in undertaking investment in infrastructure. Paragraph 3.4 floats the possibility of a franchisee investing in track and signalling and, in what I think is something of an understatement, paragraph 5.5 states: There will clearly need to be a degree of liaison between Railtrack, the Franchising Authority and franchisees on the planning of infrastructure investment". As I said at the outset in dealing with this point, I am worried that the Government's thinking shows no clear reasoning. I shall listen with interest to the Minister. I am not sure which of them is to reply because the noble Earl is a little removed from the Dispatch Box.

The Earl of Caithness

I shall be there.

Lord Clinton-Davis

I am glad that the Minister for Transport is replying to what is essentially a transport point. I beg to move.

Lord Teviot

I am one of those Back-Benchers who has not gone home whom the noble Lord, Lord Clinton-Davis, has described. I agree with a great deal of what he said. He covered the subject fully. Perhaps I may dot the i's and cross the t's. Contrary to what one thought at the time, the PTEs established under the 1985 Act have been a remarkable success. However, I agree with the noble Lord that the Government might take a different view on whether they should be the franchising authorities. With the bus industry they have been extremely impartial authorities. They have in no way favoured the previous passenger transport companies. They have been impartial and a success.

Does my noble friend agree that this system will be more bureaucratic? Under the present Section 20 arrangement there are two parties involved—the PTE and BR. It will now be the PTE with the franchising authority which will have to consult the track authority until the other authorities, whose names I do not have, are established. The whole scheme is cumbersome and expensive. In one PTE the director responsible has a staff of four which deals with a £30 million budget and the two bodies—the PTEs and BR. If they have to take on this scheme, everything will grow like Topsy. More staff will be needed. Decisions will not be made and timetables will be stretched. It all sounds rather strange to me. That relates to Amendment No. 39.

Amendment No. 40 relates to the assets. Authorities could feel injured where they have sponsored the rolling stock and paid for this and that. Regard should be paid to them. Like the noble Lord, Lord Clinton-Davis, I am waiting to hear my noble friend's reply.

The Earl of Caithness

As has already been made clear, the Bill gives both corporations powers to consult anyone they consider appropriate for the purpose of facilitating the implementation of privatisation proposals. I believe that the Committee will agree with me that we can leave it to BR to carry out its consultations as best it sees fit. For the Government's part, my right honourable friend the Secretary of State has met PTA and PTE representatives recently to discuss with them the privatisation proposals. I know that my honourable friend the Minister of State has been keeping in touch with those organisations' representatives.

I am sure that the Committee is aware that the PTEs and PTAs are involved in providing local rail services in seven conurbations. Under our privatisation proposals, the White Paper made it clear that the PTAs and PTEs will continue to be responsible for specifying the services to be provided in their areas. Services will continue to be run under contract, initially by BR. The franchising authority, taking the PTA/PTE specification, will be responsible for franchising those services to private sector operators.

Turning to Amendment No. 40, as the noble Lord, Lord Clinton-Davis, reminded the Committee, some PTEs and PTAs have invested, for example, in rolling stock. The treatment under our privatisation proposals of property or assets funded partly or in full by PTAs and PTEs is an important matter and one that is currently under consideration.

I am glad that the noble Lord, Lord Clinton-Davis, declared his interest in the matter. The points he raised were the same issues as were put to my right honourable friend the Secretary of State at a meeting with the representatives on 10th November. I have to say that they are still very much under consideration. We are grateful for the points that were put forward and of course I note what the noble Lord said today. I can tell the Committee that we envisage that specific provisions on the role of PTAs and PTEs in the franchising process will be incorporated in the main legislation. I have no doubt that all of us will be discussing the issue again when we come to that legislation.

Given what I have said and the fact that there was a meeting less than a month ago and that we are considering the points that were put to us, I wish to say to the noble Lord, Lord Clinton-Davis, and my noble friend Lord Teviot that we have taken on board the points that have been made. I shall draw to the attention of my honourable friend the Minister with responsibility for transport what both noble Lords have said before we draw conclusions as to where we proceed from here.

Lord Teviot

Before my noble friend sits down and the noble Lord, Lord Clinton-Davis, winds up, I am heartened by much of what my noble friend said. However, I repeat that it is not as simple with the PTEs and the franchising authority. Whereas British Rail speaks with one voice, the franchising authority must talk to two or three other authorities before reaching a decision. The matter is still not cut and dried.

5.15 p.m.

The Earl of Caithness

That is why we are considering the consultations. I am grateful to my noble friend for what he said and for his elucidation. I do not believe that the situation is quite as difficult as he portrayed, but we are considering it. We wish to work on it in the future.

Lord Clinton-Davis

I am glad that the discussions are being encouraged by the Minister. That is one point with which I specifically asked the Minister to deal and consequently I take encouragement from his reply. I assume also that the issue of whether the PTAs and PTEs might be the local franchising authority is no longer ruled out of court by the Minister. I hope that he will specifically refer to that. It is one of the most important issues, which not only I, but also the noble Lord, Lord Teviot, in his intervention, raised.

The Minister said little about the protection of assets funded by passenger transport authorities and executives. The noble Earl will know that the investment they have undertaken in the rail network is very substantial. It relates to resignalling, electrifica-tion, new rolling stock, station improvements, the opening of new stations, and so on. One can cite many examples of the extraordinary work which has been undertaken.

The PTAs and PTEs are anxious and I therefore invite the Minister to say a little more when he speaks again, as I hope he will. They are concerned about the way in which the assets will be dealt with in the light of the Government's proposals.

Perhaps I may summarise the anxieties: there are three. The PTAs and PTEs wish to ensure that rail passengers and the areas that are covered continue to benefit from the improved levels of service which are being achieved as a result of the investment to which I referred. Secondly, they wish to ensure that no other organisation benefits financially from the disposal or transfer of locally funded assets. The Minister said nothing about that. Thirdly, they wish to ensure that the position concerning future investments is clarified as quickly as possible. On that point, I agree that it is a matter under discussion and I do not specifically ask the Minister to comment at this stage unless he chooses to do so. However, the first two points are ones which he should address.

The view of Mr. Roger Freeman was that these are problems that need to be addressed. He said in Standing Committee A of another place on 9th June 1992 at col. 50: We want to ensure that any changes that we propose are sensible in relation to their continuing responsibilities". Quite a lot of time has elapsed since he said that and it would be helpful if the Minister could explain the position in that regard to the Committee now. The fact is that while the Minister now acknowledges that there is a problem, nothing is said about it in the White Paper.

The franchising consultation document acknowledges that the regional railways' partnership with local authorities has been in a way the driving force behind the development of the regional commuter networks. The document confirms that PTEs will continue to have powers to make capital grants towards rail investment. So far so good. But while the document also contains a good deal of detail on the rights of franchisees, it does not explain how the provisions relate to rolling stock which is funded by PTAs and PTEs. It does not indicate whether franchisees would be required to use rolling stock financed by a PTA or PTE as part of a package of improvements on a particular route.

While it is helpful that the Government should recognise that there is a continuing role for these authorities in grant-aiding rail investment, the gravamen of my observations today is that it is unclear at present how all that will work in practice. I would have hoped that the Minister would be able to be a little more forthcoming. Recognising the importance of the issue, as the department does, I would have hoped that the Minister would have seized the opportunity this afternoon to add to the clarity of the Government's thinking which leaves something to be desired.

I put those points to the Government again in the hope that the Minister will have something more to say. Of course, I recognise that many of the issues can also be regarded as matters of detail for further discussion. But I promise him that we shall come back to the issue at further stages of the Bill. Before I seek leave to withdraw the amendment, I invite the Minister to answer the points that I have just made.

The Earl of Caithness

The noble Lord would be wrong to assume that we have changed our minds as to who should be the franchising authority. That is not what I said. I said that my right honourable friend the Secretary of State had taken note of the points put to him and we are considering them. The noble Lord has explained his points in greater detail than perhaps on other amendments because of his anxiety. He is very knowledgeable on the matter. That highlights the difficulty of trying to raise such amendments before we come to the main legislation. I have tried to be as helpful as I can to the noble Lord, I said that we have listened with care to what the PTAs and PTEs said at the meeting on 10th November. I have listened with equal care to what the noble Lord and my noble friend Lord Teviot said today. We are considering the matter and have not reached firm conclusions.

It is difficult to give specific answers to specific questions when we are not dealing with the major legislation. We are on a paving Bill and have not come to a final conclusion. When we do so, it will then be clear what the decision is. I have absolutely no doubt that we shall discuss this and all the various other amendments that the noble Lord raised when we come to the main legislation.

Lord Clinton-Davis

Before the noble Earl sits down, I wish to clarify this point. I thought he was implying that all the issues were still open for debate as concerns the department. But he then went on to say that the Government had not changed their mind about the PTAs and PTEs being the local franchising authority. I wish to know now and the Committee will want to know whether the Government are still of the view that this is not an issue on which they will be capable of changing their minds. Are they absolutely rigidly adhering to the view that the PTAs and PTEs will not be the local franchising authority?

Lord Teviot

I must come to the defence of my noble friend. I was not expecting to do that. I think he has made himself perfectly clear. He has not made up his mind one way or the other. This is the paving Bill. I have not noticed a change of drift.

The Earl of Caithness

I am grateful to my noble friend Lord Teviot. He expressed the position rather better than I did. The Government's position is absolutely clear. When the noble Lord has read the White Paper and the other documents and has taken note of what the PTAs said when they reported back to him after the meeting with the Secretary of State, I believe he will find that the Government's position is clear. We have noted the points that have been made and we are still discussing the matter internally. Until we have reached a conclusion, how the heck can I answer the noble Lord?

Lord Clinton-Davis

The noble Earl has said that the Government have not changed their mind about the role of the PTAs and PTEs. That is the simple response to the point he has just made. Unlike the noble Lord, Lord Teviot, I find the Minister startlingly unable to clarify this issue. I simply do not know where he stands on this matter. I have one further point to make. The arguments that I have adduced today are not simply the arguments of the AMA, as he knows, but are also the arguments of the Central Transport Consultative Committee. That is a statutory body. The noble Lord, Lord Boyd-Carpenter, does not trust the arguments of that body. However, it is one that carries considerable authority. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 40 not moved.]

Lord Clinton-Davis moved Amendment No. 41:

Page 2, line 14, after ("thing") insert ("subject to subsection (4A) below").

The noble Lord said: In moving Amendment No. 41, I wish to speak also to Amendment No. 42. Environment and transport questions are matters which the Opposition consider very important. We wish to canvass some arguments this afternoon on those issues, notwithstanding the standard reply we shall receive from the Minister, or from both Ministers for that matter, as they are both in cahoots on this issue. They always have been in cahoots on privatisation paving measures. Nonetheless we are entitled to raise these issues and we shall do so.

We take the view that, if rail services are to continue to play a major role in economic, environmental and land use strategies, it is essential that broader policy criteria are reflected in a number of areas—for example in the Secretary of State's guidance to the franchise authority; in the factors taken into account in the Government's principles for access and for charging; in the factors taken into account in determining the duration and geographical extent of a franchise; in the capital grants made to Railtrack and the level of return which it is expected to make on its assets; in the qualitative criteria used by the franchising authority in shortlisting potential franchisees and in repackaging service specifications; and in the franchise authority's decision on which application for a franchise represents the, best overall value for money". All those points are referred to specifically in the franchising consultation document.

I should have thought the Government would join with us in seeking reduced congestion, fewer accidents and more environmental benefits, but the trouble is that none of these issues is automatically reflected in the revenue raised by a rail operator, or by Railtrack for that matter; they have no direct interest in those factors. Do the Government propose to establish a mechanism whereby these issues will be taken into account in investment decisions? As regards environ-mental protection, no one can doubt the significant role which is undertaken by the railways in protecting the environment. Road congestion has been estimated by the CBI to cost British business £15 billion a year. That is a situation that will get worse.

The forecast increase in road traffic suggested by the Government themselves in their White Paper on the Environment was for growth between 1988 and the year 2025 of between 83 and 142 per cent. As regards greenhouse gases, the main greenhouse gas, carbon dioxide, is likely to increase, according to calculations which have been made by reputable people, by between 60 and 120 per cent. by the year 2025. The Government are committed to stabilising carbon dioxide emissions at 1990 levels by the year 2005. That forecast is absolutely undermined by their own policies, particularly in relation to their emphasis on road transport as against rail. Exhaust emissions give rise to far greater costs for road than for rail transport. These matters are not reflected in balance sheets but they ought to be reflected in the Government's considerations. I beg to move.

Lord Donoughue

I wish to speak on the coal industry particularly as regards Amendment No. 42, which requires that the relevant corporations should have regard to the environmental effects of their actions and requires that they publish the details of any such effects. There are a number of serious environmental issues arising in relation to the coal industry. Those issues will be particularly noticeable after the privatisation of coal. Central to them are questions concerning the statutory responsibility for environmental hazards deriving from coal mines, whether open or closed. As one example of this—although there could be many—I refer to the matter of discharges from closed mines. These are often very toxic and acidic. Shafts fill with water which becomes polluted by metals and chemicals. In time that polluted water seeps out and pollutes our rivers. I believe that that is already a serious problem in South Wales.

The question is: who precisely will be responsible for cleaning up pollution and who is responsible now? I believe the National Rivers Authority says it is British Coal. Whose responsibility will it be after the privatisation of British Coal? I believe that at present there are no controls over discharges after closures. We shall witness a large number of closures. Who will be responsible for the environmental hazard of discharges after closure? There is a huge range of responsibilities that relate to environmental hazards from coal mines. There are the questions of water pumping, pit shaft capping, methane control, spontaneous combustion underground, land subsidence and the toxic pollution of land. After privatisation who will be responsible for those hazards? As I have said, even now it is often difficult to establish who is responsible. Have the Government yet formed any views about who will be responsible after the fragmentation of privatisation?

I wish now to consider a particular environmental aspect of British Coal land. I have already considered British Coal water. There is the question of derelict land. A recent Department of the Environment report identified over 20,000 hectares of land already made derelict by British Coal activities where there is no liability for reclamation. I believe that arrangements are under way for such land to be reclaimed following past and current closures. Therefore, that problem is being dealt with.

However, given the scale of potential difficulty after privatisation, what arrangements are there to ensure that private operators restore derelict land resulting from their future closures of mines? What if a private owner extracts coal, particularly if it is an opencast mine, takes his profit and then disappears and there is no continuing body which can be held responsible? Who then is responsible for the costs of restoring that derelict land?

This is an important and complex environmental problem. There already exists a huge inherited legacy of responsibilities for environmental safety relating to mines. The problem increases with the prospect of more closures after privatisation. It also becomes more problematic because of the uncertainties regarding responsibility for hazards and for compensation in relation to those hazards after the fragmentation—assuming it is fragmentation—of privatisation.

These are probing amendments, particularly Amendment No. 42. We are seeking from the Government the assignment of clear responsibility for environmental hazards deriving from mines. A body of some kind must ultimately be designated. That body must be accessible and accountable, and it will have to be properly funded.

Environmental duties have, I believe, been placed on British Coal's opencast activities but there is no equivalent duty in respect of deep mine operations. We urge the Government to establish such a statutory environmental duty and to establish a proper body to enforce it. Without it the Bill paves the way for an environmental disaster. We look to the Government to meet our concerns on that aspect. I look forward to hearing whether the Minister can give us any indication as to the Government's thinking.

5.30 p.m.

Lord Boyd-Carpenter

The noble Lord, Lord Donoughue, has touched on a point of real importance and substance, and I am very glad that he has done so. However, whether he has raised it in an appropriate way is a more open question.

Let us suppose that there were to be no steps to privatisation and the ownership of the coal industry continued as at present. It is obvious that there must be further pit closures. I agree that how many and how quickly is a matter for argument and discussion, but there must be some. The continuing closure of pits must give rise to questions of pollution and who should be responsible for remedying that pollution. As the coal corporation becomes smaller and poorer it is increasingly unlikely that it will be able, even if it so intended, to deal with those problems. Therefore, it is useful to raise the question as to what will happen in that respect whether privatisation goes ahead—as I hope it will—or whether it does not. It will be a problem in either case. I do not know whether my noble friend the Minister is fully briefed to answer that question.

Having said that, I do not consider that the amendment does much good. To place on a body the responsibility for "having regard" to likely effects is not an effective sanction. It is always possible to say, "Yes, of course I had regard to that, but I decided that nothing needed to be done". If one's obligation is simply to have regard to something that is an insubstantial and ineffective sanction. Therefore, I do not believe that the amendment copes with an important and serious situation.

if the amendment were pressed to a Division, which seems somewhat unlikely, I should vote against it. However, there is a serious question concerning how the increasing pollution deriving from the decline of the coal industry is to be dealt with. There are obvious limits to what my noble friend the Minister will be free to say at present, but I believe that the Committee will be interested to hear any reassurance that he can give us.

Lord Hylton

I support the general thrust of the amendments. I shall content myself simply with quoting two current examples concerning the mining of minerals. They happen to be examples drawn from the mining of base metals but similar considerations can apply to coal mines, particularly when pumping of underground water ceases on the closure of the mine.

The first example is in Cornwall. The former Wheal Jane mine, which is now closed, is presenting considerable and costly problems relating to water purification. The other example comes from the Continent. In former Yugoslavia a lead, zinc and cadmium mine is threatening the River Drina with toxic, corrosive and poisonous effluent, with possibly severe consequences for the whole of the Danube basin downstream. At present, as Members of the Committee may have read, efforts are being made to shore up a darn. We must all hope that they will he successful; otherwise the consequences will be horrendous.

Lord Haslam

The debate today suggests that we have never closed a coal mine. I have to remind the Committee that we have closed 120 mines since the miners' strike. I do not believe that that has created great difficulties in environmental terms. British Coal has endeavoured to do as much as it can to remove any dereliction after the closure of mines because that is the only way in which the land can be sold. That has been a firm policy.

I believe that any private owner closing mines in the future will have the same desire. Also, what has been said is somewhat contrary to what the noble Lord, Lord Donoughue, said yesterday about new owners "ripping us off" by selling such land. There is no way that that land can be sold until it has been restored.

The average opencast coal site in this country lasts about five years. The restoration of these sites is as good as anything one will see anywhere in the world. That is being achieved by a combination of private contractors and British Coal. Instead of just returning the land to agriculture local authorities may prefer a golf course or a nature reserve. British Coal and the contractors will endeavour to provide whatever local authorities want which fits the requirements of the local community. For example, a runway for a STOL airport has been laid out recently at Tinsley Park outside Sheffield.

On both counts British Coal has a good record. I believe that the profit motivation to which the noble Lord, Lord Donoughue, referred yesterday will ensure that any new owners will have to restore derelict land if they are to sell it.

Lord Ezra

The noble Lord, Lord Haslam, is absolutely right to emphasise the high regard for environmental issues exercised by the National Coal Board and, more recently, by British Coal. There is no doubt that, quite apart from the impact of closed mines on the environment, there has been consider-able regard for the way in which both deep mining and opencast operations have been conducted. The restoration of opencast land as operated by British Coal is of a very high standard.

What we are concerned about, as indicated clearly by the noble Lord, Lord Donoughue, is what will happen in future. What standards will be applied and how will they be enforced? I feel that if there is to be some form of licensing of mining operations, which there might be, the way in which the new owners, the licensees, take account of environmental considerations, not only during the course of their current operations but when those operations cease, ought to be a condition of such licences. That is an important issue and we should all be pleased to have some elucidation.

Baroness Denton of Wakefield

I thank the noble Lord, Lord Clinton-Davis, for recognising the consistency between my noble friend and myself. I confirm that this is a paving Bill. It is solely concerned with making preparations for privatisation and in particular with removing any doubt that the corporations may act in relation to and advise on privatisation proposals.

As such, the action taken under the powers to be conferred by the Bill would not in itself have any environmental effects since those powers in themselves do not effect any substantive changes. These will be the powers that this Chamber will be invited to consider in later Bills. Nevertheless, I recognise that this amendment was an opportunity for Members opposite to raise issues of major concern and to identify their concerns, which will be subject to considerable discussion at a future date when the relevant Bills come forward.

I assure the Committee that the Government fully recognise the range and complexity of the environ-mental issues connected with coal mining and railway operations. We fully recognise the importance of securing that future coal mining activity proceeds only with proper regard to the environment and its protection, and that will be fully taken into account.

My noble friend Lord Boyd-Carpenter suggested that I may not be fully briefed on these matters. On future matters, no; on the matters involved in the paving Bill, yes. But, I am happy to reassure him that we shall make absolutely certain that the responsibilities are identified and taken into account.

Perhaps I could draw the attention of the Committee to the fact that privatisation has in the past identified and quantified certain issues which had not fully been dealt with before the necessary regulation and study of privatisation. I think in particular of how the decommissioning costs of nuclear were brought forward. Without doubt in the case of both these Bills it will bring forward issues on which decisions will have to be made.

The noble Lord, Lord Donoughue, raised the important matter of water pollution. That can be considered only when ideas of how to deal with it within the context of privatisation are brought forward. But I assure him that his views will be taken into account. Today's debate will obviously be well noted by my honourable friend the Minister of State for Energy.

All the Government's proposals for a new framework of working rights for the private sector coal industry will be brought forward in due course, taking into account the coal review. But full account will be taken of planning issues. All planning permissions for new mines or open cast developments will contain appropriate conditions as determined by the planning authorities for the restoration of the site etc. after the completion of coal extraction. Planning authorities have powers to enforce management schemes in respect of existing tips continuing in use.

My noble friend Lord Haslam pointed to the work which has already been done. I acknowledge that British Coal has a good record in site management and restoration. We certainly wish to make sure that future coal operators maintain equally high standards.

The Government are committed to a greener future in Britain. We want to see the railways play their part. We recognise that rail transport offers important environmental advantages over road. British Rail has published a policy statement about protecting the environment. It has a good record, both in terms of the environmental management of existing activities and in considering the environmental impact of new investment. We would want everyone who provides rail services to adopt standards which are at least as high. The rail privatisation White Paper makes clear that the Government intend to place appropriate duties on the rail regulator to ensure, through the requirements of a licensing system, that all new operators do just that.

The noble Lord, Lord Hylton, identified specific instances where issues of other mineral activities created problems. I note the seriousness of those matters. But in this instance I hope I have been able to reassure noble Lords that when in due course the relevant Bill comes forward they can be quite certain that the matters they raise will be treated with the highest of priorities. I hope that the amendments will be withdrawn.

5.45 p.m.

Lord Clinton-Davis

The first speaker from the government side was the noble Lord, Lord Boyd-Carpenter. He acknowledged that this is an important issue. I am delighted to hear that. I can tell him that nothing could have given my noble friend Lord Donoughue greater pleasure—perhaps more pleasure than anything else he can recall—than to think that he has enjoyed the support of the noble Lord. I counselled him that if the noble Lord supports us on this issue, at least in principle, then he should take care. We may well be wrong.

The noble Lord, Lord Haslam, referred to the fact that British Coal had a good record. Nobody disputes that in the environmental field. The point was also made by the noble Lord, Lord Ezra. But we wish to know—we shall come back to this point no doubt later on—the sort of conditions the Government have it in mind in imposing upon new entrants to the coal industry these environmental considerations. It is not always a matter of sale of the land, which was touched on by the noble Lord, Lord Haslam. Land can become derelict and may remain unsold. It is important that the conditions should apply equally in that situation.

I noticed that the noble Baroness referred to the considerations after coal extraction had been completed. But it may not be completed. It may just be interrupted, perhaps for rather a long time. Those are matters on which we look forward to hearing more from Ministers in due course.

The noble Baroness referred briefly to the railways and acknowledged the part that they play in the development of environmental policy. The trouble with that, however, is that the Government's priority in relation to transport is still essentially—overwhel-mingly—based on roads. I quoted statistics earlier and gave the Committee information (which in any event is within its knowledge). The Government's vision of green issues is substantially blurred by reason of the damage that is continuously being done through the great emphasis given to road haulage as against rail freight. That will become even worse if we suffer major pit closures, since something like 60 per cent. of the freight carried by rail at the moment comes from the coal industry.

We were not entirely satisfied with the Ministers' responses—but neither would we have expected that. They were tied to the concept that they can say little about these issues until we have moved outside the paving Bill provisions. However, when issues about which the Government are seeking to consult are being discussed this Chamber is also entitled to be consulted. Therefore, I hope that they will not continue to talk about the Bill being a paving Bill, saying that it is inappropriate to raise these issues. Of course it is appropriate and we shall continue to do so. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 42 not moved]

Lord Clinton-Davis moved Amendment No. 43:

Page 2, line 17, after ("exercisable") insert ("subject to subsection (5A) below").

The noble Lord said: The amendment gives us the opportunity to look at the Government's franchising document. It has gone out to consultation but only on a limited basis. There is still considerable uncertainty about the way in which the franchising authority will operate. The document was aimed specifically at seeking views from prospective franchisees. Is that how the document is to be seen, or are the Government interested in the views of other organisations about its contents?

An area of uncertainty is the criteria to which the franchising authority will work. The White Paper casts no light on that matter. The consultation document refers to responses to requests for initial bids for franchises being "evaluated against a number of criteria". What are those criteria? How will they be set?

The document indicates that the Secretary of State will set high-level objectives on a range of issues, including the grouping of services in franchises and so forth. However, they do not appear to include the establishment of criteria for the assessment of bids. Why not? The consultation document also asserts that the authority will, be responsible for paying subsidy to franchisees where necessary within overall budgetary constraints set by the Secretary of State". What criteria will the authority use in allocating resources? Will the Minister outline the consultation which the Secretary of State will carry out before issuing guidance to the authority? Will he also indicate the criteria which the authority will use in undertaking its work?

I turn now to an issue which was not dealt with in the White Paper; if I am wrong I stand to be corrected. It is the potential conflict between franchising and the concept of open access. The consultation document does not enlighten us further on that point. It indicates that a franchise will not protect a franchisee from competition from other operators. That provision muddies the water even further. Therefore, it is difficult to understand the Government's assumption that some operators will be prepared to pay the franchising authority for the right to operate profitable services under a franchise. We have open access provisions on the one hand and the fact that a franchise provides no protection from competition on the other. What are the circumstances in which that will happen? For the reasons that I mentioned briefly it is important that the Minister should try to cast light on that issue. This Chamber is entitled to be consulted on the question of franchising, as are other outside interests.

The manner in which the Government's proposed access and charging regimes operate in practice is bound to have a fundamental effect upon the nature of the rail services provided in this country. The White Paper referred to a major consultancy in that regard. The franchising consultation document states: The Government plans to make its decisions on the principles known by the end of 1992". It is essential that there is full consultation on the results of the consultants' work before any final decisions are taken. Will the Minister confirm that that will be the case?

On the question of objectives, the Government believe that access and charging regimes should meet certain objectives relating to issues such as efficiency, competition and discrimination. If rail services are to play a major part in maintaining healthy regional and local economies, it is essential that the objectives should be drawn more widely. The range of objectives which are established in the White Paper—com-petition for track slots, in particular into main stations at peak times—could have the effect of squeezing out local commuter services. Perhaps the Minister will acknowledge that that will be most deleterious. We ask that the objectives shall relate to environmental, social and economic issues and to transport needs.

The fulfilment of the railways' contribution to land use and environmental policy hinges on investment. The volume of investment and the way in which it is planned and advanced are critical. The White Paper makes it clear that that will be the responsibility of Railtrack primarily but the document does not sufficiently reflect the urgency or significance of that issue.

Those are critical matters. I repeat that the Chamber is entitled to be consulted about the Government's thinking, as are the potential franchisees. It is incumbent on the Minister to be a little more open with the Committee than he has been in respect of other issues using as a camouflage the nature of the Bill as sufficient reason for not going into detail. The issue is different at the very least. He must acknowledge that on the basis that the franchising document has been issued for consultation.

Recent press reports have suggested that the Government no longer intend to publish the proposed Coopers & Lybrand report on access and charging principles. A report to that effect appeared in the Independent on 22nd November. The newspaper reported that the Government intend to publish their own report in the New Year setting out a financial regime for sharing track costs. Will the Minister say whether those press reports are accurate? Is there any reason why the Government should not publish the consultants' advice? Will he confirm that there will be full consultation on that aspect of the Government's proposals? I beg to move.

The Earl of Caithness

I listened to the noble Lord, Lord Clinton-Davis, with great care. Unless I am mistaken his comments did not relate to the amendment. Perhaps he can explain that.

Lord Clinton-Davis

I thought that what I said was germane to the amendment.

The Earl of Caithness

I understand that the effect of the amendments will be that BR will have to exclude from its consideration and advice any proposal which involves the transfer of its functions, properties, rights or liabilities to Railtrack or to anyone who might become responsible for track or infrastructure, the rail regulator and the franchising authority. I do not recall the noble Lord moving that type of amendment. He spoke at length about the franchising document and I am happy to respond to some of the points that he raised. But, with due respect to the noble Lord, if he wishes to talk about a particular subject, it would be helpful if the amendment were relevant to that subject. That would help me to give him a fuller answer.

As regards franchising, the noble Lord said that he thought that the document had gone out for limited consultation. We sent out over 2,000 copies of the document and we have received useful responses from a wide range of parties, including nearly 50 expressions of interest. I was able to tell the Committee that yesterday.

As the noble Lord will be aware from reading the franchise document, it was deliberately set out in terms that we wanted to know what people who were likely to be interested in franchising services felt was important. We have given a great deal of thought to that area but we thought that it would be wrong to give a prescriptive set of rules in a document such as this. We believed it important that the matter should go out for consultation and we are considering the replies to the consultation document on franchising. We shall make a decision in due course on that. However, the responses that we have received have been extremely helpful.

I should have thought that the noble Lord, Lord Clinton-Davis, would welcome that. If we had said, "This is exactly how the system will work despite all the various different types of services that are provided", the noble Lord would have said that the Government were being far too prescriptive. Having thought about it carefully, the Government have taken a very different approach and have set out some generalisations and asked for consultation. The noble Lord now wants more detail. I understand that, and he will be given more detail in due course.

I turn to the amendments as I understand them. As I said earlier, the effect of the amendments would be that British Rail would exclude from its considerations any advice on proposals—

6 p.m.

Lord Clinton-Davis

I do not wish to get off on the wrong track here. This Bill enables British Rail to facilitate government proposals to transfer its functions and assets to other people. In order to consider the merits of that, it is important that we should have a clear understanding of the likely functions of those transferees. The aim of this amendment is to probe the Government on that point. If the Minister did not understand that, it may be my fault because I did not make myself clear.

The Earl of Caithness

I am trying to help the noble Lord on that. Over the past two days my noble friend and I have been extremely constructive in trying to answer questions raised. The noble Lord knows that on some issues we cannot go very far because consultations are still taking place with various bodies, including the PTAs and the PTEs. In other areas we can be much more forthcoming because decisions have been taken. At this stage, by the very nature of the amendments before us, we must respond generally.

I shall deal with the amendments as I understand them. Members of the Committee will appreciate that it is important that we can have British Rail's input into our proposals for the establishment of Railtrack, the appointment of the rail regulator and the franchising authority, as into any other proposals that we make. Indeed, those are central elements of the privatisation proposals.

The Government are proposing that one part of BR will become a track authority—to be known as Railtrack—with responsibility for operating all track and infrastructure. Reference to that can be found at paragraph 16 of the White Paper. The franchising authority will be responsible for negotiating, awarding and monitoring franchises and will therefore have a key role in the future passenger railway. The rail regulator too will have an essential role in overseeing the application of arrangements for track access and charging, for promoting competition, preventing abuse of monopoly power and anti-competitive practices, promoting the interests of consumers and ensuring that network benefits are maintained.

It is clear to me that those three bodies are critical to the successful privatisation of the railways and that it is important not to exclude BR from playing its full part in providing input into our detailed proposals in that respect. BR's input can only be to the benefit of the privatisation process. I realise that the noble Lord does not like that process.

Lord Clinton-Davis

The Minister can never spare himself the little shaft at the end of his remarks, although it is rather unimportant and trivial. The Minister has failed to respond to two very important points which I raised. First, he says that 2,000 consultation documents have been sent out. To what category of organisation has that document been sent or has it been sent generally to everybody interested in rail transport? Perhaps the Minister can give an indication on that.

Secondly, I asked about the Coopers & Lybrand report, on which he was completely silent. Perhaps the Minister will respond to that before I indicate what I propose to do as regards the amendment.

The Earl of Caithness

Coopers & Lybrand have been providing advice to the department as part of the work on the charging regime. That work is still under consideration. The results will be published shortly.

Lord Clinton-Davis

I am glad to hear that the results are to be published, because that refutes the story in the Independent on Sunday. The Committee will thank the Minister for that information. The noble Earl has not responded as regards the other matter and I invite him to tell me about the general nature of the organisations to which the consultation document was sent.

The Earl of Caithness

As I said, 2,000 copies of the document were sent out from the department. They were available on demand but I do not have with me—and I apologise to the noble Lord—a complete list of the 2,000 recipients of the document.

Lord Clinton-Davis

I am not asking for a complete list. I am interested in the general nature of the people to whom it was sent. I am glad to know that the document is available. Will the Minister take into account the views of people other than potential franchisees?

The Earl of Caithness

As I said, the document was available on demand. It was open to anybody to ask for a copy and that person or organisation would have received a copy and would have then sent in a reply which would have been considered.

Lord Clinton-Davis

I am delighted with that response from the Minister. In his usual benign manner he has eventually given me a reply. It is always very difficult to extract that from him. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 44 and 45 not moved.]

Lord Clinton-Davis moved Amendment No. 46:

Page 2, line 19, at end insert:

("(5C) It shall be the duty of the British Railways Board and the British Coal Corporation to communicate their intentions to the Secretary of State who, within four weeks, shall present a report of such proposals which shall be laid before Parliament. (5D) Any intentions in subsection (5C) above, which require action under subsection (1) above shall only be made by order of the Secretary of State.").

The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 51. This amendment deals with the question of how accountability to Parliament will be met within the terms of the Bill. Amendment No. 46 deals with the requirements on the part of British Rail and British Coal. Amendment No. 51 deals with the obligations of the Secretary of State. I beg to move.

Baroness Denton of Wakefield

The noble Lord was refreshingly brief in moving the amendment and I hope that I have understood the point of his remarks. It may be that the noble Lord is anxious that without this amendment Parliament will be unable to scrutinise privatisation plans in detail before they are implemented. I am pleased to assure the noble Lord that that anxiety is misplaced. Parliament will have ample opportunity to debate the Government's plans as regards both these industries when substantive proposals are brought forward.

In the meantime, this Bill does not allow privatisation schemes to be implemented. That can only happen under the main privatisation legislation. I should add one further important point, which applies to British Coal. It is possible that in the coal review, options will be considered. For example, it may be that British Coal will wish to make an input as regards the extraordinary opportunities for the private sector in the production of coal. The amendment would hinder their making a full contribution to the development of such options. I cannot believe that the Committee wishes to put such obstacles in the way of British Coal making a contribution to developments which may be helpful to the nation's coal mining industry. I hope that I can reassure the noble Lord that there will be ample opportunity for both Houses to consider the issues of privatisation.

Lord Clinton-Davis

I like the reassurances given by the noble Baroness; they are much nicer than those given by her noble friend. I shall consider her remarks and in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 47 and 48 not moved.]

Clause 1 agreed to.

Lord Donoughue moved Amendment No. 49:

After Clause 1, insert the following new clause:

("Research and welfare . Before any proposal is made under section 1(1) of this Act in relation to the coal mining industry, regard shall be had to the need for the application out of any proceeds of sale or transfer of the property and assets involved of sufficient funds for the following purposes, namely—

1. (i) the maintenance of the Coal Research Establishment on the basis of an actuarial calculation of its requirements at the date of implementation of the proposal; and
2. (ii) the maintenance of the Coal Industry Welfare Organisation on the basis of an actuarial calculation of its requirements at the date of implementation of the proposal; and
3. (iii) suitable arrangements for the sale or transfer to ensure the continued supply of concessionary coal to any person entitled to such coal as a result of his or her spouse's employment at any coal mine affected.").

The noble Lord said: Amendment No. 49, standing in my name and that of the noble Lord, Lord Ezra, seeks that before the implementation of Clause 1, the proceeds of privatisation should be used for three specific purposes among others—to maintain the Coal Research Establishment, to maintain the Coal Industry Welfare Organisation and to maintain the continued provision of concessionary coal. I shall speak briefly on each point.

I believe that the Coal Research Establishment is the only research centre undertaking research into coal utilisation in the British Coal industry. It is apparently funded from diverse sources. British Coal contributes around £8 million per annum net; the private sector, particularly the power plant manufacturers and operators, contribute and there are some EC grants. The total investment is already inadequate. British Coal's research and development expenditure is only one-twentieth of that in Germany. It is less than that in the United States. We bear in mind the sad experience of Grimethorpe and note that the United Kingdom is the only OECD major coal producer with no operational clean coal power technology.

Our fears are that research and development—already inadequate—will disappear altogether after privatisation, as we know happened in electricity where the CEGB research centre closed down. With that fear in mind we suggest the establishment of an endowment fund from the proceeds of privatisation to endow the Coal Research Establishment permanently.

The Coal Industry Welfare Organisation originated with the Acts of 1920 and 1952. It is financed by a levy on tonnage produced. Can the Minister say whether that levy will continue after privatisation? It is important that those valued welfare activities, especially in relation to the disabled, should continue in the devastated mining communities. Therefore, again we suggest the setting up of an endowment fund. However, these are probing amendments. We are not committed rigidly to the suggestions but wish to give the Government an opportunity to say that they are committed to the continuation of the Coal Industry Welfare Organisation.

Concessionary fuel is a major item. It affects around 260,000 beneficiaries. The future liability costs are astronomical. I believe that it was estimated by the Rothschild Report—we have not officially seen that report but I am sure the Minister has—that through to the year 2000 it will cost £785 million. Can the Minister give an assurance that that concession, on such a scale, will continue after privatisation. I beg to move.

6.15 p.m.

Baroness Denton of Wakefield

For the sake of the record I must repeat that this paving Bill is not the method by which the privatisation of the coal industry will be achieved. No sale or transfer of assets that is not already possible under existing legislation can take place until further legislation has been passed by both this Chamber and another place. Therefore the paving Bill is not an appropriate place for the detailed provisions such as those contained in the amendment.

However, I acknowledge that the noble Lord, Lord Donoughue, raises important issues. I should like to set out the Government's thinking on them, as I hope I did on the question of research and development in answer to the noble Lord, Lord Ezra, when I was able to assure the Committee that privatisation considerations will include careful attention to the future of the research work carried out by British Coal and to the future of the Coal Research Establishment. I can assure the Committee that we will take account of the points raised both yesterday and today on the question of research.

With regard to concessionary coal arrangements, my honourable friend the Minister for Energy gave categoric assurances on the subject in another place. I shall repeat them now. Entitlement to concessionary fuel will be safeguarded. The Government recognise the importance of the coal industry's social welfare arrangements which contribute to the wellbeing of miners, former miners, their families and mining and former mining communities. The Coal Industry Welfare Organisation plays a valuable role in co-ordinating, administering and funding social welfare arrangements and activities. It provides direct benefits and services.

In the context of privatisation the Government will want to be as responsive as possible to the anxieties about the future of the coal industry social welfare arrangements and will be giving careful consideration to the importance of the sensitive issues involved, including funding.

The points raised are important. I acknowledge that those and the points raised during the discussion of the Bill in Committee are matters which concern the Committee and were raised for that purpose. In relation to Amendment No. 49 I hope that the noble Lord will recognise that it is not appropriate for this Bill and will agree to withdraw it.

Lord Donoughue

We are grateful for the positive and characteristically constructive way in which the Minister approached what she rightly saw as an opportunity to raise the issues. We note with pleasure that she gave firm assurances on two points and a categoric assurance on the third. At whatever is the later stage that is appropriate for the Government to state what they have in mind, we look forward to receiving categoric assurances on all three issues. With that in mind, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Short title, financial provision and extent]:

[Amendment No. 50 had been withdrawn from the Marshalled List.]

[Amendment No. 51 not moved.]

[Amendments Nos. 52 to 54 had been withdrawn from the Marshalled List.]

Clause 2 agreed to.

House resumed: Bill reported without amendment.