HL Deb 18 January 1993 vol 541 cc723-40

3.1 p.m.

Read a third time.

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

Lord Donoughue moved Amendment No. 1:

Page 1, line 10, after ("include") insert ("providing subsection (1B) below has been satisfied").

The noble Lord said: My Lords, for the convenience of the House, in moving this amendment I shall speak also to Amendment No. 5.

This is the only amendment which we move on the coal aspect of the Bill. However, it absorbs new and important developments which have taken place since Committee stage. Therefore I trust that the House will allow me to explain in a little detail why the amendment is proposed and what it seeks to achieve.

The amendment seeks to ensure that in future decisions on the destiny of the British coal industry observe two procedural aspects: to proceed with due consultation with the relevant parties according to agreed procedures; and to proceed with independent scrutiny of the facts, the figures and analysis in the decision-making. That approach is not new; we have pressed consistently for that on this side of the House. In the big debate on 19th October our Motion specifically called for such independence of review. The House voted to agree that Motion by a comfortable majority with support from all sides, including government supporters. In Committee I moved amendments raising those issues, especially relating to due consultation.

Throughout that time the Government have resisted such pressures. They refused to set up a formal independent inquiry into the coal industry and I shall say more on that later. They instituted an internal review but not a proper independent inquiry which this House demanded. They rejected criticisms that the DTI and British Coal had ignored and breached the laws in agreed procedures relating to due consultation on pit closures. I argued that in Committee and it was rejected.

There has recently been a most important development. The courts, represented by Lord Justice Glidewell and Mr. Justice Hidden, announced their judicial verdict since we went into Recess and since the Committee stage. That verdict was given in the Recess and was entangled in the Christmas diversions and it may be that some noble Lords did not have the opportunity to study it. Certainly this is the first time that this House has had a chance to consider that judgment.

It was a devastating judgment. I cannot recall a time when a government department, a Secretary of State and a public corporation were judged to be so wrong doing. The judgment also supports our case as previously put, and as put in this amendment.

For the assistance of the House, I shall summarise briefly the judgment of 21st December of Lord Justice Glidewell and Mr. Justice Hidden. It concluded that the decisions of the Secretary of State for trade and British Coal—namely, on 13th October to close 31 collieries and on 19th October to close 10 and to review the other 31—were unlawful, and that the Secretary of State was ultra vires in his actions and decisions. The judgment stated that the decision was made without any consultation with the unions and so was in breach of Section 99 of the Employment Protection Act 1975, now Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. The decision seemed also to be in breach of Article 2 of 1975 Directive No. 75 of the European Council.

It states that the Secretary of State and British Coal deprived the trade unions and workforce of a legitimate expectation that the modified colliery review procedure would be followed and also that the decision to close the 10 pits without any independent scrutiny was "irrational". The court concluded also that British Coal and the Secretary of State should not reach a final decision on closures until, first, the review procedure had been completed; and, secondly: some form of independent scrutiny had been followed in relation to each of the collieries".

The judgment states that the court is very anxious about what happens now. It ruled that: What is needed is the rapid addition of some independent scrutiny". I repeat, "some independent scrutiny". The court had in its possession knowledge of the actions which the Government had taken and clearly did not consider them to be sufficiently independent. Lord Justice Glidewell concluded that the decisions of 13th and 19th October were quashed.

What an incredible indictment and what a humiliation that is for the Government, the department and British Coal! The Secretary of State and British Coal were deemed by distinguished judges to have acted, "unlawfully," "ultra vires" and, "irrationally". The judgment states categorically that the Government joined with British Coal in flagrantly breaching British law, a European directive and the coal industry's long-established consultative process.

I wonder how noble Lords on all Benches feel about that. I am sure that everyone will agree that it is not a matter of pride. I have no recollection of such a powerful judicial condemnation of any government and their advisers.

My Lords, what do we conclude? I believe that we are perfectly justified in concluding, first, that in the area of consultation, which is the first area mentioned in the amendment, the Government and British Coal cannot be sufficiently trusted to obey the law or follow agreed industry procedures. Those rights and obligations in relation to consultation must be guaranteed and entrenched. In my view I should add that that will relate to safety as well as to closures because there are further signs in British Coal's submission to the coal review that it proposes to alter safety standards but it has not consulted the unions on that. That is what this amendment seeks to achieve and I do not see how the Government, given their record, recent history and the court's judgment, can resist that.

The Minister may argue that since November the consultative procedures have been followed in relation to closures. I must advise the House to view that with scepticism. Since the court's judgment quashing the decisions, there are no valid closure decisions in existence on which to consult. The Government and British Coal have been found guilty of abusing the consultative process and cannot be trusted to use it properly in the future. Those processes are not being properly followed now. The amendment seeks to correct that situation in future in relation to the coal industry by entrenching and guaranteeing the proper conduct of due consultative procedures. That is consultation.

The second aspect of our amendment concerns independent scrutiny. The court judgment pronounced that what was needed was, the rapid addition of some independent scrutiny. The House, and much outside opinion, has also called for that, and this amendment seeks to address that factor.

The Government have admittedly—and we always attempt to be fair when we can—made some gestures in this direction. I should like briefly to explain why we think that they are not enough. The first gesture—it is really more than a gesture because we welcomed it—is the Government's own review of the coal industry. That is welcome because it has opened up the energy debate. But it is not an independent review. It is an internal review, and the Government have chosen to ignore the vote in this House calling for an independent review.

The Secretary of State has repeatedly stated in the past that he finds the arguments for closures compelling. He has not, to my knowledge, retracted that. The Prime Minister said the same on television, and to my knowledge he has not retracted that. The official advisers within the department are still the same people who drafted electricity privatisation in such a way that the market was structured, tilted, to exclude coal. They have prejudged the issue. We have no evidence that they have changed their minds, and there has been no White Paper so far.

Two Select Committees in another place are due to report—the Trade and Industry Committee and the Employment Committee. We welcome that and look forward to those reports. They are independent, although of course they contain government supporters. However, they are not permanently reviewing the future of the coal industry in the way that we believe is required; nor are the Government committed to accepting their conclusions.

Here I should like to say a few words about Boyds, the American consultants. We have heard that the company was appointed as consultants in response to the court's view that an independent scrutiny was required. The Secretary of State and the Department announced that, in response to the court's judgment, they were appointing Boyds to report on the closure of the 10 doomed pits. Since then we have also read that that decision has been retracted; that it has not been appointed. It would be helpful if the Minister would clarify the position on the appointment of Boyds. Has that company been appointed in response to the court's request for independent scrutiny, or has there been another U-turn? It was appointed and then dismissed, or was it never appointed at all? The attempt to appoint Boyds, whether or not it still holds, is significant because it demonstrates that the Government do not yet understand or accept the concept of independent scrutiny as has been put forward here and supported by the court. Boyds is not independent; it is closely associated with the earlier policies that led to the closure decision.

I should like to restate what the judge said. He said that it is for British Coal and the unions to decide how such an independent scrutiny should be conducted. He said that not only should there be an independent scrutiny—and we have stated that Boyds is not independent—but he stated explicitly that the unions should be involved in that decision. The unions were not consulted on who should do it and how the independent scrutiny would be conducted before that announcement. So there was yet another arbitrary, one-sided decision to appoint Boyds as the independent scrutiny. That was in breach of the industry's consultation obligations, in defiance of the court's decision, and in defiance of the decision that it should be done jointly with the unions.

We have neither due consultation nor sufficient independent scrutiny. Those are two crucial factors necessary for future decision-making in the coal industry, and which have been called for by the court, by those who work in the industry, by most independent outside commentators, and by many in this House. This amendment seeks to provide just that, and to provide it on a consensual basis by agreement among all interested parties to secure an agreed future for this industry. It is a necessary protection against the kind of arbitrary, doctrinaire, ill-considered and lack of consultative decision-making from which the industry has recently suffered. The amendment seeks to ensure that such decision-making will be based on an objective and fair analysis of the facts and is figures, and is taken within the rational framework of a coherent energy strategy.

That is what the British coal industry needs and deserves but has not recently experienced: independent scrutiny, coherent analysis, due consultation, and decisions within the law of the land. I trust that the Minister will accept that as being in everyone's interest. I also trust that we will not just have nit-picking on the mere words of the amendment. I hope it will be accepted that the basic principles of independence and consultation will be incorporated in the Bill. I beg to move.

3.15 p.m.

Lord Ezra

My Lords, I should like to support the amendment moved by the noble Lord, Lord Donoughue, for a number of reasons. First, he was right to draw our attention to the important developments that took place while this House was in Recess and to the judgment of the court on 21st December. This immediately followed events that took place on 13th October when the Government's original announcement was made and then the amended announcement on 19th October. It is right therefore that this opportunity should be seized to emphasise the fundamental issues raised in that judgment.

Let me deal first with the consultative procedure. One of the most important traditions established since the enactment of the Coal Industry Act 1946 was the progressive development of consultation, particularly with regard to the key, very human and often emotional issue of colliery closures. During the time that I was in the Coal Board we took immense pains in preparing the case, with technical assessment of the remaining reserves and of the difficulties in mining those reserves if we were of that opinion. I can remember, when particularly difficult closures were being considered, that presentations were made by a team to the full board before they went down to the colliery to make the presentation. On some occasions we invited Members of Parliament from the various parties to come so that they could also be apprised of the issues involved, and the reasons that had led us, as managers trying to do what was in the best interests of the industry, to our conclusions.

That was an important tradition, established over many years. The saddest part of the most recent developments was the Government's announcement about the closures on 13th October, which seemed to set aside entirely this great tradition of consultation. Therefore, at the very least we need to be reassured that that will be restored, that from now on no pits will be closed without the full consultative procedures taking place, and indeed that that will be the procedure to be adopted whoever might end up owning these pits. We also have to think about the future. That can be put down as a condition in the licence to mine the coal from the pits that may or may not be sold to other parties.

As to the independent review procedure on which the noble Lord, Lord Donoughue, also laid emphasis, the House barely needs to be reminded that a majority of your Lordships were in favour of such an independent review and independent approach. I believe that the views then expressed by a majority, and carried by a majority vote, should be endorsed by the procedures to be adopted from now on.

A great difficulty has been created by what happened on 13th October. The concern of all of us in the House must surely be to find a fair and reasonable way out of that difficulty. I believe that the amendment so ably moved by the noble Lord, Lord Donoughue, presents a way of dealing with one of the most important aspects of that difficulty.

Lord Clinton-Davis

My Lords, I wish to raise two quite separate points which were not raised by my noble friend Lord Donoughue in his absolutely brilliant introductory speech. The first relates to coal and the second to the relationship between coal and rail. As far as I understand the position, British Coal has complained that coal imported from non-European Community countries amounts to dumping in a number of respects. I believe that the allegations relate to Colombian coal, where child labour is widely used, and to South African coal, where exploitation of another kind takes place. My understanding is that the Commission has declined to take action. I wonder whether the Minister can confirm or deny that position. If the Commission has declined to take action where the Coal Board believes that a strong case has been made out, will the Minister indicate whether the board and/or the Government have it in mind to take proceedings against the Commission as regards its failure to act?

My second point concerns the relationship between the freight transport movements of British Rail and the closure programme of British Coal. Have the Government taken into account the relationship between those two industries in that regard? That is not an unreasonable question to ask because the Government have set about this hybrid procedure to deal with the two industries. That was undertaken very unwisely, but none the less my question is relevant. It is rendered even more relevant by the fact that Sir Bob Reid, giving evidence before the House of Commons Select Committee on Employment, indicated that British Rail's profit from coal was substantial. He said according to a report in the press that the, latest figures for transporting bulk goods, including coal, disclose a turnover of £505 million and an operating profit of £67.5 million … the only way to offset these losses would be for the Government to increase its subsidy to BR, or a fare increase". He also said that if British Coal's current plans were to be undertaken 1,151 employees would have to be made redundant as far as the railways are concerned, and they would come mainly from staff operating the system from pithead to power stations. He indicated that eventual job losses could reach about 2,770 over four years. He also made a remarkable comment when he said that he, as chairman of British Rail, was given no warning of the announcement made by British Coal. Those are serious matters. What I and the House will want to know is whether those factors were taken into account by the Government in the assessments they undertook.

Baroness Denton of Wakefield

My Lords, the noble Lord, Lord Donoughue, has introduced into this debate the judgment of Lord Justice Glidewell and Mr. Justice Hidden on the colliery closure decisions announced on 13th and 19th October. Despite the eloquent case made by the noble Lord at no point can I see that it has any relevance to the Bill which we are considering today. This Bill and the closure decisions are entirely separate subjects. They are both important subjects. In case recent festivities have affected the memories of noble Lords, I should remind the House of the purpose of our deliberations on this Bill. We are here to give a Third Reading to a Bill whose purpose is to allow two corporations to make preparations for privatisation. That is a narrow technical purpose but one which is of vital importance to the two corporations.

Without this Bill British Coal and British Rail would be severely handicapped as regards contributing to and commenting on plans for privatisation. However, I must respond to the noble Lord, Lord Donoughue, in view of the nature of the points he made despite their lack of relevance to this Bill. My right honourable friend the President of the Board of Trade has noted the judgment of the court on these cases and in the light of that judgment has appointed Boyds—this has been mentioned—which is an internationally renowned firm of mining consultants, to produce an independent report on the 10 pits. I noted but did not understand the noble Lord's comment that previous knowledge reduces independence. The matter we are discussing is a separate exercise from the report on the 21 pits. It is of course for British Coal and the mining unions to decide whether the appointment of Boyds meets the needs of the case.

Lord Donoughue

My Lords, I must refer to my comments on Boyds in questioning the true independence of that firm. Will the Minister tell us who paid Boyds for its previous advice and involvement in the department's policy making?

Baroness Denton of Wakefield

My Lords, I do not believe that the matter of who paid a consultant is relevant to that consultant's independence. I emphasise again that it is for British Coal and the mining unions to decide whether the appointment of Boyds meets the need for an independent element as suggested by the court. I emphasise to noble Lords that the appointment by the President of the Board of Trade is not intended in any way to pre-empt the outcome of the discussions between British Coal and the unions on the procedure which they should now follow. However, the Government hope that British Coal and the unions will view this appointment as a helpful step which introduces an appropriate independent element and that they will agree to make use of it.

British Coal and the unions will be given the opportunity to make representations to Boyds before the draft report is produced. They will also be able to accompany Boyds on the latter's pit visits. My right honourable friend has asked Boyds to arrange for the mining unions and British Coal to receive copies of the report in draft and has also asked Boyds to receive their comments. He will require Boyds to take into account those comments in finalising its report. It will of course be for Boyds to decide on the final content of its report as it is essential for all concerned that the report should be independent.

My right honourable friend proposes to publish Boyds's final report. No final decisions will be taken on closing the 10 pits until the consultation process has been completed, Boyds has reported on the 10 pits and Parliament has had the chance to debate the coal review White Paper and the report of the Trade and Industry Select Committee. Those are not gestures. I believe that they demonstrate that the Government take the judgment of the court very seriously.

In addition to those developments in relation to the 10 pits, noble Lords will also appreciate that the review of the future of the 21 pits proposed for closure in October currently being undertaken is deep and wide-ranging. Evidence has been received from over 300 organisations and individuals. All the evidence has been passed to the Trade and Industry Select Committee and made publicly available except in cases where those submitting it have asked that it should not be. The Government will be publishing a number of studies commissioned from independent consultants. The Trade and Industry and Employment Select Committees are conducting their own independent inquiries. There will be a White Paper, which the Government hope to publish as soon as possible next month and which this House and another place will have an opportunity to debate. As your Lordships will know from earlier stages of the Bill, no decision will be taken on the timing of coal privatisation legislation until after those debates.

If the amendment is an attempt to inject a further element of review covering essentially the same ground as the coal review, the two Select Committees and the Boyds study of the 10 pits, then it would serve little purpose other than to postpone the important decisions which must be reached to end the uncertainty currently facing both British Coal and the miners and to delay British Coal's ability to make plans to improve productivity and reduce costs in order to secure the largest possible share of the market.

Further, if the amendment merely seeks to add an independent process of scrutiny to any possible pit closures, then again it would serve little purpose in the light of the way British Coal has responded to the observations of Lord Justice Glidewell. Again, it would continue the uncertainty facing British Coal and its employees.

It would appear from the amendment that, if the Secretary of State made a proposal to British Coal which included the possibility of the closure of a colliery, then before British Coal could consider that proposal there would be an independent inquiry chaired by a person appointed jointly by my right honourable friend the President of the Board of Trade, British Coal and the relevant trade unions. Colliery closures are not proposed by the Secretary of State to British Coal but are a management matter for British Coal under its statutory duties and functions. They are therefore proposed by British Coal and are subject to obligations to consult in relation to proposed redundancies. The powers of the Bill, which concern the facilitating of privatisation, are not related to British Coal's ability in law to propose colliery closures. Therefore, the amendment would probably not bite on the colliery closure proposals as intended.

The noble Lord asked whether the appointment of Boyds had been confirmed. The appointment of Boyds resulted from remarks by Lord Justice Glidewell that that might provide the way forward, although it was recognised that agreement on that form of scrutiny was a matter for British Coal and the unions.

I turn now to the question asked by the noble Lord, Lord Clinton-Davis, in relation to dumping. As he well knows, it is for the European Commission to decide whether complaints, including that made by British Coal, merit further investigation. The Government expect the Commission to take its responsibilities in this area seriously and therefore to consider the complaint seriously. I understand that the Commission has not yet reached a decision on whether to open an investigation. The Government have told the Commission that they have no objection to a formal investigation being started.

I shall leave it to my noble friend to comment in detail on any matters concerning British Rail's case in respect of freight, but obviously that is part of the review.

I hope that the noble Lords recognise that the amendment is not appropriate for the Bill and would continue the uncertainty which surrounds the coal industry. It would have a damaging effect on the ability of British Coal to contribute to the privatisation process which is the main purpose of the part of the Bill relating to coal. I hope that I have answered the questions raised by the noble Lord and that he will be encouraged to withdraw the amendment.

3.30 p.m.

Lord Dormand of Easington

My Lords, before the noble Baroness sits down will she deal with the point which arises from her statement that the Government will not consider the closure of any pits until the Boyds report has been received and considered? Is she aware—I am sure that she is—that in some cases, including at least one of the 10 pits, miners are going to the pits but are being refused employment even though they are being paid? Can one think of anything more ludicrous than to have miners at a pit and yet not to produce coal? If the noble Baroness and her colleagues think that that is not relevant to the Bill, they must be living in cloud-cuckoo-land. She ought to deal with that specific issue because the matters which my noble friend Lord Donoughue raised indicate a flagrant disregard of the decision of the court. As I have said before in this Chamber, if a pit is not worked it very soon crumbles and production at that pit may be stopped for ever. These points ought to be dealt with in detail now.

Baroness Denton of Wakefield

My Lords, I must inform the noble Lord, Lord Dormand, that, as he will know, that is a matter for British Coal. However, I do not believe that there is anything in the judgment which requires coaling in the 10 pits to recommence while consultation takes place.

Lord Donoughue

My Lords, I thank the Minister for what she said. Some of it was quite stunning. To suggest that with a few amendments we on this side of the House have created uncertainty in the coal industry is breathtaking. In the creation of uncertainty in an industry we all bow to the Government and the department. I bow to the Minister.

Baroness Denton of Wakefield

My Lords, I thank the noble Lord for allowing me to intervene. I did not say that the noble Lords had caused the uncertainty. I stressed that continuing that uncertainty would not be helpful to the future of the industry or to the people who work in it.

Lord Donoughue

My Lords, I do not believe that that is an adequate response to what we propose. The statement that the Bill has no relevance to the other wider matters which we have raised is also stunning. One cannot detach the Bill and its proposals for privatisation from British Coal's proposals for pit closures. They are interrelated. Nothing that the Minister has said has given the assurance which we sought. It is not a question of uncertainty but of continuing consultation and continuing independent scrutiny. None of that is guaranteed. Therefore we must test the opinion of the House.

3.39 p.m.

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

Their Lordships divided Contents, 110; Not-Contents, 133.

Division No. 1
CONTENTS
Airedale, L. John-Mackie, L.
Ardwick, L. Judd, L.
Ashley of Stoke, L. Kennet, L.
Attlee, E. Kilbracken, L.
Beaumont, of Whitley, L. Listowel, E.
Blackstone, B. Llewelyn-Davies of Hastoe, B.
Bonham-Carter, L. Lockwood, B.
Boston of Faversham, L. Longford, E.
Bottomley, L. Lovell-Davis, L.
Brimelow, L. Macaulay of Bragar, L.
Brooks of Tremorfa, L. McCarthy, L.
Bruce of Donington, L. McIntosh of Haringey, L.
Carmichael of Kelvingrove, L. Mackie of Benshie, L.
Carter, L. McNair, L.
Castle of Blackburn, B. Mallalieu, B.
Cledwyn of Penrhos, L. Mason of Barnsley, L.
Clinton-Davis, L. Milner of Leeds, L.
Cocks of Hartcliffe, L. Monkswell, L.
David, B. Morris of Castle Morris, L.
Dean of Beswick, L. Murray of Epping Forest, L.
Donaldson of Kingsbridge, L. Nicol, B.
Donoughue, L. Northfield, L.
Dormand of Easington, L. Ogmore, L.
Ewing of Kirkford, L. Peston, L.
Ezra, L. Pitt of Hampstead, L.
Falkender, B. Plant of Highfleld, L.
Falkland, V. Ponsonby of Shulbrede, L.
Fisher of Rednal, B. Prys-Davies, L.
Fitt, L. Rea, L.
Foot, L. Richard, L.
Gallacher, L. Ritchie of Dundee, L.
Galpern, L. Robson of Kiddington, B.
Geraint, L. Rochester, L.
Gladwyn, L. Sainsbury, L.
Graham of Edmonton, L. [Teller.] Seear, B.
Sefton of Garston, L.
Greenhill of Harrow, L. Serota, B.
Grey, E. Shackleton, L.
Hamwee, B. Shaughnessy, L.
Hanworth, V. Shepherd, L.
Harris of Greenwich, L. Stallard, L.
Hayter, L. Stedman, B.
Healey, L. Stoddart of Swindon, L.
Hilton of Eggardon, B. Strabolgi, L.
Hirshfield, L. Taylor of Blackburn, L.
Hollick, L. Taylor of Gryfe, L.
Hollis of Heigham, B. Tordoff, L. [Teller.]
Holme of Cheltenham, L. Turner of Camden, B.
Hooson, L. Underhill, L.
Howie of Troon, L. Wallace of Coslany, L.
Hughes, L. Wedderburn of Charlton, L.
Hunt, L. White, B.
Jacques, L. Williams of Elvel, L.
Jay, L. Wilson of Rievaulx, L.
Jay of Paddington, B. Winchilsea and Nottingham, E.
Jeger, B.
NOT-CONTENTS
Addison, V. Hood, V.
Alexander of Tunis, E. Hothfield, L.
Allenby of Megiddo, V. Howe, E.
Archer of Weston-Super-Mare, L. Hylton-Foster, B.
Ironside, L.
Arran, E. Johnston of Rockport, L.
Astor, V. Kimball, L.
Auckland, L. Kinnoull, E.
Belhaven and Stenton, L. Knollys, V.
Beloff, L. Lindsey and Abingdon, E.
Bessborough, E. Liverpool, E.
Blatch, B. Lloyd-George of Dwyfor, E.
Blyth, L. Long, V.
Boardman, L. Lyell, L.
Borthwick, L. Mackay of Ardbrecknish, L.
Boyd-Carpenter, L. Mackay of Clashfern, L.
Brabazon of Tara, L. Macleod of Borve, B.
Braine of Wheatley, L. Malmesbury, E.
Butterworth, L. Manchester, D.
Cadman, L. Mancroft, L.
Caithness, E. Margadale, L.
Campbell of Alloway, L. Marlesford, L.
Campbell of Croy, L. Merrivale, L.
Carnegy of Lour, B. Mersey, V.
Carnock, L. Monk Bretton, L.
Cayzer, L. Morris, L.
Charteris of Amisfield, L. Mountevans, L.
Chelmsford, V. Moyne, L.
Clanwilliam, E. Munster, E.
Cochrane of Cults, L. Nelson, E.
Cockfield, L. Norfolk, D.
Constantine of Stanmore, L. Norrie, L.
Cox, B. O'Cathain, B.
Craigavon, V. Orkney, E.
Cranborne, V. Orr-Ewing, L.
Cullen of Ashbourne, L. Palmer, L.
Cumberlege, B. Pender, L.
Dacre of Glanton, L. Platt of Writtle, B.
Davidson, V. Plummer of St. Marylebone, L.
De Freyne, L. Pym, L.
Denham, L. Quinton, L.
Denton of Wakefield, B. Rodger of Earlsferry, L.
Eccles of Moulton, B. Romney, E.
Effingham, E. St. Davids, V.
Elles, B. Selborne, E.
Elliot of Harwood, B. Shannon, E.
Elliott of Morpeth, L. Simon of Glaisdale, L.
Elton, L. Strange, B.
Erne, E. Strathcarron, L.
Erroll of Hale, L. Strathclyde, L.
Faithfull, B. Strathmore and Kinghorne, E. [Teller.]
Flather, B.
Fraser of Carmyllie, L. Sudeley, L.
Fraser of Kilmorack, L. Terrington, L.
Gainford, L. Teviot, L.
Geddes, L. Thomas of Gwydir, L.
Goschen, V. Trefgarne, L.
Greenway, L. Trumpington, B.
Gridley, L. Ullswater, V.
Hailsham of Saint Marylebone, L. Vaux of Harrowden, L.
Vivian, L.
Harding of Petherton, L. Wakeham, L.
Harmar-Nicholls, L. Walker of Worcester, L.
Hayhoe, L. Westbury, L.
Henley, L. Wharton, B.
Hesketh, L. [Teller.] Wolfson, L.
Hives, L. Wynford, L.
Holderness, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

3.48 p.m.

Lord Clinton-Davis moved Amendment No. 2:

Page 1, line 10, after ("include") insert ("providing subsection (1C) below has been satisfied").

The noble Lord said: My Lords, it may be for the convenience of the House if we discuss Amendment No. 6 with Amendment No. 2.

The effect of the amendments is to debar the use of powers under the Bill relating to British Rail pending the publication of reports on the effects of proposals by the Transport Select Committee and the chairman of British Rail. I justify the amendment on two grounds. The first is the growing confusion and uncertainty about the nature and likely effects of the Government's proposals. Hardly a day passes without some changes being announced. On 8th December it was announced in the Financial Times that the Government had given the clearest indication that they were prepared to bend their rail privatisation plans to make them more attractive to would-be train operators.

The article said that the Government: might be ready to drop its insistence on open access and allow operators effective monopolies on some lines, particularly British Rail's Network SouthEast commuter routes".

It is extraordinary that this fundamental point should be suddenly slipped in, although the Minister may say, "Well, it hasn't happened; it's just faulty reporting in the Financial Times". If that is right, then there it is. But if in fact there is substance to that report, it indicates how the Government have not thought their way through these issues.

The second point has been the absence, so far as concerns the Government's plans, of a full and open debate. If we take those points together, I believe that they reinforce the need for a fundamental review of what it is that the Government propose. The Transport Select Committee and the chairman of British Rail are well placed to be able to contribute to a review of this kind. I pray that in aid of one of the points to which I drew attention in the intervention that I made and which did not produce any reply of substance from the Minister's noble friend.

Regarding the uncertainty, I have no doubt that the Minister will say that we should await the publication of the Bill. As I understand it, that is imminent. That is not a proper response because it highlights the dangers of proceeding with poorly worked out, inadequately discussed proposals. The amendments will at least ensure that the powers in the Bill could not be used until a more open and orderly debate had taken place.

I believe that the chairman of the Transport Select Committee has made out the case for the amendments. Indeed, it has been corroborated by the reply that he received to a letter he wrote on 25th November to the Secretary of State for Transport. Following the publication of the Green Paper on the BBC by the Government, Mr. Adley wrote in the following terms: The Green paper is remarkable for the way in which it sets out a variety of options in a reasonably objective way, illustrating the practical advantages and disadvantages of each. There will now be a five months' consultation period. There is not even mention of legislation at this stage, let alone a detailed timetable for it". He went on to ask whether any lessons might usefully be gleaned from the approach that had occurred in relation to the BBC as concerns the rail privatisation proposals. The Secretary of State replied on 14th December: BR privatisation—and the ways of achieving it—have been discussed since 1988 and formed part of our manifesto commitments at the election. I think we owed it to the public to make clear the broad principles which we see governing the privatisation of BR and we did it as soon as we could after much thought by publishing the white paper in July. But we have not made up our minds on every detail. That is why we have issued—and will issue—various further documents about the way in which we think our proposals should he implemented". That response ignores the fact that the debate which occurred between 1988 and the date upon which the White Paper was published was simply based on press reports, speculation and not on any Green Paper or a formal statement of the Government's views.

The letter also overlooked the difficulties that have arisen as a result of what I might call the "drip feed" of consultation documents. We have had one or two already. We are promised, I think, eight in all. What is required is a comprehensive view of the Government's proposals on which a full and open public debate might take place.

One aspect of the Government's proposals which is coming under increasing criticism is the proposal for the establishment of a track authority. Indeed, the Transport Select Committee has focused very much on that issue. But the Secretary of State has acknowledged in the debate which took place in another place on 12th January that this is, "at the heart of our proposals". That was the term he used. But how important is that heart in reality? Mr. Roger Freeman, winding up the debate, said that the Government, do not rule out the possibility of what we call vertical franchising".—[Official Report, Commons, 12/1/93; col. 863.] The Secretary of State said at col. 795: In other areas of transport, we do not generally expect the provider of services to run the infrastructure as well. Therefore, the split between Railtrack and rail services is well precedented". But Mr. Roger Freeman said at col. 863: In certain cases, it may make a lot of sense for franchisees to control the signalling and infrastructure—subject, of course, to the freeholding interest of Railtrack". I think that there is an element of confusion between those two approaches.

Then there is the whole question of franchising to which I have already referred. The White Paper and the franchising document made it clear that the Government envisaged no protection from competition for companies operating franchised services. That has been widely criticised and potential franchisees have made it abundantly clear that it could well undermine the whole concept of franchising.

Therefore, in the light of that anxiety, there have been indications that the Government were reconsidering their position. But again in a further round of correspondence with the chairman of the Transport Select Committee, Mr. Roger Freeman indicated that the Government had not reached the view that franchising and open access are incompatible. His letter dated 7th December goes on to refer to problems in relation to track and station capacity in London. It ignores the key issue of whether franchising can work in a fully competitive environment.

Whether we are talking about whatever alias for these proposals the Government choose—privatisation, semi-privatisation or commercialisation (the term changes almost weekly, if not daily)—it is clear that a large number of issues require continuing open debate. That should happen before the Bill is debated. It has happened elsewhere in other respects. It is to the advantage of Parliament and of the community as a whole and it is certainly to the advantage of the future of the British railway system, and it should happen before the powers in the Bill are used. I beg to move.

The Earl of Caithness

My Lords, in wishing the noble Lord, Lord Clinton-Davis, and the rest of the House a happy new year, may I suggest to the noble Lord one new year's resolution? It is not to believe everything that he reads in the press with the addiction that he has done in the past.

The Bill before us empowers BR to act in relation to proposals put to it by the Secretary of State. We look forward to BR being able to play its full part in the preparation for privatisation. BR's input will be important. The amendments tabled by the noble Lord would prevent BR from doing anything under the powers which this Bill confers on it in response to a proposal from my right honourable friend until such time as both the Transport Select Committee in another place and the chairman of British Rail have published reports setting out their reactions to that proposal.

Although I am sure that the whole House listened carefully to what the noble Lord said, I should not be surprised if the House found it as difficult as I to understand the reasoning behind the amendment. Let me turn first to the Transport Select Committee. As your Lordships will be aware, that committee is conducting an inquiry into the Government's rail privatisation proposals. This has been under way for some time and my right honourable friend has given evidence to the committee. The work of the Select Committee will provide valuable input into Parliament's consideration of the main privatisation Bill and into the further development and implementation of the proposals once the legislative framework is in place. However, nothing would be gained by preventing BR from making its input until such time as the Select Committee had produced its report.

The noble Lord's amendment also suggests that further work by BR should not proceed until a report on the effects of the proposals has been published by the chairman of British Rail. The ability of the chairman to produce a considered report may to some extent be constrained until the Bill before us is enacted. But my right honourable friend has discussed our proposals with the chairman on numerous occasions. We have kept the chairman abreast of developments in the proposals and BR is ready to make its full contribution. This will be needed during the passage of the main privatisation Bill and the period of implementation thereafter. The chairman of BR has also given evidence to the Select Committee which will no doubt he reflected in its report. But why stop BR from playing its full part until its chairman has published a report? I am sure the House will agree that there can be no sense in that.

Let me repeat what I have said many times on this Bill. The objective of our privatisation proposals is to improve the quality of service to rail customers. We have published our proposals in the White Paper and in subsequent policy and consultation documents. Perhaps I might add that the noble Lord, Lord Clinton-Davis, criticised us for having what he called a drip-feed of consultation papers. He would be far more vociferous if we had not put out the consultation papers and had held them up until the last one had been prepared. He would have rightly said that the Government were withholding the information that they had. We have been absolutely honest in putting out the consultation papers as soon as they have been received. Yes, there are more to be delivered to the Government; yes, there are more for the House and everyone else to see. But as soon as we get them it is right that we make them available, as we have done in the past.

We believe that our proposals are the right way forward. We have welcomed the widespread debate which they have initiated and which will no doubt continue during the consideration of the main privatisation Bill in Parliament and on into the implementation of our proposals. All the views that we have received have helped contribute to the refinement of our proposals. I am sure noble Lords would agree that there has been no shortage of opportunities both here and in another place, or in outside debates, to consider the proposals that we have had.

We look forward to the contribution to the current debate which will be made by the Transport Select Committee and to our continuing discussions with the chairman of British Rail. I am sure the House will agree that preventing British Rail from making its full contribution would serve to hinder rather than help the process of further development of our proposals.

Lord Clinton-Davis

My Lords, I do not find that reply at all convincing. The Minister chided me for having some assiduity about press reports. I am not alone in that in this country nowadays. Certainly I asked him whether there was any truth in the matter. Is it not a perfectly reasonable point to make when so reputable a newspaper as the Financial Times draws attention to this matter? The Minister has said that there is no truth in it. But I rely far more on statements that have been made by the Secretary of State and the Minister of State in another place and in correspondence. I would claim that there is a great deal of doubt in the light of that and of the conflicts that have arisen between the statements made by both of them. It requires the Government to be far clearer in their thinking about what they are proposing.

The Minister said that the Government's objective is to improve the quality of service. It is the objective of us all. It is the way they are going about it that will produce a negative effect. That is a matter for the debate that will take place later this afternoon.

The Minister said that I would be more critical of the Government if they had not been forthcoming with consultation papers. I suppose there is some truth in that. Yes, I would. But he misses the whole point of my argument, which is that consultation should have taken place on the basis of a Green Paper, not the shrivelled White Paper that they ultimately produced —which was not in time for the debates in another place—which casts very little light on the Government's proposals. They should have enabled a full public debate to have taken place inside and outside this House because it is a matter of serious importance.

Then the Minister said—somewhat in conflict with his earlier remarks—that there had been no shortage of opportunities to consider the proposals in this place during the currency of the Bill. Every opportunity has been taken. There has not been a debate when either the noble Baroness or the noble Earl has not said that this was not a suitable vehicle for discussing the probing amendments—amendments which reflected very great concern on our part—and we should wait for the main Bill. They justify the rather unattractive and uninformative answers that they give on that score. Then the Minister says that there is no shortage of opportunities to consider the proposals. I do not believe that the Minister has responded properly to the case that we have made and I must therefore test the opinion of the House.

4.6 p.m.

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

Their Lordships divided Contents, 103; Not-Contents, 137.

Division No. 2
CONTENTS
Addington, L. Hamwee, B.
Ardwick, L. Hanworth, V.
Ashley of Stoke, L. Harris of Greenwich, L.
Attlee, E. Hayter, L.
Beaumont of Whitley, L. Healey, L.
Blackstone, B. Hilton of Eggardon, B.
Bonham-Carter, L. Hollick, L.
Boston of Faversham, L. Hollis of Heigham, B. [Teller.]
Brimelow, L. Holme of Cheltenham, L.
Bruce of Donington, L. Hooson, L.
Carmichael of Kelvingrove, L. Howie of Troon, L.
Carter, L. Hughes, L.
Castle of Blackburn, B. Hunt, L.
Cledwyn of Penrhos, L. Jacques, L.
Clinton-Davis, L. Jay, L.
Cocks of Hartcliffe, L. Jay of Paddington, B.
David, B. Jeger, B.
Dean of Beswick, L. John-Mackie, L.
Donaldson of Kingsbridge, L. Judd, L.
Donoughue, L. Kennet, L.
Dormand of Easington, L. Kilbracken, L.
Ennals, L. Kinloss, Ly.
Ewing of Kirkford, L. Listowel, E.
Ezra, L. Llewelyn-Davies of Hastoe, B.
Falkender, B. Lockwood, B.
Falkland, V. Longford, E.
Foot, L. Lovell-Davis, L.
Gallacher, L. Macaulay of Bragar, L.
Galpern, L. McCarthy, L.
Geraint, L. McIntosh of Haringey, L.
Gladwyn, L. Mackie of Benshie, L.
Graham of Edmonton, L. [Teller.] McNair, L.
Mallalieu, B.
Grey, E. Mason of Barnsley, L.
Milner of Leeds, L. Shackleton, L.
Morris of Castle Morris, L. Shepherd, L.
Nicol, B. Stallard, L.
Northfield, L. Stoddart of Swindon, L.
Ogmore, L. Strabolgi, L.
Peston, L. Taylor of Blackburn, L.
Pitt of Hampstead, L. Taylor of Gryfe, L.
Plant of Highfield, L. Tordoff, L.
Ponsonby of Shulbrede, L. Turner of Camden, B.
Prys-Davies, L. Underhill, L.
Rea, L. Wallace of Coslany, L.
Richard, L. Wedderburn of Charlton, L.
Ritchie of Dundee, L. White, B.
Robson of Kiddington, B. Williams of Elvel, L.
Rochester, L. Williams of Mostyn, L.
Sainsbury, L. Wilson of Rievaulx, L.
Seear, B. Winchilsea and Nottingham, E
Serota, B. Young of Dartington, L.
NOT-CONTENTS
Aldington, L. Hayhoe, L.
Allen of Abbeydale, L. Henley, L.
Allenby of Megiddo, V. Hesketh, L. [Teller.]
Archer of Weston-Super-Mare, L. Hives, L.
Holderness, L.
Arran, E. Hood, V.
Astor, V. Hooper, B.
Auckland, L. Hothfield, L.
Belhaven and Stenton, L. Howe, E.
Beloff, L. Hylton-Foster, B.
Bessborough, E. Ironside, L.
Birdwood, L. Johnston of Rockport, L.
Blyth, L. Kenilworth, L.
Boardman, L. Kimball, L.
Borthwick, L. Knollys, V.
Boyd-Carpenter, L. Lane of Horsell, L.
Brabazon of Tara, L. Lauderdale, E.
Braine of Wheatley, L. Leigh, L.
Brigstocke, B. Lindsey and Abingdon, E.
Broadbridge, L. Liverpool, E.
Butterworth, L. Lloyd-George of Dwyfor, E.
Cadman, L. Long, V.
Caithness, E. Lyell, L.
Campbell of Alloway, L. Mackay of Ardbrecknish, L.
Campbell of Croy, L. Mackay of Clashfern, L.
Carnegy of Lour, B. Macleod of Borve, B.
Carnock, L. Margadale, L.
Charteris of Amisfield, L. Marlesford, L.
Chelmsford, V. Merrivale, L.
Clanwilliam, E. Mersey, V.
Cochrane of Cults, L. Milverton, L.
Constantine of Stanmore, L. Monk Bretton, L.
Cox, B. Morris, L.
Craigavon, V. Mountevans, L.
Cranborne, V. Moyne, L.
Cullen of Ashbourne, L. Munster, E.
Cumberlege, B. Nelson, E.
Dacre of Glanton, L. Norfolk, D.
Davidson, V. Norrie, L.
De Freyne, L. O'Cathain, B.
Denham, L. Orkney, E.
Denton of Wakefield, B. Orr-Ewing, L.
Eccles of Moulton, B. Oxfuird, V.
Effingham, E. Palmer, L.
Elles, B. Pender, L.
Elliot of Harwood, B. Platt of Writtle, B.
Elliott of Morpeth, L. Plummer of St. Marylebone, L.
Erne, E. Porritt, L.
Faithfull, B. Prentice, L.
Finsberg, L. Pym, L.
Flather, B. Quinton, L.
Fraser of Carmyllie, L. Rankeillour, L.
Fraser of Kilmorack, L. Reading, M.
Gainford, L. Richardson, L.
Geddes, L. Rodger of Earlsferry, L.
Goschen, V. Romney, E.
Gridley, L. St. Davids, V.
Hailsham of Saint Marylebone, L. Selborne, E.
Simon of Glaisdale, L.
Harmar-Nicholls, L. Stedman, B.
Strange, B. Ullswater, V.
Strathclyde, L. Vaux of Harrowden, L.
Strathmore and Kinghorne, E. [Teller.] Vivian, L.
Wakeham, L.
Sudeley, L. Westbury, L.
Swansea, L. Wharton, B.
Terrington, L. Wolfson, L.
Teviot, L. Wyatt of Weeford, L.
Thomas of Gwydir, L. Wynford, L.
Trumpington, B. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.