Railways Bill

HL Deb 27 October 1993 vol 549 cc852-918

3.18 p.m.

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

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Railways Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill. I beg to move that this Bill be now read a third time.

Moved, that the Bill be now read a third time.—(The Earl of Caithness.)

On Question, Bill read a third time.

Clause 4 [General duties of the Secretary of Stare and the Regulator]:

Lord Lucas of Chilworth moved Amendment No. 1:

Page 4, line 48, at end insert:

("() The Secretary of State shall take appropriate steps to safeguard the solvency of occupational pensions schemes as referred to in paragraphs 10A and 10B of Schedule 11 below.").

The noble Lord said: My Lords, Amendment No. 1 stands in the names of the noble Lord, Lord Marsh, my noble friend Lord Peyton of Yeovil, the noble Lord, Lord Tordoff, and myself. The noble Lord, Lord Marsh, asked me to move the amendment as both he and my noble friend Lord Peyton are unfortunately abroad at this time. There is an explanation for that, which I shall come to in due course.

With the leave of the House, when moving Amendment No. 1, I shall speak also to Amendments Nos. 57 to 70. I remind the House that Amendments Nos. 66 and 69 are in my name and those of others, and Amendment No. 1 is the paving amendment for those two. The remaining amendments are in the name of my noble friend the Minister.

My noble friend Lord Peyton and others had believed that, so far as concerns pension fund arrangements, the proposals outlined by my noble friend the Minister on 20th October (at col. 573 of Hansard) would have been the end of the matter. Indeed, I would not wish to be carping about the assurances that my noble friend the Minister then gave. However, the matter has not so ended and I shall explain to your Lordships why we believe that to be so.

The House will want to welcome the Government's amendment, Amendment No. 65, in so far as it meets the assurance given on 20th October—that is, placing a duty on the Secretary of State to guarantee index-linked pensions to those BR pensioners who will be in the closed fund, and also introducing powers which will guarantee the pensions of people who retire from British Rail in the future. However, we are somewhat taken aback by the breadth of control that will be given to the Secretary of State in Amendment No. 65.

In providing the guarantee the Secretary of State can dictate terms not only about the payments to be made under the guarantee—that is quite reasonable, of course—but also, in paragraph (8)(b), about, any matter relating to the management, affairs or winding up of the scheme". Under the powers in the amendment he can even amend the rules of the scheme. None of this was mentioned by my noble friend Lord Caithness when he gave his assurances—indeed, they were rather more than assurances; his undertaking—to my noble friend Lord Peyton at the Report stage. I do not believe—I will not believe—that the Government would wish to give with the one hand and then take away later in their amendment precisely the same things with the other. But that is in fact what the provisions of their amendment do.

The government amendment is disturbing in two ways. First, there are wide powers to attach terms and conditions without the obligation to take actuarial advice and without consulting the trustees. The famous memorandum of understanding clearly envisaged advice being obtained from the joint actuaries of the scheme. Your Lordships' House has shown at previous stages of the Bill that it attaches considerable importance to consultation with the trustees. That is now denied under the terms of Amendment No. 65.

Secondly, the powers the Government propose to take appear to overlap with the order-making powers in paragraphs 2 and 3 of Schedule 11. The powers are subject to the affirmative resolution procedure, and the House will also have the opportunity when we examine orders made under paragraph 3 of that schedule to have the views of the trustees before us. Those important safeguards have been made much of by the Government. Now, however, the Government seem to be ignoring that. The current proposals before us set aside the safeguard because the Government would be able, under their proposed amendment, to override orders that had been previously agreed by both Houses of Parliament. I do not think that that is their intention but that is the outcome of their amendment.

Amendments Nos. 66 and 69, which stand in my name and those of other noble Lords, seek to reduce the Secretary of State's powers to attach terms and conditions to his guarantee to what he, quite rightly to protect the taxpayer, reasonably requires. In particular, Amendment No. 69 leaves in powers with respect to investment policy and distribution of surpluses, which were matters covered in the famous memorandum of understanding signed with the trustees and British Rail. It is my understanding that both the trustees and British Rail remain fully committed to that memorandum. Amendment No. 69 will also require the Secretary of State to act on the advice of the scheme actuaries and to consult the trustees before he attaches terms and conditions to the guarantee.

The chairman of the trustees, Mr. Derek Fowler, wrote to my right honourable friend the Secretary of State on 26th October, which was yesterday. I want to quote two paragraphs of that letter. Mr. Fowler started by saying: I am impelled to write to you again having just seen the Government's Amendments to the Railways Bill to be moved on third reading in the House of Lords tomorrow". In a later paragraph he says: I am sufficiently experienced in public expenditure matters to know that Government guarantees cannot be given lightly and without sensible controls which protect taxpayers' interests. Those requirements were recognised in the Memorandum of Understanding. What I had not foreseen when I signed the Memorandum was that the Secretary of State would be given powers to virtually take over the fund if the solvency guarantee were to be invoked". That really is the nub of the matter I put before your Lordships today. It is the purport of Amendments Nos. 66 and 69 to negate that power of being able to take over the fund, changing its rules and method of operation in the event of the guarantee being called in. I do not think there is any other matter that I ought to put before your Lordships. I beg to move.

Lord Clinton-Davis

My Lords, in view of the seriousness of this matter I think that it would be helpful, to ensure that the House is privy to the Minister's thinking about these issues, particularly in the light of Mr. Fowler's letter, if the Minister could intervene at this stage and, with the leave of the House, perhaps reply later on to the debate which would follow his intervention. I think that it would be helpful to do that.

The Earl of Caithness

My Lords, if that is convenient to the House I am certainly happy to do so. One of the difficulties posed by having this paving amendment right at the beginning is that it brings to the front of our proceedings the discussion on pensions. It has made discussion on pensions that bit more difficult for the House to understand because we are dealing with a group of amendments—not only Amendment No. 1 but Amendments Nos. 57 to 70, some of which are in the names of noble Lords from around the Chamber, some in the name of the noble Baroness, Lady Turner of Camden, and some in the name of the noble Lord, Lord Tordoff. It makes discussion and the pin-pointing of the issues which we are debating difficult.

I shall try to deal initially with the amendment moved by my noble friend. Perhaps I may say at this stage how sad I am that my noble friend has not taken up my offer to see him. I knew that he was concerned about aspects of the Bill. I told him that my door was open and that the Secretary of State's door was equally open. I regret that he has not taken up that offer.

Your Lordships will recall that I promised at Report stage last Wednesday to bring forward for consideration today amendments that would put on the face of the Bill a duty for my right honourable friend the Secretary of State for Transport to give a guarantee to the closed fund containing existing BR pensioners and deferred pensioners. I also promised that we would take powers so that he can give a guarantee to the BR section of the joint industry scheme if, as the memorandum of understanding acknowledges, it becomes seriously unstable at any time in the future. The new paragraph 10A introduced by my Amendment No. 65 fulfils those promises. Let me make it clear that this government amendment fulfils the promises that I gave to the House at Report stage. It also incorporates in the Bill the key commitments made by the Government in the memorandum of understanding. As usual, I have written to some noble Lords explaining the proposed new paragraph 10A in some detail and have arranged for copies to be placed in the Library.

As I understand the amendments to which my noble friend Lord Lucas of Chilworth spoke, essentially they are seeking two things: first, to delete from the powers, under which my right honourable friend the Secretary of State may give a guarantee, any general provisions relating to the management, affairs or winding up of the scheme or the amendment of the scheme rules. Secondly, they are also seeking specific provision on the face of the Bill for consultation with the trustees and for the advice of the scheme actuaries to be considered on the terms and conditions of the guarantee to be given by the Government.

I would like to make an apology to the House that the second part of what my noble friend wants was omitted from the government amendment. I have made it perfectly clear to your Lordships time and time again throughout the proceedings that we accept the point. Indeed, I wanted to table an amendment today to correct the situation, but as your Lordships will know, I discovered that I could not put down a manuscript amendment at Third Reading. Perhaps I may confirm that the main point of difference on this will be resolved because we shall be tabling an amendment tomorrow for consideration in another place to deal with this point. It will insert into sub-paragraph (8) of the new paragraph 10A a requirement for my right honourable friend to consult with the trustees and the actuaries to the scheme on the terms and conditions of the guarantee. I wish that we had put it in at the first stage, but your Lordships can rest assured on the promise that I have given.

Perhaps I may now turn to the main point of difference between us. The giving of the guarantee will be a contingent public expenditure commitment. Once it is given all the risk is accepted by the Government which will need the flexibility to deal with all matters pertaining to the management and affairs of the scheme and its rules in order to meet any circumstances which might arise.

I believe that some of your Lordships will recall how difficult I said it would be to put a guarantee on the face of the Bill. That was the reason why we resisted it initially—that is to say, because of the very difficult circumstances that surround giving a guarantee where all the contingent risk comes to the Government. But we accepted the will of the House that your Lordships wanted that provision on the face of the Bill and we have drafted it accordingly. The memorandum of understanding makes it clear that control over matters which could have a significant impact on the finances of the fund that being a quote from the memorandurn—"will be required". Some may be introduced as rules of the closed scheme, but it is not possible at the present time to be sure which will be covered by the rules and which will be required as a condition of a guarantee.

One example of the type of provision that we may wish to make is a provision to prevent an amendment to the rules of the scheme which would increase the benefits payable under the scheme without the consent of the Secretary of State. It may also be necessary for the terms and conditions to make provision in the event of the winding up of the scheme; for example, to deal with the timing of the liquidation of investments. I believe it is clear that the amendment moved by my noble friend would prevent that, which would be a retrograde step.

I wish to deal with two points which my noble friend raised. He referred to terms and conditions. I believe that he slightly missed the point here. The terms and conditions imposed must relate to the guarantee. They cannot override orders made under Schedule 11. So his comment that we could overrule what had been agreed by both Houses of Parliament is an inaccuracy.

As regards Mr. Fowler's letter of yesterday, I saw that this morning. I believe that what he said goes far beyond the words of the amendment when he speaks in that letter about virtually taking over the fund. As Mr. Fowler rightly states, there must be terms and conditions attached to any guarantee. As I said, we cannot now foresee exactly what they will have to be, but the subject matter is foreshadowed in the memorandum of understanding which, I say again—I am glad that my noble friend confirmed that British Rail and the trustees will abide by it—we shall abide by.

It is important to appreciate that there is a difference between drafting Acts of Parliament and coming to agreement around a table. We debated Government cash payments exhaustively last week and the House has had its say on the topic. Doubtless Mr. Fowler's remarks are addressed to the other place when he writes as he does on that particular matter. I believe that there must be some misunderstanding when he writes about indefinite postponement of Government contributions. A proposal falling far short of that has already been put to the trustees.

I confirm that we are not steadily eroding the memorandum of understanding. We stand by it. We want to see it implemented and there are detailed discussions to come. They have already started with the trustees. We approach these in a constructive spirit and in good faith and I am sure that the trustees will do likewise.

In conclusion, on this particular part of this group of amendments, I can meet my noble friend's concern on the first part about consultation with the trustees. As regards the second part, we have a very genuine difficulty with what is proposed as shown in the two examples that I gave. I can give many other examples. I believe that the amendments will impede the sensible progression that we have set our minds on.

3.30 p.m.

Lord Tordoff

My Lords, those of us who have put our names to this amendment will be grateful to the noble Earl, Lord Caithness, for having accepted that there was an error in the government amendment. We are grateful to him for coming to the House immediately to admit and accept that that is the case and that such steps as can be taken will be taken in another place. But I fear that this is just another indication of the way in which this Bill has been progressing through Parliament. Here we are, at Third Reading stage of a Bill which has been going on for months in Parliament, with the Government tabling an amendment yesterday—allegedly committing them to do what they agreed they would do as regards the noble Lord, Lord Peyton—and getting it wrong.

It should not be left to the opposition parties to have to draw attention to errors in government amendments. I do not want to rub the noble Earl's nose in this and I shall not go further on that point. It is a sad reflection of the way in which this Bill has proceeded through your Lordships' House.

Incidentally, I thought that the noble Earl's opening remarks were perhaps unfortunate in suggesting that somehow there had not been proper consultation between people tabling amendments and the Department of Transport when, after all, the amendment which the Government are putting forward today only appeared on our desks yesterday. We had the almost impossible task of producing a suitable amendment in time.

I have a letter from the noble Lord, Lord Marsh, who, as the noble Lord, Lord Lucas, has said, unfortunately is unable to be here. I believe that I should read it to your Lordships. It is dated yesterday at 4 p.m., addressed to me and states: Having just seen the latest Government amendments to the pensions Schedule my reaction is one of outrage particularly in respect of Sub-paragraph (8). I spoke to the Chairman of the Trustees to check that I have not misunderstood the amendments and his reaction is the same as mine. To my deep regret I cannot be present for the Debate which I would certainly not miss if it were possible to do otherwise". The Minister tells us that the chairman of the trustees misunderstands the situation. In his letter of yesterday the chairman of the trustees is saying, "I have written to the Government three times in the past three weeks to seek clarification of a position that I thought that I understood in July when I signed the memorandum of understanding".

The charge that we are putting before your Lordships this afternoon is that the amendment which the Government have now tabled is significantly flawed in two respects, not just one. Perhaps I should repeat what the noble Lord, Lord Lucas, was talking about in relation to the second objection, the first having been dealt with by the Minister's concession. I refer to the phrase about attaching conditions with respect to, any matter relating to the management, affairs or winding up of the scheme". There is then a reference to the rules of the scheme.

I may be wrong because, like many other people, I am just about as confused as anybody could be about this Bill, including the Department of Transport, but as I understand it, in so far as they are necessary these powers are already contained in the order-making powers which the Government have taken in the Bill. We had some hesitation about those order-making powers because of the possible hybridity, but let us now put that behind us. Those order-making powers are there and will come before Parliament because, however flawed the system for dealing with such orders in your Lordships' House, there is some control over them in another place.

As it stands, the government amendment seems to try to bypass that procedure. The Minister shakes his head, but as far as I am concerned the words in the amendment mean exactly what they say they mean, and they do not refer to any possibility of the system producing an order which will come before Parliament for discussion. In a sense, it is as simple as that.

At the very last minute the Government are seeking to take powers. They may not realise that they are doing so at this stage because when one challenges something about this Bill it is surprising how often the government lawyers say, "Yes, you are right. We had better change it". I have a nasty feeling that we are in that position again. I am sure that it is not done with malice by the Government, but I believe that those are the powers that they are taking unto themselves in this amendment. I also believe that the amendment that was so ably moved by the noble Lord, Lord Lucas, would stop that happening. I hope that the House will support it.

3.45 p.m.

Baroness Turner of Camden

My Lords, I rise to support the statements made this afternoon by the noble Lord, Lord Lucas, when moving his amendment and the statements that have just been made by the noble Lord, Lord Tordoff. Of course, even at this late stage we welcome the inclusion in the Bill of the funding guarantee, but we have had very little time to study it and to secure specialist advice on what is, after all, a complicated and difficult subject.

When I first read the government amendment, I was very concerned because it seemed extremely flawed and did not comply with the undertakings that were given in the memorandum of understanding. I am glad to hear from the Minister this afternoon that one of those concerns is to be met—albeit at this terribly late stage and without your Lordships having a chance to consider that amendment because it will be dealt with in another place. Nevertheless, an amendment is to be tabled to deal with the point that there is no provision in the wording for consultation with the trustees. Clearly, that is absolutely necessary.

Another aspect of the so-called "guarantee" contained in the government amendment is the need to ensure that, in giving it, the Secretary of State does not impose conditions that could worsen the accrued or prospective rights of the scheme members. We may well be told this afternoon that there is in any case a general, no-worsening guarantee. However, in the circumstances in which the guarantee has to be called upon, that may not be so clear unless something to that effect is spelled out on the face of the Bill.

I do not want to go over the ground that has been so extensively traversed already in dealing with the funding question, and the Minister will know that pensioners and prospective pensioners of BR have been desperately concerned about the security of their pensions. That is tied up with ensuring that there is a proper funding guarantee, which is why it is one of the most important issues in this part of the Bill. There have been repeated references to the guarantees given in the memorandum of understanding. But our advice is that we need to get at least some of that written into the Bill because unless we do so we cannot be absolutely sure that the rights and prospective rights of pension fund members have been adequately protected. This is the last occasion on which we in this House will have the opportunity to consider these matters in some depth. I therefore hope that the Minister will be prepared to take on board what a number of us are saying this afternoon.

There is another aspect of the wording of the government amendment which concerns me and which has led me to table my own amendment to it. What bothers me about the new clause is that it does not seem to cover the class of person referred to by me on a number of occasions in the past, notably employees who join the railway industry after the passage of the Bill. I should perhaps tell your Lordships that I have had some legal advice to that effect, pointing out that such people are not covered. On 20th October at col. 606 of Hansard, I moved an amendment, the intention of which was to provide some form of pension provision for employees who join the railway industry after the passage of the Bill. I pointed out that otherwise a two-tier workforce would come into being. I do not want to repeat those arguments, and I did not think that it would be necessary to do so because in response to my amendment at that stage the Minister said that there was not a great deal between us and that if I would look at the definition of "eligible persons" in paragraph 1(1) of the schedule, which applied to the whole of the schedule, I would see that it already covered future employees of the railway industry. The definition did not limit such persons to those in service at the passing of the Act and provided for any person to be a member provided that that membership would not prejudice Inland Revenue approval of the scheme.

However, it now seems that the new clause rules out new employees. Under the new clause the Secretary of State is obliged to give a guarantee in respect of the liabilities of the trustees of a new scheme, the members of which comprise only pensioners and deferred pensioners and where the pension rights of all members have been transferred to that scheme under paragraph 4 of the schedule. There is no obligation on the Secretary of State to provide appropriate guarantees in respect of any new scheme, the members of which include existing employees whether or not employed by the board or a subsidiary prior to the passage of the Act.

It is important to note that, unless the wording is amended, no guarantee is made in circumstances where the new scheme remains open to new employees. I do not believe that that is in line with the undertakings that were given in the memorandum of understanding, and the only way in which I could think of dealing with it at relatively short notice was to table the amendment which stands in my name. Clearly these issues have to be addressed by the Government if they are to put flesh in the Bill on the memorandum of understanding and if they are to assuage the fears that still exist among pensioners and prospective pensioners of BR.

Lord Simon of Glaisdale

My Lords, the pension arrangements in this Bill have aroused widespread concern extending far beyond the pensioners themselves. The principal spokesmen for the pensioners in your Lordships' House have been the noble Lord, Lord Peyton of Yeovil, my noble friend Lord Marsh and the noble Lord, Lord Shepherd. My noble friend Lord Marsh impressed upon us on the last occasion that this matter was discussed here that it is only your Lordships who can now protect the position of the pensioners.

Amendments on Third Reading are, on the one hand, confined to tidying-up, and, on the other hand, to giving effect to undertakings given at an earlier stage. It is perfectly clear that the noble Lord, Lord Peyton and my noble friend Lord Marsh, and, I suspect, also the noble Lord, Lord Shepherd, feel that the government amendment diverges seriously from the undertaking given by the Minister. So far as I am capable of judging, that seems to be so.

One is bound to ask what attempt was made by the department to agree the amendment with the noble Lords who, were principally concerned. The Minister seemed to suggest that it was up to the noble Lord, Lord Peyton, to approach the department, but surely that is the wrong way around. The Government in producing the amendment should seek the agreement of those to whom the undertaking was given. Moreover, it is even more serious than that because it now appears that the trustees to whom the Minister, at every earlier stage appealed as giving sufficient protection, are themselves now deeply concerned about the government amendment.

I shall vote for the amendment moved by the noble Lord, Lord Lucas of Chilworth, if it is carried into the Division Lobbies.

The Earl of Caithness

My Lords, the noble Baroness, Lady Turner of Camden, took us on to her Amendments Nos. 67 and 68. If your Lordships will permit me, I shall deal now with those and the other subsequent amendments—there is one in the name of the noble Lord, Lord Clinton-Davis—and then return to the main amendment.

The noble Baroness, Lady Turner of Camden, spoke to Amendment No. 67. I have some problems with its drafting, but its spirit is one that we have already accepted. We have already given a commitment that we will use the protection orders which we can make under paragraph 6 of Schedule 11 to ensure that pension rights of protected persons are no less favourable as a result of any amendment, or winding up, of a pension scheme. I hope that that meets the anxieties expressed by the noble Baroness.

I turn to the second amendment spoken to by the noble Baroness (Amendment No. 68). It enables the Secretary of State to guarantee a railway pension scheme which is not in any accepted sense a "closed scheme", by which we mean a scheme to which no new members are to be admitted. The purpose of giving a government solvency guarantee is to ensure that a pension fund is able to meet its obligations to its pensioner members in the event of any shortfall, where there is no, or only a very small, other source of funds.

However, I do not think it is right that the Secretary of State should give solvency guarantees to an "open scheme" which is still able to admit new members. If there is a deficit in such circumstances, the employer and the contributing members will be able to increase their contributions. That is perfectly reasonable—after all, the contributors can also enjoy a "pensions holiday" when there is a surplus—and is, in fact, the practice with most pension schemes.

If the Secretary of State were to give a solvency guarantee to an "open" fund, he would do so with no clear idea of the contingent liability which he would be taking on. New members could join the scheme at any time, and in due course might give rise to government funding to ensure that their pension rights are safeguarded. On public accounting grounds therefore the Secretary of State must be able to guarantee schemes only where the potential liabilities are not open-ended.

Although I have spoken to the two amendments tabled by the noble Baroness, I do not believe them to be strictly consequential upon Amendment No. 1.

With permission, I should now like to speak to the other group of amendments (Amendments Nos. 60 to 64 and Amendment No. 70), which are all of a minor technical nature to correct earlier omissions or inconsistencies, or are consequential on the government Amendment No. 65.

Amendments Nos. 60 to 64 relate to the new sections of the Transport Act 1980. Amendments Nos. 60 and 61 amend the new Section 52B of the 1980 Act. Amendment No. 60 makes provision for any guarantees to be given by my right honourable friend the Secretary of State instead of the BR Board. Amendment No. 61 allows him to make a substitution order in relation to any section of a new scheme.

Amendment No. 62, tabled by the noble Lord, Lord Clinton-Davis, covers similar ground to the government Amendment No. 63. They both substitute "Minister" for "Secretary of State" to make the new Sections 52D(2) and 52D(4) consistent with other references in the new sections of the 1980 Act inserted by paragraph 9 of Schedule 11.

Amendment No. 64 deletes the previous requirement in Section 52D(4) of the 1980 Act to lay a copy of the consent to the BR guarantee, and any conditions attached to it, now that the guarantee is to be given by the Secretary of State instead.

Amendment No. 70 is a direct consequential of Amendment No. 65. It provides for the orders made under sub-paragraph (5) to be subject to the negative resolution procedure. Sub-paragraph (5) allows the Secretary of State to disregard people in the scheme who, because they do not meet the description in that paragraph, might prevent a guarantee being given.

I turn finally to Amendments Nos. 57, 58 and 59 which are all technical amendments clarifying the provisions of Schedule 11.

I commend to the House Amendment No. 65 and the technical and consequential amendments which stand in my name. I also recommend that the House accepts Amendment No. 62 in the name of the noble Lord, Lord Clinton-Davis.

I shall return, if I may, to the first point about which we were talking. I refute, if I may, most strongly, what was said by the noble and learned Lord, Lord Simon of Glaisdale. I believe that the Government have fully met the commitment that I gave on Report. The House is not likely to be asked to decide whether the commitment has been met, the question is whether it should be in the wording in my name or whether part of that wording should be changed to that preferred by my noble friend Lord Lucas of Chilworth and the noble Lord, Lord Tordoff. Unless I have misunderstood him, for which I sincerely apologise, I understood the noble and learned Lord to say that we had not met the commitment that I gave. We most certainly have met that commitment.

Perhaps I may take up a point made by the noble Lord, Lord Tordoff. I believe that I did not make myself as clear as I should have done when I spoke earlier, so that is still a misunderstanding in his mind. There is no order-making power to amend the rules of a new scheme. The duty to guarantee will be in respect of a new scheme. Some of the terms and conditions of the guarantee would not be appropriate as rules to the scheme. Perhaps I may give the example that I gave previously; that is, the timing of the liquidation of investments. That is why we have had to word the guarantee in the way that we have. We are not talking here about amending the rules of a new scheme.

It is important that your Lordships realise the significance of the difference and the reason for the difference between the amendment proposed by the noble Lord, Lord Tordoff, and the government amendment. Perhaps I may give some other examples of why the Secretary of State might wish to control the management and affairs, or amend the rules, of the scheme he has guaranteed. It is because it is the taxpayers' money that is being guaranteed; it is to ensure the efficient administration and management of the scheme so that the contingent liability is not unreasonably increased, and I am sure all your Lordships would support that; it is to ensure adequate security of the assets of the scheme, again something I believe that your Lordships would welcome; to change the frequency of actuarial valuations; to preclude or otherwise control changes in the composition or representation of the trustees; to delay the winding up of the scheme if market conditions, for example share prices and property values, are unduly unfavourable at the time.

There is a good reason why we have drafted the Government's amendment in such terms. I always said that the amendment would be difficult to draft but we have been able to do so. It fulfils the commitment that I gave to your Lordships and the wording is necessary. I commend it most strongly to the House.

4 p.m.

Lord Clinton-Davis

My Lords, before the Minister sits down will he concede that notwithstanding the discussions which must have taken place with the chairman of trustees—he is a man in a position of great authority and responsibility in relation to this matter—the chairman remains unconvinced that the Government have complied with their undertakings? I am in no sense impugning the Minister's integrity by saying that. That fact is revealed in the letter that the chairman wrote to the Secretary of State and in the frustration that he has encountered in dealing with the Government in respect of these matters. He is a man who, for the best of intentions, was persuaded at the last moment before the original amendment tabled by the noble Lord, Lord Peyton, was discussed—at 5 o'clock on the previous evening—and felt impelled to agree to the memorandum of understanding. He did not have the opportunity to consult all his trustees. That is the record.

The chairman received advice from his legal and other professional advisers that the Government had fallen down on their commitments. And so he wrote again—not once, but three times. On the last opportunity that he had to express himself he stated: 1 am impelled to write to you again having just seen the Government's Amendments to the Railways Bill to be moved on third reading.". Obviously, as on all previous occasions, he had taken proper professional advice on these matters. It is extraordinary, is it not, that when the Minister originally referred to the memorandum of understanding he vigorously prayed in aid the support of the chairman of the trustees? That support appears to have wavered somewhat—

The Earl of Caithness

My Lords, with respect, I believe that the noble Lord is out of order as regards the way in which we conduct the procedure in this House. If the Minister has replied—which I have—a noble Lord is entitled to ask a question of him for elucidation but not to make another speech. Perhaps I may make it absolutely clear that the chairman of the trustees has not questioned the fact that the Government have met their undertakings in respect of the provisions of a guarantee. The noble Lord, Lord Clinton-Davis, is wrong on that point.

Lord Clinton-Davis

My Lords, the rules are difficult to follow in circumstances in which the Government have tabled an amendment virtually at a last moment. With respect, I believe that the Minister should not have made that point. I began by asking a question: is it not a fact that the chairman of the trustees had written to the Minister in such terms?

Is the Minister saying that, in the light of what he has told the House today and any further discussions that might have taken place today, he has been able to satisfy the chairman of the trustees and the deep anxieties that he has unusually expressed in his letter? What steps has the Minister taken to be in touch with the chairman today? What has been the result of any deliberations that have taken place? Surely the House will agree that those are perfectly reasonable questions to put to the Minister at the last opportunity that we have to discuss these matters.

The Earl of Caithness

My Lords, with the leave of the House, I still maintain that the noble Lord was wrong as regards the procedures of the House. Certainly the chairman of the trustees has anxieties, but he has not questioned that the Government have met their undertakings in respect of the provision of the guarantee.

Lord Lucas of Chilworth

My Lords, I am grateful to noble Lords who have taken part in the shorter, more contentious part of the debate in relation to these amendments and others. I do not propose to respond to other amendments.

I wish to make one matter quite clear. I was unhappy with my noble friend the Minister when he took me to task for not having taken up the offer of a meeting. Perhaps I may make the position absolutely clear. The letter arrived before I saw the government amendments. At that time there was no need for me to take up the offer. Indeed, other engagements already agreed precluded my so doing later that night. That is one of those little red herrings that I find extraordinarily disturbing at this late stage of the Bill when we are dealing with a serious matter.

I wish to clarify two further matters. First, I am grateful to my noble friend for correcting what he described as an omission in the Government's amendment—that dealing with consultation. My noble friend used the words "consultation with the trustees". He said nothing about the scheme actuaries. My amendment introduces the need to take the advice of the scheme actuaries. I trust that if I have misunderstood my noble friend he will forgive me, but I wish to be clear about what is to be put right in another place.

Secondly, my noble friend has not dealt with the second part of my series of amendments which deal with the provision in subsection (8) (c) of the Government's Amendment No. 65. That gives the Secretary of State the powers to alter the guarantee: requiring or precluding, or otherwise with respect to, amendment of the rules of the scheme". That was the point made by the chairman of the trustees; the Secretary of State can alter the rules.

My noble friend Lord Caithness read out a string of circumstances, asking, "What about in this circumstance shouldn't the Secretary of State have power? What about in the other circumstance?". I suggest that that is whistling in the dark. I suggest that in order to support his argument my noble friend is conjuring up events which may arise. I have not found his response entirely satisfying that which. I seek to put right in the Bill by virtue of the amendment. Therefore, I ask your Lordships' House to determine whether I have succeeded.

4.8 p.m.

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

Their Lordships divided: Contents, 150; Not-Contents, 151.

Division No. 1
CONTENTS
Addington, L.	Iddesleigh, E.
Airedale, L.	Jay, L.
Alport, L.	Jay of Paddington, B.
Archer of Sandwell, L.	Jenkins of Putney, L.
Ardwick, L.	John-Mackie, L.
Ashley of Stoke, L.	Judd, L.
Attlee, E.	Kennet, L.
Aylestone, L.	Kinloss, Ly.
Balfour of Inchrye, L.	Kirkhill, L.
Bath, M.	Lawrence, L.
Beaumont of Whitley, L.	Layton, L.
Birk, B.	Llewelyn-Davies of Hastoe, B.
Blackstone, B.	Lloyd-George of Dwyfor, E.
Bonham-Carter, L.	Lockwood, B.
Boston of Faversham, L.	Longford, E.
Bottomley, L.	Lovell-Davis, L.
Braybrooke, L.	Lucas of Chilworth, L. [Teller.]
Bridges, L.	McCarthy, L.
Brimelow, L.	McIntosh of Haringey, L.
Brooks of Tremorfa, L.	Mackie of Benshie, L.
Bruce of Donington, L.	Mallalieu, B.
Callaghan of Cardiff, L.	Masham of Ilton, B.
Campbell of Eskan, L.	Mason of Barnsley, L.
Carmichael of Kelvingrove, L.	Mayhew, L.
Carter, L.	Milner of Leeds, L.
Castle of Blackburn, B.	Molloy, L.
Chichester, Bp.	Monkswell, L.
Cledwyn of Penrhos, L.	Monson, L.
Clinton-Davis, L.	Montagu of Beaulieu, L.
Cobbold, L.	Morris of Castle Morris, L.
Cochrane of Cults, L.	Mountevans, L.
Cocks of Hartcliffe, L.	Mulley, L.
Cross, V.	Munster, E.
Darcy (de Knayth), B.	Nathan, L.
David, B.	Nicol, B.
Dean of Beswick, L.	Ogmore, L.
Donaldson of Kingsbridge, L.	Palmer, L.
Donoughue, L.	Parry, L.
Dormand of Easington, L.	Peston, L.
Ezra, L.	Pitt of Hampstead, L.
Falkender, B.	Plant of Highfield, L.
Falkland, V.	Polwarth, L.
Fisher of Rednal, B.	Rea, L.
Gallacher, L.	Redesdale, L.
Geraint, L.	Ritchie of Dundee, L.
Glenamara, L.	Robson of Kiddington, B.
Gould of Potternewton, B.	Rochester, L.
Graham of Edmonton, L.	Russell, E.
Greene of Harrow Weald, L.	Sainsbury, L.
Greenhill of Harrow, L.	Saltoun of Abernethy, Ly.
Gregson, L.	Scanlon, L.
Grey, E.	Seear, B.
Gridley, L.	Sefton of Garston, L.
Hanworth, V.	Serota, B.
Harris of Greenwich, L.	Shannon, E.
Haskel, L.	Simon of Glaisdale, L.
Hayter, L.	Slim, V.
Healey, L.	Stallard, L.
Henderson of Brompton, L.	Stedman, B.
Hilton of Eggardon, B.	Stoddart of Swindon, L.
Hirshfield, L.	Strabolgi, L.
Hollick, L.	Taylor of Blackburn, L.
Hollis of Heigham, B.	Taylor of Gryfe, L.
Holme of Cheltenham, L.	Tenby, V.
Houghton of Sowerby, L.	Thomson of Monifieth, L.
Howell, L.	Thurlow, L.
Howie of Troon, L.	Tordoff, L. [Teller.]
Hughes, L.	Turner of Camden, B.
Hunt, L.	Varley, L.
Hylton, L.	Warnock, B.
Hylton-Foster, B.	Wedderburn of Charlton, L.

Whaddon, L.	Williams of Elvel, L.
Wharton, B.	Williams of Mostyn, L.
White, B.	Wilson of Rievaulx, L.
Wigoder, L.	Winchilsea and Nottingham, E.

4.18 p.m.

Lord Clinton-Davis moved Amendment No. 2:

Page 5, line 1, leave out subsection (4).

The noble Lord said: My Lords, this is a matter to which I adverted when we debated these issues on 14th October. Perhaps the Minister will pay a little attention to the debate. I know that he must feel enormously relieved by the massive majority which he has just received, although his party must be conscience stricken by what it has done.

The Minister described the amendment as simple. The amendment dealt with the privileged position to be afforded to management-employee bids for franchises. He described that as a simple amendment. It was an amendment which was again tabled virtually at the last moment. It was smuggled in. He sought to justify the amendment by saying that it merely tidied up the Bill and made it comprehensive throughout because management buy-outs take their place in Parts II and III of the Bill. He said: I do not believe that the advice that I received has changed since we last dealt with this issue".—[Official Report, 14/10/93; col. 294.] Well, if it had not changed, why introduce it? It was introduced for the simple reason that it was a device to ensure that the Peyton amendment (dealing with the right of British Rail to enter the franchising stakes) could be subverted. That was the point of it. It is as plain as a pikestaff. Moreover, I have reason to believe that the Minister will have to say something about it at a later stage of the Bill's proceedings.

Frankly, I believe that it is wrong to smuggle in such issues as the Secretary of State has sought to do on this occasion. Further, I understand that the Secretary of State is now asserting to his Back-Benchers in another place—from whom, of course, he has been seeking some kind of refuge—that that is precisely the position; in other words, that that was the way to get around the Peyton amendment.

I previously expressed some doubts about the practicality of the privilege that is to be given to management/employee bids. I doubted it, save for cream routes that might possibly be acquired—although I believe that they will face much competition—because it could be extremely risky for individuals to invest in that particular form of enterprise. It will be prudential for them to take skilled, professional advice, not only on the principles involved but also on their own personal position. I say that because it is by no means risk-free as regards their own personal position.

I raised another issue during earlier debates upon which I should like to elaborate for just a few moments this afternoon. I gave the Minister notice earlier today that I would raise the following specific points. I am anxious that he should be in a position to reply to them because, in my submission, they are serious matters. By embarking upon such a provision in the Bill, I wonder whether we are exposing candidates for franchises who come from that particularly privileged sector to the risk of litigation by reason of breaches of the competition rules of the Treaty of Rome.

In earlier debates, I referred to Article 85 of the treaty. However, I believe that I should start today with Article 7, and then move on to Article 90 of the treaty. Article 7 says: Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited". I submit that defining the category of candidates for franchising agreements in the way set out in the present provision in the Bill implicitly discriminates on the grounds of nationality—in other words, it is a breach of Article 7, prima facie at least.

Article 85 deals with distortions of competition which may arise through the application of unfair provisions, and does so in some detail. As I put that on the record on the last occasion, I shall riot rehearse the arguments again this afternoon. However, Article 90 states: In the case of public undertakings and undertakings to which Member States grant special or exclusive rights. Member States shall neither enact nor maintain in force any measure contrary to the rules contained in this Treaty, in particular to those riles provided for in Article 7"— from which I just quoted— and Articles 85 to 94". Those are serious issues and issues which those embarking upon such a form of enterprise must take into account. In making their bids, they will certainly be expending a considerable amount of money. Such matters are not dealt with easily; indeed, they are technical and thus expensive issues because of the advice which must be sought.

Can the Minister say whether in fact the Government have an answer to such questions? In fairness, the Minister wrote to me, I believe, only yesterday—although, in fact, the letter does not bear a date. He referred to the points that I made with regard to Article 85. The letter reads: No decisions have yet been taken on how the Secretary of State will exercise his duty in respect of MEBOs. But, as with all his duties and functions under the Bill, in exercising his duty in Clause 4 the Secretary of State will, of course, take account"— I emphasise the words "take account"— of the UK's obligations under the Treaty of Rome". Of course he will do so; the UK is governed by those provisions, including the rules relating to competition. The letter continues: If it transpired that any proposed arrangements would be subject to Article 85, it would of course be open to the Commission to grant an exemption under Article 85(3)". Of course, the Commission has the power to do so, but it certainly does not follow that it will exercise that power in favour of the MEBO.

I should like to ask the Minister the following questions as well as some legal issues which I ask him also to address. In the earlier debate the Minister said: Even at this early stage there are already indications that a number of management and employee teams are giving active consideration to preparing bids for their franchise".—[Official Report, 14/10/93; col. 293.] How many such bids does the Minister consider to be likely? Is it not a fact that there is already considerable disenchantment on the part of those whom the Government had expected would be interested in making such bids? Further, is the Minister aware that a poll is in the course of being taken which shows that there is very little interest in such matters? Incidentally, I gather that the results of that poll will be available on Monday next, but the latter is the information that I have just received. I believe that the Minister owes it to the House to deal not only with the legal issues but also with the other questions that I raised. I beg to move.

4.30 p.m.

The Earl of Caithness

My Lords, as the noble Lord, Lord Clinton-Davis, said, the amendment seeks to remove the duty on the Secretary of State, in exercising his functions on Part I of the Bill, to promote the award of franchises to companies in which employees providing the railway services to be franchised have a significant interest. I must confess a great deal of disappointment that the noble Lord has taken that attitude towards management and employee buy-outs.

When at Report stage I moved the amendment to insert the new duty on the Secretary of State, I explained that the Government wished to encourage bids from BR management and employee teams which have shown an encouraging level of interest in bidding for franchises for the services that they run—the franchising equivalent of management and employee buy-outs.

The noble Lord, Lord Clinton-Davis, would like me to quantify the situation. However, until we actually receive the bids, it will be difficult to do so. Nevertheless, I can assure noble Lords that there is a significant number of potential management and employee buy-outs looking at the situation; but they are waiting to see the full effect of the Bill and how much they might be circumscribed by amendments that the noble Lord, Lord Clinton-Davis, seeks to insert which might make it unwise for them to proceed. I think that that would be to the detriment of future rail services in the country. I believe that we should seek to encourage the managers and employees who have knowledge of the railways and who are keen to break away from the monolithic structure that is imposed upon them by British Rail, and get away from government control and funding.

I hope the noble Lord, Lord Clinton-Davis, would agree—I know the rest of the House would agree with this—that management and employee buy-outs have been a remarkably successful feature of many previous privatisations. One need look no further than the transport sector to find a variety of examples of this. The National Freight Corporation, bus companies and trust ports have all been sold to management and employees—and, moreover, have thrived. Giving management and employees a stake in the companies they work for has provided them with a powerful incentive to make a success of their business by creating a direct link between the fortunes of the company and those of the people running it and working in it.

The noble Lord, Lord Clinton-Davis, raised the possibility that by putting the duty in this statutory form, the Government could run into difficulties under the European Community's competition rules. I undertook to consider this point and I have done so. As the noble Lord said, I have written to him. I should first make it clear that no decisions have yet been taken on how my right honourable friend the Secretary of State will exercise his duty in respect of management and employee buy-outs. But as with all his duties and functions under the Bill, in exercising this duty in Clause 4, he will of course take account of the UK's obligations under the Treaty of Rome including those relating to competition. If it transpired that any particular arrangements were likely to be caught by Article 85, there is, of course—the noble Lord read this out from the letter I sent him—provision for the Commission to grant exemptions under Article 85(3).

I also listened with care to what the noble Lord had to say about the other articles; but as no decisions have been taken on how to proceed and how the Secretary of State will exercise his duty, the situation remains unclear. I entirely accept that whatever he does must be in line with our obligations under the Treaty of Rome. I do not just refer to Article 85 but also Articles 7 and 90. The Bill will not require him to take any action in breach of these obligations. There is plenty of past evidence of preferential treatment being granted to management employee buy-outs without European action being taken. The provisions for selling trust ports, as I have said, are but one example of that. I have responsibility for that area.

The principle is well established. The duty in Clause 4 does not require any particular action by the Secretary of State and therefore the question of compatibility with the treaty does not arise at present. It is too early to say how the Secretary of State will exercise his duty, and it is also too early to speculate on the compatibility of any measures with our treaty obligations. However, I am grateful to the noble Lord, Lord Clinton-Davis, for drawing this matter to our attention.

Lord Clinton-Davis

My Lords, before the Minister sits down, will he tell the House whether his department has been in touch with Directorate-General IV of the European Commission about these provisions and what response it has received?

The Earl of Caithness

My Lords, what I consider much more important are the powers that the Secretary of State enacts under this Bill. At the moment we are talking about a provision which exists in a similar form in other pieces of legislation. It is how the Secretary of State exercises his powers under this Bill that is the important matter the Commission will be concerned with.

Lord Clinton-Davis

My Lords, with the greatest respect, the Minister has failed to address the points that have been made, and the burden of that may well rest on the head of the Secretary of State and his department in due course. This is not like other provisions that have been included in privatisation measures before because this provision confers a privileged position. To the best of my knowledge, I have not encountered such a provision in previous legislation. I stand to be corrected on that point, but that is my belief. It is that privileged position which I believe the Commission could well find offensive. This statutory provision could be used in evidence against the interests of the management employee bid. That is the problem. As I have said, I have given the Minister notice of the points I wished to raise but he has not presented the House with any new points. What he has said before was wholly unsatisfactory and what he has repeated today is also wholly unsatisfactory. However, he will have to justify his position vis-á-vis the European Commission in the event of any disappointed franchisee claiming that the measure we are discussing is offensive to the provisions of the articles I have quoted. However, I am wrong in saying it will be up to the Minister to justify himself: it will be up to the unfortunate people who are involved in the management employee buy-out. That is the problem. However, time will tell what is to happen. I do not intend to press this matter to a Division this afternoon. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 [General duties of the Franchising Director]:

Lord Tordoff moved Amendment No. 3:

Page 6, line 32, at end insert:

("() The Franchising Director shall have regard to the maintenance of the discount fare schemes referred to in section 28(4A) below.").

The noble Lord said: My Lords, in moving Amendment No. 3, 1 wish to speak also to Amendment No. 11 which is grouped with it. The amendments take us into the whole question of discounts and special cards of one kind or another. Noble Lords who were present on that occasion will remember that this subject was debated on 14th October (at col. 323 of the Official Report) when an amendment was moved by the noble Lord, Lord Clinton-Davis, which sought to instruct the franchising director to do certain things. We are saying that it should be a condition of the approval of the scheme that it is no less favourable than those in operation at the date upon which this Bill is passed.

The noble Earl, Lord Caithness, said that he understood the motives that led to the tabling of the amendment and that he was not unsympathetic to those motives. However, he said that there were problems because of the inflexibility which was contained within that amendment. He said: the proposed restriction on the access price for discount schemes would be inflexible and could prevent new schemes being introduced to the advantage of passengers. Elderly people, for example, might be happy to pay a higher access charge if that meant that the discount were larger or that other services such as coaches or leisure services were added to the benefits of the card".—[Official Report, 14/10/93; col. 324.]

I believe the amendment that we have tabled today gets round that problem in that it allows for flexibility between various possibilities. I believe it is necessary to have this provision on the statute because the franchising director could well be under great market pressure to minimise the discounts in certain cases. The franchisees may well tell the franchising director they are having difficulty in making a profit and that they cannot go ahead unless he moderates the terms of the discounts. We are anxious that that should not happen and that the franchising director should have the strength of the building societies—as they say—round him in the shape of an entry on the face of the Bill. As I have said, I believe the amendment contains the flexibility that was not included hitherto, and I hope the Government will consider the amendment suitable. I beg to move.

Lord Clinton-Davis

My Lords, I rise to support the noble Lord, Lord Tordoff. I agree that his amendment is preferable to the one I moved on an earlier occasion. We are anxious to determine that there should not be a process of devaluing these concessionary fares which are so important to so many people. One could certainly envisage a situation where, whether acting in collusion with the Government or not, British Rail in the movement towards privatisation decides these concessionary fares are to be devalued by imposing substantial increases in the prices it charges for them. This amendment seeks to deal with that issue.

I do not propose to take the matter any further because we have debated these issues before. The Government's response to concessionary fares was belated and grudging but, in so far as it went, it was to some degree helpful. However, they had to be pushed every inch of the way whereas the House will recall that initially, apart from one particular area in relation to concessionary fares, the Government said all this was to be left to market forces. Then they reneged on their own position, not for the first time in relation to this Bill. They came under pressure from their own Back Benches in another place and they came under pressure here. Further concessions were drawn out of them. Perhaps it is not too late and they can have further thoughts on an issue which is of such vital concern to so many people. We cannot leave such issues to market forces. The noble Lord, Lord Tordoff, has done the House a service by reintroducing the matter today.

The Earl of Caithness

My Lords, I was not quite sure whether the noble Lord. Lord Clinton-Davis, was thanking the Government for having listened to the debate or whether he was cross that the Government had moved having listened to debate. I was not clear whether he wished us to remain impervious even to good arguments or whether he would have preferred that we moved on every argument, whether good or bad.

I listened with care to the noble Lord, Lord Tordoff. Amendment No. 11 is the main amendment. know that the noble Lord is anxious, as are other noble Lords, about the form of discount schemes which will be required by the franchising director. As your Lordships will recall, we considered a similar amendment at Report stage. As I said then, I understand the wish to ensure that young, elderly and disabled people have proper access to discounted tickets at a reasonable price. The Government are on record as saying that the disabled persons discount scheme should provide broadly the same benefits as the current BR scheme. The franchising director will ensure that that is the case. I believe we can leave it to the franchising director, in the light of the objectives and guidance which he will receive, to ensure that the approved schemes for the elderly and young take their needs properly into account.

Our debates on these matters demonstrate a fundamental difference of view between the Government and the noble Lord, Lord Tordoff. We do not wish to bind future operators to current BR practice in every detail. There is a real danger that the proposed restrictions on "entry" price to those schemes and on the benefits and conditions of use would create inflexibility and could prevent new schemes being introduced which would be to the advantage of passengers. There will be trade-offs to be made between the cost of joining the scheme and the benefits to be enjoyed. Operators should be free to bring their commercial judgment to bear on such matters, given that there is always the requirement for the franchising director's approval.

I note that the noble Lord, Lord Tordoff, stated that he had taken on board the point that we made about inflexibility and had moved towards our position. I am grateful to the noble Lord. However, I highlight words in the noble Lord's amendment which cause me considerable anxiety. I believe that the "no less favourable" formulation in Amendment No. 11 will result in simply freezing the present arrangements in perpetuity. I find it hard to envisage how that provision will give passengers the best deal. It is still on that basis that I take a different view from the noble Lord, Lord Tordoff.

Lord Tordoff

My Lords, the Government's attitude is well revealed by the debate. They would like discount fare schemes to continue but will do nothing to ensure that they do. To suggest that the words "no less favourable" are a strait-jacket is nonsense. The amendment is couched in such a way that there is great flexibility with the interchange between various possible schemes. However, the principle is stated. It should not be possible to introduce schemes which are less favourable than at present. The amendment provides the only way to stiffen the back of the franchising director so that he is not forced into a position which neither the Government nor Members on this side of the House wish by the free operation of market forces in their naked horridness. In the circumstances, I have no alternative but to ask the House to decide between our two points of view.

4.44 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 128; Not-Contents, 150.

Division No. 1
CONTENTS
Addington, L.	Iddesleigh, E.
Airedale, L.	Jay, L.
Alport, L.	Jay of Paddington, B.
Archer of Sandwell, L.	Jenkins of Putney, L.
Ardwick, L.	John-Mackie, L.
Ashley of Stoke, L.	Judd, L.
Attlee, E.	Kennet, L.
Aylestone, L.	Kinloss, Ly.
Balfour of Inchrye, L.	Kirkhill, L.
Bath, M.	Lawrence, L.
Beaumont of Whitley, L.	Layton, L.
Birk, B.	Llewelyn-Davies of Hastoe, B.
Blackstone, B.	Lloyd-George of Dwyfor, E.
Bonham-Carter, L.	Lockwood, B.
Boston of Faversham, L.	Longford, E.
Bottomley, L.	Lovell-Davis, L.
Braybrooke, L.	Lucas of Chilworth, L. [Teller.]
Bridges, L.	McCarthy, L.
Brimelow, L.	McIntosh of Haringey, L.
Brooks of Tremorfa, L.	Mackie of Benshie, L.
Bruce of Donington, L.	Mallalieu, B.
Callaghan of Cardiff, L.	Masham of Ilton, B.
Campbell of Eskan, L.	Mason of Barnsley, L.
Carmichael of Kelvingrove, L.	Mayhew, L.
Carter, L.	Milner of Leeds, L.
Castle of Blackburn, B.	Molloy, L.
Chichester, Bp.	Monkswell, L.
Cledwyn of Penrhos, L.	Monson, L.
Clinton-Davis, L.	Montagu of Beaulieu, L.
Cobbold, L.	Morris of Castle Morris, L.
Cochrane of Cults, L.	Mountevans, L.
Cocks of Hartcliffe, L.	Mulley, L.
Cross, V.	Munster, E.
Darcy (de Knayth), B.	Nathan, L.
David, B.	Nicol, B.
Dean of Beswick, L.	Ogmore, L.
Donaldson of Kingsbridge, L.	Palmer, L.
Donoughue, L.	Parry, L.
Dormand of Easington, L.	Peston, L.
Ezra, L.	Pitt of Hampstead, L.
Falkender, B.	Plant of Highfield, L.
Falkland, V.	Polwarth, L.
Fisher of Rednal, B.	Rea, L.
Gallacher, L.	Redesdale, L.
Geraint, L.	Ritchie of Dundee, L.
Glenamara, L.	Robson of Kiddington, B.
Gould of Potternewton, B.	Rochester, L.
Graham of Edmonton, L.	Russell, E.
Greene of Harrow Weald, L.	Sainsbury, L.
Greenhill of Harrow, L.	Saltoun of Abernethy, Ly.
Gregson, L.	Scanlon, L.
Grey, E.	Seear, B.
Gridley, L.	Sefton of Garston, L.
Hanworth, V.	Serota, B.
Harris of Greenwich, L.	Shannon, E.
Haskel, L.	Simon of Glaisdale, L.
Hayter, L.	Slim, V.
Healey, L.	Stallard, L.
Henderson of Brompton, L.	Stedman, B.
Hilton of Eggardon, B.	Stoddart of Swindon, L.
Hirshfield, L.	Strabolgi, L.
Hollick, L.	Taylor of Blackburn, L.
Hollis of Heigham, B.	Taylor of Gryfe, L.
Holme of Cheltenham, L.	Tenby, V.
Houghton of Sowerby, L.	Thomson of Monifieth, L.
Howell, L.	Thurlow, L.
Howie of Troon, L.	Tordoff, L. [Teller.]
Hughes, L.	Turner of Camden, B.
Hunt, L.	Varley, L.
Hylton, L.	Warnock, B.
Hylton-Foster, B.	Wedderburn of Charlton, L.

Whaddon, L.	Williams of Elvel, L.
Wharton, B.	Williams of Mostyn, L.
White, B.	Wilson of Rievaulx, L.
Wigoder, L.	Winchilsea and Nottingham, E.
NOT-CONTENTS
Aberdare, L.	Hooper, B.
Abinger, L.	Hothfield, L.
Addison, V.	Howe, E.
Ailesbury, M.	Ironside, L.
Aldington, L.	Jenkin of Roding, L.
Alexander of Tunis, E.	Johnston of Rockport, L.
Archer of Weston-Super-Mare, L.	Killearn, L.
Arran, E.	Kimball, L.
Ashbourne, L.	Lauderdale, E.
Astor, V.	Lindsay, E.
Astor of Hever, L.	Long, V.
Barber, L.	Lucas, L.
Bessborough, E.	Lyell, L.
Birdwood, L.	Mackay of Ardbrecknish, L.
Blatch, B.	Mackay of Clashfern, L.
Blyth, L.	[Lord Chancellor.]
Boardman, L.	Macleod of Borve, B.
Boyd-Carpenter, L.	Malmesbury, E.
Brabazon of Tara, L.	Mancroft, L.
Braine of Wheatley, L.	Marlesford, L.
Bridgeman, V.	Merrivale, L.
Bruntisfield, L.	Mersey, V.
Butterworth, L.	Middleton, L.
Cadman, L.	Miller of Hendon, B.
Caithness, E.	Milverton, L.
Campbell of Alloway, L.	Monckton of Brenchley, V.
Campbell of Croy, L.	Monk Bretton, L.
Carnarvon, E.	Montgomery of Alamein, V.
Carnegy of Lour, B.	Mottistone, L.
Carnock, L.	Mowbray and Stourton, L.
Carr of Hadley, L.	Moyne, L.
Cayzer, L.	Nelson, E.
Chalker of Wallasey, B.	Nelson of Stafford, L.
Chelmsford, V.	Norrie, L.
Chesham, L.	O'Brien of Lothbury, L.
Chilver, L.	O'Cathain, B.
Clanwilliam, E.	Orkney, E.
Clark of Kempston, L	Orr-Ewing, L.
Cockfield, L.	Peel, E.
Constantine of Stanmore, L.	Perry of Southwark, B.
Cranborne, V.	Platt of Writtle, B.
Crawshaw, L.	Plummer of St. Marylebone, L.
Crickhowell, L.	Porter of Luddenham, L.
Cumberlege, B.	Prentice, L.
Dean of Harptree, L.	Quinton, L.
Denham, L.	Renton, L.
Denton of Wakefield, B.	Renwick, L.
Dixon-Smith, L.	Rodger of Earlsferry, L.
Downshire, M.	Romney, E.
Eccles, V.	St. Davids, V.
Ellenborough, L.	Saint Oswald, L.
Elles, B.	Seccombe, B.
Elliot of Harwood, B.	Selborne, E.
Elliott of Morpeth, L.	Sharples, B.
Elton, L.	Skelmersdale, L.
Erroll of Hale, L.	Soulsby of Swaffharn Prior, L.
Ferrers, E.	Strange, B.
Finsberg, L.	Strathcarron, L.
Flather, B.	Strathcona and Mount Royal, L.
Forte, L.	Strathmore and Kinghorne, E.
Fraser of Carmyllie, L.	[Teller.]
Fraser of Kilmorack, L.	Suffield, L.
Gainford, L.	Swansea, L.
Gardner of Parkes, B.	Swinfen, L.
Goschen, V.	Terrington, L.
Grantchester, L.	Thomas of Gwydir, L.
Hailsham of Saint Marylebone, L.	Trumpington, B.
Harding of Petherton, L.	Tugendhat, L.
Harlech, L.	Ullswater, V. [Teller.]
Harmsworth, L.	Vaux of Harrowden, L.
Hayhoe, L.	Vivian, L.
Henley, L.	Wade of Chorlton, L.
Hesketh, L.	Wakeham, L.
Hood, V.	[Lord Privy Seal.]

Wedgwood, L.	Wolfson, L.
Whitelaw, V.	Wyatt of Weeford, L.
Wise, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

Division No. 2
CONTENTS
Addington, L.	Bridges, L.
Airedale, L.	Brimelow, L.
Archer of Sandwell, L.	Bruce of Donington, L.
Ardwick, L.	Callaghan of Cardiff, L.
Ashley of Stoke, L.	Campbell of Eskan, L.
Auckland, L.	Carmichael of Kelvingrove, L.
Aylestone, L.	Carter, L.
Bath, M.	Cledwyn of Penrhos, L.
Beaumont of Whitley, L.	Clinton-Davis, L.
Birk, B.	Cobbold, L.
Blackstone, B.	Cocks of Hartcliffe, L.
Bonham-Carter, L.	Croham, L.
Boston of Faversham, L.	David, B.

Dean of Beswick, L.	McCarthy, L.
Donaldson of Kingsbridge, L.	McIntosh of Haringey, L.
Donoughue, L.	Mackie of Benshie, L.
Dormand of Easington, L.	Mallalieu, B.
Ellenborough, L.	Mayhew, L.
Ezra, L.	Milner of Leeds, L.
Falkender, B.	Mishcon, L.
Falkland, V.	Molloy, L.
Fisher of Rednal, B.	Monkswell, L.
Gainsborough, E.	Monson, L.
Gallacher, L.	Morris of Castle Morris, L.
Geraint, L.	Mulley, L.
Gladwyn, L.	Nathan, L.
Glenamara, L.	Nicol, B.
Gould of Potternewton, B.	Ogmore, L.
Graham of Edmonton, L.	Palmer, L.
Greene of Harrow Weald, L.	Parry, L.
Greenhill of Harrow, L.	Peston, L.
Grey, E.	Pitt of Hampstead, L.
Hanworth, V.	Plant of Highfield, L.
Harris of Greenwich, L.	Prys-Davies, L.
Hayter, L.	Rea, L.
Healey, L.	Redesdale, L.
Hilton of Eggardon, B.	Ritchie of Dundee, L.
Hirshfield, L.	Robson of Kiddington, B.
Hollick, L.	Rochester, L.
Hollis of Heigham, B. [Teller.]	Russell, E.
Hooson, L.	Sainsbury, L.
Howie of Troon, L.	Seear, B.
Hughes, L.	Sefton of Garston, L.
Hunt, L.	Serota, B.
Hylton, L.	Simon of Glaisdale, L.
Hylton-Foster, B.	Slim, V.
Iddesleigh, E.	Stedman, B.
Irvine of Lairg, L.	Stoddart of Swindon, L.
Jay, L.	Strabolgi, L.
Jay of Paddington, B.	Tenby, V.
Jenkins of Putney,	Thomson of Monifieth, L.
L. John-Mackie, L.	Thurlow, L.
Judd, L.	Tordoff, L. [Teller.]
Kagan, L.	Turner of Camden, B.
Kennet, L.	Varley, L.
Kinloss, Ly.	Wedderburn of Charlton, L.
Kirkhill, L.	Whaddon, L.
Lawrence, L.	White, B.
Listowel, E.	Wigoder, L.
Llewelyn-Davies of Hastoe, B.	Wilberforce, L.
Lloyd-George of Dwyfor, E.	Williams of Elvel, L.
Lockwood, B.	Williams of Mostyn, L.
Longford, E.	Wilson of Rievaulx, L.
Lovell-Davis, L.

NOT-CONTENTS
Aberdare, L.	Carnarvon, E.
Abinger, L.	Carnegy of Lour, B.
Addison, V.	Carnock, L.
Aldington, L.	Carr of Hadley, L.
Alexander of Tunis, E.	Chalker of Wallasey, B.
Archer of Weston-Super-Mare, L	Chelmsford, V.
Arran, E.	Chesham, L.
Astor, V.	Chilver, L.
Astor of Hever, L.	Chorley, L.
Attlee, E.	Clanwilliam, E.
Barber, L.	Clark of Kempston, L
Bessborough, E.	Constantine of Stanmore, L.
Blatch, B.	Cranborne, V.
Blyth, L.	Crawshaw, L.
Boardman, L.	Crickhowell, L.
Boyd-Carpenter, L.	Cumberlege, B.
Brabazon of Tara, L.	Dean of Harptree, L.
Braine of Wheatley, L.	Denham, L.
Braybrooke, L.	Denton of Wakefield, B.
Bridgeman, V.	Derwent, L.
Bruntisfield, L.	Dixon-Smith, L.
Butterworth, L.	Downshire, M.
Cadman, L.	Elles, B.
Caithness, E.	Elliot of Harwood, B.
Caldecote, V.	Elliott of Morpeth, L.
Campbell of Alloway, L.	Elton, L.
Campbell of Croy, L.	Ferrers, E.

Finsberg, L.	Nelson, E.
Flather, B.	Nelson of Stafford, L.
Fraser of Carmyllie, L.	Norfolk, D.
Fraser of Kilmorack, L.	Norrie, L.
Gardner of Parkes, B.	O'Brien of Lothbury, L.
Goschen, V.	O'Cathain, B.
Grantchester, L.	Oppenheim-Barnes, B.
Hailsham of Saint Marylebone, L.	Orkney, E.
Harding of Petherton, L.	Oxfuird, V.
Harlech, L.	Peel, E.
Harmsworth, L.	Pender, L.
Hayhoe, L.	Perry of Southwark, B.
Henley, L.	Platt of Writtle, B.
Hesketh, L.	Plummer of St. Marylebone, L.
Hood, V.	Polwarth, L.
Hooper, B.	Prentice, L.
Hothfield, L.	Quinton, L.
Howe, E	Renton, L.
Ironside, L.	Renwick, L.
Jenkin of Roding, L.	Rodger of Earlsferry, L.
Johnston of Rockport, L.	Romney, E.
Keyes, L.	St. Davids, V.
Killearn, L.	Saint Oswald, L.
Kimball, L.	Seccombe, B.
Lane of Horsell, L.	Selborne, E.
Lauderdale, E.	Sharples, B.
Leigh, L.	Skelmersdale, L.
Long, V.	Soulsby of Swaffham Prior, L.
Lucas, L	Strange, B.
Lyell, L.	Strathcarron, L.
Mackay of Ardbrecknish, L.	Strathcona and Mount Royal, L.
Mackay of Clashfern, L.	Strathmore and Kinghorne, E.
[Lord Chancellor.]	[Teller.]
Malmesbury, E.	Suffield, L.
Mancroft, L.	Swansea, L.
Marlesford, L.	Swinfen, L.
Merrivale, L.	Teynham, L.
Mersey, V.	Thomas of Gwydir, L.
Middleton, L.	Trumpington, B.
Miller of Hendon, B.	Ullswater, V. [Teller.]
Milverton, L.	Vaux of Harrowden, L.
Monckton of Brenchley, V.	Vivian, L.
Monk Bretton, L.	Wakeham, L.
Montagu of Beaulieu, L.	[Lord Privy Seal.]
Montgomery of Alamein, 'V.	Wedgwood, L.
Mottistone, L.	Whitelaw, V.
Mountevans, L.	Wise, L.
Mowbray and Stourton, L.	Wolfson, L.
Munster, E.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.52 p.m.

Clause 17 [Access agreements: directions requiring facility owners to enter into contracts for the use of their railway facilities]:

The Earl of Caithness moved Amendment No. 4:

Page 18, line 29, leave out ("affect any other person's rights under") and insert ("necessarily involve the facility owner in being in breach of').

The noble Earl said: My Lords, I beg to move Amendment No. 4 and at the same time, with the leave of the House, speak to Amendments Nos. 21, 46 and 53. The amendments are grouped together because they all deal with the access provisions. Amendment No. 4 is a technical improvement to the wording of Clause 17(1) (b). Amendment No. 46 brings the definition of "interested person" in Schedule 4 more into line with Clause 17(1) (c).

Amendment No. 21 is consequential on the removal of access agreements from the enforcement provisions in Clauses 55 to 58. Amendment No. 53 to paragraph 11 of Schedule 4 provides a Scottish equivalent of the legal term "suit". I beg to move.

Lord Harmar-Nicholls

My Lords, before we move on to the detail of the amendment, could it be placed on the record that something must be wrong with the Tannoy system for summoning Members to the vote? A number of us were in another part of the building, carrying out our work as part our parliamentary duties. Immediately the announcement came on the Tannoy, we made our way to the Chamber. On two occasions this afternoon I did that, only to find that the door was closed. I do not know whether anything can be done about it, but it looks as though the Division does not appear on the Tannoy soon enough to allow people who are carrying out their parliamentary work in another part of the building to arrive in the Chamber.

Lord Howell

My Lords, I rise to support that interjection. It affected me in the last vote when we were having a cup of tea in the other place in the refreshment room and the notice of the vote did not come up. As it happens, with this vote, it was not crucial but on the previous vote it certainly was crucial and Members were prevented from voting. Therefore, I think that this is a matter which should be considered.

Lord Taylor of Blackburn

My Lords, I too support this interjection. It took us exactly three minutes to get here from when the first announcement came on the annunciator in the CPA offices. There were three of us down there. We came here, and immediately we arrived the door was closed.

Lord Archer of Weston-super-Mare

My Lords, perhaps I may ask a question as a fairly new person in your Lordships' House. Why do we have six minutes in which to arrive in the Chamber when Members in the other place have eight minutes? Looking around me, they are a little younger than many of us in this House. Why do we have two minutes less than they have?

Lord Dormand of Easington

My Lords, I can answer that, if no one else can. When offices were provided in the Norman Shaw building outside, two minutes were added to allow Members of the other place to come from Norman Shaw. I had an office there. The two minutes extra were necessary, and that is still the situation.

Lord Clinton-Davis

My Lords, surely these are matters which may be taken up through the usual channels, rather than delaying the proceedings of the House.

Several noble Lords

No!

Lord Mason of Barnsley

My Lords, we still have to raise the matter on the Floor of the House. Members who have come to the House of Lords from another place occasionally use the facilities of the other place. Three of us were having tea in the tearoom there and as soon as it was flashed on the screen that: there was a Division in the Lords, all three of us immediately left. We can get here comfortably in two minutes, but the doors were closed. It is quite obvious that the annunciator was alerted too late. That is not new, it has happened before. Although I know that my noble friend Lord Graham of Edmonton has raised the matter, it has obviously not been solved satisfactorily. It is a matter of urgency, I tell the noble Lord, Lord Clinton-Davis, because we lost our vote. I know that at least five Members of the Opposition failed to get here in time but they had hurried from their respective meetings to do so.

Lord Bottomley

My Lords, the noble Lord, Lord Harmar-Nicholls, and I were at the Commonwealth Parliamentary Association meeting, which is a very important meeting. He said to me: "Watch the board and see when the vote comes up". As soon as it came up, I warned him, but we arrived too late. It really is very bad. This is the second time that it has happened in my case when I have been attending Commonwealth Parliamentary Association meetings.

Lord Graham of Edmonton

My Lords, I believe that Members who have raised these matters have done a service to the House, even though it has taken a few minutes from the debate. I know that the Government Chief Whip will be as anxious as I am that these matters be looked at yet again. I feel that this discussion has served a good purpose. The points are serious and have been honestly made. We should not have to put up with this. However, we shall deal with it.

Viscount Ullswater

My Lords, I apologise that I was not in the Chamber at the beginning of this brief discussion. However, I have been made aware of noble Lords' comments, and I intend to make certain that the problems are overcome in the future.

Lord Clinton-Davis

My Lords, I apologise if I intervened early because obviously noble Lords wished to get the matter off their chests. Unfortunately, apart from re-running the vote—which I should quite like to do—this all explains why the Government managed to get a majority of one.

In relation to the grouping of the amendments, perhaps I may ask the Minister a question. I understand that the purpose is to remove the need to keep a register of certain agreements. Why do the Government intend to do that? Before the Motion is put, I asked the Minister a question on Amendment No. 21.

The Earl of Caithness

My Lords, I am grateful to the noble Lord. He is speaking to Amendment No. 21. That should have been done at an earlier stage. It deletes the reference in Clause 72(2) (b) to final or provisional orders relating to access agreements from the matters which the regulator must include in his register. The noble Lord will recall that we discussed this matter at an earlier stage.

On Question, amendment agreed to.

5 p.m.

The Earl of Caithness moved Amendment No. 5:

Page 22, line 3, leave out ("or Schedule 4 to this Act").

The noble Earl said: My Lords, in moving this amendment I should like, with the leave of the House, at the same time to speak to Amendments Nos. 6 to 10, 22, 45, 47 to 52 and 54.

These amendments respond to criticisms that were voiced at Report stage, on the review procedure in Schedule 4. The amendments delete the review procedure and make the necessary consequential amendments.

The review procedure in Schedule 4 provides for the parties to a proposed access contract, and interested persons, to apply for a review of the decision by the regulator where an application for directions to enter an access contract has been made under Clause 17. Our concern here was to ensure that there are proper safeguards for those affected by the regulator's decisions.

My noble friend Lord Brabazon suggested at Report stage that the procedure might have some disadvantages, in extending the total time required to reach a final decision, and introducing a new person into the process, with extra scope for disagreements and thus uncertainty. The noble Lord, Lord Tordoff, agreed that this was a "perfectly rational" point. In the event, I decided that it was time to look at this matter again.

In view of the criticisms made, we have concluded after careful consideration that the provisions in the schedule should be deleted. The schedule however already contains a number of safeguards. Those affected by proposed access contracts have the right to make representations to the regulator, and the regulator can request further information or clarification. The other parties must be invited to respond to the representations. While the schedule sets out minimum periods for representations, it is open to the regulator to set longer periods if he believes it appropriate. Decisions of the regulator would also of course be subject to judicial review.

It is for those reasons that we have concluded that a special review procedure is not necessary. I hope that the House will agree. I beg to move.

Lord Clinton-Davis

My Lords, I should like to raise one brief point so far as the Minister is concerned. Will he give an assurance to the House that there is nothing in these amendments which would reduce the scope for questioning an access agreement? That point was put to me earlier and I should like to obtain an assurance in respect of it. Is the Minister in a position to answer that point now?

The Earl of Caithness

My Lords, I believe not. There are the other safeguards in the Bill and of course, as I said, the regulator would be subject to judicial review. However, I will make absolutely certain that I am right; I shall let the noble Lord know if I am wrong.

Lord Clinton-Davis

My Lords, with the leave of the House, perhaps I may press the noble Earl a little further. If he is wrong, I take it that he will take steps to put the matter right in another place.

Lord Brabazon of Tara

My Lords, I should like very briefly to thank my noble friend for having listened to the point I made at the last stage of the Bill and for having responded with these amendments. It shows the flexibility with which the Government have handled this Bill, and I am very grateful to the Minister.

Lord Tordoff

My Lords, perhaps I may say how good it is that rationality is finally breaking through on this Bill.

On Question, amendment agreed to.

Clause 18 [Access agreements: contracts requiring the approval of the Regulator]:

The Earl of Caithness moved Amendment No. 6:

Page 22, line 12, leave out ("or Schedule 4 to this Act").

On Question, amendment agreed to.

Clause 19 [Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network]:

The Earl of Caithness moved Amendments Nos. 7 and 8:

Page 25, line 16, lease out from ("above") to ("or") in line 17.

Page 27, line 27, leave out from ("above") to ("and") in line 28.

On Question, amendments agreed to.

Clause 22 [Amendment of access agreements]:

The Earl of Caithness moved Amendments Nos. 9 and 10:

Page 29, line 40, leave out from ("Regulator") to end of line 41.

Page 30, line 12, leave out ("except as provided by Schedule 4 to this Act").

On Question, amendments agreed to.

Clause 28 [Fares and approved discount fare schemes]:

[Amendment No. 11 not moved.]

Clause 30 [Failure to secure subsequent franchise agreement]:

The Earl of Caithness moved Amendment No. 12:

Page 38, line 15, leave out ("(3) (b) of the section in question") and insert ("(4) (b) of section 39 or subsection (3) (b) of section 41 below, as the case may be").

The noble Earl said: My Lords, in moving this amendment it may be for the convenience of the House if I speak also to Amendments Nos. 13 and 19. These are technical amendments which tidy up cross references and are consequential on amendments agreed to at Report stage. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 13:

Page 38, line 20, after first ("(1)") insert (", (2)").

On Question, amendment agreed to.

Clause 34 [Passenger Transport Authorities and Executives: franchising]:

The Earl of Caithness moved Amendments Nos. 14 to 18:

Page 42, line 1, leave out from ("question") to ("consult") in line 10 and insert:

("(a) of his intentions with respect to the inclusion, in any franchise agreement contemplated by that subsection, of provisions relating to the operation of any additional railway assets wholly or partly within the area in question, and

(b) of his intention—

(i) in a case falling within paragraph (a) of that subsection, to issue the invitation to tender, or

(ii) in a case falling within paragraph (b) of that subsection, to enter into the franchise agreement, and must, in either of the cases mentioned in paragraph (b) above,").

Page 42, line 21, leave out ("(b)") and insert ("(b) (i)").

Page 42, line 24, leave out ("(c)") and insert ("(b) (ii)").

Page 45, line 43, leave out from ("area") to end of line 46.

Page 46, line 2, at end insert ("or

(ii) the operation under or by virtue of a franchise agreement of additional railway assets wholly or partly within their passenger transport area, whether or not the Executive is a party to the franchise agreement;").

The noble Earl said: My Lords, in moving these amendments, it may be for the convenience of the House if I speak also to Amendment No 42.

These amendments are technical. In particular, Amendment No. 14 is a purely drafting amendment to Clause 34(5), which deals with the requirements placed on the franchising director before issuing an invitation to tender, or, as the case may be, entering into a franchise agreement in relation to railway passenger services in a passenger transport area. Amendments Nos. 15 and 16 are numbering consequentials.

Amendments Nos. 17 and 18 are also drafting amendments.

Amendment 42 is to Clause 138(2), which amends Section 56 of the 1968 Transport Act. I beg to move.

On Question, amendments agreed to.

Clause 37 [Proposals to discontinue non-franchised etc. passenger services]:

The Earl of Caithness moved Amendment No. 19:

Page 49, line 32, leave out ("and section 38 below are") and insert ("is").

On Question, amendment agreed to.

Lord Teviot moved Amendment No. 20:

After Clause 47, insert the following new clause: ("Major Reductions

.—(1) This section applies where any person providing railway passenger services on any line or from any station proposes to effect a major reduction in those services.

(2) Unless the Regulator has certified that the proposed reduction is not a major reduction, the person shall give notice of the proposal to the Franchising Director not less than three months before the date the major reduction is to take place, provided that the person shall not effect the major reduction unless the Regulator so permits in accordance with the provisions of this section.

(3) A notice under subsection (2) above shall be accompanied by a statement of—

1. (a) an assessment of the impact of the major reduction on the existing passengers,
2. (b) the date on which the major reduction is to be made, and
3. (c) any alternative transport services which appear to the relevant person to be available.

(4) Where notice is given to the Franchising Director under subsection (2) above, he must send a copy of the notice and the accompanying statement to the Regulator and to every consultative committee whose area consists of or includes the whole or any part of the services which are the subject of the major reduction.

(5) Upon receipt of the notice, each consultative committee shall—

1. (a) consider whether the major reduction will cause any hardship, having regard to the social and economic needs of the area affected by the proposal and the people living and working therein, and
2. (b) decide in what manner to collect information and opinions on the proposal and, after consultation with the Regulator, decide whether to hold a public hearing, and
3. (c) identify any reasonable means of alleviating any such hardship, and
4. (d) report on these matters to the Regulator within 16 weeks of receipt of the relevant notice and statement.

(6) It shall be for the Regulator to decide whether the proposed major reduction should, or should not, be allowed to take effect; and a decision may be given allowing the proposed closure to take effect subject to the compliance with such conditions (if any) as the Regulator may see fit to impose.

(7) The Regulator shall make his decision within 26 weeks of the day on which he receives the notice and statement in accordance with subsection (4) above.

(8) For the purposes of this section, "major reduction" is defined as an alteration in the level or timing of services which will adversely affect the economic and social needs of the passengers and the area served by those services.").

The noble Lord said: My Lords, my noble friend the Minister and other noble Lords will recall that at Report stage I raised the matter of closures—I referred to them as being "by stealth". This is a very real concern. I am afraid that I make no apologies if I return to this point, especially as this amendment, to which I spoke then, attracted support from all sides of the House.

Since then, my noble friend has had—there can be no other word to describe it—a ding-dong of correspondence. I am very grateful to him for making those replies. However, I regret to say that I am still doubtful whether the assurances that he sought to give me will safeguard passengers, especially of the vulnerable railway lines, against progressive closures by British railways' operating companies; for example, those not yet franchised after privatisation. However, on that particular point I shall listen very carefully to what my noble friend has to say. I must say to noble Lords that a ding-dong between the mover of an amendment and a Minister is interesting. But it is your Lordships' decision. Your Lordships have to listen to the arguments. I say that, knowing that my noble friend the Minister appreciates how important is the overall principle of this Bill. I believe that private enterprise can improve the provision of many rail services.

My noble friend Lord Brabazon gave the very good example of the privatisation of telephone communications. Everyone said that they would close down in five minutes but they have been very successful. So one is very keen on privatisation.

Closures by stealth will not be a threat on every line because either the services will be franchised at economic rates to operators or an acceptable level of service will in many cases be laid down by the franchising director. My noble friend stressed that latter point at report stage. I do not disagree with it. It is an aspect of privatisation to improve matters in the future.

The Bill is surely an appropriate opportunity to provide the same level of safeguards for all services. The Government appear to be prepared to provide for only some services. What has happened in the past is happening now on such lines as York to Sheffield and could happen after privatisation on rural lines if the operator cannot support the long-term retention of the initial service. I was heartened by the widely felt concern of the House when I raised this matter at an earlier stage and by the understanding shown for the needs of our rural areas. Our rural communities need the support of jobs, communication services, schools and post offices, if they are to thrive. Where they still exist, rail services help to give them such support. But those services may well not be profitable when judged in terms of market forces. I am sure my noble friend agrees that they perform an important economic and social function in the areas concerned.

Your Lordships will be aware that, with the pattern that closure by stealth takes, services are reduced to minimum levels. There are fewer passengers as a result and eventually there is much less apparent justification for the relevant line to be retained.

I return to a point that I wished to make earlier. The fundamental problem remains that there is nothing in the Bill to prevent the franchising director and the British Rail operating companies from modifying the specific agreements which, we are told, will guarantee the basic timetable that will be in force up to April 1994. The Government appear to be happy for safeguards against such possible reductions to be provided in respect of franchised services where specific levels of service are laid down, but not in respect of non-franchised services which are likely to be the less attractive ones but which are no less important from an economic and social point of view in the areas concerned.

The Minister is familiar with the purposes of the amendment. I shall not go through its terms in detail. There are two key elements. The first is a requirement for the regulator to be notified of proposed reductions in services. The second is a requirement for the regulator to advise the consultative committee for the area affected of such proposed reductions as he (the regulator) determines to be major. That provides the opportunity for consultation before services are subjected to major reductions. That is the safeguard that I seek for passengers.

At an earlier stage the Minister raised two difficulties. He said that the necessary safeguards had already been provided in the Bill. The other difficulty concerned the definition of "major reduction". Both those points can be answered. I have already described how the Bill does not provide adequate safeguards for services run by the franchising director or where no particular service has been laid down. It cannot now be left to the franchising director to be judge and jury. The regulator is there to monitor and control the system. For that reason the regulator should clearly be given the responsibility to regulate proposed major reductions irrespective of how a particular line has been dealt with in the years following the introduction of this Bill. It cannot be over-stressed that not all rail services will be provided under franchise agreements.

I do not believe that the definition of the term "major" will be a problem in practice. It will be open to the operator or the franchising director to consult the regulator. If there is uncertainty as to whether a proposal will be considered major, it may be that the regulator will wish to publish guidelines to assist the franchising director and the operator. I should have thought that that was not a matter that needed to be covered on the face of the Bill. I find it hard to believe that the Minister found that to be a greater problem than the matter of closure itself.

I have sought to address the point raised by my noble friend. My outstanding fears remain as does the need for this amendment, which is a relatively simple one. It does not set in stone today's timetable; it does not introduce any time-consuming appeal process; it does not affect the regulator's freedom to allow major reductions of services after consultation if the economic factors are inevitable. The amendment continues to enjoy the support of the CLA, the NFU, Transport 2000, the central transport consultative committee's rural voice and the cyclists' group. I hope that even at this late stage my noble friend's response will be favourable. On that note, I beg to move.

5.15 p.m.

Lord Carmichael of Kelvingrove

My Lords, I am pleased to be able to support the noble Lord's amendment. I am grateful for the fact that I have been given a certain amount of information from the Country Landowners' Association. I never dreamt that I should use that association's brief in such a Bill. However, one realises that in discussing rural matters it is the best organised body in the country able to protect, from its point of view, the rural areas. One of the points that it makes, which I can certainly appreciate because it has happened in other fields, is that the amendment addresses the problem of the closure of lines by stealth. It has always been the suspicion of the railways. I do not know how much truth there is in the view that the service gets worse, the rolling stock and the hold-ups get worse and ultimately it can be shown that the service is so poorly used that it is not worth continuing. The amendment addresses that point.

As the noble Lord, Lord Teviot, stressed, the proposal would require any operator to notify the regulator of proposed reductions in services. It would be for the regulator to determine whether a change should be regarded as major as defined in the amendment; that is to say, having an adverse affect on the economic and social needs of the local area.

The Country Landowners' Association and I believe that if the clause, or something very close to it, is not inserted, closure by stealth could become a fact of life of the privatised line. When services have been reduced to a minimum level, there will be fewer passengers and therefore there will be an apparently good economic reason for closing the line completely. If that happens, rural communities will be unable to support jobs, services, post offices and schools. Existing rail links which now help to give such support would be removed. I believe that it should not be permissible for rail links to be steadily eroded without consultation and to be reduced for perhaps wrong and too immediate reasons, not taking full account of the totality of the economic and social life of a particular area.

The fact that the railways would cease to provide much needed support for certain areas would produce a downward slope for the whole economy of the area and ultimately be the ruination of local life. Despite what the noble Lord, Lord Brabazon, said, we have seen that in other privatisation programmes. We certainly saw rural areas being badly affected by the withdrawal of bus services. Therefore I am happy to support the noble Lord, Lord Teviot, in his amendment.

Lord Polwarth

My Lords, this is a real problem. Over 20 years ago my rail service was removed by the late Lord Beeching. Since then I have had to undertake a journey of 50 miles to reach a railway station.

We are looking at the future of the main line from London to Glasgow via the west coast route. What are we to do about it? With the new stock that exists on the east coast route, Glasgow traffic can be sent via Edinburgh and it will arrive at roughly the same time. But what will happen to the west coast route? There will be a reasonable amount of traffic as far as Preston. Preston is the point where all the services change round. But will anyone bid for the line beyond Preston? The area incorporating Carlisle, the Lake District, the North West of England and the South East of Scotland will be left with no service whatever other than perhaps a little chugger train.

At the moment we can catch a train from Carlisle to London and it is an excellent service which takes just four hours. Once the railway is privatised that will be the end of that, though there may be a connecting train. But what of the inhabitants of Carlisle and the whole area of the North West of England? That is why the amendment is so valuable. The franchise director should have to say whether the removal of a major service is involved. It will be tempting for him to say, "That is fine. You can go to Glasgow via Edinburgh". But what will happen to the whole of the area which will be left without any service? My noble friend Lord Teviot tabled an excellent amendment and I shall support it.

The Earl of Caithness

My Lords, I appreciate that my noble friend Lord Teviot feels strongly about this matter, and he should make no apology for that. Naturally I have taken time to consider the arguments again since the previous stage. However, while I expect the House to have some sympathy with the aim of my noble friend's amendment, my objections remain and I shall explain them in some detail.

Of the two difficulties mentioned at Report, I accept that, with judicious drafting and perhaps agreed guidelines as to what constitutes a major reduction, the number of timetable changes that would need to be notified to the regulator could be limited. But, more fundamentally, I was and remain of the view that a statutory procedure controlling service levels is neither necessary nor desirable.

I have every sympathy with the view that services should not be reduced to risible levels, so avoiding the need to go through the closure procedure. But—and here I stress the point because it is an answer which will concern my noble friend Lord Polwarth—in future the franchising system will provide greater protection than now. That is because the franchising director will set minimum levels of service to which franchisees will have to adhere. In future it will not be possible for them unilaterally to effect major service reductions.

My noble friend mentioned the service on the west coast main line. What will happen in that regard is that the franchising director will say, "I want, a service on that line", and a government subsidy will be provided because it will not be economic to run it alone; it will probably form part of many other services within the franchises. The franchisee will have to put forward and continue to maintain the service that the franchising director demands. The franchisee will not have the option to say, "I am only going to bid from Preston. I shall not bother to go to Carlisle". It will be the reverse. The franchising director will require a franchisee to operate the service that he specifies based on the British Rail timetable at the time.

My noble friend Lord Teviot rightly pointed out that it may be some time before all services are franchised and that there will be other non-franchised services. Pending franchising, services will continue to be run by British Rail. British Rail is currently reorganising its passenger operations into separate train operating companies to shadow the proposed franchises. From April 1994, the franchising director will become responsible for paying subsidy in support of those services through a system of specific contracts. Therefore it would not be possible for train operating companies and BR unilaterally to effect major reductions in their service levels prior to franchising.

We have always made it clear that franchises will be based on the timetables operated by BR immediately prior to franchising. The same is true of the contracts into which the franchising director will be entering with BR's operating companies. In both cases minimum levels of service will be specified in the agreements with the franchising director. Those are the services that must—I stress "must"—be provided.

Clearly there will need to be some flexibility to enable services to be tailored to meet demand, but only in the terms of the agreements. Nevertheless that is a much more rigorous approach than now, when BR has a good measure of freedom, subject to the general public service obligation, to reduce the levels of service that it provides.

My noble friend was concerned also about reductions in the levels of other non-franchised services. However, I stress two points. First, our policy is that all BR's existing passenger services should be franchised. Secondly, while it is true that the regulator has a general monitoring role following privatisation, it will be the franchising director's specific role to procure appropriate levels of passenger service in accordance with the objectives, guidance and instructions set for him by the Secretary of State. Therefore, if the franchising director decides that a reduction in the level of service provided by an open-access operator leaves passengers with insufficient services, it will be up to him to secure the provision of additional services through franchising.

At this point I mention consultative committees. As your Lordships will know, we have accepted amendments to the Bill to give the statutory consultative committees freedom to comment for the first time on reductions in the levels of any services provided by BR, by franchisees or on behalf of the franchising director. The Secretary of State's objectives and guidance for the franchising director will include a requirement for him to liaise with the Central Rail Users' Consultative Committee, the Rail Users' Consultative Committees and the London Regional Passengers' Committee so that he can take into account their views on the pattern and quality of services being provided through franchising.

Underlying the debate is the whole question of whether it is the franchising director or the regulator who is the right person to control minimum levels of service. Our policy is that that responsibility falls to the franchising director. The prime responsibility of the franchising director is to secure the provision of franchised passenger services. That includes arriving at judgments as to the level and quality of services to be provided. The franchising director will allocate financial support within the budget agreed with the Secretary of State. He could not do that effectively if his decisions on levels of service were second-guessed by the regulator.

There is a further, more subtle, point. Under Clause 136 of the Bill the regulator is not to be a competent authority for the purposes of imposing public service obligations nor for paying compensation under EC Regulation 1191/69, as amended. My noble friend's amendment would effectively enable the regulator to require any operator to continue to run services when it is not in his commercial interests to do so. Under EC regulations the imposition of such obligations requires the payment of compensation, which can only be done by a competent authority.

Unlike the franchising director, the regulator is not to be a competent authority for those purposes. We can only make the regulator a competent authority too if we also give him a budget with which to pay compensation for any service obligations that he may impose. We would certainly not want to do that. The regulator is to be an independent authority. It could not be his responsibility to provide financial support.

As I said in my opening remarks, I believe that the aim of this amendment is one which will command a great deal of sympathy in the House. But the point at issue is whether it should be for the franchising director or for the rail regulator to oversee levels of service. I hope that I have persuaded your Lordships that this is properly a task for the franchising director. Indeed, securing the provision of the appropriate levels of passenger rail services is his task. I hope therefore that my noble friend will be able to agree that the statutory procedure envisaged by his amendment is not a necessary addition to the Bill.

Perhaps I may recap. It is the franchising director's responsibility to procure the levels of passenger rail services that are appropriate. That is his task. It is not the task of the regulator. That is why I disagree with my noble friend on this amendment.

5.30 p.m.

Lord Sefton of Garston

My Lords, before the noble Earl sits down, perhaps I may press him on that point. He said something else about the franchising director. He said that the franchising director would work practically under the control of the Secretary of State and that the Secretary of State would lay down guidelines in regard to certain routes. He discounted the regulator having any control over maintaining routes such as the west coast mainline. Perhaps I may give an example of what has happened in the past few weeks.

We met the Secretary of State with regard to the west coast mainline. I obtained from him a personal assurance that the west coast mainline, which most businessmen connected with the North of England realise is a very important link from the Channel to Glasgow and surrounding areas and all the other areas in between, where most of the manufacturing processes in this country are carried out and on which this country will rely to be a success in Europe, is a priority and that he would stick by that priority. What happened? Once again we have seen that the money that should have gone to the west coast mainline to modernise that link has gone to London.

There is no guarantee under the Bill that anyone will be looking at the strategic importance of main lines. It is absolutely essential that the amendment moved by the noble Lord, Lord Teviot, is carried because that is the only way in which economists and industrialists in this country will be able to affect the siting and maintenance of main railway lines in order to give us a decent chance to fight the economic battle.

The Earl of Caithness

My Lords, with respect to the noble Lord, Lord Sefton of Garston, I disagree with him. That is the franchising director's job. It is not the regulator's job. The regulator is an independent authority. I explained in some detail why I thought it was inappropriate for the regulator to have the duties that my noble friend wishes to place on him. That is the responsibility of the franchising director. It is the franchising director who will have the budget to give the taxpayers' subsidy. It will be Railtrack which will be taking the strategic view of the need for infrastructure in different lines. The lines—and the west coast mainline—will be transferred to Railtrack, which will remain for the time being a government body.

Lord Teviot

My Lords, I come back to my original amendment and I am afraid that I really have to go for the kill here. I am grateful to the noble Lord, Lord Carmichael of Kelvingrove, for his expert contribution. I was particularly touched by my noble friend Lord Polwarth, who referred us to the excellent example of where a railway was lost. I am so sorry that I did not inform my noble friend Lady Elliot of Harwood, who introduced an Unstarred Question many years ago when the Waverley line was closed. Around 15 Members of your Lordships' House attended the debate. That part of Scotland has been scarred. The line used to run from Edinburgh to Galashiels, Hawick and Newcastleton through to Carlisle. One does not want that situation again.

My noble friend has talked about the franchising director and the regulator. It really is a bureaucratic situation. My amendment is crystal clear. If it is carried I am quite sure that the other place, in considering your Lordships' amendments, is capable of improving it. I wish to press the amendment.

5.35 p.m.

On Question, Whether the said amendment (No. 20) shall be agreed to?

Their Lordships divided: Contents, 97; Not-Contents, 143.

Division No. 3
CONTENTS
Addington, L.	Jay, L.
Airedale, L.	Jay of Paddington, B.
Archer of Sandwell, L.	Jenkins of Putney, L.
Ardwick, L.	Judd, L.
Ashley of Stoke, L.	Kagan, L.
Aylestone, L.	Kirkhill, L.
Beaumont of Whitley, L.	Listowel, E.
Birk, B.	Llewelyn-Davies of Hastoe, B.
Blackstone, B.	Lockwood, B.
Bonham-Carter, L.	Lytton, E.
Boston of Faversham, L.	McCarthy, L.
Braybrooke, L.	McIntosh of Haringey, L.
Broadbridge, L.	Mallalieu, B.
Bruce of Donington, L.	Mason of Barnsley, L.
Campbell of Eskan, L.	Mishcon, L.
Carmichael of Kelvingrove, L.	Molloy, L.
Carter, L.	Monkswell, L.
Castle of Blackburn, B.	Monson, L.
Cledwyn of Penrhos, L.	Morris of Castle Morris, L.
Clinton-Davis, L.	Mulley, L.
Cocks of Hartcliffe, L.	Murray of Epping Forest, L.
Dean of Beswick, L.	Nathan, L.
Desai, L.	Nicol, B.
Donoughue, L.	Ogmore, L.
Dormand of Easington, L.	Plant of Highfield, L.
Falkland, V.	Prys-Davies, L.
Gainsborough, E.	Rea, L.
Gallacher, L.	Redesdale, L.
Geraint, L.	Richard, L.
Gladwyn, L.	Robson of Kiddington, B.
Glenamara, L.	Rochester, L.
Graham of Edmonton, L. [Teller.]	Russell, E.
Greene of Harrow Weald, L.	Sefton of Garston, L.
Gregson, L.	Serota, B.
Grey, E.	Stoddart of Swindon, L.
Hanworth, V.	Strabolgi, L.
Harris of Greenwich, L.	Taylor of Blackburn, L.
Hayter, L.	Taylor of Gryfe, L.
Hilton of Eggardon, B.	Teviot, L. [Teller.]
Hollick, L.	Thurlow, L.
Hollis of Heigham, B.	Tordoff, L.
Holme of Cheltenham, L.	Turner of Camden, B.
Hooson, L.	Wedderburn of Charlton, L.
Houghton of Sowerby, L.	Whaddon, L.
Howell, L.	White, B.
Howie of Troon, L.	Wigoder, L.
Hughes, L.	Williams of Mostyn, L.
Hunt, L.

NOT-CONTENTS
Aberdare, L.	Chelmsford, V.
Addison, V.	Chesham, L.
Allenby of Megiddo, V.	Chilver, L.
Alport, L.	Clanwilliam, E.
Archer of Weston-Super-Mare, L.	Clark of Kempston, L
Arran, E.	Constantine of Stanmore, L.
Ashbourne, L.	Craigavon, V.
Astor, V.	Cranborne, V.
Astor of Hever, L.	Crawshaw, L.
Attlee, E.	Crickhowell, L.
Barber, L.	Cumberlege, B.
Belstead, L.	Dean of Harptree, L.
Blatch, B.	Denham, L.
Blyth, L.	Denton of Wakefield, B.
Boardman, L.	Dixon-Smith, L.
Boyd-Carpenter, L.	Downshire, M.
Brabazon of Tara, L.	Ellenborough, L.
Braine of Wheatley, L.	Elles, B.
Brentford, V.	Elliot of Harwood, B.
Butterworth, L.	Elliott of Morpeth, L.
Cadman, L.	Elton, L.
Caithness, E.	Ferrers, E.
Campbell of Alloway, L.	Finsberg, L.
Campbell of Croy, L.	Flather, B.
Carnegy of Lour, B.	Fraser of Carmyllie, L.
Carnock, L.	Gardner of Parkes, B.
Chalker of Wallasey, B.	Gisborough, L.

Goschen, V.	Nelson of Stafford, L.
Gridley. L.	Norrie, L.
Hailsham of Saint Marylebone, L.	O'Cathain, B.
Harding of Petherton, L.	Oppenheim-Barnes, B.
Harlech, L.	Orkney, E.
Harmar-Nicholls, L.	Orr-Ewing, L.
Harmsworth, L.	Oxfuird, V.
Harrowby, E.	Peel, E.
Hayhoe, L.	Pender, L.
Henderson of Brompton, L.	Perry of Southwark, B.
Henley, L.	Platt of Writtle, B.
Hesketh, L.	Polwarth, L.
Hooper, B.	Prentice, L.
Hothfield, L.	Rees, L.
Howe, E.	Renton, L.
Hylton-Foster, B.	Renwick, L.
Johnston of Rockport, L.	Rodger of Earlsferry, L.
Keyes, L.	Romney, E.
Kimball, L.	St. Davids, V.
King of Wartnaby, L.	Saint Oswald, L.
Lane of Horsell, L.	Seccombe, B.
Lauderdale, E.	Sharples, B.
Leigh, L.	Skelmersdale, L.
Lindsay, E.	Slim, V.
Long, V.	Soulsby of Swaffham Prior, L.
Lucas, L.	Strange, B.
Lucas of Chilworth, L.	Strathcona and Mount Royal, L:
Lyell, L.	Strathmore and Kinghorne, E.
Mackay of Ardbrecknish, L.	[Teller.]
Mackay of Clashfern, L.	Suffield, L.
[Lord Chancellor.]	Swansea, L.
Malmesbury, E.	Swinfen, L.
Mancroft, L.	Tebbit, L.
Marlesford, L.	Thomas of Gwydir, L.
Merrivale, L.	Torrington, V.
Mersey, V.	Trumpington, B.
Middleton, L.	Ullswater, V. [Teller.]
Miller of Hendon, B.	Vivian, L.
Milverton, L.	Wakeham, L.
Monk Bretton, L.	[Lord Privy Seal.]
Montagu of Beaulieu, L.	Wharton, B.
Montgomery of Alamein, V.	Whitelaw, V.
Mottistone, L.	Wise, L.
Mowbray and Stourton, L.	Wolfson, L.
Munster, E.	Young, B.
Nelson, E.

Resolved in the negative, and amendment disagreed to accordingly.

5.44 p.m.

Clause 72 [Keeping of register by the Regulator]:

The Earl of Caithness moved Amendment No. 21:

Page 91, leave out lines 1 to 4.

On Question, amendment agreed to.

Clause 83 [Interpretation of Part I]:

The Earl of Caithness moved Amendment No. 22:

Page 102, leave out lines 27 to 32 and insert ("section 17 or 18 above; or

(b) an installation access contract entered into pursuant to directions under section 19 above;").

On Question, amendment agreed to.

Clause 85 [Powers of the Board to make transfer schemes]:

Lord Teviot moved Amendment No. 23:

Page 106, line 44, at end insert ("or a Passenger Transport Executive").

The noble Lord said: My Lords, this amendment is a simple proposition with a simple objective and a simple explanation to justify it. It involves, as I have said, merely the addition of the words, or a Passenger Transport Executive".

It is an amendment to the current Clause 85 of the Bill which is concerned with the board's power to make a transfer scheme to a variety of bodies in respect of all or any part of its undertaking or assets. The manner in which that is to be done is constrained by the terms of that clause, but in particular by subsection (3). At present—and this may be deliberate—the clause does not include a Passenger Transport Executive among the list of bodies which may be in receipt of a transfer of assets. I shall listen with interest to my noble friend when he replies.

It may be that, prior to the execution of any transfer scheme, a case might be made to the Secretary of State for him to exercise his power of direction under the subsection which I have mentioned in favour of a PTE in recognition of the exclusive nature of a proposed franchise area. A case in point involves the Merseyrail electric services where advantages might be gained in terms of efficiency and value for money in allowing the relevant infrastructure assets to be transferred to the PTE but on the clear understanding that the operation of the network is to be under franchise.

No disbenefit would accrue to the Exchequer or to Railtrack from such a move. Indeed, there is the prospect that Railtrack's ability to exclude such assets from its charging principles will contribute to administrative simplicity and cost-effectiveness.

Even if at this stage the Government are not of the view that such an arrangement would be beneficial or desirable, agreement to this simple amendment would merely provide a facility to do so should the Secretary of State be persuaded by the merits of an application. He would clearly not be bound to approve any such application. It would, however, be sad were he to deny himself the means of doing so if such a move were deemed to be in the best interests of both the rail passenger and the public purse. I beg to move.

The Earl of Caithness

My Lords, my noble friend said that this amendment was supported by a simple argument. Indeed it was and I shall give the House a simple response. Our policy is that PTEs should be jointly responsible with the franchising director for specifying and paying for franchised services within their areas. PTEs are very successful at securing services within their areas, and we therefore believe that they should continue to do so. This is provided for under Clause 34 of the Bill.

However, we do not believe that PTEs should take on the ownership of assets which currently belong to the board, as my noble friend wishes. The board's major assets will be transferred to Railtrack and the rolling stock leasing companies. Railtrack will wish to encourage private sector management and financing of stations and to involve the private sector in the financing of infrastructure assets. Railtrack will in time itself be privatised, as will the leasing companies. We do not believe that these functions should generally be carried out by public bodies such as PTEs, and it is no part of our policy to transfer any of BR's assets to the PTEs.

Lord Teviot

My Lords, that is a rather disappointing reply. I shall read very carefully what my noble friend has said. I have mentioned a particular example. I do not wish to take the matter any further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 87 [Transfer to the Secretary of State or the Franchising Director of the Board's function of making transfer schemes]:

The Earl of Caithness moved Amendment No. 24:

Page 109, line 6, after first ("company") insert (", a company wholly owned by the Franchising Director").

The noble Earl said: My Lords, in moving Amendment No. 24, with the leave of the House, I should like to speak also to Amendments Nos. 25 and 38. These are purely technical amendments. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 25:

Page 109, line 21, leave out subsection (6).

On Question, amendment agreed to.

Clause 91 [Transfer schemes: general]:

The Earl of Caithness moved Amendment No. 26:

Page 112, line 27, after ("reverter") insert ("(or corresponding right in Scotland)").

The noble Earl said: My Lords, in moving Amendment No. 26, I should like to speak also to Amendment No. 27. These are Scottish adaptations to the amendments that were made to this clause on Report. They are purely technical amendments and I commend them to the House. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 27:

Page 112, line 28, after ("re-entry,") insert ("right of irritancy,").

On Question, amendment agreed to.

Clause 93 [Assignment of employees to particular parts of undertakings]:

Baroness Turner of Camden moved Amendment No. 28:

Page 114, line 21, at beginning insert:

("() The Transfer of Undertakings (Protection of Employment) Regulations 1981 shall apply to any person dealt with under a scheme established under this section.").

The noble Baroness said: My Lords, in moving Amendment No. 28, I should like to speak also to the other amendments which stand in my name up to and including Amendment No. 35 which, as your Lordships are aware, have been grouped.

First, I should like to thank the Minister for ensuring that discussions took place in accordance with the promise made on Report that there would be urgent consultations with the appropriate unions about the new clause that was introduced then, Clause 93. We had two meetings on Monday and there has since been correspondence received from the Minister, for which I am indebted.

However, there are still some issues which need to be resolved, which is why we have tabled amendments to this clause on Third Reading as this is the last opportunity that we shall get. We still feel strongly that we have had inadequate time to consider what clearly looks like a major departure from the original Bill introduced at a very late stage in the Bill's passage through the House. The unions still have some concerns which I believe are reflected to some extent in the amendments which stand in my name. Nevertheless, I personally accept the Minister's assurance that there was no hidden agenda and that this was not a last-minute attempt to remove rights that people might otherwise have.

However, the problem that we face—as with the memorandum of understanding which was referred to earlier in connection with pensions provision—is that nothing can adequately protect people (no matter what the intentions of Ministers) unless there is appropriate wording on the face of the Bill. It has been explained to us that there is no question about the application of the Transfer of Undertakings (Protection of Employment) Regulations 1981, known as TUPE. These have been written into the Bill in Clause 151(6) and their impact is overriding. However, we have been informed by the Minister that legal advice has been obtained to the effect that where an employee is working part of the time for one division of BR and part of the time for another, and one of those divisions is transferred to a subsidiary, the effect of the TUPE regulations is uncertain. Indeed, a European Court decision appears to indicate that TUPE might not apply. The intention of Clause 93 was therefore to endeavour to ensure that such employees had protection.

Clause 93 has been devised to deal with such an eventuality and to provide that, if work has to be rearranged as a result of such a transfer, the employee will not be worse off and that if he can claim that he is, compensation will be paid. On the face of it, this looks very reasonable, but it is clear that some suspicions still remain. I think that it would be true to say that the unions do not doubt the Minister's intentions (just as I do not), but what happens in a few years' time when different people may be in charge?

The Minister assured the unions that the Government fully accept that there must be consultation about the operation of the procedures set out in Clause 93. If that is so, why not write it into the Bill? The intention is, we are told, to ensure that even those—it is agreed that there may be only a small number of such people—who may not have full TUPE protection should nevertheless have it. In that case, why not write a clause to that effect into this part of the Bill?

I must emphasise to your Lordships that a lot of suspicion has been generated among those who work in the industry largely as a result of the way in which the Government have handled this aspect of working conditions. The paragraph of Clause 93 which has given rise to most concern is that which appears to give the right to modify unilaterally the terms and conditions of employees who are subject to it and who are to be assigned under a scheme. It has been pointed out that people are moved around now but that collective agreements are in place which govern the way in which that is done and which protect the employees concerned. The Minister has assured the unions that there is no intention of interfering with collective agreements and that they will continue to operate. Nevertheless, doubts and concerns remain. Of course, terms and. conditions can always be altered as a result of negotiation. Sometimes an individual may wish to change those terms. We do not wish to stand in the way of that, but particularly as we are informed that these arrangements will need to come into play in only a small minority of cases, we believe that the individual's consent to such a change should be gained.

The amendments are meant to give effect to the guarantees that have been received that the trade union agreements will continue to apply; that employees will not be dismissed for any reason principally associated with the transfer; and that there should be negotiations on measures envisaged in connection with the transfers.

We have also drafted amendments simply to underline the fact that the employees covered by the new clause would be able to pursue their cases to an industrial tribunal or to the EOT. We have no objection to arbitration processes and fully accept that there should be an internal right of appeal, but it must be quite clear that these cannot extinguish rights held externally.

I must emphasise again that the late appearance of Clause 93 without consultation has given rise to a great deal of concern and suspicion. Your Lordships will already be aware of the immediate reaction of the unions when this clause was introduced on Report. There have been assurances from the Minister when he sought to lay those fears to rest. However, I repeat that that can be done effectively only if the safeguards are actually written into the Bill itself. Without such safeguards, there will continue to be concerns lest sections of the workforce—perhaps only small numbers—should have their terms and conditions unilaterally worsened. The promise of unspecified compensation, which is contained in the clause, is not sufficient to allay those fears.

I therefore hope that the Minister will accept the arguments that I have put this afternoon and that he will accept some of the amendments. I beg to move.

The Earl of Caithness

My Lords, I am grateful to the noble Baroness, Lady Turner of Camden, for the way in which she has moved the amendment. I am glad that there have been the meetings which I promised and I am sorry that there was some misunderstanding about exactly what our true motives were. I am glad that everybody now accepts that the Government were trying to do nothing other than clear up any uncertainties.

The whole point of Clause 93 is to enable BR or the franchising director to be able to act to remove uncertainties and, in the longer run, to avoid the risk of redundancies. Perhaps I can explain a little further. At the moment staff are allocated to divisions in BR to meet the needs of the railways as presently constituted. Different arrangements will be needed to implement the provisions of the Bill. As particular parts of BR are transferred to the private sector, transfers of parts of BR's business will occur to which the TUPE regulations will apply. In most cases, no difficulties will arise. Staff working solely in the transferred part will themselves transfer, as provided under TUPE. But in other cases there may be a problem, or at least uncertainty. Some or all of the staff may work only some of their time in the part of the business to be transferred. Questions then arise. Should they all, or just some of them, transfer? Under TUPE, none of these staff would be transferred because it, and the Acquired Rights Directive, applies only to people wholly assigned to the relevant part of the undertaking. But this would result in the transferred business being left without all the staff it needs, while BR had to retain staff for which it no longer had work, or vice versa. I am sure that the House will agree that that is unacceptable. The same problem could also be expected to arise in future if franchises are re-formed after the first and subsequent round of franchises. That is why the franchising director is given similar powers to BR in this clause.

Therefore, we have provided the powers of assignment in Clause 93. We believe that those provisions will give effective protection to the interests of BR employees who will need to be assigned to one undertaking or another within BR before—and I stress the word "before"—any undertaking is transferred to a subsidiary or to the private sector. Some unavoidable changes in terms and conditions of employment may be required to achieve that end. Where they are, the employee must end up in a no less favourable position than he was before. Compensation will be paid in respect of any overall detriment to a person's terms and conditions.

The clause does not seek to change a person's employer; it can be used merely to assign his employment to a particular part of the employer's undertaking. The employer will of course use consultation procedures under existing agreements with the unions, but there is no need to include those in the Bill. He will also use existing allocation arrangements whenever possible. That is important, but those allocation arrangements may not work effectively in every case. That is why we need the powers in the Bill. Once assigned to that part of the undertaking, any transfer of the part to another employer will attract the provisions and protection of TUPE.

To repeat, under these provisions there is no change of employer, and compensation will be paid for any unavoidable detriment. The full consultation and protection procedure provided by TUPE will come into effect when the undertaking, or part thereof, is transferred.

I shall mention arbitration, a matter the noble Baroness raised. There is nothing in Clause 93 that seeks to overturn existing employment legislation. Therefore, although provision is made for independent arbitration, an employee may still pursue his case under employment protection legislation, if he so wishes. I hope that that explanation allays the anxieties of the noble Baroness on that aspect of the matter.

6 p.m.

Baroness Turner of Camden

My Lords, I thank the Minister for his explanation, but it by no means allays my concerns. I return to the point that I made at the very beginning: if the intention is to ensure that people in this rather special position have the protection that would otherwise be afforded by the Transfer of Undertakings (Protection of Employment) Regulations 1981, but it is not now sure that they will receive it, why is it not a good idea to write into this section of the legislation that, despite the doubts about applying it to people, there is, nevertheless, the guarantee that the full undertakings contained in TUPE will apply to them?

Nothing that the Minister has said has allayed my concerns. It is necessary to have rights of consultation and rights in relation to trade union agreements written into the Bill. That would of course be made clear if there is specific reference in this section of the Bill to TUPE. I cannot let matters stand as they are. Despite the meetings that we are glad to have had with the Minister—and we accept his undertakings—nevertheless, the unions still feel that at some time in the future when different people will be looking after things under this legislation, they need to have these provisions written into the Bill to ensure that the safeguards will operate in respect of those particular employees.

In those circumstances, I feel that I have to test the views of the House on this important issue. I am aware that outside the House a great deal of attention is being paid to it. A great deal of legal advice has been obtained, and the legal advice is to the effect that we should have these undertakings written somewhere into the Bill. In those circumstances. I beg leave to put the amendment to the House.

6.4 p.m.

On Question, Whether the said amendment (No. 28) shall be agreed to?

Their Lordships divided: Contents, 84; Not-Contents, 136.

Division No. 4
CONTENTS
Addington, L. [Teller.]	Hunt, L.
Airedale, L.	Jay, L.
Archer of Sandwell, L.	Jay of Paddington, B.
Ardwick, L.	Jenkins of Putney, L.
Ashley of Stoke, L.	Judd, L.
Beaumont of Whitley, L.	Kagan, L.
Birk, B.	Kirkhill, L.
Blackstone, B.	Kissin, L.
Bonham-Carter, L.	Listowel, E.
Boston of Faversham, L.	Llewelyn-Davies of Hastoe, B.
Broadbridge, L.	Lockwood, B.
Campbell of Eskan, L.	McCarthy, L.
Carmichael of Kelvingrove, L.	McIntosh of Haringey, L.
Carter, L.	McNair, L.
Castle of Blackburn, B.	Mallalieu, B.
Cledwyn of Penrhos, L.	Mason of Barnsley, L.
Clinton-Davis, L.	Monkswell, L.
Cocks of Hartcliffe, L.	Morris of Castle Morris, L.
Dean of Beswick, L.	Mulley, L.
Desai, L.	Murray of Epping Forest, L.
Dormand of Easington, L.	Nathan, L.
Falkland, V.	Nicol, B.
Gallacher, L.	Plant of Highfield, L.
Gladwyn, L.	Prys-Davies, L.
Glenamara, L.	Rea, L.
Graham of Edmonton, L. [Teller.]	Redesdale, L.
Greene of Harrow Weald, L.	Richard, L.
Gregson, L.	Robson of Kiddington, B.
Grey, E.	Rochester, L.
Hanworth, V.	Russell, E.
Harris of Greenwich, L.	Russell of Liverpool, L.
Hayter, L.	Sefton of Garston, L.
Hilton of Eggardon, B.	Serota, B.
Hollis of Heigham, B.	Stedman, B.
Holme of Cheltenham, L.	Stoddart of Swindon, L.
Houghton of Sowerby, L.	Strabolgi, L.
Howell, L.	Taylor of Blackburn, L.
Hughes, L.	Taylor of Gryfe, L.

Tordoff, L.	White, B.
Turner of Camden, B.	Wigoder, L.
Wedderburn of Charlton, L.	Williams of Mostyn, L.
Whaddon, L.

NOT-CONTENTS
Aberdare, L.	Johnston of Rockport, L.
Abinger, L.	Kenilworth, L.
Addison, V.	Keyes, L.
Allenby of Megiddo, V.	Kimball, L.
Archer of Weston-Super-Mare, L.	Lane of Horsell, L.
Arran, E.	Lauderdale, E.
Astor, V.	Leigh, L.
Astor of Hever, L.	Lindsay, E.
Attlee, E.	Long, V.
Auckland, L.	Lucas, L.
Barber, L.	Lyell, L.
Belhaven and Stenton, L.	Mackay of Ardbrecknish, L.
Belstead, L.	Mackay of Clashfern, L.
Blatch, B.	[Lard Chancellor.]
Blyth, L.	Macleod of Borve, B.
Boardman, L.	Malmesbury, E.
Boyd-Carpenter, L.	Mancroft, L.
Brabazon of Tara, L.	Marlesford, L.
Brentford, V.	Merrivale, L.
Cadman, L.	Mersey, V.
Caithness, E.	Miller of Hendon, B.
Campbell of Croy, L.	Milverton, L.
Carnegy of Lour, B.	Monk Bretton, I.,
Carnock, L.	Mottistone, L.
Chalker of Wallasey, B.	Mountevans, L.
Chelmsford, V.	Mowbray and Stourton,
Chesham, L.	Nelson, E.
Chilver, L.	Nelson of Stafford, L.
Clanwilliam, E.	Norfolk, D.
Cochrane of Cults, L.	Norrie, L.
Colnbrook, L.	O'Cathain, B.
Colwyn, L.	Orkney, E.
Constantine of Stanmore, L.	Orr-Ewing, L.
Cork and Orrery, E.	Oxfuird, V.
Craigavon, V.	Peel, E.
Cranborne, V.	Pender, L.
Crathorne, L.	Perry of Southwark, B.
Crickhowell, L.	Platt of Writtle, B.
Cumberlege, B.	Prentice, L.
Davidson, V.	Rees, L.
Dean of Harptree, L.	Renton, L.
Denham, L.	Renwick, L.
Denton of Wakefield, B.	Rodger of Earlsferry, L.
Dixon-Smith, L.	Romney, E.
Downshire, M.	St. Davids, V.
Dudley, E.	Saint Oswald, L.
Ellenborough, L.	Seccombe, B.
Elles, B.	Sharples, B.
Elliot of Harwood, B.	Skelmersdale, L.
Elliott of Morpeth, L.	Soulsby of Swaffham Prior, L
Elton, L.	Stewartby, L.
Ferrers, E.	Strange, B.
Finsberg, L.	Strathmore and Kinghorne, E.
Flather, B.	[Teller.]
Fraser of Carmyllie, L.	Suffield, L.
Gardner of Parkes, B.	Swansea, L.
Glenarthur, L.	Swinfen, L.
Goschen, V.	Tebbit, L.
Gridley, L.	Teynham, L.
Harlech, L.	Thomas of Gwydir, L.
Harmar-Nicholls, L.	Torrington, V.
Harmsworth, L.	Trumpington, B
Harrowby, E.	Ullswater, V. [Teller.]
Hayhoe, L.	Vivian, L.
Henley, L.	Wakeham, L.
Hesketh, L.	(Lord Privy Seal.)
HolmPatrick, L.	Whitelaw, V.
Hooper, B.	Wise, L.
Howe, E.	Young, B.
Hylton-Foster, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.12 p.m.

[Amendments Nos. 30 to 35 not moved.]

Clause 107 [Responsibility for composite listing particulars of certain licensed successor companies]:

Viscount Goschen moved Amendment No. 36:

Page 126, line 9, at end insert:

("() Subsections (1) and (2) above have effect only in relation to licensed successor companies—

1. (a) which are wholly owned subsidiaries of the Board; or
2. (b) which are wholly owned by the Crown.").

The noble Viscount said: My Lords, in moving the amendment I shall speak also to Amendment No. 37. These amendments limit the scope of Clauses 107 and 108 to licensed successor companies which are either wholly owned by the Crown or are wholly owned by British Rail subsidiaries. They would disapply the clauses to licensed successor companies which were in the private sector or in which the private sector has an interest. I beg to move.

On Question, amendment agreed to.

Clause 108 [Application of Trustee Investments Act 1961 in relation to investment in certain licensed successor companies]:

Viscount Goschen moved Amendment No. 37:

Page 126, line 25, at end insert:

("(a) whose shares or debentures are included in the Official List, within the meaning of Part IV of the Financial Services Act 1986, in pursuance of that Part; and

(b) which, immediately before its shares or debentures were admitted to that Official List, was—

1. (i) a wholly owned subsidiary of the Board; or
2. (ii) a company wholly owned by the Crown.").

On Question, amendment agreed to.

Clause 116 [Interpretation of Part II]

The Earl of Caithness moved Amendment No. 38:

Page 129, line 28, after ("vested") insert ("by virtue of and").

On Question, amendment agreed to.

Clause 117 [Safety of railways and other guided transport systems]:

Baroness Turner of Camden moved Amendment No. 39:

Page 131, line 29, at end insert:

("() Nothing in this section shall be deemed to permit any persons who provide railway services allowing their employees, who work in safety critical occupations, in other than emergency circumstances, to work—

1. (a) more than seventy-two hours per week;
2. (b) more than twelve hours per turn of duty;
3. (c) more than six days per week;
4. (d) without a minimum rest period of twelve hours between turns of duty.").

The noble Baroness said: My Lords, on Report I introduced an amendment which was designed to ensure that after privatisation safety would not be put at risk because of increased working hours. I shall not repeat all the arguments that I then advanced. I referred to the accidents which had sometimes, though fortunately rarely, occurred. I drew attention to the long hours worked by some staff on railways. It is an industry in which traditionally working hours have been long, often with a great deal of overtime, because of the kind of service that has to be provided. I said that guidelines had been established by BR following the Clapham disaster and the recommendations of Sir Anthony Hidden QC.

There is an anxiety lest private operators intent upon maximising profitability may not observe the guidelines or any maxima at all. The wording of my amendment on Report attracted some opposition because it sought to apply the limits to everyone by referring to "persons who provide railway services". It was pointed out by the noble Lord, Lord Boyd-Carpenter, that that could include the chairman of a board or a managing director. We have therefore brought back a similar amendment with slightly different wording. We have provided that any persons who provide railway services shall not allow their employees who work in safety critical operations to work more than the hours set forth in the amendment. The amendment also makes provision for emergency circumstances.

I hope that as a result of the rewording the amendment will commend itself to the Minister. On the last occasion I gained the impression that the Government were concerned to ensure that people did not work overlong hours and that safety standards were maintained following privatisation. On those grounds, I beg to move.

Lord Boyd-Carpenter

My Lords, the noble Baroness referred to the debate which took place on Report on a similar though slightly differing amendment. Today she said that the words "safety critical occupations" will exclude chairmen and managers. I rather doubt that. I believe that the work of a manager in particular can be very safety critical indeed. If that is so, the objections which were raised on Report apply in this case.

In any event, I doubt whether it is wise to put into statute exact time limits of this kind, not least because it gives some colour and justification to those who make people work right up to such limits. It can be said that workers are still within the limits that have been laid down if they stop less than five minutes of the various period specified in the Bill, and that is all right. I am sure that in many circumstances it would be all wrong. I do not know what my noble friend the Minister will say, but I am suspicious of such an amendment and believe that it will do the Bill no good.

Lord Swinfen

My Lords, I wonder what the position would be if the country were at war and large numbers of railway employees had left of their own free will or had been drafted into the forces. If there were no railway emergency but a national emergency of such a kind would people still not be allowed to work for longer hours? The drafting of the amendment does not cover such a situation.

The Earl of Caithness

My Lords, the noble Baroness's main concern remains to ensure that safety is not put at risk because of increased working hours following privatisation. That is an aim that surely the House will agree with and, as I said when we last discussed this, it is a matter that is already being dealt with in the health and safety regulations to implement the new safety regime for the privatised railway. I also explained that the Health and Safety Executive had consulted on the draft regulations and was now considering the responses with a view to finalising the regulations at the end of this year.

It is right that the statutory framework for the new safety regime should be provided in health and safety regulations. I therefore have difficulty in principle, regardless of the merits of the amendment, in seeking to extract a particular aspect of the new safety regime to deal with it in the Railways Bill. I put it to the House that that would be quite inappropriate.

The draft safety critical work regulations propose a general duty on operators to ensure that safety critical staff do not work excessive hours. This is new. In addition, the draft regulations proposed, for consultation purposes, specific limits on the hours of duty to be worked by train drivers. This goes beyond BR's internal guidelines and negotiated hours of work by placing this issue on a statutory basis.

When we discussed this previously, the noble Baroness represented the concern of unions that private sector operators may not observe the guidelines that have already been established. By dealing with this matter in regulations as the Health and Safety Executive proposes, operators will have no choice but to comply with what the regulations lay down.

Responses to the consultation on this matter, which, I understand, include the extent to which limitations on hours should be extended to other workers carrying out safety critical tasks, are now being considered by the Health and Safety Executive. It is clear that hours of work and minimum rest periods will be covered in the regulations. I do not believe that we should seek to second-guess the independent expert advice of the Health and Safety Executive on those matters.

I can tell the noble Baroness that I have already drawn to the attention of the Health and Safety Executive the comments which she made in our earlier debates, and I shall draw to its attention what the noble Baroness said this afternoon.

In conclusion, I confirm that there is absolutely no question that privatisation will lead to any diminution in safety standards. It will be in the commercial interests of private sector operators to ensure that their operations are safe. The safety regulations to which operators will be subject will not allow them to be otherwise.

Baroness Turner of Camden

My Lords, I thank the Minister for that fairly sympathetic response as regards the anxieties which have been voiced from this side of the House. In drafting the amendment, we believed that the reference to "safety critical" employees referred to a quite specific type of employee known by that term within the railway industry. I do not believe that it covers senior management staff, as the noble Lord, Lord Boyd-Carpenter, seemed to indicate. Moreover, the inclusion of the words "emergency circumstances" certainly covers the kind of circumstances to which the noble Lord, Lord Swinfen, referred.

I am glad to learn what the Minister said this afternoon about the regulations now under discussion with the Health and Safety Executive and the fact that consultations are proceeding in relation to those draft regulations with those responsible for organising people within the industry. I welcome also the assurance that the Government certainly do not intend that privatisation should lead to any diminution in safety standards. I welcome that assurance and, in those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Swinfen moved Amendment No. 40:

After Clause 131, insert the following new clause: ("Application of building regulations

. Part M of the Building Regulations 1991 shall have effect in relation to railway premises.").

The noble Lord said: My Lords, this is the same amendment as that which I moved and withdrew on Report. The House will recall that it is designed to ensure that there are proper access and facilities at stations for passengers with disabilities. As I understand it, the current laws which cover those matters are rather complex and they are covered in a number of special Acts and health and safety at work legislation.

Part M of the building regulations is designed specifically to make buildings that are open to the public properly accessible to disabled people. However, those regulations are not applicable to statutory undertakings such as British Rail. I understand that the new private operators will be in a similar position.

If the amendment is accepted, the regulations would apply only to areas to be used by passengers. The regulations set out that they would come into force only if there is a major redevelopment or a complete rebuild of a building such as a station. It would not mean that the railways would automatically have to upgrade all their stations tomorrow. That is quite impractical.

It was quite obvious from the debate on the amendment on Report that proper consideration of the needs of disabled people as passengers is not presently being taken into account when major refurbishments of stations are undertaken. I believe that that situation could be exacerbated by the denationalisation of the railways as the private operators have a duty to their shareholders to produce a reasonable profit. My noble friend Lord Caithness failed totally to give me any adequate explanation as to why Her Majesty's Government opposed the amendment on Report, and in fact his response to the amendment was a very good argument in its favour. I hope that he is able to give me a better response this evening. I beg to move.

Baroness Darcy (de Knayth)

My Lords, I am glad that the noble Lord, Lord Swinfen, has brought back this amendment because I did not feel that the Minister's reply on Report was very satisfactory. He said: Indeed, we see no reason at this time why the present situation should be changed. Railtrack will be the natural successor to BR in terms of the rights and obligations of statutory undertakers, both in this field and others. It will step into BR's shoes, so to speak, in this area".—[Official Report, I 9/10/93; col. 559.] On Report, the noble Lord, Lord Swinfen, mentioned the new station at Waterloo International and the refurbished Liverpool Street station. They fail to provide the features required by regulations. I mentioned Oxford station. The Minister agreed at col. 560 what a wasted opportunity for redevelopment that was.

In a later conversation the Minister said that the council rather than BR was responsible for Oxford. But if the regulations applied they would apply to the builder rather than the body authorising the building. Therefore, those regulations would have sorted out Oxford. I reiterate what the noble Lord, Lord Swinfen, said about the regulations applying only to new construction or major alterations, thus sparing later expense rather than incurring expense on buildings which would not otherwise be refurbished or rebuilt.

The Minister was concerned also that small stations might be required to make very expensive alterations. I have not given the Minister notice of this matter but I am sure that he will be able to confirm or refute in his reply that the alterations would be subject to the test of practicability and reasonableness as enshrined in the Chronically Sick and Disabled Persons Act. Therefore, if one were asking for a vast amount to be done at a small station, that would be deemed impracticable. I am sure the Minister will be able to clarify that point.

At col. 560 the Minister referred to Clause 68 which is now Clause 70. He referred to consulting DPTAC. I agree that DPTAC does great work. However, Clause 70 provides only that DPTAC should be consulted. I believe that it should be stated that when practicable and reasonable the advice of DPTAC should be followed.

In view of something that has happened today, I am minded to encourage the noble Lord, Lord Swinfen, to stick to his guns. I do not know whether your Lordships heard "You and Yours" today on Radio 4. Eric Forth, the Minister for Education in another place, was asked why the draft code of practice for children with special educational needs contained no mention of a matter referred to in an amendment which I had withdrawn following a firm undertaking from the noble Lord, Lord Henley. He seemed to say, "Oh well, it is up to us to decide what to do with amendments which are withdrawn". It may be that the Minister concerned knew nothing of the various meetings and discussions preceding the withdrawal of the amendment and it may be that he knew nothing of how firm that commitment was. I have great respect for and faith in' the Minister, the noble Baroness, Lady Blatch, an extremely hardworking and committed Minister who has great integrity. I am sure that we shall sort that matter out. I do not introduce this matter to make a fuss because I am sure that it will be cleared up. I say that merely to emphasise that in most cases there is absolutely no substitute for writing a provision on the face of the Bill.

If the noble Lord, Lord Swinfen, does not press his amendment, I hope that he will extract a very firm commitment that DPTAC's advice will not only be sought but that, where reasonable, it will be adhered to and acted upon. I hope that he will make sure that somewhere that is written down in black and white.

Lord Carmichael of Kelvingrove

My Lords, the Minister must recognise that an extremely powerful case has been made out by the two previous speakers. I hope that my colleagues in this House would support them were they to seek the opinion of the House on this matter.

Lord Cochrane of Cults

My Lords, my elder brother, who was a Member of your Lordships' House, had the misfortune to be in a wheelchair all his life, and alas, my brother-in-law is now similarly confined, so I feel that I have a little experience in this field. With the improvements in medical science and increasing longevity, it is inevitable that some of us here will find ourselves in a similar plight. Others may do so as a result of motor accidents, which once might have been fatal but from which people now recover. From my own experience, accessibility to many buildings has vastly improved. Moreover, British Rail—a much maligned institution, often unfairly—now makes much better, and even rather good provision in many cases, for wheelchair passengers.

However, it is no use having access onto the train if you cannot make your way through the station except with great difficulty, and sometimes in really rather unfavourable circumstances. For example, you may have to travel in a lift which is otherwise used for goods. But, of course, that is better than nothing. I very much support my noble friend's amendment, especially so when it is backed by the vast experience of the noble Baroness, Lady Darcy (de Knayth).

Although I fully accept the need to move on with the proceedings at this time of night—a point well made by the noble Lord, Lord Carmichael of Kelvingrove—I hope that my noble friend will be able to give us rather more positive assurances than has been the case in the past. We are discussing a real public need and one which should be dealt with.

6.30 p.m.

Earl Attlee

My Lords, if a developer did not have to adhere to the building regulations, how would he know how nearly he should adhere to the regulations in order to make a successful bid?

The Earl of Caithness

My Lords, I am grateful to my noble friend Lord Swinfen for explaining his amendment. Naturally, I have given careful thought to the issues raised at Report stage, and my officials have had further discussions with their opposite numbers in the Department of the Environment who have policy responsibility for the building regulations. Indeed, I met my noble friend only yesterday to discuss the matter. I hope that I shall be able to report progress that he will find acceptable.

I explained to the House on Report that the exemption from building regulations currently enjoyed by BR as a statutory undertaker was of long standing and that it recognised the specialised nature of many railway buildings. I resisted my noble friend's amendment on the last occasion primarily on the grounds that it was undesirable—through the Bill—to seek to make piecemeal changes to the building regulations regime. Further consideration since our earlier debates has only strengthened that view. The problem is that the amendment would apply, in isolation, one small part of the buildings regulations—that relating to access for disabled people—while leaving the rest of the regulations exempted. I believe that that was the point which concerned the noble Earl, Lord Attlee. I say that because under the terms of the amendment we would be using one part of the building regulations. That would not only introduce a new enforcement body—the local authority building inspectors—which has not traditionally had responsibilities for station buildings; it would also present difficulties in terms of the powers of building inspectors to enforce compliance. For example, there are other provisions in the building regulations which would normally deal with such matters as egress and escape in the event of fire. But they would not apply. So the amendment would introduce controls over entry for disabled people to railway premises without commensurate controls to ensure their safe and rapid exit in an emergency. That is why we believe that there are potential dangers in having a piecemeal approach.

I am, however, anxious to be constructive. I accept the spirit of what my noble friend intends. We want to ensure that, wherever practicable, the needs of disabled people are properly considered, and especially so at the design stage of any new station buildings. However; I must warn your Lordships that apparently simple solutions will not always be appropriate. I wonder how some noble Lords would fulfil the obligations if one was to take, perhaps, the refurbishment of a country station which had two platforms but only one vehicle access to one platform. How would you get a disabled person in a wheelchair across to the other side? I am sure that we can all think of country stations where that would apply. Indeed, I can think of one from which I travel fairly regularly. Further, it might be prohibitively expensive to install a lift over or under the railway line and it may not be practically possible.

Some noble Lords may ask, "Why not have the old barrow crossings at track level?" I have to say that they have been ruled out on high speed lines by the Railway Inspectorate on safety grounds. I would hate to push the noble Baroness, Lady Darcy (de Knayth), let alone my noble kinswoman Lady Masham of Ilton across, one of those barrow crossings if there was a high speed train on the way. Likewise, I do not think that my noble kinsman Lord Swinton would thank me very much if I tried to do so.

However, in other areas, much can undoubtedly be achieved with a little forethought. British Rail already has its own code of practice, Designing for the Disabled which is currently in the process of revision. It aims as far as possible to ensure that the interests of disabled people are catered for in the design of new stations. I know that the noble Baroness had some criticism of the stations. However, we are all learning, and I am very keen that we should build on that process.

Perhaps I may just say at this stage that the information I have now received with regard to Waterloo International is somewhat more positive than the noble Baroness seems to believe. It appears that considerable efforts are being made, in consultation with disability groups, to introduce features for disabled people, including corduroy edgings for the tops of stairways and bright colouring for columns and other steelwork. Moreover, at Liverpool Street station my information is that full access is provided for disabled people to both station levels, with wheelchair-accessible toilets adjacent to the travel centre and other features in accordance with the BR code of practice. Some problems still remain, but everyone is trying to rectify those for partially sighted people. I hope that they will be sympathetically addressed.

I have two positive proposals to put before the House. The first recognises that the Bill already imposes a duty on the regulator, in Clause 4, to have regard to the interests of disabled persons and in Clause 70 to prepare, publish and promote a code of practice for protecting disabled people using passenger and station services, in consultation with the Disabled Persons Transport Advisory Committee. I believe that the code will provide a natural place for developing best practice with regard to station design. I can tell my noble friend that I intend to ask the regulator to give serious consideration to seeing that this code of practice addresses the need to make reasonable provision for access to disabled people when stations are reconstructed or extended or when new stations are built.

I will go further. As I have said, the reason why the building regulations, in total, do not apply to most of the buildings owned by BR is that there is an exemption, under Section 4 of the Building Act 1984, for all statutory undertakers. I am now able to give your Lordships this commitment: the Government will take steps to review that exemption. It will be a complex matter, but we shall be asking the Building Regulations Advisory Committee—a statutory body under the 1984 Act—to initiate a review early in the new year. The committee will be asked to carry out necessary consultation; to report on the extent to which the exemption under Section 4 remains appropriate; and where there is evidence that it is inappropriate, to recommend what changes should be made. We shall ensure that the review takes full account of the specific concerns expressed by the House, and in particular the question of access for disabled people al stations.

I hope that the House will accept that offer as an earnest of our willingness to take a fresh look at issues across the board. Importantly, it will allow a considered approach to be taken, and proper consultation to be carried out with interested bodies before any changes to the statutory provision are brought forward.

I believe that we have gone a long way to meet the concerns not only of my noble friend Lord Swinfen but also of other noble Lords who have spoken in the debates on the matter. I thank my noble friend for bringing forward the point. It is an important one. As a result of his tabling of the amendment both on Report and on this occasion, I have now been able to give the House those two assurances.

Lord Swinfen

My Lords, I should like, first, to thank all those who have taken part in our small debate. I also thank them for their support. I hope that my noble friend will take note of the comments made by the noble Baroness, Lady Darcy (de Knayth) and that the advice of DPTAC will be taken seriously whenever it is given. The committee knows what it is talking about and it is essential that we should listen to its advice.

I should also like to take the opportunity to thank my noble friend for the meeting that I had with him and his officials yesterday. I am grateful for the way that he and his officials took on board my concerns. That appears to have borne some fruit. I am delighted that he has been able to bring to the notice of those who will be preparing the code of practice the fact that they should have proper regard to the needs of people with disabilities. I am also delighted that there will be a review of the statutory exemption from the building regulations early in the New Year. I hope that review will not be unduly delayed. Other bodies apart from the railways are affected by the measure, for example the British Airports Authority.

I hope that when reviewing this undertaking the Government will bear in mind what the noble Baroness, Lady Darcy (de Knayth) said; namely, that they will consider the issues of practicality and reasonableness when applying the regulations to small stations. It had been my intention to press the amendment this evening if I did not receive a reasonable response from my noble friend, but I think the House will agree with me that he has gone as far as he can under the circumstances. Therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 132 [Schemes for the organisation etc. of transport police]:

The Earl of Caithness moved Amendment No. 41:

Page 149, line 40, after ("1949)" insert ("or section 53(4) of that Act as it applies to Scotland").

The noble Earl said: My Lords, in moving Amendment No. 41 I wish, with the leave of the House, to speak to Amendments Nos. 55 and 56. They are technical amendments. I beg to move.

On Question, amendment agreed to.

Clause 138 [Grants and other payments towards facilities for public passenger transport to and from airports, harbours etc.]:

The Earl of Caithness moved Amendment No. 42:

Page 154, line 25, after ("his,") insert ("to refrain from exercising such functions,").

On Question, amendment agreed to.

Clause 151 [General interpretation]:

The Earl of Caithness moved Amendment No. 43:

Page 164, leave out lines 12 to 16 and insert:

(""publicly owned railway company" means a company which is wholly owned by the Crown and which carries on, or is to carry on,—

1. (a) an undertaking derived, or to be derived, (whether wholly or partly and whether directly or indirectly) from, or from some part of, an undertaking carried on by the Board or a wholly owned subsidiary of the Board; or
2. (b) an undertaking in the course of which the company uses, or will use, any property, rights or liabilities acquired, or to be acquired, (whether directly or indirectly) from the Board or a wholly owned subsidiary of the Board;").

The noble Earl said: My Lords, this is a technical amendment. I beg to move.

On Question, amendment agreed to.

Clause 154 [Short title, commencement and extent]:

The Earl of Caithness moved Amendment No. 44:

Page 166, line 18, after ("126") insert (", 128").

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

On Question, amendment agreed to.

Schedule 4 [Access agreements: applications for access contracts]:

The Earl of Caithness moved Amendments Nos. 45 to 54:

Page 172, leave out lines 34 to 36.

Page 172, line 40, leave out from beginning to ("before") in line 45 and insert ("whose consent is required by the facility owner, as a result of an obligation or duty owed by the facility owner which arose after the coming into force of section 17 of this Act,").

Page 172, line 47, leave out from beginning to end of line 8 on page 173.

Page 174, line 19, leave out ("Subject to the following provisions of this Schedule").

Page 174, line 25, leave out from beginning to end of line 20 on page 176.

Page 176, line 22, leave out ("Subject to the foregoing provisions of this Schedule").

Page 176, line 31, leave out ("or this Schedule").

Page 176, line 34, leave out ("any application for review").

Page 176, line 42, after ("suit") insert ("or instance").

Page 177, line 4, leave out ("or costs").

The noble Earl said: My Lords, these amendments have all been spoken to. I beg to move.

On Question, amendments agreed to.

Schedule 10 [Transport police: consequential provisions]:

The Earl of Caithness moved Amendments Nos. 55 and 56:

Page 199, line 10, after ("shall") insert ("in its application to England and Wales").

Page 199, line 25, at end insert:

("1A.—(1) The said section 53 shall in its application to Scotland be amended in accordance with the provisions of this paragraph.

(2) In subsection (I) of that section for the definition of the approved scheme there shall be substituted—

""the approved scheme" means the scheme in force for the organisation of the transport police made by the Secretary of State under section 132 of the Railways Act 1993;".

(3) In subsection (4) (a) for the words "by any of the Boards or their wholly owned subsidiaries" there shall be substituted the words "by—

1. (i) any of the Boards or their wholly owned subsidiaries; or
2. (ii)any person who is a party to an agreement with the British Railways Board for making available to that person the services of constables so appointed."").

The noble Earl said: My Lords, these amendments have all been spoken to. I beg to move.

On Question, amendments agreed to.

Schedule 11 [Pensions]:

The Earl of Caithness moved Amendments Nos. 57 to 61:

Page 200, line 15, at end insert:

(""employment" means employment under a contract of service or apprenticeship (whether express or implied and, if express, whether oral or in writing), and cognate expressions shall be construed accordingly;").

Page 200, line 35, at end insert:

(""participant", in relation to a pension scheme or a section of a pension scheme, means a person to whom pension

rights are accruing under the scheme or section by virtue of his employment in a class or description of employment to which the scheme or section relates; and cognate expressions shall be construed accordingly;").

Page 205, line 12, at end insert ("except that, in the case of an employee—

1. (a) who is employed for less than sixteen hours, but for at least one hour, in any week, or
2. (b) whose relations with the employer are governed during the whole or part of a week by a contract of employment which normally involves employment for less than sixteen hours, but for at least one hour, weekly,

that Schedule shall so apply in relation to that employee and that week with the modifications in sub-paragraph (11) below.

(11) Those modifications are that the said Schedule 13 shall have effect—

1. (a) as if paragraph 3 provided for any week—
   1. (i) during the whole or part of which the employee's relations with the employer are governed otherwise than by a contract of employment which requires him to be employed for a minimum number of hours weekly, and
   2. (ii) in which the employee is employed for one hour or more, to count in computing a period of employment;
2. (b) as if paragraph 4 provided for any week during the whole or part of which the employee's relations with the employer are governed by a contract of employment which normally involves employment for at least one hour, but for less than sixteen hours, weekly to count in computing a period of employment; and
3. (c) as if paragraphs 5 to 7 and, in paragraphs 9, 10 and 15, the references to paragraph 5, were omitted.

(12) Expressions used in sub-paragraph (10) or (11) above and in Schedule 13 to the Employment Protection (Consolidation) Act 1978 have the same meaning in that sub-paragraph as they have in that Schedule.").

Page 210, leave out line 50 and insert ("Secretary of State under paragraph 10A of that Schedule;").

Page 210, line 52, at end insert:

("(1A) The Minister may also make a substitution order in relation to any section of a new scheme, within the meaning of Schedule 11 to the Railways Act 1993, if the section is one—

1. (a) which is designated under paragraph 10(1) of that Schedule; and
2. (b) in relation to which a guarantee has been given by the Secretary of State under paragraph 10A of that Schedule; and the following provisions of this section (and sections 52C and 52D) shall apply in relation to any such section of a new scheme as if any reference to a guaranteed pension scheme included a reference to such a section.").

The noble Earl said: My Lords, these amendments have all been spoken to. I beg to move.

On Question, amendments agreed to.

Lord Clinton-Davis moved Amendment No. 62:

Page 214, line 38, leave out ("Secretary of State") and insert ("Minister").

The noble Lord said: My Lords, this amendment has been spoken to. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 63 and 64:

Page 214, line 47, leave out ("Secretary of State") and insert ("Minister").

Page 214, line 52, leave out from beginning to end of line 2 on page 215.

The Principal Deputy Speaker (Baroness Serota)

My Lords, there are amendments to Amendment No. 65. I will therefore take amendments Nos. 63 and 64. The question is that these amendments be agreed to.

On Question, amendments agreed to.

The Earl of Caithness moved Amendment No. 65:

Page 217, line 56, at end insert:

("Government guarantees to trustees of certain new schemes

10A.—(1) Subject to the following provisions of this paragraph, the Secretary of State—

1. (a) shall give to the trustees of any new scheme which satisfies the conditions in sub-paragraph (3) below, and
2. (b) may give to the trustees of any new scheme which satisfies the conditions in sub-paragraph (4) below, a guarantee in respect of their liabilities to make payments in respect of pension rights under the scheme.

(2) This paragraph applies in relation to a section of a new scheme as it applies in relation to a new scheme; and any reference in this paragraph to a new scheme, a closed scheme, a pension scheme or a member shall be construed accordingly.

(3) A new scheme satisfies the conditions in this sub-paragraph if—

1. (a) all the members of the scheme are persons whose pension rights under the scheme are pension rights which have been transferred, so as to become pension rights under that scheme, pursuant to an order under paragraph 4 above; and
2. (b) the rules of the scheme prevent any member of the scheme from being a participant in the scheme.

(4) A new scheme satisfies the conditions in this sub-paragraph if—

1. (a) the scheme is a closed scheme; and
2. (b) at the date on which the scheme becomes a closed scheme, all the members of the scheme are—
   1. (i) participants in the scheme to whom pension rights under the scheme are accruing by virtue of their employment with a relevant employer; or
   2. (ii) pensioners or deferred pensioners under the scheme whose pension rights under the scheme derive in whole or in part from their, or some other person's, participation in an occupational pension scheme as an employee of a relevant employer.

(5) Classes or descriptions of person may be prescribed whose membership of, or participation in, a new scheme is to he disregarded for the purpose of determining whether the new scheme satisfies the conditions in sub-paragraph (3) or (4) above.

(6) The power to give a guarantee under sub-paragraph (1) (b) above becomes exercisable in the case of any new scheme if the Secretary of State is of the opinion that it is desirable to give such a guarantee for the purpose of ensuring that the trustees of the scheme are, or will be, able to meet their liabilities to make payments in respect of pension rights under the scheme as those liabilities fall to be met.

(7) The Secretary of State shall consider any representations made by the trustees of a new scheme which satisfies the conditions in sub-paragraph (4) above concerning their ability to meet their liabilities to make payments in respect of pension rights under the scheme.

(8) Any guarantee under this paragraph shall be given in such manner, and on such terms and conditions, as the Secretary of State thinks fit; and, without prejudice to the generality of the foregoing provisions of this sub-paragraph, the terms and conditions on which a guarantee under this paragraph may he given include terms and conditions—

1. (a) with respect to any matter relating to payment under the guarantee, including—
   1. the circumstances in which payment under the guarantee falls to be made;
   2. the amounts, or the method of determining the amounts, of any payments that fall to be so made;
   3. the persons to whom any such payments are to be made;
2. (b) with respect to any matter relating to the management, affairs or winding up of the scheme, including—
   1. (i) the policy to be followed in relation to the investment of assets held for the purposes of the scheme; and
   2. (ii) the distribution of any surplus which may arise under the scheme; or
3. (c) requiring or precluding, or otherwise with respect to, amendment of the rules of the scheme; 909 and the sub-paragraphs of paragraphs (a) and (b) above are without prejudice to the generality of the preceding provisions of the paragraph in question.

(9) Any sums required by the Secretary of State to fulfil a guarantee given under this section shall be paid out of money provided by Parliament.

In this paragraph

"closed scheme" means a pension scheme—

1. (a) to which no new members are to be admitted; but
2. (b) under which pensions and other benefits continue to be provided;

"deferred pensioner", in the case of any pension scheme, means a person who has pension rights under the scheme but who (so far as relating to those pension rights) is neither a participant in the scheme nor a pensioner under the scheme;

"relevant employer" means—

1. the Board;
2. a wholly owned subsidiary of the Board; or
3. a publicly owned railway company, other than a company which is wholly owned by the Franchising Director.").

The Deputy Speaker

My Lords, I now call, as an amendment to Amendment No. 65, Amendment No. 66.

[Amendment No. 66, as an amendment to Amendment No. 65, not moved.]

[Amendments Nos. 67 and 68, as amendments to Amendment No. 65, not moved.]

On Question, Amendment No. 65 agreed to.

[Amendment No. 69 not moved.]

The Earl of Caithness moved Amendment No. 70:

Page 218, line 10, after ("Schedule") insert (", other than an order under paragraph 10A above,").

The noble Earl said: My Lords, I move the final amendment. I beg to move.

On Question, amendment agreed to.

6.45 p.m.

The Earl of Caithness

My Lords, I beg to move, That the Bill do now pass.

Moved, That the Bill do now pass.—(The Earl of Caithness.)

Lord Clinton-Davis

My Lords, this has been a fantastic process in so many ways. The Government embarked on rewriting the Bill as it reached the Report stage. One thing that has emerged very clearly is that our original verdict on this Bill has been wholly vindicated. It is a Bill that is unwanted by the public and which has been nurtured in a flawed ideology with Ministers increasingly uncertain as to the reactions of their own troubled Back-Benchers. Ministers have panicked prior to votes on important issues such as pensions. The other place will be left with something like 400 amendments to consider in two days, because that is what the Government propose.

I believe that the procedures of the House have been abused over and over again in the course of our discussions on the Bill—a Bill botched from beginning to end. It is a Bill which detracts attention from the essential issues besetting our transport and railways system. We have chronic under-investment compared with our Continental neighbours. I do not believe the Government's protestations that all this will somehow or other be cured by the franchisees who will come onto the scene. Services are already being slashed in the run-up to privatisation. Only a member of the Magic Circle, like the Secretary of State, could cause 500 trains to disappear every week and 50 more stations to close on Sundays, coupled of course with cuts in British Rail's grant, thereby effectively sawing the lady in half. All that has been attached to other policies. Fare rises way in excess of inflation are already in train. Doubts remain about concessionary fares. There have already been attacks on wages and conditions. For safety reasons trains are having to run more slowly. Ministers have forgotten to consult, even when under a statutory duty so to do.

The Government have emerged out of this whole process in an extremely bad light. We shall listen with interest to the Minister's final remarks as I gather he is to make an announcement on the Government's reaction to the Peyton-Marsh amendment. The Minister, to use his own words, has been poised on his seat waiting to make a further worthwhile announcement. The time has now come to do so.

We on this side of the House have tried to achieve the impossible. I include the noble Lord, Lord Tordoff, in that sentence. We have tried to give proper protection to the 340,000 railway pensioners. We have tried to provide for those who change their jobs within the railway system. We have tried to protect concessionary fares and rural services. We have tried to mitigate the disasters of fragmentation which this Government seek to impose upon the country.

British Rail is being deliberately derailed. We shall have many more quangos and there will be more jobs for the Conservative Party faithful. However, that will be coupled with bigger fare increases and more cutbacks. I believe it was the Mail on Sunday which encapsulated the position well when it stated: To make routes profitable, a lot more will have to go…There will be increased congestion and pollution, reduced choice, extra costs on industry, new road building schemes in areas of outstanding natural beauty". That is the verdict of that Conservative newspaper. Time will tell whether the Government's aspirations and hopes will be worth anything as their policies collide with the rocks of reality. We believe that the Bill represents useless baggage of Tory ideology which, frankly, should be consigned to the lost property office of decomposing ideas, never to be heard of again.

I wish at this stage to raise one issue upon which we have not concentrated. It is the effect of the Bill on Northern Ireland. The issue was referred to in the paving Bill. I believe that that reference could allow the Government to turn their attention to privatisation of the Northern Ireland rail network in the future. A consultation report on privatising that rail network has been completed, but the Government have refused to publish its findings. That in itself raises anxieties and should alert the people of Northern Ireland to the Government's future intentions with reference to their rail network.

We know that the Bill will have wide-ranging effects on the British Rail network and those in turn could affect Northern Ireland. In particular, the privatisation proposals have raised fundamental questions about the future of the Glasgow-Stranraer line which is obviously of vital importance to Northern Ireland's transport system. Attempts are currently under way to try to procure European funds to support the reopening of the Stranraer-Carlisle line. It would appear that the decision on the future of transport links between Stranraer and Northern Ireland could go either way. If the Stranraer line is allowed to run down, the Dublin-Holyhead line could become the main Euro ferry-rail route. The matter is important. I hope that the Minister will deign to comment on it.

Having rendered an additional indictment of the Bill, as I believe is wholly right, perhaps I may say in mitigation of the Minister that he has done his best throughout to battle against all logic and reason. He has remained courteous. He has endeavoured to be helpful. He has shown his determination to try to improve the Bill although he is not the Minister with prime responsibility for it. We are grateful to him for those aspects over which he was able to exercise his influence. He was ably assisted by his colleague, the noble Viscount, Lord Goschen.

I express my special thanks to my colleagues. I include (for this purpose only) the noble Lord, Lord Tordoff. I apologise deeply to the noble Lord if I have unhelpfully referred to him as the noble Lord, Lord Trefgarne, on one occasion. However, I pay special thanks to my noble friends Lord Carmichael and Lord Ewing. We miss my noble friend Lord Ewing but I am assured that he is recovering in health and will be back with us in the not very distant future. He was substituted ably by my noble friend Lady Turner. The whole House will have been impressed by her great knowledge on the difficult question of pensions—it will be noted that I delegated the issue entirely to her—and on questions affecting TUPE. I thank my noble friends for all the help that they gave me throughout the passage of the Bill.

I wish to place on record, too, my thanks to my colleagues in another place, notably Mr. John Prescott, and Mr. Brian Wilson, and to our teams of experts drawn from the transport industry, local authority groups, trade unions and pension and insolvency experts dealing with specific insolvency matters relating to railway administrative orders. I thank, too, the many people who wrote to us from all over the country, sustaining our opposition. They sought to advise us on many issues. However, some technical issues were difficult to deal with because of the short notice that we and, necessarily, our experts were given.

Finally, I thank our researchers in the House, notably Katherine Quarmby, without whom no one in this team would have been able to accomplish what we did in seeking to improve the Bill. I thank all noble Lords who participated. It has been an interesting series of debates, albeit they have been difficult and trying for us in the circumstances to which I have alluded.

Lord Tordoff

My Lords, at the closing stages of this curious Bill, I echo the thanks given by the noble Lord, Lord Clinton-Davis. His colleagues on the Front Bench and his support staff in the Whips' Office have co-operated with us to a high degree. That has been extremely necessary because we have been overwhelmed with advice and assistance from outside the Chamber. With the small resources available I hope that we have done our duty by the House and by the railway industry in our attempts to improve the Bill. If we have done so, it is largely due to the assistance of outside bodies such as pensioners' organisations, British Rail pension trustees, interested railway groups, travellers and many people throughout the country who are interested in railways. Without their help we could not have made such progress.

I thank, too, the noble Lord, Lord Henderson of Brompton, and the noble and learned Lord, Lord Simon, for their contributions to matters relating to hybridity as regards the pensions fund. One of my regrets is that we failed marginally, by seven votes and by one vote, to convince the Government to look more closely at the hybridity problem with regard to the orders that they will make on pensions in the future. It is unfortunate that the first report of the Delegated Powers Scrutiny Committee of your Lordships' House was treated in a somewhat cavalier manner by some Members of this House. It is also worth noting that a number of amendments added to the Bill since the scrutiny committee produced its report also contained delegated legislation which has not been examined by the scrutiny committee. The committee had a self-denying ordinance not to consider amendments, which I understand, because such consideration might have given rise to a huge workload. However, if the Government insist on using secondary legislation so widely, and I dare say wildly, in their amendments, there should be some mechanism whereby we can benefit from the advice of the learned Delegated Powers Scrutiny Committee.

I regret that we have been unable to do more for the pensioners. That issue has been an important facet of the Bill. It is clearly an area about which people remain worried. I have never believed that it was the Government's intention, as has been alleged. in another place, to steal from the pension fund; I am sure that that is not the case. However, I still believe that people do not feel as secure as they should as the Bill passes to another place.

Our position on these Benches remains as it did at the start of this Bill. We are not against some measure of privatisation. We are not against some measure that will introduce private capital into the running of a railway system in this country. We are against what appears to be the wanton destruction of a railway network which—despite all its faults, most of which are due to underfunding and could be put right by increased capital from the private sector—will be broken up; there is no question of that. But there is no sense of purpose in the Bill. There is no sense of a government strategy which integrates rail transport into a proper network system for the movement of goods and passengers. I think that that is extremely dangerous for the future of our country, for the economy and particularly for the environment of our country.

So it is with sadness that we have not been able to make improvements on the Bill. I said at a meeting yesterday outside your Lordships' House that that was probably because the Bill was so awful that it was "unimprovable". We have tried. I think that we have failed, but I thank the Minister and the noble Viscount, Lord Goschen, for their unfailing courtesy in dealing with the somewhat irritating points that we have put to them over the many past weeks. I wish the Bill were better than it is, but I am sure that the Commons will have one or two attempts to improve it even now.

7 p.m.

Lord Boyd-Carpenter

My Lords, I am sure that all noble Lords who have attended the debates on the Bill will share my admiration for the skill, charm and, above all, physical stamina which my noble friend Lord Caithness has shown in his handling of the Bill. He has had to deal with a number of immensely difficult issues. He has been confronted by formidable debaters in the persons of the noble Lord, Lord Clinton-Davis, and in particular the noble Baroness, Lady Turner of Camden. My noble friend has at no stage failed to give an answer—not always the one which all of us wanted, but a plausible and effective answer—to the many points which have been put. I think that the noble Earl will be able to look back on the progress of the Bill with great satisfaction and with the knowledge that he has established his reputation as a most effective parliamentarian and Minister.

I have a slightly sentimental feeling about the Bill. As I mentioned at an earlier stage, I was a Member of another place sitting in this Chamber when the Bill to nationalise the railways went through. I made a speech which I do not regret criticising that nationalisation procedure. Nothing that has happened since has made me regret those views, except perhaps that I might have expressed them with greater emphasis if I had known how unhappy the story of railway nationalisation would be.

No one who uses the railways, no one with experience of them, no one who has had to deal with them as a Minister, feels that nationalisation has served British Rail other than very badly and that it was absolutely right for the Government—though it required some courage—to come forward with a measure of this kind. Whether the measure is wholly right in detail experience alone will show. It is not usual for any complicated piece of legislation of this kind to be perfect. However, as I understand it, it is a sincere attempt to move our railway system more into the private sector and to get rid of some of the more harmful aspects of the nationalised position in which it stood. Therefore, I wish the Bill well. I am rather glad to think that the speech which I made in this very Chamber, heaven knows how many years ago, has for once proved not to be wholly unfounded.

There is only one other point I wish to make which is quite different. Your Lordships will be aware that the code of procedure of your Lordships' House contemplates that on Third Reading there should be only minor amendments or amendments carrying out promises made by the Government. The procedure which we have followed—and I make no criticism of any of your Lordships in that respect—may have been inevitable, but it turned the Third Reading into largely another Report stage. That is entirely contrary to the indications given in the guide book and sets a rather alarming precedent. I express the hope that the Procedure Committee will examine the matter. The noble Lord, Lord Clinton-Davis, wishes to intervene.

Lord Clinton-Davis

My Lords, I am much obliged to the noble Lord. When the House is met with the wholesale abuse of the legislative process in the way that we have seen on this Bill, the House must be more flexible. That is the circumstance in which substantive amendments came to be moved on this occasion.

Lord Boyd-Carpenter

My Lords, of course, there is quite a lot of force in what the noble Lord says. I make no criticism of any noble Lord, but what has happened—for whatever reason—is contrary to the guidance given in the book and contrary to the accepted procedures of the House in recent years. Therefore, I suggest that it is right that the Procedure Committee should look at the process as a matter of urgency. I do not believe that the noble Lord, Lord Clinton-Davis, will quarrel with that.

There were certain stages in the debate on Third Reading where, to some extent, we were repeating the Report and Committee stages. That is not necessarily a good way for the House to proceed. We should like the guidance of the Procedure Committee on the matter and that is why I raise it at this stage.

Meanwhile, the Bill will go to another place. It carries with it the good wishes of many of us and, as I have already ventured to say, admiration not only for my noble friend Lord Caithness who conducted the Bill through the House but also my noble friend Lord Goschen, who played a considerable part in helping him. I hope that very soon the Bill will be the law of the land and that the process of privatisation of our cherished railway system will have begun.

The Earl of Caithness

My Lords, the Railways Bill is an important Bill. It represents the most significant reorganisation of the railways for 50 years. That has been reflected in the comprehensive scrutiny by your Lordships, not only of the Bill's provisions, but also of how the Government intend to implement the proposals for which the Bill provides a statutory framework.

We have had six days in Committee; one day for re-commitment; three days on Report; and another day today on Third Reading. In all, we have spent over 50 hours debating the Bill and have passed over 500 amendments.

When I introduced the Bill over four months ago, I said that its purpose was straightforward: to provide the means to bring about improvements in the quality and quantity of rail services. Many of your Lordships who spoke at the time recognised the need for improvements in the railway industry. I said that the Government believed that the way to improve rail services was to provide the maximum opportunities for private sector involvement in the management, operation and financing of the railways. We certainly do not want to go down the route of some continental railways, where a third of their annual subsidy is paid off in debt before they even start to do anything with their railways.

Although this is not a conventional privatisation, we want the railways to benefit in the same way as other transport industries from the efficiency, managerial flair and enterprise of the private sector, where the consumer comes first. This remains our view.

I also explained that we were taking a gradualist and flexible approach. Indeed, this is one of the strengths of our proposals. When the Bill reached your Lordships' House we had filled in many of the details of our proposals, following the series of policy and consultation documents and subsequent policy statements. The detailed aspects of our proposals have been the subject of a number of probing amendments. The Bill is largely an enabling measure and that has provided plenty of opportunity, of which your Lordships have not hesitated to take full advantage, for wide-ranging debates on many, if not most, of the issues associated with railway privatisation.

I expected criticism of the Bill from noble Lords opposite. But I also expected—contrary to what happened in another place—that there would be constructive alternatives to what the Government had proposed. But I was disappointed. There was none, except the usual bleat about renationalisation, and nothing about the passengers. I have tried, I hope successfully, to answer the questions and allay the genuine anxieties raised by some noble Lords. Those are perhaps inevitable at times of change. Throughout the passage of the Bill, both here and in another place, we have listened and have been able to respond positively on a number of points that have been raised, either by tabling amendments or, where that has not been appropriate, by giving undertakings and assurances. We have clarified our proposals and brought forward a number of amendments to refine and improve the provisions in the Bill. The uncontroversial nature of many of the amendments which the Government have brought before the House has affected the fact that only one has been seriously opposed and many have been welcomed.

I mention here particularly the amendments that I moved in response to worries at earlier stages in respect of fares control and discount fares schemes. We now have on the face of the Bill a duty on the franchising director to consider, when 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 franchising director will also be under a duty to require, through franchise agreements, participation by franchisees in discount schemes for disabled people, the elderly and the young. Our concern to protect the interests of disabled people who use the railways was also reflected in the amendments placing a duty on the regulator in consultation with DPTAC, to prepare and encourage the adoption of a code of practice.

We have recognised the important role that the consultative committees play in providing a voice for the consumer, and we have strengthened their role. The noble Baroness, Lady Stedman, has championed their cause. We have accepted some of the amendments of the noble Baroness and have gone a long way to meet her remaining worries in amendments that the Government have tabled. The Government's view did not prevail when the opinion of the House was tested on two issues: on the role of BR in the franchising process, and on the role of the trustees in any substitution order relating to government contributions to pension funds which my right honourable friend may propose.

Noble Lords will be aware that the Government have been giving careful consideration to the issue of whether BR should be a franchisee in the light of the amendment of the noble Lord, Lord Peyton, agreed at Committee stage. Clearly, my right honourable friend the Secretary of State will want to hear the views of another place. But I can say that he will not be recommending that the amendment should be overturned. The Government accept that there may be circumstances in which it might be appropriate for BR to be a franchisee. But the Government remain of the view that it would not be appropriate to treat BR in the same way as other potential franchisees, and that legislative provision should be made in relation to BR's role in the franchising process. My right honourable friend will therefore be tabling appropriate amendments when the Bill returns to the other place.

Turning now to the issue of pensions, we have today considered the Government amendment providing an express duty on my right honourable friend the Secretary of State—

Lord Clinton-Davis

My Lords, I should be grateful if the noble Earl would allow me to intervene. He has introduced a novel point. I know that it is unusual to intervene at this stage, but perhaps he will forgive me. He has said—he will correct me if I am wrong—that the Government will not seek to set aside the amendment in the names of the noble Lords, Lord Peyton and Lord Marsh; what they will do instead is to find some ways of subverting it. Is that not what it comes to? What seems to me to have been designed is a blatant and discreditable attempt to subvert an amendment which has been convincingly carried by this place by a majority of 38—another piece of Mr. MacGregor's sleight of hand. That is really what it amounts to. He is saying: "Well, we are not going to let British Rail enter the franchising stake except in the most exceptional circumstances". I can assure the House that my colleagues in another place will oppose that way of subversion of that important amendment with all the power and strength that they have.

Lord Tordoff

My Lords, with the leave of the House, since the noble Earl has not yet resumed his seat, perhaps I may ask him if he can clarify the situation a little more. We are in a very strange procedural situation here, at the stage of Bill do now Pass, when new matter is being introduced. An amendment is to he sustained in another place, we are told, but it will be amended in some way. Can we know in what general way it is intended to amend it and what is the purpose behind that amendment? Is it merely to put British Rail into a situation where it could be the franchisee of last resort? From what the Minister says, one understands that he will allow the amendment to stand but put British Rail into some inferior position to other potential franchisees.

The Earl of Caithness

My Lords, I am sorry that I gave way to the noble Lord, Lord Clinton-Davis. Indeed, what has happened is nothing unusual in this House. The noble Lord, Lord Tordoff, will recall the discussions that we have had over the eight-and-a-half years that I have been a Minister dealing with Bills in this Chamber: an amendment against the Government is carried; it is then up to another place to decide what to do with that amendment. Sometimes the Secretary of State of the day decides that he wishes to oppose it; sometimes he wishes to accept it; sometimes he wishes to accept the principle but bring forward amendments. There is nothing wrong in that. It is nothing unusual. We have done it lots of times before. I am very surprised that the noble Lord, Lord Clinton-Davis, should have got so excited about this particular matter. What happens in another place is entirely the concern of another place. If the noble Lord's party wishes to have a discussion, it is free to have a discussion. We have had a discussion. The House has made its point of view clear. We have not sought to challenge that in any way in this House. It is now up to another place to decide what they should do with the proposal of my right honourable friend the Secretary of State.

Let me confirm: we believe that there might be circumstances in which it might be appropriate for BR to be a franchisee. But my right honourable friend will be bringing forward amendments. It is quite right that he should have waited until we had finished our proceedings before he finally decided his position. I shall of course be discussing the matter with my right honourable friend the Minister for Public Transport and my right honourable friend the Secretary of State as soon as we have passed this Bill.

I return to the issue of pensions. We have today considered the Government amendment providing an express duty for my right honourable friend the Secretary of State to give a government guarantee to the proposed pensioners' closed section of the joint industry scheme and a power for him to give a similar guarantee to any closed public sector section. That amendment responded to your Lordships' request that these commitments from the memorandum of understanding entered into in July between the Government, the BR board and the chairman of the trustees be set on the face of this Bill.

Noble Lords will also know that last Wednesday this House accepted an amendment tabled by the noble Lords, Lord Peyton and Lord Marsh, which has the effect of requiring the agreement of the trustees of a scheme to any substitution order that my right honourable friend the Secretary of State proposes to make under the new Section 52(b) of the Transport Act 1980.

I have to say that I regret that noble Lords saw fit to pass this amendment. It does nothing to further the interests of railway pensioners; it places the trustees of the pension fund in what is potentially a very difficult position; and it gives an independent third party an unprecedented veto over the Secretary of State's power to make orders relating to public expenditure—a matter, my Lords, for the other House. I question whether that was an appropriate exercise of the role of this House as a revising Chamber. The issue will now have to be considered in another place.

I conclude by thanking the House for its forbearance throughout our deliberations on this Bill. I am grateful for the contributions that have been made by many noble Lords from all sides of the House. The depth of knowledge and experience on the issue that we have discussed have been apparent on many occasions, and the courtesy extended by noble Lords opposite to me and to my noble friends who have supported me on the Front Bench has been very much appreciated throughout our many hours of debate.

I should like to thank those on the Back-Benches behind me. They have been helpful to me most of the time. As always, my noble friend Lord Boyd-Carpenter has enriched our debates. For him it is a special occasion. I am sure that it is worth waiting 50 years to get back on the right track.

I would also mention my noble friends Lord Brabazon, Lord Teviot, Lord Wade and Lord Stanley, who have ensured that we have given full attention to issues such as freight, the PTEs and the needs of rural areas. If I have not always succeeded in satisfying every point that they have put to me, I have been able to go at least part of the way.

I thank the noble Lord, Lord Clinton-Davis, for his contributions and those of his noble friends Lord Carmichael and Lady Turner. I hope that the noble Lord will also pass on our good wishes to his noble friend Lord Ewing, whom we have missed in the latter half of our debate. I am grateful to the noble Lord, Lord Tordoff, for his usual courtesy and his contributions throughout our debates and for the contributions of his noble friend Lord Redesdale during the early stages of the Bill. I cannot omit to mention the noble and learned Lord, Lord Simon of Glaisdale. Finally, I should like to thank my noble friends Lord Goschen and Lord Howe for their support. I am particularly grateful for the help of my noble friend Lord Goschen. I should like to say a very personal thank you to my right honourable friends the Secretary of State and the Minister for Public Transport for their support and help, particularly as we moved to the closing stages of the Bill.

I offer a big thank you to my officials also. As some noble Lords may go home along Marsham Street at night, they may have looked up and seen the oil lamps still burning. It was the officials working on the late amendments tabled by the noble Lords opposite. On behalf of all the House I wish to thank the Hansard writers, the clerks and the officials, all of whom have provided us with their usual, very good service.

On Question, Bill passed, and returned to the Commons with amendments.