Lords Sitting of 1 July 1993

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Worcester.): The LORD CHANCELLOR on the Woolsack.

Employees: Unfair Dismissal Protection
Baroness Turner of Camden Baroness Turner of Camden asked Her Majesty's Government:
What plans I hey have to improve the position of the significant numbers of employees who are dismissed but are prevented from claiming unfair dismissal by the two-year qualifying period.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the Government believe that the current two-year qualifying period for the generality of unfair dismissal cases strikes the right balance between the interests of employers and employees. However, the Trade Union Reform and Employment Rights Bill extends the range of unfair dismissal cases for which no qualifying period of service is required.
Baroness Turner of Camden: My Lords, I thank the Minister for that response. However, is he aware of the report issued recently by the National Association of Citizen Advice Bureaux which expresses deep concern about the increasingly systematic way in which some employers are exploiting the lack of protection in this area? The report states that the crudest form of this systematic exploitation is the practice of dismissing employees just before they qualify for protection against unfair dismissal and lists a whole series of cases that have been reported at CABs across the country. Can the Minister not foresee a situation in which many low paid employees have absolutely no chance of ever building up any entitlement to employment rights because every time they come up to the two-year period they are dismissed? Should not the Government make inquiries into the situation which their own legislation has created?
Viscount Ullswater: My Lords, it would be a short-sighted employer who dismissed satisfactory employees simply because he wanted to avoid potential unfair dismissal complaints. Such action would increase costs in terms of high turnover, recruitment, training of new staff, low morale and motivation in the workforce, all of which would be likely to contribute to low productivity.
I have seen the NACAB report, and I would point out that the new Trade Union Reform and Employment Rights Bill introduces new entitlements which I know go a long way to provide what the report asks for.
Lord Boyd-Carpenter: My Lords, is not part of the trouble with what the noble Baroness proposes that if
924
that were put into effect it would substantially diminish the amount of employment in the short-term category?
Viscount Ullswater: Yes, my Lords. My noble friend raises an extremely important point. As I said in my original Answer, we feel that the balance between employers and employees is now right and encourages as much employment as possible.
Lord Rochester: My Lords, does the noble Viscount agree that the practice of employers whose systematic policy is to dismiss employees just before the expiry of the two-year qualifying period is not simply short-sighted, as he said, but should be condemned?
Viscount Ullswater: My Lords, I believe that the reasons I have given as to why it is short-sighted are good reasons. Of course I would in no way support employers who indulge in these bad practices.
Lord McCarthy: My Lords, does the noble Viscount not admit that protection already exists against dismissal on grounds of sex or race below two years and that it does not have the disastrous effects which the noble Lord, Lord Boyd-Carpenter, suggested? Indeed, when we had normal, unfettered protection against dismissal under two years there were a disproportionate number of cases which were much more successful in the generality. Does he agree that all the evidence suggests that protection should cover all areas of employment?
Viscount Ullswater: My Lords, the noble Lord reminds the House that there is no qualifying period in the case of race or sex discrimination, or, the noble Lord did not add, of dismissal for being a trade union member, although that is also protected, as is a safety committee member on an offshore installation. As I said originally, the Bill introduces new rights of complaint in respect of any statutory right, and those are important additions. We should be content with them.
Lord Stallard: My Lords, will the Minister accept that this is only one of the tricks which these short-sighted employers get up to? They must have long-sighted advisers, because they take on youngsters and get rid of those young people just before they become eligible to pay their full National Insurance stamp, and they take on women for less than the stipulated number of hours so that they do not have to pay holiday pay. Does the Minister agree that they are falling back into the old pre-war tricks of utilising as many people as they can for as short a lime as possible and at as little cost to the employer as possible?
Viscount Ullswater: My Lords, the noble Lord has brought forward some rather anecdotal points. There may be very good business reasons for employing casual staff, for example, to give greater flexibility to deal with fluctuating workloads. Therefore, I should like to see the evidence before I comment.
Lord Hailsham of Saint Marylebone: My Lords. is it not obvious that irresponsible and foolish behaviour on the part of employers towards their employees gives them a bad name and therefore there will come

925
a point at which it carries its own punishment? Is it not also obvious that the constant elaboration of the machinery of government to protect otherwise fairly respectable people usually also brings its own punishment?
Viscount Ullswater: My Lords, I agree with the words of my noble and learned friend. I believe it right that employers should be in the best position to judge what is right for them. However, if they indulge in bad employment practices not only will they get a bad reputation but it will do their business great harm.

Public Bodies: Appointees' Arrangements
3.7 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What is the maximum number of days per week that people appointed as chairmen and members of government bodies are expected to work.
The Lord Privy Seal (Lord Wakeham): My Lords, the amount of time chairmen and members of government bodies are expected to work varies according to the appointment. Although some appointments are full time, the majority are part time, with the commitment ranging from several days a week to a day a month or less.
Lord Dean of Beswick: My Lords, I am grateful to the noble Lord the Leader of the House for that reply. I am referring to members of the board and not to professional officers. Do those people sign a contract stating how many days or hours work they will put in? If they do, who makes sure that they hold to that contract, bearing in mind that in a Written Answer given in Hansard for another place on Monday of this week it was indicated that in one regional health authority alone 120 places had been created on new quangos as a result of the Government setting up the new National Health trust hospitals? One can multiply that figure by 14—which is the number of regions—to establish the total number of about 1,400 people appointed to the new quangos. Some of them are receiving substantial salaries. Can the noble Lord give an undertaking that those appointees carry out the functions for which they are paid, bearing in mind some of the disasters which have just taken place in Wessex, the West Midlands and the London Ambulance Service?
Lord Wakeham: My Lords, first, I should like to say that I believe that the House and the nation should be grateful for the time and effort many distinguished people give to serving on public bodies, often at no little cost to themselves. Secondly, I do not know whether they actually sign a piece of paper in the form of a contract. But I know this. Ministers satisfy themselves that those whom they appoint have sufficient time to devote to the appointment, given their other commitments and appointments. That factor is taken into account in each individual case. It is for the Minister to satisfy himself on that aspect.
926
On the third point, a considerable number of people are appointed to those bodies. The majority are part time and unpaid. The information at 1st September 1992—that is the last figure—is that there are some 41,000 appointments over the whole range of public life. There are now 1,412 bodies to which those appointments are made compared with 2,167 in 1979.
Lord Dean of Beswick: My Lords, I am rather surprised that the Minister referred to people giving voluntary service and making sacrifices. Is he aware of the recently published statistics for the two national health trust units in Leeds? The new professional head receives £75,000 a year, and some directors have apportioned themselves an annual salary averaging £55,000 each. That means that Leeds now has two national health trusts which cost nearly £1 million to run before anyone sticks a plaster on anybody. Is that what the health service is coming to? Are we not creating a dangerous situation if we allow such costs to continue? Knowing the noble Lord the Leader of the House, I am surprised at his complacency.
Lord Wakeham: My Lords, I gave the facts: that the majority of those appointments are unpaid and voluntary. I believe that the nation is right to be grateful to those who serve in that way. Of course, some appointments are paid and the Ministers satisfy themselves that those people are paid properly and are able to do the duties involved. With that number of appointments I cannot imagine that there are not some people who are not up to standard. But it is for the Minister to deal with the matter in the appropriate way.
The Earl of Haisbury: My Lords, having occupied both positions referred to in the noble Lord's Question, perhaps I may say that the workload was carefully outlined and explained to me in advance of my accepting the appointment. Thereafter I did my best to keep to the ten-ns of my obligation with professional integrity.
Lord Wakeham: My Lords, I am grateful to the noble Earl for the endorsement from his experience of what I believe to be the position.
Lord Ennals: My Lords, for some reason the noble Lord the Leader of the House made a comparison with the circumstances in 1979. Will he place in the Library of the House not only the number of people, and the number of quangos, but also the amount paid to those people? When he makes that information available, I believe he will find that there is a substantial contrast which is not to the advantage of the present Government.
Lord Wakeham: My Lords, I shall certainly place in the Library all the information that I have readily available. If the noble Lord is not satisfied with the information, no doubt he will get in touch with me.
Lord Montagu of Beaulieu: My Lords, is my noble friend aware that when I became Chairman of English Heritage I signed an agreement to work two days a week? In fact I worked four days.
Lord Wakeharn: My Lords, the nation is grateful to my noble friend for the service that he gave during that time. I believe that it is not untypical of what a number of people do.
Lord Bruce of Donington: My Lords, is the noble Lord aware that evidence is accumulating, in particular with regard to the National Health Service, which indicates that the new administrative steps taken by the Government have resulted in inefficient, so-called businessmen running the health service in many areas? They are paid extortionate salaries while useful medical personnel, in particular nurses, are being discharged.
Lord Wakeharn: My Lords, I believe that virtually every statistic that anyone can produce about the performance of the health service in recent years indicates that it is much better than at any time previously.
Lord Jenkins of Hillhead: My Lords, is the noble Lord the Leader of the House aware that we have reason to be grateful to the noble Lord, Lord Montagu of Beaulieu, for having signed a contract for two days and for having worked for four days? Some of us believe that it might be better if his successor had signed a contract to work for four days and had worked for two days.
Lord Wakeham: My Lords, the noble Lord, Lord Jenkins, makes his point. Without in any way wishing to detract from the contribution of my noble friend, I do not believe that it was a fair point.
Lord Peyton of Yeovil: My Lords, perhaps I may refer to the comments of the noble Lord, Lord Bruce of Donington. As recently as this afternoon, I was in The Royal London Hospital. It is a new trust hospital. The comments that he has just made seem to me to be as unfounded, wide of the mark, unfair and damaging to morale as they could be.
Lord Wakeham: My Lords, I attributed the noble Lord's remarks to the devotion with which he has attended a recent measure before this House. It may have made him a little less balanced in his judgment on these matters.
Lord Richard: My Lords, the noble Lord the Leader of the House treats the matter with understandable levity. Does he recognise that there is now real anxiety about the accountability of quangos? Excluding the health service, they now account for no less than 20 per cent. of all public spending. A managing director can be ousted by the board and is responsible to the shareholders. A local authority councillor is responsible to the local electorate. Ministers presumably can be sacked by the Prime Minister. Who sacks people from quangos if they do not do the job? Is it only the Minister? If so, can the Leader of the House tell us how many people have been sacked recently for incompetence?
Lord Wakeham: My Lords, I cannot give the noble Lord the Leader of the Opposition the figure of how many have been sacked. A number have resigned. A number have left over the years. People appointed to
928
those boards are responsible to Ministers; and Ministers are responsible to Parliament. That is a very strong chain of responsibility which I believe serves the public interest well.
Lord Dean of Beswick: My Lords, I am pleased to inform the Minister, should he not already be aware, that later this month I shall ask a Question on a similar subject. Will he then produce the figures of appointments to quangos which are salaried as well as saying how many are voluntary and receive no pay?
Lord Wakeham: My Lords, I can assure the noble Lord that if he has put down a Question, I shall answer it to the best of my ability.
Lord Sefton of Garston: My Lords, the Minister stated that he will be prepared to produce figures. Will he also produce an estimate of the amount that the Government paid with regard to those posts when they were local government appointments? Will he compare those figures with the present cost?
Lord Wakeham: My Lords, if the noble Lord wishes to frame such a Question I shall do my best to answer it. However, I do not believe that the question that he asked is capable of an absolutely rational answer.

Employment: Union Membership and Salaries
3.18 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they approve of the practice of employers who pay higher wages and salaries to staff who are not members of trade unions or staff associations.
Viscount Ullswater: My Lords, we believe that it is an employers' right to decide, in the light of the needs and circumstances of his business, how he wants to negotiate pay settlements with his staff. However, it is, and will remain, unlawful for employers to penalise employees because of their union membership or non-membership.
Lord Molloy: My Lords, I am grateful to the Minister for that reply. However, is he aware that my Question has the support of Members of Parliament of all parties who are gravely apprehensive? We are just coming out of a great recession and such a practice could do irreparable harm. It is in the Tolpuddle style. It is a threat to freedom of association and might involve bribery and coercion. The Minister's reply is encouraging. If the practice referred to becomes a reality, will he assure us that appropriate action will be taken by the appropriate Minister?
Viscount Ullswater: My Lords, perhaps I should restate the law. It was never meant to interfere with collective bargaining arrangements. Its purpose is to protect employees from action taken against them as individuals by employers on the grounds of trade union membership or non-membership.
The Duke of Norfolk: My Lords, is the noble Viscount aware that the question of the noble Lord, Lord Molloy, would end in the re-introduction of the closed shop? I was present in Germany and saw the German miracle take place because of the great trade union leader and Foreign Secretary to Mr. Attlee, Ernest Bevin, who abolished the closed shop in Germany, or did not re-introduce it, and made many other trade union reforms such as limiting the number of trade unions to 15. That was the basis of the German miracle.
Viscount Ullswater: My Lords, I agree with my noble friend the Duke of Norfolk. The reforms of the 1980s have helped reduce strikes to record low levels and brought renewed confidence in the United Kingdom economy among overseas visitors. The 0.5 million working days lost in 1992 are the lowest calendar year total ever recorded since records began in 1891. The figure is nearly 25 times lower than the average for the 1970s.
Baroness Turner of Camden: My Lords, will the Minister tell his noble friend the Duke of Norfolk, who asked about the closed shop, that this Question has nothing to do with the closed shop but everything to do with trade union representation? Perhaps we may look again at my noble friend's Question in which he refers to staff who are not members of trade unions. He also has in mind those who seek representation by trade unions but who are denied that representation since higher wages and salaries are offered to people who do not seek representation by a trade union. That is the issue at stake here. Perhaps the Minister will reply to that.
Viscount Ullswater: My Lords, of course the provision that was made with the amendment to the Trade Union Reform and Employment Rights Bill is entirely even-handed. It applies equally where an employer takes action following a decision to recognise a particular union.
Lord Hailsham of Saint Marylebone: My Lords, does my noble friend agree that there is a place in a free society for freedom under law? Has not every question so far been directed towards substituting politically or morally defensible or desirable behaviour into the legal system, which is a great mistake?
Viscount Ullswater: My Lords, I agree with my noble and learned friend. We must be careful not to put the law into every corner of our lives.
Lord Rochester: My Lords, does the noble Viscount agree that under the recent legislation a reasonable employer should not offer a douceur to employees who support his decision no longer to recognise a union but withhold it from those who do not?
Viscount Ullswater: My Lords, in the cases with which we are concerned, which were subject to a Court of Appeal case, employers offered their staff a financial incentive to sign a new contract of employment incorporating different negotiating arrangements. There was no suggestion that individuals should leave their union.
Lord Monkswell: My Lords, in an earlier Answer the Minister advised the House of the number of days lost as a result of industrial action compared with the previous period. Can he advise the House how many days' work have effectively been lost by the level of unemployment that exists today compared with the previous period to which he referred?
Viscount Ullswater: My Lords, how long is a piece of string?
Lord McCarthy: My Lords, in answering the noble Lord, Lord Molloy, I understood the Minister speaking for the Government to say that they were quite happy with the present situation. Would they be just as happy if, for example, a pro-union employer were to discriminate in favour of trade unionists; if he were to give those with collective bargaining rights more money, better conditions and shorter hours? Would the Government then say that that was an attempt to discriminate, short of dismissal, and that it was unlawful?
Viscount Ullswater: No, my Lords. I thought that my Answer agreed with the noble Lord—so long as employers do not discriminate against people who are not union members.
Lord Molloy: My Lords, is the noble Viscount aware that I agree very much with what the noble Duke, the Duke of Norfolk, said? Like him, I have very little time for closed shops. However, there is nothing in what we request that has anything to do with closed shops. If it had, I would be agin it. What I want is that there will be no unnecessary industrial action taken at this time to frustrate both our Government and our country, and that is the kind of thing that would lead to it. I plead with the Government to think again.
Viscount Ullswater: My Lords, I believe that the industrial relations climate in this country is very good at the moment and that the records show that that is so. I sought to indicate that to the House. I believe that the amendment moved to the Trade Union Reform and Employment Rights Bill merely restates the law as set down by the noble Lord, Lord Jacques, in a speech in this House on 23rd September 1975, at col. 189 of Hansard. He said that Clause 45, now Clause 146 in the consolidated Bill:
"deals with the individual rights of employees, not collective bargaining issues".

Nuclear Weapons: Non-Proliferation
3.26 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
What are the conditions which must be met before they will be able to get rid of their nuclear weapons as aspired to by Baroness Chalker of Wallasey [H.L. Deb., col. 282, 26th May 1993].
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, for as long as our security continues to depend on the

931
possession of nuclear weapons, Her Majesty's Government are committed to maintaining a minimum deterrent.
Lord Jenkins of Putney: Precisely, my Lords. The noble Baroness, Lady Chalker, is not with us this afternoon. I hope that that is not due to anything untoward. I am now glad to see that she is here, if not on the Front Bench. Is it not the case that she expressed the Government's desire to be rid of nuclear weapons under certain conditions? I ask the noble Viscount whether he will be so good as to spell out the conditions which will enable the Government to dispose of the nuclear weapons of which they have expressed the desire to rid us.
Viscount Cranborne: My Lords, as always, my noble friend and I are at one on matters of government policy. 1 may quote my noble friend exactly when she said that Her Majesty's Government would get rid of nuclear weapons,
"only when it is safe to do so".—[Official Report, 26/5/93; col. 282.]
The element of uncertainty and lack of precision in itself contributes to the power of deterrence.
Lord Williams of Elvel: My Lords, will the noble Viscount agree that the nub of the matter is the non-proliferation treaty and the review conference, which will he coming up fairly soon? In the matter referred to by my noble friend in his Question, the noble Baroness, Lady Chalker, said that the UK delegation,
"delivered a statement reaffirming our aim to secure the treaty's unconditional, indefinite extension in 1995 and our commitment to support continuing progress towards nuclear disarmament".—[Official Report, 26/5/93; col. 280.]
I am sure that we all agree with those sentiments. However, given that President Clinton, as I understand it from today's Independent, is on the point of announcing that there will be no further testing in the United States, unless another nuclear power did so first, where does that leave our own nuclear deterrent, of which the noble Viscount is so fond?
Viscount Cranborne: My Lords, the noble Lord, Lord Williams, is as aware as I am that the United States administration—allies whom we greatly value, as I know the noble Lord does—is reviewing testing policy. We are in close touch with them and it would be entirely wrong to speculate on the conclusions of that review until an announcement is made.
Lord Ewing of Kirkford: My Lords, will the Minister say whether it is still the Government's intention to complete the programme of four Trident submarines?
Viscount Cranborne: Yes, my Lords.
Lord Stoddart of Swindon: My Lords, in the light of our discussions over the past few days in this House, and as long as the Government feel it necessary to have nuclear weapons, will the noble Viscount give an absolute assurance that only Britain's finger will be on the nuclear trigger, and that no part will be played at any time ever in the future by the Council of Ministers or the Commission?
Viscount Cranborne: My Lords, the noble Lord tempts me strangely. I merely reiterate that the nuclear deterrent possessed by this country is an independent one and will continue to remain so.
Lord Williams of Elvel: My Lords, how will the noble Viscount square that answer with the inability to test in Nevada if that is the case? Does he agree that it is no longer independent; that we rely on the United States for testing?
Viscount Cranborne: My Lords, I shall not give the noble Lord an answer in a speculative mode now, any more than I did a few moments ago. 1 merely emphasise to the noble Lord that testing has always played a genuine and important part in maintaining the safety and reliability of nuclear weapons. In the event of a test-free world, the challenge would be to develop alternative techniques and a fully adequate substitute.
Lord Jenkins of Putney: My Lords, is not the truth of the matter that the reason that the noble Viscount has not given an answer to my noble friend Lord Williams is that he does not have an answer? Will he address himself to the question of the necessity of accuracy in these matters? If he says that we shall get rid of our nuclear weapons when it is safe to do so, is he entirely unable to spell out any part of the circumstances that would enable him to say that it is safe?
Viscount Cranborne: My Lords, I am entirely unable to do so because to do so would give comfort and aid to our enemies.

Business
3.31 p.m.
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Committee stage of the Railways Bill will be adjourned at about 7 p.m. and that during this adjournment, the Report stage and, subject to your Lordships' agreement to the Motion which is about to be moved by my noble friend the Leader of the House, the Third Reading of the Bail (Amendment) Bill and the one-hour Unstarred Question in the name of the noble Earl, Lord Russell, will be taken. Following the recent agreement by the House to this new procedure of time-limiting dinner break Unstarred Questions, no speech on the Question should exceed 12 minutes in length.

Business of the House
Lord Wakeham: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with to enable the Third Reading of the Bail (Amendment) Bill to be taken after the Report stage today; and to enable the Representation of the People Bill to be taken through its remaining stages on 8th July.
Lord Harris of Greenwich: My Lords, I gave the Leader of the House notice that I proposed to make some comments on this particular resolution. My concerns relate exclusively to the Bail (Amendment) Bill, and not to the other Bill which is mentioned. We understand the case for treating that in the way suggested by the Leader of the House.
The House may be aware that the Bail (Amendment) Bill was given a Second Reading on 9th June. It is a Private Member's Bill emanating from the House of Commons giving the prosecutor in some cases the right to appeal to a Crown Court against a magistrates' court decision to give bail. The consequence of such an appeal is automatically that the defendant will be held in custody for a period of up to 48 hours.
No issue of principle has divided us so far as this particular Bill is concerned. It has received general support in all parts of the House. But, as the noble Lord the Leader of the House will be aware, a number of issues of considerable significance were raised during the Second Reading debate by the noble Lords, Lord Mishcon and Lord Williams of Mostyn, and by the noble Viscount, Lord Tenby. Then we had a situation where last Thursday there was a Business Motion in the name of the Leader of the House to take all stages of this Bill at one Sitting—the one which occurred last Monday. Representations were made through the usual channels, and I am grateful to the noble Lord the Leader of the House for deciding not to proceed with that Motion. A number of issues arise from that procedure which cause considerable disquiet in many parts of the House.
First, because of the timetable in the House of Commons, it was argued that it was essential to proceed in this way; otherwise, there was a risk that the Bill would fail. The second point is that it was argued—as it has been argued on many previous occasions—that if any amendments were made to the Bill, the Bill would fail. Last Monday we had only 45 to 50 minutes' discussion during what was the Committee stage of the Bill. We faced a situation where, for instance, the noble Lord, Lord Mishcon, did not move a number of amendments because of the need to make progress because of the Maastricht Bill. In addition to the Bail (Amendment) Bill, during the dinner hour we also took the Osteopaths Bill and the Motion on the fishing vessels scheme.
Yesterday afternoon, in order to try to make progress and get agreement on all sides of the House, there was a discussion between a number of us and the promoters of the Bill, some of the colleagues of the noble Lord the Leader of the House and representatives of government departments on many of the amendments that were moved on Monday and some of those that were not moved on Monday. In fact, it was a Committee stage of the Bill but the Sitting was in private. If I may say so, it does not seem to me—I am sure that I shall carry the noble Lord with me on this point—that that is a very sensible way to deal with public business.
Tonight we very much hope that we shall reach agreement when we discuss the Bail (Amendment) Bill
934
both on Report and on Third Reading. But there are, I believe, three important issues which I very much hope the noble Lord will consider.
First, there is the Commons timetable for looking at Lords amendments to Commons Private Members' Bills. It seems to me most unsatisfactory that arguments of the kind that have been deployed in relation to the Bail (Amendment) Bill and used on previous occasions so far as other Private Members' Bills are concerned, are used simply because the House of Commons will not agree to look at Lords amendments later in the Session than they presently do.
Secondly, there are the repeated statements made on this Bill and on many previous Bills that if any amendments are passed there is a danger that the Bill will fail.
Thirdly, it seems to me remarkable that with the present weight of business in this House we have not been meeting on Fridays. This Bill could have been dealt with properly and in detail last Friday, but of course there was no Sitting of the House. It seems to me quite wrong that we should be placed in this situation. The liberty of many people will be affected as a result of the passage of this Bill. It is quite wrong that as a revising Chamber we should not apply ourselves in a far more businesslike way to looking at these issues than has been possible when discussing this Bill.
Lord Wakeham: My Lords, I am most grateful to the noble Lord, Lord Harris, for raising those points and for giving me notice that he intended to do so. I say at the beginning that the Motion that I moved has been agreed through the usual channels. I do not think that it is the noble Lord's intention that we should eventually not agree to the Motion. Nevertheless, he has raised a number of points which are important.
The question of the Commons timetable is a difficulty in this case. I believe it was my noble friend Lord Bethell who made the point that amendments might not be considered. As I understand it, the noble Lord was not speaking 100 per cent. accurately in theory, but in practice was probably right. That is to say, Lords amendments would be at such a low place in the Order Paper in the House of Commons that in practice they would not be reached. Those points are important and I shall certainly undertake to discuss them with my right honourable friend the Leader of the House of Commons and my colleagues in another place to see whether this matter can be looked at and whether we can find a more satisfactory way of doing it; or at least, get a more satisfactory answer if we cannot do it. I shall certainly do that, and I shall write to the noble Lord.
With regard to sitting on Friday, it is a matter for this House to decide whether it wants to, and on which occasions. I am sure that there are occasions when it is right to do so. Those are decisions that I would not dream of arriving at without discussions through the usual channels. I shall certainly have those discussions. There are occasions when it must be appropriate.
Lord Graham of Edmonton: My Lords, I simply say from these Benches that the Motion that the Leader of the House has moved has the full approval of these Benches through the usual channels in the light of the hiatus that occurred at the beginning of the week. We certainly fully endorse the sense of aggravation felt by the participants in the affair. I am sure that the noble Lord, Lord Harri 3, will appreciate the good intentions of the Leader in seeking to avoid the possibility of anything of that kind happening again.
On Question, Motion agreed to.

Asylum and Immigration Appeals Bill
3.40 p.m.
The Minister of State, Home Office (Earl Ferrers):My Lords, I beg to move that the Commons amendments and reasons be now considered.
Moved, That the Commons amendments and reasons be now considered.—(Ear/ Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT TO A LORDS
AMENDMENT AND COMMONS REASONS FOR
DISAGREEING TO CERTAIN LORDS
AMENDMENTS
[ Page and line references are to Bill (56) as first printed by the Lords]
LORDS AMENDMENTS
1 Before Clause 3, insert the following new clause:
Young unaccompanied asylum seekers
(".—(I) The Secretary of State shall by order establish an advisory panel for the purpose of making advice available to a child who has arrived in the United Kingdom unaccompanied by an adult person capable of looking after him.
(2) The members of such advisory panel shall be appointed from time to time in accordance with the provisions of section (Appointment and functions of advisory panel) below and shall have the functions therein described.
(3) A member of such advisory panel is referred to as an asylum-seeker's adviser.
(4) Where a child unaccompanied by an adult person capable of looking after him arrives in the United Kingdom and is, or appears to an immigration officer to be, under the age of 18 years and such child has made, or may reasonably be considered as desiring to make, a claim for asylum, the immigration officer shall notify the advisory panel with a view to the child being forthwith referred to an appropriate asylum-seeker's adviser for the purpose of carrying out the functions described in section (Appointment and functions of advisory panel) below.")
2 Before Clause 3, insert the following new clause:
Appointment and functions of advisory panel
(".—(1) The Secretary of State, after consultation, if thought fit, with the Refugee Council and any other statutory or voluntary body which he considers appropriate, shall from time to time appoint such persons as he thinks fit to be members of the advisory panel and every such appointment shall be made upon such terms and conditions in all respects as the Secretary of State shall determine.
(2) The Secretary of State may from time to time revocably delegate to the Refugee Council or other appropriate statutory or voluntary body all or any of his duties under subsection (1) above.
936
(3) The advisory panel shall so far as practicable include persons who—

(a) are, or can call upon persons who are, able to converse in the several languages likely to be spoken by young unaccompanied asylum-seekers;

(b) are familiar with the habits and customs of the territories from which such young asylum-seekers are likely to come; and

(c) have knowledge of child-care legislation and immigration procedures.

(4) An officer or employee of the immigration service shall not be eligible for appointment to the advisory panel.
(5) It shall be the function of an asylum-seeker's adviser, to whom a young asylum-seeker has been referred, to befriend and advise the asylum-seeker in all matters relating to immigration, accommodation, education, health and general welfare for so long and to such an extent as the adviser shall from time to time consider desirable; and in performing such function the adviser shall have regard to the ascertainable wishes and feelings of the young asylum-seeker (considered in the light of his age and understanding).
(6) Nothing in this section (Young unaccompanied asylum-seekers) above affects the powers of duties of local authorities under the Children Act 1989 or otherwise.")
The Commons disagreed to these amendments for the following reason:
2A Because they involve a charge on the public revenue and the Commons do not offer any further reason, trusting that the above reason may be deemed sufficient.
Earl Ferrers: My Lords, I beg to move that the House do not insist on their Amendments Nos. 1 and 2 to which the Commons have disagreed for the reason numbered 2A.
The reason which was given by another place for disagreeing with Amendments Nos. 1 and 2 is that they involve a charge on the public revenue. In a sense that is a formality. The Government understand, respect and share the concern to protect the welfare of unaccompanied child asylum seekers which prompted the noble and learned Lord, Lord Brightman, to introduce these amendments.
Our real concern is that the creation of a statutory panel, with a duty to appoint an adviser for every unaccompanied child, may not be the best way of protecting the interests of this group of children. We therefore propose to meet the spirit and the purpose of the proposals in the amendments in what we believe will be a more practical and flexible way. I am grateful to the noble and learned Lord for the understanding and helpful part which he has played in the discussions on this matter.
The Home Office has agreed to fund the Refugee Council to enable it to establish and administer a non-statutory panel of advisers. The advisers would be volunteers from the communities from which most unaccompanied children come. They will be specifically chosen for their suitability for this role and they will be given the necessary training.
When an unaccompanied child arrives in this country and claims asylum, or when he or she applies to the Home Office for asylum after entering the country, the immigration officer or the Home Office will notify both the appropriate social services department which has the statutory duty of protecting

937
the child's welfare and the administrator of the new panel, who will offer the services of an adviser to the social services department wherever that is considered to be appropriate and in the best interests of the child.
The function of the adviser will be principally to ensure that the social services department is aware of the child's wishes and of any cultural considerations which might be relevant, and to ensure that the child understands, so far as is possible in view of his or her age, what is happening and what choices he or she may have.
The decision by my department to fund the Refugee Council so that it can set up that panel has of necessity to be for one year in the first instance. But I can assure your Lordships that that does not indicate any lack of enthusiasm for the project on the Government's part. The fact is that public expenditure decisions have to be taken on an annual basis.
We cannot commit ourselves to a specific level of support in future years. No government department can do that on any subject. But we certainly intend to give the scheme sufficient support to enable it to have a full and fair opportunity to prove its worth. I hope, therefore, that noble Lords will appreciate that, by inviting your Lordships not to insist upon the amendments which were agreed at Report, I am nevertheless giving an undertaking to carry out the intention of the amendment that the Government will meet the spirit and the intention of these amendments but will do so by non-statutory means.
Moved, That the House do not insist on their Amendments Nos. 1 and 2 to which the Commons have disagreed for the reason numbered 2A.—(Earl Ferrers.)
Lord Brightman: My Lords, the Government have rejected the statutory scheme for helping unaccompanied child refugees which a large majority of your Lordships wish to see in place. However, the Government are committed to a non-statutory scheme which has the same end in view. I am grateful to the Government for accepting that commitment.
At the foot of page 50 of the Hansard report of the other place, the Government referred to that commitment as a practical administrative measure which will deliver "precisely the same service" as my amendment sought. Those words are important. They show that the Government are undertaking to put in place exactly what this House wishes to see in place. The only difference is that the framework within which the scheme will operate will be a commitment or undertaking and not a statute.
Speaking for myself, I am content with that situation. The noble Baroness, Lady Faithfull, who placed her name to my amendment, desires me to apologise for her absence from the Chamber. She authorises me to say that she entirely agrees with my approach. I am also grateful to the Government for the seven additional initiatives (which are detailed on pages 30 and 31 of the Hansard report) taken by the Government to relieve the plight of unaccompanied children. These initiatives were not spelt out in my amendment and I regard them as a welcome bonus.
Baroness Seear: My Lords, we on these Benches recognise that the Government have gone a certain way towards accommodating the wishes of your Lordships' House in the Bill that passed through this Chamber. But they have given only half a loaf and not the whole bread that we would much prefer to have.
There are a number of issues that we cannot find entirely satisfactory. We cannot believe that a non-statutory scheme gives an adequate safeguard or that the use of volunteers is an appropriate way to deal with a very important service. It is admittedly a service to only a small number of children but for them it is very important. A non-statutory scheme does not seem to give the same kind of security as would have been offered by the measure passed in your Lordships' House.
We also note that funding is for only one year. The Minister said that that was inevitable. There is always an annual review. It would be nice to be encouraged to think that the Government intend the service to go on. The need for it undoubtedly will go on. It is also very doubtful whether volunteers will be able fully to carry out the duties required. We are told that training will be given. The question arises as to what kind of training and how thorough it will be. Those people will be dealing with children, many of whom will be very distressed and confused as to the position in which they find themselves. The children will need well-informed and skilled help if they are to be able to get through satisfactorily the very difficult position in which they find themselves.
I should like also to ask the noble Earl about returning children when they are denied the right of entry into this country. Do they also have to go back to the country to which they first went after they left the country from which they are fleeing, because fleeing is what it will be? If so, what provision will be made for the welfare of those children? We have discussed the matter on previous occasions in connection with refugees in general. But what happens when an unaccompanied child has to go back? For example, there was the case in which someone had passed through France on the way from his own country and had to wait at Calais for the ferry. It was then deemed that France was the country to which that person should be returned. The thought of an unaccompanied child who has been rejected from this country being returned to a country which in no conceivable sense is its country must cause serious anxiety.
These were matters which were raised at the time. The decision has gone some way but I am afraid that I do not entirely agree with the noble and learned Lord, Lord Brightman, that this is a satisfactory alternative to the measure put forward by your Lordships' House.
Lord McIntosh of Haringey: My Lords, we supported these amendments when they were moved by the noble and learned Lord, Lord Brightman, at Report stage. The Minister will be aware that the vote that took place was not an ambush. There was no element of surprise. The vote reflected by a

939
considerable majority the strong feeling in all parts of the Chamber for additional protection for young, unaccompanied children arriving in this country.
The noble and learned Lord was good enough to show me his correspondence with Ministers. I agree with him that the Ministers concerned have been anxious to find a way around the problem without bringing in a statutory requirement. However, I agree with the noble Baroness, Lady Seear, that in some ways that is still unsatisfactory. First, we had the unqualified statement by Ministers and the noble Earl today that there is no way in which a government can commit themselves to expenditure for more than one year. The Minister knows better than I do that there are all sorts of ways in which a government, if they want to, can commit themselves to expenditure for more than one year. That has never caused any practical problem if there has been a will to do so. The impermanence of the funding to the Refugee Council is and must be a cause for anxiety.
The second difficulty concerns the issue of reliance on volunteers, to which the noble Baroness, Lady Seear, referred. The anxieties expressed in the debates when the Bill was going through this House indicate that, if a single case arises where the volunteer fails to turn up—they cannot be compelled to turn up—and that results in a child being sent back to a dangerous destination. whether or not it is the point of origin, there will he an explosion not only in this House but throughout the country. Those anxieties are not theoretical; they are based on practical cases which were rehearsed at considerable length in your Lordships' Chamber. We must accept that efforts have been made to meet the point of the noble and learned Lord, Lord Brightman. But we cannot accept that the right solution to the problem has been found.
Lord Bonham-Carter: My Lords, I support the noble Lord, Lord McIntosh, in his reservations in regard to the use of volunteers. Dealing with children who have suffered a traumatic experience on arriving unaccompanied in this country as refugees seeking asylum is not a matter which can be handled adequately by a volunteer telephoned at short notice. It requires great skill and understanding. The effect on the child of incompetence—though no doubt the person in question acted with the best will in the world—may be extremely serious.
I cannot understand how the Government can possibly defend this penny-pinching and mean-minded policy towards children in traumatic circumstances who are seeking the protection of this country. I plead with them to consider that the consequences of their actions may be extremely serious. A small sum of money, estimated by the noble and learned Lord, Lord Brightman, at around £64,000 a year, is all that would be required to give an adequate service to deal with this real and human problem.
Viscount Brentford: My Lords, I wish to make one or two points on the issues raised. First, I should stress that there is one great advantage in the new scheme, on the assumption that it works in the way outlined by my noble friend. If the adviser comes from the
940
Refugee Council, he will he in a much stronger position in his relationship with the child to establish himself as the child's friend than if he were a government or statutory employee.
There is a greater risk in the scheme not working than there would be if it were a statutory scheme. But I suggest that we should try it and monitor it, which I am sure the Refugee Council will do, to ensure that it is working. I believe that there could be added strengths to the scheme, provided it goes on year by year and provided that it works in practice. I can see that a statutory scheme may not always work in practice for the reasons outlined by some speakers—a person may not turn up, whether he is a volunteer or appointed by statute. But if the scheme is assisted and run by the Refugee Council as though it were a statutory scheme, and it obtains the right volunteers who will be trained and therefore well equipped to do the work, then I would warmly welcome it. It is important that the new scheme is monitored thoroughly to ensure that it works in practice on the ground.
Lord Eatwell: My Lords, in answering the points raised, will the noble Earl confirm the sum of money referred to by the noble Lord, Lord Bonham-Carter? Are we allowing these children to be placed in a position of jeopardy for the sum of £64,000?
Earl Ferrers: My Lords, I thank my noble friend Lord Brentford for the views he put forward, which encapsulate what the Government are trying to do. We are trying to meet the spirit of the amendment which the noble and learned Lord, Lord Brightman, moved persuasively and effectively and which your Lordships wish to see incorporated in the Bill. The only difference is that one is a statutory scheme and the other is a non-statutory scheme.
There are advantages in the scheme being non-statutory. One of the disadvantages of a statutory scheme—as was pointed out at the time the amendment went through your Lordships' Chamber—is that it confuses where the ultimate responsibility for a child lies—whether it lies with the adviser or with the social services. Under the non-statutory scheme there is no question of where the responsibility lies; it lies with the social services.
The noble Baroness said that that is only half a loaf. I thought that that comment was a bit mean and penny-pinching because we have given a great deal. We have tried to meet the spirit of the amendment. It referred only to children who came into this country at ports of arrival, whereas the non-statutory scheme will apply also to those children who are already in this country and who appear at the Home Office seeking asylum.
Under the statutory panel, an adviser had to be provided for each child. Under the new scheme a statutory adviser will be appointed only where that is considered necessary by both the adviser and the social services who are responsible for the child. Hillingdon, which houses Heathrow, has a great deal of experience in dealing with those children. It would

941
be inappropriate to say that each new applicant had to have a special adviser. Where the requirements are that an adviser is necessary, one will be appointed.
The noble Lord, Lord Bonham-Carter, flew off—if I may say so—and accused the Government of being penny-pinching and mean and would not even approve of the payment of £64,000 for those children. That story was rehearsed by the noble Lord, Lord Eatwell. The Government are not being mean. We are spending £100,000—the amount being given to the Refugee Council in order to set up the panel. It is not a question of being mean or penny pinching.
The noble Lord, Lord McIntosh, tried to take me to task for saying that it would be for only a year. The noble Baroness, Lady Seear, was concerned about that also. I made it perfectly clear that no government can commit themselves for more than a year. But we certainly intend to give the scheme sufficient support to enable it to have a full and fair opportunity to prove its worth. That is as generous an undertaking as one can give.
My noble friend Lord Brentford said that we should try the scheme and monitor it. I can assure him that that is exactly what we shall do. We shall monitor it extremely carefully.
The noble Baroness was concerned about advisers. They will be volunteers; but of course they were going to be volunteers under the statutory scheme. They will be trained for this purpose and that will be the responsibility of the council to decide.
The noble Baroness also referred to returning children to other countries. I accept the noble Baroness's implication and that of the noble Lord, Lord Eatwell, that when children come into this country in that kind of state of course they have to be dealt with with great care. That is our desire. That is what the social services do now. If we get the advisers incorporated too, that should go further to protect their position. One could not rule out the possibility of ever returning children to their country or to third countries, but I can give the firm commitment that this will happen only after a very full consideration of each case on its merits. If that were to happen we would have to satisfy ourselves that there would be proper and satisfactory reception arrangements in another country.
I hope therefore that your Lordships will realise that by not accepting the amendment another place has nevertheless undertaken to fulfil the requirements of and the sentiments behind the amendment. I hope that I have persuaded your Lordships that this will be the case. I beg to move.
4 p.m.
Lord McIntosh of Haringey: My Lords, before the Minister sits down, he made a statement in his closing speech that the statutory scheme would also have consisted of volunteers. I have looked back at the amendments and there are indeed specifications about the qualifications of the advisory panel proposed by the noble and learned Lord, Lord Brightman, and the provision that officers or employees of the Immigration Service shall not be eligible. But there is
942
no statement in the amendments that the advisory panel would consist of volunteers. I cannot recall any suggestion in debate that that should be the case. I wonder whether the Minister would care to reconsider that statement.
Earl Ferrers: My Lords, as I understand the position, the panel would have been drawn up and they would have been an unpaid panel. The noble Lord shakes his head. I understand that it would have been an unpaid panel and that probably the chairman would have been paid and the other people would have been paid expenses. So far as I am aware there is no difference in what we are suggesting other than that of the statutory panel.
Lord Boyd-Carpenter: My Lords, before my noble friend finally sits down, would he like to join with what many of us feel should be congratulations to the noble and learned Lord, Lord Brightman, on achieving this quite considerable improvement in our social provision which, as your Lordships will recall, originated with his efforts? Would he also say that the noble and learned Lord and your Lordships' House have both performed a very useful function?
Earl Ferrers: My Lords, I agree wholly with my noble friend. The noble and learned Lord, Lord Brightman, raised a point of considerable importance. It was one which had the acceptance and the approval of the House and it is one which the Government have taken on board and have undertaken to fulfil in the sentiments in which it was required. The only difference is whether it should be in a statutory form as opposed to a non-statutory form. Apart from the fact that another place has required it to be in a non-statutory form, I actually think that a non-statutory form is better because it has far more flexibility, far less rigidity and does not blur the areas of responsibility. But the noble and learned Lord, Lord Brightman, and indeed your Lordships' House as a whole have done a great service to this batch of people who can suffer difficult problems when they come to this country in those circumstances.
On Question, Motion agreed to.
LORDS AMENDMENT
3 Clause 10, page 7, line 35, at end insert:
("(3AA) The Secretary of State shall appoint a person, not being an officer of his, to monitor, in such manner as the Secretary of State may determine, refusals of entry clearance in cases where there is, by virtue of subsection (3A) above, no right of appeal; and the person so appointed shall make an annual report on the discharge of his functions to the Secretary of State who shall lay a copy of it before each House of Parliament." ")
The Commons agreed to this amendment with the following amendment:
3A Line 8, at end insert:
'(3AB) The Secretary of State may pay to a person appointed under subsection (3AA) above such fees and allowances as he may with the approval of the Treasury determine.'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 3A to Lords Amendment No. 3.

943
Your Lordships will remember that the House approved an amendment at Third Reading in the name of my noble friend Lady Flather which requires my right honourable friend the Foreign Secretary to appoint an independent person to conduct a periodic monitoring of refused entry clearance applications. The amendment simply provides the necessary authority for the payment of fees and expenses for that person.
Moved, That the House do agree with the Commons in their Amendment No. 3A to Lords Amendment No. 3 —(Earl Ferrers.)
On Question, Motion agreed to.
LORDS AMENDMENT
4 Clause 16, page 10, line 2, at end insert:
("(2) Nothing in this Act shall impose any charge on the people or on public funds, or vary the amount or incidence of or otherwise alter any such charge in any manner, or affect the assessment, levying, administration or application of any money raised by any such charge.")
The Commons disagreed to this amendment for the following reason:
4A Because it is unnecessary.
Earl Ferrers: My Lords, I beg to move that the House do not insist on their Amendment No. 4 to which the Commons have disagreed for the reason numbered 4A.
Amendment No. 4 provided that nothing in the Act should involve a charge on public funds. I understand that its insertion in the Bill, when the Bill was last before your Lordships' House, was an error. I moved the amendment. I was in error. I apologise to your Lordships.
Moved, That the House do not insist on their Amendment No. 4 to which the Commons have disagreed for the reason numbered 4A.—(Earl Ferrers.)
On Question, Motion agreed to.

New Towns (Amendment) Bill [H.L.]
4.7 p.m.
Lord Morris: My Lords, on behalf of my noble friend Lord Finsberg, and with his fiat, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Morris.)
On Question, Bill read a third time.
Clause 1 [Power of delegation]:
Lord Morris Lord Morris moved the amendment:
Page I, line 5, leave out from ("1981") to ("there") in line 6 and insert ("(which makes provision as to the Commission for the New Towns)—

(a) in paragraph 5(2) (quorum etc. of committees)—

(i) for "committee set up under paragraph 3 above" there shall be substituted "committee or sub-committee of the Commission", and

(ii) after "the committee" in each place there shall be inserted "or sub-committee",

(b) in paragraph 5(3) (validity of proceedings) for "such a committee" there shall be substituted "a committee or sub-committee of the Commission", and

(c)").

The noble Lord said: My Lords, it may be of help to the House if I quickly explain the purposes of the amendment. The first part of the amendment is purely a matter of clarification. On the substitution of the words in brackets in lines 5 and 6 it will be made more obvious on the face of the Bill that the provisions proposed relate to the Commission for the New Towns. The second part of the amendment deals with an omission in the Bill. Paragraph 5 of the existing schedule to the New Towns Act 1981 provides that the. validity of any proceedings of the commission shall not be affected by any vacancy among its numbers or any defect in the appointment of its members. This is a usual provision relating to statutory bodies and its. scope will be extended to any committees or sub-committees of the commission. Again, it follows the precedent of the Leasehold Reform, Housing and Urban Development Bill on arrangements for the Urban Regeneration Agency.
It should be explained that the existing wording of paragraph 5 also relates to,
"such a committee".
The committees referred to are town committees set up under paragraph 3, of which there is only one. This deals with the housing management matters at Basildon. Paragraph 3 committees are there for particular purposes and do not enable the commission to make the delegation that it now seeks. It would be useful for the House to know that this amendment has been requested by the Government. I most warmly commend the two changes to the Bill to your Lordships. I beg to move.
Viscount Goschen: My Lords, the amendment is of a purely technical nature but is essential to ensure that the Bill will actually enable the commission to achieve the purpose for which it has been designed. The Government therefore support the amendment.
On Question, amendment agreed to.
Lord Morris: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Lord Morris.)
On Question, Bill passed, and sent to the Commons.

Railways Bill
4.9 p.m.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Caithness.)
Lord Clinton-Davis: My Lords, I have given notice to the noble Earl who will be dealing with this matter of two points about which I am deeply concerned. The first is that the Government have tabled at a very late stage a number of highly significant and complicated amendments. I believe that the Minister will concede that. I also believe that his reasoning is that he would rather be able to state the Government's point of view about these amendments at a fairly early stage. But

945
that places us in a difficulty in terms of being able to analyse and to scrutinise properly and to consult with people who are involved in these matters about the adequacy of what it is that the Government are proposing.
All I say at this stage is that I respect the Government's views, but we are put in a difficulty. I feel that it would not be possible for us to give full consideration to these matters in so far as they fall to be dealt with today. It may be that we shall have to deal with them at Report stage.
An even more disturbing issue has arisen which relates to Schedule 10 and the caveats which have been expressed by the Select Committee on the Scrutiny of Delegated Powers concerning the effect of that schedule. I am in some difficulty as to how we are to deal with the matter adequately. It is a subject which is of very great significance to the House because it affects its powers and whether we should be dealing, in the way that the Government recommend, with the issues which affect something like 340,000 pensioners involving £8.5 billion and the pension fund. That has caused deep concern to the Select Committee.
At this point I mention what the Select Committee has to say because I believe that the House should be seized of it without wishing to invite a debate on the matter. The pension rights of these individuals are obviously of very great concern to them. Therefore, the House is urged to consider with care whether the arrangements for British Rail pensions after privatisation can appropriately be left to delegated legislation. That is the first fundamental point which is raised by the Select Committee.
The second point which it raises deals with the provision in Schedule 10, paragraph 11(2) which states:
"If, apart from the provisions of this sub-paragraph, the draft of an instrument containing an order under this Schedule would be treated for the purposes of the Standing Orders of either House of Parliament as a hybrid instrument, it shall proceed in that House as if it were not such an instrument".
That means that people will be denied the opportunity of petitioning. As I have already indicated, this matter involves the interests of several hundred thousand people.
The Select Committee says on this subject:
"We … urge the House to consider with care whether, if it is agreed that the matters to be delegated under Schedule 10 are appropriate for delegation, paragraph 11(2) does not exclude an appropriate form of parliamentary scrutiny. In view of the extent of the powers, the substantial assets involved and the number of people affected, we urge the House to consider most carefully whether, in spite of any precedents, there is sufficient justification for the exclusion of the hybrid procedure in this case".
Those are very important caveats which have been entered. Unfortunately, we were not privy to this document at the time that we agreed on the order of debate in Committee. The problem which arises here is that Schedule 10 falls to be debated, in all probability, on the last day of Committee stage and just before we enter the Recess and therefore virtually at the last moment. That is where that schedule would normally fall to be debated and voted on.
946
I do not believe that that can be regarded as satisfactory when we are dealing with a matter which is as significant to the interests of this House and its procedures as this issue very clearly is. If we cannot, through the usual channels, find a way of elevating this issue so that it can be properly debated and voted on at a reasonable hour, I ask the Minister to agree to make an early statement well before we get to this item so that the Government's response will be very clear before the debate and so that we can consider it. I do not believe that that is an unreasonable request. We shall have to consider, through the usual channels, what can be done in this respect.
As we are about to go into Committee I thought it appropriate to alert the House to this issue because some noble Lords may not have been aware of what the Select Committee had to say. I hope the House will agree that it was wholly appropriate for me to raise the issue at this time so that we can give consideration to the way in which this matter can be properly debated and voted on if necessary.
4.15 p.m.
Lord Tordoff: My Lords, I do not wish to go into the substance of the debate on Schedule 10, as regards which I have an amendment standing in my name to delete that schedule and also to amend it by deleting the last paragraph if that were necessary. I agree with the noble Lord, Lord Clinton-Davis, who has probably made the first half of my speech on Schedule 10. We are placed in some difficulty. We have been greatly assisted by the Select Committee. As one who was on the Jellicoe Committee and witnessed the delegated powers scrutiny committee being set up, I congratulate him on what it has done as regards this Bill which is an excellent piece of work. The noble Lord, Lord Clinton-Davis, is right to express concern for the situation in which we are placed concerning a subject which is a very important matter for your Lordships' House.
Lord Boyd-Carpenter: My Lords, I very warmly support what has just been said about the undesirability of this immensely important schedule being taken in the middle of the night. Will my noble friend give an undertaking that, whenever it is taken, it will be taken in reasonable, daylight hours during which the schedule can be fully discussed in view of its admittedly very great importance to a very large number of people? It would be a shocking thing to take it at 11 o'clock at night.
Lord Peyton of Yeovil: My Lords, I support what my noble friend Lord Boyd-Carpenter has just said. I have tabled an amendment as regards the clause on pensions about which there is widespread anxiety. Like the noble Lord opposite, I have read the report of the Select Committee. I agree with him that it would be very undesirable to go straight ahead as though we did not have the benefit of the Select Committee's thinking on this very important subject. It would be very dangerous from the point of view of the reputation of this House if we were to find ourselves deciding an issue of this importance in the middle of the night.
Lord Bruce of Donington: My Lords, the report of the Select Committee on the Scrutiny of Delegated Powers was published only last Monday, 28th June, when some of us were very heavily engaged on other matters which have been the subject of dispute in this House. From an examination of the report, which I have only recently carried out, and particularly of paragraphs 10, 12 and 15, it is perfectly clear that some very serious matters have arisen. I do not propose to deal with paragraphs 12 and 15 which deal with what we call the Henry VIII procedures and which are not really relevant for the purposes of this afternoon's discussion.
In paragraph 10 the Select Committee draws the attention of the House to the possibility that the Bill itself may be tainted with hybridity as regards Schedule 10 which is brought into operation by Clause 121 of the Bill. I have no specialist interest in the Railways Bill itself, but I do have an interest in the activities of the Select Committee. It would surely be entirely proper for the House to debate the report of the Select Committee before it proceeds on a detailed consideration of the amendments before it. If the Bill is ultimately proved to be tainted with hybridity, a very long procedure would have to be adopted. Much of the labour of the House on the Bill would have been lost.
I do not think that it can be said that the Railways Bill is of such a nature that it demands the overwhelming support of the country or of any of the political parties for its urgent enactment. Nobody exhibits any particular enthusiasm for it. Therefore, I submit that it might be for the more economic use of the time of the House if the report of the Select Committee were to be considered first and the whole question of hybridity disposed of and, on the assumption that it is disposed of, for the House then to proceed to resolve itself into Committee. I shall take anybody's guidance on this, particularly that of the noble and learned Lord, Lord Hailsham, who is well versed in these things. But those are my observations on the Bill for the moment and I hope that they may prove to be of assistance to the House.
Lord Cocks of Hartcliffe: My Lords, I should like briefly to support what has been said by other noble Lords, and particularly by my noble friend Lord Clinton-Davis from our Front Bench. Having lived through the Aircraft and Shipbuilding Industries Bill in another place, I react to the word "hybridity" rather like the old cavalry charger out to graze hearing the distant bugle, but I shall leave that for the moment.
When one moves from the other place to this place, there is naturally a substantial fall-off in the amount of correspondence that one receives because one no longer has a constituency to be served. However, I must advise your Lordships that on the subject of the railway pensions fund and pensioners I have received a reasonable amount of correspondence, not only from old colleagues but from people who live in the Bristol area where there is widespread concern. In view of that, I hope that some rather more felicitous timing can be arranged.
The Earl of Caithness: My Lords, I have listened with care to everything that has been said. With regard to the first point which the noble Lord, Lord Clinton-Davis, raised, yes, a number of government amendments have been tabled and there are more to come. Many seek to fulfil commitments that were made in another place. I am doing my best to ensure that none of the government amendments is a starred amendment so that your Lordships will have at least some time to consider the propositions which we wish to put before your Lordships' House.
With regard to the clause on pensions, Schedule 10 and the report of the Select Committee, such reports will, of course, always be published only at the last minute, thus there will always be a tight timetable. Your Lordships will remember that that was accepted by the Jellicoe Committee when it was set up. This is a problem that will face your Lordships' House from time to time.
Having said that, I have listened with care to what has been said and I understand the importance of pensions. I remember pensions being an issue during the deregulation and privatisation of the buses. We are still in discussion with British Rail and the trustees on the question of pensions and we shall wish to bring forward amendments to Schedule 10 in due course. However, I am sure that whatever time we discuss that —and the time when we discuss matters is often in the hands of the noble Lord who leads the Labour Party —the House will give the matter the very thorough consideration which I certainly agree that it deserves. I shall draw what your Lordships have said to the attention of my noble friend the Chief Whip.
Lord Tordoff: My Lords, before the Minister sits down, perhaps I may say that we are grateful for what he has said. Although we understand what he said about the timetabling of reports from Select Committees, which, as he rightly said, will always be late, our difficulty is that the Motion governing the order of consideration and setting out which clauses should be taken in what order was moved by his noble friend the Leader of the House before we had had the benefit of the report from the Select Committee. I am sure that there is nothing between us on a party basis; it is simply a matter of how we can get round the new situation which we face today and which we may very well face again in the future. It is a question of whether there is some mechanism for looking back at the structure of the debates that we have already agreed to on the basis of the Motion that was moved by his noble friend or whether we can go back to the drawing board to find some other way of moving Schedule 10 up the Marshalled List in some way.
Lord Clinton-Davis: Before the Minister replies to that point—if he is going to reply to it—I was interested in what he said about tabling further amendments, which I rather expected. The Minister has been extremely helpful in providing noble Lords with Notes on Clauses. Would he be able to provide noble Lords with notes on the amendments that he proposes to table, bearing in mind that they are likely

949
to be tabled at fairly short notice (even if they are unstarred) so that we can better understand the purpose behind the Government's tabling of them?
The Earl of Caithness: My Lords, again I take note of the point which the noble Lord, Lord Tordoff, has raised. As he agrees with me that this situation could recur in relation to other pieces of legislation, I think it appropriate that my noble friend the Chief Whip looks at the whole question.
With regard to the point which the noble Lord, Lord Clinton-Davis, has just made, I hope that he has in his hand a letter from me explaining the government amendments which have been tabled recently. The letter was copied to the noble Lords, Lord Carmichael of Kelvingrove and Lord Tordoff. It is difficult to write to all of your Lordships because there are over 1,000 Members of your Lordships' House and I am sure that 999 would not want the letter in any case. However, I shall ensure that those of your Lordships who are actively involved with this Bill are kept in touch.
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MURTON OF LINDISFARNE in the Chair.]
Lord Tordoff Lord Tordoff moved Amendment No. 1:
Before Clause 1, insert the following new clause:
("General Duty of Secretary of State
. It shall be the principal objective of the Secretary of State in exercising any powers conferred on him by or under this Act to promote an efficient, comprehensive and safe rail network in the United Kingdom, with due regard to the environmental benefits which may come from the development and use of railway services.").
The noble Lord said: It will be remembered that there was considerable discussion on Second Reading about the objectives of the Bill and the Government's aims in introducing it. This is an enabling Bill. It sets up new structures, but nowhere in Part I of the Bill is there any indication of what it aims to do or of the duties of the Secretary of State in relation to the railways in general. I therefore felt it important that we should find some form of words at the beginning of the Bill to say what the Secretary of State is about. That is why I have tabled Amendment No. 1, which states:
"It shall be the principal objective of the Secretary of State in exercising any powers conferred on him by or under this Act to promote an efficient, comprehensive and safe rail network in the United Kingdom, with due regard"—
to other matters which we shall be debating in some detail later.
It is probably true to say that in all previous railway Bills there has been some form of opening clause setting out the general duty of the Secretary of State. That is true of many Bills that pass through your Lordships' House because education Bills, for example, state that it shall be the purpose of the Secretary of State for Education to promote education in the country. This Bill, however, has a great yawning gap at the beginning. It seems to me self-evident that something ought to go there. I have had a stab at it, but I do not know whether the drafting is correct. If, however, the Government will agree in principle to
950
provisions of this sort but are not satisfied with the present drafting, I hope that they will come up with some better wording.
It seems to me that the danger is that by accepting the Bill as it stands, we are taking all long-term responsibilities for the railway system in this country away from the Secretary of State. Who is going to be responsible for ensuring that in the future the United Kingdom has a decent railway system? Various functions are specified later in the Bill for various directors in conjunction with the Secretary of State, but nowhere is there a clear statement of what the aims of the Secretary of State shall be in promoting the railway network in this country.
Perhaps I should have said earlier that we are discussing also Amendments Nos. 3, 6, 11 and 11A. I have no doubt that the noble Lord, Lord Ewing of Kirkford, will wish to speak to his amendment, Amendment No. 3, to which I have put my name and that the noble Baroness, Lady Nicol, will wish to speak to her environmental amendment. My noble friend Lord Redesdale will speak to Amendment No. 11. I need say no more. The matter is self-evident. It seemed to command approval from all round the Chamber on Second Reading, and, therefore, I beg to move.
4.30 p.m.
Lord Ewing of Kirkford: Perhaps I may take up the invitation of the noble Lord, Lord Tordoff, and speak to Amendments Nos. 3 and 6 in the name of the noble Lord, myself, and other Members of the Committee. Amendment No. 3 is a paving amendment which lays the ground for Amendment No. 6. Amendment No. 6 deals almost exclusively with the need for a national rail strategy. Those three words "national rail strategy" must strike a chord with all Members of the Committee in whichever part of the Chamber they sit.
As a political realist, I accept that, barring a snap general election—I must make it clear at this stage that if there were to be a snap general election before the implementation of the Bill, its provisions would not be implemented—we are faced with the possibility, because, as the noble Lord, Lord Tordoff, said, this is a paving Bill, that the Bill's provisions will be enacted and implemented eventually. Against that background I see my responsibility as seeking to improve the provisions and proposals contained within this paving measure.
One of the provisions that I want to improve relates to the need for a national rail strategy. In the Bill, we are faced with the establishment of a number of organisations, the principal two being the track authority and the franchising authority. The track authority will be under the chairmanship of Bob Horton, the former chairman of British Petroleum whom I know well and who, if I may say so as an aside, was a good colleague of the Secretary of State for Transport at St. Andrews' University. I have discovered that college days seem to live on and on and on. The student relationships that are built up seem to pay off in years to come. I know Bob Horton

951
well, because in Grangemouth in my former parliamentary constituency, where BP has its massive refinery, I had occasion to meet him from time to time.
So we are faced with the track authority, under the chairmanship of Bob Horton, and also with the franchising authority. Those two organisations need not have, and, in my view, will not have, the same interests. That is why I regard, as will, I am sure, Members of the Committee in whatever part of the Chamber they sit, the need for a national rail strategy as being of paramount importance. I do not need to paint the picture, but every politician who says that then goes on to say, "but, I hope". Indeed, I shall paint a picture of those who may seek to franchise. I shall give one or two illustrations; for example, the Virgin organisation, which has made it clear, even at this early stage, that it is interested in certain profitable aspects of BR's existing operation. On the other hand, in the context of the Scottish services, the Stagecoach company is already saying that it is interested in certain routes operated by BR.
Both those organisations—quite rightly, and I do not criticise them for this—will be interested, and indeed it will be of paramount importance to them, in receiving a profitable return on their investment. They will have little regard for what happens to the rural services that serve the mainline services that they seek to obtain in their bid for the franchise. We could easily be involved in a situation where Virgin, on the one hand, and Stagecoach, on the other, obtain a franchise for mainline services without having any regard whatever to the feeder services from the rural areas that serve those mainline services. Far from having a national rail strategy, we shall have a fragmented rail strategy.
We shall have different standards in different parts of the country, depending upon who is successful in obtaining the franchise. I readily admit that there will be companies which will obtain the franchise and which will make an excellent job of running the services in the franchise area that they obtain. But equally there will also be companies which will make an appalling job of running the services in the area of the franchise that they obtain.
In case the Minister is tempted to deny that proposition, let me just refer him to what happened late last week in one of the areas covered by Scot Rail. The company involved in the franchise of catering services in the North East of Scotland went out of business overnight. Passengers travelling reasonably long distances the following morning were without any catering services on a route upon which they had become accustomed to having those catering services. I hope that the Minister in his response to my argument today will not say that in awarding the franchise there is some guarantee that somehow those companies which are successful in obtaining the franchise will be successful companies in perpetuity. Recent history is certainly not on his side.
I want to make it clear—I know that the noble Lord, Lord Tordoff, is in agreement—that we shall want to test the feeling of the Committee on this matter, because it is essential that in a national rail strategy there is at least some uniformity of
952
performance and availability of service to the travelling public, to freight users and to all those who use the rail network throughout Great Britain.
I referred to rural services. The Minister may not recall —I do not blame him for not recalling—my Second Reading speech in which I described how the SNCF in France had modernised its rail network through modernising its rural services. They are referred to by SNCF as "pick-a-back" services. There is a need to establish a series of rural locations where people are brought in to the mainline services to be transported from point to point. If that system—I said as an aside in my Second Reading speech that it had been financed to the extent of 48 per cent. of total investment by the EC—were not adopted and developed in this country, under the Government's proposals this country would be faced—the Minister will have to acknowledge this—with a rail network that serves mainline stations only.
I am not making a political point here at all. I am making a point on behalf of the travelling public who use the rail network and whom we want to encourage to use the rail network in even greater numbers. However, if we make it difficult, and even impossible, for those who use the rail network to reach mainline stations, it will be our fault as parliamentarians if the rail network is not a national rail network in the sense we want it to be. If there is no national strategy, that will be our fault. It will not even be the fault of those who obtain the franchise; nor will it be the fault of the track authority.
The track authority will be tempted to invest in modernising track and all the facilities. The pressure on the authority will be to invest in the routes that are franchised. By charging the franchisee a rent for the track, the authority will obtain a return on its investment. In my view the authority will be reluctant to invest in rural areas where the railway route is not franchised and is therefore a social responsibility.
I hope that the Minister will say what responsibility the track authority will have for investing in the rail network where the network has not been franchised. I can understand the temptation of the authority to invest in the franchised areas of the rail network because that is where it will receive a return on its investment. However, by and large, routes in the rural areas of Great Britain will not be franchised. It is as simple as that.
We come back to this whole question of social responsibility. On Second Reading the Minister said that the Government would accept responsibility for any subsidy that had to be given to the rural areas and those areas of the network which were not franchised. I must again say to the Minister that history is not on his side. When British Telecom was privatised, far from the Government accepting the social responsibility for uneconomic telephone kiosks, that responsibility was eventually passed—as governments do—from the Government to local authorities.
I envisage that sooner rather than later areas of Devon and Cornwall and rural areas throughout England, Wales and Scotland will discover that the responsibility for maintaining uneconomic lines will be passed from the Government to local authorities.

953
That is a simple step to take. Local authorities will say to those people who have to pay council tax, "We cannot possibly afford to keep those rural routes open." The rural routes will close simply because the Government do not have a national rail strategy. We are trying to be helpful to the Government here.
I turn now to the Government's determination to get as much traffic as possible off the road and on to rail. I agree with the Government that the matter is of crucial importance in environmental terms. The noble Lord, Lord Tordoff, did not speak to his Amendment No. 11. I am sure he will accept that Amendment No. 11 deals with the environmental and social aspects of the rail network. If we are to attract as much freight as possible away from roads and on to the rail network, that, too, requires a national rail strategy.
I wish to mention a good example of that. The Minister has responsibility for shipping matters as well as rail matters. I am sure the Minister is perfectly well aware of what is happening at the present time, and what has happened for a number of years in the Scotch whisky industry. I know that industry well, and not because I patronise it or drink most of its products. For a number of years that industry has been subject to what is known as the grid system. Ship owners who own the vessels which take the whisky abroad say it is cheaper for them to pay the road haulage costs from the distillers, blenders and bottlers in Perth and the West of Scotland where whisky is produced down to the port of Felixstowe than it is to steam a vessel from Felixstowe to a Scottish port. The net result is that our motorways—and also the rural roads leading to the motorways—are congested with heavy goods vehicles which transport the whisky from its point of manufacture to its point of export at the port of Felixstowe.
The road haulage costs are paid by ship owners who know that it is cheaper to pay those costs rather than steam vessels to Scotland. We must consider how we are to attract freight from road to rail. We shall not achieve that objective on the basis of the fragmented approach to franchising that the Government have adopted in this legislation. I hope the Minister will not mention the Channel Tunnel as there are three substances that will not be permitted to pass through it. Those substances are liquid gas, liquid petroleum and whisky. Whisky will not be permitted to pass through the Channel Tunnel because it is highly volatile. I often wonder therefore what damage whisky does to us poor mortals as it passes through our kidneys. I hope the Minister will not say that the Channel Tunnel is about to open and therefore whisky can be transported from Perth straight through to the Continent, because that will not happen. Whisky will always have to be transported by sea.
The matter is quite simple, and I cannot comprehend why the Government and their advisers cannot grasp this. If we wish to attract freight from road to rail we must adopt a national rail strategy. These are important matters. At the minute there is a whole series of transport users' consultative committees. The Bill effectively abolishes the TUCCs, including the central transport users' consultative
954
committee. The TUCCs concern themselves with railways but in Scotland they also concern themselves with the CalMac ferries sailing between Dunoon and Rothesay and all the other ferry points in Scotland. In the north east of England they concern themselves with the Tyne and Wear Metro. In the Manchester area they concern themselves with the Manchester Metro. Indeed, the bus services which British Rail has established—for example, the King's Lynn to Peterborough service—all fall within the ambit of TUCCs. Therein lies, in one form or another, a national strategy for transport.
Before the Minister checks the Bill, I accept that later on the problems of CalMac, the Tyne and Wear Metro, the Manchester Metro and the King's Lynn to Peterborough bus service are dealt with, but there is fragmentation. The cohesion is broken up. Our amendments argue that there should be cohesion. There should be a national strategy. There is absolutely no evidence of that in the Bill. The sufferers will be the rural areas of Great Britain. Therefore, I urge all sides of the Committee to consider seriously the need for a national rail strategy.
The Government should be required to publish their proposals for a national strategy. I accept that that can happen only after the Bill has been implemented because, as I said at the beginning, I am a political realist and, barring a general election, the Bill will be implemented. The Government should be obliged to publish their proposals in order to give sufficient time for them to be considered before they are implemented. It should also be possible to amend those proposals so that all parts of the country can enjoy an equal standard of service, whether it be in John O'Groats or Land's End. There should be no discrimination. I know that the Minister will say that there are no rail services to John O'Groats and Land's End. That shows Members of the Committee what have been the effects of Beeching and the onset of a Conservative Government. The combination of those factors has been disastrous. However, I am now seeking to persuade the Minister that he should turn away from the error of his ways and accept the advice of Members of the Committee on all sides. He should accept our advice and our proposal that there should be a national rail strategy. I am pleased to speak to both Amendments Nos. 3 and 6.
Lord Redesdale: I should like to speak to Amendment No. 11.
Lord Renton: Perhaps I may say—
Lord Tordoff: Amendment No. 11 stands in my name and I did suggest that perhaps the noble Lord, Lord Redesdale, might speak to that amendment at the beginning. I believe that the noble Baroness, Lady Nicol, may then wish to speak to Amendment No. 11A before we have a general debate on the issue.
Lord Redesdale: Amendment No. 11 makes it a duty on the Secretary of State and the regulator to promote the environmental, social and economic benefits of the railway. When the environmental and social benefits are linked with the economic benefits, in the short term there seems to be something of a

955
paradox because, as we all know, the railways are quite expensive to run. However, it would be an extremely short-term view not to include Amendment No. 11 in the Bill because in the long term, there is a strong feeling in the country that we already have too many cars and motorways. If we continue to build more roads and put more cars on the roads, the environmental costs may be extremely high in the future.
A case in point is the road which will destroy the ancient woodland at Oxley's Wood. If it is not made a duty of the Secretary of State and the regulator to study the long- term effects of going from one transport system to another, then, environmentally, we may make the country far poorer in the future and the cost may be a great deal higher in the long run. Although, in the short term, it may cost money, I believe that the needs of the country should be looked at in the long term.
An article in the Evening Standard today points out that although there has been a drop in the number of people using the railways due to the recession, trains are still overcrowded because there has also been a reduction in the number of trains. In fact, there is serious overcrowding on Network SouthEast trains during the commuter rush hour period. In economic terms that is the way in which the system will run under the Bill. If there is no consideration of the long-term benefits of a working, integrated rail system, which is integrated with other transport systems, the Bill could prove to be extremely expensive for the country in the long term.
Lord Renton: I do not see the name of the noble Lord, Lord Redesdale, attached to any of the amendments which we are discussing, although I was extremely interested in what he said. I hope that my noble friend will take seriously the view expressed by the noble Lord, Lord Tordoff, in his admirably short and clear speech, about the need, especially in the case of a long and detailed Bill such as this, to declare the intention of Parliament as to the purposes of the Bill and to do so in an early part of the Bill.
The Government have gone some way towards meeting that need, but not, alas, in Clause 1. They have done so in Clause 4, which Amendment No. 11 is intended to amplify in an important respect. I believe that there is a case for reconsidering the setting of the first four clauses of the Bill. I should like to see a purpose clause—a clear statement of principle—at the beginning containing the purposes which are expressed in Amendment No. 1 and those already expressed in Clause 4. I should perhaps remind the noble Lord, Lord Tordoff—because I do not believe that he has quite taken it on board—that Clause 4 places obligations on the Secretary of State as well as upon the regulator.
Having said that, perhaps I may disclose that I started my working life in 1931, after coming down from Oxford, in Paddington station for the Great Western Railway. Alas, I was not a railway porter. I was not paid at all. I was there as a pupil in the lawyers' office. However, I became a railway enthusiast, and I still am. I accept the views expressed by the noble Lord, Lord Tordoff, and the noble Lord,
956
Lord Ewing of Kirkford, that, for the various reasons which they have expressed and which I believe are shared on all sides of the Committee, we need to have a new railway scheme which will, from the public point of view, make it attractive to travel by raid instead of increasing the traffic on our roads.
I should not expect Members of the Committee opposite to agree with me but I believe that this Bill will, with good fortune—and it needs good fortune —achieve that purpose. But let us have those good purposes which are intended stated early in the Bill.
Perhaps I may refer briefly to Amendment No. 3 which is in this group. With respect to noble Lords who have put their name to this amendment, that kind of detail should go into a schedule as it does not come very well at the beginning of the Bill. They may care to bear that point in mind.
The noble Lord. Lord Ewing, spoke to Clause 6. I am sure that we all rejoice that, as he expressed his views so fully and at such great length just now, we shall hear many much shorter speeches from him during the rest of the proceedings.
I hope that my noble friend Lord Caithness, who has done so much during his years in the Government to help to protect the environment, will realise that there is a strong case for the Bill to contain as one of its purposes the benefit that can be achieved for the environment.
I hope that we do not have a Division on this first group of amendments. We want a free discussion; we want the Government to show that they have an open mind and we do not want to commit ourselves just yet to any of these amendments. As I have pointed out, even the very good amendment of the noble Lord, Lord Tordoff, overlaps with Clause 4. It is unthinkable that they could both remain in the Bill.
With those, I hope, encouraging words to all concerned, I shall be very interested to hear the rest of the debate.
5 p.m.
Baroness Nicol: I should like to confine my remarks to Amendment No. 11A. I do not need to remind most noble Lords about the value of national parks. They are among our greatest national assets containing as they do some of the most beautiful countryside in Great Britain. They were created in the National Parks and Access to the Countryside Act in 1949 which stated the statutory purposes to which my amendment refers. Those purposes are to preserve and enhance the natural beauties of these areas and to promote their enjoyment by the public.
Unless safeguards are built into the Government's plans for the future of the railways, there is a serious risk that they will not only lead to damage to the unique landscapes of the national parks and their wildlife, but will impose access restrictions on many of those who wish to enjoy them.
We have heard how essential the existing railway network is to the economy of rural areas, and we shall hear more about that from the noble Lord, Lord Wade, on a later amendment. However, the provisions of the Railways Bill, which includes breaking up the network, the abolition of crossrail subsidies and

957
encouraging private sector competition between lines, will put many of those lines in danger. At the same time the Government have announced that they plan to halve their expenditure on railways in 1995–96.
Many of the rural railways which are so important in national parks rely heavily on public sector subsidies because of the high costs of maintaining the track. For precisely that reason those lines are most at risk from closure. Some potential operators have already indicated that they would not be willing to take on those lines, yet it is those very lines that are of such fundamental importance to the livelihoods of the people who live in those areas. Should some of those lines escape closure, it is more than likely that many would face cuts in the frequency and standard of services. That would greatly reduce the value of those lines as a means of transport.
Many of the 100 million people who visit the national parks every year do not own cars. If the railways close or become unaffordable, visitors to national parks must stay at home or use private transport. A policy that forces people to stay away is not in accordance with the second statutory purpose to which I referred earlier; namely, to promote their enjoyment by the public. As I am sure noble Lords appreciate, increasing use of cars can only mean more congestion or new roads. Are we aiming at national parks or national car parks? That is basically the position. Some parks already suffer greatly from congestion and any further shift of freight from rail to road will only increase pressure for new roads, as my noble friend on the Front Bench said. More new roads in the parks would not only be disastrous in themselves, but the excavation of raw materials for those roads, many of which come from quarries in the national parks, would lead to even more degradation. Those quarrying rights exist under ancient mineral rights which can only be extinguished at great cost and are therefore likely to continue.
National parks are a part of our national heritage valued by us all. The Government have often stated their intention to maintain them. The amendment would place a duty on the Secretary of State and the regulator to further national park purposes not only in the interests of all who live and work in the parks, but in the interests of all of us. I hope that the Government will look kindly on the amendment.
Lord Peyton of Yeovil: I should like to start by saying that any noble Lords who find themselves speaking against the noble Lord, Lord Ewing, are at a very great disadvantage. He is always so persuasive and manages to inject a little humour which is very welcome. He will have moved all noble Lords to share in his lamentation at what I admit was news to me; namely, that Scotch whisky would not be accommodated in the Channel Tunnel. I hope that my noble friend on the Front Bench, who is known for his sympathy to such heart-breaking pleas, will make it his early duty to see that something is done about that.
I wonder whether it is wise to include in legislation words which amount more to pious hopes than binding duties. The noble Lord, Lord Tordoff, sought to put upon the shoulders of my right honourable
958
friend the Secretary of State the duty to make the railways efficient, comprehensive and safe. There can be no controversy about wishing to see the railways earn that description; but I have great misgivings. First, I should never wish to join those who encourage Secretaries of State in the belief that they are in any way possessed of miraculous powers. Secondly, I must tell my noble friend that I have such misgivings about the Bill that I think it would be positively unkind, if not cruel, to put upon my right honourable friend duties which the Bill itself would make it difficult to perform.
I have always thought it very unwise for former Ministers, especially as the years go on, to revisit the scenes of their—I was going to say "crimes", but perhaps not—previous activities. I cannot remember doing so until today, at least on the subject of railways. However, perhaps I may be permitted just one moment of autobiography. I recall a conversation that I had with the noble Lord, Lord Marsh (who I know is much concerned about the Bill) when he first became chairman. It was quite short and simple. I said to him that I was sharply aware that his job would be very difficult and that I was even more sharply aware that my own was impossible. I assured him that I would support him both publicly and privately until I told him contrary. I also said that there was one thing for which I would not forgive him; namely, if he allowed me to be surprised when it was within his power to avoid it.
The present Government, and my right honourable friend, for whom I have very great and genuine regard, have the good fortune to have as chairman Sir Bob Reid who is a most unusual and talented manager. He is someone who I believe has already rendered very significant service to the railways. Sadly, it will take time for that service to produce a harvest. However, it is my conviction that, given the chance, it will. If I were in the position of my right honourable friend, I would say to Sir Bob Reid, "Please, take account of these things which I think are important; but, otherwise, get on with the job and do it your way".
Perhaps I may now move on to cover two further points. As I see it, one of the problems is the incredible labyrinthine relationships which will be established as a result of the Bill. I should like to read out the list to Members of the Committee because I am very anxious not to omit any of those involved. First, there is the Secretary of State; secondly, British Rail; thirdly, there will be Railtrack; fourthly, there will be the regulator; fifthly, there will be the Franchising Director; sixthly, the suppliers of the industry, which ought not to be forgotten as they employ many people in the country; seventhly, there will be the customers, whether passengers or those who put freight on the railways; and finally—and I put them last because I wish to place particular stress upon the situation—there will be the staff and the morale of the staff.
When I say "staff", I refer to men who have spent their working lives in the railways. They will find themselves still being British Rail people but working for Railtrack. Moreover, quite apart from having an uncertainty as to where their loyalties lie, at the end of

959
the day such people could experience very considerable worry that their rightful expectations as regards pensions will not be honoured if the Bill is not amended. I have tabled an amendment for a later stage in that respect, but there is no point in my expanding upon the matter at present. I can only say that I believe that that will be a very important factor in the future.
While talking about staff, I should also mention their role in handling the business of the shadow franchises. In my view, it will be asking a great deal of people to accept that sort of split in their roles and their loyalties at a time when they will wonder whether they are doing themselves something of an injury.
In this country we have a love of complex—I would almost say "unworkable"—procedures. I fear that that network of different sections of people and different interests to which I referred will be a very severe handicap and will in fact make what is already a very difficult problem almost insoluble.
There is one further point that I should like to make on the amendment. I refer to the question of if and how the very much needed investment will be sustained. The one single advantage that I see in the Bill—although it will not be realised by any means—is that it would offer some hope of at least a measure of separation. if not divorce, from the Treasury. I do not wish to detain Members of the Committee for any length of time by delivering my opinions about that body. However, I have long believed that it is a body of very clever people, situated in the midst of our affairs, who are very good at conducting their own pattern of procedures and very good at defending themselves; but whose familiarity with the problems of industry, especially in the long term, is very slight indeed. The only good fortune that the Bill may bring to the railways is some degree of separation from, as I said, that body of very clever men who are capable of inflicting such great harm.
I am not prepared to vote in favour of the amendment because I think in the first instance and in all the circumstances that it expresses unreasonable hopes; and, in the second instance, that it would impose duties on my right honourable friend which no man could possibly perform.
5.15 p.m.
Lord Hunt: Amendment No. 11A, tabled in the name of the noble Baroness, Lady Nicol, was only brought to my attention very shortly before the Committee stage began. However, having enjoyed the pleasure of being president of the Council for National Parks for a number of years, I should like to say a very brief word or two in strong support of her amendment.
The noble Baroness gave what one might call a "global figure" of the number of visitors to our national parks every year. If I had had the opportunity, I would have brought with me particular figures relating to the more popular of our national parks. None of your Lordships who has visited national parks, particularly those which are most popular, could be unaware of the extent to which already every year in the summer the purposes of the
960
National Parks and Access to the Countryside Act 1949 are being negated by the nose-to-tail queueing of cars along the roads, quite apart from the other incidental environmental damage which is caused by so many private cars.
In my view it is essential to minimise the continuing growth in the invasion of our national parks by private cars by ensuring that the existing rail links are maintained and continue to be provided. We must also ensure that public road transport is used within the national parks to connect with trains at the railheads and other pick-up points to mitigate to some extent that invasion of our national parks by the private car.
Those parks which come immediately to mind which are at present well served by the rail system are the Lake District, the Snowdonia National Park and the Yorkshire Dales. There is no doubt that they have efficient systems of public transport to connect with rail. In my view, it is of great importance that those rail systems should be maintained.
Baroness Castle of Blackburn: I want at the outset to declare a personal interest in the Bill. I am one of the millions in this country who do not drive. I am also a member of an increasing number who are getting on a bit. We look to any Minister of Transport or any transport policy to guarantee us mobility. Indeed, the job of any Minister of Transport should be to maximise the mobility of all sections of the community, drivers and non-drivers, rich and poor, those in rural areas or in busy city centres. It is for those reasons that we so urgently need a statement on the intention behind the Bill before we get down to the minutiae.
When you take as your goal maximising the mobility of everyone two things become obvious. The first is that you cannot do that without a railway system. The second is that you cannot do it without a national network for those railways.
I want to pay tribute to what British Rail has always managed to achieve, underfunded as it has been and sniped at with the roads always being given preference over rail. I believe that it has served us magnificently. One of the glories of the present system is the ability to make a cross-country journey from North to South by a direct line, in comfort, peace and security, without having to change trains. I have done that many times. I have relatives in Cumbria and I join them more than once a year. Obviously, I do not go in my own car.
When making that journey, I have been placed on the train, say at Oxford or Reading, bought a through ticket having been advised by the very nice gentleman at the ticket office of the cheapest form of fare to help me on my way. (I can just see that continuing under the new system!) Then I have sat in a comfortable seat on the train—and with a buffet if I wanted it. I have travelled all the way to Penrith without having to move. The return journey was the same. I did that not long ago. The train had come from Glasgow. It went all across the North of England and the Midlands and ended up eventually in Brighton. Nobody on that train had to go and get another ticket or to change to

961
a train provided by another operator, scramble out with heavy luggage and cross to another platform to get on another train.
I say advisedly that this Bill is a direct threat to that kind of facility. It is absolute nonsense to say, vaguely because it has not been worked out yet, that all the franchise holders will come to agreement. Just imagine the cat's cradle of bureaucratic agreements there would have to be to cover the journey from Glasgow to Brighton. How many franchise holders' territories would one have to pass through? Who would offer a comprehensive, cheapest possible fare at the outset of the journey? It is nonsense, and we know it.
In my view, one of the most hypocritical parts of this Bill is Clause 4. I have just been reading subsection (1) (e), which states that one of the aims of the Bill will be to promote measures to facilitate the use of services provided by a large number of franchise holders. Therefore, the Government admit that the network will be broken into fragments and then say that there has to be some magical bureaucratic glue to stick it all together again.
I have one simple piece of advice to the Minister, if he really wants to facilitate long cross-country journeys: do not fragment the railways in the first place. That is the challenge that we must make throughout the whole course of the Bill, because a fragmented service will be a nightmare. What is more, it will be inferior.
Lord Boyd-Carpenter: In these last few minutes, the debate has become a reconstruction of the Second Reading debate. The vigorous, entertaining and admirably delivered speech of the noble Baroness was really an opposition to the Second Reading of the Bill and not, as I understand it, addressed to the series of amendments which is before the Committee.
It is perhaps right that before we settle down to the consideration of detailed amendments, we should discuss briefly the situation as it stands at the moment. All that I would say to the noble Baroness on the merits of the matter is that although much of what she said is perfectly sensible, she appears to overlook entirely the position from which we are starting. We are starting from the position of a nationalised industry. At Second Reading I mentioned the Bill in another place which nationalised this industry. We really must go back to that in order to have a full understanding of the difficult problems which now face the Government in deciding how to deal with the issue. I do not underrate for one moment the tremendous difficulties which are faced by the Government and the very real problems which it would be silly to ignore. I beg of the Committee to understand that the Government are not starting from scratch or evolving a new system for a new organisation. They have to deal with an existing situation which is difficult and with a position which most people who consider it carefully regard as wholly unsatisfactory at present.
With regard to the amendments, there is an interesting point on the structure of the Bill. If accepted, Amendment No. 1 starts the Bill off with a declaration of policy and the way in which it should be
962
conducted. There is a useful argument for that. However, as I believe my noble friend Lord Renton observed earlier, one cannot have the introduction proposed in Amendment No. 1 at the same time as Clause 4. I shall be interested to hear from the Minister as to whether any general declaration of policy should come at the beginning, in Clause 1. There is certainly an argument for that. The alternative, at present adopted in the Bill, is to put the policy approach rather oddly in Clause 4.
I add one further word of caution. It would be a pity to set out a mass of detailed instructions in the Bill as to how the newly-reformed industry is to be conducted. If one sets the instruction out in statutory form, the legislation becomes somewhat inflexible in dealing with a changing situation. It invites litigation. It invites people who are interested to go to the courts to seek to obtain decisions against the railway authorities or the Government as the case may be. While some general observation as to what is intended is rightly and sensibly inserted, I should have thought in Clause 1 of the Bill, to seek to set out a long and detailed statement as to the duties of the various functionaries would be a mistake. The proper vehicle for that kind of thing is a full Ministerial Statement on which the Minister can be challenged in either House if it is felt that he and the government of the day have not carried out in principle what they have stated they wished to do.
Therefore I make two suggestions to my noble friend: first, that he reconstructs the beginning of the Bill by including some general observation, probably on the lines of the present Clause 4, as to the duties to be performed by the various functionaries, but that he should not be led into trying to spell out in detail in legislation exactly how the job is to be done. It will be a changing job as the years pass, and as techniques and technologies alter. The methods to be used will have to vary. Therefore I suggest that a good deal of flexibility, such as flows from basing policy on Ministerial Statements rather than legislation, seems wise.
5.30 p.m.
Lord Renton: I agree with so much of what my noble friend says. However, will he bear in mind, first, that Ministerial Statements are not part of the law and are not binding upon the users of statutes? Secondly, Ministerial Statements are not binding upon the successors of the Ministers who make them.
Lord Boyd-Carpenter: Of course, that is so; and, indeed, that is part of the advantage. When one deals with the handling of a major industry in a changing economy such as our own, one does not wish to tie oneself down with great rigidity to exact provisions which can be, and are likely to be, litigated upon by those concerned. I fully understand my noble friend's natural liking for anything which can be litigated upon. It is something that he does awfully well. But I am not sure from the point of view of the conduct of government that it is necessarily the ideal solution.
Therefore I leave it to the Minister to give the Committee his views on two points. First. I refer to the

963
actual arrangement of the Bill, to which the amendments directly relate. Should the policy indications which are to be included in the Bill be inserted in Clause 1, with Clause 4 telescoped into it? Secondly, perhaps he will tell us the degree to which he feels it is wise and helpful, and in the interests of the industry, to put those policy indications into legislation.
Earl Attlee: I agree with the comments of the noble Lord, Lord Boyd-Carpenter, on Second Reading speeches. I enjoyed listening to the speech of the noble Lord, Lord Ewing. He referred to the transport of Scotch whisky. I wondered whether he was speaking on behalf of the road haulage industry. He presented a fine case for road haulage. But could the problem be that the loading gauge on the railways will not accommodate a standardised container?
Lord Ewing of Kirkford: I am grateful to the noble Earl for giving way. First, under no circumstances was I speaking on behalf of the road haulage industry. I take the view that the vessels should be steamed to the ports in Scotland to take the whisky. The problem with whisky, liquid gas and petrochemical products is that in bulk form they are all highly volatile. That is why they will not be allowed to go through the Channel Tunnel. That is why I made the point that if whisky is too dangerous to go through the Channel Tunnel, what damage does it do to us mere mortals as it goes through our kidneys?
Earl Attlee: I am grateful for the noble Lord's intervention. I take on board his comments. However, we still have a problem with the loading gauge of containers going through the railway system. Perhaps the Minister will guide us on that. I look forward to the Minister's comments on the amendment before coming to my decision.
Lord Rodgers of Quarry Bank: There was a moment during the speech of the noble Lord, Lord Peyton, when I was overcome by an infirmity of purpose. I was present to support my noble friend Lord Tordoff. However, when the noble Lord, Lord Peyton, referred to the indelicacy of placing any responsibilities on the Minister because of the nature of the Bill, I felt that it might be ungenerous and intolerant of me not to follow his example and leave the Minister free to interpret the Bill as he wished should it eventually receive, Royal Assent.
However, on further reflection, I believe that the proposed amendment goes to the heart of the matter. It is a question of the relationship between Ministers and the chairmen of what were once nationalised industries. The remarks of the noble Lord, Lord Boyd-Carpenter, were relevant when he referred to a conduct of Government issue. The noble Lord, Lord Peyton, referred to his relationships with the noble Lord, Lord Marsh, when he was a Minister and the noble Lord, Lord Marsh, was chairman of the Railways Board.
It is an interesting and important issue. On the basis of the Morrisonian principle, upon which some of our industries were nationalised, over the years there was a delicate relationship—the noble Baroness, Lady
964
Castle, was fully aware of it—between the Minister (whoever he or she might be) and the chairman of the nationalised industries, including the chairman of British Rail. What were the respective areas of their responsibility? I believe that it was the job of the Secretary of State to listen to what the chairman said, to give him occasional advice, to be warned of dangers ahead, but to let the chairman get on with the job of running the industry, the job to which he was appointed. Equally it was important for chairmen of nationalised industries to be sensitive to their role and to the role of Ministers who answered to Parliament. On the whole, I believe that the system worked reasonably well because both parties to the dialogue understood their duties.
I believe that the whole House agrees that the Bill is extremely complex and it makes the present relationships between the Minister and the industry seem infinitely simple. We must all hope that, whether we like it or not, if the Bill were to receive the Royal Assent it will be a success. However, the likelihood is that the Minister will have to intervene and will be drawn into decisions which are not properly his or would not have been, as a result of the wide spread of duties which are embodied in the Bill. If that is the case, if there is now a spread of responsibility—that was accepted on Second Reading—is it not important to define, if we can, what the Minister should principally be concerned with?
That brings us back to my noble friend's amendment and the idea of defining early in the Bill its real purpose. I looked at the Long Title. It is rather clumsily worded, as many Long Titles are. Having read it, I find it easy to ask: to what end? What is the point of the Bill? What is the point of the railways? What is the role of the Secretary of State? Why have this legislation at all?
No doubt the Minister will argue that we have the legislation to make the railway industry more efficient and, we hope, to result in a smaller burden falling on the taxpayer. However, that is not a sufficient goal for Government, nor is it a sufficient role for the Minister. He ought to know the purpose for which the wheel turns; in other words, the objectives which lie behind the wording of the Bill and the duties of those who are called upon to perform under it.
I do not ask—and it would be unreasonable to do so—for a White Paper embodied in the Bill. That is not the way we proceed in these matters. However, listening not only to the arguments of my noble friend but also the arguments on other clauses, which were powerful, I thought that what the Bill lacks, with all its shortcomings, is a definition of purpose. It is for that definition of purpose that my noble friend asks.
Apart from mischievously indicating why it would be unkind, if not cruel, to place a Secretary of State at such a disadvantage, the noble Lord, Lord Peyton, said that the chairman should be told to get on with the job and "Do it your way". However, the chairman has special responsibilities and no doubt the several chairmen and regulators in the Bill will get on with the job and do it their way. But the Secretary of State cannot escape so easily. He will be asked: to what end? I believe that far from placing an unreasonable burden

965
on a Minister who may be obliged to operate a nonsense of a Bill, it is fairer to assist him, if we possibly can. We may not like the Bill, but in all generosity we should assist the Minister by supporting the amendment which my noble friend moved.
5.45 p.m.
Lord Marlesford: I am perhaps revealing my ignorance of procedures in Committee when I say that I found the grouping a little odd. Amendment No. 1, in the name of the noble Lord, Lord Tordoff, is on a general and important subject. Then there is the detailed Amendment No. 11A, from the noble Baroness, Lady Nicol. I wish to say a word on both amendments. If I am silly in raising the grouping point, as a newcomer I apologise.
My noble friend Lord Caithness knows that I am deeply concerned generally about the Bill. I mentioned that on Second Reading, as the Committee may recollect. On the other hand, I wish to give him and the Government constructive support with the Bill. By that, I mean I hope that during its passage through your Lordships' House some amendments and improvements will be accepted.
First, I wish to say a word about the mandate for the railway, as is proposed by the amendment of the noble Lord, Lord Tordoff. There is probably benefit in including some such a general statement in Clause 1, but I am attracted by the point made by my noble friend Lord Boyd-Carpenter: that one would not wish to enshrine in statute something which by its nature is bound, from time to time, to change. I suggest something much closer to the analogy of the Treasury's medium-term financial strategy which is announced and published and can be debated as the responsibility of the Minister and the Government of the day.
A large subsidy of money is put directly into British Rail through the public service operation grant. It is currently still over £1 billion. I think I am right in saying that the innovation was originally started by the noble Baroness, Lady Castle, when she was Minister of Transport. It is a good idea that it should be possible to pay to British Rail from public funds those moneys which are needed to undertake socially desirable services which are not of a commercial nature. That is sensible.
My anxiety is that we know far too little about how that money is spent at the moment. It is related too little to the objectives of the day. It has decreased. It was over £1.5 billion in 1982. It decreased significantly when the InterCity operation turned losses into profits, but it is still a large sum. As to the future organisation of British Rail, I have an irreconcilable political difference of view from the Opposition. I believe that the people of this country could be better served by a privately run railway than a publicly run one. I do not share the rather rosy recollections of the noble Baroness, Lady Castle, of the magnificence of the railway. Nor, thinking of the airlines, do I agree with her that a privately run rail service would necessarily mean that the nice man in the ticket office
966
would not tell us the cheapest price. Competitive airlines are constantly trying to sell one the cheapest way of flying. However, that is another point.
I do believe that we need a general statement at the beginning of the Bill. I could not vote for the words proposed in the noble Lord's amendment, but it might be useful to include some requirement for the Government to announce annually their mandate for the running of the railway. It could then be related to the expenditure of public money specifically to achieve that mandate.
Secondly, I wish to say a word about Amendment No. 11A in the name of the noble Baroness, Lady Nicol. I support it in general, but I do not think she would expect such a limited point to be put directly into the Bill. In a way I would have preferred it to be debated under Amendment No. 9 to be moved shortly by my noble friend Lord Wade. Perhaps we may discuss that.
I wish to emphasise the needs of the more remote rural areas. The national parks are a good example. It is not a matter of improving the situation under the so-called privatisation proposal. It is necessary now. I wish to quote one example. There are 10 national parks, plus the Norfolk Broads, which are the equivalent of a national park. The Broads are served by the line from Ipswich to Lowestoft. British Rail has recently published its new timetable for the line, which includes 12 stations, but it has omitted eight of the stations from the timetable, including Oulton Broad. This is astonishing. So the national parks are not even well served at the moment.
I contend that that is against British Rail's Passenger's Charter. The fourth point of that charter specifies "clear and up-to-date information." If it publishes a timetable omitting the names of the stations served, it will not encourage people to go to those places. I wrote to Sir Bob Reid and received a very nice personal letter back from him. However, he said that the omission of the names of the stations was to save money. This indicates that something is seriously wrong with the lower scales of management of the railway. I hope that my noble friend Lord Caithness might take that up with British Rail.
It is very important that we take into account the needs of rural communities generally. That could be included as a general statement in an amendment, perhaps supplemented by what my noble friend Lord Boyd-Carpenter had in mind; namely, an ongoing but changeable statement of the public purposes of the railways.
The Earl of Caithness: I have listened with care to what the Committee has said with regard to these amendments. They have been grouped together for the convenience of discussion. But, as several Members of the Committee have pointed out, they are by no means consequential upon one another. As a result, it is inevitable that we have had something of a Second Reading debate at this early stage.
It was mentioned that these amendments have a number of common elements with which, I am sure, everybody in this Chamber has some sympathy. I am

967
sure that we all attach importance to the environmental, social and economic benefits of the railways, and to the economic needs of rural areas and the importance of our national parks.
As regards efficiency, we believe that privatisation —giving the private sector the opportunity to operate existing services and introduce new ones—is the best way to bring about an efficient railway with the improvements to services which we all believe are needed. Efficiency is about providing value for money for both the taxpayer and the passenger, as well as giving passengers the punctual and reliable services that they want. Introducing competition and fresh private sector management into the railways will bring about greater responsiveness to passengers' wishes for improved efficiency and better services.
The rail network will continue to be comprehensive. We have made it clear that we will continue to support socially necessary services which are reliant on subsidy. There is no reason to believe that our proposals will lead to the closure of lines or to reductions in services. However, if in future, circumstances change, and closure of a line or a service is proposed then, as now, statutory closure procedures would apply. Those procedures are very rigorous indeed. I am sure the Committee will agree with this conclusion when we have had the chance to debate the closure provisions of the Bill later in our proceedings.
We will also promote a safe rail network. Safety has been of paramount importance in the formulation of our proposals. The Health and Safety Commission has produced a report with 37 recommendations. The Government and the chairman of British Rail have welcomed the report and accepted its recommendations.
The new safety regime which will result from the commission's report will ensure that high safety standards on the railways can be maintained. All operators will have to produce a railway safety case to show that they can operate safely before they can start operations. This will have to be validated by Railtrack. Railtrack's own railway safety case will be validated by the Health and Safety Executive. There will he monitoring by Railtrack and by the HSE to ensure compliance with safety cases. All operators, and Railtrack, will have to comply with safety standards set or recognised by the Health and Safety Executive, which will enforce standards across the rail industry. Therefore I say to the noble Lord, Lord Ewing of Kirkford, that there will not be disparities throughout the country. There will be a very high and equal standard, monitored and enforced by a very reputable organisation.
So far as concerns the environment, we are committed to a greener future for transport in Britain and want to see the railways play their part. We recognise the very substantial advantages that the railways can offer: they often cause less environmental damage than road transport, and can be energy efficient. Here, I agree with what my noble friend Lord Renton had to say. Surely the only way to realise this potential is to get more people to choose to use rail, and that must mean offering them the services they want, both passengers and freight. By ending British
968
Rail's monopoly and introducing private sector competition—and private sector investment—we are providing the right conditions to make this happen.
The importance of rail freight was mentioned on many occasions during the Second Reading debate, and again today. It is worth repeating, therefore, that the Bill contains two measures specifically targeted at assistance to rail freight, where it brings environmental benefits. First, a new and expanded freight facility grant scheme for the railways, with a counterpart for inland waterway transport. Secondly, a completely new grant for freight train operators which will contribute towards track charges for freight flows which would otherwise disappear, or could not be attracted to rail, subject to an assessment of the environmental and other benefits. Again, I say to the noble Lord, Lord Ewing of Kirkford: there is opportunity here, and I hope that businesses throughout the land will be able to take advantage of these two special facilities and schemes that we have been able to offer.
I listened with interest to what my noble friend Lord Peyton had to say, and we have discussed this Bill outside the Chamber. At one stage he mentioned the labyrinth nature of the relationship resulting from the Bill. That involves the Secretary of State, the regulator, the franchise director and the consultative committees. I am sure that if my noble friend paused and thought for a moment, he would agree with me that the only new person coming on to the railway scene is the regulator. At the moment BR does all the jobs of the franchising director and many more. The great difference with this Bill, as I am sure my noble friend will understand, is that for the first time it will make for transparency in regard to what has been going on under a monopoly nationalised industry.
I listened with care to what my noble friend Lord Marlesford had to say. I agree with the point that he made about subsidy. Again, it is the transparency resulting from our proposals that will tell us for the first time where the vast amount of taxpayers' money is going and where the social subsidy will be best targeted in future. These are factors that we do not know at the moment. The very great advantage of our proposals is that we will make better use of taxpayers' money than we have been able to do in the past. All these issues and more will be discussed at future stages of the Bill.
Let me now turn in detail to the amendments. First, although, as I have indicated, I have sympathy with the sentiments underlying the new clause of the noble Lord, Lord Tordoff, I do not believe that it is appropriate to put general statements of this kind in the legislation. I listened with care to what the noble Lord, Lord Rodgers of Quarry Bank, had to say, and to my noble friends Lord Marlesford and Lord Boyd-Carpenter. In particular, when it comes to legislation, the whole Committee pays particular attention to what my noble friend Lord Renton has to say. But on consideration, the noble Lord might think that we have got it right. The Railways Bill is similar in structure to other privatisation legislation. I would refer the House to the Telecommunications Act, the Electricity Act and the Gas Act. It has not been the

969
practice to include in such legislation any opening objectives in the way proposed by the noble Lord, Lord Tordoff. We do not consider it appropriate to depart from the precedent in the Railways Bill. I can understand the need to do so on other transport Bills, but when it comes to a privatisation measure, I think that there is a difference, as indeed I have been able to demonstrate.
We have dealt with the various elements of the principal objective proposed for the Secretary of State in specific duties and objectives in the Bill where they are relevant and properly directed.
Clause 4 places duties on the Secretary of State, and on the regulator, in exercising their powers under Part I of the Bill. These duties deal, for example, with protecting the interests of rail users, something close to the heart of the noble Baroness, Lady Castle; promoting the use of the rail network—another point that the noble Baroness mentioned, and a matter that we shall take care of; promoting efficiency, economy and competition, taking into account railway safety, and having regard to the railways' impact on the environment.
I say to my noble friend Lord Boyd-Carpenter that the Bill is structured to establish the new players in the industry, the regulator, the franchising director and the consultative committees, before dealing with their duties and functions. I hope that my noble friend will think that we have got that in a logical order in the Bill.
The Secretary of State is given a principal duty in Clause 106 which is directly and appropriately related to exercising his powers in Part II of the Bill. I believe that that is the proper way to deal with such matters. However, of course I have taken note of what the Committee has said and I shall discuss the matter with my right honourable friend the Secretary of State.
I turn, secondly, to the matter of national rail strategy—I refer to Amendments Nos. 3 and 6, moved by the noble Lord, Lord Ewing of Kirkford. These would require the Secretary of State to formulate and from time to time review a national policy for the rail network. He would have to have regard to the desirability of operating the policy consistently throughout Great Britain, ensuring that it was formulated in sufficient time to achieve effective implementation and safeguarding and developing the rail network in rural areas. In addition, he would be required to specify objectives for the railways in contributing to reducing road congestion, environmental impact and casualties and meeting the needs of those without access to private transport. The amendment provides for consultation with rail users' representatives over the development of policy and for annual review with reports laid before Parliament.
Our view is that a centrally imposed national policy of that kind would be quite inappropriate for the new privatised railway. It would be inflexible and very quickly out of date, as several Members of the Committee have pointed out. Privatisation is the Government's strategy for the railways into the 21st
970
century. It is a strategy outlined in last year's White Paper and fleshed out in the Bill that is now before the Committee.
I listened to the noble Lord's most entertaining speech. I think that he is still under some misapprehension about what we are trying to do in this Bill. I hope that he will consider that it is wise not to move his amendment when we come to it shortly but to listen to the detailed discussions that we shall have in the six days of Committee stage. I believe that many of his worries will then be put to rest. We shall be discussing some of the items that he mentioned: the duties of the Secretary of State, the franchise director, the regulator, the consultative committees, the pensions and safety—we shall discuss all those issues in detail.
I should like to take up three points in particular. The noble Lord asked for assurances that franchisees would not go out of business overnight. The Bill contains specific provisions to ensure that services are not interrupted in the event of insolvency. I refer to Clauses 53 to 58 which we shall debate in due course. They establish a special insolvency regime for railway operating companies. That is one example where future debates will help the noble Lord.
The noble Lord asked also whether it was the case that rural services would not be franchises. It is the intention that all BR's existing services should be franchised. The Government have already announced the pattern of franchises based on BR's existing profit centres. Subsidy will be available to support unprofitable rural services operated by the franchisees. I feel that the noble Lord, Lord Hunt, also is under a slight misapprehension. The franchise will be based on the BR timetable at the time of awarding the franchise. Neither the noble Lord nor the noble Baroness, Lady Nicol, need fear that there will be a sudden and overnight diminution in the amount of services. The service will be based on the service currently provided by British Rail at the time of the franchise.
The noble Lord, Lord Ewing, also mentioned the transport users' consultative committees. It is true that provisions relating to the various services covered by the new rail users' consultative committees appear in different parts of the Bill. In the case of services provided by British Rail and franchisees, the committees will report to the rail regulator. In the case of Caledonian MacBrayne ferry services, the Tyne and Wear Metro and other services mentioned by the noble Lord, the rail regulator will have no role and the committees will report to the Secretary of State. Therefore the provisions have to be made in a rather different way.
But let me assure the Committee that those services which are now covered by the committees will continue to be covered by the new committees. So the noble Lord did not understand the situation absolutely rightly. When we go through the Bill in detail, he will see that that point and various other points that I have mentioned will put to rest many of his concerns.
Finally, I turn to Amendments Nos. 11A and 11, which add to the duties in Clause 4(1). Amendment

971
No. 11A adds a duty to further national park services, as defined in the National Parks and Access to the Countryside Act 1949. The noble Baroness, Lady Nicol, will know of my interest in national parks from my days in the Department of the Environment, where I had responsibility for them. In addition to what I have already said about the franchising, I would stress that the closure procedures that we shall discuss later in Committee are very strict indeed and very similar to what we have now. I hope that her mind will be put at rest on that point.
Amendment No. 11 adds a new duty:
"to promote the environmental, social and economic benefits of the railways".
I do not believe that it would be appropriate to refer specifically to national park purposes in the general duties on the Secretary of State and the regulator. I say to the noble Lord, Lord Redesdale, that there is already a requirement. I draw his attention to Clause 4(3) (b). There he will find that there has to be:
"regard to the effect on the environment".
I believe that it would be over-specific to single out the national parks separately, important though they are, and to include the amendment that the noble Lord wanted.
We have had a very useful discussion. I hope that I have been able to reassure the Committee that we have its concerns very much at heart. Many of the issues mentioned are already covered in the Bill and we shall discuss those matters in greater detail. I look forward to doing so. The concern on all sides is to improve the railways. That is the purpose of the Bill and we want to work together to get it right.
6 p.m.
Lord Renton: Before the noble Earl sits down, I must say that I am very impressed by all that he said. However, I should like to get clear one point regarding the idea of what my noble friend Lord Boyd-Carpenter called "statements of policy". Generally they are called statements of principle and of purpose.
I can well understand my noble friend's desire to follow what has been done in other privatisation Bills. However, would he agree that Clause 4 achieves what is normally attempted to be achieved by statements of policy, statements of purpose or statements of principle—call them what you will? Incidentally, one of his colleagues in the Government, the noble and learned Lord the Lord Chancellor, on at least two occasions has commended it.
The Earl of Caithness: Again my noble friend Lord Renton shows his expertise in this matter. This is not the moment for me to take issue with him. I hope that he will permit me to to go away, cogitate on what he said and discuss it with my right honourable friend.
Lord Tordoff: I am grateful to those who have joined in behind this modest amendment, which took me three minutes to move one hour and 38 minutes ago. We have had a wide-ranging debate. We have heard what might be called a Second Reading speech and almost a Third Reading speech in one case.
I should like briefly to go backwards through the amendments that we have been discussing. I can add
972
nothing to what the noble Baroness, Lady Nicol, and my noble friend Lord Hunt said about Amendment No. 11A. They said everything and I do not propose to speak again on that amendment, except to say that it is very worthy of support.
I draw attention to the wording of Amendment No. 11. The important words in that amendment are "to promote". The Minister agreed that there is reference throughout the length and breadth of the Bill to doing one's best arid doing whatever one does in an environmentally friendly way. I am sure that that is the intention of the Government. But there is a difference between that and promoting environmental, social and economic benefits as a principal item. It is not just an ancillary afterthought; something that we shall do if we can manage it, once we have created greater efficiency. That thought needs to be in the forefront of people's minds whenever they make decisions on such matters, especially matters of transport. And it relates of course to the interrelation between rail and other forms of transport.
I entirely agree with what the noble Lord, Lord Ewing, said and do not propose to go over that ground. I turn to my Amendment No. 1 and would like to deal with one or two of the comments that have been made. There has been widespread support for the idea of having a general statement at the beginning of the Bill. The Minister said that it would be found in Clauses 4 and 106. In fact, at one stage I was tempted to pave Clause 106 right back to the beginning of the Bill. But I realised that Clause 106 refers only to the second part of the Bill and Clause 4 only to the first part. It is that fragmentation of the obligations which worries me. The question is: where does the buck stop?
The noble Lord, Lord Renton, was kind enough to say that he thought that it was a good thing to have a general statement of objectives at the beginning of a Bill. I must say that I was greatly touched with the news that there was life at Paddington before Paddington Bear. But I am grateful to the noble Lord for what he said.
The noble Lord, Lord Peyton, was the counsel of despair. I can understand that he does not believe it possible for the Secretary of State to do much about the railways. I accept what he said regarding the way in which British Rail is performing at the moment under Sir Bob Reid. I have known Sir Bob Reid for many years; he was a senior colleague of mine in our previous incarnations. I have the feeling that there is a new spirit in British Rail and it is a pity that it has not been allowed to carry on for a few more years to allow that spirit to run through the organisation; we would have seen a great deal of improvement. But that is not to be.
I accept also what the noble Lord, Lord Peyton, said about divorce from the Treasury. Make no mistake about it: the dead hand of the Treasury is one of the great malignant forces which has stopped money going to British Rail in investment which this country so badly needs. If it has to be that private capital must be brought in to improve the railway

973
service, in principle I am not against that. However, I do not believe that the way in which it is being done in the Bill is the right way.
My quarrel with the Bill is that the Secretary of State does not seem to have any basic, fundamental objective written into it. There are bits and pieces of it all over the place, but there is no fundamental objective right at the beginning. I thought that my noble friend Lord Rodgers, talking of definition of purpose, put his finger right on the point. The buck for the transport system, including the railway system, has got to stop with the Secretary of State. The Bill does not provide for that. The Secretary of State must be answerable to Parliament for the rail network and nowhere in the Bill is that crisply spelt out.
This is an important aspect of the Bill and we need to be clear about it at this stage in our discussions. I commend the amendment to the Committee.
6.13 p.m.
On Question, Whether the said amendment (No. I) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 95.

Division No. 1

CONTENTS

Attlee, E.

Llewelyn-Davies of Hastoe, B.

Beaumont of Whitley, L.

Longford, E.

Bonham-Carter, L.

Mclntosh of Haringey, L.

Bottomley, L.

McNair, L.

Broadbridge, L.

Mallalieu, B.

Callaghan of Cardiff, L.

Masham of Ilton, B.

Carmichael of Kelvingrove, L.

Mayhew, L.

Carter, L.

Merlyn-Rees, L.

Castle of Blackburn, B.

Meston, L.

Chorley, L.

Morris of Castle Morris, L.

Cledwyn of Penrhos, L.

Murray of Epping Forest, L.

Clinton-Davis, L.

Nicol, B.

Cocks of Hartcliffe, L.

Ogmore, L.

Craigavon, V.

Pitt of Hampstead, L.

Darcy (de Knayth), B.

Rea, L.

David, B.

Redesdale, L.

Dean of Beswick, L.

Richard, L.

Dormand of Easington, L.

Rix, L.

Eatwell, L.

Robson of Kiddington, B.

Ennals, L.

Rochester, L.

Ewing of Kirkford, L.

Rodgers of Quarry Bank, L.

Falkender, B.

Russell, E.

Gallacher, L.

Seear, B.

Gladwyn, L.

Sefton of Garston, L.

Graham of Edmonton, L. [Teller.]

Shackleton, L.

Shannon, E.

Greene of Harrow Weald, L.

Shaughnessy, L.

Greenhill of Harrow, L.

Shepherd, L.

Hamwee, B.

Stedman, B.

Harris of Greenwich, L.

Stoddart of Swindon, L.

Hughes, L

Strabolgi, L.

Hunt, L.

Tordoff, L. [Teller.]

Hylton, L.

Turner of Camden, B.

Hylton-Foster, B.

Waverley, V.

Ilchester, E.

Wharton, B.

Jay, L.

White. B.

Jay of Paddington, B.

Wigoder, L.

Jeger, B.

Williams of Crosby, B.

Jenkins of Hillhead, L.

Williams of Elvel, L.

Jenkins of Putney, L.

Williams of Mostyn, L.

Kilbracken, L.

Wilson of Rievaulx, L.

Lawrence, L.

Winchilsea and Nottingham, E

NOT-CONTENTS

Alexander of Tunis, E.

Arran, E.

Annaly, L.

Ashbourne, L.

974

Astor, V.

Long, V.

Astor of Hever, L.

McColl of Dulwich, L.

Banbury of Southam, L.

Mancroft, L.

Barber, L.

Marlesford, L.

Bauer, L.

Merrivale, L.

Bethell, L.

Mersey, V.

Blatch, B.

Morris, L.

Boyd-Carpenter, L.

Mountevans, L.

Brabazon of Tara, L.

Mowbray and Stourton, L.

Braine of Wheatley, L.

Munster, E.

Bridgeman, V.

Murton of Lindisfarne, L.

Brougham and Vaux, L.

Napier and Ettrick, L.

Cadman, L.

Nelson, E.

Caithness, E.

Northbrook, L.

Campbell of Alloway, L.

Orkney, E.

Campbell of Croy, L.

Park of Monmouth, B.

Chalker of Wallasey, B.

Peel, E.

Clark of Kempston, L

Pender, L.

Coleraine, L.

Peyton of Yeovil, L.

Cranborne, V.

Renton, L.

Cumberlege, B.

Rodger of Earlsferry, L.

Davidson, V.

St. Davids, V.

Denham, L.

Seccombe, B.

Denton of Wakefield, B.

Sharpies, B.

Downshire, M.

Simon of Glaisdale, L.

Elliott of Morpeth, L.

Skelmersdale, L.

Elton, L.

Skidelsky, L.

Ferrers, E.

Soulsby of Swaffham Prior, L.

Fraser of Carmyllie, L.

Stewartby, L.

Gardner of Parkes, B,

Strathclyde, L.

Geddes, L.

Strathcona and Mount Royal, L.

Gisborough, L.

Goschen, V.

Strathmore and Kinghorne, E. [Teller.]

Hailsham of Saint Marylebone,L.

Sudeley, L.

Harmsworth, L.

Swansea, L.

Harvington, L.

Teviot, L.

Hemphill, L.

Teynham, L.

Henley, L.

Thomas of Gwydir, L.

Hertford, M.

Trefgarne, L.

Hesketh, L. [Teller.]

Trumpington, B.

Holderness, L.

Ullswater, V.

Howe, E.

Wade of Chorlton, L.

Jenkin of Roding, L.

Wakeham, L. [Lord Privy Seal.]

Kimball, L.

Lane of Horsell, L.

Wilberforce, L.

Lauderdale, E.

Wynford, L.

Leigh, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 1 [The Rail Regulator and the Director of Passenger Rail Franchising]:
6.20 p.m.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 2:
Page 1, line 8, at beginning insert ("Subject to section (Preparation for Franchising Director) below,").
The noble Lord said: It may be for the convenience of the Committee if we also consider Amendments Nos. 5, 10, 22, 48 to 50 and 59. Few would dispute the significance of the discounted rail fares that apply over so many areas of our national network. The Government believed, initially at least, that this matter could be left to the commercial judgment of operators and should not be enshrined in legislation. The report of the Select Committee on Transport in another place had this to say about the preservation of network benefits—through ticketing, cross validity and discounted fare schemes:
"The Government's arguments regarding experience of the bus industry have not removed our doubts. We foresee far greater difficulties in securing voluntary agreement among two or three dozen train operators to the continuation of uniformly discounted fares, fares tapered over distance, railcards and the like".

975
The Government's response to that view is said to be reflected, in part at least, in Amendment No. 48, to which we shall be coming later. I shall want to say one or two words about that though I shall listen with interest to what the Minister has to say. What I would say at the very outset, however, is that Amendment No. 48 is clearly far less specific than the amendment I am recommending to the Committee now. We cover the entirety of the range of the fares that we are talking about whereas the Government do so in a very generalised way. There are major defects in the Government's proposal at first sight.
Around eight out of 10 rail journeys are made with rate-reduced tickets in one way or another. Around 50 per cent. of all journeys cross current profit centre boundaries. The significance of that is that it appears to be the Government's intention under the Bill that each profit centre may be operated by a different franchise. If that is the case, around 40 per cent. of all journeys will be available only at full fare unless an operator has reached a special agreement with another operator. Therein lie the anxieties that were expressed by the Transport Committee in another place.
Each franchisee will set the fares for journeys on his own trains. What he cannot do is set fares to stations outside his own franchise area. It follows from this that his trains can operate only at full fare unless all relevant operators have agreed to accept each other's reduced rate tickets. That seems to be a nightmare situation. It is not only long distance journeys that will be affected and be dearer in consequence. Distance is but one criterion in that the larger the distance the more likely is it that boundaries will be crossed which will lead to the problems which I just cited. Short distances will also be affected —Southampton to Portsmouth; Reading to Banbury; Coventry to Wolverhampton; and Glasgow to Fort William; all will be adversely affected in this way. It has been reliably estimated that the loss of discount through ticketing could well lead to a doubling of fares.
What about what in the airline business is called interlining—tickets being valid from one operator to another? Bus deregulation has set a very doubtful precedent. Tickets are very rarely transferable. What one might be able to do, along the lines practised by airlines, is that a passenger with a return ticket but travelling on a different franchisee's train or on an open access operator's train may have to pay a supplement, but the supplement would be at the rate of full standard fare.
So far as concerns railcards, it would be right to say that British Rail has been very innovative in its marketing. Discount railcards are available to young people, disabled people, the over 60s, families and so on. They represent very good marketing techniques. They are an incentive for greater rail travel. They increase revenue. For that reason the Government argued at the outset that it followed from that that the new operators would find it in their best interest to offer the same range of tickets as is currently the case. All that they were prepared then to enforce was full fare through tickets.
What they failed to appreciate in this context is that their proposals were designed to break up the whole of
976
the national rail network. So how can they ensure that railcards can be valid on a national basis? Would one operator accept another's railcard? How can we be sure that that will be the case? How can we be sure that the franchise director will be able to achieve that basis? I shall turn later to some of the further difficulties I foresee in that respect. There is another problem. Is it possible that the regulator may find practices of this kind to be anti-competitive, because that happened in another context?
The Government continued to insist on their assertion that all would be well if it were left to the operators right until the Committee stage of the Bill in another place, except for the single retreat that had been announced allowing railcards for disabled people. But, significantly, they would not be available to those accompanying disabled passengers. That is a very significant omission from the Government's proposals. Nor do I see any evidence in Amendment No. 48 that that lacuna has been dealt with.
Then, somehow or other, things began to happen. There was the Newbury by-election. The Government had a whole host of their own troubled Back Benchers in another place. More retreats in those circumstances took place because the Government took fright. They announced in a series of U-turns that they would amend the Bill to safeguard railcards for senior citizens and for young persons. I have already dealt with one omission. It will be interesting to know whether the omission is taken up by subsection (5) of new Clause 48.
It remains to be seen, therefore, what that clause will achieve. Will family railcards be caught up by the new clause? That is of great importance, particularly for those non-car owning families to whom my noble friend Lady Castle referred earlier. What about armed forces railcards and the whole panoply of railcards that are now in existence? Will they be maintained? We are talking about Rail Rovers, BritRail passes and promotional offers, which have been extremely popular. With regard to BritRail, the concessions for visitors from abroad with which we shall be dealing later have been very helpful in promoting tourism in this country. That is the subject of a separate amendment. I shall not pursue it now.
I do not believe that it is enough for the Government to agree that because these aspects are popular the franchisees will necessary continue to utilise them. The precedents afforded by bus privatisation illustrate the problems. There was a once-universal wander bus ticket; since deregulation, it is infinitely more limited. I believe that the multitude of rail operators will inevitably stand in the way of the operation of such schemes, except perhaps in a rather limited way, despite the attempts of the Government to impose certain obligations on them.
What about the Travelcard? It can be used for unlimited travel on Network SouthEast, the London Underground and buses, with the revenue being split three ways. But after privatisation Network SouthEast will be operated by several franchisees. It is far from clear that all of them will issue or accept the

977
Travelcard. There are bound to be major administrative problems which will represent a disincentive; having to share revenues between 10 or more participants, for example.
The Minister for Transport in London, Mr. Norris, said in another place that he would quit and stake his job and reputation on the card which provides cut-price travel for millions of bus, Tube and rail passengers across London. That was described as an astonishing pledge although nothing is astonishing these days. If he goes he will be just one in a whole train of Ministers. But we shall see.
We are here talking not just about multi-modal ticketing via the franchise director, which was the phrase used by the noble Earl at Second Reading. The Travelcard, which we are seeking to retain, would specify zonal fares used on a general basis with other forms of passenger transport. That is a far more precise definition.
Another example of concessionary fares not operating is the Manchester Metrolink. That is a private franchise tram scheme. It does not participate in the Greater Manchester Travelcard. It found that it was not in its commercial interests to do so. Therefore there is offered only limited access to British Rail stations.
Amendment No. 22 deals with the need to ensure that the reduced fares will be comparable with the position which they occupy at the present time. That is of vital importance. A limitation on the power to reduce a range of tickets and fares which are available to users of the relevant services has to be examined very carefully. I do not believe that what the Government are seeking to do provides sufficient safeguards. The Government should accept our Amendment No. 22, which is far more specific. It provides a real protection for people who avail themselves of those facilities.
I now turn to some of the problems that I foresee as regards Amendment No. 48. It commences by saying:
"A franchise agreement may include provision with respect to the fares to be charged"
and not "shall". There is no obligation. The franchising director has immense powers. Apparently, he does riot have to consult because there is no duty on him to do so. It is within his discretion to determine whether the facilities should be used. He has to determine whether it is reasonable in all the circumstances of the case. That provides him with an immensely wide discretion which is far wider than he ought to enjoy. It is in stark contrast to what we offer in our own amendment.
What are the criteria that he will deploy? How will he go about making the decision? Can we be sure that under the criteria which he has to operate the kind of facilities that are offered by London Travelcards will continue within his discretion? There is no certainty about that; there is no certainty that the present facilities will continue.
I believe that the Minister referred to Clause 53 dealing with the continuation of services where there has been an insolvency. One might have something
978
rather less, which could provide real problems. I invite the Minister to reply to the points which I shall make. What happens if a franchise agreement requires the franchisee to participate in a discount fares scheme only for the franchisee to find, midway through the franchise, that it is really uncommercial? He shares the view of the Manchester organisation, to which I referred. He is not operating in a very profitable area and finds the scheme a great disincentive to his operating at all. He tells the franchise director, "I am sorry, I cannot go on doing this".
As I understand it, the franchising director can then consider the position. He can say, "I am going to give you notice that you have to continue the service." The franchisee replies, "I am very sorry, but I cannot. What are you going to do about it because I can't do anything in order to continue the service?" Will there be prosecution? That does not solve the passengers' problems. Will there be civil action? That does not solve anything either. So we could have a lacuna. How is that to be filled in those circumstances? What does the franchising director do about it?
That is a question which needs to be resolved. I do not see any sanctions which are available in the later clauses of the Bill which deal with that commercial situation. It is a matter which we need to consider very carefully indeed. I commend Amendment No. 2 to the Committee. I beg to move.
The Earl of Caithness: It may be helpful if I speak now because there are government amendments and also amendments to the Government's amendments, proposed by the noble Baroness, Lady Stedman. I know that the noble Lord, Lord Tordoff, wishes to say something. However, if I explain the Government's position now I believe that it would be helpful.
I shall deal very quickly with one matter because I know that the noble Lord, Lord Clinton-Davis, will return to it time and time again. I refer to the analogy of the experience of the bus industry. That is a misleading track to go down. Outside London, buses operate commercially in a deregulated market. There is no regulator or franchising director for the bus industry. In recognition of the fact that the rail network must operate on an integrated basis, the Bill provides for a regulator and a franchising director to co-ordinate the arrangements between the parties. So the fear that the network benefits will disappear are misplaced.
I listened with care to what the noble Lord, Lord Clinton-Davis, said. Rather than the amendment which he has moved, I commend to the Committee government Amendment No. 48. That new clause would be added to the Bill after Clause 24 in the section on franchising. It would implement two commitments given by the Government at Report stage in another place.
First, subsection (2) of the new clause places a duty on the franchising director, where he considers it necessary in the interests of passengers, to ensure that franchise agreements contain provisions to ensure that fares are in his opinion reasonable. The Government have brought forward this provision in recognition that there has been some concern that fares will rise as a result of privatisation. We believe that that concern

979
is misplaced. There is no reason to expect fares to rise unduly when services are franchised. Subsidy will continue to be available for socially necessary services. Moreover, it has always been the intention that the franchising director should, through franchise agreements, control fares where franchisees enjoy monopoly power. But until now there has been nothing on the face of the Bill in respect of fares control by the franchising director.
The new clause rectifies that omission. The franchising director will have to consider in each case, whenever he lets a franchise, whether the interests of passengers require him to include in the franchise agreement provisions to ensure that fares are reasonable. The duty is not limited to cases where franchisees are likely to enjoy monopoly power, although this could be expected to be a factor that the franchising director will want to take into account. He will have to consider all the circumstances of the franchisee's operations and exercise his judgment accordingly. I hope that the Committee will agree that this subsection represents a valuable addition to the Bill. I believe that there is much common ground in the Committee on that point.
I turn now to discount fares which are the subject of subsections (3) to (5) of our new clause (Amendment No. 24). of Amendment No. 5 standing in the name of the noble Lord, Lord Clinton-Davis, and of Amendment No. 50 in the name of the noble Lord, Lord Rix. which deals explicitly with discounts for the disabled. The noble Baroness, Lady Stedman, has tabled amendments to the Government's Amendment No. 48 in relation to the family Railcard.
The new clause fulfils the commitments given by my right honourable friend in another place to impose a duty on the franchising director to require, through franchise agreements, participation by franchisees in discount schemes for disabled people, the elderly and the young. Perhaps it would help if I set out the present position on discount cards offered by British Rail. Under the present arrangements, all discount cards are offered by BR on a purely voluntary basis. BR developed these Railcards on its initiative. BR is free to withdraw any or all of them at its discretion. It does not need an Act of Parliament or secondary legislation; it is at BR's discretion. Discount cards are, with one exception, offered for purely commercial reasons—to increase patronage and revenue, particularly during the off-peak period—and they are, in general, profitable. The one exception is the disabled person's Railcard which does not make money but is provided by BR in recognition of the special needs of disabled people.
I am convinced that private sector operators will see commercial opportunities in providing similar discount schemes. It would be remarkable indeed if the private sector could not make a profit where BR can. Indeed, as one of the benefits of privatisation, we expect private sector operators to develop new marketing initiatives to make their services attractive to passengers and it is important that we should not unduly constrain their ability to do so.
The Government have, however, accepted that as a fall-back precaution there is a good case for statutory
980
protection for discount schemes for three groups of passengers—disabled people, senior citizens arid the young. So subsections (3) to (5) of government Amendment No. 48 impose a requirement that every franchise agreement should contain provisions requiring franchisees to participate in discount schemes for those three groups. The schemes would be approved by the franchising director. I hope that the amendment will provide the assurance which noble Lords and others have sought that discount schemes for those groups will continue after privatisation.
Lord Renton: I think that there is a difficulty here which I do not know whether my noble friend has appreciated. He is imposing a fresh obligation on the franchising director to introduce schemes as mentioned in his Amendment No. 48, but what the noble Lord, Lord Rix, and I and others want is a continuation of existing schemes because freshly introduced schemes might not be quite so good.
The Earl of Caithness: I hope that my noble friend will bear with me because I shall come to the point that he wants me to come to in a moment.
Lord Renton: I am sorry for interrupting my noble friend.
6.45 p.m.
The Earl of Caithness: Amendment No. 5, to which the noble Lord, Lord Clinton-Davis, also spoke, goes further than the Government propose and I hope that I shall be able to persuade the Committee that it goes too far.
First, the amendment requires the Secretary of State to publish regulations specifying discount schemes. We believe that this is unnecessary and cumbersome. It would not be sensible to enshrine the details of discount schemes in regulations. The current schemes are frequently adjusted by BR in response to market demands. Each year detailed changes are made. These discount schemes are not, have never been and should not be set in concrete. It is important that this flexibility should be maintained.
Secondly, the requirements in terms of age limits and other qualifications for discount are highly specific. Again, I believe that it would be wrong to set these down in legislation in this way. To do so would make it impractical for franchisees and the franchising director to tailor schemes to future needs which at this stage may be difficult to predict.
Thirdly, Amendment No. 5 would require participation in a wider range of Railcard schemes. I do not believe that there is the same justification on the basis of social need to provide statutory protection for all these schemes. The Network Card, for example, is available to anyone who wants to buy it and simply encourages passengers to make more off-peak trips than they would otherwise make. There is no strong case for requiring franchisees to participate in this sort of scheme if it is not in their commercial interest to do so.
Indeed, it is important to strike a balance between putting a straitjacket on the marketing activities of private sector operators, on the one hand, and risking

981
the disappearance of socially valuable discount arrangements. There is a danger that, unless we are careful, we shall fix the railways' arrangements in these areas, while none of their competitors —and transport is a highly competitive business—faces any externally imposed requirements. This in the long run would be to the great commercial disadvantage of the railways, imperilling the very advantages of rail which noble Lords have spoken about so eloquently this afternoon. We believe that our amendment strikes the right balance.
Amendments Nos. 48A and 48B would require franchisees similarly to participate in discount schemes for families. The noble Lord, Lord Clinton-Davis, has referred to the family Railcard which provides discounted travel for anyone over the age of 18 accompanied by between one and four children. It is not restricted to families as such. It is so clearly a marketing initiative developed by BR for purely commercial reasons that it is not properly comparable to the schemes for disabled people, the elderly and young people which provide a different order of social benefit. Discount arrangements for group travel with children should be left to operators to develop in line with their assessment of market requirements. Again, no restrictions are placed on rail's competitors. Having said that, I look forward to what the noble Baroness, Lady Stedman, will say, but I hope that she will bear in mind the points that I have just made.
We have already made it clear that we expect multi-modal ticket arrangements like the London Travelcard to continue. The Government recognise the concern that has been expressed over the future of such schemes. As the Bill stands, the franchising director will be able to require franchisees to participate in the London Travelcard scheme and my right honourable friend the Secretary of State has undertaken that he will be giving the franchising director guidance in that regard. Franchisees will then be required to participate in Travelcard in accordance with their franchise agreements. The same mechanism could be used to secure participation in Travelcard arrangements outside London. I hope that that satisfies the noble Lord, Lord Clinton-Davis.
Lord Clinton-Davis: No, it certainly does not.
The Earl of Caithness: Concern has been expressed about the continued participation of other modes, particularly buses, in the London Travelcard. For as long as bus and Underground services in London continue to be secured through London Transport this issue will not arise. We will look at this in the context of our proposals for the deregulation of buses in London. We could not, in any event, use the Railways Bill to bind bus operators.
Amendment No. 10 would place a specific requirement on the regulator to promote multi-modal ticketing. I have to say that, for the same reason as the Bill cannot bind non-rail operators, I do not believe that this is an appropriate duty to place on the regulator. His functions are limited to the railways —and so they should be. He has no powers over
982
operators of other forms of public transport which would enable him to perform the duty proposed in Amendment No. 10.
I turn now to the Forces Railcard, which is also referred to in Amendment No. 5, which was spoken to by the noble Lord, Lord Clinton-Davis. This is a commercial deal negotiated between British Rail and the Ministry of Defence. There is no reason why the ministry—or any other major customer—should not negotiate direct with operators in the future. There is no need for a statutory provision.
I turn now to the point which is, I think, of concern to my noble friend Lord Renton. Amendments Nos. 21 and 50 both make specific provision for discounts for people accompanying disabled passengers, as does the present BR disabled person's Railcard. We have already given a commitment that the benefits which are provided by the existing Railcard should be broadly maintained. I would expect that to include discounted travel for those accompanying severely disabled passengers. I do not, however, see any need to refer to that specifically in the Bill. It can be covered in the guidance which the Secretary of State will give the franchising director.
I turn now to Amendment No. 22.
Lord Clinton-Davis: I hope that the Minister will not ignore the questions that I put to him.
The Earl of Caithness: No, certainly not. I shall return to them later, because I shall obviously have to listen and respond to what is said by the noble Baroness, Lady Stedman, the noble Lords, Lord Tordoff and Lord Rix, my noble friend Lord Renton and others who wish to take part in the debate. I thought that it was right to set the scene now because of the government amendment.
Amendment No. 22 would limit the franchising director's ability to agree to a reduction in the range of ticket and fare prices available only if he is satisfied, after consulting rail user groups, that such reductions would not materially disadvantage users and potential users of the services in question. The amendment is based on the premise that the franchising director will be seeking to keep a grip on franchisees' actions. It assumes that franchisees will be required to carry forward all BR's existing ticket and fare types and only withdraw them with consent. Our intention is for the franchising director to adopt a rather lighter touch. It may, for example, be necessary for the franchising director to specify, through the franchise agreement, that a franchisee provides certain ticket types; for example, for the purpose of satisfactory fares control a franchisee may be required to offer a standard single and a monthly season ticket, subject to a certain price ceiling, probably set by formula.
It might also be necessary for franchisees to offer certain types of fare to facilitate inter-operator ticketing arrangements. The intention generally is to give franchisees the freedom to offer the ticket types and fares that they judge appropriate in response to passenger demand, rather than for the franchising director to have to approve every departure from BR's current range. There is no magic about BR's current range of ticket types and special offers. They represent

983
BR's attempt to match to passengers' demand the products on offer and the prices. Franchisees may have other ideas. I hope that they do, and are successful in attracting more people to travel by rail.
We have already given the commitment that the franchising director will consult rail user groups, in particular, the RUCCs. The franchising director will be able, through those consultations, to assess passenger requirements and form a view on which ticket types might need to be protected. We have also debated the amendments in my name covering the duty of a franchising director in respect of fares control and participation in discount schemes for the elderly, the young and the disabled.
There is a great deal of similarity between what the noble Lord, Lord Clinton-Davis, and other Members of the Committee require. There is however a fine difference between us; namely, the question of encouragement for the private sector to come up with new ideas and incentives to encourage people to travel by rail—something that we all wish to see. We do not want to put the private sector in a straitjacket. We want the franchising director to have certain duties, but again, not a heavy hand on the tiller. I hope that on consideration the Committee will feel that the Government amendments are the right ones. They fulfil a commitment made in another place.
Baroness Stedman: The Government promised in another place, having agreed that they would put the disabled person's discount card on the face of the Bill, that the senior citizen's card and the young person's card would continue. I am grateful that the Minister has put that into his amendment and that it will eventually be on the face of the Bill.
I am worried about family railcards. The only assurance given in another place was that existing family railcards would he valid until their expiry dates. I do not know how much contact the Minister has with elderly grandparents or young families. I do not know whether he realises what a great benefit the family railcard has been to those groups of people. Many young families would never be able to visit their elderly relatives as a family, because the cost would be prohibitive unless there was some form of discount similar to that offered on the present family railcard. Most such visits are made by families at weekends. That probably means that they do not use a car. They are therefore travelling by rail and taking traffic off the roads at weekends which are the busiest times.
I tabled the amendments as probing amendments to remind the Minister that there are family railcards with discounts, with the hope that we can throw that into the pool of our general discussions, and at the same time find out whether the Minister has any views to offer the Committee about the Britrail card referred to by the noble Lord, Lord Clinton-Davis. It has brought in a great deal of revenue to BR from overseas travellers. There is now also the InterRail card which can be taken up by many people, not just the young, who travel around Europe. Surely it would be difficult for those people who have been used to having, or are becoming used to having an InterRail
984
card to travel around Europe if we do not provide anything in its place. How do we get on with our European neighbours?
Lord Tordoff: I shall speak briefly about Amendment No. 10, but more generally first. The mistake that the Government are making in all this is that they are saying, "Yes, it will be all right, because market forces will operate, and if it is commercially viable then things will be all right". I accept that in Amendment No. 48 the Government have gone some way from that position. Members on all sides of the Committee will be grateful that they have taken up the obligation that they laid upon themselves in another place. But I believe that there is still the underlying feeling in the Government's mind that all will be well, because if the service is commercially viable it will be provided.
The Government are forgetting that the network will be fragmented. The Government can say what they will do if there is to be a monopoly of the whole network. But, for instance, in London, with about 16 operators operating, it is unlikely that they will all feel. that there will be a great benefit to them from continuing with travelcards, for instance. We have seen that in the Buses Bill and in a great deal of legislation recently that there is an assumption that all will be well, while practice shows that that is not the case. Multi-modal travelcard schemes are important in the London area and other metropolitan areas. They must not be allowed to be damaged. The Minister says that we can perhaps have another look at this matter when bus deregulation in London comes in. By the time bus deregulation comes in. in whatever form—that is another long battle we shall have one of these days—it may be too late. Travelcards may have declined. People will then be forced to get out their motor cars and travel by road again.
We shall find over and over again throughout our discussions on the Bill that the Government do not take into account, as much as they should, that there are forces outside the purely commercial ones at which we should be looking. I have no objection, as I have said, to trying to improve the efficiency of the railways, to making them more attractive and to bringing in new capital, but we must always recognise that there is another major element. We must try to do everything that we can, by every means, even if it is an uncommercial means, to encourage people to get out of their cars and onto public transport, particularly the railways. That is what Amendment No. 10 is all about. It is trying to preserve the multi-modal travelcard which has been of such great benefit in London and the other metropolitan areas of the country.
7 p.m.
Lord Rix: I am conscious that the curtain is about to come down for dinner, but before that happens I should like to respond to the Minister. I am grateful for the government concessions given in Amendment No. 48 and the Minister's reassurances as to our

985
Amendment No. 50. But those reassurances do not go quite far enough in regard to the disabled person's railcard.
There is a story about two gentlemen discussing a dog belonging to one of them. It is an animal of considerable potential but uncertain temperament. The non-owner who was being encouraged to take the dog on trust said to the owner, "You know that dog will not bite, and I know that dog will not bite; but the dog does not know that he will not bite".
We have received from the Government much reassurance and some concessions, and all of that is welcome; but my experience as a man of the theatre encourages me to take the view that promises and declarations of intent gain something extra from being incorporated in legally binding requirements. I found in my younger days that a contract in my pocket and the first day of rehearsal concluded was a certainty of a job rather than an assurance that a reliable third party had given a firm undertaking that a job would shortly become available—in theatrical parlance, "Don't 'phone us, we'll 'phone you".
We have made some progress with regard to the disabled person's Railcard but the amendment standing in my name and that of my noble friends —I hope I may say that—from all parts of the Chamber seeks to build on that progress and to make sure that the new arrangements start with a baseline of existing discount arrangements and move on from there as circumstances allow. I have a further important though somewhat tangential point. At present the disabled person's Railcard can be used to purchase through tickets as buying tickets at various ticket booths en route would be a virtual impossibility for the majority of disabled people. Can the Government give an assurance that such a facility to ease their right of passage will be maintained? I fear that Members of this Chamber and Members of another place would hardly escape blame if we left it open to operators to slide away from the minimum level of decency which people with disabilities now enjoy.
Lord Renton: I wish to support what the noble Lord, Lord Rix—whom I also call my noble friend —has said about Amendment No. 50. Like him, I acknowledge what the Government are doing in Amendment No. 48; but there is a difference still between the two. We cannot vote on Amendment No. 50 today because it will not be reached today and it has not been moved today. Between now and the next meeting of the Committee (which will be next week) I want to study very carefully what has been said by my noble friend. But it seems to me that requiring discount schemes for disabled people to be introduced in future but leaving the details to the operators is not as good as saying—as I think the Bill should say and as this amendment states—that existing discount schemes shall remain in operation.
There is another factor here. It may well be that if a disabled person and the person who has to accompany the disabled person, take out a scheme which is intended to last 12 months—there are such schemes—and if meanwhile privatisation takes place,
986
it really would be awful if those existing schemes could not be carried into privatisation. But I do not think even that is enough. As a keen supporter of privatisation, I want to make sure that nobody is going to be worse off as a result of it. As I say, I hope that my noble friend Lord Rix will reserve his position as to moving and voting on Amendment No. 50 until our next meeting. Meanwhile, we must consider the matter.
Lord Mountevans: I will not touch on Britrail cards as I believe we shall discuss those later in the evening. However, I wish briefly to express my considerable concern about the remarks made by the noble Lord, Lord Tordoff. It is all very well to say that things will work out but what my noble friend has not yet told us —I do not believe the Government have yet mentioned this—is how things will work out. Will we have a private enterprise company seeking to collect revenue from multi-modal tickets and then distributing it? Will those tickets be controlled by the dominant operator, whether that is a road or rail operator or, in the case of London, probably an Underground operator? Those are the anxieties that I have.
The Earl of Caithness: The contributions we have just heard have made a useful addition to our discussion on this important topic. I shall of course read with interest and care what Members of the Committee have had to say. I shall deal with some of the points that have been raised. The noble Lord, Lord Clinton-Davis, asked about the franchising director. As he pointed out, the franchising director will have discretion in exercising his functions under the Bill. He will, however, be subject to the duties which the noble Lord will find in Clause 5, and in particular his duty to fulfil the objectives given to him by the Secretary of State. For example, the Secretary of State would be able to give him guidance as to the basis on which franchisees should participate in Travelcard arrangements. The matter will also be subject to judicial review if the franchising director acts unreasonably.
The noble Lord, Lord Clinton-Davis, also asked about the franchising director's power to deal with breaches of franchise agreements if the franchisees failed to carry out their obligations to participate in network benefits that they entered into on signing their franchises. We shall discuss the enforcement powers that the franchising director has in Clauses 49 to 51, and we shall deal with that matter in some detail. Again, that matter comes back to the point I made on the first amendment; namely, it is only when we have gone through the Bill and considered all these matters that we shall see how the Bill holds together.
The noble Baroness, Lady Stedman, mentioned the family Railcard. The noble Baroness has tabled an amendment to the Government's amendment on that matter. She spoke convincingly of the need to maintain the family Railcard to enable families to travel at weekends and to enable children to see their grandparents. Alas! I no longer have grandparents to see; but I certainly have young children, and I understood many of the remarks of the noble Baroness. I shall of course read with care her remarks.

987
Again, it is a question of wishing to encourage people to travel by rail I am sure the private sector will encourage that. If one considers other travel operators that have entered the private sector, for example British Airways, one can see that some of the incentives that company offers are considerably more original and are an improvement on the incentives it offered when it was in the public sector. I have no doubt that the same will apply on the railways.
The noble Lord, Lord Tordoff, referred to Travelcard. I ask the noble Lord to read my remarks with care in the Official Report. I said that my right honourable friend the Secretary of State has undertaken that he will give the franchising director guidance in regard to Travelcard and the franchising director can then include it in the franchise. I believe the noble Lord's concern will be satisfied. I agree with him that the whole point of these benefits is to encourage people to travel by rail. That is what we want to see, and I am sure that is what the franchisees will want. The more people they have travelling on their routes, the better it will be for the franchisees.
The noble Lord, Lord Rix, and my noble friend Lord Renton said we had not gone far enough with regard to disabled people. My advice at the moment is that the noble Lord's amendment goes further than the existing British Rail agreement. However, I shall consider that further because, as I understand it, the existing British Rail facilities for people accompanying disabled persons only apply when severely disabled people are travelling. I believe that is the position but I shall make sure that is the case. I hope I can talk to my noble friend and the noble Lord, Lord Rix, between now and another stage of the Bill.
Lord Renton: We only ask for a continuation of existing provisions. We do not want to go any further than anybody else.
The Earl of Caithness: I noted that with interest. That is why I said this is a matter we ought to discuss between now and another stage of the Bill. This debate has been helpful. I again commend to the Committee the Government's Amendments Nos. 48, 49 and 59. These have gone a long way to meeting the anxieties mentioned by so many Members of the Committee and they fulfil the commitments made in another place.
Lord Clinton-Davis: With the greatest respect, I do not believe that Amendment No. 48 is satisfactory in its present form and I shall refer specifically to one other matter to which the noble Earl did not allude in his reply.
Suffice it to say that the Minister has come under very strong pressure not only from this side of the Committee but also from the noble Lords, Lord Renton, Lord Rix, and the noble Baroness, Lady Stedman. I suspect that the Government will concede this matter. I hope that they do. But they need to be made to concede it now. This is the opportunity that we have to deal with this specific matter.
The Minister has given us words of hope and expectation and guidance but no certainty and no
988
assurances. It is all hidden by the belief that our proposal will somehow or other stifle initiative and innovation. With respect, that is a lot of nonsense.
The form of privatisation or commercialisation that is to be introduced here will bring about a totally changed situation. Even the Minister said in a previous debate that it is not akin to other methods of privatisation. For that reason we must be reasonably sure that the benefits which accrue at present will continue. That was the burden of the case put by the noble Lord, Lord Renton, and that is the case that I adopt.
I am not satisfied with general words about the franchising director being guided and coming to certain conclusions. The franchising director does not have to consult with anybody. He may consult arid he may be guided to consult but at present, we do not know that. No statutory obligation is imposed upon him.
Another point that I wish to make was not dealt with at all by the Minister. At present Amendment No. 48 is restricted to franchised services. Earlier the Minister referred to the commitment that was given on Report in another place to allow the franchising director to examine both monopoly and non-monopoly franchises. However, nothing is said in Amendment No. 48 about open access services. Let us assume that the Great Western main line is in due course operated by a mix of open access and franchised services. Network benefits should be retained for all groups, in particular disabled and elderly travellers. They should be able to use the services of all operators, whether or not they are franchised. That is not dealt with in the Bill or in Amendment No. 48.
Therefore, there are strong arguments that in addition to its open and unrestricted nature, Amendment No. 48 is misconceived and misplaced in many respects. Amendment No. 5 and the amendments coupled with it are to be preferred. I am not satisfied with what the Minister has said. I believe that there are so many holes in what he has said that the Committee should divide on this issue.
Lord Renton: Before the noble Lord goes any further, perhaps I may point out that he rather implied that his amendment meets the point which the noble Lord, Lord Rix, and I have made about the continuation of existing schemes. However, it would not necessarily do so.
Lord Clinton-Davis: I do not see why not. Indeed, paragraph (3) (d) of Amendment No. 5 encompasses the point which is made in the noble Lord's own amendment. I do not believe that there is any question about that. I commend Amendment No. 2 to the Committee.
7.15 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 51; Not-Contents, 81.

Division No. 2

CONTENTS

Addington, L.

Llewelyn-Davies of Hastoe, B.

Airedale, L.

McGregor of Durris, L.

Bonham-Carter, L.

McNair, L.

Bottomley, L.

Mishcon, L.

Broadbridge, L.

Morris of Castle Morris, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Carter, L.

Ogmore, L.

Cledwyn of Penrhos, L.

Pitt of Hampstead, L.

Clinton-Davis, L.

Rea, L.

Cocks of Hartcliffe, L.

Redesdale, L. [Teller.]

David, B.

Richard, L.

Eatwell, L.

Robson of Kiddington, B.

Ewing of Kirkford, L.

Rodgers of Quarry Bank, L.

Gladwyn, L.

Russell, E.

Graham of Edmonton, L. [Teller.]

Seear, B.

Sefton of Garston, L.

Greene of Harrow Weald, L.

Shackleton, L.

Greenhill of Harrow, L.

Shepherd, L.

Hamwee, B.

Stoddart of Swindon, L.

Harris of Greenwich, L.

Tordoff, L.

Houghton of Sowerby, L.

Turner of Camden, B.

Hughes, L.

White, B.

Jay of Paddington, B.

Wigoder, L.

Jeger, B.

Williams of Crosby, B.

Jenkins of Putney, L.

Williams of Elvel, L.

Judd, L.

Williams of Mostyn, L.

NOT-CONTENTS

Arran, E.

Jeffreys, L.

Astor, V.

Kimball, L.

Astor of Hever, L.

Lane of Horsell, L.

Attlee, E.

Leigh, L.

Banbury of Southam, L.

Long, V.

Barber, L.

McAlpine of West Green, L.

Belstead, L.

Mancroft, L.

Bethell, L.

Mersey, V.

Blatch, B

Mountevans, L.

Boyd-Carpenter, L.

Mowbray and Stourton, L.

Brabazon of Tara, L.

Munster, E.

Braine of Wheatley, L.

Murton of Lindisfarne, L.

Bridgeman, V.

Napier and Ettrick, L.

Brougham and Vaux, L.

Nelson, E.

Cadman, L.

Orkney, E.

Caithness, E.

Pender, L.

Campbell of Croy, L.

Peyton of Yeovil, L.

Chalker of Wallasey, B.

Renton, L.

Chelmsford, V.

Rix, L.

Coleraine, L.

Rodger of Earlsferry, L.

Cox, B.

St. Davids, V.

Cranborne, V.

Seccombe, B.

Cumberlege, B.

Sharpies, B.

Davidson, V.

Skelmersdale, L.

Denham, L.

Skidelsky, L.

Denton of Wakefield, B.

Soulsby of Swaffham Prior, L.

Downshire, M.

Stedman, B.

Elliott of Morpeth, L.

Strathclyde, L.

Elton, L.

Strathcona and Mount Royal, L.

Faithfull, B.

Ferrers, E.

Strathmore and Kinghorne, E. [Teller.]

Fraser of Carmyllie, L.

Gardner of Parkes, B.

Swansea, L.

Geddes, L.

Teynham, L.

Goschen, V.

Trumpington, B.

Grantchester, L.

Ullswater, V.

Harvington, L.

Wade of Chorlton, L.

Hemphill, L.

Wakeham, L. [Lord Privy Seal.]

Henley, L.

Hesketh, L. [Teller.]

Waverley, V.

Howe, E.

Wilberforce, L.,

Ilchester, E.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
Viscount Goschen: I beg to move that the House do now resume. In moving this Motion may I suggest that the Committee stage should begin again not before twenty minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Royal Assent
7.22 p.m.
The Deputy Chairman of Committees (Baroness Cox): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Trade Union Reform and Employment Rights Act,
Licensing (Amendment) (Scotland) Act,
Osteopaths Act,
Merchant Shipping (Registration, etc.) Act,
Asylum and Immigration Appeals Act,
London Underground (Jubilee) Act,
Dawat-e-Hadiyah Act.

Bail (Amendment) Bill
Report received.
Clause 1 [Prosecution right of appeal]:
Lord Mishcon Lord Mishcon moved Amendment No. 1:
Page I, line 12, leave out ("High Court or").
The noble Lord said: My Lords, if I may use understatement, a certain amount of discontent was expressed in some parts of your Lordships' House in Committee with regard to some of the Bill's provisions, not its policy. A most useful meeting was arranged between the Committee stage and this stage of the Bill which took place yesterday.
I should like to express my thanks, and I believe that I express the thanks of my colleagues in the House, for the arrangements that were made for that meeting. It was attended by Mr. David Maclean, the Minister of State at the Home Office, the noble Viscount, Lord Astor, who has had the task of assisting with the Bill on the Government's behalf, the noble Lord, Lord Bethell, who has sponsored the Bill in this House, the noble Lord, Lord Harris of Greenwich, my noble friend Lord Williams of Mostyn and the noble Lord, Lord Wigoder. Mr. Michael Stephen was also present and added considerably to the usefulness of the meeting since he is the sponsor of the Bill in another place. We were also helped by officials from the Home Office, the Lord Chancellor's Department and the Crown Prosecution Service.
The result of the meeting was that I and other noble Lords would move amendments on Report. They will either be accepted, as I understand it, or certain assurances of which we were told will be given by the noble Lord, Lord Bethell, or on the Government's behalf. The people who attended that meeting believed that those undertakings and assurances were satisfactory in all the circumstances and your Lordships will perhaps take account of our views when deciding whether you are similarly satisfied.
I move Amendment No. 1 in that spirit, and very briefly. Your Lordships may remember that in Committee the amendment was linked with the difficulty of legal aid. I beg to move.
Lord Bethell: My Lords, I was party to the discussions to which the noble Lord, Lord Mishcon, referred and I understand why he has tabled the amendment. I have no hesitation in inviting the House to support it.
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon moved Amendment No. 2:
Page 1, line 13, at end insert ("on the grounds that there is a serious risk to the public or that such person was likely to interfere with the course of justice.").
The noble Lord said: My Lords, as your Lordships may remember since it was moved in Committee, the amendment seeks to ensure that these appeals are brought upon definite grounds and assume a minor number, not a major number. I beg to move.
Viscount Astor: My Lords, the noble Lord has explained the concern which underlies this amendment and it is a concern that we all share. He is concerned that appeals against the grant of bail should be brought only in the most exceptional cases and not simply where the prosecutor disagrees with the magistrates' decision. Mere dissatisfaction should certainly not be enough. This power is intended to be used only in rare cases where there is a serious public interest.
I think that the noble Lord will accept that his amendment, as drafted, would not allow a right of appeal in certain cases where most would agree that it should exist; for example, where a person has been charged with serious offences and the prosecutor believes that there is good reason to suppose that the defendant will abscond. On that ground alone, therefore, it is not acceptable. We could, of course, probably all think of alternative wording which could be used, but the danger with attempting to set out in statute the precise circumstances in which the power might be exercised is that something will be missed and a case will arise where all would agree that an appeal should be brought but the wording of the Act will not allow it. A better course therefore, in our view, is to adopt the Scottish approach to these matters, which is to leave open in statute the circumstances in which an appeal might be brought but to lay down clear guidelines for prosecutors.
We had much discussion at Committee stage about what the guidelines to the CPS might contain. Your Lordships will appreciate that, as the Bill has yet to complete its passage, it would be unrealistic to expect guidelines already to have been drafted. Nevertheless consideration has been given to what such guidelines might say and I can give noble Lords some reassurance on that point. The guidelines will, in the first place, make it clear that the CPS foresees the number of cases in which it would exercise the right of appeal as small.
The broad effect of the guidelines will be that the right of appeal would be used only in cases of the greatest concern where there are substantial grounds under the Bail Act on which the court could refuse
992
bail. Prosecutors will apply an overarching test of whether there is a serious risk of harm to members of the public or other significant public interest grounds. The public interest grounds will not be used to justify appeals in minor cases. In making their assessment prosecutors will take into account the seriousness of the offence. Examples of such cases might include offences of violence where weapons are used, serious sexual offences where there is an element of violence and serious arson cases. I hope that your Lordships will accept that guidance to this effect provides the best way of meeting the anxieties which have been expressed and that, with that assurance, the noble Lord will agree to withdraw his amendment.
7.30 p.m.
Lord Williams of Mostyn: My Lords, we welcome what is a most productive approach. I endorse very shortly the remarks made by my noble friend Lord Mishcon about the very helpful meeting that we had, especially regarding the anonymous public servant who produced an admirable minute. He deserves every congratulation.
Lord Harris of Greenwich: My Lords., I have but one question to put to the noble Viscount. I believe that we discussed the point on Monday. When the guidelines have finally been drafted, it would be most helpful if those of us who have participated in the proceedings could have copies.
Viscount Astor: My Lords, I am delighted to give the noble Lord that assurance.
Lord Mishcon: My Lords, in view of the assurances given by the noble Viscount, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Harris of Greenwich Lord Harris of Greenwich moved Amendment No 3:
Page 1, line 19, at end insert ("and such appeal has been authorised by a person having at least the status of a member of the Crown Prosecution Service with four years' seniority.").
The noble Lord said: My Lords, the amendment deals with the same point as that detailed in Amendment No. 4, tabled in the name of the noble Lord, Lord Mishcon. It raises the question as to who will determine whether the appeal on behalf of the Crown Prosecution Service should be made. I believe that there was general anxiety, certainly so far as concerns the noble Lord, myself and my noble friend Lord Wigoder, that that decision should be taken at a senior level in the Crown Prosecution Service. One would not want a situation in which a relatively junior and inexperienced Crown prosecutor, possibly in office for a matter of only three or four months, did in fact decide to announce that he was going to appeal without any reference to a senior officer, or without taking any subsequent action to obtain the authority of a senior officer, with the result that a defendant was wholly unreasonably kept in custody for 48 hours, which would be the effect of announcing the appeal.
We discussed the matter at our unofficial "Committee stage" yesterday evening. After the noble Lord, Lord Mishcon, has spoken, I shall be most

993
grateful if the noble Viscount can give us some indication as to what is the agreed position. My amendment deals with a relatively senior member of the Crown Prosecution Service, whereas the amendment of the noble Lord, Lord Mishcon, puts forward an alternative form of wording. We await with interest to hear the noble Viscount's response. I beg to move.
Lord Mishcon: My Lords, I need not add anything to the very clear explanation of what happened at yesterday's meeting given by the noble Lord, Lord Harris of Greenwich.
Viscount Astor: My Lords, the amendments reflect the concern that a decision to appeal against the grant of bail may be taken on flimsy grounds by an inexperienced prosecutor, with the result that a person whom a magistrates' court has decided should be granted bail is, therefore, held in custody. We are all fully aware of the special nature of the power that the Bill is creating and of the need to ensure that it is exercised sparingly and judiciously. Our concern is that such an amendment would introduce a requirement which simply could not, for very sound practical reasons, be met in all cases.
In many cases—certainly those where a defendant is brought before the court having been arrested the previous day—Crown prosecutors will receive the case papers only a short time before the day's business begins. Every effort should be, and will be, made to ensure that there is prior consultation before a decision is taken to appeal against the grant of bail. I hope that your Lordships will appreciate that the speed at which business moves and the impossibility of ensuring that a branch Crown prosecutor will always be available at the end of a telephone means that imposing an absolute requirement of that sort could have the effect of preventing an appeal being lodged in a case in which it is clearly justified. It is perhaps worth registering that one branch Crown prosecutor may have all the prosecutors working in all the courts in a shire county reporting to him or her: it is simply not possible to guarantee that one person will always be available, even if the prosecutor is able to get to a telephone within the half-hour or so before the court business begins.
While the Crown Prosecution Service will undoubtedly do everything in its power to ensure that only those appeals which are clearly justified are brought—and the guidance to which I have already referred will help to ensure this—those practical constraints must be taken into account and therefore lead the Government to resist a statutory requirement for authorisation within a given period or at a specified level.
I can assure your Lordships that the guidance which will be issued to Crown prosecutors will make it clear that appeals should not be made by junior prosecutors without seeking approval from more senior lawyers. The phrase "more senior lawyers" means lawyers of at least four years' experience within the Crown Prosecution Service. In any case where Crown prosecutors consider that it might be appropriate to use the right of appeal, they will,
994
wherever possible, obtain prior authority to do so. If at the hearing when they have heard all that the defence has to say, and that view is confirmed, they will have authority to lodge the appeal. If, in exceptional circumstances, it is not possible to obtain prior authority, Crown prosecutors will seek a subsequent review of the decision to appeal by a more senior lawyer. That will be done within the time limit for giving written notice of appeal, if possible; but if not, within 24 hours at the latest.
That will be spelt out in the guidance to Crown prosecutors, and I hope will reassure your Lordships that there will always be a "double check" by a more senior prosecutor in cases involving an appeal against the grant of bail. On that understanding, I hope that noble Lords might agree to withdraw their amendments.
Lord Harris of Greenwich: My Lords, speaking on behalf of myself, my noble friend and, I suspect, the noble Lord, Lord Mishcon, I think that the noble Viscount's answer does in fact meet the anxiety that we expressed on the matter. Subject to one point, with which I shall deal shortly, I shall withdraw the amendment. The only additional point I make is that I should certainly like to associate myself with the noble Lord, Lord Williams of Mostyn, in his thanks to the official who drafted the "heads of agreement" of yesterday evening. It was an admirable piece of work. Whoever did it deserves considerable congratulation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon had given notice of his intention to move Amendment No. 4:
Page 1, line 19, at end insert, ("and such appeal has been authorised by a person having at least the status of Branch Crown Prosecutor.").
The noble Lord said: My Lords, in order that the spirit of unanimity which appears to have gripped the House should continue, I should also like to associate myself with the vote of thanks expressed in regard to the person who so accurately, and in such a businesslike way, composed the minute, to which the noble Lord, Lord Harris of Greenwich, referred. For reasons similar to those advanced by the noble Lord, I shall not move my amendment.
[Amendment No. 4 not moved.]
Lord Mishcon Lord Mishcon moved Amendment No. 5:
Page 1, line 21, leave out from ("prosecution") to ("granted") and insert ("made representations that bail should not be").
The noble Lord said: My Lords, the amendment deals with a technical matter which was observed by the Government and the noble Lord, Lord Bethell. I believe that I am right in saying that they have agreed to accept the amendment. I have but one comment to make. It concerns what lawyers would call a comment under the "slip rule". We all received such help from the Bill department that I should not like any words of mine to be regarded as criticism of those involved.
However, there was a misprint in the amendment in Committee to the effect that the word "representation" should be in the plural. I pointed that out to those concerned and was informed that it would be put right on Report with the insertion of the word

995
"representations". Under the slip rule, if the amendment is accepted, I hope that the plural of the word will go into the Report. I beg to move.
Lord Bethell: My Lords, I agree that the wording proposed by the noble Lord, Lord Mishcon, amounts to an improvement in the Bill. The wording is more felicitous; and, if I may say so, the same applies to the proposed wording for Amendment No. 6. I therefore invite the House to accept the amendment.
Lord Mishcon: My Lords, all I can say is, thank you.
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon moved Amendment No. 6:
Page 1, line 22, leave out ("objection was") and insert ("representations were").
The noble Lord said: My Lords, I repeat my thanks. I beg to move.
On Question, amendment agreed to.
Lord Bethell Lord Bethell moved Amendment No. 7:
Page 2, line 2, leave out ("one hour") and insert ("two hours").
The noble Lord said: My Lords, with the leave of the House I shall speak also to Amendment No. 9. The amendments offer a possible alternative to Amendment No. 8 in the name of the noble Lord, Lord Mishcon. I accept the principle behind the noble Lord's amendment that it should be clear on the face of the Bill that a failure to lodge written notice should lead to the appeal failing and the release of the defendant. To make sure that this is a realistic timetable for prosecutors to work to, the amendments would, with the approval of the noble Lord, Lord Mishcon, extend the time limit from one hour to two hours.
The amendment in the name of the noble Lord, Lord Mishcon, refers to the appeal being null and void. Those words might suggest that the oral notice of appeal is retrospectively invalidated and might raise questions as to the lawfulness of the detention of the defendant in the interim period. The amendment which appears in my name refers instead to the appeal being,
"deemed to have been disposed or
if the prosecution fails to lodge written notice within the two-hour limit. "Disposed of" are the words used in Clause 1(6) of the Bill, which has the effect that once the appeal is determined or otherwise disposed of the defendant must be released from custody. I therefore hope that noble Lords will accept Amendments Nos. 7 and 9. I beg to move.
Lord Mishcon: My Lords, the noble Lord, Lord Bethell, has set out the position very fairly. I am content with his amendments.
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon had given notice of his intention to move Amendment No. 8:
Page 2, line 3, at end insert ("failing which, the person shall be released from custody and the prosecution appeal shall be null and void.").
The noble Lord said: My Lords, given the circumstances which have just been explained, I shall not move the amendment.
[Amendment No. 8 not moved.]
Lord Bethel Lord Bethel moved Amendment No. 9:
Page 2, line 6, at end insert:
("(6A) Where the prosecution fails, within the period of two hours mentioned in subsection (5) above, to serve one or both of the notices required by that subsection, the appeal shall be deemed to have been disposed of.").
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon moved Amendment No. 10:
Page 2, line 8, leave out ("commenced") and insert ("determined").
The noble Lord said: My Lords, Amendments Nos. 10 and 11 deal with the anxiety expressed in Committee that the term of custody, should be as limited as possible in the circumstances and that the hearing of the appeal, as your Lordships have already heard, should be expedited. It is in that spirit that my amendments have been put down. I believe that the noble Lord, Lord Bethell, has something to say about them. I beg to move.
Viscount Astor: My Lords, the Government accept the serious anxiety behind this amendment about the length of time a defendant spends in custody pending the resolution of the appeal. It is an argument of compelling principle that a person to whom the courts have already granted bail should spend as little time as, possible in custody pending the hearing of the prosecution appeal. That is the desire of all those involved. The expectation should be that, save in exceptional circumstances, appeals should be not only commenced but determined within 48 hours. The fact that the Bill now restricts the prosecutors who may exercise a right of appeal, and the assurances which can be given about the circumstances in which an appeal may be launched, provide reassurance that this power will be used only in a small number of cases. The courts will want to hear appeals as quickly as possible within the 48-hour period.
There may be circumstances when it would be in the interests of justice to allow a short adjournment beyond the 48-hour time limit; for example, where some further information not immediately to hand might assist the judge in reaching a decision. Such cases should be very rare—we would expect most appeals to be heard quickly and on the basis of the information already available—but it might be unjust not to allow for them. I believe that the noble Lord himself recognises that point. I hope that because of that anxiety he may be persuaded not to press the amendment.
The noble Lord, Lord Mishcon, also spoke to Amendment No. 11. I have spoken several times about reassurances which the Government are prepared to give in response to concerns over aspects of the Bill. In addressing that amendment, I have to ask your Lordships to recognise that it would place heavy burdens on those responsible for bringing appeals of this kind and those tasked with making arrangements for their hearing.
The Lord Chancellor's Department proposes to consult the judiciary with a view to providing guidance to the effect that in those cases where the time limit would, but for the formula provided in the Bill as it now stands, expire on a Saturday or public

997
holiday, everything possible should be done to expedite the hearing. Where this proved impossible, consideration would be given to the possibility of making special local arrangements to bring on the appeal on a Saturday or public holiday.
That encompasses the desire expressed by the Lord Chief Justice, on being consulted about this prosecution right of appeal, that everything should be done to avoid the necessity of defendants being held in custody for long periods. The noble and learned Lord, Lord Taylor, has indicated that where the appeal is launched just before a weekend or bank holiday he would expect the appeals to be heard wherever possible on the same day.
Those undertakings move the Government as near as they are prepared to go to the spirit of the amendment of the noble Lord, Lord Mishcon. On that basis I hope that he will feel able to withdraw the amendment.
Lord Bethell: My Lords, I associate myself with the comments made by my noble friend. It is a measure of the respect with which we have taken into account the observations of the noble Lord, Lord Mishcon, and other noble Lords opposite, that we have gone into such detail and arranged the assurances which my noble friend has put before the House. I hope very much that noble Lords opposite concede that those assurances go a long way to meeting the points raised by the noble Lord. I hope that in the light of what my noble friend said the noble Lord will see fit to withdraw his amendment.
Lord Mishcon: My Lords, I am deeply grateful for what has been said, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved.]
Lord Elton: My Lords, as a mere spectator I should like to say what an agreeable and unusual experience the passage of this Bill has been.
Earl Ferrers: Order!
7.45 p m.
Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of this day):
Lord Bethell: My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Bethell.)
Lord Mishcon: My Lords, in dealing with the Motion which has just been so eloquently moved, perhaps I may say that I have learnt two lessons from the course that this Bill has taken. First, when one is informed that no amendments are possible if a Bill is to be kept alive, I advise my brethren not to believe it. The second lesson is that if one does believe it, one still has a duty, as a Member of this great House, with its duties and powers of revision, to say, "So far and no further". If amendments are necessary, especially
998
where the liberty of the subject is concerned, one must not be constrained and this House must never fall to that temptation.
Having said that, I believe that other noble Lords who have been concerned with this matter will agree that I have been treated with the greatest courtesy by the noble Lord, Lord Bethell, and the Minister. It has not been easy to reach agreement on these very important matters in a short period of time. It would not have been possible without the co-operation and the courtesy of those involved.
Lord Wigoder: My Lords, first, perhaps I may congratulate the honourable Member in another place who promoted the Bill. Secondly, perhaps I may compliment the noble Lord, Lord Bethell, upon the way in which he has steered the ship into harbour in your Lordships' House after a short, but somewhat stormy voyage. Finally perhaps I, too, may express my thanks to the noble Viscount, Lord Astor, for the assistance that he has been able to give on behalf of the Government in ensuring that the legitimate anxieties about the Bill were satisfactorily met.
I conclude by underlining one point. There is nothing in the Bill that should lead in any way to the relaxing of the standards which magistrates have to apply in deciding whether bail should be granted. The prima facie entitlement to bail set out in the Bail Act 1976 remains unaltered. The grounds of objection to bail which have to be proved before a person can be remanded in custody remain wholly unimpaired; and the presumption of innocence, of course, remains completely untouched.
I am sure that the Government will agree that there is nothing in the Bill which can or should lead to the still further overcrowding of our remand prisons.
Baroness Seccombe: My Lords, I, too, add my congratulations to the honourable Member for Shoreham. The principle of the Bill was received in this Chamber with general and enthusiastic support. However, I believe that it will leave the House as a greatly improved Bill which will be much welcomed by the judiciary as a tool in the pursuit of justice.
Viscount Astor: My Lords, I congratulate my noble friend Lord Bethell on, I hope successfully, taking this short but important Bill through your Lordships' House. I, too, wish to thank those noble Lords who have contributed to our discussions on the Bill, in particular the noble Lords, Lord Harris of Greenwich, Lord Wigoder, Lord Williams of Mostyn, Lord Mishcon, the noble Viscount, Lord Tenby, and my noble friend Lady Seccombe. I believe that we have shown that whatever timetable we face your Lordships are able to deal with the Bill. Your Lordships are also able to give it proper consideration. I am sure that noble Lords are right in saying that we added to the Bill.
I am grateful for the words that noble Lords opposite said about the officials who helped with the Bill. It has been a busier time for them even than for your Lordships. I appreciate the noble Lords'

999
comments. I am grateful for all the work that my officials have done. I trust that the Bill will now be given a Third Reading.
Lord Bethell: My Lords, I, too, thank those noble Lords who have taken part in the discussion of the Bill. I concede the point made by noble Lords opposite that the Bill has been considerably improved by amendments moved by the noble Lord, Lord Mishcon, and others. I wish to assure noble Lords that when I advised the House on Second Reading that it would not be possible to amend the Bill and for it to become law, I spoke in good faith on the basis of information given to me, no doubt equally in good faith, by the department and others. No one is happier than I am that it proved possible for another place, and for the Government, to arrange for the various points raised by the noble Lord, Lord Mishcon, and others to he incorporated into the Bill before it returns to another place, we hope tomorrow morning. The, so to speak, shadow Committee stage of the Bill which took place not a million miles from this Chamber yesterday—it might have been irregular, and ideally, not to be emulated—was a very useful exercise. I hope, therefore, that we have got the Bill right.
A number of noble Lords opposite have referred to the need to protect miscarriages of justice whereby under the Bill an innocent person given bail by a judicial hearing could conceivably be incarcerated for 48 hours or longer. I hope that noble Lords will also concede that, balanced against that consideration, is the need to protect members of the public from an unwise decision to grant hail. There have been one or two such instances in the recent past. Those who moved the Bill had that consideration in mind also.
Having said that, I wish to thank all noble Lords who have participated, in particular, the officials and others who co-operated so well in our discussions yesterday and earlier. I hope that the Bill will receive a Third Reading.
On Question, Bill read a third time, and passed, and returned to the Commons with amendments.

School Tests: Implementation by Regulation
7.55 p.m.
Earl Russell Earl Russell rose to ask Her Majesty's Government whether, in view of the current difficulties about testing in schools, they will in future refrain from introducing contentious matters by regulation.
The noble Earl said: My Lords, I am sorry if any of your Lordships thought five minutes ago that I had perhaps skipped bail. I assure the House that I was in fact on remand not far away and am now in my place. It is not my intention to make a party political speech. Whether I shall achieve that intention I do not know; but I shall try. I have given notice to the noble Lord, Lord Judd, and to the Minister, that I shall try.
Some questions are too important to be used for party politics. I am concerned about the need for consent in the processes of government and the difficulty of achieving that consent. That should never
1000
be a party matter; and I hope that it will not be. In the specific context of school tests, I say only that I very much hope that we shall not be discussing them in this Chamber in a year's time. Whenever the Dearing review reports, and whatever it states, I hope that the review will give rise to a genuine dialogue, and that whatever comes out of that dialogue will be a system that those concerned can, with conscience, operate.
I do not believe that anyone in any quarter of the House can regard the present situation with entire satisfaction. I wish to suggest that the bad politics of this situation are the result of a faulty parliamentary and legislative procedure. I remember extremely well the debate of 5th May 1988. It was my first full day in Committee in this Chamber. Therefore I remember it a good deal better than I may remember other days. In that debate it was clear that there was support in every quarter of the House for the principle of school testing and a great deal of doubt about what type of tests the Government intended to introduce.
As the debate continued, it emerged slowly that the Government did not know. The noble Baroness, Lady Hooper, who was at the Dispatch Box, said:
"It was never the Government's intention to put this sort of detail into the Bill. It is a framework Bill".—[Official Report, 5/5/88; col. 707.]
I place that remark beside the memorandum of the Hansard Society when giving evidence to the Delegated Powers Scrutiny Committee of this House, which stated:
"We emphasise that statutory delegation should never leave an Act bare of everything except a framework of ministerial powers, with all the real substances being left to ministerial regulations".
In 1988 the situation was even worse because the decisions on those vital and contentious questions of how tests should be conducted were left not even to statutory instrument, nor to the affirmative or negative procedure, but simply to a plain executive order. The effect was to let the Secretary of State off the lead of the requirement to look for consent. When let off the lead, it is a great temptation to start chasing hares. He was let off the lead, and I think that the effects were unfortunate. In making something like this work, there is a need for bargaining, consultation, adaptation and even occasional changes of mind. Most vital, there is a need to recognise that there are independent professional values, even if they should happen to be wrong. One cannot expect self-respecting members of a profession to operate procedures which they believe—however mistakenly it may appear to be —by their own professional standards to be wrong. There has to be a diplomatic negotiation.
Therefore, we need a procedure which ensures that that takes place. This procedure by executive order does not allow that at all. As my noble friend Lady Seear said in 1988, it looks like a diktat handed down from on high. In fact, it was a procedure without the proper safeguards. It had no proper safeguards for ensuring that what was put forward was ready. I shall not go into the detail of key stage 3, but I make the point that when trouble arose, there was an attempt to deal with it, in effect, by hectoring. That is what

1001
happens when one is rushed into a situation and one has no chance of getting out of it, except by driving straight on.
The Government have spent so long dealing with trade unions that they tend to see trade unions under everything. Therefore, I shall quote on this something which is about as far from a trade union organ as I can think of: the editorial in the Oxford Magazine in the first week of this term. It said that the Government,
"showed an unhealthy (and not unfamiliar) mistrust of a profession's ability to do its job without rigid specifying and recording, … [this] would explain far more recalcitrance than teachers have yet shown. So far from being quick to resist, they have been remarkably patient".
That is an opinion which I think ought to cause some anxiety.
It is also vitally important that we should not be in this position in a year's time when the Dearing review reports. Dr. John Marenbon, a fellow historian whom I know and like, said that the time limit would not allow for the thorough reconsideration of basic principles which is needed if national testing is to survive.
Those last words are important, for national testing cannot survive unless a dialogue takes place between the Government and the teaching profession, with the understanding that their values are different. Unless some point of accommodation can happen, nothing can be done.
That is where it is so important to have a procedure which allows not only for the consultation, but also for time in which mistakes can be ironed out. No one is perfect, every proposal when first put forward contains some things which are not right and which may not work. The other point which is of vital importance is that in this culture there is an indissoluble association in most of our minds between the giving of consent and the process of voting. Many professional associations outside Parliament know well that the best chance of defeating any government proposal to which they find it difficult to consent is in this House. So when this House cannot vote, it is a great deal more difficult to achieve consent in the outside world.
I would not wish to imply by that any doubt about the legal force of regulations. Were I to do that, as soon as he reads this, the noble and learned Lord, Lord Simon of Glaisdale, would be quick to put me right. Regulations, if they are intra vires—and the Woolwich building society will stress that that is a vital qualification—are legally as binding as Acts of Parliament. However, they do not feel as if they carry as much consent. Without the process of voting, there is not the sense of giving consent.
Those of us who were in the Chamber in 1988, during the Local Government Finance Bill, will know that, after the number of times we voted on the Bill, to refuse to consent to the legislation afterwards would have been not merely morally wrong, it would have felt utterly ridiculous because we had voted on it so many times. We had had our chance and we felt bound by the result of the vote. So there was an emotional as well as a legal force behind it. It is that emotional force which I think we lose by having a procedure to put
1002
through contentious matters on which we in this House have no chance to vote. I believe that that undermines the fabric of government by consent. That is a good deal more serious even than any mistake which may or may not have been made in the course of testing. Government by consent is more difficult than I used to think. I should be sorry to see us do anything to make it harder.
8.6 p.m
Lord Elton: My Lords, the noble Earl, Lord Russell, has put down a Motion which draws your Lordships' attention to contentious matters: the question of testing in schools. I shall delay your Lordships for only a moment because I believe that some of the contentious nature arises from the background which needs to be examined, and some of it from perceptions of the effects of the proposals for testing. I am not sure that those perceptions are well founded. It would be useful to have the Minister resolve that doubt.
I am only looking at a narrow aspect of the subject: the testing of English at the age of 16—next year, 1994. I am aware of some of the anxieties because of a useful conversation that I had with the National Association for the Teaching of English.
I understand, as your Lordships will understand, that the syllabus to be tested at the age of 16 in 1994 will have already been in the schools and taught for a year. Noble Lords will recall that during the last term —the term in which it is tested—much of the time will be spent in revision. That means that we are looking at a syllabus for which only two remaining terms of teaching are left.
When the syllabus was introduced, I understand that it was published on time in the summer of 1992. It was nevertheless subject to revision later on, and there were a number of doubts about it which had to be resolved. I have had it said to me twice now that changes were made to the syllabus in the first term in which it should have been taught. If so, that is a matter for concern and would explain some of the anxiety of the profession because programmes have to be worked out, teachers have to read the material, books and so on have to be bought before the school year begins. If the syllabus is not finally in place before the school year begins, the teaching will not be fully effective until well into the first of the five-and-a-half terms available for teaching it. That is the background.
As to the substance and effect of the orders, I understand that from 1988 to 1991 there was a seven point, A to G scale for assessing work. That work could be 100 per cent. course work, if so wished. In 1991, course work was reduced to a maximum of 30 per cent. and at about then, the change was predicted to a 10 point numerical scale. That gave rise, I understand, to unease and was contentious.
Later, Sir Ron Dearing was brought to bear on the problem as to the future of this scale. He suggested that it would be wrong to implement it while it was under his consideration, and proposed—and the Government accepted—that A to G scales should be reintroduced, but augmented by an A* grade for exceptionally outstanding work.

1003
Teachers who have been preparing themselves for the 1-10 numeric scale, and who may be new to the profession, not having had experience of anything else, are concerned about their ability to convert A to G. I would be most grateful if my noble friend could confirm that they can use the old (or rather the new, and now shelved) 1–10 scale and submit that, with their evidence for the marks for the scales that they have awarded, to the boards, and that the boards themselves will convert them from the numeric to the alphabetic scale. If that is so, my noble friend might like to comment on the reflection of some teachers that this helpful service will in some way put them one remove further away from assessment of their pupils themselves.
My final point relates to the draft English order now out for consultation. I believe that it is due to be made in September. Because of the anxieties and lack of trust that are about at the moment, there is a general suspicion that this order will affect syllabuses that will he due to be tested before two years have elapsed from its making. I hope I have made that clear. It is clear (is it not?) that if an order is to be made affecting the way children are tested, the way they are taught and the syllabus that they are taught, that order must be made in time not only for the teaching to begin the day after, but for the preparation for that teaching, and the purchase of the books, and so on, if necessary, to be done ahead of the first term in which it is taught. If my noble friend can give an assurance that that will indeed be the case, that will also do something to relieve the anxieties which at the moment, I have to tell her, are very real among the profession of which I used to be a member.
8.11 p.m.
Lord Skelmersdale: My Lords, it is with some trepidation that I enter the list on an education debate in your Lordships' House for only the fourth time in almost two decades. I do so for two reasons. The first is that in the last year I have become a governor of a large comprehensive school in Taunton, and therefore know just a little about what the Question euphemistically calls the "current difficulties" of testing in schools. The other is that when I first saw the Question of the noble Earl, Lord Russell, I was struck, as a member of the Joint Committee on Statutory Instruments by the generality of the concept behind it. The noble Earl could so easily have chosen, say, social security orders or the upgrading of prescription charges, or a whole range of order-making powers —in which case, of course, this debate would have been answered by another Minister. I therefore empathise with my noble friend Lady Blatch, and gently suggest that a debate such as this would have been perhaps rather better answered by my noble friend the Leader of the House.
Be that as it may, I believe in the old adage that the electorate gets the government it deserves, and, by extension, that means the elected MPs it deserves. By slightly further extension, I believe that Parliament gets the primary legislation that it deserves. My comparatively recent interest in statutory instruments has reinforced that view.
1004
The joint committee is bound by three things: the standing orders of both Houses; their terms of reference; and the Acts of Parliament providing for the many pieces of subordinate legislation that we examine each year. In passing, perhaps I may put in a plea for fewer, better drafted, orders. In 1983, according to the First Report of your Lordships' Select Committee on the Scrutiny of Delegated Powers, the joint commit tee considered and reported on 1,965 orders. Nine years later (that is, last year) the number had grown to a massive 3,359. I can report that the latest figures that I have show that we have considered 2,155 since the start of this Session of Parliament. A better comparison, however, might be to say that we have considered some 1,700 since 1st January this year.
At present the joint committee is under-resourced, which means that our reports are not always as timely as they might be. But a paper is always produced when Parliament wishes to discuss a particular order. In my view, that is putting the cart before the horse, and I have argued on occasion that reports should be produced in time for Parliament to decide whether it wants to debate an order. I see a nod from the noble Earl opposite.
Tonight is not the appropriate time to discuss this particular hobby-horse of mine any further, but I trust that the House will forgive my mentioning it. It is germane to the generality of the Question that we are discussing.
The joint committee considers the orders that it receives mostly in terms of "vires"; clarity of drafting —which incidentally accounts for some 25 per cent. of all our comments; of unusual use of powers; and of exceptional financial provisions. Of these, the one that matters tonight is vires. It is important that it is outside our terms of reference to discuss the appropriateness of a particular order-making power in the parent Act. That, as we all know, comes in various forms, the most serious of which is that giving rise to instruments requiring affirmative approval and draft instruments requiring affirmative approval (the difference here is largely technical); through instruments subject to annulment (that is, the negative resolution procedure) and which may or may not include some Northern Ireland legislation; on through instruments not subject to parliamentary proceedings laid before Parliament; finally, to the group which particularly concerns us this evening: instruments not subject to parliamentary proceedings, not laid before Parliament. It is this last group that Parliament has decided, through enacting the Education Reform Act 1988, and particularly Section 4 thereof, is appropriate for the implementation of key stage attainment targets, programmes of study and assessment arrangements for the national curriculum.
I decided that it was worthy of some study as to how that position was reached. The noble Earl, as a good professor, prompted me to carry out just such a study. It took me a little time, as the Education Reform Bill was rather like the Maastricht Bill in the thorough way in which the House debated it. Indeed, it gives me a little ironical amusement that this debate comes the day after the end of the Committee stage of

1005
the European Communities (Amendment) Bill. The House spent two days on the Second Reading debate; seven days in Committee; five days on Report; and two days on the Third Reading. The noble Earl was too modest to say that not only was it the first Committee stage that he was involved in but that it was also the Bill on which he made his maiden speech.
That said, my memory is that key stage assessment testing turned out to be slightly faulty. I discovered on Second Reading that the subject was certainly a minor issue—I think the noble Earl would agree. My evidence is the fact that the noble Baroness, Lady Seear, winding up for the Liberal Democrats did not mention the subject at all; nor did the noble Lord, Lord Peston, sitting in the position of the noble Lord, Lord Judd, this evening. My noble friend Lady Hooper, the then Minister, did, however, touch on it by commenting on the report which had aroused the interest of the noble Lord, Lord Ritchie, earlier and some others. The noble Baroness concluded:
"I assure your Lordships that the attainment targets, programmes of study and assessments taken together will be carefully constructed to ensure that they do not lead to a narrowing of focus that could undermine the Government's whole policy for the curriculum".
The issue, then, at that stage was a minor one. That, however, as the noble Earl said, was not to be maintained. It flared up in Committee and was the subject of the first Division on the second day. Even then it was not about testing per se; it was about the type of testing which was then envisaged. The amendment was not carried, but the important point is that my researches on Clause 4 at Committee stage revealed no mention of upgrading, still less attempt to upgrade, the order-making power to negative or even affirmative procedure. That was in Committee.
I pursued my inquiries to the Report stage. I eventually found Amendment No. 61A, moved by the noble Lord, Lord Ritchie, to the effect that any order which was at variance with the advice of the National Curriculum Council or the Schools Examination and Assessment Council should be by affirmative resolution, and that any dispute as to the extent of the disagreement should be settled by judicial review. That was certainly rather a novel procedure but the matter was debated. Perhaps because of its novelty the amendment was resisted by the Government and subsequently defeated. I suppose it is just possible that the result, and certainly the debate, would have been rather different and better informed if we had had the advice of the Select Committee on delegated legislation, as we have for this year's Education Bill, as my noble friend will know. The whole subject had died away by the time that the Bill reached Third Reading.
The net result was that so far as the order-making provision in Clause 4, the Bill that arrived in your Lordships' House was the same in every respect as when it left it. We all know that since then the subject of key stage assessment testing has risen higher and higher on the political agenda. In the words of my right honourable friend the Chancellor, the Government are "in a hole". If my noble friend is to follow the implicit advice of the noble Earl, she has one of two courses open to her: either to drop any idea
1006
of laying any more orders on testing or to change the law to allow a fiercer order-making procedure. As I said, Parliament gets the legislation that it deserves.
As a parent and a governor I hope that my noble friend will resist both proposals. I want to know how well my child is doing at school in competition with his or her classmates. I want to know how well the school is doing vis-à-vis the other schools in Taunton. The hole in which the Government find themselves is a political and not a legislative one. It is a political solution that is required. I am therefore particularly grateful for the wise advice of my noble friend Lord Elton on how to achieve the solution. I hope that my noble friend Lady Blatch will follow that advice.
8.20 p.m.
Lord Judd: My Lords, I am sure that we are all very grateful to the noble Earl, Lord Russell, for having introduced this subject tonight. He was obviously right to emphasise that this is not a party political issue and that what concerns us above all are the interests of children. It is important that we face up to the weaknesses in the system and to what has gone wrong.
First, perhaps I may say that it has been a particular pleasure to listen to the noble Lord, Lord Skelmersdale, who has presided with such charm and effectiveness over so much of our work in the Education Committee. It is good to hear him participate in this little exchange this evening.
Since the inception of the national curriculum and the assessment arrangements, decisions over what is taught in schools and how it is assessed seem to have been rather dominated by top-down regulations. A characteristic of both the national curriculum subjects and testing appears to have been that no significant aspect has been agreed by genuine discussion and agreement between the Government and teachers, parents and governors. Despite that, some national curriculum orders have indeed gained acceptance and support from teachers because of the sensitivity of their subject working groups. The best examples are arguably the English order and the orders for modern foreign languages, art, music and PE. But such examples have been rather unusual.
The truth is that all too often the Secretary of State appears to have ridden roughshod over the views of teachers. The clearest example was when the Government, despite overwhelming opposition from the profession, parents and governors, drastically reduced the coursework element of GCSE. Most contentious was the reduction of the coursework element in English to an upper limit of 30 per cent. At a stroke, in that subject, as in others, teachers' ability to motivate young people was drastically undermined.
One of the characteristics of the national curriculum subject implementation has been the impossibly short timetable which the Government have forced on schools. That has been almost totally rigid and non-adaptable. It has led to tremendous work overload, especially in primary schools. For example, Coopers & Lybrand's 1991 investigation

1007
into the cost of introducing the national curriculum into primary schools detailed the effects of overload on teaching pupils the basic skills. I quote:
"There is no doubt that the National Curriculum and present levels of resourcing have changed the balance of the primary curriculum away from reading, writing and numbers towards the other National Curriculum subjects. As we have seen, time spent listening to reading has particularly been reduced".
A recent Ofsted report confirmed that finding. In that report a 1991–92 overview of the teaching of English found that:
"The pace of improvement in English in Key Stages 1 and 2 has slowed. This seems to be associated with the fact that teachers have had to respond to implementing other national curriculum subjects and the assessment of them, leading to less time for planning and less attention to developing the teaching of English".
When teachers, parents' and governors' groups have attempted to put moderate and reasonable proposals to the Government about how to find a way forward based on consensus, I am afraid that such proposals have been largely ignored. For instance, the Government, the current NCC, SEAC, the future SCAA and LEAs have the 1988 Act (Section 16) regulations at their disposal. That would permit the national curriculum to he wholly or partially suspended to allow experimental and developmental work on the curriculum and assessment. But the use of those regulations has never been considered. In fact, when a joint deputation from the National Union of Teachers and the National Association of Head Teachers, the parent-governor organisations and CASE met the Secretary of State in October 1991 to present alternative assessment proposals, it was suggested that those proposals should be tried out in pilot schools. That suggestion was turned down flat by the Secretary of State. More recently, the Government's determination to stick to their goal regardless of mounting opposition has led to what I hope will not be considered overdoing it when I describe it as new heights of absurdity.
The last minute decision by the Secretary of State to switch to forms of testing of key stage 3 English, with materials being introduced into schools in the middle of the year, led to damaging disruption in secondary schools. The recently released survey of the 1993 national curriculum assessment arrangements in English in key stage 3 by the National Association for the Teaching of English, to which the noble Lord, Lord Elton, referred, found that:
"By September 1992 almost all schools had established detailed plans (schemes of work) for Key Stage 3 based on the English order. But during the month that followed, most schools had been forced to make substantial changes to these schemes … The test requirements and the late announcements had led to substantial reductions—and in some cases omission —of elements of the National Curriculum programmes of study … Schools had set budgets and purchased books before the resource requirements of the SATs were published. As a consequence, schools had to find substantial additional financial resources".
The controversy over testing in schools this summer is part of the failure by government to listen to teachers and parents about the kinds of tests that are needed for the national curriculum. Quite unnecessarily the Secretary of State has alienated teachers, parents, governors and educationists. I find it highly disturbing that his concession to review the national
1008
curriculum was not the result of some reasoned discussion between himself and parents, governors and teachers but because of industrial action taken in despair.
Unfortunately, it is still all too evident that the Government have yet to learn one fundamental lesson; namely, that it is just not possible to improve the quality of education and increase teachers' morale by top-down order and diktat. Only recently the Secretary of State introduced new regulations which require the reporting of test results at key stage 1 in English, mathematics, science, technology, history and geography and at key stage 3 in English. mathematics, science and technology. Yet he knows full well that practically all schools in England and Wales have not completed the assessment arrangements and are not prepared to report the results this year. Further, the Secretary of State's decision to suspend assessment in technology, history and geography at key stage 1 in 1994 and to reconsider whether assessment should go ahead in technology at key stage 3 in 1994 seems to indicate that his right hand does not know what his left hand is doing.
Finally, it is worth pointing out that the Dearing review itself is in danger of being compromised. When Sir Ron Dearing started the first of his round of consultative conferences on the review of the curriculum and assessment, he reassuringly said:
"I came to the task with no preconception. The agenda is on the table; the questions raise fundamentals and we shall be studying everything that is said in reply".
Yet the Minister has shown how far removed she is from those hopes. She firmly refused to recognise that the new powers of assessment audit which the Education Bill introduces could well alienate teachers even further. She has equally firmly refused to recognise the hopes of teachers, parents and governors. In short, she has imposed severe restraints on the ability of Sir Ron Dearing to reach agreement.
I am sure that the noble Baroness will recall that as recently as 21st June she said,
"I end by saying that three principal factors are absolutely crucial and are not negotiable. One is the framework of the national curriculum. The second is a system of assessment and testing; and the third is public information on performance". —[Official Report, 21/6/93; col. 89.]
The Government still have a chance to allow the Dearing review to do its job convincingly. The Secretary of State could regain considerable credibility and respect by facing up to reality and recognising the irrelevance of this year's assessment and testing arrangements. He could describe his 11th May Statement as a contribution to the review, not fixed in stone, and make clear that it is capable of rejection by the review's interim proposals. The Secretary of Stale could insist that the review must not be rushed and that the views of teachers', parents' arid governors' organisations are fundamental to the direction of the review.
In Scotland regional negotiations followed a decision of government in 1992 to withdraw regulations on imposed national tests and to introduce flexibility and improve new areas of professional discretion into the assessment arrangements. We on these Benches support testing schemes that. are

1009
coherent, meaningful and manageable. As we have repeatedly made plain, we support a system similar to that in Scotland for England and Wales.
It is manifestly inconsistent and most unfair to deny the parents, children and teachers of England and Wales the benefits of a system which has been conceded by the Government in Scotland. Although not perfect, the Scottish system enjoys the confidence of the vast majority of those concerned. That is why we seek assurances from the Government that the Dearing review will not be prevented from examining the possibility of extending the Scottish system of testing school pupils to England and Wales.
We, like our Liberal colleagues—with whom I am glad we share so much in common in our approach to education—seek assurances that the Government will not continue to proceed with contentious issues by regulations.
8.32 p.m.
The Minister of State, Department for Education (Baroness Blatch): My Lords, I am going to stick, if I may, to the Motion on the Order Paper. I should like more time to take issue with much of what the noble Lord, Lord Judd, said. A great deal of what he said was unsubstantiated and some was innuendo. Given that he was going to remain apolitical, it was an extraordinary 10 minutes of his time in the debate.
I shall take the advice of my noble friend Lord Skelmersdale. We are discussing a subject which is in any event contentious and the noble Lord, Lord Judd, has made no secret of that. He has said something contentious about the system of assessment and testing many times since his entry into this House. Therefore any order or regulation that comes before this House I feel would not meet with his acquiescence.
I wish to make two points in regard to the Ron Dearing review. First, I do not intend to come to this Dispatch Box and pre-empt the outcome of the review. On the one hand I am accused of interfering with, pre-empting or stifling that review; and on the other I am invited to say something definitive about it. Secondly, there is an extensive dialogue taking place with teachers. It has a wide remit. I am not going to do anything to inhibit that, nor do I intend to enter into any redefinition of what the remit should be.
I have listened with interest to the debate. As my noble friend Lord Skelmersdale said, if one removed the issue of testing one could talk about any order, any regulation and indeed the use of subordinate legislation for issues which might be considered contentious—which is what I thought the Motion was concerned with.
I am very conscious that the noble Earl, Lord Russell, and others who have spoken in the debate have made a thorough study of these matters. The noble Earl made a distinguished and powerful contribution to the debates which led to the establishment of the House's new Select Committee on the Scrutiny of Delegated Powers—and indeed played an equally influential part in informing the analysis which appears in the committee's first report.
1010
The Government's position on the use of delegated powers and secondary legislation was set out in the memorandum we submitted to the Select Committee in January this year. I shall not try the patience of your Lordships by repeating today all that we said in that memorandum. But I would emphasise that what we are seeking to do—and what the Select Committee itself seeks to do—is to steer a sensible and proper course between the demands of effective scrutiny of legislation and the no less pressing demands on the time of this House.
No one would dispute the need to distinguish between primary legislation and the detailed secondary legislation which is consequential to it and flows from it. Like everyone else who has looked into this subject, the Government have considered carefully whether some set of criteria could be drawn up which would provide a clear test of when something was primary and when it was consequential; and in the latter case, where a delegated power was appropriate, whether there were criteria which could be laid down in advance to determine whether a secondary measure should be introduced by means of an affirmative resolution, a negative resolution or without scrutiny.
We concluded, as have previous governments, that that is just not practicable. Those matters have to be determined case by case on their merits. The new Select Committee on scrutiny came to the same conclusion and indeed quotes the Government's memorandum with approval on that point in its own list of conclusions.
The noble Earl, Lord Russell, makes the particular point that a measure should not appear in secondary legislation if it is contentious or controversial. That is an attractive proposition. The noble Earl's evidence to the Select Committee, and published as part of the committee's first report, states his view that major matters of political controversy should not be embodied in regulations. The noble Earl went on to say—and I hope that he will forgive my quoting his words:
"It is not, of course, possible to draw up constitutional lists of matters of political controversy. This is a matter of political good sense rather than the making of rules."
I would endorse that. It is clearly not possible to know what matters will provoke great concern. It is certainly not necessary for an issue to stray outside the basic structures and principles established in a piece of primary legislation for it to provoke debate. Moreover, what is contentious to one person is not to another. What is controversial now may not have been so in the past and vice versa.
With the Select Committee on the Scrutiny of Delegated Powers we now have a potentially powerful mechanism for considering in an informed way just those questions as Bills come before the House. My noble friend Lord Elton is an eminent member of that body. The Government, as your Lordships will know, have undertaken to provide a separate memorandum to the Select Committee on each Bill as it comes up. I have no doubt that the Select Committee, under its chairman, my noble friend Lord Rippon, will be quick to report if it feels that an inappropriate proposal has been made and that something should appear on the

1011
face of a Bill which at present does not. My department had the honour, or at least the distinction, of producing the first such memorandum in relation to the Education Bill.
I turn now from the general to the particular of the national curriculum assessment orders. The principle of assessment and testing is not itself contentious. It is an integral and vital element of the national curriculum. Parliament gave its assent to assessment as part of the national curriculum in passing the Education Reform Act.
The noble Earl did however raise the question as to whether the assessment orders and associated tests should be subject to affirmative or to negative resolution. We have to ask whether it is realistic to expect Parliament to approve the details of the assessment and testing arrangements. Those are essentially operational matters and matters of detail.
The orders give effect to the arrangements for assessment and testing. They cover such matters as the way in which an overall score for a subject is derived from the constituent parts of the tests and teacher assessment. They set out provisions for the case where a pupil misses a test for various reasons. They provide for the verification of the results from the tests.
Those matters are the bare bones of the assessment arrangements. While teachers and others naturally have an interest in them—and that is why we consult on the orders —they are not really the stuff of which controversy is made.
Of course I accept that the tests themselves this year have provoked heated debate. The question then arises whether Parliament should scrutinise the tests. I cannot accept that it is right for Parliament to do so. My reasons are three-fold. First, the tests are largely taken "unseen" by pupils. It would not be a fair test of what pupils can do if the papers are public knowledge well in advance. That would defeat the purpose of testing. And how could the tests be kept confidential if Parliament were asked to scrutinise them?
Secondly, the tests are in their nature detailed documents. Looking at the tests of 14 year-olds this year, each pupil takes three papers in each subject. There are different sets of papers in each subject depending on the ability of the child and the level for which he or she is entered. There is surely too much detail here for it to be appropriate for Parliament to get to grips with.
Thirdly, it is not Ministers who write the test questions. They are not written by officials in my department. The School Examinations and Assessment Council commissions those with a particular expertise in examining to devise the questions and to try them out. Ministers and our officials are not well placed to determine what the questions should be and how they should be put. I would argue that the same consideration applies to Parliament and that it is a rare noble Lord who would be well-placed to consider the tests.
I think that the Government's record in this matter is an honourable one. In addition, I believe that both the findings of the Second Report of the delegated powers scrutiny committee on the Education Bill and
1012
the response of the House and of the Government to those findings augurs well for the important role of this House as a revising and scrutinising Chamber.
My noble friend Lord Elton was kind enough to give me notice of some specific questions. If I may link his questions with what my noble friend Lord Skelmersdale said, resolving teachers' concern about assessment and testing is not a procedural issue. It is a practical one and one of policy and perhaps even of politics. That is why Sir Ron Dearing is conducting the review. But I shall answer the specific question of how the GCSE levels 10 to 4 will be converted to grades A to G. For written examinations, conversion between the two grading scales will be undertaken by the GCSE examining groups. For course work, schools have been advised by the School Examinations and Assessment Council to submit marks or levels to the examining groups which will combine course work and examination marks to determine subject grades.
I was asked whether I was aware that English syllabuses for 1992–94 for the GCSE examination cycle were issued to schools late and then altered in the autumn. As my noble friend said, the syllabuses for English courses introduced in the classroom last September were sent to schools in April 1992. This was a little later than usual. The programmes of study underpinning the syllabuses had been with the schools since March 1990. That needs to be understood. I also understand that subsequently some late additions were made by the GCSE examining groups to certain of the English literature syllabuses. However. in contrast to what the noble Lord, Lord Judd, said, the impact on schools of these changes was minimal and none of them affected the national curriculum English syllabuses.
I was asked how the GCSE syllabuses geared to the 10-level scale could be used for grades A to G. The syllabuses are geared to the programmes of study in the national curriculum. The Government and the School Examinations and Assessment Council have both recently taken steps to reassure teachers and schools that the recently announced grading changes do not mean any discontinuity in the GCSE work that they started last September. I can assure my noble friend that there will not be changes before they sit the examinations.
I was also asked whether schools would suffer further disruption to GCSE studies in English because the syllabuses which pupils are now studying will be changed before they take their examinations in 1994. They will not. The plan is that a new English order will come into effect in 1994 in key stages 1, 2 and 3, anti in 1995 in key stage 4. Pupils will not therefore start to study new GCSE syllabuses based on new curriculum requirements for English until the autumn of 1995, and will not be examined on those syllabuses before the summer of 1997.
It has not been the easiest of years. It certainly has not been easy for teachers and schools. We recognise that and understand it. We wish Sir Ron Dearing well. There is a real dialogue taking place between Sir Ron, his colleagues, the teachers and the schools. We hope that will continue and produce a positive outcome. I

1013
can say to all noble Lords who have spoken in the debate that we will take careful note of what the committee and the House have to say on these matters and of what your Lordships have said today.

Railways Bill
8.45 p.m.
House again in Committee on Clause 1.
[Amendment No. 3 not moved.]
Lord Tordoff Lord Tordoff moved Amendment No. 4:
Page 1, line 8, leave out from ("appoint") to end of line 20 on page 2 and insert ("an officer to be known as the Director of Railway Regulation and Franchising for the purpose of carrying out the functions assigned or transferred to the Regulator or (as the case may be be) the Franchising Director, by or under this Act.
(2) An appointment of a person to hold office as the Director of Railway Regulation and Franchising shall be for a term not exceeding five years; but previous appointment to this office shall not affect eligibility for re-appointment.
(3) The Secretary of State may remove any person from office as the Director of Railway Regulation and Franchising on the ground of incapacity or misbehaviour.
(4) Subject to subsections (2) and (3) above, a person appointed as the Director of Railway Regulation and Franchising shall hold and vacate office as such in accordance with the terms of his appointment.
(5) When discharging the functions of the Franchising Director, the Director of Railway Regulation and Franchising shall act as a corporation sole by the name of "The Director of Railway Regulation and Franchising".
(6) The provisions of Schedule Ito this Act shall have effect with respect to the Director of Railway Regulation and Franchising.").
The noble Lord said: As my name is attached to the amendment, I move it on behalf of the noble Lord, Lord Ewing, and myself. It is a probing amendment designed to make more understandable the necessity to separate the functions of the regulation of railway services and the procurement of railway services in the public interest through franchising. The franchising director is to be given powers of regulation of fares on non-franchise services, if assurances given in the House of Commons are followed through. This suggests that there is a considerable overlap between the roles and a lack of clarity in the Government's intentions for each of the new offices. It seems to us that combining the offices would reduce bureaucracy and simplify the new structure.
What is clear is that there is consensus that a triad —perhaps the Minister will disagree with this—or even a trinity is overkill. Looking at the emerging picture, it is increasingly clear that the Government are blurring the distinction between the regulator's role, which includes the protection of the public interest, and the franchising director's role, which must also include the public interest in the way in which he specifies services. Charging—that is to say, fares—is normally looked upon as a regulatory matter: yet here it is to be with the franchising director. So although in the purest sense one could say that licensing and regulation are logically separate from procurement of services, in a complex industry like the railways the overlap becomes quite considerable. What the Government apparently
1014
propose in respect of fares exemplifies this. Therefore the amendment suggests that one new officer can discharge both functions, simplifying the tiers of bureaucracy with which operators and the public have to deal. The Government need to produce some rather better arguments than they have so far to justify the separation.
In addition to simplification, there is need for more development and not mere regulation in the Bill. The proposals put forward by the Liberal Democrats 18 months ago suggested that there should be a rail enterprise and development office. We fear that the way the legislation is going will preserve the bureaucratic aspect of the 19th century concept of railways. I am sure, based on what he has said today, that that is not what the Minister intends. But new technology and the great advances made in road and air transport—and freight in particular—should not lead to the demise of rail freight but its parallel development. So the figure at the top should not be a regulator but one who is responsive to enterprise and to development. I beg to move.
Lord Carmichael of Kelvingrove: I am grateful to the noble Lord, Lord Tordoff, for moving this amendment. He is a signatory to it and it is a probing amendment. We wish to find out what is the Government's view on it. The Bill rests on a triad of rail masters who control a large supporting cast. It is a unique venture separating the trains from the tracks on which they run and requiring that both the providers of the infrastructure and the operators of the train services to operate commercially. Nowhere else in the world, nor in the entire history of the railways of this country, have these things been done.
The first member of the triad operates anonymously. The name of Railtrack, while nowhere on the face of the Bill although the first new body to be described in A guide to the Government's Proposals, which was issued to your Lordships' House before Second Reading, will provide the infrastructure, track, signals and stations.
On the Railtrack network the Government hope that soon they will be running the trains of a myriad of railway operating companies. Most of them will hold franchises, with British Rail itself operating companies. Most may be completely commercial open access passenger services. But all freight will be on the open access basis.
The second person in the triad is the regulator—a Godfather-like creature. He is to grant licences, guard access rights and seek to promote and protect the users' interests. He will also develop the railway services. Regulators in other privatisations, notably of gas, electricity and telephones, have looked after the availability of services and the prices charged to customers.
The third member of the triad is the franchising director. He is the human face. As someone put it, he is the Mr. Nice Guy, the smoothie, the purchaser, the specifier of passenger railway services needed for the public good; the facilitator of some of the regulator's aims of promoting and developing rail services. He

1015
will secure the compliance of the minor players to the standards required for the carriage of passengers and he will exact penalties when they fail.
A most significant additional duty emerged for the franchising director at Report stage in another place. The Minister will he aware that Mr. Roger Freeman, who was the Minister in charge of the Bill, said:
"First, a duty should be imposed on the franchise director in respect of fares … clause 5 is probably the most appropriate for that to be introduced".
Clause 5 deals with the duties of the franchising director, a topic which we believe is something which can be looked at with pleasure. Mr. Freeman went on to elaborate three other matters:
"Secondly, … a duty in relation to fares exercised through the franchising agreement … some services will run outwith the franchising arrangements … existing railway services throughout Great Britain will be subject to franchises. Therefore, the agreements into which the franchising director will enter will cover all services".—[Official Report, Commons, 25/5/93; col. 814.]
Looking at the emerging picture, it is increasingly clear that the Government are blurring the distinction between the regulator's role, which includes protection of the public interest, and the franchising director's, which must also include the public interest in the way he specifies services. Charging fares is normally looked on as a regulatory matter, yet here it is to he with the franchising director. As set out in the Bill originally, that is not his job.
Although in a purist sense one could say that the licensing and regulation are totally separate from the procurement of services, in a complex industry like the railways the overlap becomes considerable. What the Government apparently propose in respect of fares shows that very clearly. Therefore, the amendment suggests that one new officer can discharge both functions, simplifying the tiers of bureaucracy with which operators and the public will have to deal. I believe that the Government need to produce good arguments to justify continued separation as proposed in the Bill. Therefore, I fully approve and support the amendment moved by the noble Lord, Lord Tordoff.
The Earl of Caithness: I am delighted to share the enthusiasm to cut down bureaucracy and streamline the new system, as put forward by the noble Lords, Lord Tordoff and Lord Carmichael of Kelvingrove. It will not come as any surprise to them that we thought very long and hard about the number and nature of new offices to be established under our privatisation proposals. Our aim has been to minimise the bureaucracy involved while grouping responsibilities in a way which makes good, practical sense. We concluded that the offices of the franchising director and the regulator should be separate because the functions of each office are different.
The regulator is to have oversight of the railway industry as a whole. He will be concerned with use of the network by train operators as well as the use of train services by passengers. He is to be responsible for licensing operators, for overseeing access agreements, for promoting competition, and for promoting the use of the railway network. His interests will cover freight as well as passenger services.
The franchising director will be concerned with the franchising of passenger railway services. He will have
1016
a budget for paying subsidy provided by the Secretary of State, and, using that budget, he will be responsible for securing the provision of socially necessary passenger railway services throughout the country, working jointly with the PTAs and PTEs in their areas.
The franchising director will naturally have an interest in seeing that access to the track is made available as cheaply as possible to the franchisees. His natural inclination would be to see trainpaths awarded to franchisees above all others—freight operators or new open access operators. The regulator, on the other hand, while recognising the importance of franchised passenger services, will be concerned with the interests of all rail users and in seeing that these are efficiently catered for across the board.
While we have accepted that some moderation of competition will be necessary to get franchising under way, our aim ultimately is to create a competitive market for railway services, with operators competing for custom and bidding for trainpaths. Only through this process will the railway be turned around so that the focus is on providing the services rail customer; really want. That is why it is important for the regulator to be independent of both the franchising director and of the Secretary of State.
If the posts were merged, non-franchise operators and indeed Railtrack would always have the suspicion that the director of railway regulation and franchising would favour his own franchised services over others' interests. I hope that the Committee will agree that that cannot be right.
There will be a long-term role both for the regulator and for the franchising director. As competition develops and as more operators come on to the network, his role in overseeing the terms of access will become more important. But even in the long term we accept that some socially necessary passenger services are likely to continue to require subsidy. Those services will be procured by the franchising director.
I hope that I have made it absolutely clear why, after a great deal of consideration and having looked at the argument for combining both posts, we feel that it is better to separate them.
9 p.m.
Lord Tordoff: I am grateful to the Minister for that interesting reply. I actually heard the word "promote" once or twice, which gives me some encouragement in relation to what I was saying about the development of the service. As the noble Lord, Lord Carmichael, and I have both said, this is a probing amendment and we shall clearly need to look at the reply. I begin to understand that there may be points at which the separation of services is of some benefit to the railway system as a whole, so perhaps I may leave it there for the moment. When we have read the Minister's reply and thought about it, we may come back on this point at a later stage. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause I agreed to.
[Amendments Nos. 5 and 6 not moved.]

1017
Schedule 1 agreed to.
Clause 2 [Rail users' consultative committees]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 7:
Page 2, line 29, leave out ("Rail") and insert ("Transport").
The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendment No. 8. A fair amount of the subject matter of these amendments was discussed in relation to earlier amendments which many of us believed were so substantive as to lead almost to Second Reading-type speeches. I am pleased to be associated in this amendment with the noble Lord, Lord Teviot, who will perhaps speak more fully than myself about it.
As currently drafted, the Bill proposes to abolish the existing CTCCs and TUCCs and replace them with committees, the titles of which confine them to matters relating only to rail travel. As the amendment clearly shows, we feel that that is too narrow and that the committees should be able to consider much wider transport matters. Wider functions in respect of the ferries, the Underground, and light rail and bus services are actually written back into the Bill at a later stage although at this early stage they appear to have been removed. We are concerned about the position of a number of transport users' consultative committees for the north east and the north west of England and for the Manchester Metrolink, as well as about the Scottish users' consultative committee. They deal with much wider forms of travel than purely the railway system. It would be an absolute tragedy if they should be lost in areas where there is a very good combination of rail, road, Underground and bus transport. In Scotland, there is also an important network of steamers on the Clyde and the sleeper trains which meet them.
The noble Baroness, Lady Stedman, has tabled important amendments to Clauses 68 and 69 to extend the remit of the committees to allow for open access to rail services also. We hope that those amendments will attract wide support.
It is interesting that the amendments proposed by the noble Lord, Lord Teviot, extend the powers of the TUCCs explicitly to bus users, with the primary roles of traffic commissioners and local authorities being, I believe, ingeniously preserved and built upon by his amendments. I hope that the noble Lord's amendments, to which he will speak much more fully than I have, will receive the deep consideration and support of the Committee.
Lord Teviot: It is a great pleasure to join the noble Lord, Lord Carmichael of Kelvingrove, in these amendments. I am sure that he will remember the many amendments that we shared in 1985. The noble Lord has considerably thrown me because I had thought that I was to move Amendment No. 7. I hope, however, that I am a sufficiently skilled parliamentarian—I rather doubt it—to condense my prepared speech and to leave out the points which the noble Lord mentioned. The first point on which I must take issue with the noble Lord is that I do not think that these matters have been discussed earlier.
1018
The first pair of amendments, to Clauses 2 and 3, reverse a change in title that the Bill proposes. Currently, we have a central transport consultative committee, the regional transport users' consultative committees and the London regional passengers' committee. I believe that passengers by all forms of land public transport in the UK need representation. The CTCC, TUCCs and LRPC have discharged the function admirably for railway users. The noble Lord, Lord Carmichael, mentioned Caledonian MacBrayne's ferry services in Scotland.
As the noble Lord mentioned many others also, I shall not do so, but shall move on to my next point and to the substance of the amendment. As the problems of congestion and environmental pollution increase, it will be increasingly important that we look at all forms of passenger transport together. Members of the Committee know that I take a close interest in the bus industry and in the excellent work that is carried out by the magnificent seven passenger transport authorities and executives in the main conurbations outside London. I believe that the Government wish the sort of entrepreneurial skills that have been shown by the managers of the newly independent bus companies to be applied to railway passenger services. Indeed, they hope that some of the bus companies will bid for franchises.
I am presuming that your Lordships are aware of the Reverend W. Awdry's railway stories, so I ask the Committee to consider the situation if Bertie's bus service successfully takes on Thomas's branch line. What better solution than Bertie and his colleagues delivering and collecting passengers to the stations along the route? But what if something goes wrong on the journey? If it is on the branch line it is easy. One contacts the users consultative committee which will weigh the complaint and take the necessary action. But if it is on the bus, there is no focus. The traffic commissioner may or may not be interested. The local authority may have an interest if it pays a subsidy. Surely that cannot be right. Passengers using Bertie's bus services to link with Thomas's branch line regard themselves as making one journey with several parts. One body should therefore represent their interests.
A more logical arrangement than that proposed by the Bill would be to retain the consultative committees as full transport consultative committees—in fact, as passenger consultative committees. They would perhaps discharge a wider function more effectively if responsible directly to the Secretary of State rather than to the regulator. At present, the CTCC and TUCCs report to the President of the Board of Trade. Clearly, they must work also with the traffic commissioner and local authorities. That is why in extending their functions to buses I have included those bodies in the proposed amendments to Clauses 68 and 69.
This is something upon which I hope the Government will wish to reflect. They may say that the market will ensure that the passenger is satisfied about open access rail services or commercial bus services, but many passengers may use fully commercial, subsidised or franchised services in the course of a single journey. The Government promote charters for

1019
consumers and encourage companies to gain quality accreditation under BS 5750. The setting up of transport consultative committees in the way that I propose gives passengers a watchdog that can act as a ginger group without in any way fettering the activities of any other bodies involved. Of course, many of the private bus companies have adopted the Bus and Coach Council's code of practice for dealing with complaints. Such procedures are adequate in the vast majority of cases. We hope that private railway operators will be similarly enlightened, but if problems cannot be resolved locally the wisdom and impartiality of bodies such as the CTCC and the TUCCs is invaluable.
The amendments are not, I am afraid, technically perfect. They are designed to allow the Committee to consider in more depth questions of consumer representation and, in particular, the need to place railways in the context of inland passenger transport as a whole. I hope that the Government will be persuaded to go more widely than the Bill does at present, so we may come back at a later stage with more comprehensive amendments.
Viscount Goschen: Amendments Nos. 7 and 8 seek to retain the old names of transport users' consultative committees and central transport users' consultative committee for the new consumer committees. I cannot recommend them to the Committee for several reasons. The new committees will differ from the old ones in certain aspects in terms of their constitutional and administrative arrangements. We have already expanded their role, and we intend to introduce amendments that will allow them to investigate all aspects of passenger services provided by franchisees, British Rail or on behalf of the franchising director. That will mean that for the first time the committees will be able to comment freely on all aspects of fares, levels of service, closures, franchises and any other matters concerning passengers.
I trust that the Committee will agree that to abolish the old committees and replace them with identically named ones would seem more than a little odd. The new names, which have the support of the committees themselves, will also better reflect their role. That is because, apart from some ferry services in Scotland, they will have no remit other than rail services.
I turn now to Amendments Nos. 115 and 119. Those amendments seek to require the central rail users' consultative committee and the rail users' consultative committees to investigate matters relating to bus services. They are therefore outside the scope of this Bill. Even if that were not the case, de-regulated buses are open to market forces and we therefore see no requirement for a statutory users' committee. I therefore urge the noble Lord, Lord Carmichael, to withdraw the amendment.
Lord Teviot: Before the noble Lord replies, I must tell my noble friend that I am wholly dissatisfied with that reply. I made various points, and I hoped to be given more information. It might be better to bring the amendments back on Report when matters are clearer and amendments can be more tightly drawn.
Lord Carmichael of Kelvingrove: I could not agree more with the noble Lord, Lord Teviot. Amendment No. 7 suggests that the committees should not be involved with rail only. I am grateful to the Minister for the further explanation that they will be involved with fares, services and franchises. That is an advance for which we are grateful.
But, transport, particularly in urban areas, is not just a matter of rail services. When one is dumped at Victoria or Euston Station, one wants to continue one's journey. We want the TUCCs to concern themselves with connecting services. Perhaps Euston and Victoria Stations are bad examples to use in this context. However, if one travels to Gourock, one wants to take a ferry across to Rothesay or Dunoon. The noble Lord, Lord Teviot, and I see the role of the TUCCs as not just being concerned with the railways but with the whole integrated transport system. That was what we obtained from good TUCCs. I agree with the noble Lord, Lord Teviot, that—
9.15 p.m.
Viscount Goschen: I was trying to stress that the word "rail" would better reflect the role of these bodies as we are principally talking about rail services. When I referred to "rail" I inferred that rail would cover the other services we are talking about which are rail based, for example the Underground. The London Regional Passengers Committee is an example of this point. The main thrust of our discussion concerns rail services. Therefore we feel that the term "rail" would better reflect the function of the committees we are discussing than the term "transport".
Lord Carmichael of Kelvingrove: I understand what the noble Viscount has said. Obviously we are not discussing bus services that do not run to railheads, for example. Therefore I do not follow the logic of the noble Viscount's argument. Like the noble Lord, Lord Teviot, I too feel that "transport" is a better term in this context. As I have said, I am grateful to the noble Viscount for explaining the fares, services arid franchises. He has gone a little further than we expected on that. If the noble Lord, Lord Teviot, is agreeable to my suggestion, I am only too happy to take this matter away and examine it carefully. Perhaps we may have an off the record discussion with the Minister on the meaning of this provision. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Clinton-Davis: I wish briefly to make a couple of observations. Clause 2(6) deals with the formation of the consultative committees. It will be the duty of the Secretary of State to appoint the chairmen after consultation with the regulator. What sort of criteria will the Secretary of State, together with the regulator, consider for the appointment of these chairmen? Are they to have specifically local knowledge and experience? I hope they will not be automatically supporters of the Conservative Party as happens with

1021
so many quangos these days. I hope I can rely upon the Secretary of State not to apply those kinds of criteria.
What then happens is that the regulator appoints between 10 and 20 other members but he has to consult with the Secretary of State and the chairman. What kind of experience will these people have? What kind of criteria does the Minister expect that the regulator will apply? I commend the Government on Schedule 2 which is associated with Clause 2. I particularly commend the Government for paragraph 9 of that schedule which has amended the Chronically Sick and Disabled Persons Act by ensuring that when appointing members of the committee regard should be given to the desirability of appointing people who are disabled or who have experience of work among the disabled, or who have knowledge of the special needs of the disabled.
That is a significant advance. I have not often been in the business of applauding the Government, but I do so on this occasion. I have made a probing request and I have applauded the Minister, who was not present while I was busy doing so. I hope that what I have said in the latter respect will be regarded by the Government as helpful.
Viscount Goschen: I should say to the noble Lord, Lord Clinton-Davis, that there is no statutory requirement as regards the appointment of the chairman. I thank the noble Lord for his kind remarks about paragraph 9 of Schedule 2 which amends Section 14(1) of the Chronically Sick and Disabled Persons Act.
Lord Clinton-Davis: I do not understand that reply. In the Notes on Clauses there is specific reference to the provision that the Secretary of State will appoint the chairman of each consultative committee. On what basis will that be done? The noble Viscount says that there is no statutory duty. Is there no obligation on the Secretary of State? If there is no obligation, what will happen? I do not understand what the Minister is saying.
Viscount Goschen: The obligation is to select the best man for the job.
Lord Clinton-Davis: Yes, but I do not understand why the noble Viscount says that there is no statutory duty. Of course there is a statutory duty.
Viscount Goschen: There are no statutory requirements as regards deciding who shall be the chairmen of the committees. The Secretary of State will take into account a wide range of factors, including the prospective chairman's knowledge of rail services.
Lord Clinton-Davis: The noble Viscount said: "The best man for the job". Are women excluded?
Viscount Goschen: Indeed, I made a politically incorrect remark. I should have said that the Secretary of State will choose the best person for the job.
Clause 2 agreed to.
Schedule 2 agreed to.
1022
Clause 3 [The Central Rail Users' Consultative Committee]:
[Amendment No. 8 not moved.]
Clause 3 agreed to.
Schedule 3 agreed to.
Clause 4 [General duties of the Secretary of State and the Regulator]:
Lord Wade of Chorlton Lord Wade of Chorlton moved Amendment No. 9:
Page 4, line 4, at end insert ("and having regard to the economic needs of rural areas").
The noble Lord said: This amendment stands in my name and that of my noble friend Lord Stanley of Alderley, who sends his apologies to the Committee for his absence but he supports all that I shall say on the amendment.
Clause 4 seeks to establish the general duties of the Secretary of State and the regulator. We thought it appropriate to add to that clause a responsibility of the Secretary of State and the regulator to be aware of the importance of the rural economy. I know that that issue was raised earlier, in particular by the noble Lord, Lord Ewing, but that addressed rural areas more generally. This amendment draws attention specifically to the economic needs of rural areas.
During recent years there has been a large upsurge in economic activity in rural areas, particularly as the agricultural industry has lost its importance in creating wealth in those areas. There has been a large movement of businesses and investments into rural areas. Therefore, the rail service is an extremely important part of providing services and products to those industries and, indeed, taking away the products. The whole concept of development in rural areas has been extremely important for people who have moved out of agricultural industries. It is particularly important in the more remote areas; for example, in Wales, Cumbria, on the East side of the country and in the South West.
The amendment seeks to ensure that the facilities and resources which are at present used to maintain those rail services in rural areas will be maintained. As I understand it, out of the total grant which British Rail takes from the Government, some £400 million per year goes towards maintaining those rural services. In addition, something in the order of £7 million comes from local authorities. I seek to ensure that those resources continue to be available and that the Government understand the importance of maintaining the economic viability of those areas. There is considerable anxiety in rural communities that the Bill may make the continuation of those services difficult if the Government do not ensure that that money continues to be available.
We wish to see the franchises operated in the rural areas, but, in order to do so, they will clearly need Government support. I should be most grateful if my noble friend would explain how that system will work, how he sees the franchisee being able to derive benefit from the grant that is now available to British Rail and whether he feels confident that the services that are now available to rural areas will continue under the new system.
I should like to ask my noble friend another question relating to this matter. I intend to withdraw

1023
Amendment No. 21 which raises a slightly different issue. Without going into that, perhaps I may draw attention to the fact that the electricity, telecommunications and water legislation made provision to ensure that charges in rural areas were not increased as a result of the extra costs involved in those areas. The Acts stipulated that there had to be an equalisation of charges. Rural communities are anxious that, under the Bill, the franchisee might well increase the rail charges both for freight and passengers in the more inaccessible areas. Clearly, it is important that the rates are not excessive and do not make it uneconomic to carry out businesses in those rural areas. I should be most grateful if my noble friend would deal with those matters. I beg to move.
Lord Clinton-Davis: I should like to support the amendment proposed by the noble Lord, Lord Wade. He is right to point out the importance of maintaining the rural economy, but it cannot be separated from the difficulties that will inevitably be faced by rural services. They face critical situations and there is always a shadow overhanging them. That point has been borne out by history over the past 30 years or so. The special problems that arise in relation to the Government's plans are that if the franchise director finds that he is running out of money —it is not impossible that that should be the case—he might find that he is not able to provide for rural lines which are the biggest loss-making area and which might therefore receive the lowest priority. He will have to work to a fixed budget and there will be strains on that budget. Consequently, there will be pressure to maintain rural services which may not be possible.
I do think that the costs of running rural services are likely to rise under the Government's proposals. Revenue could well be reduced. Extra subsidies are unlikely to be available to allow for that, at least on the scale that is required. The Government's plans in relation to the railways are to halve total rail spending over the next three years and there will therefore be less public money available for subsidy or investment. So, even if I were wrong about the last proposition, there can be little doubt that rural services are likely to come under threat.
The position is rendered even more difficult by the fact that there will be incentives to end the provision of cross-franchise services. Regional railway cross-country services have been something of a success in recent years. They have been considerably expanded and upgraded with new trains, but the trouble is that they fit rather badly into the different franchise areas and the danger is that administrative tidiness could well take precedence over passengers' needs. I understand that there is some talk of curtailing the East Anglia north-west services at Peterborough rather than Norwich in order to aid the franchising process.
I want to see the same objectives fulfilled as those outlined by the noble Lord, Lord Wade. You cannot glibly talk away the problems that arise because there is no doubt that rural services, sometimes representing those with the highest costs and lowest revenues, are
1024
likely to be particularly vulnerable. Therefore, the noble Lord's request is particularly apposite. I shall listen with interest to the Minister's response.
9.30 p.m.
Lord Redesdale: On these Benches we support the noble Lord, Lord Wade, as regards the amendment. It seems that rural economies can suffer greatly due to market forces. In times of recession, there will be less use of the railway services. Moreover, if those services are under the pressure of market forces, they are vulnerable to closure. We would like the Minister to give some assurance that such services will be safeguarded.
Lord Marlesford: I support my noble friend Lord Wade in his amendment. I should like briefly to make two or three points. First, we are now in are new era compared to the days of Beeching; indeed, it is a time when people are moving into the countryside rather than out of it. Therefore, the idea that it should be necessary to close rural services is not sustainable.
Secondly, I am afraid that there is a temptation for British Rail under its present management to run down rural services, often by subterfuge or by pure bad management. I already gave the example this afternoon of the way in which the names of stations served by British Rail services are being omitted from the timetable, allegedly in the name of saving cost. Thirdly, in the case of unmanned stations—and it is quite right that they should not be manned—it is high time that British Rail introduced a proper communication service so that passengers who use those railway stations know when a train is either delayed or cancelled. At present, they are often unaware of the situation. That is an astonishing fact, but, nevertheless, it is true.
I should like to say a word about the public service subsidy. My noble friend Lord Wade suggested that of the £1 billion plus which goes to British Rail some £400 million goes to rural services. It is most important that we should know exactly which services receive the money. Further, the Government have a real role in allocating that money. It is not fair to leave it all to local authorities. The Government have a ready-made body which, I suggest, could be used to advise them on the needs in rural areas. I refer to the Rural Development Commission. If the commission was asked to have as part of its mandate the provision of advice on where the rural services are needed, where they are under threat and the extent of services, I believe that that would be extremely valuable.
Finally, with the privatisation of rural services—I like to think of it as privatisation; I have some difficulty with the franchise concept—far from being less efficient and less easy to provide such services, I believe that there would be much more initiative involved in providing them. Of course. people would have to be paid where it is wholly uneconomic as, indeed, they are at present. That situation would not change. However, I believe that we could have much enhanced rural services which would actually supplement the growing interest that there is for people to live in and visit the countryside. In cost

1025
terms, I am sure that it would be a great deal less expensive as well as environmentally more desirable than building many extra roads in the country.
The Earl of Caithness: I am glad that my noble friend Lord Wade of Chorlton has raised such an important matter. I should like to take the opportunity to pay tribute to the work that he has done, especially in the North West, in making the economy so successful in the rural areas. The Government recognise the important role that the railways play in many rural communities. I stressed that fact in answer to the first amendment moved this afternoon when we touched upon a similar matter. That is why we have taken pains to make clear on a number of occasions the Government's commitment to continue to pay subsidy for socially necessary, loss-making services for as long as is necessary.
We have also made clear that the statutory closure procedures will continue to be extremely vigorous. There is absolutely no reason to believe that privatisation will lead to more closures. Therefore, our policies already recognise implicitly the economic needs of rural areas.
Having said that, I have difficulty with inserting an explicit mention of economic needs of rural areas as my noble friend commends to the Committee because all of the objectives which the amendment embodies are already covered in the duties in Clause 4 as drafted. The duty in Clause 4(1) (a) to protect the interests of users of railway services and that in Clause 4(1) (b) to promote the use and development of the railway network to the greatest extent economically practicable are both relevant to the needs of rural areas as they stand. To add a specific reference to rural areas might imply that we thought that urban areas were in some way less important, which I am sure is not the intention of my noble friend.
The noble Lord, Lord Clinton-Davis, raised the question of regional railways and cross-country services. Those will be subject to separate franchises. Franchise areas are not necessarily geographically specific because the franchises will inevitably overlap, as BR profit centres do at the moment.
I listened with interest to what my noble friend Lord Marlesford had to say. Again, he returned to the issue of greater transparency regarding the loss-making services. I have no doubt that franchising and the work of the franchising director will be a revelation to many of us who wish to know where the taxpayer's money is being spent at present.
My noble friend Lord Wade of Chorlton also looked forward to Amendment No. 21. I have to point out that the railways are different from the gas, electricity and water services. I believe that if he reflects upon it he will see that Amendment No. 21 would have all sorts of unforeseen consequences in distinguishing between first class and standard class passengers. That would lead to problems that would be capable of being remedied only by allowing a franchisee to try to provide the service that most people in that part of the world wanted. It might be that in some rural areas there is a greater demand for first-class services than in other rural areas. To try to
1026
make everything the same would inhibit the travelling public from being given the type of services that they deserve and which we believe the franchisees will be able to give them in the future.
I am grateful to my noble friend for raising this important point. I hope that I have been able to set his mind at rest.
Lord Wade of Chorlton: I am grateful to my noble friend for the way in which he replied to the amendment. There are a number of issues which I feel he did not address. I still do not understand how in practice a franchisee will be structured to be able to afford to run a rural railway and to make use of the funding which now goes to British Rail. However, in order to make progress, I shall not press the matter. Perhaps my noble friend will allow me to contact him and have a conversation with him about that matter. If that is satisfactory, there will be no need to take the matter further at Report stage. I beg leave to withdrawn the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 to 11 A not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 12:
Page 4, line 37, at end insert:
("(c) the interests of users and potential users of services for the carriage of goods by railway provided by a private sector operator, in respect of—

(i) the prices charged for carriage of goods by means of those services; and

(ii) the quality of the service provided,

in cases where the circumstances appear to the Secretary of State or, as the case may be, the Regulator to be such as to give rise, or be likely to give rise, to a situation where railway services are being provided where no competitive transport market exists.").
The noble Lord said: I put down the amendment two days ago and my noble friend Lord Kimball wished to support the amendment. Unfortunately, through a misunderstanding which I believe was entirely my own fault, my name was removed from the amendment and my noble friend Lord Kimball was left as its only supporter. That was a misunderstanding and I should like to move the amendment.
At Second Reading I said that I supported the full privatisation of British Rail but that, sadly, this Bill did not go so far as to permit that to take place. If we cannot have full-blooded privatisation, we must ensure that the present monopoly which is so damaging to free competition is not allowed to continue. On the passenger side that will be achieved by the franchising of certain lines to the private sector —a move which I welcome. That is a matter which is being greatly debated and will no doubt continue to be debated during the Committee stage.
However, with the rail freight industry the Bill fails in many respects to ensure that the highest degree of competition is promoted, in particular regarding the activities of the current Trainload Freight division of BR. Although I generally welcome the Government's announcement that Trainload Freight is to be split up, I wonder whether there will be enough competition if only three successor companies are created. Railfreight Distribution will remain intact as a monopoly carrier and, although open access to the track will be granted after April 1994, it is unlikely

1027
that that monopoly will be broken by new entrants for some considerable time after that. Therefore we must ensure that, if a monopoly situation persists in the future rail freight industry, the customer is protected.
There are a number of natural monopolies in the rail freight industry either through geographical position or economies of scale. That underlines the point that the end user—the rail customer—must be protected; and, as in other privatisations, the only person able to do that is the regulator.
The aim of the amendment is to permit the regulator to take a legitimate and healthy interest in the prices charged and the quality of service provided by a rail operator in circumstances where no competitive market exists. Where there free competition between different rail freight operators, the price charged by the track authority should be self-regulating. However, there is the possibility that some freight customers may still face the unenviable prospect of a situation where rail is the only mode by which goods can be moved and the number of operators offering their services is limited in the extreme. Stimulus may therefore need to be given to the promotion of "on the rails" competition in those circumstances. The regulator appears to be the only person able to promote it.
The amendment is not detailed. It does not seek in any way to prescribe in detail the approach that the regulator should adopt. That is for him to decide.
In effect, the amendment merely seeks to reinforce an amendment achieved in another place and tabled by my honourable friend the Member for Worcester which widened the scope of the regulator's activities to include a general commitment to the promotion of competition for the carriage of goods by rail.
After all, there is support among all parties represented in the Chamber for the principle that as much freight as possible should be encouraged to move from our heavily congested roads on to the railway system. The amendment will help that process in a small way. The amendment is simple. It protects the interest of the private sector against current and future monopolies. I believe that that ought to be a principle which the Government welcome. I hope that my noble friend will accept the amendment, or at least welcome the principle that underlines it. I beg to move.
The Earl of Caithness: I can understand that the rail freight customers, like any group of businessmen, are keen to protect their interests. I appreciate that their anxieties are genuine. However, I believe that the worries expressed by my noble friend are unfounded. I am glad to have the opportunity to explain the Government's position to the Committee.
It is the Government's intention to foster within the UK a competitive, liberalised rail freight market which gives customers a genuine choice and which allows the industry to develop away from the strait-jacket of nationalised industry controls. The experience of the US rail freight industry demonstrates how rail freight can prosper when freed from heavy-handed regulatory intervention. We believe that deregulation is vital to encourage new rail freight operators to enter the market, as well as stimulating
1028
the privatised ex-BR businesses to offer a more efficient and competitive product. That is not to say that there should be no protection for customers, however powerful they may be (and the larger rail freight customers are very powerful indeed).
First, Clause 4(1) (a) places the Secretary of State and the regulator under a duty to exercise their functions in a manner which they consider best protects the interests of users of railway services. That general duty naturally covers rail freight customers as well as other users of railway services.
Secondly, we have developed a track access regime which requires the regulator to approve the terms of all access agreements with facility owners. This means that Railtrack will not be able to exploit its market power unfairly when negotiating with rail freight operators and customers. Access agreements will be based on genuine commercial negotiation.
However, my noble friend's amendment seeks to go further by reinforcing the protections I have just outlined. I do not believe that the circumstances of rail freight justify such additional provision. Negotiations between customers and freight train operators will be conducted on a wholly commercial basis, in the same way that other businesses negotiate with road hauliers and shipping lines. There are two key points to bear in mind. First, as I mentioned earlier, the whole thrust of our policy is to stimulate the development of a competitive rail freight market. That is why we are splitting BR's trainload freight and contract services business into three entirely separate companies for privatisation. That is why we are introducing unfettered open access to the railway network for rail freight operators. If a rail freight customer does not like the price he is offered, or the quality of service he is getting, he will be entirely free to approach an alternative supplier and get a competitive quote.
Secondly, in the unlikely case that there is no competitive market for the transport of goods by rail in a particular locality, and the customer feels tied to rail, then existing competition law will come into play. I remind the Committee that we have extensive anti-monopoly legislation in the United Kingdom. If the Director General of Fair Trading has grounds for believing that a firm (including a private rail freight firm) has more than 25 per cent. of the market—which might mean the market in a particular locality—and is operating against the public interest, he can make a reference to the MMC. If the MMC report confirms monopoly abuse, the firm can be required to stop the offending practices.
I am sure the Committee will agree that this combination of a liberalised rail freight market, the general duties of the regulator and Secretary of State to protect the interests of railway users, and the existing framework of UK competition law will provide adequate protection for rail freight customers without the need for specific additional duties on the Secretary of State and the rail regulator.
9.45 p.m.
Lord Brabazon of Tara: I am grateful to my noble friend for that reply to the amendment which I moved. I believe that we all genuinely wish to see an increasing

1029
amount of freight moved by rail and, therefore, it is essential that potential customers for moving freight should have the best terms made available to them. I liked the words my noble friend used about competition liberalisation in the rail freight market. I take the point about existing competition law and the powers of the Director General of Fair Trading which exist now and will continue to exist under the new regime.
The difficulty that I raised of the alternative supplier was answered by my noble friend. I wish to withdraw the amendment. I shall study carefully what my noble friend said and if I have further comments to make on the issue, I shall come back at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Grantchester): If Amendment No. 13 is agreed to, I cannot call Amendment No. 14.
The Earl of Caithness The Earl of Caithness moved Amendment No. 13:
Page 5, line 2, leave out from beginning to ("in") in line 13 and insert ("in exercising the functions assigned or transferred to him under this Part—

(a) until 31st December 1996, to take into account any guidance given to him from time to time by the Secretary of State;

(b) to act in a manner which he considers will not render it unduly difficult for persons who are holders of network licences to finance any activities or proposed activities of theirs in relation to which the Regulator has functions under or by virtue of this Part (whether or not the activities in question are, or are to be, carried on by those persons in their capacity as holders of such licences); and

(c) to have regard to the financial position of the Franchising Director in discharging his functions under this Part. (4A)").

The noble Earl said: I beg to move Amendment No. 13, and, with the leave of the Committee, speak to Amendment No. 15.
The purpose of these amendments is to strengthen the financial duty of the regulator in relation to holders of network licences, of which Railtrack will be by far the most important. The financial position of Railtrack will inevitably be significantly affected by the actions of the regulator, both through his licensing functions and through his approval of access agreements. The Government have therefore always accepted that there should be a duty on the regulator relating to the financial position of Railtrack. In the current text of the Bill this duty is expressed as a requirement to have regard to the financial position of holders of relevant licences.
The first amendment seeks to strengthen this duty by requiring the regulator to do more than have regard to Railtrack's financial position: he is to act in a manner which he considers will not render it unduly difficult for Railtrack, and other network licence holders, to finance their activities. There are thus two key differences from the existing duty: the requirement to act in a particular way, not just to have regard to the financial position, and the specific reference to financing of activities. We believe that the changes will significantly strengthen the duty.
The remainder of the amendment relates to the coverage of the duty in relation to Railtrack's activities. The intention is that the duty on the regulator should apply to persons holding a network licence, but that it should apply to any of the activities of those persons affected by the regulator's functions, which may be wider than the licensed activities. Thus, in the case of Railtrack, the duty is to apply in relation to all its activities which might be affected by the regulator's decisions, including for example its role as owner of stations.
The rest of Amendment No. 13, and Amendment No. 15, are concerned only with the arrangement of the subsections of what is currently Clause 4(4). Since Amendment No. 13 requires some re-organisation of Clause 4, it is more convenient to make what was Clause 4(4) (c), the duty in relation to the interests of disabled persons, a new subsection of Clause 4. I beg to move.
Lord Clinton-Davis: I thank the Minister for explaining the rationale behind the amendment. I shall have to consider very carefully what he has said in this regard. I should like to raise with him a few points that are germane to this specific amendment. First, the amendment refers to the cut-off date, 31st December 1996, beyond which it will not be necessary to take into account the guidance from the Secretary of State. I believe I am right in saying that. If the cut-off date is to be 31st December 1996, I believe that it is far too soon after the franchising process has begun to work for guidance—which will cover matters of great importance such as the regulation of open access services to compete with franchises—to be rescinded. This is a matter which we would have alluded to. It depends on whether this amendment is negatived. In the unlikely event that it is, I understand that we cannot deal with Amendment No. 14, when my noble friend Lord Carmichael would have gone on to speak about the cut-off date in rather more detail. But we may return to that on another occasion.
Periods of four years are commonly mentioned in relation to the completion of the franchising process. That means that only those franchises which are completed before the cut-off date receive protection. I believe I am right in making that assumption.
The revised subsection (b) would appear to have the effect of tilting the balance between the need for operators to finance their operations—which are designed to maximise their profits, or certainly to make profits—and the need for the franchising director to maximise the benefits that he gets from his resources in favour of the operator. I wonder whether the Minister will be able to comment on those points.
Will the Minister indicate why subsection (c) does not also extend to the financial position of the PTAs and the PTEs, which under Clause 29 will be joint parties with the franchising director in letting a number of franchises. Why is their financial position not to be taken into account?
There is also a geographical dimension to which I would make reference. ScotRail, or the south-western lines of Network SouthEast, are early franchises to be protected; but services in cities such as Birmingham, Manchester, Leeds and Liverpool will not receive

1031
similar treatment simply because their franchises are not completed until after the rather magic date of 31st December 1996. I think I can leave it at that for the time being, and I shall be interested to hear what the Minister has to say.
The Earl of Caithness: I am glad to have the opportunity to respond to the noble Lord, and in particular to his concern regarding 1996 which has perhaps led to one or two misunderstandings that he might have had.
The Government wish to establish the regulator as an independent person carrying out his functions in the way that he thinks fit, and not subject to a continuing requirement to look over his shoulder to see what the government of the day want. That is the way that other regulators have been established. I believe that a considerable degree of independence is essential if they are to carry out their functions properly.
The only reason for the requirement concerning guidance from the Secretary of State for the first three years is to give the Secretary of State a way to provide guidance about the launch of the new regime, which the regulator is then required to take into account. Such a power was not needed in other major privatisations, partly because the transition to the new regime was shorter and partly because the other privatisations in general did not involve the establishment of a new financial regime in which the Government have a continuing involvement.
For those reasons we thought it right that the regulator should be required to take into account formal guidance from the Secretary of State during the establishment of the new regime. But we believe that it is both unnecessary and undesirable for the Secretary of State to have a continuing power to issue formal guidance. That would inevitably compromise the independence of the regulator. That is why we have a cut off date of 31st December 1996.
In the special circumstances of the new dimension for railways, it is a good idea that the Secretary of State has a modus operandi for getting information to the regulator. But it is also important that the regulator remains an independent person. We believe that a timescale to 31st December 1996 is the right way.
The noble Lord asked me about franchises and whether they would or would not be protected. They would all be under the same protection of the regulator and the franchising director. The difference will he that, after that period to 31st December 1996, the Secretary of State will not be able to issue directions to the regulator. The system will be up and running. It will be going forward on a proper and good basis. Therefore the oncoming franchises will be treated by an independent regulator. But the system and the way in which these things happen will have been established.
With regard to PTAs and PTEs, we felt that as they are funded in a different way, it would not be right to have the same amendment as we have for the regulator with regard to Railtrack. I hope that that answers some of the noble Lord's points.
Lord Clinton-Davis: I shall read with great care what the noble Lord said. These are important matters. However, I am by no means convinced about the rationale behind the cut-off date. I am not at all sure that sufficient experience will have been accumulated by that date. Indeed, earlier we debated matters which were highly germane to the cut-off date relating to the concessionary fares, discount fares and so on, where the guidance to be given by the Secretary of State to the franchise director is rather critical.
The time that is envisaged is just about three and a half years away—from the time that the operation begins it will be much less than that and perhaps only a couple of years. I do not believe that the Secretary of State has any reason for optimism to believe that within that time there will have been a sufficient accumulation of experience and knowledge to enable the system to continue on its own revs. That is perhaps a matter to which we can return later. The Minister stated what he believes, and I have stated what 1 believe. 1 am perfectly content to leave the matter there for tonight.
The Earl of Caithness: I shall just draw attention to the difference between the duties on the regulator and the duties on the franchising director. I am not sure whether the noble Lord slightly confused them.
Lord Clinton-Davis: No, no. It is not the same thing.
On Question, amendment agreed to.
[Amendment No. 14 not moved.]
Viscount Goschen Viscount Goschen moved Amendment No. 15:
Page 5, line 15, leave out second ("to") and insert ("tho Regulator shall").
On Question, amendment agreed to.
10 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 16:
Page 5, line 16, at end insert:
("( ) No statutory instrument containing an order under subsection (4) above shall be made unless a draft has been laid before and approved by resolution of each House of Parliament.").
The noble Lord said: We hoped that Amendment No. 16 would be taken with Amendment No. 14, but as the earlier amendment moved by the Minister caused Amendment No. 14 to be omitted, we have to move Amendment No. 16. The amendment states:
"No statutory instrument containing an order under subsection (4) above shall be made unless a draft has been laid before and approved by resolution of each House of Parliament".
We consider the question of guidance by the Minister to be too important merely to be left to the Minister without coming before the House. Our debates have shown how important it is that the views of those in the rural areas should be heard. Perhaps in bigger conurbations there are other ways of making the Minister aware of what should happen in terms of a statutory instrument. But we believe that any guidance that the Minister gives to the franchisee or to the regulator should have the authority of Parliament behind it in a positive and not in a negative way. I ask the Minister to give an indication that he will consider

1033
an approved resolution of each House, or give a reason why he thinks that that is unnecessary. I emphasise the great importance of hearing a voice, particularly from the rural areas, on this matter. I beg to move.
The Earl of Caithness: I shall have to study with care what the noble Lord, Lord Carmichael of Kelvingrove, said. I did not understand why he was moving the amendment. It relates to an order and was consequential upon Amendment No. 14, which specifies that there be an order relating to the date of 31st December 1996.
The noble Lord said that he wanted the advice that the Secretary of State is going to give to the regulators to come before Parliament. That is a different question. Given its nature, the advice will need to be flexible and will be for guidance rather than a specific instruction. Perhaps the noble Lord will allow me to attempt to give him a better reply at a later stage.
Lord Carmichael of Kelvingrove: I am grateful to the noble Earl. In a perfect world the advice of the Minister may be enough. But there may not always be a perfect situation. Therefore, the Secretary of State may feel that he needs something a little more firm. He may need to go as far as to obtain a regulation. I do not believe that everything works only on nods and winks. Some matters are too important for that. At the same time the Secretary of State may need more power. If he obtains that power it is vitally important that it should be by positive rather than by negative resolution.
That may have clarified the point that I was trying to make. It is complicated by the acceptance that Amendment No. 14 could not be moved. However, I hope that the Minister will consider the point and I look forward to his explanation. We can then see whether there is any way of achieving the desired effect from my side and from the point of view of the people who asked me to table the amendment in terms of control of the franchisee by the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 17 to 18A not moved.]
On Question, Whether Clause 4, as amended, shall stand part of the Bill?
Lord Renton: I have not given my noble friend notice of this but I do not think that he will suffer as a result of my not giving notice. Of course I would not challenge Clause 4 because I am in favour of stating the principles on which those charged with responsibility under the Bill shall be given duties under it. But I would ask my noble friend to look at the bottom of page 3 where he will find in subsection (1):
"The Secretary of State"—
who, by the way, can be challenged in Parliament—
"and the Regulator"—
who cannot be challenged in Parliament—
"shall each have a duty to exercise the functions assigned or transferred to him"—
that means, in this case, each of them respectively, I hope and believe; the word "him" cannot refer to one of them only—
1034
"under or by virtue of this Part in the manner which he"—
that means each of them respectively—
"considers best calculated",
to do the various things set out. But the use of the expression "which he considers best" means that neither of them can be challenged. The Secretary of State might be challenged a little in Parliament but he has only to say, "This is what I think is best", and no one can undo that. I should have thought that it is in the public interest that, instead of the expression, "which he considers best", the subsection should read, "which is considered best in the public interest". Then it would be open to people who feel that the admirable aims which are then set out in paragraphs (a) to (g) had not been fulfilled to take the matter to the court.
I do not ask my noble friend for an answer at this moment on these points. That would not be fair. But I ask him to consider between now and Report stage whether this is the best way of expressing the heavy responsibilities which are required.
The Earl of Caithness: I take careful note of what my noble friend Lord Renton has said. I should like to consider, when I see the Official Report, what he has said and discuss it.
Clause 4, as amended, agreed to.
Clause 5 [General duties of the Franchising Director]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 19:
Page 5, line 46, at end insert:
("( ) to promote the interests of users of passenger rail services and improve the quality of services available to them;
( ) to promote good working practices, training and conditions of service for railway staff in the interests of providing safe, high quality services;").
The noble Lord said: I move this amendment on behalf of my noble friend Lord Ewing. The amendment is rather more broadly based than those we have had before in that it seeks to ensure that the franchising director shall have as his first priority the interests of passengers and the quality of the services they receive. Therefore the two new subsections are placed ahead of those dealing with the guidance to be given by the Secretary of State and financial matters.
Some Members of the Committee will remember the experience of bus deregulation which has shown that there are great dangers of subsidised service contracts being determined almost exclusively on the basis of price. Few tendering authorities have been able, within the framework of the Transport Act 1985, to put quality control above price. The result is that many contracts are operated by old vehicles and by staff who seem to receive little or no training. In some of the areas that I know where there has been privatisation the buses are extremely old and are frequently very dirty. They are quite unlike the special franchise buses that one sees in London. They have been variously named. One or two of them are of a very high standard in a different way.
This amendment is designed to focus attention on the need to pursue the objective that franchises are let on the basis of quality as well as price. Part of that is to ensure that conditions such as training and the

1035
pensions of the railway staff employed by the franchisees are conducive to the provision of safe and high quality services.
I said before that bus deregulation has shown us a great deal. It has put great pressures on staff, particularly those who were used to the old service ways rather than the purely commercial methods. There are frequent complaints from passengers in areas which I know personally outside London about staff attitudes and the ways in which the services are operated.
I hope that the Minister will take on board that this is a genuine attempt to look at the problems that can arise with the franchise director if he does not take this part of his duty of passenger satisfaction very seriously indeed. I beg to move.
Lord Redesdale: I support this amendment. I believe that in one respect it goes to the heart of the privatisation problem in that it is not a vertical system. Sixty per cent. of the costs will be spent on the track. If that money is tied up in that way and more money is tied up in the leasing of the railway stock—most of which will be the cheapest which the franchisees can lay their hands on and the oldest stock—it means that with any franchisee who is then going to try to save money (which many management buy-out companies will have to do) the largest unit cost on which he can save will be labour.
The difficulty is that, if one cuts back on the number of people working on the railways, it will lead to problems of safety. In addition, it will probably lead to a service which is not of benefit to the customer. We hope that the Minister will deal with these points when he replies.
The Earl of Caithness: Our proposals for franchising are based on our desire to see better services on offer to passengers. This will come, we believe, from the involvement of the private sector and a closer focus on the passengers' interests. It will clearly be necessary to structure franchise agreements in a way that ensures that franchisees are focused on their customers' requirements, and that provides them with the flexibility to respond to those requirements but includes such safeguards as are necessary to protect the passengers' interests. We are, for example, proposing amendments which will place a duty on the franchising director in respect of fares control.
I am not convinced that it would be right to impose the sort of duties Amendment No. 19 envisages in Clause 5. The duties in that clause have deliberately been set at a high level and relate to two areas: the fulfilment of objectives set for the franchising director by the Secretary of State and the need to ensure that payments made by the franchising director are such as he reasonably considers will achieve those objectives economically and efficiently.
The objectives the Secretary of State will set will go into considerably more detail than would be appropriate on the face of the Bill. We have already made available a first draft of how these objectives might be framed in a paper provided to the Standing Committee which considered this Bill in another place. I have made sure that copies are available in the
1036
Library here. That draft made reference to the need for the franchising director to protect passengers' interests and to promote the use and development of the railway network.
When the franchising director is appointed, subject. to this Bill becoming law, the objectives set by the Secretary of State will be a public document. The objectives will be published and a copy will be laid before Parliament for noble Lords to scrutinise.
The franchising director will clearly need to have regard to the interests of rail passengers and the quality of service on offer when granting franchises and monitoring franchisees' performance. He will be looking for service improvements to come from improved efficiency, innovation and better responsiveness to customer demand. He will also need to have regard to the value for money offered by franchisees, and would need to consider carefully proposals for improved quality which would result in higher fares or increased subsidy.
The franchising director might also wish to take an interest in the working practices of franchisees, in so far as these impact on the franchisees' ability to deliver the specified service. But I am not convinced of the need for him to have a duty on the face of the Bill in respect of this area.
The noble Lord's amendment also mentions training. Training will of course be critical for staff carrying out safety-related functions. But this is not a matter for the franchising director: he has no safety functions. Training was covered in some detail in the Health and Safety Commission's report and is a matter for the Health and Safety Executive. An operator's arrangements for ensuring his staff have adequate training will be dealt with in the railway safety case. I believe that answers the point raised by the noble Lord, Lord Redesdale. It is not a question of the licence. This comes into the safety case because, as I said at the beginning of our discussions today, safety is of prime importance. That is why the 37 recommendations have been agreed by the chairman of British Rail and the Government. These arrangements will be dealt with in the safety case, with the Health and Safety Executive overseeing the whole operation.
10.15 p.m.
Lord Carmichael of Kelvingrove: I am grateful for the full explanation that the Minister has given. I believe that most of his examples were accurate. The point that the noble Lord, Lord Redesdale, and f have been trying to get over is that everything is not perhaps as the Minister had thought. I referred earlier to the example of bus franchises in London. which is the one example that I know is different. The quality of the service provided, of the staff and the vehicles has been extremely high. I have visited a number of other areas of the country—not only in Scotland—where, sadly, staff morale looks very poor. The quality of the vehicles used is also very poor. The whole feeling is of neglect. That is what we are trying to prevent by our amendment.
I shall read the Minister's reply with great care. But I hope that he will realise that what we have been

1037
concerned about is true of many franchises. I do not know how railway carriages could become "rundown", but I believe that, especially in rural areas, they may deteriorate and the services provided may be much poorer than is the case now under British Rail, even with all the criticism that it now receives. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 20:
Page 6, line 9, at end insert:
("(c) to promote the use by persons not resident in the United Kingdom of the rail network, by ensuring there are available for purchase by them documents entitling them to free access to all railway services provided through a franchise agreement").
The noble Lord said: This is a probing amendment. We touched on this issue earlier when the noble Baroness, Lady Stedman, referred to something that I had said previously about BritRail. She commented on the importance of BritRail in promoting, in particular, the inward tourist industry in the United Kingdom. Railcards for inward tourists can only be purchased abroad, as I understand it; they cannot be purchased in this country. They provide for a wide area of travel on our rail network and have proved extremely successful. Consequently, I should like to know how, in practice, that type of facility is to be made available in future.
The Minister said earlier that this matter would not be within the remit of the franchising director. Consequently therefore there will be a problem for tourist organisations. With whom will they negotiate? Who will be responsible for promoting abroad the United Kingdom's rail services? Is it to be left to that large number of franchisees merely to get together in an umbrella organisation to do that? It is a great pity that the services which can be advertised successfully abroad by British Rail will not be able to be continued in the same way.
What assessment have the Government made through discussions with the tourist industry to see what impact their proposals will have upon that industry, and, in particular, in relation to the survival of something like the BritRail card? The Government cannot say, "Well, it will all take care of itself". Things do not happen like that. There is an existing facility. It will not be easy to replace it, particularly with the proliferation of different interests involved. The one thing about franchisees is that they do not have a common interest, although I accept that it may be said that they have a common interest in attracting tourism to this country. There, the situation disintegrates a little, because they will not have identical interests in promoting the services of other franchisees.
I shall refer to the impact of rail services in terms of the definition of social need. Does the impact of rail services on the tourist industry fall into that category? I suspect not. Will such services be included in the ScotRail franchise? I do not know whether the Minister can reply to that question. The situation in the west of Scotland, for example, as I understand it, is that a number of seasonal summer services are operated by BR. They are important to the economies
1038
of the areas in which they operate. They also have the happy advantage of being able to provide tourists with rail rather than road facilities. That is an important factor, not merely from the point of view of the rail system itself, but in terms of the environment and so forth, a matter to which noble Lords alluded in earlier debates.
I have raised a number of questions in relation to the amendment. I do not propose to test the feeling of the Committee on this matter, but I shall be interested to hear what the Minister has to say.
Lord Mountevans: I am grateful to the noble Lord, Lord Clinton-Davis, for raising this topic which is one upon which I touched on Second Reading. Tourism is an undoubted success. I know that my erstwhile colleagues in the British Tourist Authority greatly appreciate the support from British Rail which they have enjoyed for many years. One of the easiest products to sell abroad is the BritRail pass. I know, because I have done the selling, if not the physical booking.
The ability to travel unrestricted all over the BR network is an attractive one. The card is a product we must retain, not least because we compete with many other countries or even groups of countries which offer similar products. It is a lucrative product for BR, or for the railways, as we shall shortly call them, I suppose. In general, tourists make use of off-peak capacity. It is not easy to think in terms of BR services specifically and uniquely provided for foreign visitors. The fact that such visitors travel the length and breadth of the land is to be welcomed, because, on the one hand, that relieves the pressure on London and, on the other, it spreads economic benefits to those areas which need all the economic help that they can get. Here one is reminded of the amendment moved earlier this evening by my noble friend Lord Wade of Chorlton.
It could be argued that there is a revenue distribution problem, but the mechanics for dealing with it are already in place, as my noble friend the Minister conceded on Second Reading. All the advantages of the BritRail pass apply just as strongly to InterRail cards which are bought by much younger people. The added tourism benefit of the InterRail card is that the young tourist of today is the repeat visitor of tomorrow. I share the anxieties expressed by the noble Lord, Lord Clinton-Davis, about how the product will be assembled and sold. I, too, look forward to hearing my noble friend's answer.
Lord Redesdale: I wish to speak to this amendment as some years ago I travelled the length and breadth of Europe on an InterRail card. That was a thoroughly enjoyable experience. That is a system that has been agreed among state run railways. How will the franchise operators in this country reach an agreement that will allow this service to continue? Will citizens of this country be able to continue to make use of the InterRail service if it is no longer a reciprocal service? Will the Channel Tunnel be open to InterRail cardholders to enable them to sample the delights of cities such as Edinburgh, York or even Newcastle?
The Earl of Caithness: The Government are certainly keen to promote the use of the railway whether by UK residents or incoming visitors. This is already reflected in the regulator's duties in Clause 4. Similar objectives are likely to be placed on the franchising director through guidance given to him by the Secretary of State under this clause. The Government also recognise the value of the railways to travel, trade and tourism. In response to the report of the Transport Committee in the other place, the Government pointed out that marketing rail services to incoming tourists is a substantial business. Sales of the BritRail pass alone represent some £15 million a year. The Government are confident that such an arrangement, which makes sound commercial sense for BR now, will be equally attractive to future operators. I imagine the private sector would be only too keen to increase its revenue. If the BritRail card can produce that amount of money now, it is obvious that the private sector would wish to take advantage of it. The Government therefore propose that it should be for the rail operators to develop appropriate arrangements for the future.
I shall now reply specifically to the points raised by the noble Lord, Lord Clinton-Davis. The rail operators will be able to co-ordinate their arrangements through the joint industry arrangements, as necessary, in conjunction with the travel and tourism industry. Detailed arrangements to facilitate this are under discussion. Until those have reached a conclusion I am unable to go further. I take the noble Lord's point about the summer services of ScotRail. I believe that once ScotRail is franchised, it will want to provide summer services for residents of the United Kingdom and for tourists that are as good if not better than the present services.
Lord Clinton-Davis: I have listened to what the Minister said. I am not entirely satisfied with his reply but we shall have the opportunity to return to this matter at a later stage if necessary. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 21 and 22 not moved.]
Clause 5 agreed to.
Clause 6 [Prohibition on unauthorised operators of railway assets]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 23:
Page 7, line 8, at end insert:
("( ) Nothing in this section shall be deemed to refer to London Regional Transport or railway undertakings owned and operated by any Passenger Transport Executive.").
The noble Lord said: The Bill before us is exclusively concerned with the break-up and disposal of the assets and services of the British Railways Board. However, it appears that the Government were faced with a problem while drafting the Bill in that an exclusively "British Railways" piece of legislation would be deemed hybrid and require a more cumbersome parliamentary procedure. To avoid this problem the Bill's scope was widened theoretically to embrace all railway undertakings even though the Government have (as far as we know) no intention at
1040
present to interfere with London Underground, the PTE-owned services like Glasgow Underground and Tyne and Wear Metro or, indeed, any other railway undertaking in Great Britain.
The legislation as drafted will therefore require the Government either to go through a laborious process of licensing every railway company in the land—including preserved steam services in private ownership—or, more likely, use the powers in Clause 7(2) (a) to exempt everyone except British Railways and prospective franchisees from the obligation to be licensed. If such an exemption were to be made, the Government would have effectively brought to Parliament, under the Public Bill procedure, a measure which in reality is a piece of hybrid legislation. This is quite a serious parliamentary point. I hope that the Minister will deal with the matter. We should prefer to have a British Railways Bill rather than a Railways Bill. I beg to move.
10.30 p.m.
The Earl of Caithness: Our policy towards London Underground and other public sector urban arid suburban railways was set out in a paper on exemptions which the Department of Transport published on 24th May of this year. Although the noble Lord, Lord Carmichael, made a persuasive case for his amendment, I believe that the situation is rather more complex than he realises.
We intend to exempt most of the activities of these railways from the licensing requirements in the Bill, as well as from the access and franchising requirements. But there are a number of places where London Underground, in particular, shares track or stations with British Rail; and it may be necessary to issue a limited licence to London Underground in respect of these particular facilities. This will be possible using the licensing and exemption powers in the Bill; but if the licensing powers did not apply then this could create difficulties.
The overlap between London Underground and British Rail means that the matter is not so simple as the noble Lord portrayed it when moving the amendment. The overlap means that it is not possible to exempt everything other than British Rail. When we considered this difficult problem, we thought it best to deal with the matter by way of the exemption procedure.
Lord Carmichael of Kelvingrove: I am grateful to the Minister. If I followed his explanation properly, he seemed to suggest that his advisers and he had been aware of the hybridity problem when the Bill was drafted. I thought that I had mastered what was meant by hybridity when the Aircraft and Shipbuilding Industries Bill passed through another place many years ago. That was a piece of parliamentary history. One speaker said that the Bill was not hybrid and another speaker said that it was. In fact, it was necessary to change part of that Bill. Is the Minister aware that there is a sneaking possibility of hybridity in this legislation?
I know that the learned Clerks of both Houses love to get their teeth into the question of hybridity.

1041
Perhaps the Minister will confirm that he is at least aware of the question of hybridity and that is why the method which was chosen was chosen in order to avoid that. In the meantime, I shall be happy to read the Minister's explanation and consider whether we should return to this matter at the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 [Exemptions from section 6]:
Baroness Stedman Baroness Stedman moved Amendment No. 24:
Page 7, line 47, at end insert ("and the Regulator shall in every case send a copy of the notice to the Central Committee and to every consultative committee likely to be affected by the grant of the licence exemption.").
The noble Baroness said: In moving this amendment, I shall speak also to Amendments Nos. 26, 35 and 37 to 39. This group of amendments deals, in Clauses 7 to 23 of the Bill, with licensing, access agreements and franchising, all of which are vital components of the operation of the proposed arrangements.
As the Bill stands at present, there is no reference in those clauses to the central consultative committee or the new consultative committees. I believe that there should be a requirement that those committees are consulted at appropriate stages to ensure that the needs and wishes of consumers are taken into account.
I am sure that it would be extremely helpful to the Committee if the Minister found himself able to give a commitment that he expects these committees to be consulted on the issues.
The first of the amendments, Amendment No. 24, places an obligation on the regulator in Clause 7 to give notice before granting a licence exemption and requires him to consider the representations and objections to any such proposal. In so doing, he is obliged to publish a notice in such a manner as he considers appropriate for bringing the proposal to grant a licence exemption to the attention of the
"persons likely to be affected by the grant of the licence exemption".
The clause does not specify anywhere who are the
"persons likely to be affected by the grant of the licence exemption".
This amendment seeks to ensure that the regulator includes the Central Rail Users' Consultative Committee and the other relevant consultative committees among the people who are to receive a copy of his notice, so that the statutory bodies that are set up under the Bill to represent the rail users have the opportunity to consider and comment on any appraisal by the regulator to grant the licence exemption.
The same applies to Amendment No. 26 which amends Clause 8 specifying the circumstances in which and the procedure by which the Secretary of State and the regulator can grant the licences authorising a person to be the operator of the railway assets specified in the licence.
Before granting a licence, the Secretary of State or the regulator must give notice and is required to consider objections to any such proposal. In so doing,
1042
they are again obliged to publish a notice in such a manner as they consider appropriate for bringing the proposal to the attention of the persons likely to be affected by the grant of the licence. Again, it is not specified who are the
"persons likely to be affected by the grant of the licence".
The amendment seeks to ensure not only that the Secretary of State or the regulator includes the CRUCC and the relevant consultative councils among the people who receive a copy of his notice, but that they also receive a copy of the licence which it is proposed to grant. That would ensure that the statutory bodies set up under the Bill to represent the rail users have the opportunity to consider and comment on any proposals to grant a licence as well as the proposed terms of the licence.
In the same way with Amendment No. 35 amending Clause 10, there are obligations that the regulator should give notice before making modifications to a licence and be required to consider representations and objections and, in so doing, is again obliged to publish a notice and bring it to the attention of the persons most likely to be affected.
It seems to me that the persons most likely to be affected are again the central consultative council and the other councils. That would ensure that those who are the watchdogs and guardians, as it were, of the consumers' interests are the likely bodies to be included and should be mentioned on the face of the Bill.
Again, with Amendment No. 37 regarding Clause 11, we have the same vague phrase to the effect that the attention of the persons likely to be affected should be drawn to the obligation on the regulator to publish the particular
"reference or variation in such manner as he considers appropriate".
It is important that the statutory bodies that are set up under the Bill to represent rail users are aware of any reference in this instance to the Monopolies and Mergers Commission on matters relating to the modification of licences. They have in the past made submissions to the MMC when the commission has undertaken investigations into various aspects of British Rail services. It would be wrong for the regulator to be able to make a reference to the MMC without being obliged to notify the new statutory bodies which represent the passengers.
Amendment No. 38 to Clause 12 again refers vaguely to those persons who are likely to be affected. I am sure that, if the provision referred to the statutory bodies, it would be much plainer to everyone. The amendment seeks to tighten up the procedure to ensure that the regulator is obliged to send to the central consultative council and the other consultative councils a copy of the MMC's report when he receives it. That would mean that the statutory bodies set up to represent the rail users would have the opportunity to consider such a report prior to publication. By nature of the reference, any such report is likely to have a direct bearing on the exercise of the committees' statutory duties.
Amendment No. 39 is the last amendment in the group and deals with Clause 13. Again, we have the same vague phrase that the people to be consulted are those, "likely to be affected by it".
We believe that it would be much better if the statutory body representing rail users should be named in the Bill and, therefore, have the opportunity to consider all such points as they arise. I beg to move.
Viscount Gosehen: I can entirely understand why the noble Baroness wishes the consumer committees to be provided with copies of important documents such as reports by the MMC. It is, of course, vital that they have the information that they need to represent passengers properly. However, we are quite clear that it is not necessary to legislate to achieve that aim. There is also no point in burdening committees with piles of papers, many of which are standard or, indeed, not relevant to their activities. For example, many licences will be awarded to bodies outside the scope of the committees such as freight train operators, "open access" passenger train operators and light maintenance depot operators. Similarly, the amendments would require papers connected with an MMC reference to be sent to the committees, even if the subject of the reference was about the freight railway.
I hope that I can reassure the noble Baroness that the Secretary of State and the regulator may be relied upon to provide information which is relevant to the work of the committees. As the noble Baroness, Lady Stedman, stated, most of the information is in any event published; for example, in Clause 12 there is a requirement that the MMC's report be published in a mariner appropriate for bringing the report to the attention of persons likely to be affected by it. That would cover the relevant committee. It is open to the committees to inspect and obtain copies.
We are very conscious that the committees are not full-time professionals but people who volunteer to represent their fellow rail users. Their time is limited; they also have very limited staff resources. We are most reluctant to waste their valuable time by burdening them with piles of papers, many of which are essentially identical or simply not relevant to their activities. That would serve only to reduce the time that they can spend helping passengers with difficulties or commenting on important issues relating to service quality. I would, therefore, ask the noble Baroness to withdraw the amendment.
Baroness Stedman: I am grateful to the noble Viscount for his reply. However, I am also disappointed. I had a feeling that the Government might for once say that they would accept such a set of amendments and would write the statutory bodies into the Bill. As the night went on, I felt my halo becoming tighter and tighter; I had hoped that I would be going home wearing one because I was able to say that we had at least persuaded the Government to say yes to something.
I am sorry that the Government have resisted the amendments. I shall read the noble Viscount's response and perhaps return to the matter at the next
1044
stage with a slightly different approach. However, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 25:
Page 8, line 21, leave out subsection (9) and insert,
("(9) A licence exemption may be granted under subsection (1) above only if—

(a) the licence exemption is to come into force on the day on which section 6(1) above comes into force; or

(b) the licence exemption is to be granted on or before that day but is not to come into force until after that day;

and a licence exemption may be granted under subsection (3) above only if the licence exemption is not to come into force until after that day.").
The noble Earl said: In moving the amendment I shall, with the leave of the Committee. speak also to Amendment No. 34. The amendments are intended to address some problems which might occur where trains are operated partly by virtue of a licence and partly with the benefit of an exemption. It is inevitable that some trains will operate partly on licensed and partly on unlicensed lines. We need to clarify the effect of licensing conditions in those cases. not least in relation to the possibility of fares conditions being set by the regulator. One particular case where such issues may arise is in relation to the proposed Heathrow Express service, which was raised by my noble friend Lord Brabazon of Tara on Second Reading.
Amendment No. 25 allows exemptions to be granted by the Secretary of' State at the outset, before the licensing regime comes into force, even though the exemption may not come into force immediately. That may be helpful to remove uncertainty as to whether a rail project in the planning or construction phase is to be licensed or exempted from the licensing regime when it starts operation. My right honourable friend the Secretary of State for Transport has already been approached by the promoters of the Heathrow Express scheme seeking that sort of clarification.
Amendment No. 34 inserts a new clause after Clause 9 to clarify the conditions of licences in relation to exemptions. Although the details of the drafting are rather complex, the basic approach we have adopted in the amendments is quite simple. Where a person is operating a railway passenger service partly by virtue of a licence and partly with the benefit of an exemption, we want the conditions of the licence to apply only to the extent that the train is operated by virtue of the licence. We wish to avoid imposing licence conditions in relation to the exempted operation. If we thought it appropriate to impose such conditions the right course would be not to grant an exemption. Subsection (1) of the new clause sets all this out.
The difficulty with that approach is how to handle conditions which by their nature must affect both the licensed and unlicensed operation. An example might be a condition relating to the type of train to be used on the licensed track. Where it is proposed to run a through service using both licensed and unlicensed track such a condition would inevitably affect operations on the unlicensed track also. Subsection (2) provides that such conditions may be imposed.
Subsection (3) of the new clause covers fares conditions. An operator of railway passenger services which are, to use shorthand, partly licensed and partly exempt, will want to know whether he is potentially subject to fares control through a condition of a licence. The approach we have adopted is again straightforward. Exempt services should not be potentially subject to fares control, whereas that should be a possibility for licensed services. Where a service is partially exempt and partially licensed it should not be subject to fares control unless the journey in question involves at least two consecutive stops during any part of that journey throughout which the operator of the train operates by virtue of a licence.
Subsections (4) and (6) of the new clause provide the formidable list of definitions needed to turn those general principles into legal reality. Finally, subsection (5) provides that the fares provision in subsection (3) has effect notwithstanding anything in subsections (I) and (2), and also provides that Clause 9 is to be subject to the provisions of the new clause.
I hope that the Committee will agree that this new clause properly provides for the position where services are partly exempt and partly licensed.
10.45 p.m.
Lord Clinton-Davis: This is the situation to which I alluded at the very beginning of our discussions today. How on earth can we give proper consideration to these very complicated amendments, notwithstanding what the Minister has said? It is unsatisfactory that at this stage we should be expected to deal with these matters. I do not believe that they necessarily fell within the scope of the undertakings given in another place. The Government have had enough time to put their house in order. It is regrettable, to say the least, that we should now have to deal with these matters, which were starred amendments yesterday.
I do not propose even to try to do so. I take note of what the noble Earl said, but it places restrictions on us at Report stage when we are faced with a position like this. However, there it is. It is water under the bridge now. I merely say that, in relation to this and the next group of amendments which the Minister will move, I am not in a position to offer any response to what he read out.
Lord Brabazon of Tara: Unlike the noble Lord, Lord Clinton-Davis, I am most grateful to my noble friend for having moved the amendments. They address an issue which I raised at Second Reading. I am very grateful to my noble friend for having brought them to the Committee. Admittedly he did so only yesterday or the day before, but at least he has produced an amendment in response to a point that I raised at Second Reading. That is exactly the purpose of Committee stage in this House.
They are complicated amendments. If one looks merely at subsection (3) (b) of Amendment No. 34 one sees the words:
"at least two consecutive scheduled calls at stations during any one continuous spell of licensed operation".
1046
The amendments need careful study. I am most grateful for what my noble friend said in response to the points that I made at Second Reading. I shall wish to study the amendments in detail, but I am grateful that my noble friend has gone as far as to move the amendments at this stage.
The Earl of Caithness: I am grateful to my noble friend Lord Brabazon for his welcome of the amendments. Of course, I look forward to discussing them at a later stage. I thought that it would be helpful to the Committee to put them down as soon as possible so that the noble Lord, Lord Clinton-Davis, had at least some time to look at them. I know that he was busy with the Bill on the Maastricht Treaty yesterday. However, it seemed to me best to get the amendments on to the Marshalled List and into the Bill so that we could come back to them at a later stage.
On Question, amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 [Licences]:
[Amendment No. 26 not moved.]
Clause 8 agreed to.
Clause 9 [Conditions of licences]
The Earl of Caithness The Earl of Caithness moved Amendment No. 27:
Page 10, line 8, leave out ("the activities authorised by") and insert ("the licence holder's being the operator of railway assets under the authorisation of").
The noble Earl said: In moving Amendment No. 27, with the leave of the Committee I shall speak also to Amendments Nos. 28 to 33 inclusive.
These are clarificatory amendments. They do four things. Some are designed to clarify the scope of conditions which may be imposed in licences. Some are to permit specific matters covered in licences to be made subject to approval of persons other than the regulator. One amendment concerns the persons to whom payments may be made as a requirement of licence conditions. One amendment is consequential on earlier changes.
Amendment No. 27 is purely consequential on changes to Clause 6 made in another place. It brings the terminology into line with that now used in Clause 6.
Amendment No. 28 concerns payments required under a licence. Clause 9 currently provides for payments only to the grantor of the licence, that is, the Secretary of State or the regulator. There are two difficulties with this. One is that we wish payments required under licences to be made normally to the regulator. Replacing "the grantor" by separate references to the Secretary of State and the regulator permits this. The second difficulty is that we may wish to require payments to be made to other persons in some circumstances. For example, we may wish to use a licence condition to require payments to be made to the employer of the British Transport Police. The amendment would permit this.
Amendment No. 29 provides for conditions in licences to require the licence holder to enter into any agreement with any person for such purposes as may be specified in the conditions, and for the conditions to include provision for determining the terms on which

1047
such agreements are to be entered into. This amendment is intended to make it clear that licence conditions can require the licensee to enter agreements concerning, for example, through ticketing or common operating procedures. Agreement of this sort will be essential to the proper functioning of the railway system. Given what the noble Lords, Lord Clinton-Davis, and Lord Carmichael of Kelvingrove, said earlier, I would think that the provision will be extremely welcome to them.
Amendments Nos. 30, 31 and 32 are all intended to widen the provisions in Clause 9(2) to permit persons in addition to the regulator to be given a role in imposing requirements, consenting to things being done or not done, or determining questions arising under the licence. In many cases such questions would probably be reserved for the regulator, but it may be appropriate in some circumstances for the licence to specify other persons for such tasks. Perhaps I may give the Committee examples. I refer to the Health and Safety Executive, or the British Transport Police Committee on matters concerning policing.
Amendment No. 33 makes it clear that two further areas may he covered in licence conditions: referral for approval of such things falling to be done under the licence as are specified in the licence, and the provision of documents or other information to a qualified person in connection with any functions of that person under the licence. In both cases the person by whom the approval must be given, or to whom the documents must be supplied, may be any person specified for that purpose in the licence, though in the case of the provision of documents there is a separate requirement to provide them to the Secretary of State or the regulator for the purpose of exercising their functions under Part I of the Bill.
Subsection (2A) of the same amendment provides for conditions in a licence to be modified or to cease to have effect in circumstances specified in or determined by or under the licence conditions. This provision and all the previous provisions of this and the related amendments are without prejudice to the generality of Clause 9(1) (a). I should also add that all of those clarifications of the coverage of licence conditions are precedented in previous privatisations.
Finally the provision in subsection (2C) of the amendment contains the definition of a "qualified person" as used earlier in this and related amendments. A qualified person is a person specified in a licence for the purpose in question, a person of a description so specified or a person nominated for that purpose by such a person. That is a fairly wide description, but it may be that in some cases the appropriate person will not be established until after initial licences have been issued, so a wide description is necessary. I beg to move.
Lord Clinton-Davis: I merely say that we reserve our position on the matter. At this time of night I am certainly not in a fit condition to absorb much of what the Minister had to say, and I am not sure he absorbed it himself. It was difficult stuff, I think he will agree. We reserve our position.
The Earl of Caithness: The noble Lord disappoints me.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 28 to 33:
Page 10, line 12, leave out ("the grantor") and insert:

("(i) the Secretary of State,

(ii) the Regulator, or

(iii) any other person, or any other person of a class or description, specified in the licence, except a Minister of the Crown or Government department,").

Page 10, line 15, at end insert:
("(1A) Conditions included in a licence by virtue of subsection (1) (a) above—

(a) may require the licence holder to enter into any agreement with any person for such purposes as may be specified in the conditions; and

(b) may include provision for determining the terms on which such agreements are to be entered into.").

Page 10, line 18, leave out paragraph (a) and insert:
("(a) to comply with any requirements from time to time imposed by a qualified person with respect to such matters as are specified in the licence or are of a description so specified;").
Page 10, line 21, leave out ("the Regulator") and insert (''a qualified person").
Page 10, line 24, leave out ("the Regulator") and insert (''a qualified person").
Page 10, line 26, at end insert:
("(d) to refer for approval by a qualified person such things falling to be done under the licence as are specified in the licence or are of a description so specified;
(e) to furnish to a qualified person such documents or other information as he may require for the purpose of exercising any functions conferred or imposed on him under or by virtue of the licence;
(f) to furnish to the Secretary of State or the Regulator such documents or other information as he may require for the purpose of exercising the functions assigned or transferred to him under or by virtue of this Part.
(2A) Conditions included in a licence may contain provision for the conditions to cease to have effect or be modified at such times, in such manner and in such circumstances as may be specified in or determined by or under the conditions; and any provision included by virtue of this subsection in a licence shall have effect in addition to the provision made by this Part with respect to the modification of the conditions of a licence.
(2B) Subsections (1A), (2) and (2A) above are without prejudice to the generality of subsection (1) (a) above.
(2C) Any reference in subsection (2) above to a "qualified person" is a reference to—

(a) a person specified in the licence in question for the purpose in question, or

(b) a person of a description

so specified, and includes a reference to a person nominated for that purpose by such a person pursuant to the licence.").
On Question, amendments agreed to.
Clause 9, as amended, agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 34:
After Clause 9, insert the following new clause:
Conditions of licences: activities carried on by virtue of a licence exemption
(" .—(I) If and so long as a person is a licence exempt operator—

(a) there shall not be included in any licence granted to him any condition which relates to his licence exempt activities, except to the extent permitted by virtue of subsection (2) below; and

1049

(b) any such condition which is included in a licence which has been granted to him shall, except to that extent, be of no effect so far as so relating.

(2) A condition which relates to both a licensed activity carried on by a person and a licence exempt activity carried on by him may be included in a licence, but only if and to the extent that, in consequence of his carrying on a mixed activity, the condition must necessarily have effect in relation to the whole, or some part, of so much of the mixed activity as consists of the licence exempt activity if the condition is to have full effect in relation to so much of the mixed activity as consists of the licensed activity.
(3) There shall not be included in a licence any condition relating to the fares that may be charged in respect of train journeys involving licence exempt travel, other than train journeys which also involve—

(a) licensed travel; and

(b) at least two consecutive scheduled calls at stations during any one continuous spell of licensed operation.

(4) For the purposes of subsection (3) above and this subsection—

"call" means any stop at a station for the purpose of allowing passengers to board or leave the train (including the stops at the stations at the beginning and end of the train journey in question);

"licence exempt travel" means travel by means of a train whose operator is, by virtue of a licence exemption, exempt from the requirement to be authorised by licence to be the operator of that train for the whole, or for some part, of the train journey in question;

"licensed travel" means travel by means of a train whose operator is authorised by licence to be the operator of that train for some part of the train journey in question;

"spell of licensed operation", in the case of any train journey, means any part of the journey throughout which the operator of the train in question lawfully acts as such by virtue only of holding one or more licences;

"train journey" means a journey between any two stations which is scheduled to be made by means of one train (irrespective of where the train in question begins or ends its journey).

(5) Subsection (3) above has effect notwithstanding anything in subsection (1) or (2) above; and section 9 above is subject to the provisions of this section.
(6) In this section—

"licence exempt activity" means any activity which a person carries on in his capacity as a licence exempt operator;

"licence exempt operator" means an operator of railway assets, or railway assets of a class or description, who is, by virtue of a licence exemption, exempt from the requirement to be authorised by licence to be the operator of those railway assets or of railway assets of that class or description;

"licensed activity" means any activity which a person carries on in his capacity as a licence holder;

"mixed activity" means any activity which is carried on by a person who is both a licence holder and a licence exempt operator and which is carried on by him in part as a licensed activity and in part as a licence exempt activity.").

On Question, amendment agreed to.
Lord Mountevans Lord Mountevans moved Amendment No. 34A:
Insert the following new clause:
("Requirements as to mutual ticket arrangements between operators of passenger services
.—(1) This section applies in any case where the activities authorised by the licence are or include the provision of services for the carriage of passengers by railway, and references in this section to services are to such services.
1050
(2) Each licence shall include such conditions as the Regulator considers appropriate for the purpose of requiring the licence holder—

(a) to issue relevant tickets to passengers;

(b) to permit passengers who hold relevant tickets issued by other licence holders to use the services provided by him without charge directly by him, on any route which is reasonable for travel between the places specified on the tickets; and

(c) to participate in such arrangements as may be specified in the licence for the purpose of enabling reimbursement to be made to licence holders who have permitted passengers to use the services provided by them without charge as mentioned in paragraph (b) above.

(3) In subsection (2) above "relevant ticket" means a ticket of a kind designated by the Regulator for the purposes of this section which entitles the holder to travel from a place within the area where the licence holder issuing the ticket is authorised by the licence to provide services to a destination outside that area.
(4) This section is without prejudice to the generality of section 9 above.").
The noble Lord said: This is a probing amendment to explore the future prospects for the use of alternate routes between any two points specified on a given railway ticket. To take an example, I have in mind the journey from Exeter to London. At present it can be made direct via Westbury or via Bristol or via Salisbury. I hope that such options would continue to be available post-franchising and post-open access. Initially I thought that this might be a matter for the franchising director, but my legal advice is that a twin track approach is needed to cover open access.
I mentioned the flexibility which exists at present, and I believe that it would be advantageous for it to continue. At the moment, a given fare buys a ticket valid via any reasonable route. British Rail, although broken down into profit centres, runs practically all the trains and I am not aware of any fare competition between the present sectors which may in future become franchises.
However, in the future my London-Exeter example is complicated by the following. British Rail may be involved as the residuary operator and/or there may be two franchisees and/or there may be open access operators. The franchise director could, I believe, encourage inter-availability through the franchise agreements. But open access operators are not within his remit and hence I bring the regulator into the discussion. My new clause allows him to specify licence conditions to provide that the operator would accept other parties' tickets (of types specified by the regulator) between any two points as specified on the face of a ticket. Revenue allocation would require a scheme, possibly based on sampling, but it does not seem to me to pose an insurmountable problem.
In seeking to protect the passengers' enjoyment of inter-availability, I believe that we are preserving a present good practice and one which many customers would like to see continue. And not only many customers. I am grateful for the support of a number of user and other organisations such as the statutory tourist boards, Age Concern, Help the Aged, CoSLA, the National Council for Inland Transport and the Ramblers' Association. All those bodies subscribe to the aims of Transport 2000 and continued inter-availability is one of that umbrella organisation's

1051
objectives. I shall be interested to hear how my noble friend sees inter-availability developing. I beg to move.
The Earl of Caithness: I am grateful to my noble friend for taking us through his amendment. I have to say that there were various interpretations of it, but I thank him for the clarification that he has given. As he explained, the intention of the amendment is to ensure that passengers should continue to have the flexibility to make choices about their time and route of travel and should not incur undue penalty as a result. This facility is clearly valued by passengers at the moment and the Government expect that in many cases operators will want to negotiate similar arrangements in the future. It is not, of course, universal. Certain tickets, including many discounted fares, carry restrictions as to day or time of travel, or use of particular trains.
It is open to the regulator or the franchising director, under their powers in the Bill, to impose suitable obligations on operators to provide inter-availability, where they consider this appropriate in the public interest. The Government do not intend to impose blanket obligations in this respect. We believe that to do so would be too restrictive. It would tend to blunt competition and, for example, inhibit the development of particular rail services aimed at specific market segments.
We do, however, accept that there will be circumstances—particularly in the case of high frequency commuter flows—where passengers will expect their tickets to be valid for travel on the next available train, regardless of the identity of the operator. That is a reasonable expectation, and—so far as franchised services are concerned—my right honourable friend the Secretary of State intends to give appropriate guidance to the franchising director on such matters, under Clause 5 of the Bill.
It may be that a possible alternative to inter-availability in some cases would be to provide for the passenger to trade in his ticket for one which is valid for travel on a different operator's services. Possible arrangements of that kind are being investigated by the department and its advisers. There are attractions, in that the information obtained at the booking office can then more reliably ensure that revenue is attributed to the operator whose services the passenger has chosen to use for his particular journey.
For all these reasons I do not believe that it would be sensible to be too prescriptive on inter-availability on the face of the Bill. Suitable arrangements will be developed. They will need to vary with different circumstances. There are adequate powers to impose requirements where justified; and revenue allocation arrangements will be able to be put in place as now to ensure that revenue income is routed to appropriate operators.
11 p.m.
Lord Mountevans: I am most grateful to my noble friend for that very detailed reply, which obviously requires some further study. With that background, and again expressing my gratitude. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 [Modification by agreement]: [Amendments Nos. 35 and 36 not moved.]
Clause 10 agreed to.
Clause II [Modification references to the Monopolies Commission]:
[Amendment No. 37 not moved.]
Clause 11 agreed to.
Clause 12 [Reports on modification references]:
[Amendment No. 38 not moved.]
Clause 12 agreed to.
Clause 13 [Modification following report]:
[Amendment No. 39 not moved.]
Clause 13 agreed to.
Clause 14 agreed to.
Clause 15 [Facility owners to permit use of railway facilities by other persons]:
Baroness Stedman Baroness Stedman moved Amendment No. 40:
Page 16, line 26, after ("If") insert ("after consultation with the Central Committee and every consultative committee likely to be affected by the access agreement").
The noble Baroness said: In moving Amendment No. 40, with the leave of the Committee I should like to speak to Amendments Nos. 41 and 44. Amendments Nos. 40 and 41 go together as amendments to Clause 15 concerning access agreements. I am seeking to ensure that before giving his approval to an access agreement, the regulator is obliged to consult the statutory body set up by the Bill to represent the rail users. That would ensure that the various consultative committees and the relevant RUCCs would have the opportunity to consider and comment on the terms of any access agreement.
The proposed system of access agreements will be an important element in the new regulatory framework for the railways. The access agreements will contain many provisions which will have a direct impact on the passengers who use the service. Such provision will, for example, relate to the timetables or changes in service, to the equipment in use such as the rolling stock and to the establishment of performance monitoring systems. These are all matters on which the CTCC and the RUCCs currently make direct input to British Rail on behalf of rail users. The benefits of those arrangements really ought to be preserved under the new system.
Amendment No. 44 to Clause 16 is one where again I am niggling about the vague wording, where the regulator is obliged to publish a notice, again in such a manner as he "considers appropriate", to bring any proposal to grant a facility exemption to the attention of persons likely to be affected by the grant of a facility exemption. Again, there is no specification as to who are the persons likely to be affected.
It seems to me that it is the consultative committees from among all the people who ought to receive a copy of the notice. The statutory body set up under the Bill

1053
to represent all the rail users would then have the opportunity to consider and comment on any proposal which the regulator made to grant a facility exemption. It seems to me that it would be wrong for the regulator to be able to grant facility exemptions without being obliged to notify what he was going to do to the new statutory bodies representing the passengers using the railways. I beg to move.
Viscount Goschen: We sympathise with the noble Baroness and her wish to strengthen the role of the consumer committees. But we believe that these amendments go too far.
The committees will be looking at the performance of the railway as it affects the passenger. We do not believe that they need to be consulted on drafts of access agreements in order to fulfil that function. Access agreements are essentially contracts between train operators and the owners of facilities such as stations, track and light maintenance depots. They do not directly affect the interests of passengers. In the case of freight operators, access agreements will have no impact at all on passengers, and it would clearly be quite wrong for the committees to become involved in such matters.
Amendment No. 44 would require the regulator to send to the committees copies of notices of his intention to grant an access exemption. Again, we do not feel that that is appropriate. We have already set out our policy on initial exemptions from the access requirements of the Bill. We do not envisage access exemptions granted by the regulator being a frequent occurrence; nor will they necesssarily be limited to passenger services, in which the committees have an interest. Where the regulator thinks that it would be useful to have the views of a consultative committee on a possible access exemption, he will be able to ask it. But we do not believe that a statutory requirement to send the committees a notice of his intention to grant an access exemption is either necessary or desirable.
I therefore ask the noble Baroness whether she will withdraw this group of amendments.
Baroness Stedman: I am sorry and disappointed in the reply from the noble Viscount. I had hoped that perhaps the consultative body set up as the statutory body representing the rail users might have a little more confidence placed in it and be specifically named to do the job that it is supposed to do and not leave it to chance that the regulator may or may not consult it. It is a great pity that we have not written into the Bill that the rail users' consultative committees are those who speak for the passengers and those who use the railways.
I shall look into what has been said. For the time being I withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 41 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 42:
Page 16. line 45, at end insert:
("( ) Where the railway facility to which the access agreement relates is a track or station the Regulator shall in
1054
determining whether or not to approve the proposed terms of the agreement have regard to any advice issued to the facility owner by the Secretary of State.").
The noble Lord said: In moving this amendment I shall speak also to Amendment No. 43 and shall try to deal briefly with them. It will not be easy, but I am aware of the late hour.
The purpose of Amendment No. 42 is to try to probe the policy of the Government regarding the criteria that Railtrack and the regulator will be obliged to take into account in granting access to track and stations. In the first round of the franchising agreement, it seems that agreement would have to be reached between the franchising director and the regulator on the train paths which are needed to provide the services that are to be franchised. In addition, the Secretary of State will advise the regulator to limit the level of competition to allow the franchising to get under way. That is a far cry from the original proposal envisaged by the Government.
But what will happen in the later rounds of franchising? I feel that the situation is somewhat obscure. The access document states that Railtrack will be under no obligation to meet the access requirements of the franchising director. On the assumption that the second round of franchising will not start until after December 1996, the Secretary of State will have no power to order the regulator to follow any advice issued to him. That was conceded earlier. As I said at Second Reading, it is extraordinary that Railtrack is not referred to in any of the 185 pages of the Bill; yet it is pivotal in the process that we are discussing.
Committee Paper 5, which deals with the draft licence for Railtrack, includes a special condition setting out the way in which Railtrack should undertake its network business. It has to accord with an access regime policy statement. The concept of that statement is extremely important. For example, one can presume that Railtrack could be advised that it should give particular weight to the importance of local commuter services in allocating access to congested mainline stations. The draft licence refers to the access document simply as an example of a statement. But can the paper be said to help in determining the terms of the way in which Railtrack's responsibilities are to be carried out?
In my view it is a far too generalised way of dealing with the matter and I should like to ask the Minister specifically: to what extent will the regulator be required, or even allowed, to have regard to the statement when it falls to him to consider the contents of access agreements? There can be no doubt that the allocation of access to track and stations, and the criteria to be taken into account in making such decisions, will be of the utmost importance. The Secretary of State is obliged to give proper policy guidance since it is he who is answerable to Parliament. Surely, the access regime policy statement would be the most appropriate vehicle therefore for the provision of that advice. I should like to know what the Minster's views are on that point. If he agrees with it—I do not think for one moment that he will —what form is the statement to take? What consultation will there be as to its contents? What

1055
parliamentary scrutiny will take place? How will the existence of the statement relate to the role and responsibilities of the regulator?
I turn from that to Amendment No. 43, the purpose of which is to highlight the likely effects of the principles on which the Government are proposing that charges for access to the railway network should be based.
One of my concerns is that I do not believe that it can be acceptable for the franchise director to indirectly subsidise open access services. The amendment would ensure that that did not happen. The Minister in another place, Mr. Roger Freeman, sought to argue that it was a sensible course. At col. 1121 of Hansard, he said:
"I strongly believe that it is sensible to encourage the running of additional passenger rail services. Where the absence of such services would imply certain costs for the rail network that had to he recovered from the existing services, it is right that those additional services should be offered—as long as they cover their avoidable costs as a minimum. We want Railtrack to try to negotiate the best possible commercial terms, but if the choice is between covering avoidable costs and running, or being denied the ability to offer that service because it is not making a significant contribution to common overheads I know which one I would choose".
Unfortunately, that defence ignores two essential issues. First, the Minister ignored the implications for the competitive position of open access operators and franchisees, and the latter will clearly be at a disadvantage. Secondly, the Minister overlooked the fact t hat the government proposals will mean that any element of subsidy paid to franchisees to cover their track costs will in part cross-subsidise allegedly "commercial" open access operators. That aspect is highlighted by a further statement made by the Minister at col. 1125, when he said,
"It is important that the market system works. An open access operator may want to hid to run a train service because it will be profitable: he may want to pay sum X for the right to run, for example, a service into Manchester or a commuter service into London. The franchising director may want to protect that group of trainpaths. He may have to pay more if he judges it socially necessary to preserve that network of services".
But under that scenario the franchising director is in an impossible position; he cannot win. He faces the risk of either paying higher levels of subsidy in order to retain a network of services in competition with open access bids or of cross-subsidising open access operators. There is therefore, exemplified by that fact, a clear incompatibility of franchising and open access operations.
The issue was addressed by the Commons Transport Committee. Amendment No. 42 seeks to address the anxieties addressed by the committee in its report. I am not sure that it wholly addresses those issues; but it will go some way towards that. I look forward to hearing the Minister's response. I beg to move.
11.15 p.m.
The Earl of Caithness: The noble Lord asked why Railtrack is not mentioned by name on the face of the Bill. Railtrack, when established, will be a government-owned company. The names of the companies are rarely mentioned in legislation. One good reason
1056
for that is that their name may change in future. Railtrack is covered by the expression "network operator" in the Bill. This approach allows us to legislate for all network operators, not just Railtrack. For example, if the Isle of Wight Railway is operated as a vertically integrated franchise, the franchisee will be a network operator as well as a passenger service operator.
Amendment No. 42 is clearly aimed at the terms proposed by Railtrack for access to its facilities. The amendment is attempting to influence the regulator's decisions by the roundabout method of requiring advice given to Railtrack by the Secretary of State to be taken into account by the regulator.
In the short term I do not believe that such a requirement is necessary because the Secretary of State can give guidance direct to the regulator, which, under Clause 4(4), the regulator is required to take into account. This guidance will cover the approach to access charging. In the longer term I do not believe that the requirement is desirable. The provision for guidance to the regulator is intended to cover the launch of the privatisation regime, particularly franchising, but is deliberately limited to the first three years, up to 31st December 1996. Our policy is to establish the regulator as an independent person to take decisions on the appropriate charges, and after the interim period we do not want the Secretary of State to have the opportunity to intervene in these types of decisions. A requirement for the regulator to take into account any advice from the Secretary of State to Railtrack would risk interference with the regulator's independence.
Amendment No. 43 would require the regulator, when considering the proposed terms of access agreements, to ensure that a facility owner did not distinguish in his charges between operators of passenger rail services which are the subject of a franchise agreement and operators of those services which are not. The intention of this amendment is to require charges for track and other facilities not to differentiate between franchised and other passenger services.
The view of the Government, set out in our paper Gaining access to the Railway Network, which was published in February this year, is that the long-term health of the railway industry will best be secured if Railtrack pursues a policy of market pricing, subject to the avoidance of unfair discrimination between competing operators in the same market. The requirements of European law must be satisfied. However, we believe that to adopt any kind of standard tariff approach to charging would price off the network those operators who could afford to make a contribution to costs above the marginal costs they impose on Railtrack, but who could not afford to pay as much as the average cost. The result would be a downward spiral of increased costs pricing off marginal users, leading to an increase in charges for remaining users, and so on.
The regulator will have to consider whether there is any unfair discrimination when he considers the terms of access contracts, including any moderation of competition required for the successful launch of

1057
franchising. While I am happy to accept that the regulator will have an important role in ensuring that the charging system operates fairly, I believe that to impose artificial constraints on the regulator in his approach to this task would be unhelpful.
To answer a specific point raised by the noble Lord, Lord Clinton-Davis, the regulator must take account of any factors that he considers relevant in determining access agreements and must be guided by his duties in Clause 4 of the Bill, including the duty to have regard to guidance issued by the Secretary of State under Clause 4(4) (a) until 31st December 1996. The access policy statement will form part of that guidance.
While we are on the question of access, I should like to clarify the position for the Committee. There are a number of government amendments to go down in relation to this clause. After discussion with the noble Lord, Lord Clinton-Davis, they were not put down as they might well have been starred amendments which we are seeking to avoid. But they will be down for a later stage.
Lord Clinton-Davis: I am grateful to the Minister for reading almost as quickly as I was. This is no time to enter into a debate. We have entered into an agreement and we must honour that agreement. We were almost on the brink of it. I shall read very carefully what the Minister had to say but I reserve the right to come back to these issues at a later stage. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 43 not moved.]
Clause 15 agreed to.
Clause 16 [Exemption of railway facilities from section 15]:
[Amendment No. 44 not moved.]
Clause 16 agreed to.
Clauses 17 to 20 agreed to.
Viscount Goschen: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at nineteen minutes past eleven o' clock.