Lords Sitting of 26 October 2000

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by Lord Bishop of Lincoln): The LORD CHANCELLOR on the Woolsack.
The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before business begins, I take the opportunity to inform the House that I am to make an official visit to Newcastle upon Tyne to take part in the Magistrates' Association dinner and to address its annual general meeting and conference tomorrow, Friday 27th October, when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Millennium Dome: Sale
3.1 p m.
Baroness Anelay of St Johns Baroness Anelay of St Johns asked Her Majesty's Government:
What progress they have made with their plans to sell the site of the Millennium Dome.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, the Government are currently in discussion with Legacy plc in relation to Legacy's proposal for a high technology business campus at the Greenwich site. The Legacy proposal is currently being analysed by the competition team in advance of any decision on preferred bidder status. We hope to make an announcement in due course, but I can assure the noble Lord that the Government are determined to get the best deal for the regeneration of east London.
Baroness Anelay of St Johns: My Lords, I thank the Minister for that reply. He referred to the "best deal". In that connection, what action has he taken in response to the information supplied by the chairman of the Dome Company, David James, to the effect that the best way of offsetting the Dome's enormous losses and of maximising the value for that site would be to pull down the Dome and thereby to achieve three times the amount of money from its sale as the Government will achieve by making a bargain basement deal with Bourne Legacy?
Lord Falconer of Thoroton: My Lords, I apologise to the noble Baroness for calling her a noble Lord! No such information has been provided to me by the chairman of the Dome Company. Before any deal is done, all options will be considered to ensure that it is the best value for money.
Lord Acton: My Lords, is my noble and learned friend aware that this morning's Independent reported
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a record number of 38,300 visitors to the Dome on Monday; 35,000 on Tuesday, a similar number yesterday and no doubt even more today? Can he give a current estimate of the number of visitors for the entire year?
Lord Falconer of Thoroton: My Lords, the current budget, copies of which are available in the House today, is based on 4.5 million revenue-generating visitors. I saw the article in the Independent. It is accurate, but I have been in this job for long enough not to make any claims in relation to it.
Lord Elton: My Lords, presumably in closing the operation, the intention is to minimise loss. Did the Minister learn with surprise—perhaps he did not and I am misinformed—that the whole facility of the Dome is to be made available free of charge on its last day?
Lord Falconer of Thoroton: My Lords, after the Dome closes on its last day, 31st December, there will be a party arranged by the Ministry of Sound. The facility will be free to that organisation, but catering arrangements will be made. That is the best value for money use on 31st December.
Lord Peston: My Lords, is my noble and learned friend aware that some of us regard the building as a marvellous piece of architecture? It would be an act of sacrilege to pull down such an excellent building. In this case, money is not the only criterion which might be applied to the problem. Is there a statutory obligation to sell the Dome? Would not the best value way forward be to keep the Dome in the public sector and use it for one of the many purposes which many of us have been advocating for some time, including as an indoor sports arena?
Lord Falconer of Thoroton: My Lords, there is no statutory obligation to sell the Dome. However, the Government have stated that they wish to try to find a buyer for it. That is what we are doing. I agree with my noble friend that the building is impressive. There are different views on that, but many people would agree with my noble friend.
Baroness Carnegy of Lour: My Lords, there are a large number of derelict acres of land around the Dome, which I fly over every week. Can the Minister tell the House whether the whole acreage of derelict land around the Dome is for sale; if not, how much is for sale and what percentage is unpolluted?
Lord Falconer of Thoroton: My Lords, the north Greenwich peninsula on which the Dome stands was decontaminated to a level which matched the then plans for that peninsula. Much, although not all, of the north Greenwich peninsular is owned by English Partnerships. The part on which the Dome stands is subject to a lease from the company which owns the Dome. It is for English Partnerships to decide what it

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wishes to do with that land not covered by the lease. It has bought the land with a view to regenerating that part of London.
Lord Marsh: My Lords, I refer to the question asked by the noble Lord, Lord Peston. I wonder whether the Minister is slightly confused. Is he saying that the objective for the conclusion of this exercise is that the taxpayer shall get best value for money, or is it still open that something may be done which is not best value for money, such as preserving this memorial to disaster?
Lord Falconer of Thoroton: My Lords, I hope that I was not confused about the position, which the Government made clear about a year ago. A competition was set up with a view to selling the Dome. There were two shortlisted bidders: Nomura, which dropped out, and Legacy plc, with which we are currently having discussions. The competition involved preserving the Dome. The buyers take the Dome subject to obligations to preserve it. Value for money and appropriate use were among the factors to be taken into account in determining who would succeed in the competition. Both preserving and selling the Dome are met by the terms of the competition.
Lord Mackie of Benshie: My Lords, did the Minister take any comfort from a press report that the German Government have lost even more money on a piece of foolishness?
Lord Falconer of Thoroton: My Lords, happily, my responsibilities are for the Dome, not for any German millennium projects.
Baroness Gibson of Market Rasen: My Lords, is the Minister aware that those who work in the Dome and the surrounding area followed closely the discussions in this House on the Dome and in particular on its future? Will my noble friend continue to bear them in mind when any future discussions take place on the Dome?
Lord Falconer of Thoroton: Yes, my Lords; I shall. I am grateful for the opportunity to say that whoever else was to blame, the staff who have worked in the Dome have played no part in that story. Indeed, they have contributed massively to the enjoyment experienced by many visitors to the Dome.
Lord Eden of Winton: My Lords, I agree with the noble Lord, Lord Peston, that the building is a fine piece of architecture. However, when the building was planned and designed, was not the original intention that it would not be required to remain in existence for more than one or two years? If the Minister is attempting now to find some further use for the building in years to come, does not the point made by my noble friend Lady Carnegy of Lour bear much further and more serious consideration by the
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Minister; that is, that the future existence of the whole venture should be integrated with the surrounding development and infrastructure?
Lord Falconer of Thoroton: My Lords, the noble Lord is correct that when the Dome was originally built, it was envisaged that it would be a temporary structure, but the Government decided that they would have a competition to dispose of it on a permanent basis. I entirely agree with the comments of the noble Lord. As I hope that I made clear in the Answer, the regeneration of east London and north Greenwich must play a crucial part in decisions about what happens to the Dome. That was one of the vital factors in deciding the winner of the competition.

European Union: Political Integration
3.9 p.m.
Lord Blaker Lord Blaker asked Her Majesty's Government:
What is their policy towards closer political integration in the European Union.
Baroness Ramsay of Cartvale: My Lords, as my right honourable friend the Prime Minister said in his widely publicised speech on 6th October in Warsaw,
"We want to be a part of a larger, stronger democratic Europe. A Europe of free, independent sovereign nations who choose to pool that sovereignty in pursuit of their own interests and the common good, achieving more together than we can achieve alone".
Lord Blaker: My Lords, I am grateful to the Minister for that Answer. But why have the British people become slowly more hostile to the euro and the European Union under this Government?
Baroness Ramsay of Cartvale: My Lords, I do not know how to comment on what the noble Lord, Lord Blaker, chooses to read into opinion polls. All I can say is that it is clear that the people of Britain, along with the people of other member states, want a lot from Europe. They do not simply want a free trade area; they want peace, prosperity and security. That is what this Government are trying to achieve with European developments.
Lord Tomlinson: My Lords—
Lord Stoddart of Swindon: My Lords—
Noble Lords: Tomlinson!
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, I cannot see behind me but I gather from voices around the House that my noble friend Lord Tomlinson should perhaps ask the next question.
Lord Tomlinson: My Lords, does my noble friend agree that when the British people made a decisive decision in a referendum to maintain our membership

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of what was then the European Community, they did so on the basis of the Treaty of Rome, which envisaged ever closer union with the peoples of Europe?
Baroness Ramsay of Cartvale: My Lords, I completely agree with my noble friend. That was exactly the point I was trying to make. The British people did not make a decision just to go into a free trade area, despite the propaganda we now hear from some circles in this country.
Baroness Williams of Crosby: My Lords, in the light of the Minister's reply, does she agree that perhaps the major political goal in Europe in this decade is the enlargement of the European Union to contain the fragile new democracies of central and eastern Europe? Does she agree also that to achieve that aim it is essential to bring about an extension of qualified majority voting and a reform of the Commission along the lines Her Majesty's Government indicated they would support at the forthcoming Nice summit?
Baroness Ramsay of Cartvale: My Lords, the noble Baroness raised a number of points. I entirely agree with her. The Prime Minister made very clear in his speech in Warsaw that enlargement is a basic goal of this Government. We hope, and it is our intention, that the new applicants will be participants in the next IGC and that they will start to come in at the end of 2002. We hope for a significant breakthrough on that front during the Swedish presidency.
Lord Howell of Guildford: My Lords, whether or not the Prime Minister is in favour of the euro—that seems to change from day to day—will the noble Baroness encourage him to give a robust "no" to some of the less attractive, deeper integrationist proposals that are now being incorporated in the draft treaty of Nice? I refer to suggestions such as the idea that the charter of fundamental human rights should be given full legal status and that the veto should be taken away on tax policy and in many other areas as well. Will the Minister agree also that the idea of a hard-core, fast-track integration may be completely upside down? The best way to achieve the kind of European unity, stability and prosperity that we all want may be by avoiding too much integration and going on a fast-track that lies outside those ideas. Forcing people together is not the best way of binding them together. Does the noble Baroness agree with that?
Baroness Ramsay of Cartvale: My Lords, I cannot answer, "Does she agree with that?", when so many points were raised by the noble Lord, Lord Howell. However, I shall try to deal with as many as I can in the time that is acceptable to the House.
The question of enhanced or closer co-operation is not new. That was a mechanism agreed at the Amsterdam IGC and it lets a group of member states move ahead with co-operation in a specific area. I can assure the noble Lord that the Prime Minister made it clear and it is the position of our Government that enhanced co-operation has to be genuinely open to all
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member states who want to take part. It should not be used to form a hard-core or two-speed Europe and it should not undermine the single market.
We are open to looking at the question of qualified majority voting. But we made clear that the veto will be kept in all areas that we consider essential to British interests, including the area of tax.
Lord Stoddart of Swindon: My Lords—
Lord Grenfell: My Lords—
Baroness Jay of Paddington: My Lords, my noble friend Lord Stoddart tried to speak earlier. It may be sensible to hear his question now.
Lord Stoddart of Swindon: My Lords, I am grateful to the Leader of the House. Is my noble friend aware that I read the Prime Minister's speech on 6th October with great interest? But can she tell me how his speech squares with the speech made in the European Parliament by Mr Prodi, when he said,
"The single market was the theme of the Eighties; the single currency was the theme of the Nineties; we must now face the difficult task of moving towards a single economy, a single political unity"?
Can my noble friend tell me how those statements square with each other? Can she say also whether, in the light of the Prime Minister's speech, he is prepared to veto the proposal which will be made at Nice for a charter of fundamental human rights and not give away any more veto powers?
Baroness Ramsay of Cartvale: My Lords, there have been many significant speeches by European leaders over the past few months. We have had speeches from President Chirac, Joschka Fischer, Mr Prodi, Chancellor Schroeder and our Prime Minister on 6th October in Warsaw. Why should they all agree? Is it not marvellous that there is this great debate going on throughout Europe about its future?
We have made it crystal clear again and again from this Dispatch Box and anywhere else that has been appropriate that the United Kingdom will not accept the charter of fundamental human rights as a legally binding text; it is not to be a legally binding document. That has been agreed and we do not need to keep making that point.

New Electricity Trading Arrangements
3.17 p.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
When they expect the new electricity trading arrangements (NETA) to be introduced.
The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the new electricity trading arrangements were originally scheduled to go "live" between the end of October and

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the middle of December. That timescale was always very tight and in mid-September it became apparent to Ofgem that problems which had arisen during the testing of the central IT systems would mean that that target period could not be achieved. Ofgem is undertaking a comprehensive replanning exercise and I expect a firm implementation date to be announced shortly.
Lord Ezra: My Lords, I thank the noble Lord for that information. Does he not agree that it is worrying that this important measure has been subject to delay? It is similar to major computer problems that occurred in other areas in recent times. For example, it was announced this morning that the Inland Revenue has lost a number of tax returns, which may or may not be to the advantage of those concerned. Can the Minister assure us that when the complex new system is introduced, there will be sufficient back-up in case it fails? Furthermore, will the Government take advantage of the interval now available to ensure that there is a supplier of last resort in case any existing supplier is unable to fulfil its obligations, such as occurred recently with the insolvency of Independent Energy?
Lord Sainsbury of Turville: My Lords, I thank the noble Lord, Lord Ezra, for giving me the opportunity to talk about a subject every bit as exciting as the Dome and European political integration. The team of people working on the new electricity trading arrangements—the DTI, Ofgem, the National Grid Company and Logica—are working extremely effectively together. We should be able to produce a robust system. It is through ensuring that it is robust and that the interfaces are right that this delay has occurred.
Lord Fraser of Carmyllie: My Lords, do the Government realise that failure to set a date for NETA is doing us immeasurable harm in the European context? Hitherto, we have enjoyed a premier position as leader in liberalising the energy markets of Europe. With every month of delay, we are rapidly losing that position. Does the Minister recognise that it will not do for him now to say nothing more than that a firm date will be announced at some time in the future? A date must be set. Does the Minister recognise what damage will occur if it is not?
Lord Sainsbury of Turville: My Lords, it is fair to say that the previous system was hardly a price-making mechanism; it was simply a price-taking mechanism. It was therefore subject to many problems. We are introducing the new system in order to correct the situation and to have a proper pricing mechanism. I am surprised that the noble and learned Lord, of all people, should not be interested in producing a proper market mechanism.
Lord Taylor of Blackburn: My Lords, as regards new power stations, how many applications, which should have been announced soon, are being delayed?
Lord Sainsbury of Turville: My Lords, there are restrictive applications and on that basis a number of
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gas applications are not going forward. I cannot give an exact figure in relation to what has happened in the past few months but I shall write to the noble Lord.
Lord Avebury: My Lords, what penalty arrangements apply to the late supply of IT equipment? If the question is too complicated to answer off the cuff, can the Minister put a paper in the Library of the House?
Lord Sainsbury of Turville: My Lords, that situation is not applicable in terms of penalties because it relates to the interfaces between the system which is designed and the system with which it will interconnect. In those terms, it is not suitable to talk about blame lying with one of the parties.
Lord Ezra: My Lords, the Minister failed to comment on the point I raised about the supplier of last resort. Is it not important that under the new trading arrangements ordinary users of electricity should know that if their supplier goes out of business they will automatically continue to be supplied?
Lord Sainsbury of Turville: My Lords, the basis of the system is that it is about balancing the supply and demand when there are equally a large number of people demanding and a large number of suppliers. The system is designed to deal with exactly the situation in which one supplier is not able to supply.

Medeva: Polio Vaccine
3.23 p.m.
Lord Clement-Jones Lord Clement-Jones asked Her Majesty's Government:
What further action they plan to take following their recent decision to withdraw certain batches of polio vaccine manufactured by Medeva.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, Ministers are establishing what can be learnt from the events leading to the decision to withdraw the oral polio vaccine and the adequacy of the MCA's procedures to gather and validate information from vaccine manufacturers and its advice to Ministers on this issue.
Lord Clement-Jones: My Lords, I thank the Minister for that reply. I hope he will accept that it was regrettable that no ministerial Statement was made last week, particularly as it took two months after discovery for the department to announce the problems with the polio vaccine. Is the Minister satisfied that the MCA will not be misled about the contents of vaccines and that their manufacture in the factories is of a sufficiently high standard, particularly at the Medeva factory in Speke?
Lord Hunt of Kings Heath: My Lords, the review which we undertake must examine the procedures

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which the MCA uses to ensure that manufacturers are conducting their affairs in accordance with the standards and guidelines laid down. We shall want to examine that carefully.
I can assure the noble Lord that the MCA has inspected the Speke site vigorously and frequently. Indeed, I understand that it inspected the site four times this year in order to ensure that problems are not giving rise to public health hazards, that they are being resolved satisfactorily and that appropriate standards are being met.
Baroness Gardner of Parkes: My Lords, is the flu vaccine, which is in such short supply, manufactured by the same company? Why is it that so many people over 65 who responded to the superb advertisements for flu inject ions cannot get them?
Lord Hunt of Kings Heath: My Lords, Medeva is one of the companies which produces the flu vaccine. Of the five manufacturers supplying the UK market, all except one are on target to produce the supplies when required. That one company is called Solva and it supplies about 15 per cent of the total market. It has estimated that it will be able to resolve the problems and deliver the additional doses required during the week 20th to 24th November.
Lord Williamson of Horton: My Lords, as one of those who has received a polio vaccine manufactured by Medeva within the past month, I want to ask whether the company breached the European guidelines. If it did, will there be a penalty? I want to be a Member of this House for some years yet.
Lord Hunt of Kings Heath: My Lords, I understand that it is considered that it did breach the 1999 guidelines and consideration will be given to action being taken against the company in relation to that. However, the guidelines will have the full force of law for existing products from spring next year. As regards their legal status, the guidelines at present relate to new products. However, in order to ensure public confidence in the vaccine programme, the Government took the decision that, because this product breached 1999 guidelines, it was right to withdraw that vaccine.
Perhaps I may reassure the noble Lord that the Committee on the Safety of Medicines established a working party yesterday and, on the basis of additional information available to it, it confirmed its conclusions that no TSE safety issues arose from the use of UK source bovine materials in the manufacture of vaccines currently marketed in the UK.
Baroness Northover: My Lords, can the Minister confirm that oral vaccines will now be treated in the same way as injectable vaccines?
Lord Hunt of Kings Heath: My Lords, yes, I can confirm that. Undoubtedly, they are covered by the 1999 guidelines.
Earl Howe: My Lords, does the Minister agree that public confidence in the NHS vaccination programme
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is a paramount consideration? Does he also agree that, if that is to be achieved and if false fears are to be banished, there must be absolute openness both by government and the pharmaceutical industry? Will he confirm that government and industry have firmly adhered to that principle?
Lord Hunt of Kings Heath: My Lords, I agree that enhancing and ensuring public confidence in the vaccine programme in this country is essential. It is worth reminding the House that the success of our immunisation programme has resulted in the incidence of childhood diseases falling to their lowest ever levels. It is very important to ensure that the public are aware of the importance of immunisation.
It is important that there is openness in the performance of the regulatory agencies. I believe that this Government have proved themselves to be as open as possible as regards these issues. When the matter was reported to Ministers last week, we took action effectively and speedily.
Earl Russell: My Lords, is the Minister aware that the views of the noble Earl, Lord Howe, on the need to maintain public confidence are widely shared? Would he further agree that, as secrecy reaches epidemic proportions within both Whitehall and business, that objective might be more easily achieved in the light of a more tightly drafted Freedom of Information Bill?
Lord Hunt of Kings Heath: My Lords, I would say only that the Department of Health wants to ensure public confidence in the vaccine programme. We accept that openness and vigour in the process of licensing and regulation is an important component of that. We are as committed as anyone can be to ensuring that that is done satisfactorily.

Business of the House: State Opening
3.30 p.m.
Lord Carter: My Lords, it may be for the convenience of the House if I make a brief statement on the date of State Opening. I hope that your Lordships will be pleased to hear that State Opening will be on Wednesday 6th December.
Lord Henley: My Lords, I thank the Government Chief Whip for finally coming to the House to give the date of State Opening. Will the noble Lord confirm that this is the first time since the Second World War, perhaps since even the First World War or even earlier, that State Opening has been as late as December? Will the noble Lord also confirm that there has been full co-operation and absolutely no filibustering by this side in dealing with the vast amount of legislation before the House? I give the example of the Countryside and Rights of Way Bill. It was intended originally that that Bill would occupy about 10 days in Committee, but we managed to finish it in some six days.

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Will the noble Lord also confirm that it is not only the number of Bills before the House which has resulted in this unprecedented late State Opening but the fact that many of them have had to be rewritten as they have proceeded through the House, not by this side but, as often as not, by the Government? One has only to consider the saga of the Political Parties, Elections and Referendums Bill. The noble Lord will recall that the first day in Committee on that Bill, which emanated from the Home Office, was back in May. On the second day in Committee noble Lords had to consider some 100 pages of government amendments to a Bill which itself was scarcely longer than that.
Can the noble Lord also confirm that much the same was true of the Financial Services and Markets Bill? Will he remind noble Lords of just how many government amendments to that Bill were tabled and the fact that, just one month after Royal Assent, it had to be amended because of the passage through this House of the Regulation of Investigatory Powers Bill? I could also mention the Freedom of Information and Criminal Justice (Mode of Trial) Bills, and the time that the Government wasted on Clause 28.
In passing, I remind the Government Chief Whip that many of those Bills emanate from the Home Office. It may be that the noble Lord will want to have a word with some of his colleagues in that department. Perhaps the noble Lord and the Leader of the House can take a slightly stronger line with that department when they consider legislation that is to be brought before the House next year.
I end by asking for an assurance from the noble Lord that we shall have a considerably lighter burden next year. This year we have already sat on 155 days—that surpasses the figure last year when we sat for longer than the Commons—and there are 18 or more days to go. That is asking a lot of this House which has sat to midnight and beyond virtually every day since we returned from the Summer Recess. I hope that the noble Lord will offer us a lighter passage next year.
Lord Carter: My Lords, I am grateful to the Opposition Chief Whip. He is misinformed about the lateness of State Opening. In 1921 State Opening was on 14th December. I am tempted to observe that some of your Lordships may well remember it! The Opposition have not filibustered and, through the usual channels, there has been the customary co-operation. The noble Lord said that originally 10 days had been allocated to the Committee stage of the Countryside and Rights of Way Bill. The Opposition asked for 10 days; I offered five days, and it took six.
The number of Bills this Session has not been exceptional compared with others. I agree that a large number of amendments have been tabled, but we are a listening government and respond to sensible requests for improvements to Bills. This is not unusual. I recall that when I sat on the Benches opposite at Report stage of an education Bill 400 amendments were tabled in this House, which is a
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second Chamber. In nine of the past 20 years, the Queen's Speech has taken place in the second half of November. It is a little later this year. However, the noble Lord, Lord Strathclyde, is on record as saying that the Government are entitled to get their programme. I entirely agree with him, and I organise the business to that end.
Lord Renton: My Lords, will the noble Lord bear in mind that it would be to the advantage of the Government, Parliament and the people if legislation contained clear statements of principle and was encumbered with much less detail? Will the noble Lord seek to persuade the departments and Parliamentary Counsel to legislate in the way that I suggest?
Lord Carter: My Lords, that view is not shared by all those involved in the preparation of legislation. It is believed that purpose statements, which were quite common in the 19th century, lead to considerable legal problems in the interpretation of Acts. But I agree that there is a debate to be had on the balance between what appears in primary legislation and what appears in secondary legislation.

BSE
3.38 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, with the permission of the House, I shall now repeat a Statement made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food. The Statement is as follows:
"With permission, I wish to make a Statement on the report of the BSE inquiry chaired by Lord Phillips of Worth Matravers. Today, the Government are publishing the report, and I want to announce our initial response and to outline a package of measures for the benefit of people suffering from variant CJD and their families, as well as the families of people who have already died of the disease. This is not, however, the occasion to announce the Government's substantive response to the inquiry's report. That will come later.
"I should like to express the Government's thanks to Lord Phillips, Mrs June Bridgeman and Professor Malcolm Ferguson Smith for their very thorough inquiry which has occupied them for the best part of the past three years.
"As the Government recognised when setting up the inquiry, BSE is a national tragedy. To date, 85 definite or probable cases of variant CJD have been reported in the UK. Of those 85, 80 people have died. There is an unknown number of cases yet to come. It is not possible to give precise forecasts because of the many uncertainties about the disease. I know that the whole House will join me in expressing deepest sympathy to those who have fallen victim to variant CJD, and to their families.

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"BSE has also had a serious impact on many tens of thousands of people whose livelihoods depend on the rearing of livestock and the processing and manufacturing of meat products.
"The inquiry was set up by my right honourable friends the Member for Copeland, the Member for Holborn and St Pancras and the Secretaries of State for Scotland, Northern Ireland and Wales. Its remit was to establish and review the history of the emergence and identification of BSE and new variant CJD and to reach conclusions on the adequacy of the response, taking into account the state of knowledge at the time.
"The inquiry report comprises 16 volumes and some 4,000 pages. Volume 1 sets out the key findings and conclusions. Quoting directly from the report's executive summary, the key conclusions are as follows:
BSE developed into an epidemic as a consequence of an intensive farming practice: the recycling of animal protein in ruminant feed. This practice, unchallenged over decades, proved a recipe for disaster.
In the years up to March 1996 most of those responsible for responding to the challenge posed by BSE emerged with credit. However, there were a number of shortcomings in the way things were done.
At the heart of the BSE story lie questions of how to handle hazard—a known hazard to cattle and an unknown hazard to humans. The Government took measures to address both hazards. They were sensible measures, but they were not always timely, nor adequately implemented and enforced.
The rigour with which policy measures were implemented for the protection of human health was affected by the belief of many prior to early 1996 that BSE was not a potential threat to human life.
The Government were anxious to act in the best interests of human and animal health. To this end it sought and followed the advice of independent scientific experts—sometimes when decisions could have been reached more swiftly and satisfactorily within government.
In dealing with BSE, it was not MAFF's policy to lean in favour of agricultural producers to the detriment of the consumer.
At times officials showed a lack of rigour in considering how policy should be turned into practice, to the detriment of the efficacy of the measures taken. At times bureaucratic processes resulted in unacceptable delay in giving effect to policy.
The Government introduced measures to guard against the risk that BSE might be a matter of life and death not merely for cattle but also for humans, but the possibility of a risk to humans was not communicated to the public or to those whose job it was to implement and enforce the precautionary measures.
The Government did not lie to the public about BSE. They believed that the risks posed by BSE to humans were remote. The Government were preoccupied with preventing an alarmist overreaction to BSE because they believed that the risk was remote. It is now clear that this campaign of reassurance was a mistake. When on 20th March 1996 the Government announced that BSE had probably been transmitted to humans, the public felt that they had been betrayed. Confidence in government pronouncements about risk was a further casualty of BSE.
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Cases of a new variant of CJD were identified by the CJD Surveillance Unit and the conclusion that they were probably linked to BSE, was reached as early as was reasonably possible. The link between BSE and variant CJD is now clearly established, although the manner of infection is not clear'.
Those are direct quotes from the Phillips report executive summary.
"The Government welcome the report. We will be studying its findings with care and looking closely at the lessons that flow from them. It is right that this House—and the wider public—should have the opportunity to do so too. They are important findings and they address some fundamental questions about the adequacy of the response to BSE.
"The report contains many lessons for public administration. Areas where we will be focusing our response include the implementation of policy decisions; the process of contingency planning; co-ordination across government departments and other agencies; the assessment, management and communication of risk; the role of scientific advisory committees; and government's assessment and use of scienitfic advice.
"Even now, there are some questions about BSE which are unresolved. We do not know with certainty how the disease entered the cattle herd; nor why it has been so predominantly a disease affecting this country. Lord Phillips's conclusion is that the origin of BSE is likely to have been a new prion mutation in cattle, or possibly sheep, in the early 1970s. In the light of this conclusion, my right honourable friend the Secretary of State for Health and I will be commissioning an independent assessment of current scientific understanding, including emerging findings, on the origins of the BSE epidemic. This study will then be considered by the Spongiform Encephalopathy Advisory Committee and published.
"While it was beyond the remit of the inquiry to examine current public protection measures, the House will want to know that the chairman of the Food Standards Agency advises that the inquiry report gives rise to no immediate need for new food safety measures. He intends to discuss this aspect of the report at the next public meeting of the agency's ongoing BSE controls review.
"Both the Spongiform Encephalopathy Advisory Committee and the Food Standards Agency board propose to review relevant elements of the report. We will take account of any conclusions or advice they wish to offer in the Government's response to the report. The same applies to the Select Committees of this House.
"The Government will announce their substantive response to the report in the coining months. Following this announcement the House will have an early opportunity to debate in government time both the report and the Government's response.

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"However, there is one element in the inquiry's report which the Government are singling out for attention now. That is the care of patients suffering from variant CJD and support for the families caring for them.
"The needs of variant CJD victims were frequently insufficiently addressed, especially in the early days of the disease. The rapidly degenerative nature of variant CJD requires timely and accurate diagnosis and a swift response from the local health and social services. Patient care has been variable in the past and not always responsive enough to the rapidly changing needs of patients.
"My right honourable friend the Secretary of State for Health issued new guidelines in August to improve the care of variant CJD victims. The Government now intend to go further.
"I can tell the House that given the special circumstances of these patients, my right honourable friend will now establish a new national fund for the care of victims of variant CJD. The fund will ensure a speedy response to diagnosis and improvements in the quality of care for patients. This package will be co-ordinated through the national CJD surveillance unit in Edinburgh.
"The new national care fund will be used to purchase care and equipment appropriate to the individual needs of variant CJD patients. The fund will be held by the CJDSU care co-ordinator, supported by a new national network of experts available to support local clinicians and local social services caring for patients wherever they live.
"My right honourable friend the Secretary of State for Health met families of variant CJD victims and representatives of the Human BSE Foundation yesterday to discuss this new package of care. Over the next few weeks his department will be working with the families affected to refine the package to ensure it is effective and properly meets the needs of patients.
"This dreadful disease has a devastating effect on victims and their families. The families have campaigned for improved diagnosis and care for those who may yet be affected by this national tragedy. I am sure the House will want to acknowledge the dignified and constructive way in which they have done so.
"In addition to the enhanced care package, we are determined to provide appropriate support for those who are suffering from variant CJD, for those who care for them and for the families of those who have already died.
"The Government therefore intend to put in place financial arrangements to benefit sufferers from variant CJD and their families, taking account of their particular needs in individual cases.
"The Government's preferred option would be to establish a compensation scheme, resulting in a special trust fund, which could amount to millions of pounds. There are a number of other possible
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options. We intend to work closely with the families affected to identify the best way forward. The first discussions with the families and their representatives will take place next week.
"The Government want to express their appreciation for the co-operation of all witnesses who have been called before the inquiry. Although the inquiry team stated that,
'any who have come to our Report hoping to find villains or scapegoats, should go away disappointed',
the report does make a number of specific criticisms of a number of individuals.
"I shall not comment on individual cases. The report contains an annex listing those who are criticised. Some of the individuals criticised also receive praise from the inquiry. There is no corresponding list of individuals who are praised. Elsewhere, the report identifies shortcomings which do not amount to criticisms, and therefore do not feature in the annex. For both those reasons, it is important that the report is considered in its entirety.
"Whenever serving public servants are subjected to criticism by a public inquiry, the question arises whether any form of disciplinary action should be taken. The report states that,
'if those criticised were misguided, they were nonetheless acting in accordance with what they conceived to be the proper performance of their duties'.
However, mindful of the importance of the issues covered by the inquiry, an independent person, Sheila Forbes, a Civil Service commissioner, will lead a review and advise accordingly. The Government want this review to be carried out quickly across the departments involved.
"The devolved administrations also received the report and will respond for their interests.
"Members will also wish to know that I am today sending copies of the report to the European Commission, the European Parliament and to the governments of each EU member state. In addition, I have arranged for the report to be placed on the Internet, accessible via the Ministry of Agriculture, Fisheries and Food's website.
"On taking office in 1997 the Government put consumers at the heart of decision-making on food safety issues. We have established the independent Food Standards Agency. We have opened up our scientific advisory committees, including the appointment of consumer representatives. We have put scientific advice to government in the public domain, encouraging a culture of openness, trusting the public and stimulating informed public debate. The 'deregulation culture' that called for a 'bonfire of regulations' has been replaced by a proportionate approach that strives for better regulation with the protection of the public at its heart. We have put in place working arrangements to encourage the sharing of ideas and information between government departments and agencies.

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"The inquiry has made a very thorough assessment of the history of BSE and of the response of the government of the day. It has added greatly to our understanding of this detailed and complex area. Work is already under way across the whole of government to follow up on the inquiry's findings. Most importantly today, we are setting in hand improved packages of care and arrangements for financial support for victims of variant CJD and their families. I commend the inquiry's report to the House."
My Lords, that concludes the Statement.
3.50 p.m.
Baroness Byford: My Lords, I thank the Minister for repeating the Statement made earlier by her right honourable friend the Minister of Agriculture, Nick Brown. We welcome the BSE report and concur with the expressions of gratitude for the work of the noble and learned Lord, Lord Phillips, and his team. On behalf of these Benches, I want to emphasise how deeply I regret the suffering and loss of life of the CJD victims. We are very sorry for the suffering and bereavement experienced by those families. For all their sakes, we must work hard to prevent another such tragedy occurring in the future.
I warmly welcome the Government's acceptance of the need for compensation for the families. We look forward to hearing in due course the details of the Government's proposals. The Minister has said today that the Government will be establishing a new national fund for the care of victims of variant CJD. The hand will ensure a speedy response to diagnosis and improvements in the quality of care for patients. That is truly to be welcomed. We are glad to hear that discussions have already taken place with families. What we need to see is a swift response to their dilemma.
The Phillips report has been almost three years in preparation. It runs to 16 volumes and some 4,000 pages. I am grateful to the Minister and to the Government for allowing us the opportunity to see a copy of the report earlier today. Obviously, we have had time only to study it briefly. The Government are entirely right in not rushing to make a substantive response to the report. I am sure the House understands that at this stage I cannot try to comment on the many details and recommendations in the report. We will wait until we have all had the opportunity to read the report and the Government's response to the report before a full debate is arranged.
The Minister and the inquiry have already recognised that we are considering this whole issue with the enormous benefit of hindsight. The Minister referred to that. Before rushing into judgment on the actions of civil servants, many of whom are not in a position to answer for themselves in public, other advisers and Ministers, we must bear in mind the state of knowledge about BSE at the time the decisions now being scrutinised were made. Therefore, I welcome the Minister's announcement in that regard.
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In the light of the Statement, perhaps I may ask five questions. First, does the Minister agree that all decisions must be based on the best available scientific advice? Does she consider that such advice was available at the time of the events considered in the report? Secondly, does the noble Baroness agree with the report that communications within and between departments and the various advisory groups were inadequate and led to misunderstandings and delay? Thirdly, does she agree with the report that the origin of the disease is still not absolutely certain and perhaps never will be certain? Fourthly, does she agree with the report that it was not MAFF's policy to lean in favour of agricultural producers to the detriment of consumers? Lastly, while our thoughts are first and foremost with the families afflicted by this great tragedy, does the Minister accept that it has had a huge impact on our farming community and that the whole industry has also been devastated?
I thank the Minister for repeating the Statement.
3.55 p.m.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for repeating the Statement and welcome the package of measures for the victims and their families. I thank her for making clear that the timescale for dealing with the issues raised by the report is the foremost priority. I hope that the House will have a chance to debate at the earliest opportunity all the extremely important issues raised in the report. Members of this House will particularly wish to examine the way in which the report highlights a culture of inappropriate structures and a climate of secrecy and of not trusting the public. Those factors lay very much at the base of the lack of advice given. Although the Minister said that the government did not lie to the public—we accept that—they ran a campaign of reassurance that beef was safe o eat. Therefore, the blame rests not so much on individuals as on a climate of secrecy. We must ensure that that climate of secrecy is not allowed to continue.
Given the conclusion of the report that advice should normally be made public, can the Minister say how the public will know if advice is not made public? That is at the heart of the worry of many noble Lords on the Liberal Democrat Benches about the Freedom of Information Bill. If advice is not made public, we simply will not know.
Does the Minister agree that scientific research and knowledge should be shared? Perhaps one of the strongest statements in the report is that an advisory committee should not water down its formulated assessment of risk out of anxiety not to cause public alarm. How will the Government deal with that issue? As dealing with hazard is such a politically hot potato, do they accept that there needs to be a structured method of risk assessment, risk management and risk communication?
The other striking issue that comes over from the report is the length of time that passed before action was taken. In 1988 there were reports of transmission to other species, particularly mice, and mechanically

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recovered meat feedstuffs began to be restricted. There was then an eight-year gap before very much action was taken. With that in mind, will compensation for victims and their families be examined by the Government in the light of what was said in the Southwood report on the feeding of animal protein to herbivores? The report stated:
"We believe that the inevitable risks are such that it would be prudent to change agricultural practice so as to eliminate these novel pathways for pathogens".
Given the fact that agriculture has been brought to its knees by this crisis, do the Government intend to review compensation payments for those livestock farmers who did not understand, of were not told of, the findings of that report?
We welcome a full debate on the Phillips report. We look forward to hearing more detail about the amount of funding that will be made available for research in areas that cause the public great concern—organophosphates, GM foodstuffs, and so on. The public should be given as much government information as possible.
4 p.m.
Baroness Hayman: My Lords, I am grateful to both noble Baronesses for expressing their welcome for the Statement and in particular their welcome for the compensation and care package to be made to the families concerned, in recognition that they have paid the highest price for this tragedy. As I said earlier, we shall examine and refine the detail of the compensation and care package with the families.
Perhaps I may respond first to a point made by the noble Baroness, Lady Byford. Everyone would agree that we need to have the best scientific advice available. If difficulties arise from that—it is a point that noble Lords in this House have mentioned on other occasions—we must bear in mind that there is no such thing as "the science"; namely, a scientific decision that is unchanging and unmoving. For myself, one of the lessons to be learnt from this is that it is necessary to be willing to expose uncertainties and to air balances of evidence and the consequent judgments that are made. Certain parts of the report make it clear that the campaign of reassurance, as it was described, has been criticised. That criticism has been levelled not because the campaign was launched with any malevolent intention, but rather because it was inappropriate to withhold from others the fact that dissenting views were expressed.
The noble Baroness, Lady Miller, asked about making scientific advice available to the public. I believe that we have moved a great deal on that front. Many committees, such as the Veterinary Products Committee and the Advisory Committee on Pesticides, publish their findings. SEAC makes public its agendas and minutes and holds press conferences. Perhaps it will reassure the noble Baroness as regards the point she made on freedom of information if I mention that the Food Standards Agency has a right enshrined in statute to make available its own advice to Ministers, regardless of whether Ministers want that
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advice made public. That is extremely important and provides an illustration of how this Government have attempted to put consumer interests at the heart of government policy making. For example, the review of BSE controls currently being undertaken by the Food Standards Agency is being carried out openly, with public meetings.
The noble Baroness, Lady Byford, asked whether I could agree with her on certain conclusions of the report. I hope that I have made it clear that today the Government do not believe that it is right to publish their response to the conclusions of the report or to the recommendations, which have taken the form of lessons to be learnt. Those run to something in the order of 200. To pick and choose specific examples on this occasion would not be appropriate. The noble Baroness will forgive me if I do not respond to individual questions as regards whether the Government agree with individual conclusions.
Furthermore, the noble Baroness is right to counsel the House not to rush in its judgment or to assume too much in terms of criticism. On the other hand, I was glad to hear that in another place Mr Tim Yeo accepted certain criticisms and publicly voiced his recognition that the last government had made mistakes. The report makes sobering reading for anyone in government. Any individual who holds the responsibilities of political office will need to read the report very carefully and then look to his or her own actions, culture and ability to work with colleagues. But of course—and inevitably—the report will make the most sobering reading for those who were involved in the tragic events now under consideration.
4.4 p.m.
Lord Jopling: My Lords, I thank the Minister for the Statement. As one who, when in office, was never informed of the existence of BSE, but left the department within a few days of Ministers being told of it, perhaps I may say that the words in the Statement declaring that it was not MAFF's policy to lean in favour of the agricultural producers to the detriment of the consumer will be received by many who have held office in that department—from both parties—with some degree of satisfaction. I believe that that was the way in which we all tried to run the department.
Furthermore, in the light of her own experience as a Minister, does the noble Baroness agree that a Minister is at maximum risk of making a total fool of himself if he rejects or overrides advice from either scientists or lawyers when he is neither a scientist nor a lawyer? Quite understandably, most Ministers are very reluctant indeed to override such advice.
Baroness Hayman: My Lords, many risks attach to the office of Minister. I am not sure that that is the greatest risk that can be taken. However, the report enjoins Ministers to reflect on whether it is appropriate, not to second-guess scientific advice, but to shelter behind it and not to recognise that, ultimately, policy responsibility goes wider than simply taking scientific advice. Certain areas of the report reflect on the need to recognise the realities of

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implementation and the need to formulate policy that is firmly based on scientific advice. While I agree that there is enormous risk—I have said as much at this Dispatch Box—in interposing one's lay judgment against the advice of scientific experts, the noble Lord has asked me for my personal opinion and I shall respond by saying that it is not something that I would counsel.
Equally, however, the report makes it clear that we shall all need to reflect on the need to incorporate the best scientific advice into policy making, but not to use scientific advisory committees as ciphers or alternatives to political responsibility.
Lord Harrison: My Lords, perhaps I may invite my noble friend to comment on the 50 per cent compensation scheme which, as she will recall, operated for some two years before the previous government then instituted the 100 per cent compensation scheme. Will she acknowledge that that scheme had the perverse effect of encouraging farmers to get rid of vulnerable animals by moving them off the farm and thus into the food trade—with all the attendant problems which went with that? Does my noble friend agree that the 50 per cent compensation scheme was short-sighted, risky and introduced a level of vulnerability for the consumer that has proved to be unacceptable to the British people?
Baroness Hayman: My Lords, having said to the noble Baroness, Lady Byford, that I would not attempt to give the Government's response to individual points, I must be even-handed in dealing with my noble friend. However, he is right to say that the issue of compensation is dealt with in the report in terms that include a fair degree of criticism of the delay in introducing a full compulsory slaughter compensation scheme in 1988. I counsel my noble friend to read what the report states about what was a very contentious issue at the time, and which remains so.
Lord Mackie of Benshie: My Lords, does the Minister agree that large numbers of farmers did their duty and accepted the loss, and turned their animals in for destruction at half price?
Baroness Hayman: My Lords, the evidence in the Phillips report—corroborated by the numbers of animals destroyed under the slaughter and compensation scheme—is that that happened.
Baroness Trumpington: My Lords, as a junior MAFF Minister, I had the honour to serve under two of the most honourable men I know—the right honourable John MacGregor and the right honourable John Selwyn Gummer. BSE was never part of my portfolio and I was not called to give evidence before the commission. However, I obviously was present at some of the discussions and I obviously answered questions from that Dispatch Box, as the Minister is doing now. As my noble friend said, politicians are not scientists; all they can do is to repeat
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the best information they can obtain from the best available sources. To my certain knowledge, that is what those Ministers did.
I greatly resent criticisms in the press and elsewhere that the two Ministers I have named could have done other than what they did when faced with a unique and totally unknown situation, the enormity of which only became obvious with the passage of time. With something as large and unknown as the BSE situation, is there not a difficulty for Ministers in deciding between scaremongering and dealing with the matter as sensibly as they can?
Baroness Hayman: My Lords, the noble Baroness is always robust in her description of the public service values she experienced while she was in the ministry. She is of course right to point out that people were dealing with an extremely difficult and unclear situation. There is no accusation of dishonourable conduct.
The report states that the Government did not lie to the public about BSE. They believed that the risks posed by BSE to humans were remote. The Government were pre-occupied with preventing an over-alarmist reaction to BSE because they believed that the risk was remote. It is now clear that this campaign of reassurance was a mistake. Beyond the issue of acting honourably, we have to ask how the situation arose over all those years; we have to ask how all the failures in the response, which are catalogued in the report, happened without malevolence. The report states that there were no villains and no scapegoats. In some ways it would be easier if there were a simple, single villain. In the absence of that, a more difficult question for all of us is how such terrible and tragic mistakes could still be made.
Lord Hardy of Wath: My Lords, while there was a serious failure, there was a response—a sweeping, costly and serious response—to which some of our European partners paid remarkably little heed. Is my noble friend surprised that in recent times the incidence of BSE in some of our neighbouring countries seems remarkably small? Despite that, we had the farce in Paris a few days ago. Can my noble friend assure the House that the United Kingdom Government will pay particular attention to the way in which the rest of Europe responds to the problem? If it fails to respond properly, sweeping problems could arise elsewhere.
Baroness Hayman: My Lords, as I said in the Statement, copies of the report are being sent to all member states and to the Commission. It is to be hoped that they will learn from it. The issue of the safety of imported beef is being addressed by the Food Standards Agency, which is looking at the matter in its current review of BSE controls. Earlier this year in Brussels, specified risk material removal rules were agreed and harmonised across the EU to ensure the safety of all EU beef. It is important that the report is understood across the Community and further afield, not only in relation to BSE and the safety of beef but

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equally in relation to other areas which might be analogous. We do not know what the next problem might be. There are disciplines to be learnt in regard to risk evaluation, risk management and risk communication which go wider than this single issue.
Lord Soulsby of Swaffham Prior: My Lords, the whole House will welcome a full debate on the report. The disease is very slow to yield up its secrets, and there are still many to be yielded up. Does the Minister agree that, despite the inaccurate and ungenerous hyperbole about BSE and the way the situation was handled, the officials in charge of the inquiry and making decisions were, in large part, acting in good faith and within the means and manpower that they had at their disposal? They were dealing with a new disease about which, at the time, we knew so little. There are still many lacunae to be filled before we fully understand a disease which has been utterly devastating to livestock production and to the families whose relatives have suffered from CJD.
Baroness Hayman: My Lords, I made clear in my quotations from the report's executive summary the conclusions that Lord Phillips had drawn about the way in which the majority of those involved had dealt with the issues that confronted them. There is praise for many people for the way in which they responded; and some of those who are criticised are also praised. The telling point he makes is that those who were the most active workers in this field were equally the most likely to make mistakes.
However, we cannot simply ignore the fact that the structures, the culture, the implementation of decisions, the use of scientific advice and the communication to the public could have been, and should have been, better, as indicated at various points throughout the report.
Lord Clement-Jones: My Lords, I join with others in welcoming the setting-up of the national care fund, the new package of care for patients with CJD and the proposals to set up a compensation scheme. Can the Minister confirm that eligibility for these schemes will be based purely on a medical diagnosis?
Baroness Hayman: My Lords, I should not like to deny the noble Lord's premise. I was trying to make clear earlier that, together with the families, we want to look at the most appropriate structure both for the care package and for the compensation. At the moment we are thinking in terms of a trust fund tailored to the circumstances of individual families. I hope that the noble Lord will forgive me, but we think it is appropriate to leave it at that at the moment and to report back on the discussions which will take place with the families as the details of the package emerge.
Lord Hoyle: My Lords, perhaps my noble friend will excuse me for returning to the charges made for the disposal of affected cattle at the time of the BSE crisis. Many people believed that the government at that time
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were "ripped off" by the large slaughterers and renderers in terms of the prices they charged for disposal. Will my noble friend expand on what the Phillips report says about that?
Baroness Hayman: My Lords, the main concerns about charging for disposal arose in relation to the Over Thirty Months Scheme introduced in 1996 and were, therefore, outwith the terms of the Phillips inquiry and are not, I believe, referred to in the report. An NAO report on the costs of the crisis did deal with these issues and there is regular renegotiation of the terms of contracts in this area to ensure value for money.
Earl Ferrers: My Lords, I declare an interest as having had some cows with BSE—some of my cattle did not have BSE but were destroyed nevertheless. Perhaps I may put two questions to the Minister. It is known that new variant CJD is the human form of BSE, but does the report contain any evidence of a proven—not a possible or even a likely, but a proven—transference from BSE in cattle to CJD in humans? The noble Baroness quoted the report as stating that the manner of infection is not clear. Therefore, there would seem to be some doubt.
My second question is of a far more sensitive nature. The Minister said that 86 people had died from this terrible disease, and we all feel the deepest sympathy for their relatives. Those deaths have taken place over a period of 10 years—eight deaths per year, as compared with 3,000 per year as the result of motor accidents and 30,000 per year from lung cancer. The awful thing is that we all have to die some time; most of us do not look forward to it and we ought to take every conceivable preventive measures. But are the Government right to offer compensation to one sector of people, and with an open cheque? Would it not be better to spend the money on ensuring that people have less chance of catching the disease in future, and that those who do are properly and adequately looked after?
Baroness Hayman: My Lords, in response to the noble Earl's last point, these are not either/or questions. It is absolutely appropriate in these extraordinary and terrible circumstances to offer a care and compensation package to the families involved. That is not at the expense of a wide research programme into preventive measures; nor is at the expense of proper regulation and proper safeguards in relation to food safety.
So far as concerns the link between BSE and new variant CJD, as part of its remit SEAC reviews emerging scientific data on a regular basis. It has considered the results of a number of separate experiments and has concluded that new variant CJD is an acquired prion disease caused by exposure to BSE or a BSE-like agent. The research does not provide information into other aspects of the disease, such as the route of exposure. The noble Earl is right: the route of transmission is not known for certain. It possibly never will be. However, it is believed that the most

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likely route is through food. As I said in repeating the Statement, the Government have decided to commission a study of the current state of understanding which will be considered by SEAC and published.
Baroness Carnegy of Lour: My Lords, am I right in thinking that, until comparatively recently, there was no means of diagnosing new variant CJD until a patient had died? Now, there clearly is a means of earlier diagnosis, as is confirmed by the paragraphs in the report on compensation. Did that slow up the realisation that there was a link between the two diseases? I recall, from the first contact I had with a family whose young son developed the disease, that it was not known what the disease was until after his death. Did that slow up the process in working out a connection?
Baroness Hayman: My Lords, I think that the main obstacle to working out a connection was the long incubation period of human TSEs, which means that it is extremely difficult to make the connection. Even now, there are no easy diagnostic tools. There is no satisfactory blood test, either for animals or for human beings. That makes for extreme difficulty on a number of fronts. That is why one of the research priorities is still to find an effective blood test in order to discover the disease.

Transport Bill
4.26 p.m.
Report received.
Clause 1 [Secretary of State's general duty]:
The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston)The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston) moved Amendment No. 1:
Page 1, line 10, at beginning insert—
("(A1) The Secretary of State must exercise his functions under this Chapter so as to maintain a high standard of safety in the provision of air traffic services; and that duty is to have priority over the application of subsections (1) to (4).").
The noble Lord said: My Lords, these amendments all relate to safety. Noble Lords will recall the eloquent arguments put forward in Committee by the noble Lords, Lord Brett, Lord Clinton-Davis and Lord Hoyle, as well as by the noble Baroness, Lady Thomas, and others. As a result, I agreed to consider again the case for putting additional reassurance on the face of the Bill about the leading role of safety.
These amendments do precisely that. Their effect will be to oblige the Secretary of State, the CAA and the Competition Commission, when exercising their functions under the Bill, to ensure that a high standard of safety is maintained before taking into account any other consideration.
Let me make it clear what "maintaining a high standard of safety" will mean in practice. It means that when the Secretary of State, the CAA and the commission exercise their functions, they must
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consider the safety standards in place at the time and ensure that those standards will not be reduced as a result of their exercising those functions.
This means that safety levels cannot be compromised, even if they are above the statutory minimum, as is the case in some areas of NATS' operations. I know that the latter point was a matter of concern for noble Lords, and I hope that this clear commitment to safety above all other factors in the Bill provides them with the reassurance that they sought. I hope that it will also reassure noble Lords that we are as concerned as they are to ensure that NATS will continue to strive for the highest standards of safety, rather than simply settling for the minimum.
I listened to noble Lords in Committee and agreed that safety should clearly be the first priority in this part of the Bill. These amendments put that beyond any doubt and I commend them to the House. I beg to move.
Baroness Thomas of Walliswood: My Lords, let me say from these Benches how much we welcome the government amendments. I spoke to our amendments in Committee and specifically asked the Minister whether he could put a safety amendment at the front of the Bill. That is what he has managed to do. We are grateful for this improvement in the Bill as it stands.
4.30 p.m.
Lord Brett: My Lords, I echo the gratitude to my noble friend the Minister for proposing these amendments. They go a long way to meeting the objectives of the amendments tabled in Committee. Speaking for the Government on Second Reading, my noble friend Lord Whitty said:
"Safety in our regime will be paramount".—[Official Report, 5/6/00; col. 1026.]
We have sought both in Committee and in discussions outside the Chamber to establish how we get that "paramount" assurance into the Bill. Alas, we understand that that word is not a legally acceptable parliamentary term, but we accept that the wording of this amendment does in fact mean the same thing. We are grateful for the assurance given by my noble friend the Minster. I should like to express my appreciation and that of my colleagues for the way in which my noble friend has taken the matter on board. It will be a matter of some reassurance to those in the industry, especially the staff.
Lord Clinton-Davis: My Lords, as one of those who raised the issue in this place, I, too, am obliged to the Minister for referring to me and to the noble Lord, Lord Hoyle. However, as the Minister knows, I wish that the Government had come to another conclusion. But having regard to what are the parameters of the Government's thoughts on the matter, I accept that the noble Lord has done all that he can in relation to the issue of safety. It is only right and proper that the issue of safety, which is a concern of the public, is recognised. That is what the amendment will achieve and what the Bill, as drafted, did not properly address.

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Like the noble Lord who preceded me, I am grateful for the changes that the Government have made. It is an example of the Minister listening. I do not think that he listened with both ears open, but one-and-three-quarters is better than none. That being the case, I thank the Minister for the concession that he has made. However, that is not to say that we are entirely satisfied about the remainder of the Bill.
Lord Monson: My Lords, I was not present during most of the Committee stage, so it is possible that my point may already have been addressed. Can the Minister tell the House whether the word "safety" for the purposes of these amendments relates not only to the obvious need to protect passengers, crew and those on the ground from accidents, but also to protecting passengers from the risks to their health—and, sometimes, their lives—arising from excessive crowding and inadequate oxygen and humidity in passenger cabins? Is it not a disgrace that airlines are still permitted to provide a seat pitch of as little as 26 inches in economy class? No adult should be expected to fly in such dangerously crowded conditions. Indeed, I submit that 29 inches for short flights, 31 inches for medium-length flights and 34 inches for long-distance flights should be the absolute minimum.
Lord Hoyle: I do not believe that the noble Lord's point is covered under this Bill. However, it is a matter that we ought to consider and perhaps we may do so at another time. I, too, join other noble Lords in paying tribute to my noble friend the Minister for the way that he has dealt with the matter of safety. We should have preferred to see the word "paramount" included in this provision; indeed, my noble friend the Minister used it in Committee. Nevertheless, he has gone as far as he possibly can. I, for one, am satisfied that safety, as it says in the amendment, will have priority over other measures. That is most important. I cannot stress too strongly how much we appreciated not only my noble friend's courtesy in receiving us but also the way in which he acted on this matter.
Lord Brabazon of Tara: My Lords, noble Lords on this side of the House welcome the fact that the Minister has put forward such amendments today. When I spoke on the issue in Committee, I said that safety was the raison d'être—the entire reason—for National Air Traffic Services. Therefore, it is extremely welcome to have measures on the face of the Bill which, as the Minister said, put a duty not only on the Secretary of State but also on the Civil Aviation Authority and the Competition Commission.
Lord Macdonald of Tradeston: My Lords, I am grateful for the supportive words we have received for this amendment. I apologise for having used the word "paramount", which I know some noble Lords wish to see employed here. It is rather arcane. Although it has been used elsewhere—for example, in Section 1 of the Children Act 1989—it was brought to my attention that the context was different. Indeed, the
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parliamentary draftsman says that the word is used in that legislation for the section that describes the single objective that is to guide the court in deciding what to do when making an order relating to the future of a child. Therefore, it would not be appropriate here. However, I am assured that maintaining a high standard of safety in the way phrased in the amendment will achieve all the purposes sought by noble Lords.
I should tell the noble Lord, Lord Monson, who raised the point about conditions inside aircraft, that that is, as has been suggested, more a matter for the CAA and perhaps better dealt with at some other time. Noble Lords should be assured that a consultative document dealing with all those issues is due to be issued from my department in the very near future. That will allow noble Lords to address such points at a future date.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 2:
Page1, line 17, at end insert—
("( )to prevent or minimise noise, vibration, pollution (including light pollution), disturbance or environmental damage of any nature;").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 29 to 33, which deal in general with environmental matters. Clause 1 obliges the Secretary of State to exercise his functions under Chapter 1 in the manner best calculated to promote the purposes set out in Clause 1(1). Those purposes do not include protection of those affected by the adverse environmental consequences of air traffic.
My amendment adds to those purposes the prevention or minimisation of noise, vibration, pollution, disturbance and environmental damage. That is partly recognised by Clause 39 of the Bill, which gives the Secretary of State power to give directions on such environmental matters. But as the Bill now stands, he could not exercise that power if it were to conflict in any way with the duties set out in Clause 1. This will limit unnecessarily the Secretary of State's ability to act on environmental matters. The duties set out in Clause 1(1) should therefore include consideration of such environmental issues to ensure that they can be given proper weight.
When I moved a similar amendment in Committee, the Government's response was to fall back on the provisions in Clause 39. I submit that that is a weak response and one that lacks logic. Clause 39 gives the Secretary of State the power to make directions on environmental matters, but because of Clause 1 that power cannot be exercised unless it promotes the interests set out in subsection (1)(a); namely, those of owners and operators of aircraft and airports, air travellers and transporters, financing by licence holders and their efficiency and economy.
Because environmental factors largely affect people living near airports and under flight paths, rather than owners and operators of aircraft and the other interested parties that I have just mentioned, an

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exercise of the Secretary of State's powers under Clause 39 may conflict with the interests set out in subsection (1)(a). If the Secretary of State attempts to issue directions under Clause 39, he may find himself the victim of judicial review on the basis that he "must", under Clause (1)(a), give priority to owners and operators of aircraft and airports, and so on.
I believe that the Government's refusal to take this simple point on board—and their late insertion of Clause 39 into the Bill—suggests that their commitment to environmental issues is more apparent than real; indeed, it is not as strong as it should be.
I turn now to the other three amendments in this group which all relate to Clause 39. This clause enables the Secretary of State to give directions relating to the environment. The amendments would make such directions subject to approval by Parliament. We welcome the addition of these powers because they recognise the importance of ensuring that damage to the environment is minimised. However, the powers are extremely wide ranging and the best way to exercise them may be disputed or prove controversial. Issues of this importance are matters into which Parliament as a whole should be allowed an input.
The Government argued again in Committee that environmental directions have been used sparingly in the past and that the Secretary of State must have the flexibility to take a wider view on when environmental matters should take priority over financial expediency.
It may become necessary and, indeed, desirable, with the expansion of air traffic, to use environmental directions more in the future. Having to come to Parliament before using directions does not impair the Secretary of State's flexibility; it just makes its proposed exercise subject to proper democratic scrutiny. The balance between environmental considerations and financial benefits is precisely the kind of issue which could be controversial and is worthy of debate.
As regards the final three amendments in the group, the Government said in Committee that general directions will be made, on which there is no need to consult, and that the appropriate time to consult will be when general directions are translated into particular details. Surely this is the wrong way round. If the Government have given general directions which will be binding on all licence holders, why will they need to give particular directions to individual licence holders? Even if particular directions are needed, it is the general directions which are likely to be more far-ranging and relate to points of principle. It is even more important to consult properly on such points of principle as, if directions incorporating points of principle are misconceived, consultation on particular directions implementing the general directions will not provide any remedy. This would make even the limited consultation exercise envisaged in the Bill something of a sham. I beg to move.
4.45 p.m.
Lord Macdonald of Tradeston: My Lords, this group of amendments concerns environmental issues. The
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first amendment seeks to add an environmental limb to the Secretary of State's duty under Chapter I, the primary purpose of which is to introduce a system of economic regulation into the provision of air traffic services.
The duties of the Secretary of State, as set out in Clause 1, deal with concepts such as efficiency, economy and the financing of activities, and "en-route" air traffic services will be regulated through an operating licence which is in itself an economic construct. Furthermore, Chapter I, which should be read in its entirety, is totally in line with the Government's sustainable development strategy. The environmental pillar is delivered in Clause 39 which provides for the Secretary of State to give directions in relation to environmental matters not only to the licence holder, or holders, but also to persons authorised by exemptions to provide air traffic services. To exercise properly those powers the Secretary of State has to consider the giving of directions to be necessary or expedient to present or deal with issues such as noise. The considerations under Clause 39 are not dissimilar to those proposed by the amendment.
The next five amendments would impose prerequisites to the exercise of the power to give directions. The first would require the Secretary of State to get the approval of Parliament before giving directions under Clause 39. This is a significant departure from the present position, under Sections 6(2)(f) and 72(2) of the Civil Aviation Act 1982, which this clause largely replaces in respect of air traffic service providers. The procedure envisaged here would, I think, be the affirmative resolution procedure involving debates in both Houses.
We see no need or justification for this. The power to give environmental directions is long established. In the past, Parliament has been content to leave these matters for the Secretary of State to deal with, not least because he must have the flexibility to take a wide view. One example would be if the provider wished to remove a navigational aid that had residual environmental monitoring benefits. The provisions of this Bill have not altered that position. I suggest again that it would place an unnecessary burden on Parliament if these matters had to be referred to both Houses of Parliament. I would add that the Secretary of State would simply not be able to act in an unreasonable manner. If he were to act in such a fashion, he would be rightly open to judicial challenge.
The remaining amendments concern the provision requiring the Secretary of State to consult before giving a direction under this clause. As presently drafted, the Bill provides that the Secretary of State must consult a licence holder or authorised person regarding a direction to do or not to do a particular thing. The amendments proposed by noble Lords opposite try to ensure that licence holders or authorised persons in the plural are consulted where they are affected by a proposed direction. The fact of the matter is that we simply do not envisage issuing such a specific direction to more than one licence holder or authorised person. If such a situation did in

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the future arise, we would expect to issue separate directions and therefore any licence holder or authorised person would indeed be consulted. I hope that I have made clear why we regard the amendments as unnecessary. In the circumstances I invite the noble Lord to withdraw the amendment.
Lord Brabazon of Tara: My Lords, I am grateful to the noble Lord for the detailed explanation he has given for not wishing to accept the amendments. I am not entirely convinced that it would not be better to have parliamentary approval in some form or another, not necessarily perhaps by affirmative resolution procedure, as I proposed in one of the amendments. I am also grateful for his comments on consultation and on directions to individual licence holders. Having said that, I shall obviously need to read with care in Hansard what the noble Lord said. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendments Nos. 3 to 6:
Page 1, leave out lines 18 to 20.
Page 1, line 21, leave out from beginning to ("interests") in line 24 and insert ("The only interests to be considered under subsection (1)(a) are").
Page 2, line 3, leave out from ("must") to ("as") in line 4 and insert ("apply them in the manner he thinks is reasonable having regard to them").
Page 2, line 5, at end insert—
("(4A) The Secretary of State must exercise his functions under this Chapter so as to impose on licence holders the minimum restrictions which are consistent with the exercise of those functions.").
The noble Lord said: My Lords, I spoke to Amendments Nos. 3 to 11 with Amendment No. 1. I beg to move Amendments Nos. 3 to 6.
On Question, amendments agreed to.
Clause 2 [CAA's general duty]:
Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendments Nos. 7 to 11:
Page 2, line 8, at beginning insert—
("(A1) The CAA must exercise its functions under this Chapter so as to maintain a high standard of safety in the provision of air traffic services; and that duty is to have priority over the application of subsections (1) to (4).").
Page 2, leave out lines 22 to 24.
Page 2, line 25, leave out from beginning to ("interests") in line 28 and insert ("The only interests to be considered under subsection (1)(a) are").
Page 2, line 35, leave out from beginning to ("as") in line 36 and insert ("apply them in the manner it thinks is reasonable having regard to them").
Page 2, line 36, at end insert—
("(4A) The CAA must exercise its functions under this Chapter so as to impose on licence holders the minimum restrictions which are consistent with the exercise of those functions.").
On Question, amendments agreed to.
Clause 3 [Restrictions on providing services]:
[Amendment No. 12 not moved.]
Clause 4 [Exemptions]:
[Amendment No. 13 not moved.]
Clause 5 [Licences: general]:
[Amendment No. 14 not moved.]
Baroness Thomas of Walliswood Baroness Thomas of Walliswood moved Amendment No. 15:
Page 4, line 8, leave out from beginning to second ("the") in line 11 and insert ("a not for profit company, formed and registered as a company limited by guarantee under the Companies Act 1985 or").
The noble Baroness said: My Lords, the purpose of the amendments in this group is the transfer of National Air Traffic Services to a not-for-profit trust in substitution for the Government's proposal of its transfer to a public/private partnership. The principal amendment in the group is Amendment No. 35. This clearly defines the company as one that issues no shares and pays no dividends to its members.
Amendment No. 35, together with Amendment No. 36, also requires that this transfer shall not take place until it has been approved by a resolution of both Houses.
Amendments Nos. 38 to 40, 44 and 45 are consequential. Amendments Nos. 41 and 42 provide for the Secretary of State to be able to modify a scheme before it is laid before Parliament. Amendments Nos. 47 and 48 omit certain sections of Clauses 47 and 48 which are incompatible with our amendments. Amendments Nos. 49, 50, 56 and 63 omit respectively Clauses 49, 50, 51 and 55. Amendment No. 64 adds to Clause 56. Amendments Nos. 68, 69, 71 and 72 amend later clauses accordingly. Finally, Amendments Nos. 58, 59 and 62 amend Clauses 52, 53 and 54 to enable the Secretary of State to make loans to, guarantee the discharge of the financial obligations of, and make grants to a not for profit company to which NATS has been transferred. I have spoken briefly because I dealt with the amendments at greater length in Committee.
During the long passage of the Bill through both Houses we have become, as it were, the standard bearers for an approach to the future character of our National Air Traffic Services which has support far beyond these Benches. Without looking too far backwards I remind the House that the trust model was the option favoured by the Select Committee and by many Members in another place. The advantages of the model are its relative immunity to takeover, the construction of a trust board which would reflect both public and stakeholder interests—airline companies and employees, which are so important—and the ability of the board to raise funds at lower rates of interest.
Today I want to look forward and discuss those arguments which have developed since Committee stage. First, the Minister was very dismissive of NavCanada's ability to satisfy the requirements for reducing operational costs, increasing investment and greater accountability. NavCanada is, of course, the model for what we are putting forward today.
Since Committee stage we have had a report from the noble Lord, Lord Brett, on his visit to Canada which clearly refutes these doubts. NavCanada has substantially reduced its operating costs and increased its investment programme in the past two years, as the 1999 annual report shows. The Canadian Government are entirely satisfied that its economic and safety regulatory regime is adequate to maintain the public interest in safety as well as the financial energy of the trust. Moreover, the airlines seem satisfied with their powers to influence decisions which affect their costs. In other words, a satisfactory balance has been struck between public and private interests.
Secondly, in Committee the Minister made much of the opportunities that would be available to NATS as a PPP to play a part in the air traffic control market of other countries. Yet now we see that the bidders for this PPP include not only foreign-owned suppliers to the air traffic control industry, which must create a conflict of interest, but also several major, national publicly-owned air traffic control organisations. In other words, the PPP will create a market in our air traffic services while protecting those of other countries—Ireland, Germany and Iceland are all bidders—which are all publicly owned.
I am mindful that we are at Report stage and that there are other speakers well able to expand on the points on which I have deliberately touched in general terms. I urge the Government most sincerely and fervently to reconsider their proposals for a PPP even at this late stage. It would be of benefit to them and to the future conduct of air traffic services in this country. I beg to move.
Lord Brett: My Lords, I thank the noble Baroness, Lady Thomas of Walliswood, in moving this amendment, for drawing attention to my visit to Canada. I went there because I did not recognise the NavCanada model, which I thought I knew, from the Government's response to the Select Committee report in another place. What I sought to do through interviews with representatives of airlines, with NavCanada itself, with Transport Canada, the sponsoring ministry originating the trust, and with the controllers and engineers, was to understand their experience. I was reassured that my understanding was not awry and that investment had increased to 400 million Canadian dollars. Operating costs had been reduced by 24 million dollars per annum. There were also reduced charges to the airlines of about 225 million dollars per annum. There was also an increase in training of about 200 air traffic control staff.
I also asked how the decision was reached. Originally, there was wide consultation, looking at six models. That was short-listed to three, and finally they decided on the trust model. They had looked at the equivalent of a PPP—they called it a mixed company—but rejected it. The PPP that they sought would have delivered much the same results as those sought here. But they decided that they could do better via a trust model. That has been successful in achieving its ends. It is not as unaccountable as was suggested in
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another place. It seems to be a model which has enjoyed success and the confidence of the staff and pilots of the Canadian skies and the public at large.
I also discovered that the Canadians had been very concerned about conflicts of interest. We are looking at a new situation. We now know that the number of bidders for the NATS strategic partnership has been reduced from eight to four. As the noble Baroness said, they all have potential conflicts of interest. It is possible that the DTER will have responsibility for ensuring that those conflicts are removed. The list of four could be reduced to a lower number in a matter of weeks or days. Therefore, I echo what the noble Baroness said. Perhaps even at this late stage the Minister would consider a non-profit-making trust model.
I made my report available to all Members of your Lordships' House who had participated at Committee stage. I also made it available to the Minister. A number of noble Lords kindly commented on the report. I understand entirely why my noble friend the Minister has been unable to do so because of the many other pressures on his time, particularly at the present time. Whatever the outcome of this discussion, I hope that the Government will be prepared to look again at a model which I believe will give enhanced confidence to the four groups—I call them the four "P"s—that we have to satisfy. They are the public, the pilots, the practitioners and the various parliaments. During the 10 months of this ongoing debate none of the four "P"s has been entirely satisfied. It is not too late to look again at a model which will ensure that greater confidence is gained more quickly rather than continuing with the Government's present plan.
Lord Clinton-Davis: My Lords, I speak on behalf of the British Airline Pilots Association, of which I am the president. I have made full disclosure to the House. Any statement that I make in relation to other amendments are dependent on that.
At the very outset my noble friend Lord Brett said that he had visited Canada and seen for himself the operation of the scheme. He is right or wrong. It is incumbent on the Minister today to satisfy the House that the Canadian scheme has no application in this country. He has not done that so far. I am not sure about it.
My noble friend the Minister has a duty to provide rather more than that. He has to show that his officials, preferably himself, have been to Canada and repeated the experiment that my noble friend Lord Brett has undertaken. So far the Minister has not done that. He has that duty because this House is concerned about air traffic control. The noble Baroness, Lady Thomas of Walliswood, moved the amendment on the basis that many people are concerned about the issue. That is the case and I speak on behalf of them today. It is not simply the pilots, but a great many people who are concerned about safety.
Bearing in mind that the Minister has not been to Canada himself, he has a duty to inform the House why he is so opposed to the scheme. He may be right.

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He has to inform the House, not on the basis of what civil servants have advised him, but on what basis he has determined that the Canadian experiment has no relevance to what we are considering today. I do not think that he can.
5 p.m.
Lord Haskel: My Lords, I am somewhat cautious about copying schemes from other countries. After all, other countries have different cultures and circumstances. Those schemes can be adapted but, if we have schemes in this country with which we are familiar, they should take priority in our consideration.
I quite like public/private partnerships. We are operating them in other parts of the economy: in health, in hospitals; and in construction with housing. It is a formula which has been developed in this country. It gives us access to private sector finance in a way that is acceptable. We have also developed ways of regulating public/private partnerships.
I am a little concerned about not-for-profit companies. Over many years in business I have learnt that profit is a great incentive to efficiency, effectiveness and to meeting the needs of customers. I hope that the Minister will give some consideration to these matters. I am not entirely sold on the copying of the formula from Canada.
Lord Hoyle: My Lords, I rise to speak because if I had not done so my noble friend Lord Haskel would have forced me to my feet. I respect him as a business person but I was somewhat amazed at his remarks today. As regards air traffic control, there is concern about one issue—safety. For the life of me I cannot understand how safety is enhanced by profit determination: that there must be profits and safety must suffer because of that. I ask my noble friend to think again. We are talking in this instance about safety.
Lord Haskel: My Lords, does my noble friend agree that safety is not entirely the prerogative of the public sector? Safety is also very important, and is maintained, in the private sector.
Lord Hoyle: My Lords, it is indeed. But my noble friend will agree that there are many cowboy firms in the private sector. The public sector is at least accountable with regard to the standards which should be acceptable to all of us. It is ironic that these remarks are made at a time when we have seen the failure of privatisation on the railways. We have heard of the damaged track which has cost lives. Can my noble friend imagine what would happen if aircraft began to fall from the skies following our determination on this issue? Safety is uppermost in the minds of the public.
I ask the Minister to reflect on that point when he replies. We should at least think carefully before we go down the path advocated in particular with regard to the bidders. All are flawed. All have a conflict of
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interest. I refer, for instance, to the airlines. I am attracted more to the airlines bid than to the others—and the airlines bid is not conceived on the basis of profit. Safety of customers is paramount in the minds of the airlines. As regards efficiency, they are interested in reducing the costs charged to them. But in relation to the consortium, foreign airlines flying in might think that preference would be given—
Lord Hughes of Woodside: My Lords, if my noble friend will forgive me, perhaps I may intervene. I seem to be missing part of the argument. I thought that airlines were private companies.
Lord Hoyle: My Lords, we are referring to an airline consortium which includes a public sector in the Irish Government's control. I am saying that it is a no-profit trust model. I think that would be of concern to my noble friend Lord Hughes of Woodside. I shall be surprised if he does not believe that safety should be paramount and that profit should not be one of the major consideration in any trust set up. That is what I sought to say in relation to the airlines. But there is a public sector partner and it seems strange to me that we are going outside for public sector partners—to New Zealand, and with regard to the airlines to Ireland—and yet are taking our air traffic controls out of the public sector.
I cannot believe that Lockheed Martin is a serious consideration. Not only is there conflict of interest because it is a manufacturer; it is also responsible for the new air traffic centre at Swanwick being delayed for six years. What will it bring to the table?
The same consideration applies to Raytheon. There is a conflict of interest because it is a supplier of equipment. Even worse, if it came in what about Lockheed Martin's system which should have been operating at Swanwick? It is planned for Scotland. There would be obvious conflict of interest there. Lockheed Martin would not allow Raytheon to use its data and would not supply it. Raytheon would have to bring in its own system which would further delay the advances made.
Serco has a small amount of operational knowledge; it deals only with small airports. It has withdrawn from Liverpool airport. I should like to know why Serco is being considered.
Perhaps I may refer to what has been said. We all owe a debt of gratitude to my noble friend Lord Brett for going to Canada to see what was happening on the ground rather than accepting what the Civil Service told us. It is often better to see for one's self what is occurring. Before his departure it was said that the airlines bear full financial risk without being in a position to manage that risk. On examination, the airlines exert substantial influence in the NavCanada model. They have five directors on the board. They believe that improved safety and investment performance has resulted. The bondholders are taking the risk, not the airlines.
Lord Clinton-Davis: My Lords, perhaps I should have made this point myself. Perhaps my noble friend

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will explain why a former Labour government of approximately five years and three months did not take any action in this regard. Is it not a fact that that Labour government considered that NATS performed well? Is there any evidence that NATS has failed to perform up to standard in the 20 years since that Labour government ceased to be in office?
Lord Hoyle: My Lords, as my noble friend will understand, it is for the Minister to reply. Like my noble friend I am puzzled because I had thought that the safety standards set by NATS are second to none not only in this country but throughout the world.
It was also said that NavCanada is not responsible to anyone. Again that statement is not true because the Canadian Government have a great deal of control over it. There is a right to call it in; there is a right to check it. If one considers what has happened in relation to the NavCanada model, not only has safety improved but efficiency has improved and costs to the airlines reduced. New air traffic controllers have been recruited and are being trained.
A lot of that relevant information would not be before us if my noble friend Lord Brett had not undertaken his mission to Canada. My noble friend the Minister has said that safety should be uppermost. Why put the whole thing at risk by going forward with any of the four bidders, all of which are flawed in one way or another? Surely it is time to consider again setting up a trust model. I accept that it does not have to follow the Canadian model exactly, but it should be a non-profit-making trust. That would mean that safety was paramount. That is why I ask my noble friend to give the matter more thought.
Lord Roll of Ipsden: My Lords, I shall not detain the House by repeating the many excellent arguments that have already been made for the amendment. I simply remind the Government of a very good American saying, usually attributed to Harry Truman: "If it ain't broke, don't fix it".
Lord Smith of Clifton: My Lords, in speaking to Amendments Nos. 34 and 35 and the associated amendments, I return to an important point that I made in Committee, because I have not yet had an adequate answer from the Government. I refer to the relative costs of the proposed PPP scheme and the public trust scheme that we advocate.
The Secretary of State has estimated that NATS will require £1.3 billion of investment over the next 10 years. As I have previously pointed out, the cheapest way would be for the Chancellor to fund that. Since he has declined that option, the next best way is to form a public trust along the lines of NavCanada to raise the necessary funds on the money market. Given its guaranteed income flow, it would attract the highest security rating and could thus borrow at the cheapest rates. Lower interest rates would mean lower costs to the airlines and passengers alike, as NavCanada has achieved.
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That would be much cheaper than selling half the equity shares in a privatised NATS, as the Government intend. Why are the Government hell bent on pursuing such an expensive method? Why should the public be fleeced in that way?
Unprecedentedly, the National Audit Office has initiated a detailed examination of the Government's proposed PPP for the London Underground. The NAO is particularly examining its value for money relative to other options and its safety implications. If prior NAO scrutiny is deemed necessary for the Government's plans for part-privatisation of the London Underground, why are the Government not submitting similar plans for the part-privatisation of NATS? It would be just as appropriate and just as crucial on cost and safety grounds.
I hope that the Minister will be able to give a considered response to that important question. We believe on all counts that the public trust proposal for air traffic control remains the best option, as the noble Lord, Lord Brett, has demonstrated.
Baroness Gibson of Market Rasen: My Lords, I had not intended to speak in the debate, but when words such as "trust", "profit" and "safety" were used, I felt that I should. Until 30th September, I was a health and safety commissioner. We often looked at reports of cases in which health and safety had been endangered. Time after time, profit was the reason for safety precautions being cut. The admirable idea of a not-for-profit trust should be accepted.
5.15 p.m.
Earl Russell: My Lords, can the Minister cite one case in which the private sector has delivered safety without the benefit of competition?
Lord Elder: My Lords, I fear that there are still some doubts about the ability of the private sector to be involved in any process that has safety at its heart. That fundamental fear is tainting some of the views that have been expressed. I do not accept that the private sector is incompatible with the provision of safety, so I do not approach the issue feeling that there is a need to exclude the private sector from the equation or to constrain its impact.
The Bill faces up to the need to add first-class project management skills to the real operational expertise of NATS. That has consequences.
I have not had the benefit of a trip to Canada—or at least, not to look at air traffic systems. I have three brief points to make about what we have heard. First, the situation in Canada is very stable. There has been a lot of investment and the situation is being managed. We need enormous new investment. I do not believe that it is appropriate to raise such sums without some equity.
Secondly, the Canadians do not have the considerable problem of congestion that exists in European and UK air space.
Lord Hoyle: My Lords, I am sorry to interrupt, but will my noble friend look at the record of NATS?

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Whenever it has asked for a loan from the Treasury, it has always repaid it with interest. It is a profitable company. There is no reason that the Treasury could not put up the money. NATS would repay it. We all know that we are awash with money at the moment.
Lord Elder: My Lords, if we added up all the things that people say that we could spend money on because we are awash with it, we would soon be in the position that we were in under the previous administration, when borrowing was going up sharply and we were far from awash with money. That is not a sensible basis on which to proceed.
Canada is not a congested country and does not have to face up to the difficulties that we have. The proposed structure for the board of a trust is similar to the current structure at the BBC. Over the past 20 or 25 years, that structure has not had sufficient sharpness or dynamism to enable the BBC to deal with sharp competitive intrusion into its market. It is all very well for managing something—in the case of the BBC, managing the decline in its control over world broadcasting—
Lord Brett: My Lords, will my noble friend explain where the competition is in air traffic control? It is a natural monopoly of the air over our country. I do not accept the analogy with the BBC's competition from independent or satellite television.
Lord Elder: My Lords, the issue is how to get a sharp, competitive body that will have to deal with the massive restructuring that there will be in European air space in the next few years. We are not dealing with a stable or unchanging situation. If we were and there were no possibility of restructuring, I would probably support the proposal, but it would not provide a sufficiently sharp or commercially focused unit that would be able to deal with the restructuring that there will undoubtedly be in Europe. In those circumstances, NATS will certainly lose out. For those reasons, I hope that the amendment will not be accepted.
Lord Brabazon of Tara: My Lords, it might be help if I briefly set out the views of the Conservative Party on the amendments. I am most grateful to the noble Baroness, Lady Thomas, for having explained them so ably. As has been said, we also owe a tremendous debt of gratitude to the noble Lord, Lord Brett, for having visited Canada—I gather at his own expense, as he said on the radio this morning—and for bringing back a report which I found so interesting. I look forward to hearing the Minister's reply to some of the points where clearly a difference of opinion exists between what the noble Lord, Lord Brett, found in Canada and what we were advised the last time this issue was debated in your Lordships' House.
I am not sure whether the Canadian trust model is the best one. Therefore, if the noble Baroness, Lady Thomas, decides to divide the House on this issue, I do not feel able either to support or to vote against the
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amendment. I believe that that will be music to the ears of a number of noble Lords opposite, not least because on the previous occasion the noble Lord, Lord Hoyle, among others, said that it would be entirely opportunistic for noble Lords on this side of the House to support an amendment when it was quite well known—
Lord Hoyle: My Lords, I said that it would be a marriage made in Hell.
Lord Brabazon of Tara: My Lords, I have the noble Lord's quotation somewhere but I did not intend to extract it at this point. He may well have said that. However, I agree with him about some of the points that he made in relation to the conflict of interest among the bidders for this process. I shall not give a commentary on the four groups involved, but I consider that the noble Lord put forward some well made points.
I believe that it was the noble Lord, Lord Clinton-Davis, who said that a raft of people is concerned about this issue. He is right about that. I also agree with the noble Lord, Lord Haskel, that profits are not always bad. I submit that not a single person in aviation could say that British Airways is any less safe since it was privatised and since it has looked, sometimes elusively, for the profit motive.
Lord Brett: My Lords, I am grateful to the noble Lord for giving way. I accept the profitability of British Airways. But is it not curious that the profit-making British Airways is a main mover in a not-for-profit consortium? Obviously it does not view profit as part of air traffic control.
Lord Brabazon of Tara: Yes, my Lords, I agree with that. I said that I did not consider it right to comment on individual groups or to list my favourite bidder, but the noble Lord's point is well known. I agree with the noble Earl, Lord Russell, who said that competition was involved. That is an interesting point. I hope that that clarifies the position from this side of the House.
Lord Macdonald of Tradeston: My Lords, new Clause 35 and its associated amendments seek to restrict the strategic partner to a not-for-profit company. The new clause would also require the Secretary of State to satisfy himself that the company includes representatives of employees and users of aviation, air travel, air navigation and related services.
I assume that one purpose of the new clause is to establish that profit will not be put before safety. However, perhaps I may assure noble Lords that whatever type of strategic partner we select, whatever its nationality and whoever it is, profits will never be put before safety. I believe that that was made clear in the first amendment that we discussed today, which was so warmly welcomed.
This PPP will not jeopardise safety; rather, it is designed to enhance the safety regime for air traffic control. Safety regulation will stay firmly in the public sector in a reformed CAA. The robust public sector

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regulatory regime will ensure that whatever the status or ownership arrangements for NATS, the company will remain one of the safest air traffic service providers in the world. In short, I do not accept the profit before safety argument and nor should other noble Lords.
Let there be no doubt that we take safety extremely seriously, as we demonstrated earlier today. The additional amendments that we tabled reflect our fundamental and overriding commitment to safety. In any event, I stress again to your Lordships and to my noble friend Lord Hoyle that there is absolutely nothing in this legislation or, indeed, elsewhere that would prevent a viable not-for-profit company from becoming our strategic partner. If such a company can pass all the eligibility criteria, can otherwise be made compatible with our proposals for the PPP, such as shareholdings, and puts forward a good bid, then a not-for-profit group could be the right partner for the Government.
However, in order for us to take a view on that, and for a not-for-profit group to prove that it offers the best future for NATS, there needs to be a competitive process which allows a rational assessment of all the bids that we receive. A not-for-profit bid needs to stand up and be assessed alongside other bids. Limiting the selection criteria to a not-for-profit group would knock out potential candidates who at the end of the day might be better partners.
The second change which the new clause would bring about would be to require the involvement of representatives of employees and users of aviation in the ownership of the company. It is certainly entirely right o assert that such people have a crucial interest in the future of NATS. That is why we devised the innovative stakeholder council. Although not part of the decision-making structure of the company, it will certainly be an influential body whose views will carry considerable weight. In addition, apart from their participation in the council, the employees of NATS will have a 5 per cent stake in our PPP.
The proposed amendment suggests that some noble Lords believe that a trust model such as NavCanada is appropriate for NATS. I say to the noble Lord, Lord Clinton-Davis, that I do not believe I shall feel the need to go to Canada to examine it carefully. I am grateful to the noble Lord, Lord Brett, for the perseverance that he showed in bringing the Canadian experience to our attention. However, I listened, too, to my noble friend Lord Haskel and note the business experience that he brings to bear when he says that the NavCanada experience may well suit Canadian circumstances but we do not believe that it provides the best solution for air traffic control in the United Kingdom.
A key rationale behind the PPP model is the improvement of NATS project management expertise, along with access to private sector finance, so that NATS can invest successfully in the right technology to meet growing demand safely. We do not believe that NavCanada would meet those needs. In the NavCanada model the airlines clearly have a great
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interest to ensure that the company is operated commercially. However, in the absence of equity participants, the airlines would bear the financial risk as users of the service. If, for example, an investment project overran its budget through mismanagement, the users would pay higher user charges. Under the PPP model, the economic regime and participation of equity holders mean that the airlines will not have to bear the financial risk. For example, if an investment project overran its budget through mismanagement, through the regulatory regime it would be the equity participants, who are best placed to manage the project, and not the airlines who would shoulder that risk.
Lord Clinton-Davis: My Lords, I am obliged to the noble Lord for giving way. Is he saying that British or any other airlines have opposed the Canadian experiment? The logic of that would be that together they would have announced some kind of dérnarche against the Canadian experiment, but, so far as I know, they have not done so.
Lord Macdonald of Tradeston: My Lords., airlines which have involved themselves in the not-for-profit bid clearly are prepared to take that risk. However, we are discussing how we believe that our PPP might be best founded. I should say that NavCanada itself refers to the setting up of its trust which, incidentally, was followed by a massive reorganisation over the past three years in the form of privatisation. As we have made clear time and time again, we consider complete privatisation to be unacceptable in a service which is as strategic and sensitive as air traffic control.
5.30 p.m.
Lord Brett: My Lords, I am slightly confused. The Minister is concerned about the airlines carrying the risk. But that concern is not only not shared by airlines in this country, which have gathered together to form a not-for-profit consortium, but in Canada the airlines seem to be extremely content with their model, in which the Minister suggests that they have all the risks and none of the controls. So if the airlines on both sides of the Atlantic, which are the main customers, are content, that seems to me to be something that we may want to consider further in terms of that model. The Minister seems to be suggesting that the airlines may be stupid in taking that risk, which they are not. They have found a way of doing this. It is interesting that no airline whatever seems to want to have a for-profit model.
Lord Macdonald of Tradeston: My Lords, I said earlier that I am ready to accept that airlines will be involved in a not-for-profit bid, and that will be judged on all-fours with all the other bids involved. I am simply saying that in the scope that we offer in the competitive processes of the PPP, it will be possible for other strongly founded bids to be brought forward.
My noble friend Lord Hoyle compared the PPP proposal for NATS with that for rail privatisation. There really is no similarity. The railways suffered

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from many years of under-investment and, by the recent admission of the party opposite, were imperfectly privatised. We are introducing a PPP precisely because we believe that it will secure the finance and management skills to maintain the position of NATS as a world leader in state-of-the-art air traffic control systems.
So it is not a privatisation as practised previously. It is a public/private partnership with a strong role for the Government.
Lord Hoyle: My Lords, I hear what my noble friend says. But is it not true that immediately afterwards the Government shareholding in the company will be diluted? Will that not bring about fresh fears? It may be very unfair, but at a time when rail safety has been put at risk because of privatisation, will not this measure be seen as a partial privatisation by the public? If any accident did occur, however unfair it may be, we should stand condemned if we go down this road.
Lord Macdonald of Tradeston: My Lords, I believe that it is misleading of my noble friend to imply that we intend instantly to dilute the Government's share. We have said that if the company in due course decides to raise more money, and in that way wishes to go out into the marketplace, then we should be prepared to see the Government's share go down from the original 49 per cent. But that would in no way undermine the controls that were exercised on the company. There would simply be a dilution of the share in what might perhaps be a much more valuable company in due course.
If we thought for one moment that there was any read across from the tragic events on the railways last week to our policy for NATS and the PPP, then we should not be asking your Lordships' House to press ahead with that policy. I assure your Lordships that there is no connection between the two.
The noble Earl, Lord Russell, asked whether the private sector has delivered safety without the benefit of competition, presumably at any time or at any place. I should have preferred more notice of that question but I should have thought that in de facto terms, if you take the British Airports Authority, which is a de facto monopoly in many areas, that has been run with conspicuous safety since its privatisation.
As regards the contribution of the noble Lord, Lord Smith of Clifton, the PPP will benefit from a very solid credit rating and will be well able to finance its business in a cost-effective manner. Of course, it comes with other benefits which I have described. I cannot speak for the National Audit Office's work programme but I believe firmly that we can demonstrate that value will be produced by this PPP for the public. I have no doubt that the NAO will make its views known in due course.
I turn now to some of the issues raised by my noble friend Lord Brett. There are some similarities between NavCanada and the PPP. Both clearly provide for a
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measure of stakeholder scrutiny. The PPP model provides for a good measure of stakeholder scrutiny; for example, through the stakeholder council, about which I spoke earlier, and through the employee shareholding. But because capital is at risk, the scrutiny of shareholders can act more powerfully than that of stakeholders.
The Government therefore believe that shareholder participation will be particularly effective in helping NATS to improve its performance in terms of safety, meeting customer demand and efficiency. Shareholders will also be more inclined to have a view as to the wider interests of the business than might some stakeholders.
In addition, the PPP accountability framework will have a number of features in common with the NavCanada model—government-appointed directors, consultation on charges, safety regulation by a public sector authority and government emergency powers of direction.
But the PPP will benefit also from a direct line of accountability to the owners of the business—the strategic partners, the employees and the government—and that accountability to the owners of the business strengthens the incentives to meet customer needs and improve the performance of the business.
Nor do we believe that the trust or NavCanada model would provide a platform to bring in a committed, world-class strategic partner to inject complementary expertise into NATS' operational skills or that it would provide sufficiently strong incentives to improve its performance.
The final area of doubt relates to the ability of that trust model to compete effectively in what we believe will be a liberalised world market for air traffic control. A trust set-up would lack the motivation, initiative, skills or credibility to compete effectively and thus would deny the United Kingdom a key role in an expanding world market.
Lord Brett: My Lords, if one looks at the four proposed strategic partners, two are major equipment suppliers, one is a management company with some considerable experience of managing swimming baths and light railways. Two of them have an international approach. Would it not be the case that if one of the multinationals were chosen to be the strategic partner and it then formed a partnership in Holland or in another part of the world, it would have precisely the same relationship with that country that it had with NATS in the PPP here? Therefore, it would not see as a priority the expansion of the British interest. We have seen that with dam construction and similar major projects, consortia are created within countries. That would include the strategic partner but it would not include the British Government or the other partners within the PPP. That is my view.
Lord Macdonald of Tradeston: My Lords, I hear what my noble friend says. I do not want to say anything which would in any way prejudice any of the

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parties which might put themselves forward to compete for the role of strategic partner in NATS. I stress again that among the companies which have come forward there clearly is complementary expertise which we believe would strengthen the company which we are moving to create.
The proposed new clause and its associated amendments are unnecessary and we invite noble Lords to withdraw them. The purpose of the proposed new Clause 36 is to require Parliament to approve a made transfer scheme before it can be put into effect, after a draft has already been approved under new Clause 35.
It also requires the Secretary of State to produce a progress report on the development of NATS' facilities before any secondary legislation can be considered. This new clause and its associated amendments would result in an extremely time-consuming and cumbersome mechanism Proposed schemes will be subject to consultation with those concerned.
They will be designed to achieve the complete separation of regulation from service provision. Double parliamentary approval for each scheme is entirely unprecedented and could jeopardise the PPP timetable.
The requirement for the Secretary of State to produce a report on the development of the facilities connected with National Air Traffic Services is also entirely unnecessary. I assume that that has been inserted in order to place on the face of the legislation some commitment to the Prestwick centre. That commitment will be contained in the strategic partnership agreement and will also be a licence condition. In addition, the Government accepted an amendment in another place which will reinforce these commitments on the face of the legislation. The amendment is now Clause 51(3) of the Bill.
The main purpose of Clause 56 is to ensure that the Secretary of State and the Treasury are not regarded as shadow directors of NATS and its new subsidiaries for the purpose of certain provisions of the Companies Act 1985. The purpose of Amendment No. 66 is to remove that protection.
Shadow directors are persons who have not been appointed to the office of director of a company but who are treated by the Companies Act as de facto directors. The obligations imposed by the Companies Act on shadow directors fall broadly into two categories — those which are intended to reveal to the public the persons who are directing the company from behind the scenes, and those which are intended to protect shareholders from directors taking financial advantage of the company.
As the Secretary of State's interest in NATS and its subsidiaries will be public knowledge, the provisions of the Companies Act are not necessary in the context of the PPP. Removing Clause 56 would expose the Secretary of State to administrative inconvenience in complying with the Companies Act without any corresponding public benefit.
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In any event, there is precedent for a provision of this nature. Similar provisions are to be found in the Commonwealth Development Corporation Act 1999 and other legislation dealing with government assets.
I have dealt at length with a number of proposals for new clauses and for other amendments to the Bill. For the reasons I have given, I urge noble Lords to reject all the amendments proposed.
Lord Prior: My Lords, before the Minister sits down, perhaps I may ask him to reflect on two points. First, bearing in mind the announcement about BSE today, and all that has been said, can he be certain in his own mind that the advice he has been receiving is what he wishes to do? This is a major issue of safety. He has to be absolutely certain about his own views on the subject and not perhaps pay too much attention to the expert advice he might be given.
Secondly, will the Minister always remember that what originates from the Treasury—I think that the Treasury has quite a lot to do with this—-is not always correct?
Lord Macdonald of Tradeston: My Lords, given his experience both in government and business, I listen to the noble Lord, Lord Prior, with great respect. As I said earlier, we are going forward in the belief that the investment of £1.3 billion, which we believe will be unlocked over the next 10 years, will create a higher and safer platform of technology which will enable air traffic services in the United Kingdom to continue to lead the world in safety, and, indeed, where possible, to export that expertise in safety, not only to Europe but around the world.
Baroness Thomas of Walliswood: My Lords, I thank the Minister for his reply. I pay tribute to the large number of speeches in support of our amendment from all sides of the House and, on occasion, from unexpected quarters. We have been debating this amendment for 57 minutes. I shall resist the temptation to rehearse the arguments. I believe that the number of people who spoke on our behalf and on our side of the argument fully justifies my testing the opinion of the House.
5.45 p.m.
On Question, Whether the said amendment (No. 15) shall be agreed to?
Their Lordships divided: Contents, 59; Not-Contents, 94.

Division No. 1

CONTENTS

Addington, L.

Dholakia, L.

Allenby of Megiddo, V.

Ezra, L.

Avebury, L.

Falkland, V.

Barker, B.

Geraint, L.

Bradshaw, L.

Goodhart, L.

Brougham and Vaux, L.

Greaves, L.

Campbell of Alloway, L.

Hamwee, B.

Clark of Kempston, L.

Harris of Greenwich, L

Clement-Jones, L.

Harris of Richmond, B

523

Holme of Cheltenham, L.

Roll of Ipsden, L.

Jacobs, L.

Roper, L.

Linklater of Butterstone, B.

Russell, E.

Mackie of Benshie, L.

Sandberg, L.

MacLaurin of Knebworth, L.

Scott of Needham Market, B.

McNally, L.

Sharman, L.

Maddock, B.

Sharp of Guiklford, B.

Mar and Kellie, E.

Shore of Stepney, L.

Methuen, L.

Shutt of Greetland, L.

Miller of Chilthorne Domer, B.

Smith of Clifton, L. [Teller]

Mowbray and Stourton, L.

Swinfen, L.

Murton of Lindisfarne, L.

Taverne, L.

Naseby, L.

Thomas of Walliswood, B.[Teller]

Newby, L.

Northover, B.

Thomson of Monifieth, L.

Oakeshott of Seagrove Bay, L.

Tordoff, L.

Phillips of Sudbury, L.

Trefgarne, L.

Razzall, L.

Walmsley, B.

Redesdale, L.

Weatherill, L.

Rennard, L.

Wigoder, L.

Rodgers of Quarry Bank, L.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Hunt of Chesterton, L.

Ahmed, L.

Hunt of Kings Heath, L.

Alli, L.

Irvine of Lairg, L. (Lord Chancellor)

Amos, B.

Andrews, B.

Islwyn, L.

Archer of Sandwell, L.

Janner of Braunstone, L.

Ashley of Stoke, L.

Jay of Paddington, B.(Lord Privy Seal)

Ashton of Upholland, B.

Bach, L.

Kennedy of The Shaws, B.

Bassam of Brighton, L.

Kirkhill, L.

Bernstein of Craigweil, L.

Lipsey, L.

Billingham, B.

Lofthouse of Pontefract, L.

Blackstone, B.

Longford, E.

Borrie, L.

Macdonald of Tradeston, L.

Bragg, L.

McIntosh of Haringey, L. [Teller]

Brennan, L.

Brooks of Tremorfa, L.

McIntosh of Hudnall, B.

Burlison, L.

MacKenzie of Culkein, L.

Carter, L.[Teller]

Mallalieu, B.

Cocks of Hartdiffe, L.

Marsh, L.

Cohen of Pimlico, B.

Massey of Darwen, B.

David, B.

Molloy, L.

Davies of Coity, L.

Morgan, L.

Davies of Oldham, L.

Peston, L.

Desai, L.

Pitkeathley, B.

Donoughue, L.

Plant of Highfield, L.

Dormand of Easington, L.

Ponsonby of Shulbrede, L.

Dubs, L.

Prys-Davies, L.

Elder, L.

Ramsay of Cartvale, B.

Falconer of Thoroton, L.

Randall of St. Budeaux, L.

Farrington of Ribbleton, B.

Rendell of Babergh, B.

Faulkner of Worcester, L.

Sainsbury of Turville, L.

Filkin, L.

Sewel, L.

Gale, B.

Shepherd, L.

Goudie, B.

Simon, V.

Gould of Potternewton, B.

Smith of Gilmorehill, B.

Grabiner, L.

Stone of Blackheath, L.

Graham of Edmonton, L.

Symons of Vernham Dean, B

Greengross, B.

Tomlinson, L.

Grenfell, L.

Turnberg, L.

Harris of Haringey, L.

Uddin, B.

Walker of Doncaster, L.

Harrison, L.

Walpole, L.

Haskel, L.

Warner, L.

Hayman, B.

Wedderbum of Charlton, L.

Hilton of Eggardon, B.

Whitaker, B.

Hollis of Heigham, B.

Whitty, L.

Howells of St. Davids, B.

Woolmer of Leeds, L.

Hughes of Woodside, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.55 p.m.
[Amendments Nos. 16 to 18 not moved.]
Clause 8 [Duties of licence holders]:
[Amendment No. 19 not moved.]
Clause 12 [References to Competition Commission]:
[Amendment No. 20 not moved.]
Clause 17 [Commission's duty as to modifications under section 16]:
Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendment No. 21:
Page 12, line 18, at beginning insert—
("(A1) The Competition Commission must exercise its functions under section 16(2) and (3) so as to maintain a high standard of safety in the provision of air traffic services; and that duty is to have priority over the application of subsections (1) to (4).").
On Question, amendment agreed to.
Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendments Nos. 22 to 26:
Page 12, line 18, leave out ("Competition").
Page 12, leave out lines 33 to 35.
Page 12, line 36, leave out from beginning to ("interests") in line 39 and insert ("The only interests to be considered under subsection (1)(a) are").
Page 12, line 46, leave out from ("must") to ("as") in line 1 on page 13 and insert ("apply them in the manner it thinks is reasonable having regard to them").
Page 13, line 2, at end insert—
("(5) The Commission must exercise its functions under section 16(2) and (3) so as to impose on licence holders the minimum restrictions which are consistent with the exercise of those functions.").
The noble Lord said: My Lords, I spoke to these amendments with Amendment No. 1. With the leave of the House I shall move them en bloc. I beg to move.
On Question, amendments agreed to.
Clause 27 [Air traffic administration orders]:
[Amendment No. 27 not moved.]
Clause 38 [Directions in interests of national security etc.]:
Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendment No. 28:
Page 24, line 32, at end insert—
("(3A) In exercising his powers under subsections (1) to (3) the Secretary of State must have regard to the need to maintain a high standard of safety in the provision of air traffic services.").
On Question, amendment agreed to.
Clause 39 [Directions relating to the environment]:
[Amendments Nos. 29 to 33 not moved.]
Clause 41 [Meaning of transfer scheme]:
[Amendment No. 34 not moved.]
[Amendments Nos. 35 and 36 not moved.]
Clause 43 [Transfer schemes made by CAA]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 37:
Page 29, line 8, at end insert—
("( ) No direction to make a transfer scheme shall be given under subsection (1) before the first Session of the next Parliament after that in which this Act is passed.").
The noble Lord said: My Lords, in moving Amendment No. 37, I shall speak also to Amendments Nos. 43 and 46. The purpose of these amendments is to delay the coming into effect of a scheme to transfer NATS to a public/private partnership until after the next election.
It must be clear to everyone that the privatization public/private partnership as the Government prefer to call it—is highly controversial. Noble Lords will be glad to know that I do not propose to rehearse all the arguments again that we heard at Second Reading and in Committee in this House, and indeed that we heard on the last amendment on which we have just voted. Nor shall I remind the House once more of the attitude of the Labour Party when in opposition and the famous quotation from the then transport spokesman that ''our air is not for sale".
We heard this afternoon a powerful case for the Canadian trust model, as was said, a model favoured by the Transport Select Committee in another place. An amendment to that effect in another place caused the third largest rebellion so far from the Government Benches there.
In short, there seems to be more than enough controversy in the Government's proposals and such an enormous about-turn from what they were saying before the last election that we believe the electorate should have a chance to see these proposals in the Labour Party Manifesto before the next election.
There is a precedent for this kind of delay. In 1982, during the passage of the Telecommunications Bill, the then Secretary of State for Trade and Industry, now my noble friend Lord Jenkin of Roding, said,
"but neither the transfer of the assets and obligations to the new company nor the issue of shares to the public will take place before the next general election. We are content that the public should decide whether or not this important step should be taken". — [Official Report, Commons, 29/11/82; col. 39.]
In other words, because the BT privatisation proposals had not been in the manifesto, and because it was then a controversial issue, the Conservative government of the day thought it only right and proper to put the issue before the electorate.
In his Statement on Tuesday to another place on the Hatfield derailment, the Deputy Prime Minister reminded us that in opposition in 1992 he suggested that we did the same with rail privatisation. He said:
"In fact, our argument was that the then Government waited to sell British Telecom until after the election, so they could have done the same with Railtrack".—[Official Report, Commons, 24/10/00; col. 151.]
In other words, the idea of a delay was at that time in the mind of the now Deputy Prime Minister.
The NATS proposal is every bit as controversial as were those relating to BT and Railtrack. But the big difference is that, whereas the BT privatisation was something people would have expected from a
526
Conservative government, the privatisation of NATS is the very last thing anyone would have expected from a Labour Government. That is all the more reason for the proposal to appear in a manifesto before being acted upon.
The Government will no doubt argue that the industry urgently needs the investment. Indeed, there is a need for investment. These amendments do not stop any of the preparations taking place, as they did not with regard to BT. But I believe that the Government plan the PPP to happen by spring next year. Everyone is expecting an election next spring, too, so the delay need be only a couple of months at most.
That is not really the point. The point is that the proposal is controversial and it should be put before the electorate in a manifesto. I beg to move.
Lord Clinton-Davis: My Lords, before the noble Lord sits down I want to ask him a question. He has argued only that the Government should do nothing precipitate at this stage. Has he considered the alternative to what the Government are suggesting because he has not mentioned one word about it? He has argued only that there should be a delay.
What are the Conservative Party arguing for? It is not for delay but that we should continue with the full privatisation of the NATS. Is that the case.
Lord Brabazon of Tara: My Lords, procedurally, the Question should be put on my amendment and I shall answer the noble Lord's points when I respond to the debate.
Lord Shore of Stepney: My Lords, with such complicated legislation, it is difficult to keep fully abreast with all the amendments before us. I must confess that when a short time ago I went into the Lobby in support of the Liberal Democrat amendment I thought that it was the only practical alternative to the thoroughly repugnant proposals in the Bill.
However, I had overlooked the excellent suggestion that is now before us. I am much in favour of the status quo; I believe that we have a wholly successful NATS which has a marvellous record of efficiency and safety. It also enjoys full public confidence. It might just be improved by the separation of the CAA as a regulatory body; one which examines it rather than being part of it. Apart from that, the status quo is excellent. Here, we have an amendment which suggests that we maintain the status quo for the next two or three years.
I find the proposal most acceptable for an additional reason which I want to mention to the House. Well within the next few months we shall have a new system for regulating air space in Europe. The common European sky proposals have been nurtured by the Commission during the past year, with all their implications for the control of British air space and of access to our airports by other nations. All of that will become plain and the implications within the new framework of a strategic partner for the United Kingdom will at last become obvious. All the bogus

527
nonsense about being unable to finance our present virtually self-financing system will be put in the dustbin where it belongs.
Therefore, I greatly welcome the amendment. I would not wish to align myself further with the thinking of the Conservative Party on the future of NATS but I welcome the excellent opportunity to have a delaying period in which all will become plain.
Lord Clinton-Davis: My Lords, I follow my noble friend Lord Shore because I have been invited to repeat what I said in my intervention. It was, frankly, that I do not trust the Tories and I never have. And I do not trust them on this issue in particular. The Tories entertain a belief that they will win the next election. They had better disabuse their minds of that, particularly in the light of today's opinion poll.
Whatever the position of the Tories may be, I come to much the same conclusion as my noble friend Lord Shore. I believe that the Government can do nothing but benefit from a delay. They will not have an opportunity to carry out their proposals before the next general election. It may be May, September or October, but they have no reasonable chance of carrying out their proposals.
Secondly, I do not believe that the Government have any intention of carrying out their proposals. Whatever may be said by the Minister today, the fact is that the Government go through the motions of passing the Bill, as we expected of them, but they do no more than that.
Thirdly, we should carefully test what the skies of Britain need. It may be the European approach, which my noble friend completely discounts. It may be a system which closely resembles the present NATS—I do not know. However, whatever it is, it is entirely acceptable to the Government because I believe that, whatever my noble friend says here tonight, the Government have no intention whatever of doing anything for £1,300 million over 10 years.
That being the case, why does my noble friend get so up-tight about it? There is no reason for it. I entirely dismiss the Tories from this argument because they have no chance of winning the next election. But why is my noble friend so uptight about it? It is not as though the Government somehow pin their hopes on the economic benefits of the scheme. No sensible person believes that. That being so, why does my noble friend use every opportunity in this debate to colour badly that which the opposition on this side of the House proposes?
My noble friend waxed eloquently about the situation in Canada—he may be right or wrong—but one thing we do know is that NATS has served this country well. Does my noble friend dispute that? The main point raised by my noble friend Lord Shore is that over the past 30 years NATS has served the people of this country well. Why should the Government interfere with that?
Lord Trefgarne: My Lords, I am president of the Popular Flying Association and am myself an
528
occasional user of airspace services. Therefore, I have a personal interest in this matter in two regards. I am not opposed in principle to privatisation, but the arrangements for continued access to airspace by general aviation are not yet properly in place. While the Civil Aviation Authority is anxious to secure adequate and proper arrangements, there is some very disquieting evidence from senior officials of NATS that they will resist them. I shall deal with that in more detail at a later stage of the Bill.
In the light of those considerations, I believe that it is better to delay the implementation of these provisions, as my noble friend Lord Brabazon proposes. I should like to see these provisions postponed until after the next election. That will give us a delay of perhaps a few months and allow the views of the Civil Aviation Authority in this matter to prevail over those of NATS, which I regard as less than helpful.
Baroness Thomas of Walliswood: My Lords, we shall support these amendments should the noble Lord press them to a Division. We do so very much in the same spirit as the noble Lord, Lord Shore, enunciated at the beginning of this brief debate. We are totally against the views of the Conservative Front Bench, whose ultimate aim is the total privatisation of NATS. However, we believe that a pause would be of benefit to the Government in enabling them to think again on the subject. It will ensure that they achieve a structure for NATS which responds not only to the demands for efficiency and so on but those placed upon it by the public. I refer to the safety culture to which the noble Lord, Lord Hoyle, spoke.
Another minor but nevertheless significant consideration is that a pause will give NATS, as it is now, additional time to make progress with modernisation of its technological base and the creation of the new centre at Swanwick. That is undoubtedly needed to meet the timetable of 2002, which is already six years late. That timetable may well be disturbed during the process of the part-privatisation. For those reasons, we shall join the Conservatives today if they decide to press the matter to a Division.
6.15 p.m.
Lord Macdonald of Tradeston: My Lords, as the noble Lord, Lord Brabazon of Tara, said, these amendments are intended to defer the making or approval of any transfer schemes until the Session of Parliament following the one in which the Bill before us receives Royal Assent. As the making of transfer schemes is a prerequisite to the establishment of the NATS PPP, this would inevitably lead to delays in the PPP timetable. I am sure noble Lords appreciate that there needs to be a degree of flexibility in the timing of the proposed sale. The necessary legislation (in the form of Part I of this Bill) must be in place so that ownership of NATS can transfer to the Secretary of State, who can then proceed to effect a partial sale. This in itself has acted as a constraint on the speed with which the NATS PPP can come into effect.

529
I believe that the restrictions which noble Lords opposite suggest go too far. They would lead to an unreasonable delay in implementing the transfer scheme provisions, and hence the sale, and I do not believe that that would be in the best interests of the various parties involved. We need to resolve the future of NATS once and for all and put an end to the uncertainty which has been hanging over staff and management for years.
My noble friend Lord Shore referred, with unexpected optimism, to the speed with which a single European sky might be achieved. My understanding of the importance of those proposals is that they would lead to better communication in overly congested airspace in Europe so that it could be managed more effectively. The technology suggests that the dozens of national jurisdictions across Europe could be reduced to five or six. As I have said before in your Lordships' House, in that consolidation lies the opportunity for a strong British company to become a world leader in selling safety and efficiency across Europe and the world. We believe that our PPP is entirely compatible with any likely outcome of the European initiatives that are in place.
My noble friend Lord Clinton-Davis again asks about our commitment to NATS. He suggests that perhaps in some way we disparage its safety record. That is not so. I have congratulated NATS on its very good safety record. The noble Baroness, Lady Thomas of Walliswood, referred to the problems of Swanwick. She might also have referred to the problems arising from investment in Prestwick. It is clear that project management of the kind of investment that we believe is needed in this industry is not best carried out by the structures which have been in place to date.
Lord Hoyle: My Lords, I am grateful to my noble friend for giving way. I said earlier that one of the partners that had been considered was Lockheed Martin, which is more responsible than anyone for delay at Swanwick. Can my noble friend explain how, if Lockheed Martin is successful in this matter, the situation will be improved?
Lord Macdonald of Tradeston: My Lords, I do not want to enter into assertions about responsibility in this case. It is accepted by the management of NATS itself that it does not have the expertise to run these kinds of projects as they should be run and that it is years and years behind in investment. We believe that, if we look to a decade of further investment, that is best achieved with the kind of expertise to be found in the right strategic partners in the private sector. For those reasons, I ask noble Lords to support us in advancing the PPP. I invite noble Lords opposite not to press these amendments.
Lord Brabazon of Tara: My Lords, I am grateful to the Minister for his reply, although I do not believe that he takes account of what the amendment seeks to achieve. The amendment does not prevent the rest of the legislation passing into law but merely asks the
530
Government to do exactly what we did with British Telecom in 1982; namely, to delay it until such time as it has a mandate from the people.
I am grateful to those who have spoken to and supported the amendment. In particular, I agree with the noble Lord, Lord Shore. Whatever happens as a result of this matter, the separation of the regulator (the CAA) from the operator (NATS) is a good thing, and all sides of the House are agreed on that.
The noble Lord, Lord Clinton-Davis, asked me at the beginning what we on this side of the House would do. He then went on to say that we had absolutely no chance of winning the next election. Therefore, I am not quite sure why he was so concerned about what we might or might not do. We do not yet know what the outcome will be. We do not know what shape NATS will be in after the Bill is enacted. I can assure noble Lords that our proposals for National Air Traffic Services will be clearly set out in our election manifesto. Those proposals will take into account all the debates which have taken place both in this House and elsewhere on the issue. The noble Baroness, Lady Thomas, assumes that we will go forward with privatisation of NATS. I cannot say that we will; I cannot say that we will not. But I cannot say that the matter is yet decided. The point is that our decision will clearly be set out in our manifesto.
Lord Brooke of Alverthorpe: My Lords, some of us were listening very carefully to the noble Lord. He will seek, I suspect, to divide the House. We need and require clearer guidance from the noble Lord. It is right and proper that the noble Lord should come out in the open and state where he stands.
Lord Brabazon of Tara: My Lords, as I said at the beginning of my remarks, we do not know. It depends entirely on what happens to the passage of the Bill. NATS will either go ahead with the PPP or not before the next election. We cannot possibly say at this stage what state NATS will be in at the time of the next election. That is not really the point at issue. The point at issue is that the Government should delay this PPP so that their views and proposals can be put in their manifesto before the next election. The proposals before us today were certainly not in the manifesto for the last election.
As I said in my opening remarks, no one would have believed that the Labour Party would go forward with a privatisation of this kind. I do not intend to go over all the issues of the PPP. Those were more than amply covered in the debate on the previous amendment. It would be a good idea for the Government to delay this matter until after the next election. Therefore, I seek to test the opinion of the House.
6.22 p.m.
On Question, Whether the said amendment (No. 37) shall be agreed to?
Their Lordships divided: Contents, 112; Not-Contents, 90.

Division No. 2

CONTENTS

Ackner, L.

Linklater of Butterstone, B.

Addington, L.

Luke, L.

Allenby of Megiddo, V.

Lyell, L.

Ampthill, L.

McColl of Dulwich, L.

Anelay of St Johns, B.

McNally, L.

Astor of Hever, L.

Maddock, B.

Attlee, E.

Marand Kellie, E.

Avebury, L.

Marlesford, L.

Baker of Dorking, L.

Mayhew of Twysden, L.

Barker, B.

Miller of Chilthorne Domer, B

Biffen, L.

Miller of Hendon, B.

Blatch, B.

Montrose, D.

Boardman, L.

Mowbray and Stourton, L.

Brabazon of Tara, L.

Murton of Lindisfarne, L.

Bradshaw, L.

Newby, L.

Bridgeman, V.

Northbrook, L.

Brougham and Vaux, L.

Northesk, E.

Burnham, L. [Teller]

Northover, B.

Buscombe, B.

Norton of Louth, L.

Byford, B.

Oakeshott of Seagrove Bay, L.

Caithness, E.

Park of Monmouth, B.

Chalker of Wallasey, B.

Pearson of Rannoch, L.

Clark of Kempston, L.

Phillips of Sudbury, L.

Clement-Jones, L.

Powell of Bayswater, L.

Colwyn, L.

Razzall, L.

Courtown, E.

Redesdale, L.

Cranborne, V.

Rennard, L.

Crickhowell, L.

Renton, L.

Cumberlege, B.

Roberts of Conwy, L.

Dholakia, L.

Rodgers of Quarry Bank, L.

Dixon-Smith, L.

Roper, L.

Elliott of Morpeth, L.

Russell, E.

Ezra, L.

Scott of Needham Market, B.

Falkland, V.

Seccombe, B.

Ferrers, E.

Sharman, L.

Forsyth of Drumlean, L.

Sharp of Guildford, B.

Gardner of Parkes, B.

Shaw of Northstead, L.

Geddes, L.

Shore of Stepney, L.

Geraint, L.

Shutt of Greetland, L.

Goodhart, L.

Skidelsky, L.

Greaves, L.

Smith of Clifton, L.

Hambro, L.

Stevens of Ludgate, L.

Hamwee, B.

Stoddart of Swindon, L.

Hanham, B.

Strathclyde, L.

Harris of Greenwich, L.

Swinfen, L.

Harris of Richmond, B.

Taverne, L.

Henley, L.[Teller)

Thomas of Walliswood, B.

Higgins, L.

Tordoff, L.

Hogg, B.

Trefgarne, L.

Hooper, B.

Trumpington, B.

Howe, E.

Vivian, L.

Hunt of Wirral, L.

Waddington, L.

Jacobs, L.

Walmsley, B.

Jopling, L.

Weatherill, L

Kimball, L.

Wilcox, B.

Kingsland, L.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Borrie, L.

Alli, L.

Bragg, L.

Amos, B.

Brennan, L.

Andrews, B.

Brooke of Alverthorpe, L

Archer of Sandwell, L.

Brooks of Tremorfa, L.

Ashley of Stoke, L.

Burlison, L.

Ashton of Upholland, B.

Carter, L.[Teller]

Bach, L.

Cocks of Hartcliffe, L.

Bassam of Brighton, L.

Cohen of Pimlico, B.

Bernstein of Craigweil, L.

David, B.

Billingham, B.

Davies of Coity, L.

Blackstone, B.

Davies of Oldham, L.

532

Desai, L.

McIntosh of Hudnall, B.

Donoughue, L.

MacKenzie of Culkein, L.

Dormand of Easington, L.

Mallalieu, B.

Dubs, L.

Marsh, L.

Elder, L.

Massey of Darwen, B.

Falconer of Thoroton, L.

Morgan, L.

Farrington of Ribbleton, B.

Nicol, B.

Faulkner of Worcester, L.

Peston, L.

Filkin, L.

Pitkeathley, B.

Gale, B.

Plant of Highfield, L.

Goudie, B.

Prys-Davies, L.

Gould of Potternewton, B.

Ramsay of Cartvale, B.

Grabiner, L.

Randall of St. Budeaux, L.

Graham of Edmonton, L.

Rendell of Babergh, B.

Greengross, B.

Renwick of Clifton, L.

Grenfell, L.

Sainsbury of Turville, L.

Harris of Haringey, L.

Sawyer, L.

Harrison, L.

Sewel, L.

Haskel, L.

Shepherd, L.

Hilton of Eggardon, B.

Simon, V.

Hollis of Heigham, B.

Simpson of Dunkeld, L.

Howells of St. Davids, B.

Stone of Blackheath, L.

Hughes of Woodside, L.

Symons of Vernham Dean, B.

Hunt of Kings Heath, L.

Taylor of Blackburn, L.

Irvine of Lairg, L. (Lord Chancellor)

Tomlinson, L.

Turnberg, L.

Islwyn, L.

Walker of Doncaster, L.

Janner of Braunstone, L.

Warner, L.

Kennedy of The Shaws, B.

Warwick of Undercliffe, B.

Kirkhill, L.

Whitaker, B.

Lipsey, L.

Whitty, L.

Macdonald of Tradeston, L.

Williams of Elvel, L.

McIntosh of Haringey, L. [Teller]

Woolmer of Leeds, L.

Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.
6.32 p.m.
Clause 44 [Effect of scheme made by CAA]:
[Amendments Nos. 38 to 42 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 43:
Page 29, line 28, at end insert—
("( ) No approval of a transfer scheme shall be made under subsection (2) before the first Session of the next Parliament after that in which this Act is passed.").
On Question, amendment agreed to.
Clause 45 [Transfer schemes made by Secretary of State]:
[Amendments Nos. 44 and 45 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 46:
Page 29, line 41, at end insert—
("( ) No transfer scheme shall be made under subsection (2) before the first Session of the next Parliament after that in which this Act is passed.").
On Question, amendment agreed to.
Clause 47 [Accounting provisions]:
[Amendment No. 47 not moved.]
Clause 48 [Accounting provisions: interpretation]:
[Amendment No. 48 not moved.]
Clause 49 [Issue of securities]:
[Amendment No. 49 not moved.]
Clause 50 [Government investment in securities]:
[Amendment No. 50 not moved.]
Clause 51 [Crown shareholding]:
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, in calling Amendment No. 51, I should point out that if it is agreed to, I cannot call Amendment No. 52 owing to pre-emption.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 51:
Page 34, line 1, leave out subsections (4) and (5).
The noble Lord said: My Lords, in moving this amendment, I wish to speak also to Amendments Nos. 52, 54, 55, 61 and 65 to 67.
These amendments are similar to the ones we moved in Committee. They concern the sale of NATS and the percentages that are to be kept by the various parties. We do not see the logic of including the 49 per cent limit when that can be diluted down as far as 25 per cent. We find that a little difficult. In Committee we suggested that 26 per cent would make more sense as it would at least give the Government the right to block any measure that required a special resolution. The Minister disagreed with that premise. My understanding is that a 25 per cent holding does not enable a shareholder to stop the passing of a special resolution but that a 26 per cent holding does. I should like some clarification from the Minister on that point.
We are also concerned that a disposal should be by means of competitive tender. The identity, competence, honesty and reliability of the private partner are vital to the effective performance of air traffic services, yet the Bill gives the Government carte blanche as to how the partner is selected, a process that could give rise to accusations of cronyism and abuse if the procedure is not transparent and open. That is the purpose of Amendment No. 52.
Amendment No. 54 concerns the designated company's articles of association. There is little point in having rights attached in the articles of association to the golden share unless they include the right to object to any change in those articles. A 25 per cent shareholding would not itself enable the Government to prevent a change in the articles of association without the power to do so being included in the articles of association.
Other amendments in this group are along similar lines. Similar amendments were moved by me at the Committee stage. I do not propose at this stage to go into the detail of all the amendments. Suffice it to say, I shall be interested to hear what the Government have to say to some of the points I have made. I beg to move.
Lord Macdonald of Tradeston: My Lords, Amendment No. 51 would have the effect of removing the obligation of the Secretary of State to hold at least 25 per cent of the ordinary share capital in the designated company and not to dispose of more than 51 per cent. That would remove the Government's current obligation to proceed by establishing a public/private partnership and would instead pave the way for full privatisation. The Government remain
534
convinced that the outright privatisation of NATS to which the previous government were committed would be a mistake.
The Government have considered at great length the other options for the future of air traffic control and the issue has been debated at length. We remain convinced that a public/private partnership is the appropriate solution. Our aim is to facilitate the development of a major British-based company, successfully going out and working in air traffic control in the UK and in countries around the world, and delivering safety for those countries and for the airlines which serve them.
It is the Government's view that the PPP will provide a secure vehicle for the major investment programme—estimated by current management to be in the region of more than £1 billion over the next 10 years—which everyone agrees is essential. That investment will secure the two-centre strategy for NATS. The PPP will achieve that and the Government's interests will be protected by a wide range of measures so that the Government, as a major shareholder, will have to give their consent for any significant actions by the strategic partner. The Government will have the right to appoint a number of non-executive directors to the board of NATS and retain a special share in the company. These partnership arrangements will ensure that the Government can continue to protect the taxpayer's financial interest as a minority investor in NATS and that NATS continues to act in the public interest.
The noble Lord asked about 25 per cent as a blocking share. But what matters here are the terms of the strategic partnership agreement. That document, which governs the relationship with the strategic partner, remains fully effective with 25 per cent. We believe that the PPP will give NATS the freedom it needs in the private sector to invest in the latest systems and safety equipment and to develop the business.
Noble Lords have expressed concerns that the PPP will compromise safety. I hope that they will accept that we have listened to those concerns by tabling the amendments which we debated at the start of today's proceedings. However, perhaps I may stress again that we shall have robust powers through the Bill, through the licensing regime and through the strategic partnership agreement.
As regards Amendment No. 52, Clause 51(4) seeks to ensure that the Crown cannot sell shares in NATS where to do so would result in the Crown holding less than a 49 per cent stake. Amendment No. 52 seeks to impose a further restriction on the Crown selling its shares in NATS by requiring it so to do only by way of competitive tender.
This amendment adds nothing to the protections that are already in place. The Government have always made it plain that they intend, as part of the PPP, to sell down the Crown's stake in NATS to 49 per cent (and it will do so by competitive tender). But I need to make it clear that this does not simply mean selling to the highest bidder. The strategic partner will be selected with a number of criteria in mind, covering

535
safety, national security, management capability and commitment, financial credibility and capacity, quality of strategic planning and satisfactory solutions to any real or potential conflicts of interest. This being so, for so long as Clause 51(4) is in force, the Government will not be able to sell any further shares in NATS, whether by competitive tender or by any other process, and whether to a strategic partner or to anyone else. For that reason, I invite noble Lords to withdraw the amendment.
Amendments Nos. 54 and 65 seek to create a statutory requirement to prevent any change in the designated company's articles of association. I can assure your Lordships that these amendments are unnecessary. It is and always has been the intention of the Government that the PPP company's articles of association will be subject to protection to prevent changes to the key rights, such as the special share. Once enshrined in the articles of association, the special share cannot be removed or changed. Draft articles of association have been laid before this House. If noble Lords care to consult them, they will find that they do include this right. In the circumstances, there is no need to make legislative provision and I invite noble Lords opposite to withdraw these amendments.
Amendment No. 55 seeks to remove the right of the Secretary of State to amend or repeal Clause 51 by order. I can understand the concern of noble Lords that, on the face of it, these powers may seem rather wide-ranging. However, I believe that I can assure noble Lords that adequate safeguards have been put in place. Under the provisions of Clause 102(6) an order under this clause cannot be made without the approval of both Houses of Parliament; in other words, the affirmative resolution procedure will apply.
I should also like to draw the attention of noble Lords to the deliberations of the Select Committee on Delegated Powers and Deregulation. In its report on the Bill, the committee commented that it did not regard this power as inappropriate and saw the affirmative procedure as providing appropriate control over its use.
I should additionally mention that subsection (12) of Clause 51 is not without precedent. A similar provision has been made in Section 18 of the Commonwealth Development Corporation Act 1999, dealing with matters relating to the minimum Crown shareholding. That section contains a power enabling the Secretary of State to amend or repeal it by order, and again the affirmative resolution procedure will apply.
I hope that noble Lords opposite will accept that proper safeguards have been put in place as regards the use of these powers and I invite them to withdraw the amendment.
Amendment No. 61 tabled by the noble Lord builds on one he tabled during our earlier consideration of the Bill. I appreciate the noble Lord's wish to ensure that Parliament is kept fully informed about sums paid out and received under this guarantee.
536
The amendment suggests that the Secretary of State must disclose the reasons for the default on repayment of sums paid out under the guarantee where he knows the reasons for default, unless he is not permitted so to do because of a duty of confidentiality. Although the Government might be aware of the reasons for the default, there could be circumstances where disclosure could prejudice the Government's ability to recover moneys paid out under guarantee, even where there is not an explicit duty of confidentiality.
The second part of the amendment requires the Government to outline to Parliament any steps they take to recover the sums in question. Again, to reveal such a course of action could place at risk the Government's strategy for recovering the moneys—even if they were under an explicit duty of confidentiality. There may, for example, be a number of competing claims for funds of the company. For the Government to reveal the action they are taking could compromise commercially confidential negotiations and give other creditors an advantage.
I can assure the noble Lord that, in resisting this amendment, I am in fact seeking to protect the interests of the Exchequer rather than wishing to be less open with Parliament. The clause already sets out requirements for the Secretary of State or the Treasury to lay statements before Parliament when the guarantee is given, when payments are made under the guarantee, and if the default occurs on repayment. Should such a default occur, the noble Lord would of course be able to probe Ministers of the day through the usual parliamentary processes.
I hope that this will offer the noble Lord comfort on the matter and that, in the circumstances, he will agree that it is appropriate not to make the suggested amendment. I therefore invite the noble Lord to withdraw his amendment.
Noble Lords opposite tabled Amendment No. 67 at Committee stage. Obviously, the explanation that I gave last time in defence of retaining subsection (4) of Clause 57 was not sufficient, so I shall make another attempt at it.
The subsection is essentially a protective measure. The direction to which it relates is one which requires the CAA to release NATS from debts which the latter owes to the CAA, in readiness for the establishment of the PPP. Once NATS is classified to the private sector it will not be able to borrow from public sources. However, it is not the intention that the Government will simply write off these debts. NATS' current debt to the National Loans Fund—approximately £300 million—can be dealt with in a number of ways. A likely course of action will be for NATS to take out a commercial loan at the time that the PPP is effected, which would be used to repay its debt to the National Loans Fund. Therefore the private sector and not the Government would be responsible for the debt. The precise mechanism will be decided nearer the time of the PPP, in conjunction with the strategic partner.
However, in complying with this direction, the CAA could be said to be acting in contravention of other duties placed upon it. It might be argued that the CAA

537
was not furthering the interests of its users by releasing NATS from its debt, even though it was acting in accordance with a direction given to it by the Secretary of State. The CAA would then be placed in an intolerable position; the subsection is designed to prevent that from happening.
I must make it clear to noble Lords, as I did last time, that this subsection is not a means by which important matters such as safety can be circumvented. It is simply to prevent the CAA from being subjected to frivolous and vexatious claims. I hope that noble Lords opposite will accept this explanation and withdraw their amendment accordingly.
6.45 p.m.
Lord Brabazon of Tara: My Lords, I am grateful for the Minister's detailed response to the amendments. I am hound to say that they comprise rather too big a group. I should probably not have agreed to such a large grouping.
The Minister's opening remarks almost took the form of a Second Reading speech and were a commercial for the PPP proposal. The noble Lord need not worry so far as I am concerned. I am well aware of the need for investment in this sector and I am well aware of the absolute paramount need for safety. As I said earlier, we are grateful for the government amendments moved at the beginning of our deliberations.
As regards the detail of some of the amendments, I shall need to read most carefully what has been said by the noble Lord. However, I am bound to say that I remain puzzled by the argument over a 49 per cent stake and a 25 per cent stake. If it is proposed that the government holding should be reduced to 25 per cent, why mention 49 per cent in the first place?
So far as concerns the golden share—or the special share—I am sure that I shall come back to this at Third Reading. Since the Committee stage, we have heard a judgment in regard to the BAA situation. The whole status of golden shares in privatised companies is in some doubt. I do not intend to take up further time on these issues. As I said, I shall read carefully what the Minister said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 52 to 56 not moved.]
Lord Lea of Crondall Lord Lea of Crondall moved Amendment No. 57:
Before Clause 52, insert the following new clause—

Transport Bill

  VOTING RIGHTS OF CROWN SHAREHOLDER, EMPLOYEE PARTICIPATION, ETC
  (" .—(1) This section applies if any property, rights or liabilities are transferred under a transfer scheme to a transferee which at the time of the transfer is—

  (a) a company which is wholly owned by the Crown;

  (b) a company which is wholly owned by the CAA;

  (c) a company which is a wholly owned subsidiary of a company falling within paragraph (a) or (b).

  (2) The Secretary of State may by order designate such a transferee for the purposes of this section.
  (3) The Secretary of State must ensure that, in relation to members' resolutions of the designated company, the proportion of votes exercised by the Crown shareholder, as a proportion of the total votes available to all shareholders, shall be in direct proportion to the proportion of shares in issue held by the Crown shareholder.
  (4) The Secretary of State must ensure that the Crown shareholder must appoint a number of Directors to the Board of the designated Company, so that the proportion of its appointees on the Board is equal to the proportion of shares in issue held by the Crown shareholder.
  (5) The Secretary of State must ensure that at least 5 per cent. of the designated company's issued ordinary share capital shall be held by an Employee Share Trust on behalf of employees.
  (6) The Secretary of State must ensure that a representative of the Employee Share Trust is appointed to the Board of Directors of the designated company.").
  The noble Lord said: My Lords, the amendment deals with the detail of the strategic partnership, which is lodged in the Library and is not on the face of the Bill. That makes matters rather difficult.
  We first raised this matter in Committee. This is an unusual PPP, and the question arises of what view the House should take about the strategic partnership agreement. One can readily acknowledge that there is a tension between, on the one hand, giving potential bidders the reassurance they seek regarding their capital investment, and, on the other hand, a cluster of features of the industry, about which we have heard, which circumscribe that.
  Perhaps I may begin with the formula under which 49 per cent of shares will be retained by the Government, 46 per cent will be for the strategic partner to purchase, and 5 per cent will be for the employees. In his reply at Committee stage, my noble friend said that the Government have always made it clear that the strategic partner will have operational control of NATS. He said that to oblige the Government to retain voting rights equivalent to their proportionate shareholding would effectively deprive the strategic partner of voting control. Of course it would—but what was the point of the 49 per cent, 46 per cent, 5 per cent split in the first place.?
  One of my noble friends referred earlier to PPPs in sectors such as the National Health Service and described how well they operated. Perhaps I may take that as an analogy and demonstrate why this particular PPP is not a normal one. Is it the case in the National Health Service that a PPP would operate on the basis that strategic control of a trust would be vested in a private sector partner even when that private sector partner had a lesser shareholding than the Government? Perhaps my noble friend will comment on that when he replies.
  It has been pointed out that we are talking about an area of rapid structural change, which will increase in the coming years. That is an argument which cuts both ways. The Minister's speculation, which he has reiterated, is in the context of half-a-dozen centres dealing with the lion's share of air traffic over the whole of Europe. We look forward to the report of a high level group on the single European sky. That will be the start of the process my noble friend referred to as a tremendous opportunity for the UK air traffic control industry, NATS specifically.
  In some respects, it is rather unfortunate that the European dimension will become clear only after the Bill has passed all its stages. But, depending on the amount of water that will have gone under the bridge by then, can the matter not be adjusted, if necessary, by looking again at the strategic partnership agreement, both in terms of further relations with the bidders and in terms of the European dimension? Perhaps there was a hint of that in the Minister's earlier comment.
  The second element in the amendment concerns employee interests. The key issue is found in subsection (6), which seeks to build on the proposal in subsection (5) that the 5 per cent of the shares earmarked for employees should be reflected in the appointment of a director. This would be minimum recognition of the fact that we are talking about a partnership between the different stakeholders. In this regard, perhaps my noble friend will reconsider the nature of the objection he advanced in Committee when he said that he does not believe that representatives can sit on a board because of a conflict of interest. I paraphrase. That is the last argument the Minister should use. If that is his argument, I should point out that there are conflicts of interest all over the place.
  We are talking about a new style of partnership. My noble friend is to be congratulated on trying to innovate. But he says that this is one area in which he cannot innovate because of his experience in Glasgow 30 years ago. We have all had experiences. He said that in those days workers' representatives could not sit on both sides of the fence. We are now talking about innovation and about a stakeholder board, in effect. Life has moved on in the past 30 years. I hope that my noble friend will feel able to revisit his philosophy on these issues.
  Lord Brett: My Lords, perhaps I may refer again to my "Gulliver's travels" to Canada. I raised with the people I met in Canada the role of the trade union directors—there were two trade union directors on the board—and I asked the airline representatives whether there was a conflict of interest. They said that one of the reasons for the success of the trust was both the choice of the partners—the board of directors—and the quality of the people. They said that they found it a great advantage to have trade union representatives—this was not the trade union representatives speaking but the other directors—because they knew directly that they represented an influence; that is, the staff. They felt that in the planning process and some of the difficult decisions they had to take, that allowed for a greater understanding and a greater confidence in the workforce than otherwise would be the case.
  They have a stakeholder council similar to that envisaged in the PPP. They said that they did not believe that holding the trade union representation at that level would have provided anything like the value
  540
  of having trade union representatives on the board of directors. I hope that the Minister will take that into account in his consideration of this issue.
  Lord Clinton-Davis: My Lords, I support the amendment on behalf of myself as president of BALPA. I do not speak on behalf of BALPA but on behalf of myself.
  As my noble friend Lord Brett said, there is an advantage in ensuring a proper reflection of the point of view of employees. The amendment does not state that the employee must be a representative of a particular union; it involves the idea that the employees have a contribution to make. Of course they have. There is no way other than representation through the official trade union that they can make that contribution.
  I know of people who have been elected because they are members of BALPA and involve themselves in policies which are important to them and important to the people from whom they have come. But it does not seem to me imperative that they should represent individual employees per se.
  The amendment encapsulates the idea that employees should have a voice—no more, no less. I entirely agree with the views of those who are in favour of the amendment.
  7 p.m.
  Lord Hoyle: My Lords, Gulliver's Travels was referred to by my noble friend Lord Brett; but perhaps we are talking about "Brett's travels". We owe my noble friend a debt of gratitude. On so many of the issues raised in our debates today he has ascertained whether there are practical advantages in what is being said.
  To take up a point made by my noble friend Lord Lea, perhaps my noble friend the Minister did have some experience in a Glasgow shipyard years ago, but the idea of not being able to serve two masters has a ring of Marxism about it rather than of partnership with new Labour. Matters have moved on. We are talking about continuous partnership between employer and employee. As we are breaking new ground, the amendment offers a unique opportunity to put an employee representative on the board.
  As always, my noble friend the Minister has approached us to see whether we could reach agreement that there should be consultation with the trade unions, of their being instrumental in advising on the appointment of a director and having the same director as on the board of trustees. However, in the words of the TUC, having a trustee director on the main board could lead to a conflict of interest. As I say, it is a substitute for the employees either being directly represented or having a representative on the board.
  I turn to an equally important point. We must give the employees confidence in the changes that are taking place. At present, they lack confidence and trust. They are concerned about what is happening. The way to bring them along with us is to make sure that they are directly represented on the board.

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  I hope that my noble friend the Minister will take this point on board and that he is prepared to break the necessary new ground. My noble friend means what he says; there is no doubt that he would consult with employers in relation to the appointment of directors. But there will be Ministers other than my noble friends who may belong to different parties with a different philosophy. Even given what my noble friend has said, a provision needs to be written in to the Bill. If consultation is to take place, we must ensure that it does not merely take place with this Government or this Minister but with other Ministers in future governments.
  I hope that my noble friend will say that employees can have direct representation. However, even given his own method—namely, consultation—I hope he will agree to consider a provision on the face of the Bill to ensure that, whichever method is chosen, it will also happen in the future with governments of a different political hue.
  Lord Macdonald of Tradeston: My Lords, the new clause proposed in the amendment, which has already been laid once at Committee stage, seeks to do four things, and I shall deal again with each in turn.
  Turning to the first of these objectives, on the subject of voting rights, the Government have always made it clear that the strategic partner will have voting and operational control of NATS, except in relation to certain key areas where the approval of the government-appointed directors, or in some cases the Secretary of State, will be required.
  In reply to the noble Lord, Lord Lea, let me say that obliging the Government to retain voting rights equivalent to their proportionate shareholding in NATS would effectively deprive the strategic partner of operational control of NATS, as its share of the votes would be less than that of the Government. That would jeopardise NATS' private sector classification, which would ultimately deny it access to private sector capital—one of the key objectives of the PPP. Perhaps I may remind the House that NATS will face a huge investment programme over the next 10 years. The inability to give the strategic partner voting control would undermine its confidence in its investment, possibly reducing the value of the NATS shares that the Government, and ultimately the taxpayer, will receive.
  With regard to the second objective—namely, to ensure that the Government can always appoint a proportionate number of directors to the NATS board—this would deprive the strategic partner of board control, thereby again placing NATS' private sector classification at risk and rendering an investment in NATS unattractive to potential strategic partners. Furthermore, it would most likely result in the Government and the strategic partner having an equal number of directors, creating the potential for deadlocks at board level—something that could jeopardise not only the commercial future of NATS but also the ability of NATS to put in place the systems and procedures necessary to guarantee the ongoing
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  provision of safe air traffic services. Having a clear line of direction, albeit with proper checks and safeguards, is essential to a successful future for NATS.
  Turning now to the third objective, namely to ensure that 5 per cent of NATS' share capital is held by an employee share trust, the Government have always made it clear that employees will be entitled to participate in NATS through holding up to 5 per cent of the ordinary share capital. This policy has not changed. It is inappropriate to attempt to prescribe the details of a complex employee share participation arrangement in primary legislation. The amendment proposed would have the effect of requiring the shares to be owned, both legally and beneficially, by the employee share trust. This would deprive employees of the full benefit of the shares (that is, the receipt of dividends and proceeds from their sale).
  Finally, the amendment seeks to secure employee representation on the board of NATS. It would be highly unusual for a major UK company to have employee representation on its board, particularly in the case of a company which is intended to be operated along the lines of a listed company. I say to my noble friends that I spoke as much from my experience as a director and chairman of a number of listed companies as I did from any trade union experience. An employee representative could face a conflict of interest between the protection of the rights of employees and the best interests of the company. This would create tensions at board level which could hamper the effective management of the company and could increase the risk of deadlock.
  Lord Clinton-Davis: My Lords, will my noble friend give way? There are ample examples of employee representatives, or people advanced by their trade union, who are already directors. Is he saying that they are always beset by problems of conflict of interest?
  Lord Macdonald of Tradeston: My Lords, I did not say "always". I said that this could create tensions at board level, that it could hamper the effective management of the company and could increase the risk of deadlock. For that reason, we do not think it appropriate to put suchx2014;
  Baroness Thomas of Walliswood: My Lords, I had not intended to intervene in this debate. However, I am puzzled as to why one type of employee representative would be prejudicial to the board's performance, when the presence of other employees who are directors of companies is not damaging to the board.
  Lord Macdonald of Tradeston: My Lords, it is for the simple reason that a board director would have a fiduciary duty to the interests of the company. If such people were seen as representatives of trade unions and employees, it would be difficult for them in some circumstances to perform that fiduciary duty without a conflict of interest being perceived by those who thought that they had been appointed to represent their interests, not the interests of the company. We do not believe that it would be appropriate to include such

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  a prescriptive clause in primary legislation. However, if following discussion between employee representatives and the strategic partner, the strategic partner felt it appropriate and beneficial to put an employee representative on the board, the Government would not oppose that. I can tell the House that we intend to facilitate such discussion. Once we have established a short list of bidders, we shall arrange meetings between them and staff representatives to discuss bidders' plans for the future of the company.
  I must also point out to noble Lords, as I have before, that we have endeavoured to give employees a voice on the stakeholder council that is to be created. It will be an influential body whose views will carry considerable weight. More importantly, it will allow representatives of NATS' employees and users of aviation access to direct involvement in the company.
  The council will offer a forum for discussion and influence on NATS' plans and arrangements for the provision of air traffic services. It will also offer the opportunity for any member of the council to raise an issue regarding the provision of these services by NATS and its subsidiaries, and for this issue to come to a resolution. The council will pay particular attention to areas such as major investment projects, safety issues, standards and service provision, long-term investment plans and the development of new technology.
  I should also remind noble Lords that the Government will have the right to appoint two or perhaps three "partnership directors" to the board of the PPP company. The Government will also have the right to appoint a trustee to an employee share trust. We are proposing that we should consult staff representatives about the criteria that we shall use in selecting these appointees, so that staff can feel comfortable about the appointments. We are also proposing that the government trustee be appointed as one of the partnership directors. This person, although bound by the rules of both appointments, would be uniquely well informed on matters of interest to staff. I am confident that that unique position could helpfully inform the board as it takes key decisions.
  I hope that noble Lords will agree that these measures, together with staff representation on the stakeholder council that I mentioned, will go a long way towards addressing staff concerns and provide sensible working arrangements that will be of benefit to all the parties involved. These matters are essentially—
  Lord Hoyle: My Lords, before my noble friend concludes, perhaps he could answer my query on his proposals regarding how we can ensure that consultation will take place in the future; that is to say, when he is no longer the Minister with such responsibility.
  Lord Macdonald of Tradeston: My Lords, if noble Lords study the documentation that we have produced for the PPP, they will see that the partnerships that we have talked about are entrenched as far as possible. In any future situation, it seems unlikely that a government would transfer their right to have directors appointed away from themselves and in that way deny themselves the opportunity to have the strategic role that we presently propose.
  These matters are essentially for the partnership documentation—that is where we have already undertaken to place them. Therefore, they would be out of the place on the face of the Bill. In view of that explanation and the reassurances that I have given, I invite my noble friends to withdraw the amendment.
  Lord Lea of Crondall: My Lords, I thank my noble friend for his clarification on the matter. However, I have two points to make. First, this is clearly not just a normal plc; it is a PPP and, inherently, a partnership multi-stakeholder model. In effect, the Minister is seeking a third way. Indeed, he mentioned the stakeholder council, as well as many other innovations that would be on the agenda in that respect.
  Secondly, I should just like to point out that the board that is emerging is a two-tier concept; it is not a traditional unitary board in the sense that we have always understood. We are innovating as we go along. I shall withdraw my amendment, but I should like to consider the position further before we reach the final stages of the Bill. I beg leave to withdraw my amendment.
  Amendment, by leave, withdrawn.
  Clause 52 [Loans]:
  [Amendment No. 58 not moved]
  Clause 53 [Guarantees]:
  [Amendments Nos. 59 to 61 not moved.]
  Clause 54 [Grants]:
  [Amendment No. 62 not moved]
  Clause 55 [Trustee investments]:
  [Amendment No. 63 not moved.]
  Clause 56 [Shadow directors]:
  [Amendments Nos. 64 to 66 not moved.]
  Clause 57 [Extinguishment of liabilities]:
  [Amendment No. 67 not moved.]
  Clause 62 [Exercise of functions through nominees]:
  [Amendments Nos. 68 and 69 not moved.]
  The Deputy Speaker (Viscount Allenby of Megiddo): My Lords, in place of Amendment No. 70, I call Amendment No. 70A.
  7.15 p.m.
  Lord Brett Lord Brett moved Amendment No. 70A:
  After Clause 64, insert the following new clause—

  PENSION ENTITLEMENT OF PRESENT AND FORMER EMPLOYEES OF NATS
  (".—(1) In this section—
  "NATS employer" includes NATS, any designated company which succeeds to the business of NATS and any employer other than a designated company which succeeds to or acquires any part of the business of NATS;
  "NATS" is National Air Traffic Services Ltd whose air traffic services are to be transferred under the provisions of this Act;
  "protected beneficiary" includes—

  (a) any person who, on the transfer date, is employed by NATS and is an active member of the Scheme;

  (b) any person who is employed by NATS on the transfer date, but is then too young to join the Scheme, and who subsequently joins;

  (c) any person who is not an active member of the Scheme on the transfer date but who is subsequently entitled to rejoin as a NATS employee without a break in their continuity of employment;

  (d.) any person who is not an active member of the Scheme on the transfer date, but who is entitled to accrued pension rights under the Scheme at that date; and

  (e) any person who is prospectively or contingently entitled to benefit under the Scheme on the death of a person covered under (a) to (d) above;

  "relevant scheme" means the Scheme or any other scheme of a NATS employer that covers protected beneficiaries, and that provides benefits in respect of the protected beneficiaries which are at least equivalent in value to those applicable to the protected beneficiaries as at the transfer date;
  "Scheme" means the Civil Aviation Authority Pension Scheme;
  "transfer date" means the date of the transfer of NATS to the public-private partnership.
  (2) NATS (or, if appropriate, the designated company) shall, subject to the consent of the Pension Schemes Office of the Inland Revenue, participate in the Scheme as a non-associated employer.
  (3) If NATS (or the designated company) does participate in the Scheme as a non-associated employer, a proportion of the total assets of the Scheme shall be segregated for the benefit of the protected beneficiaries and the share of assets so segregated shall be equal in proportion to the proportion that the Scheme liabilities in respect of the protected beneficiaries bears to the Scheme's liabilities as a whole.
  (4) If NATS (or the designated company) is unable to participate in the Scheme, that NATS employer shall instead make available a relevant scheme for the benefit of the protected beneficiaries.
  (5) If the shares or business of NATS (or the designated company), or any part of that business, is transferred to a NATS employer other than NATS or a designated company, that NATS employer shall become a non-associated employer in the Scheme and if that is not possible that NATS employer shall instead make available a relevant scheme for the benefit of the protected beneficiaries.
  (6) For the purposes of subsections (4) and (5), if a NATS employer is to make available a relevant scheme other than the Scheme, a share of the assets of the Scheme (or of the previous relevant scheme if not the Scheme) shall be transferred to the receiving relevant scheme, calculated on the basis described in subsection (3).
  (7) If a protected beneficiary transfers to the employment of another employer that also participates in the Scheme but which is not a NATS employer, that beneficiary shall remain a protected beneficiary for the purposes of the benefits to be provided to and in respect of him under the relevant scheme and if that beneficiary subsequently transfers back to the employment of a NATS employer he shall still remain a protected beneficiary.
  (8) For so long as a NATS employer remains as a participating employer of the Scheme in respect of protected beneficiaries, one trustee of the Scheme shall be a member representative selected from amongst the protected beneficiaries, and one trustee of the Scheme shall be an employer representative of the NATS employer.
  (9) The NATS employer shall contribute to the relevant scheme at no less than the rate recommended by that scheme's actuary as being sufficient to secure the accrued rights from time to time of the protected beneficiaries in full by the purchase of annuities and the NATS employer shall not he entitled unilaterally to suspend or terminate its contributions to the relevant scheme except upon its insolvency.
  (10) On the full winding-up of a relevant scheme, or on a partial winding-up which involves protected beneficiaries, any shortfall in the assets required to buy out the accrued rights at that time of the protected beneficiaries shall be met in full by the relevant NATS employer and shall be treated as a debt on the employer.
  (11) If, on the full or partial winding-up of a relevant scheme, as described in subsection (10), the trustees wish, rather than securing benefits by the purchase of annuities, to pay a bulk transfer to another scheme, that other scheme shall be a relevant scheme and the transfer value payable in respect of the protected beneficiaries shall be sufficient to secure a buy out of their accrued rights if the receiving scheme were to be wound up immediately following the transfer.
  (12) The NATS employer shall provide future benefits in the relevant scheme which, in respect of the protected beneficiaries, are at last equivalent in value to those available tinder the Scheme at the transfer date.
  (13) No amendment may be made to a relevant scheme which would result in a reduction of the accrued or future rights of protected beneficiaries, nor in an increase in the contributions payable by protected beneficiaries who are active members.").
  The noble Lord said: My Lords, I should explain that this amendment is simply a rather clearer version than Amendment No. 70, which we originally tabled.
  I shall begin my remarks by quoting my noble friend Lord Whitty on Second Reading, who said that,
  "the staff [of NATS] are absolutely key. The future of NATS depends on the quality and commitment of its staff".— [Official Report, 5/6/00; col. 1027.]
  The noble Baroness, Lady Thomas of Walliswood, moved an amendment in Committee, the terms of which were similar to those in our amendment. The express purpose of both amendments is to protect the pension rights of such vital and committed staff. When responding in Committee, my noble friend told the House that the amendment was "not justified", and went on to present a detailed explanation in support of that contention. He claimed that it would burden the PPP with an unnecessary framework. My noble friend also rejected comparison with the position of London Transport workers, whose pension provisions are protected in a later part of this Bill.
  However, my noble friend offered to meet us and those other noble Lords who were concerned about the matter. Such a meeting has taken place. Alas, the Government's position remains that such a clause is unnecessary in their view. Accordingly, we now submit a similar amendment for your Lordships'

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  consideration. We believe that such an amendment is required for two reasons. First, as my noble friend Lord Hoyle mentioned, there is a very real need to give confidence to the staff. Such confidence comes in many ways, but none more so than in protecting those pension rights that they have accrued over many years. We believe that there is a strong political reason for giving the staff confidence, if only because they see little merit in the overall PPP proposal as it stands.
  Even if my noble friend the Minister were correct to say that adequate protection already exists within the trust deed, that, in itself, will not convince the staff as long as the Government refuse to provide equal treatment within the Bill as that provided for London Transport staff. Indeed, whether or not it is necessary, there is a very real belief in the minds of the staff that if such provision is not on the face of the Bill they will not be in a protected position.
  This amendment is required for a substantive as well as a political reason. That is evidenced by the decision of the trustees of the CAA pension scheme, who have determined that they will pursue legal action against the Government if they fail to provide the assurances sought by way of this amendment. I understand that the authority has earmarked up to £1 million for that task, so it is obviously not a decision that it has taken lightly. However, staff also wish this amendment to be incorporated into the Bill because it would guarantee the following—and this is where I believe some misunderstanding may have arisen in Committee.
  We wish to ensure that a new NATS employer, or a successor employer, would be required to contribute to the scheme at a level that would protect the accrued rights and benefits of members—not simply the level provided by minimum funding requirements; that future owners would have to provide benefits in the scheme that were at least as good as those in the present CAA scheme; that sufficient funds should be set aside within the CAA pension scheme to reflect its liabilities to pensioners; and that NATS employees be guaranteed the right to remain in the CAA pension scheme in the event of there being subsequent transfers of ownership down the track. In that sense, I believe that the Minister pointed out in Committee that the trust deed is a powerful document and one that is not easily changed. However, even though such matters are subject to the trust deed, the truth is that the employer has considerable responsibility for— and, indeed, considerable control over—the funding of any pension scheme.
  Therefore, as I said on the previous occasion, if we are not able to secure an assurance on the face of the Bill, we shall have to divide the House on the issue. I hope that my noble friend the Minister will be able to consider the matter yet again. I trust that he will give us reason to believe that the confidence that we need to give the staff is the very same confidence as my noble friend Lord Whitty expressed on Second Reading when he spoke about the quality and the commitment of the staff being absolutely key to the future of NATS.
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  If we do not protect the pensions of the staff, we shall not get that confidence; and that quality and commitment will be at risk. I beg to move.
  Lord Brooke of Alverthorpe: My Lords, I support the amendment, as I did at Second Reading. However, I do not propose to repeat the arguments which I advanced then. I have considered many of the arguments proposed by my noble friend the Minister for Transport. I am sorry that he is not present at the moment to hear the points I make.
  Throughout my noble friend's comments in favour of the PPP he has spoken most passionately on occasion in favour of providing the strategic partnership with the opportunity to spread itself into the rest of the world, certainly into Europe. A number of people are therefore convinced that changes will come about through the European open skies policy and that there is a case on those grounds for a new structure to be put in place. It is interesting to note that every air traffic control organisation throughout Europe—the new PPP may wish to enter into partnerships with those organisations—is state owned. Indeed, one of the PPPs which is bidding to take over NATS is being advised by three state-owned organisations, all of which will have state funded pension arrangements.
  If the organisation appears attractive from a business point of view, it may seek to link up, or merge, with other European organisations. Those European organisations will bring civil servants, or people who enjoy broadly Civil Service terms, to the negotiating table. Their employees will have pension arrangements backed by their respective state or country. I believe that we ought to have on the face of the Bill similar arrangements in the strategic partnership in terms of conditions of employment so that we present broadly comparable terms and a more appealing and attractive proposition for those employees in other European countries who might be reluctant to contemplate joining strategic partnerships or mergers. If we adopt a common approach on pension arrangements to include ultimately backing from the state if anything goes wrong, that would present a better business case with which to go forward in the future.
  This is a new argument which I advance, having listened to the passionate and compelling points made by the Minister for Transport. I hope that in view of the points which I and the noble Lord, Lord Brett, have made, we shall receive a more sympathetic response from the Government than we have received hitherto.
  Lord Hoyle: My Lords, my noble friend the Minister is normally extremely sympathetic to our arguments. However, his response to this matter on the previous occasion we discussed it contained much Treasury "double speak" rather than a consideration of the needs of the employees. The employees need to be reassured on this matter. I believe that my noble friend Lord Brett said that the trustees of the pension scheme are so concerned about the matter that they are prepared to go to the High Court and spend up to

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  £1 million if the assurances that are sought are not included on the face of the Bill. That shows the tremendous concern that people feel about this matter. Nothing concerns people more than the prospect of losing the benefits of a good pension scheme. They have reason to be concerned because, despite all the assurances given by my noble friend the Minister on a previous occasion—he spoke of this agreement and that agreement which do not allow changes to be made—I must remind him that the National Bus Company pension scheme did not stand the test of time. The workers of that company were sold down the river. That experience must not be repeated.
  We are not asking for the moon or for something that has not been granted before. All the relevant safeguards were put in place at the time of the electricity privatisation. People will not understand—not just Members present in the Chamber tonight—the fact that an undertaking is already on the face of the Bill for those who work on the Underground.
  On the previous occasion we discussed this matter my noble friend said that there might be fragmentation and the employers might change. That is why we are trying to reassure the employees. I believe that he used the words "more complex". But what could be more complex than the open skies policy if we are to merge with organisations in a number of different countries? Some people think—the workers in the industry think this and that is the important point—that there might already be proposals to fragment NATS as it exists at present. I hope that my noble friend will agree that these are good and extremely logical reasons why the assurance we seek should be included on the face of the Bill. Those involved in the industry cannot understand why an assurance can be included on the face of the Bill for those who work on the Underground but not for air traffic controllers. That is beyond me. I hope that my noble friend will be sympathetic to my arguments and will agree that the assurance we seek should be included on the face of the Bill.
  Lord Clinton-Davis: My Lords, I entirely accept the arguments put forward by the noble Lord, Lord Hoyle. If my noble friend adduces the argument that this proposal has been put forward without adequate consideration—although I am not sure that he will—I assert that that would be entirely wrong. The lawyers who have advised those who have tabled the amendment have said specifically that the proposal is perfectly all right. Therefore my noble friend puts forward that argument at his peril. I take the view that it is important that the employees should have confidence in the Government. The proposal is the way to ensure that. There is no other way. That being the case, I hope that my noble friend will accede to the arguments which have been forcefully made by my noble friends tonight.
  Baroness Thomas of Walliswood: My Lords, the noble Lord, Lord Brett, in moving the amendment, reminded the House that in Committee a similar amendment was tabled in my name. I continue to think that he received rather better advice in tabling his
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  amendment than I did. That is why I have not resubmitted it. It is right and proper that we should support him in his endeavour. I do so because it is a matter of justice. Those whose working conditions are altered through no desire of their own should have protected one of their most valuable assets; namely, their pension. That should be clearly stated on the face of the Bill. I hope that we can convince the Government that that is the correct approach to take in this case.
  Lord Berkeley: My Lords, I support the amendment. I pick up a point made by my noble friend Lord Hoyle about the National Bus Company employees. I recall that when my right honourable friend the Deputy Prime Minister was an opposition transport spokesman he campaigned long and hard against the Tory plan which many of us felt sold the pensions of those employees down the river and allowed the fund to be raided on privatisation. The fact that it has taken my right honourable friend three years since the election to achieve anything in this regard shows how hard he has tried. My gut feeling is that is probably because the Treasury fought long, hard and perhaps "dirty" to stop that happening. I believe that employees are suspicious of the Treasury not wanting the measure we are discussing. However, as my noble friends have said, the amendment seeks to safeguard the pension; of a valuable set of employees at a time of great uncertainty and should be taken extremely seriously. As I say, I support the amendment.
  7.30 p.m.
  Lord Brabazon of Tara: My Lords, I am grateful to the noble Lord, Lord Brett, for explaining once again his amendment on this issue. I well remember the subject of pensions being discussed during every privatisation. I sat through a good many of them when I was on the other side of the House. Therefore, for the life of me I cannot understand why the Government are so resistant to putting an amendment such as this on the face of the Bill.
  Furthermore, I am most grateful for some briefing that I have received from the IPMS, the union responsible for air traffic controllers, which, like the noble Lord, Lord Hoyle, and others, is so concerned about this matter. The trustees of the Civil Aviation Pension Scheme are prepared to make available up £l million for legal action as regards this issue. It must surely be an issue of major concern to the Government.
  I do not intend to rehearse all their arguments, but I have received a detailed response rebutting many of the points made by the Minister in Committee. I look forward with great interest to what the Minister has to say in reply to this amendment. My inclination is to support the noble Lord, Lord Brett.
  Lord McIntosh of Haringey: My Lords, my starting point now, as at Committee stage, is entirely consistent with what the noble Lord, Lord Whitty, said at Second

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  Reading. Nobody can value the staff of NATS more than we do; nobody can feel more strongly than we do that they deserve proper treatment in every respect, not just as regards pensions. However, they deserve proper protection in particular for their pensions.
  We have reflected on the points made in Committee. I can assure noble Lords that we have done so in great detail. Pensions affect us all. I can well understand why the issue is so important to NATS employees. We fully support the need to protect the pensions of NATS staff and we would not do anything to put them at risk.
  I understand the issue of confidence to which the noble Lord, Lord Brett, refers; namely, that these fears were very real throughout the privatisations of the 1980s and early 1990s. If I were the noble Lord, Lord Brabazon, I would not refer to them in quite such a cheerful way. During those years tens of thousands of public servants passed from the public sector to the private sector without adequate reassurance about how their pensions would be protected. Sometimes they were denied access to a pension scheme as good as the one they were leaving. Sometimes they were confronted by invidious choices about what to do with their accrued service in the public sector pension scheme, which meant that one way or the other they would loose.
  In three privatisations—coal, electricity and rail—the previous administration used primary legislation to give statutory protected person rights to employees in those industries regarding their access to occupational pension schemes after transfer to the private sector. In every other case no such protection was given and the range of outcomes was extremely variable. Noble Lords will remember the privatisation of London Buses. I take that as a particular example of the bus industry generally to which the noble Lord, Lord Berkeley, referred. London Transport staff were forcibly separated from their pension scheme with no effective safeguards as to the quality of its replacements.
  That was the legacy we inherited in 1997. We set to work on reform. In 1998 interim new guidance was issued by the Cabinet Office under the title "Better Quality Services". This re-emphasised the importance of protecting staff pensions in restructuring involving private sector partners and required that the quality of that protection should be a factor in assessing bids for partnership. Then, in June 1999, the "wicked" Treasury issued definitive guidance under the title "A Fair Deal for Staff Pensions" which was subsequently incorporated into broader guidance on the treatment of staff by the Cabinet Office at the beginning of the year.
  The object of these reforms was perfectly simple: to take the fear out of public sector reform and sales as far as pensions were concerned and to set a common standard of protection which all projects should pass. What we have now is a comprehensive framework of protection which represents a huge improvement in the standard of treatment of staff. It is a fair deal not
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  only for the staff, but also for the private sector businesses bidding to enter into partnership to deliver public services.
  That is the background against which we have looked at the NATS employees. Our common goal is to reassure NATS staff about the pensions they have a right to expect in their retirement. I believe that I can give the reassurance which is needed without the need for amendments to the Bill.
  Perhaps I may explain how. The Civil Aviation Authority Pensions Scheme is to be amended in order to make it possible for staff employed by the PPP to remain members of that scheme. Technically, the CAAPS is already a centralised scheme for non-associated employers because Highlands and Islands Airports Limited is a non-associated employer within it. Amendments to the scheme are necessary to reflect requirements such as the elimination of cross-subsidy which is now much more relevant given the much greater size which the NATS PPP section would have within CAAPS.
  That means that staff will continue to enjoy the benefits that they currently receive. They will be able also to enjoy such new benefits as are agreed from future surpluses. They may also draw some comfort from belonging to an excellent public sector scheme, one that is very comfortably funded. For example, at the most recent evaluation of CAAPS on 31st December 1998, the minimum funding ratio was in excess of 190 per cent. Since the MFR represents what I might call the statutory floor for the funding of pension schemes, a funding ratio of 190 per cent represents a substantial excess. As regards benefits, pensions in payment are index-linked and pension benefit is calculated not just on base salary, but includes overtime and certain other fluctuating remuneration.
  Perhaps I may digress to cover the position of current pensions and deferred pensioners. I can assure the House that the position of those two groups will remain unaffected by the PPP. They will remain in CAAPS; they will be in the CAA section of the scheme, which will also include current CAA staff. They will continue to receive benefits in the same way as they do now.
  Returning to the NATS public/private partnership, we have made it very clear to all those bidding to be our strategic partner in the PPP that securing that current staff can continue to participate in CAAPS is a fundamental condition of being considered for that role. In addition, we will put into the strategic partnership agreement a binding commitment, enforceable at law, that guarantees the continuation of that right on terms at least as favourable as those now existing.
  Then there is the protection of pensions that exists under the law of the land, such as the pensions Acts of 1993 and 1995. These provide, among other things, protection for accrued benefits and funding levels.
  A further level of protection exists in the CAAPS trust deed and rules to which my noble friends have referred. These are unusually restrictive and protective

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  of members' interests. Although it may not always have been the case, it is now universally accepted and buttressed by statute that accrued rights—that is to say, the pension which an individual has earned by each day at work—cannot be adversely affected by amendments to pension schemes. By contrast, it is entirely usual for the sponsoring employer of a pension scheme to have the ability to reduce the level of benefits for future service such as prospective benefits. However, no employer who participates in CAAPS has that power because of the restrictive power of amendment in the trust deed which provides that amendments cannot be made to reduce accrued or prospective benefits. When this restrictive power is allied to the continuing interest of the Government in the PPP as shareholder, quite apart from the express contractual provisions in the strategic partnership agreement, l believe that the House will agree that there is a very substantial set of protections for the current NATS staff.
  Those who argue for statutory protection—additional protection on the face of the Bill—accept these points. But they go on to make two other claims: first, that it would have the value for NATS staff of offering them firmer assurances than those that I have just outlined; and, secondly, as has been argued tonight, that the proposal is precedented in past privatisations and indeed in Clause 243 of the Bill for Underground railway staff in London. That is true, but it is not the whole story. Let me deal with the issue of London Underground.
  The case is much more complex than that of NATS. In the case of NATS, we are arranging for a once-and-for-all transfer of the company to the private sector. There is no break-up of the company. There is no reorganisation of the industry into a number of parts, so there is no need for provision to deal with the subcontracting that occurs in the railway industry. There is no provision for the return of some parts to the public sector. Nor are the trust deeds of the two schemes or the arrangements for changes to those deeds comparable—the power of amendment to the London Underground deed is not as restrictive as with CAAPS. In particular, unlike CAAPS prospective benefits could be adversely changed.
  Lord Brett: My Lords, I am grateful to the Minister for giving way. My question relates to the PPP a year or two down the track. A policy of the strategic partner of the PPP might be to shed responsibility for some of the airports on the ground that they are the less profitable parts of the NATS empire. If that related, for example, to Aberdeen, Edinburgh or Glasgow, the staff therein are likely to find themselves required to become employees of the new employer. Where would they fit? Thai is exactly the shedding the Minister described in respect of London Transport.
  Lord McIntosh of Haringey: My Lords, I shall come to that. It is a significant point.
  Let me deal with the issue of protection beyond the PPP and the TUPE issue, which I believe is what my noble friend refers to. Yes, there is ultimately the
  554
  possibility of transfer of staff beyond the PPP. But, first, we fully intend to remain a partner in the PPP. Secondly, we are obliged to do so by the terms of the Bill. Thirdly, if that position were to be changed in the future it could be done only with the express authority of Parliament. In other words, it would have to be the affirmative resolution of both Houses. Finally, for as long as the Government remain a partner, the PPP remains intact and the protections on pensions remain intact.
  Because CAAPS is a centralised scheme for non-associated employers it is perfectly possible—it would be our intention—that any disposal of the kind to which my noble friend Lord Brett refers would be on the basis of the new organisation being a non-associated employer on the same basis, and with the same terms and conditions, as exist at present. I hope that that is a full reassurance.
  I turn now to what my noble friend Lord Brett said at the conclusion of his speech. I am sorry to take so long but it is clearly important and everyone is rightly concerned about this. He divided his arguments into the political and the substantive. He said that even if everything I said was right, it would not convince the staff. Everything that I have said is right and it is, of course, our responsibility and everyone's responsibility to seek to convince the staff.
  He went on to say that even if everything I said was right, there are substantive issues. He talked about the fund of £1 million which the trustees have to challenge the issue in the courts. I understand that. It is a highly unusual procedure but they are entitled to do it. I do not for a moment say that they should not. I am not claiming that that would delay or hinder the delivery of the PPP. That is not my argument. My argument is that on each of the four points which the trustees challenge—my noble friend Lord Brett set them out rather quickly and I am relying on my notes— I can give an assurance that the existing Bill without amendment meets those points: first, that the employer contributions are sufficient to provide the protection which is required; secondly, that the benefits are protected—I have made that clear on existing and prospective service; thirdly, that the funds are available to meet the liabilities—I made that clear when I talked about minimum funding requirement—and, finally, that the rights would remain on transfer of ownership. I have made that commitment as well in what I have said.
  So on what my noble friend Lord Brett calls the substantive points, as well as the political points, the Government believe that the employees of the National Air Traffic Service are fully protected. I have tried hard today to explain the Government's position. There is nothing between us on the aims of our policy. We all want to safeguard the pension entitlements. We have looked in detail at the statutory route as we promised the House we would do. We do not think that it is necessary to have an additional statutory protection on the face of the Bill because there are safeguards in existing legislation. Our commitment stands to the policy in the Fair Deal document, in the CAAPS trust deed and in the strategic partnership

  555
  agreement. My noble friends have asked for a conspicuous and unambiguous assurance. I hope that they will feel that I have given it unambiguously.
  Lord Brett: My Lords, I am grateful to the Minister for that detailed explanation. I am grateful for his attempts to reassure the staff of NATS. As we speak there are probably some 300 NATS staff on duty at the West Drayton centre and Heathrow. As I listened to the Minister's explanation I tried to think how they would react. As the noble Lord rightly says, we have a responsibility to convince them, whatever the substantive arguments might be.
  The Minister began by going through the litany of previous pension issues which had created this fear—and the fear is real. I apologise for having broken the flow of his contribution by asking what happens with sell-ons. It seems to me that that puts staff in a similar position to London Transport staff, who are being given on the face of the Bill protection not available to NATS staff. I heard the reassurances. It will clearly not cost the Government anything to put this provision on the face of the Bill given the strength of the assurances.
  Air traffic controllers speak even more quickly than I do but with rather less volume; they talk to pilots in clipped sentences. The phrase "He protesteth too much" comes to mind. I am sure that my noble friend will say that this is a piece of legislation of no cost to the Government and of reassurance to the staff. The only element of cost arises from the £1 million set aside for a legal challenge, the response to which is bound to cost the taxpayer several million pounds. Air traffic controllers are very logical individuals. I am not convinced that they would not say in sum total that there is no problem in putting such a provision on the face of the Bill. I heard no reason why it should not be on the face of the Bill. I feel, therefore, that I should be doing a disservice—
  Lord McIntosh of Haringey: My Lords, before my noble friend finally makes a decision, I hope that he will do so on the content of the argument rather than on the issue of confidence. He will recall—I spared the House this today—that his amendment contains a series of conditions included in subsections (1) to (13), previously annotated (a) to (m). I went through those in Committee and demonstrated one after the other why each was unnecessary. Does my noble friend want me to repeat that as an intervention in his speech? Let me assure my noble friend that that argument is as true now as it was then.
  Lord Brett: My Lords, if the Minister were to do so, my colleagues on these Benches, or noble Lords from the Opposition Benches, might wish to quote extensively from a document in rebuttal which has been circulated. That would simply extend the debate considerably.
  The Minister's final two sentences persuade me that we have to take the opinion of the House.
  7.49 p.m.
  On Question, Whether the said amendment (No. 70A) shall be agreed to?
  *Their Lordships divided: Contents, 78; Not-Contents, 77.

  Division No. 3

  CONTENTS

  Addington, L.

  Lyell, L.

  Anelay of St Johns, B.

  McNally, L.

  Astor of Hever, L.

  Maddock, B.

  Attlee, E.

  Mar and Kellie, E.

  Barker, B.

  Miller of Chilthorne Domer, B

  Berkeley, L.

  Monson, L.

  Blatch, B.

  Newby, L.

  Brabazon of Tare, L.

  Northbrook, L.

  Bradshaw, L.

  Northover, B.

  Brett, L. [Teller]

  O'Cathain, B.

  Brooke of Alverthorpe, L.

  Oakeshott of Seagrove Bay, L.

  Brougham and Vaux, L.

  Onslow, E.

  Burnham, L.

  Park of Monmouth, B.

  Byford, B.

  Phillips of Sudbury, L.

  Clement-Jones, L.

  RazzalLL, L.

  Clinton-Davis, L.

  Redesdale, L.

  Cocks of Hartcliffe, L.

  Rennard, L.

  Colwyn, L.

  Renton, L.

  Cumberlege, B.

  Roberts of Conwy, L.

  Evans of Parkside, L.

  Rodgers of Quarry Bank, L.

  Falkland, V.

  Roper, L.

  Gardner of Parkes, B.

  Russell, E.

  Geddes, L.

  Scott of Needham Market, B.

  Gibson of Market Rasen, B.

  Seccombe, B.

  Goodhart, L.

  Sharp of Guildford, B.

  Goschen, V.

  Shaw of Northstead, L.

  Greaves, L.

  Shutt of Greetland, L.

  Hamwee, B.

  Smith of Clifton, L.

  Hanham, B.

  Stoddart of Swindon, L.

  Hanningfield, L.

  Swinfen, L.

  Harris of Greenwich, L.

  Thomas of Walliswood, B.

  Harris of Richmond, B.

  Tordoff, L.

  Hogg, B.

  Trefgarne, L.

  Howe, E.

  Turner of Camden, B.

  Hoyle, L.

  Vivian, L.

  Jacobs, L.

  Waddington, L.

  Jopling, L.

  Walmsley, B.

  Lea of Crondall, L. [Teller]

  Watson of Richmond, L.

  Luke, L.

  Williams of Crosby, B.

  NOT-CONTENTS

  Acton, L.

  Desai, L.

  Allenby of Megiddo, V.

  Donoughue, L.

  Amos, B.

  Dormand of Easington, L.

  Andrews, B.

  Eatwell, L.

  Archer of Sandwell, L.

  Elder, L.

  Ashton of Upholland, B.

  Farrington of Ribbleton, B.

  Bach, L.

  Faulkner of Worcester, L.

  Bassam of Brighton, L.

  Filkin, L.

  Bernstein of Craigweil, L.

  Gale, B.

  Billingham, B.

  Gilbert, L.

  Blackstone, B.

  Goudie, B.

  Borrie, L.

  Gould of Potternewton, B.

  Bragg, L.

  Grabiner, L.

  Brennan, L.

  Graham of Edmonton, L.

  Brookman, L.

  Greengross, B.

  Burlison, L.

  Grenfell, L.

  Carter, L. [Teller]

  Harris of Haringey, L.

  Chandos, V.

  Harrison, L.

  Cohen of Pimlico, B.

  Haskel, L.

  David, B.

  Hayman, B.

  Davies of Coity, L.

  Hilton of Eggardon, B.

  Davies of Oldham, L.

  Hollis of Heigham, B.

  557

  Howells of St. Davids, B.

  Ramsay of Cartvale, B.

  Hughes of Woodside, L.

  Rendell of Babergh, B

  Hunt of Kings Heath, L.

  Renwick of Clifton, L.

  Irvine of Lairg, L. (Lord Chancellor)

  Sainsbury of Turvilie, L.

  Sewel, L.

  Kennedy of The Shaws, B.

  Shepherd, L.

  Kirkhill, L.

  Simon, V.

  Lipscy, L.

  Simpson of Dunkeld, L.

  Macdonald of Tradeston, L.

  Stone of Blackheath, L.

  McIntosh of Haringey, L. [Teller]

  Symons of Vernham Dean, B.

  Taylor of Blackburn, L.

  Tomlinson, L.

  McIntosh of Hudnall, B.

  Turnberg, L.

  Mallalieu, B.

  Warner, L.

  Massey of Darwen, B.

  Whitaker, B.

  Nicol, B.

  Whitty, L.

  Pitkeathley, B.

  Woolmer of Leeds, L.

  Prys-Davies, L.

  Young of Old Scone, B.

  [*The Tellers for the Contents reported 78 votes; the Clerks recorded only 77 names.]
  Resolved in the affirmative, and amendment agreed to accordingly.
  Lord Bach: My Lords, I beg to move that consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begin again not before 8.57 p.m.
  Moved accordingly, and, on Question, Motion agreed to.

  National Health Service
  8 p.m.
  Lord Harris of Haringey Lord Harris of Haringey rose to ask Her Majesty's Government what arrangements will be made to ensure that, if community health councils are abolished as is envisaged in the National Health Service plan, the new arrangements for empowering National Health Service users and the new patient advocate and liaison service will be independent, and will be perceived as independent, of the local National Health Service structures.
  The noble Lord said: My Lords, in introducing this short debate, I should declare that I was director of the Association of Community Health Councils from 1987 to 1998. That experience has of course meant that I am as aware as anyone of both the strengths and the weaknesses of the current arrangements.
  It is perhaps worth reminding your Lordships that CHCs were established in 1974 to represent the public's interests in the health service. They are unique institutions. They comprise up to 24 members, and only a civil servant with a particularly bad hangover would have devised the detailed composition: half appointed by the locally elected councils for the area concerned; a third elected by local voluntary organisations; and the remaining sixth appointed by the regional offices of the NHS Executive.
  They are the only bodies in the health service which elect their own chair. They have a national body recognised in statute, and that in turn has a democratic governance structure. CHCs act as the independent patients' watchdog on every aspect of patients'
  558
  experience in the NHS. They have a legal right to be consulted by health authorities on major changes in the NHS and can refer major issues for decision to the Secretary of State. They represent the views of local communities in the planning of their local health services and monitor the quality of the services provided, using their rights to visit and inspect NHS premises.
  The best CHCs are highly effective in what they do. Plenty of examples can be cited where they have made health authorities or NHS trusts think again. At a local level in the NHS they fulfil the role commonly ascribed to your Lordships' House in respect of legislation from another place, requiring governments to think again and to review what they are proposing. They have tested proposals. No doubt that has inconvenienced over-eager managers. However, the consequence of the work of CHCs has been that proposals for change have been made more robust and health services are better as a result.
  Critically, they also support patients and carers who have complaints or concerns about the NHS. Locally, they are able to integrate the various strands of the work that they do, ensuring that the lessons learnt from monitoring and from complaints work informs their input into service planning. As a result, CHC members are often better informed about what is happening in local services than trust or health authority non-executives or even the managers responsible. On a national level, CHCs network so as to promote best practice and learn the lessons of the bad from across the country with the capacity to raise issues of wider concern with the Department of Health.
  All that work is now under threat. One line of the National Health Service plan proposes the abolition of CHCs. I am a great supporter of the NHS plan. Indeed, it was extremely widely welcomed in your Lordships' House and by those involved in the health service. It provides the means to modernise the service and genuinely to provide a better service to the public. Therefore, it is a pity that the plan is flawed in its proposals to involve patients.
  The plan proposes that a patient advocate and liaison service, to be known as PALS, in each NHS trust will assist patients and their families in resolving their concerns. Each trust will also establish a patients' forum and health authorities will appoint a citizens' advisory panel. Finally, local government will be given the power to scrutinise health services in their area and to take over the power of referring major changes to the Secretary of State.
  However, those arrangements have the effect of fragmenting the work of CHCs across a range of bodies. And it is difficult, if not impossible, to see how trends and issues will be picked up and integrated at local level, let alone regionally or nationally.
  Of even more concern is the fact that the new arrangements will not be independent of the local NHS. The independence of CHCs has been the key to their effectiveness. They are able to speak frankly in the interests of patients and the public. That is essential

  559
  in ensuring the confidence of individuals who may have complaints or who may simply want to express their views without feeling that any perceived criticism will affect adversely how the service treats them in the future.
  I believe that that is critically important. I am sure that my noble friend the Minister will make much of the new PALS service. I recall that in a former existence he was a great proponent of patient advocacy schemes based within hospitals. However, if such services are based within the service itself and are accountable to the chief executive of that service, they will neither be independent of the service nor, perhaps even more importantly, will they be perceived as independent by the people who will need to use it.
  I am sure that they will be useful as a type of customer relations trouble-shooter. Of course, in that respect the service in Brighton is cited as a beacon. It has done good work, although I am told that, because of staff sickness, the scheme has not been functioning for the past 10 months. However, in any event let us be clear that the new PALS will not provide a true advocacy service.
  As an illustration, one CHC chief officer told me of an incident earlier this week when a man came into the CHC office to inquire whether he could access his medical records to further his complaint against a local trust. The trust had told him that that was not possible because he was in the process of making a complaint against it. He was of course told, as was the trust, that that was nonsense. However, what confidence would that person have had in a so-called advocacy service based within that same trust?
  Similarly, the new patients' forums and advisory councils will not be truly independent. They will be hand-picked. The people likely to raise the most challenging issues will not be selected. And even if they are not hand-picked, the public are unlikely to have confidence in such an arrangement because the members are appointed by the authorities and trusts concerned.
  Moreover, the people who serve on the forums and panels will receive advice only from within the authority or trust concerned, and—let us be clear about this—they are unlikely to be advised to raise or push an issue that the authority or trust will find difficult. They will be provided only with information which is deemed appropriate and will certainly not be given the ammunition to be truly effective.
  Personally, I support the role envisaged for local authority scrutiny committees. At least for the Labour Party, the party whipping system does not apply on such committees. The proposal is a natural extension of the role of local councillors as community advocates. However, councillors will be effective in that role only if they are properly supported and knowledgeably and independently advised. Supported by the CHCs, local authority scrutiny committees would be formidable scrutineers of local NHS developments. Unsupported, they may end up being rudderless and uninformed.
  My time is nearly up. I am conscious that CHCs vary. Some are very good, a few are poor, and a handful are, frankly, dysfunctional. The most charitable explanation for the proposals contained in the NHS national plan is that CHCs need to be abolished in order to deal with the dysfunctional handful. If that truly is the explanation, there is a danger that all the good work will be lost as well.
  I have yet to hear anyone outside the Government support the proposals. They certainly cannot support them if the new arrangements are seen as not being independent of the local NHS and, what is more, there is no mechanism to integrate the lessons learnt from the various aspects of the work currently done by CHCs. Perhaps the Minister will tell me how many representations have been received supporting the Government's proposals in respect of CHCs and patient representation. Indeed, how many representations putting forward those ideas were received in the consultation that preceded the production of the national plan?
  However, if the removal of the dysfunctional is the most charitable explanation, the one that everyone will believe is that CHCs are being abolished because they are challenging, because they are an effective irritant and because they make people think. The abolition of CHCs will be seen as a nasty outbreak of Richmond House control-freakery and, as such, will detract from the excellence of the rest of the national plan.
  There is no need for that. Instead, let us ensure that the new arrangements are genuinely independent of local NHS structures and that robust mechanisms are in place to ensure that the various strands of work are integrated together effectively. If that means reinventing CHCs, so be it. But we should not throw away a vital mechanism that not only ensures a viable voice for service users in the new NHS but, as a result, delivers a better service because of the robust criticisms and the testing of proposals to all the many millions of people who rely on the NHS and who require an independent voice to represent their interests.
  8.10 p.m.
  Baroness Cumberlege: My Lords, it gives me great pleasure to congratulate the noble Lord, Lord Harris of Haringey, on initiating this debate. As a former director of the Association of Community Health Councils, there can be nobody who knows the inside workings of CHCs better than he does, although it may be that the Minister knows them quite well because I believe that he started his career as a chief officer of a CHC.
  My experience has been very much on the other side. I was chair of a district health authority which ran 16 hospitals and I was also chair of a regional health authority. Both those authorities have been the subject of some fairly acerbic criticism from CHCs. Not a comfortable experience but character-building.
  The noble Lord, Lord Harris, said that one argument for abolishing CHCs is that they are not all perfect; and of course, we know that that is true. As a regional chairman, I met regularly with the CHCs in

  561
  my region. I knew that their performance was variable and I believe that that is true today as well. But GPs, primary healthcare teams and hospitals are variable. Through their modernisation programme, the Government are determined to improve that variability, achieve consistency and make the performance better. So here is an opportunity not for the abolition of CHCs but for strengthening and modernising them.
  The commission on the NHS, chaired by Will Hutton, which I think is a brilliant piece of work, shows how that can be done. Indeed, there was an extremely interesting debate the other evening at the King's Fund on his proposals which found a large measure of agreement.
  I have no doubt that in replying to this debate, the Minister will say how very committed the Government are to involving patients and the public in the NHS. That is a principle which I strongly endorse. In my report, Neighbourhood Nursing, which is now 14 years old, I advocated the setting up of local healthcare associations. They were to influence policy and to monitor primary care because the CHCs did not have any locus in that area. So the principle is absolutely right; it is the Government's method which is wrong.
  To kick out an uncomfortable bedfellow because he or she is awkward is a sign of weakness. It is a sign of an Administration who are increasingly centralist, controlling and not sufficiently secure to brook independent criticism. I believe that a plan which neatly removes all the difficult decisions, like hospital closures, from the Secretary of State to a faceless panel, is quite cowardly and a negation of duty.
  In the NHS plan, the Government have fragmented the previous powers and responsibilities of the CHCs so effectively that they have made the system impotent. I could go through the proposals one by one. PALS will be just that—hired, fired and paid for by the trusts, so they will have to be pally. The Independent Local Advisory Forum is a mere sounding board with no teeth. The patients fora are blinkered, as they will see only the trust's position and will not be able to view, for example, how limited access to out-of-hours GPs affects the A&E departments. I do not share the enthusiasm of the noble Lord, Lord Harris, for the local authority scrutiny panels. I started my career in local government and I have been extremely sad to see its role diminished. But in this case, the scrutiny which comes through the local authority will be neutered through the whipping system. But worse—and this worries me much more—that may jeopardise the joint working and future establishment of care trusts.
  My time is up so I shall ask just a few questions. Under the new arrangements, how can local communities hold the Secretary of State to account? Is there to be consultation on the criteria permitting referral on major change? Will councillors sign a code of conduct on political impartiality? How will patients or relatives who wish to complain access competent, truly independent support in doing so? Finally, are the proposals to be carried through on a negative order without proper consultation?
  8.14 p.m.
  Baroness Barker: My Lords, I too thank the noble Lord, Lord Harris of Haringey, for giving us this most welcome opportunity to debate what I believe is a very substantial flaw in the NHS plan; namely, a fundamental confusion within the plan about what the patient advocate and liaison service is intended to do.
  It may be useful if I were to bring to your Lordships attention a definition of advocacy which was drawn up some years ago by the Institute of Public Policy Research and the members of a number of leading voluntary organisations, including the noble Baroness, Lady Pitkeathley:
  "Citizens Advocacy is a one-to-one ongoing partnership between a trained advocate and a person who is not in a strong position to exercise or defend his or her rights, and is at risk of being maltreated or excluded. The citizen advocate must be free of conflicts of interest with those providing services to their partner and should represent the interests of their partner as if they were their own".
  I offer that definition because nowhere in the NHS plan is advocacy actually defined. I believe that what has been proposed in the NHS plan is a confusion between three different aspects: information, support and advocacy or representation.
  The new PALS system is described variously on pages 91 and 92 in terms of information, facilitation, negotiation and support for complainants. But those are very different matters which require very different skills. There is a significant difference between a service which eases the path of hospital patients through an organisation's structures and services and one which enhances and supports the ability of people—patients, families and carers—to negotiate the wider NHS, an understanding of their rights as users and their ability to obtain redress if things go wrong.
  PALS appears to deal only with patients in hospital, not patients in primary or rehabilitative care. Such patients usually need the following things. First, they need practical information about the services of a hospital in easily accessible formats. They need information about aftercare, benefits and adaptations.
  If the proposed system is to work, the integrity of the information which is provided must be assured. There must be no conflict of interest by dint of those responsible being employed by the hospital.
  Secondly, patients need support. Lots of patients just need a bit of help to get simple things done. Reading the plan, I believe that that is what the Secretary of State really intended this proposal to achieve. But that is not advocacy. I am not being pedantic here. We are talking about a major structural change on a basis which is wholly unclear.
  Here is a tremendous need for advocacy. I cite one example—language difficulties. Many patients suffer simply because of language difficulties. In certain boroughs in London, more than 130 languages are spoken. I cannot see how one hospital or one NHS facility can meet that sort of need. And yet there is

  563
  scant mention in the plan about the organisations which have that expertise; namely, voluntary organisations.
  I have two questions for the Minister. First, why is there no mention in the plan about national standards and criteria for evaluation of the PALS system? Secondly, if the Minister accepts the need for independence and the advocacy skills which exist outside the NHS, is there a case for going down a route similar to that of the community legal service and establishing an NHS advocacy standard to which a number of groups, which prove that they are up to the required standard, could bid to provide that service?
  The major flaw is that this does not cover general practice or even PCTs. By far the largest number of incidents in the NHS are in the community services. Will the proposals for PALS and patient forums ever reach down to that level, which is the level at which most people experience the NHS?
  In conclusion, I do not think that what is on offer is PALS. It is PILS—a patient information liaison service. If the Minister's department really wants advocacy, then the voluntary and statutory sectors will need to be "PALS" together.
  8.19 p.m.
  Lord Rea: My Lords, the NHS has never been a very democratic organisation and when the last vestige of local authority control went, along with the medical officers of health in the 1973 Act, the community health councils were created in part to compensate for that deficit. They have held the fort for 26 years against a trend towards increasing top-down control on an extremely limited budget.
  I am delighted that the NHS plan proposes to begin to reverse the trend of centralism. Each CHC usually has only one executive secretary or chief officer, with some clerical help and very modest premises. Nevertheless, they have had notable local successes. They act as patient advocates, similar to the proposed PALS or PILS—one can think of PILS meaning something else too—but their main achievements have come from their ability to contribute to the planning and implementation of local services. That is because it is the statutory duty of health authorities and trusts to consult community health councils on proposed changes and to represent the views and needs of their local population.
  By having a "shop front", CHCs are easily accessible. Through listening to the problems brought to them, as well as to the often expert views of their members, CHCs are able to help health authorities and trusts to fine tune their services to the needs of their community. Those successes can range, for example, from the provision of a care and occupation centre for young adults with learning difficulties to the creation of a small community hospital for low dependency patients in a deprived neighbourhood. Both those examples come from Lambeth, just across the river. It is interesting that in neither of those cases was health service money initially involved but local social
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  services and education committees in the first example and the Department of the Environment, through an inner-city regeneration programme, in the second.
  Because of their independence, CHCs can mobilise funding from different branches of local and central government as well as from the voluntary sector. In Lambeth the CHC facilitated joined-up government long before it became a trendy catchphrase. These particular gains were small in themselves but, accumulating throughout the country, CHCs have helped to create a more caring and cost-effective service. Among the plethora of organisations looking after the interests of patients which are mentioned in chapter 10 of the NHS plan there is no provision for a body with the independent, proactive role which the CHCs have. They also represent whole communities rather than advocate the needs of particular citizens. In paragraph 10.27 CHCs are castigated as being unelected. However, the all-party scrutiny committees of local authorities which are proposed will consist of councillors with many other duties, while CHC members have a dedicated role in looking after the health interests of their communities.
  I hope very much that my noble friend will be able to explain why community health councils were not consulted before the NHS plan was published, and that the sentence in paragraph 10.35 which states that "CHCs will be abolished" will be replaced by a sentence which includes the words, "CHCs will be strengthened". It does not matter very much if they continue with their name. The name perhaps might be changed but the function, status and expertise of the CHCs should be preserved. If the Government want guidance as to how CHCs could be preserved and strengthened, they have only to look at the appendix in Will Hutton's report on the Health Commission entitled Life for Health.
  8.24 p.m.
  Baroness Pitkeathley: My Lords, I too thank the noble Lord, Lord Harris, and declare an interest, not only as a long time champion of user and carer recognition in health and social care but also once upon a time as chief officer of a community health council.
  I have much admired the work of CHCs and also the work of the Association of Community Health Councils for England and Wales, of which the noble Lord, Lord Harris, was a much respected chief executive for many years. Fan though I am of CHCs, we must acknowledge, as other noble Lords have done, that they vary tremendously in the quality of work they do and in their effectiveness. As we know, the reasons for that variability are many, but we have to acknowledge that such variations exist.
  Moreover, CHCs are now 25 years old and it is entirely right that the role and function they perform on behalf of patients is reviewed. I do not want to argue tonight necessarily for the retention of CHCs but rather to emphasise the importance of ensuring that the patient voice in the NHS is as strong as

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  possible and to give examples of factors which must be taken into account when any new arrangements are being considered.
  Perhaps I may acknowledge the huge progress which has been made in recognising patients' needs in recent years. No one can possibly pretend that when it was set up the NHS put patients first. But today the experience of patients and their families is valued. Even since 1974 when CHCs were established, the culture around recognising the importance of patients has changed radically.
  Any system for improving patient experience of the NHS must first and foremost concentrate on empowering patients and making them feel centrally involved in their own health care. Public advocacy is therefore absolutely crucial. The Government must be sure that any new arrangements they consider will strengthen, not weaken, that advocacy function. In addition, as we have heard many times, one of the criticisms of CHCs is their variability, so we must not make that problem worse. I am all in favour of allocating more power to patient organisations which are run by patients, but clarity is needed about how they will relate to the NHS and to each other. This argues too for some kind of national structure or body to oversee the new system.
  Next, I should like to emphasise the importance of relating to primary care, as other noble Lords have done, as well as to trusts. As the noble Baroness, Lady Barker, reminded us, that is where most people experience the NHS. Again, the functions of the CHCs or any other body must be reviewed and care taken to ensure that primary care is not only included but given complete recognition as the most important interface between patients and the NHS.
  Concerns have been expressed regarding local authority involvement in the proposed new arrangements. That concern usually revolves around the politicisation of patient advocacy and complaints procedures. But that could work to advantage, particularly if we think about the overlap between health and social care which is so important. We are beginning to see evidence of the Berlin Wall coming down, and that could help. Above all, we must ensure that the new arrangements are not only independent but seen by patients to be independent.
  I am also concerned that so far there has been no mention of statutory rights for the new bodies. That must be addressed. Notwithstanding the more favourable and sympathetic climate in which we now operate in regard to patients' rights, we must ensure that sufficient power is vested in any new arrangements to enable the voice of patients to be as strong as possible.
  8.28 p.m.
  Lord Greaves: My Lords, not for the first time in my life, I find myself rising to support most of the eloquent case put forward by the noble Lord, Lord Harris of Haringey. I speak as a former member of the Burnley, Pendle and Rossendale Community Health Council. Perhaps I may also apologise in advance to the
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  Minister and the House. I have to catch a train and, with the present state of services, I may have to leave before the Minister sits down. If I have to do that, I promise that I shall carefully read Hansard.
  This is not the first time that central government have tried to abolish community health councils. The last time it was the Tories. One questions where these ideas, which do not appear in manifestos, come from. We all know the answer. Why is it happening? CHCs are relatively cheap. Considering the job they do, they are very cheap. They are usually representative of the local community. However, as noble Lords have said, they are varied in what they do and how they do it. I refer not only to the quality of what they do but the nature of what they choose to do in response to the circumstances as they see them. To some extent, therefore, they are seen as being untidy and messy by people who would prefer them to be a much more uniform management tool within the health service.
  Community health councils provide a wide range of information and advice and have the ability to look at health problems as a whole, including outside the narrow confines of the health service. They have the ability to look across the National Health Service at community services, hospital services and the rest, and bring them together. That is something in which the new proposals appear to be deficient.
  Community health councils are able to challenge local management; sometimes they challenge national politicians. And they do so in public. As the noble Baroness, Lady Cumberlege, said, that can be uncomfortable for those being challenged. But it is crucial and central to the whole nature of democracy. And if sometimes they embarrass or are seen to be running campaigns, that is all to the good.
  I have examples of some of the reports produced by my local community health council, Burnley, Pendle and Rossendale. One is a report on Choices in Maternity Care for Women. It was produced on the basis of finding out what those in the community, particularly mothers, wanted. A report the previous year had been on the subject of Team Midwifery. A recent report dealt with cardiology services for Burnley, Pendle and Rossendale, which has some of the highest incidence of heart disease in the country.
  Those reports are not untypical but probably unique as a selection of what a specific community health council does. That is the nature of the beast. The problem is that the role of community health councils is in many ways a political role; not a party political role; not a capital "P" political role. That is what managers in the health service are often less than comfortable with.
  A good friend of mine, a chief executive of a community health council in the West Midlands, asked me to put this question: do we really think that any of the proposed successor bodies will act as advocate for a public view that is known to be highly unpopular with the powers that be? That is the crunch of this debate.

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  A government that tries to abolish CHCs will find that the councils have a great deal of hidden support in the community and they will find it politically difficult. If they are sensible, they will listen to what noble Lords are saying tonight and reconsider their plans.
  8.32 p.m.
  Baroness Ashton of Upholland: My Lords, I too am grateful to my noble friend Lord Harris of Haringey for raising this issue and pay tribute to his work with community health councils.
  Noble Lords may recall that I am chairman of a health authority and have just completed consultations on primary care trusts, a mental health and learning disability trust and the merger of two health authorities. All that has been done with the support of the community health councils across Hertfordshire and I nominated my own community health council for a public involvement award. I trust that it found dealing with me as character-building an experience as I found dealing with its members.
  Like many colleagues in the health service, I was sorry that the demise of community health councils was heralded in the NHS plan document. I say that not because I am a huge fan of the present structure of community health councils, but because I am a huge fan of those who spend many thousands of hours volunteering in their local communities and I worry about any messages that might lower their morale.
  There is a real need to overhaul the way in which the health service interacts with its patients, carers and its local community. That is especially true at a time when the drivers for change in health demand a radical rethink of our structures, resources and our pathways of care. I support the need for radical change. But I am also conscious of the need to preserve what works and, more importantly, to understand why it works.
  Independence, real and perceived, is what gives any structure in any area credibility. Those who go to advocates must believe that they will receive impartial, confidential advice and support. And we need to retain that first and foremost in any patient advocacy and liaison service. We also need to consider what gives the patient the reassurance of independence.
  For example, as many noble Lords said, while there is a need to look at a service being on site at hospitals, we need to be careful that "on site" does not mean taking away their independence. Those offering support and advice will need to be seen to be separate and impartial, especially when advising whether or not to pursue a complaint. It is easy to see that some patients would prefer the site to be away from the hospital which provided their care.
  How organisations are funded is often the big give away when deciding on impartiality. As with other advocacy services, funding has to be separately provided and distributed without reference to the NHS organisations locally, and it must be ring-fenced. The service needs a formal and national structure, capable of lobbying on its own behalf for more resources or changes in its role. It needs clear
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  mechanisms to ensure that information it provides about service care is fed not just to the local organisations but also nationally to identify patterns and areas for attention.
  I believe—and this is where, in my experience, community health councils have faced the greatest challenge—that perceptions of independence need to go hand in hand with the importance of representation. I cannot speak for other community health councils, but I know those with whom I am most closely associated have found it difficult to attract younger members and members from ethnic minorities. It is important that, where we give a leading role to lay organisations, we ensure that they are able to represent and obtain the views of their communities.
  My final point concerns local government. The relationship between local government and health is in a very important phase. As a strong advocate of joined-up thinking, I am extremely hopeful that the partnerships we have in place between social care and healthcare, and education and health will offer real benefit to our clients. I have no difficulty in responding to local government and discussing plans with them, in fact I do so regularly. But I am concerned about how we will make sure that the views of local government on strategic healthcare changes are truly independent and do not reflect the political persuasion of any local authority.
  In Hertfordshire we have differing political views, and that is just among the labour councils. Some councils are opposed to fundholding; some now oppose primary care trusts. We need to ensure that at least we do not lose time, if nothing else, because we are caught up in a party political debate prior to an election. That point needs serious attention. Suffice to say, whatever system we put in place must be at least as good as the system we had previously and must pay tribute to those who have worked so hard in community health councils.
  8.37 p.m.
  Lord Clement-Jones: My Lords, as someone who has not sat on a CHC, I can say that we have had some notably well-informed speeches tonight. It was interesting that even those who are not wholly opposed to the Government's proposals would probably need to reinvent CHCs in order to put into effect their own proposals.
  The fact is that after 26 years of useful life, community health councils could have expected rather more consideration from a Labour government, many of whose members, like the noble Lord, Lord Harris, have links with them. We heard that from many noble Lords on the Benches opposite. Also we must thank the noble Lord, Lord Harris, for raising an extremely important issue.
  The reference to abolition of CHCs is almost an afterthought in the "Changes for Patients" chapter of the national plan. It is not difficult to unpick the proposals. The scrutiny role goes to local government, but there will be a potential conflict of interest with the increasing integration of health and social services.

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  There is also the question of how their boundaries will fit with hospital trusts. The consultation role goes to the patients' forums, but will be dependent on the good will of the hospital trust. How well will they be supported in terms of resources?
  The advocacy role will go to patients' advocacy and liaison services, but they will not be independent. The complaints role will probably go to CABs, but how will they develop the specialist expertise? All that will take place without any indication in the national plan of the resources to be allocated or the training to be given in the new roles.
  The Government's proposals generated considerable heat within my party, and were described as "fragmented" and "ill-conceived" at our recent conference in Bournemouth. The truth is that we need to integrate the various roles, not fragment them. For example, complaints help to inform scrutiny and consultation. There may well be patterns of behaviour in complaints. To discern patterns, there needs to be overview by a single local body. It is rather ironic that the national plan talks about patient empowerment and then proceeds to abolish CHCs.
  Of course, community health councils are sometimes awkward customers, but that is their merit. Independence is their key asset, as the noble Lord, Lord Harris, pointed out, especially in making complaints. They are not part of the medical establishment. No reasoned case has been made out for abolition; it is simply tagged on to the end of a chapter of the national plan. It would be better to look at some of the proposals put forward by the commission on the NHS chaired by Will Hutton in its report, New Life for Health, which we debated—thanks again to the noble Lord, Lord Harris—in June. It did not deny that CHCs had their problems. There is no legal indemnity for its members and no adequate definition of the variations in health services which entitle them to be consulted. There are differences in availability and commitment of their members, variable standards and unlimited statutory rights as health services have changed, particularly in primary care and community services.
  At the end of the day, however, the commission said that there needs to be more accountability in the NHS, not less. It suggested greater powers for CHCs, not their abolition. On Tuesday, the Secretary of State said that people have long argued that there is a democratic deficit at the heart of the NHS. That is perfectly true, but we on these Benches do not believe that abolishing the one body which currently carries out independent scrutiny is the way to cure the deficit. I prefer what his predecessor, Mr Dobson, said in 1998:
  "I look to CHCs to continue to play a role in ensuring that patient and public views are known to the NHS decision makers both nationally and locally".
  I wonder which of those quotations the Minister prefers.
  We should follow the example of the Welsh Assembly in seeking not to abolish CHCs but to make them more effective. The answer is not abolition; we need to ensure that they have adequate powers and
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  resources. At the end of the day, the abolition of the CHCs will require primary legislation. It will have to be very different from the proposals in the national plan if it is to receive support from these Benches.
  8.41 p.m.
  Earl Howe: My Lords, I should like first to express my thanks to the noble Lord, Lord Harris, for initiating this debate. I hope he will share my perception that the concerns that he has so clearly expressed are widely held both inside and outside the NHS. However, in many respects, the NHS plan is a document full of plans and aspirations with which we can all readily agree. If I had to single out the section which gives me the greatest personal grief it is that which announced the new patient advocacy service.
  Community health councils have been with us for 26 years. Depending on where you go around the country, you hear different opinions of the job they do. In some areas, the CHC is not regarded as being particularly effective. In others, such as the one near my home in the Chilterns, for example, they are highly thought of and seen as performing a useful role. But even if the way that CHCs have worked has been variable, one thing is agreed upon by everyone; the concept of CHCs is sound. A watchdog for patients keeps the NHS on its toes. And if it is to mean anything, such an organisation must be independent of the NHS and able to exercise the legal right to be heard and consulted. Without those features it will not command the confidence of the public.
  Of course it would be odd if, after 26 years, we could not identify any scope for changing or improving CHCs but what we certainly should not do is scrap them without being sure that the arrangements we put in their place retain the features of CHCs which we all value. At this stage I suspect that I am not alone in not knowing exactly how the proposed new structures will function and interact with each other.
  What strikes you immediately when you read the NHS plan is that the functions of CHCs are to be divided up between a number of different bodies. That fragmentation is bound to mean that no single body will be able to take an overview of the broader patterns which emerge from individual complaints or from problems which come to light in the provision of services. Still less will it be possible to do what the ACHCHW does so valuably at the moment in looking at failures in the system from a national perspective and feeding its views to government. From the point of view of an individual patient, it may often mean having to seek help from a number of different bodies instead of just one. That does not seem the way to achieve greater patient empowerment. Empowerment of patients depends ultimately on rights enshrined in law. At the moment, CHCs have the right to be consulted, the right to require information from health authorities, the right to inspect and report on hospital facilities and others, and the right to refer contested plans to the Secretary of State for Health. 'Those rights are valuable levers. It is all very well the NHS plan stating that patients' forums and independent

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  advisory forums will act as "sounding boards" but what does that really amount to? It looks to me like a dilution of rights, not a strengthening of rights.
  On an individual patient level, the role of an advocate presupposes a degree of genuine detachment from the organisation being criticised. I do not believe that if PALS are employed by the trusts and situated on hospital premises patients will view them as truly independent. Advocates worthy of the name must be free of any conflicts of interest, either real of perceived. They have to be in a position to take the initiative in providing support and advice and to do battle on behalf of the patient. Again, PALS seem to be a step down from present arrangements.
  I refrain from attributing any motives to Ministers for the changes they have announced. I simply say to the Minister, with considerable regret, that I believe these proposals to be a mistake. I hope that the Government will find it possible to think again.
  8.46 p.m.
  Lord Hunt of Kings Heath: My Lords, first, I thank my noble friend Lord Harris for having raised the issue and instituted an interesting debate. He led the Association of Community Health Councils with great distinction for a number of years. I have always enjoyed listening to his views about the future of patient representation and public involvement in the NHS. As the noble Baroness, Lady Cumberlege, suggested, in early 1975 I was one of the first CHC secretaries to be appointed and I found the experience extraordinarily valuable. It certainly gave me enormous insights into a wide area of NHS endeavour.
  There is no doubt that back in 1974 they were a radical step for the NHS. Never before had the NHS been required to take account of patients' views in a systematic way. There is no doubt that we owe much to the sterling work of CHC staff and members over the years. I acknowledge, as much as my noble friends Lord Rea and Lady Ashton, the noble Earl, Lord Howe, and the noble Lord, Lord Greaves, the many achievements of CHCs since their establishment in 1974–75. The noble Lord, Lord Greaves, mentioned work in relation to maternity services. I well remember conducting a survey on those services in Edgware/Hendon in the mid-1970s and I believe that it had a real impact in changing the views of the people running them.
  Therefore, there is no doubt that we can find excellent examples of work which CHCs have done and continue to do. Nor should we deny that there are examples where CHCs have not done so well. We have heard about the variable performance and my noble friend Lord Harris has acknowledged the strengths and weaknesses of CHCs. If I were to make a judgment about their achievements over 25 years, I do not believe that they have made a sufficient impact on the way in which the health service operates in terms of being sensitive to the needs of patients and the public.
  That is why, in the context of our radical reforms of the NHS, as in the NHS plan, we have decided against reforming the existing system and have seized this
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  opportunity to build a new system of patient representation and involvement. My noble friend Lord Harris referred to something completely unknown to me; that is, Richmond House freakery. That is not, as some have suggested, about getting rid of irritating CHCs which are causing problems to grey-suited managers in the NHS. Frankly, I could not stand here before your Lordships if that were the case. The fact is that our proposals are designed to do better than we have achieved in the past 25 years. I readily accept that that is the test we face in putting forward these proposals.
  I also accept the challenge of my noble friend Lady Pitkeathley to do better. I believe that we can do better both nationally and locally. At national level we have made it clear that one third of the members of the NHS modernisation board, which will help us drive through changes in the NHS, will be representatives of patient groups and frontline staff. At national level we shall ensure that, for the first time, the Commission for Health Improvement and the National Institute for Clinical Excellence, which have such crucial roles to play in the high quality service that we need to offer in future, have patient representation. So it is at local level. I believe that the combined effect of PALS, the forums which will be present in every trust and the local authority scrutiny role will be to provide a much stronger voice for the public and patients than at present, and that is how we wish the proposals to be judged.
  My noble friend Lord Harris rightly said that I am a very strong advocate of PALS. I have seen the system operate in the US and have been very impressed by the ability of patients to have direct and immediate access to people who can act on their behalf and deal with problems there and then, not via a system that takes time to operate and goes through many procedures. At present, if an NHS patient is unhappy with the service he or she receives, whether it relates to food or facilities, or the patient does not understand what is happening, or there are issues to do with the provision of clinical services, it is not clear whom the patient can approach for help and advice. We know that many patients simply suffer in silence. Some feel so strongly that they complain but often only after the event, in which case the opportunity to address the situation as it arises is lost.
  The whole point of PALS is that in future patients and their carers will be able to contact the service based in each trust. From my experience of the practice in the US, those members who are part of PALS will have direct access to the chief executive, with power to negotiate immediate solutions, where appropriate. They will also be able to put the patient and his or her carers in touch with other bodies that may be able to help, such as patient support groups or, as has already been mentioned, CABs, for assistance with formal complaints.
  My noble friend Lady Ashton and the noble Lord, Lord Clement-Jones, referred to the independence of PALS. I well recognise the issues that that raises. Our aim in developing PALS is to ensure that services respond and change to meet the needs of patients. We

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  are convinced that to achieve that PALS will need to be based in trusts and have the necessary clout to achieve change. I assure noble Lords that currently we are consulting patient groups and CHCs and drawing on the experience of trusts which already operate a scheme of this kind before we decide by whom the PALS should be employed. We are also consulting on the extent of its remit, and, in answer to the noble Baroness, Lady Cumberlege, when it may be appropriate for PALS to refer people to other sources of advice and support. I assure the House that our decision will be based on what is best for patients.
  Alongside PALS we propose that every trust, including those involved in primary care, should have a patients' forum made up of patients and their representatives who will have power to visit premises to check on standards. That forum will elect one of its number to be a non-executive director on the board of the trust. I believe that that will put patients and their needs at the heart of decision making.
  The third leg of our proposals relates to the role of local authorities. We propose that major planning decisions will be scrutinised by local authority all-party scrutiny committees, with power to refer those decisions to the new independent reconfiguration panel which will review and advise the Secretary of State on contested decisions. I believe that that is one of the most important proposals that we have put forward. I agree that since 1948 the democratic deficit has always been a problem in the NHS within the context of a national service. This system enables democratically elected local government to play a strong role in future decisions relating to the NHS, and I believe that that is to be warmly welcomed. It will strengthen the process and the connection between the health service and local people. The suggestion of the noble Baroness, Lady Cumberlege, about a code of conduct is an interesting one. I can assure the noble Baroness that as we take forward these ideas we shall have discussions with the Local Government Association.
  I was asked about funding by my noble friend Lady Ashton. We propose total funding of about £33 million per annum. A further £10 million of new money has been set aside to contribute to the new arrangements, alongside the budget of £23 million which will be freed up when community health councils are abolished. The noble Baroness, Lady Cumberlege, asked me about affirmative and negative orders. That is a matter for primary legislation which will be debated in your Lordships' House in due course.
  I believe that I have answered the question about primary care. The system relates as much to primary care as to other parts of the service. I also agree with the noble Baroness, Lady Barker, about national standards. That matter will be discussed with interested parties in the next few weeks.
  I accept that issues to do with the definition of "advocates" need to be carefully considered. We do not intend that PALS should replace existing advocacy services. The incredibly valuable advocacy services which are now available need to continue and be supported. We want to draw on expertise within the
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  existing CHC community. During the next few weeks we shall hold stakeholder meetings to discuss issues with, and hear contributions from, CHCs, voluntary organisations and patient groups.
  Both the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, suggested that we are making these changes because CHCs are awkward customers or they keep the NHS on its toes. That is not the reason. We believe that the proposals will lead to a much more effective system in which patients and the public have a bigger say in what is happening to their health service. Problems will be dealt with as they arise when people are either in hospital or are receiving primary and community care services.
  When we first talked to NHS managers who believed that CHCs might be abolished they might have been tempted to throw their hats in the air. However, when we explained the impact that PALS, local scrutiny committees and forums in trust would have the smile quickly disappeared from their faces. They recognise that what we put forward is a much more powerful and effective system of patient and public representation than we have now. In so doing, we wish to draw on the enormous contributions which CHCs have made so far; and many people who are now involved in CHCs will be extremely valuable in the context of some of the services which will replace them.
  This has been a most interesting debate. I am sure that when legislation in this area comes before your Lordships' House—we do not know when—we shall spend many more hours debating these issues.

  Transport Bill
  9 p.m.
  Further consideration of amendments on Report resumed.
  Clause 65 [Interpretation]:
  [Amendments Nos. 71 and 72 not moved.]
  Clause 66 [Air navigation: directions]:
  Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment. N o. 73:
  Page 44, line 6, leave out subsection (2).
  The noble Lord said: My Lords, in moving Amendment No. 73, I shall speak also to Amendments Nos. 80 and 81. My noble friend Lord Goschen will speak to Amendments Nos. 75 and 76. The Minister doubtless will be pleased to know that this is the final group of amendments in the first part of the Bill, dealing with air traffic control. We turn now to Chapter III, which deals with air navigation.
  Amendment No. 73 seeks to leave out subsection (2) of Clause 66. The subsection deprives anyone injured by the CAA's failure to carry out any duty imposed on it by the Secretary of State of any right of action against the CAA. The amendment restores such a right of action.
  It is a basic right that those injured by the failures of a public body should be compensated. If the Secretary of State considers the matter important enough to give

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  a direction, then it is important enough for those injured by the CAA's failure to comply to have a remedy. It is difficult to see the difference between the words "failure to carry out a duty" and "an act or omission in the exercise of performing air navigation functions".
  When we aired the amendment at the Committee stage, the Government claimed that the CAA may take a course of action in implementing a direction which is satisfactory to the Secretary of State but perceived by an individual or organisation as failing to meet the duty placed on the CAA by a direction. I regard that reply as rather weak. It is not a matter of whether an individual or organisation perceives a failure to perform a duty; it is a matter of whether the CAA has failed to perform that duty. If it has, it should be accountable for such failure, not only to the Secretary of State, but also to anyone who suffered as a result of such a failure.
  Our second amendment, Amendment No. 80, seeks to leave out subsection (7) of Clause 75. That subsection enables the CAA to charge an operator for services it does not want and does not use, even if, indeed, its aircraft cannot use them. The amendment removes that power. At Committee stage the Government claimed that aircraft might benefit from the services provided, such as maintenance of minimum separation distances, even if they failed to contact air traffic control. In these circumstances they would be using the services and would be caught by the charging provisions. Where services are genuinely not used, there is no reason why the operator in question should be charged for them. We submit that that charge would be an abuse of the CAA's monopoly position.
  Our final amendment, Amendment No. 81, seeks to remove paragraph (a) of Clause 83(2). The paragraph enables the Secretary of State to authorise detention of aircraft in respect of which default on payments occurs, even if the defaulter has sold the aircraft on. The amendment removes that power. The effect of the paragraph could be grossly unfair. How is the buyer of an aircraft to know whether there has been a default on payment in respect of that particular plane without some system of public registration of defaults relating to aircraft? Someone who buys an aircraft in good faith without notice of the default should not have to pay the previous defaulting owner's penalty. The CAA should take appropriate steps to secure payment by the defaulter.
  In comparison with other amendments debated today these amendments may be considered to be trivial, but they are important and the points they raise need to be answered by the Government. I beg to move.
  Viscount Goschen: My Lords, I have two amendments, Amendments Nos. 75 and 76, in this group. They are entirely unconnected with the other amendments in the group, but, in the spirit which I am sure the Minister will show towards my amendments, I am more than content for them to be contained in this somewhat diverse group.
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  The amendments seek to strengthen the Bill with regard to the fair treatment of air space users and to prevent any discrimination against what might be considered the little people of the industry—general aviation.
  At the Committee stage of the Bill we discussed the same issues. The Minister was generous in his assurances that the Government valued general aviation and indeed wished to see its position protected within the Bill. I am an occasional private flyer so I have an interest to declare in this matter.
  Amendment No. 76 has the effect of making clear that the CAA has a general duty towards not only the operators and owners of all classes of aircraft, but also towards all classes of air space user. This is an argument I had with the Minister at Committee stage. I got nowhere at all with him at that stage. He then was kind enough to write me a carefully considered letter, with which I did not agree, showing that he had listened even more carefully and we still had not got anywhere. I shall have a final attempt to explain to him and to see whether I can get him to agree that merely saying that one should take into account the requirements of all categories of all aircraft could leave some people out in the cold. The tone of the Minister's response at the time, and indeed of his letter, made it very clear that we actually had one and the same objective. So we are really talking about drafting at this stage.
  Categories of aircraft vary from the very smallest—gliders through to small single or twin-engined aircraft—to the very largest commercial airliners. It must also be recognised that pilots vary in their qualifications, from student pilots at the bottom of the ladder up to the holders of air transport pilot's licences, such as my noble friend Lord Trefgarne, who is a very experienced aviator.
  I am concerned that the Bill could have the effect of stating that the CAA must have a general duty towards all the groups who operate aircraft. However, some people might be left out. I shall give an example to try to focus the Minister's attention. If he can reassure me on this point, I shall be a much happier and less loquacious Peer of the Realm.
  Let us consider the example of a private pilot who has no instrument rating. Airspace could be classified in such a way as to require all people who fly in that piece of airspace to have an instrument rating to fly under instrument flight rules. He can fly under instrument flight rules in any aeroplane, other than a permit-to-fly aeroplane, that is so equipped with all the necessary navigational equipment. Under those circumstances, it could be said that the CAA had taken on board its duty towards the owners and operators of all categories of aircraft. However, it would not have taken on its duty towards all types of airspace user because there could be, for example, student pilots who definitely would not have an IFR rating. I look forward to the Minister's response on that point.
  Amendment No. 75 merely adds reinforcement to what is already in the Bill. The amendment makes it clear that access to airspace is a fundamental requirement for the general aviation community. Many

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  aspects of the Bill have been welcomed by the GA community but there has been concern—rightful concern—that when the transfer is made to the new company the rights of the less powerful users of airspace and the more fragmented users of airspace, on whom we rely for new pilots coming up through the system to fulfil the requirements of our aviation industry, will not properly be looked after. Therefore, my amendment adds some words to make it clear that access to airspace is a very important issue.
  I am sure the Minister's brief says that the words are otiose and that the point is already covered. If the Minister could be specific in his response and could underline that access to airspace is a fundamental requirement and one that is borne in mind by the drafting of the Bill, then again I should be much more satisfied.
  My third and final point is simple. In Committee some of my noble friends and I raised the question of the Civil Aviation Authority's powers with regard to the new National Air Traffic Service PPP company in terms, first, of the design and allocation of airspace and, secondly, of giving the CAA the teeth it needs to ensure that those matters are enforced. Examples were quoted of some minor difficulties that have recently occurred under the existing system. This is a good moment to pay tribute to the work of the CAA and NATS for allocating airspace in an extremely fair manner. The CAA is a very efficient organisation and we hope that that will be carried forward.
  In Committee the Minister referred to the duties that are given to the CAA under Clause 70 of the Bill. The Minister has amended the clause by adding an additional and welcome overarching or paramount, to use the noble Lord's least favourite word, safety requirement. The Minister also referred to the consultation being taken forward by the CAA. Can the noble Lord now tell us the results of that consultation? Can he assure the House that the CAA, through the amendment of the air navigation order, will now have the strong and proper powers it requires to direct the new NATS body to administer airspace in the way that the CAA thinks fit and appropriate, bearing in mind its general duty? If the noble Lord can reassure me on those points, we will have moved the argument on considerably and the Bill will be more equitable.
  Lord Trefgarne: My Lords, I very much sympathise with the views of my noble friend Lord Goschen in regard to this matter. As I said at an earlier stage when we were discussing these issues, I am president of the Popular Flying Association, which is far and away the largest recreational aviation organisation in this country. It has upwards of 10,000 members, many of whom own and operate their own small aircraft. But my views and the views of the PFA are not confined to that association. They are widely held, I believe, by other members of the general aviation fraternity, who feel profoundly threatened by some of the proposals that have come forward. They feel threatened not so much by the proposals themselves—we have no difficulty in principle with the privatisation of NATS—but by some of the things that have been said.
  578
  I believe that the Civil Aviation Authority will exercise its powers in a responsible and effective way, having due regard to the interests of general aviation. However, I am not so sure that those currently heading NATS are quite so enthusiastic. For example, I have been informed that the business development manager of NATS, Mr Peter Finch, was recently quoted as saying that he regarded those who represent general aviation interests as, "public enemy No. 1". Those were his words. Apparently, he felt that the need to look after the interests of general aviation would somehow inhibit the development of NATS in the direction he thought appropriate. If that is true, that was a disgraceful remark and I hope that the noble Lord can tell me, if he did make such a comment, that it was made without authority.
  That leads to another matter of direct importance to general aviation; namely, the question of the operation of flights outside controlled airspace. We have heard — again from the aforementioned Mr Finch—that NATS would like to impose charges on general aviation aircraft flying outside controlled airspace. I hope that that is not the policy of NATS. If it is, I hope that the Civil Aviation Authority will see to it that such charges are not imposed.
  From what I have said, noble Lords will appreciate that there are concerns that the CAA will find it difficult to defend the interests of general aviation against the battalions of NATS if these changes come into force. I therefore have great sympathy with the amendments proposed by my noble friend Lord Goschen. The plain fact is that general aviation has the same rights in airspace as does anyone else. General aviators pay their taxes and they, too, pay whatever charges are currently levied. For those reasons, they are just as entitled to use the airspace as all others.
  However, we are sometimes told that commercial flights, however small or insignificant, should have priority. I have never understood why that should be the case because we all operate commercial flights—we all pay for our fuel, tyres and engines. The order of precedence that is sometimes established here is not appropriate.
  I say again that it is important that the interests of general aviation should be properly reflected in the provisions of the Bill. I believe that the Civil Aviation Authority has every intention that that should be the case. I believe, too, that the Minister intends that that is what should happen. However, he will need to put that across to some of those working in NATS who seem not to take the same view. I hope that the Minister will be able to give me the assurances I seek as regards general aviation.
  9.15 p.m.
  Lord Macdonald of Tradeston: My Lords, Amendment No. 73 seeks to remove Clause 66(2) which provides that, should the CAA fail to perform a duty placed on it by a direction issued under Clause 66(1), then it is not liable to suit. This reflects the current provision in Section 72(3) of the Civil Aviation Act 1982. Notwithstanding Clause 66(2), the CAA will still

  579
  be liable, as is normal under the principles of common law, for its acts or omissions when carrying out activities in pursuance of its duties.
  While a direction may place a duty on the CAA—Clause 103(1) requires that the CAA must give effect to that direction—it will remain with the CAA to decide how best to implement that duty. In such circumstances, it is not too hard to imagine a situation where the CAA could take a course of action which, while satisfactory to the Secretary of State, could be perceived by an individual or organisation as failing to meet that duty. Clearly it would be undesirable for the CAA to be at risk of legal action each time it took policy decisions in response to directions it has received from the Secretary of State. In any event, the directions which the Secretary of State will give to the CAA under Clause 66(1) will require extensive consultation and will provide for any conflicts to be resolved before decisions are finally made. Furthermore, it will of course continue to be possible for decisions of the CAA to be open to judicial review.
  Amendments Nos. 75 and 76 tabled by the noble Viscount, Lord Goschen, concern Clause 70, which sets out how the CAA must exercise its air navigation functions. In essence, they appear to seek to ensure that the CAA, when exercising its air navigation functions, must take account of general aviation interests alongside commercial, military and other interests. In Committee the noble Viscount raised similar concerns. I gave an assurance in that debate that that was exactly what the CAA would do. We believe that the terms used in Clause 70(1)(b) are wide enough. The noble Viscount's second amendment, Amendment No. 76, would result in a definition which would be too wide and would encompass people such as parachutists. We do not think that that would be appropriate.
  However, we recognise that the CAA must have adequate powers to enforce its decisions relating to the use of airspace.
  Viscount Goschen: My Lords, I am grateful to the Minister. Why should not parachutists have any representation with the CAA? If they are hurtling towards the ground at 120 miles an hour, they would like to know that there is no one directly underneath them.
  Lord Macdonald of Tradeston: My Lords, if one wishes to throw the issue open so widely, it would cause concerns that we need not address in this Bill. It has never seemed appropriate in the past to consider parachutists. I do not know whether it has suddenly come as an insight to the noble Viscount, but it is not an issue to which we have addressed much attention in the past, nor do I intend to do so today.
  I can tell the House that the CAA consulted on this issue during the summer. The main proposal in the consultation paper was that the CAA should, after consultation with the Secretary of State, have a power of direction to provide air traffic services in respect of United Kingdom airspace in the interests of ensuring efficient use of airspace, or to ensure that air traffic
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  services are provided to a standard considered appropriate by the CAA for the airspace classification. That consultation has now closed and we are considering responses.
  In general, there has been a very positive response to the proposal. We must now seek to respond to the few criticisms made and make a final study of the fine print. I am happy to tell the House that we are strongly minded to pursue this proposal and to seek appropriate amendments to the Air Navigation Order 2000 very shortly.
  Turning to deal with the question of student pilots, we have no reason to believe that the interests of owners and operators of aircraft in which student pilots fly—presumably under co-pilot direction—are excluded by Clause 70(1).
  The noble Lord, Lord Trefgarne, suggested that the quotation to which he referred expressed the views of NATS. Let me make it clear that the quotation is not a sentiment I have heard expressed by anyone in NATS management. Of course NATS will ensure that fair and equitable access is given to all.
  The operating licence which will be issued to NATS includes an explicit prohibition against discrimination in the supply of its services. Condition 2 requires the licensee not to give undue preference to, or discriminate against, any person or class of persons in supplying air traffic services. The licensee is permitted to take into account the need to maintain the most expeditious flow of air traffic as a whole—which mirrors the CAA's duty in Clause 70(1)(a)—but may only apply different or additional criteria with the approval of the CAA.
  I was asked another question by the noble Viscount, who challenged me with a very specific example. I hope he will forgive me if I am forced to write to him yet again, I hope in more satisfactory terms than last time.
  Amendment No. 80 seeks to remove Clause 75(7), which allows the CAA to specify, under Clause 73(1), for the purposes of charging, operators and owners of aircraft which do not or could not use the chargeable air traffic services concerned. This reflects the current provision in Section 73(3) of the Civil Aviation Act 1982, which is being repealed.
  This provision seeks to cover the scenario where an aircraft fails to make contact with air traffic control but still enjoys the benefits of services provided in the interests of safety. An example of this is the maintenance of minimum separation distances from other aircraft. This provision also prevents less scrupulous operators from obtaining "free rides" which would result in very serious safety risks.
  The fifth amendment in this group, Amendment No. 81, concerns the powers of the Secretary of State to make regulations regarding the detention and sale of aircraft. The amendment proposes that aircraft should only be allowed to be detained where the current operator of the aircraft was actually the defaulter in paying charges due under Section 73. That would be an unfortunate position to find ourselves in.
  Principally for reasons of safety, air navigation services are not refused to any aircraft. But it is only right that those operators who make use of such services

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  should also pay for them. It is a common practice in the aviation industry that aircraft are swiftly transferred between companies; and in many cases aircraft are leased. The threat of detention action is our most potent tool and without these powers large amounts of money would not be recovered, or at least would take many months or years to collect through court action. That might well mean that a way would need to be found to offset unpaid charges. It follows that in fairness to all users of air services we think it absolutely crucial to have the power to detain aircraft, even where the defaulter was the previous operator, as a last resort to reclaim the moneys payable in respect of services.
  I hope that I have demonstrated why the House should not accept the amendments. I ask the noble Lord opposite to withdraw his amendment.
  Lord Trefgarne: My Lords, before the noble Lord sits down, would he please answer the question I raised in relation to flights outside controlled airspace? Will he confirm that neither the Civil Aviation Authority nor NATS has any plans to raise charges in respect of flights outside controlled airspace? If he cannot give me that assurance now, will he be good enough to write to me?
  Lord Macdonald of Tradeston: My Lords, I shall certainly write to the noble Lord on that point.
  Lord Brabazon of Tara: My Lords, we have had an interesting debate on this group of amendments — somewhat different and less weighty than some of our debates earlier today.
  I listened carefully to the Minister's reply. I was particularly interested in his response to my Amendment No. 73. He referred to the liability under common law. I shall read his words with great care, as I shall his response to my other amendments, particularly Amendment No. 81.
  I agree that we need the power to detain aircraft. When I occupied the position that the noble Lord presently occupies, I had a monthly note on my desk about whether we should detain aircraft from a certain country, which I shall not name. The Foreign Office took one view and the Department of Transport took another. My view prevailed. We never had to detain the aircraft because they arrived with a suitcase of dollar bills on the day before they were due to be detained. So the policy worked.
  Turning to my noble friends' amendments, it is useful that in this House we have two great proponents of general aviation in the shape of my noble friends Lord Goschen and Lord Trefgarne. I was horrified to hear the alleged description of general aviation as "public enemy number one". As the grandson of the holder of pilot's licence No. 1 in this country, when I presume that all aviation was general aviation, I suppose I am therefore an hereditary public enemy. The Minister might well agree with that sentiment.
  I leave it to my noble friend to decide what to do with his two amendments. In the meantime, I shall read the Minister's response with care. I beg leave to withdraw my amendment.
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  Amendment, by leave, withdrawn.
  Clause 70 [General duty]:
  Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendment No. 74:
  Page 45, line 29, at beginning insert—
  ("(A1) The CAA must exercise its air navigation functions so as to maintain a high standard of safety in the provision of a it traffic services; and that duty is to have priority over the application of subsections (1) and (2).").
  On Question, amendment agreed to.
  [Amendments Nos. 75 and 76 not moved.]
  Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendments Nos. 77 to 79:
  Page 46, leave out lines 4 to 6.
  Page 46, line 8, leave out from ("must") to ("as") in line 10 and insert ("apply them in the manner it thinks is reasonable having regard to them").
  Page 46, line 10, at end insert—
  ("(2A) The CAA must exercise its air navigation functions so as to impose on providers of air traffic services the minimum restrictions which are consistent with the exercise of those functions.").
  On Question, amendments agreed to.
  Clause 75 [Specifications: supplementary]:
  [Amendment No. 80 not moved.]
  Clause 83 [Detention and sale]:
  [Amendment No. 81 not moved.]
  Clause 87 [CAA's 1973 Act functions]:
  Lord Macdonald of Tradeston Lord Macdonald of Tradeston moved Amendments Nos. 82 to 86:
  Page 55, line 23, at end insert—
  ("(1A) The CAA must exercise its 1973 Act functions so as to maintain a high standard of safety in the provision of air traffic services; and that duty is to have priority over the application of subsections (2) to (5).").
  Page 55, leave out lines 40 to 42.
  Page 55, line 43, leave out from beginning to ("interests") in line 1 on page 56 and insert ("The only interests to be considered under subsection (2)(a) are").
  Page 56, line 8, leave out from beginning to ("as") in line 9 and insert ("apply them in the manner it thinks is reasonable having regard to them").
  Page 56, line 9, at end insert—
  ("(5A) The CAA must exercise its 1973 Act functions so as to impose on suppliers of air traffic services the minimum restrictions which are consistent with the exercise of those functions.")
  On Question, amendments agreed to.
  Clause 93 [Control in time of hostilities etc]:
  [Amendment No. 87 not moved.]
  9.30 p.m.
  Earl Attlee Earl Attlee moved Amendment No. 88:
  After Clause 94, insert the following new clause—

  DETERMINATION OF POSITION AND TIME WITHIN THE UNITED KINGDOM
  (" .—(1) The Secretary of State shall take steps to ensure that within six years of the passing of this Act a person shall, on a commercial basis and in a rural or urban environment, be able to determine reliably—

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  (a) his position in the United Kingdom to within 10 metres, and

  (b) the time to within ten nanoseconds.

  (2) Nothing in this section shall require the Secretary of State to provide the services mentioned in subsection (1).").
  The noble Earl said: My Lords, noble Lords will be familiar with the US military operated global positioning by satellite system—generally known as GPS. It enables one to determine one's position, height and the time with remarkable accuracy and convenience. However, for a long time the accuracy of the system was artificially degraded by the US Government for security reasons. Hand-held equipment for this purpose is ubiquitous, small, lightweight and costs between £100 and £200. There are obvious military, civil and recreational applications. The clever electronic part of it is much cheaper and before long a vast range of equipment will have GPS embedded in it as standard and at minimal extra cost.
  As the electronic world moves so fast, my understanding is that the original US GPS system is quickly becoming a legacy system. Apparently there may be difficulties in uprating it while still keeping all the millions of land-based receiver systems fully compatible. The proposed European Galileo civilian system will be much more accurate and meet the requirements of my amendment. Noble Lords will have noticed that my amendment refers to an accuracy of at least 10 metres in distance and "ten nanoseconds in time". I am sure that noble Lords are curious to know how long is a nanosecond: it is slightly less time than the Minister will take to decide to resist my amendment. I believe that it is one 100-millionth of a second.
  But perhaps more importantly, I am told that the reliability of the new system is guaranteed even for safety-critical applications. This opens up numerous possibilities for such things as aircraft and ship navigation, air traffic control, railway signalling systems, intelligent motor car systems and automatic positioning when using a mobile phone for summoning emergency services, to name but a few. I believe that the US has already legislated for the automatic positioning and that we may follow suit. The Galileo system will also be much more effective in heavily built-up areas. Your Lordships may be curious as to why the ability to determine the time so unbelievably accurately is important outside of scientific circles. My understanding is that it is, among other things, important for electronic commerce, especially in banking in order to combat electronic fraud.
  The amendment has been tabled for debate in this part of the Bill because I never gave timing much thought and those concerned, quite properly, placed it after Clause 94. But it is of much more general interest than just aviation. It is considered within the EU Commission to be a transport matter. As the noble Lord, Lord Macdonald, has ministerial responsibility for this area, I thought that he would welcome the opportunity to update your Lordships. I hope that he will tell us about the time-scale involved—perhaps in nanoseconds—the UK cost and the overall cost of the project, as well as other points, including its overall desirability for a UK perspective.
  We on these Benches have concerns regarding the cost and defence implications. I appreciate that this is a developing and complex project and that the Minister may not have fully developed his own position in this respect. That is not unusual. However, I believe that noble Lords will be interested in the factors affecting the Minister's decision-making process. I beg to move.
  Lord Berkeley: My Lords, I wish briefly to express amazement about this amendment, which is both interesting and fascinating. The noble Earl, Lord Attlee, said that the system was useful for railway signalling. However, my understanding is that it is fine as long as the train is not in a tunnel but that when it goes into a tunnel problems may arise. If my noble friend the Minister cannot give me an answer to that question tonight, perhaps he could write to me later on the subject.
  Lord Macdonald of Tradeston: My Lords, this amendment appears to be aimed at securing the establishment of a commercial satellite based navigation and timing system. After considering the technical and financial practicalities of putting such a system in place, it is the Government's view that this objective within the time-scale envisaged would be difficult to achieve. The noble Earl referred to the US GPS (1) system, which is already operational. It provides timing and position fixing services free of charge. However, its accuracy, availability and coverage fall short of those envisaged in this amendment. I understand that GPS is to be upgraded to provide improved resilience and accuracy for tracking and timing—perhaps even to a degree that might make it indispensable to party Whips, let alone trains in tunnels! However, I assure the House that these improvements are unlikely to be operational before 2008.
  There is already a European Community initiative to develop a European satellite navigation system called Galileo on lines similar to and compatible with GPS. This has only reached the project definition stage and it is not yet clear how this system will be developed, specified and funded, nor is the basis of its availability yet determined, still less when the system could be operational. Negotiations between Europe and the United States on co- operation in this area are still on going. As the noble Earl has said, these satellite systems are crucial for many aspects of modern life. The Government therefore pay close attention to these matters. He is right to draw our attention to them.
  The United Kingdom is therefore closely involved in the development of Galileo and is pressing for clarity on all these points. I shall discuss these issues with my European colleagues at the December Transport Council. I shall also press for clarity on costs. The Commission's current estimate is that Galileo will cost some 3.2 billion euros. Many think that that is a conservative estimate.
  We are also playing a full part in Europe's development of the European Geo-stationary Overlay Navigation Service (EGNOS). This is planned to provide augmentation to GPS over Europe by 2004 but

  585
  would need a validation phase to certify its use for safety critical applications and time to develop potential commercial applications. We are also examining options for extending the signal from the General Lighthouse Authority's marine differential GPS service to cover the whole of the British Isles for land based transport and other applications. Against that background, I invite the noble Earl to withdraw the amendment.
  Earl Attlee: My Lords, I thank the Minister for his reply. The timescale I suggested was purely a guess for the purposes of drafting the amendment. The key point is that the new system should offer reliability and integrity. I again thank the Minister for his reply. He will not be surprised to hear me say that I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 107 [Local transport plans]:
  Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 89:
  Page 65, line 18, after ("area") insert ("with a view to enhancing the comfort and choice in the means of transport, and developing policies to reduce the need to travel or to transport freight where possible").
  The noble Lord said: My Lords, I suspect that the Government may be pleased to move away from the rather controversial matter of radar control of aircraft and into the more peaceful realms of integrated transport. If the policy of integrated transport is to be effective, Part II of the Bill and its impact on the little decisions which are taken locally is fundamental to the success of that whole concept.
  Great national policies do not make an impact on integrated transport. It is decisions on traffic control, parking control, improved bus services, the relationship between bus services and train services and the need to move goods, services and people that make the concept of integrated transport meaningful and beneficial to people at large.
  When we discussed this part of the Bill at an earlier stage the Government were generally resistant to the idea that we should put more description onto the face of the Bill. The Government said, perfectly reasonably—and I acknowledge the reasonableness of the argument—that it was prescriptive. I am quite prepared to admit that I am a great advocate of not trying to constrain what local authorities should do in this way. That argument would have validity if we did not have the Bill. The trouble is that it seeks to guide local authorities. If one seeks to undertake that guidance then one needs a certain amount of clarity about what is being done. Amendments Nos. 89 and 90 are specifically directed at that.
  Amendment No. 89 simply requires that the planning process should also have in view,
  "enhancing the comfort and choice in the means of transport, and developing policies to reduce the need to travel or to transport freight where possible".
  Not least of the problems that we face in modern communities is that everything is now transported. When I was considering these two amendments I thought about the transport needs of new-born babies.
  586
  That may sound a ridiculous concept, but let me take, for example, disposable nappies, which are voluminous and bulky and not easy to carry. Someone who wants to buy a month's supply of disposable nappies does not want to have to carry them home on a bus. That is not an easy thing to do. I have seven grandchildren so I do know what I am speaking about. I have never had the privilege of carrying their disposable nappies, but that is neither here nor there.
  We need to recognise the changes which have taken place in society—particularly its shopping habits—when we consider all these issues together. It is all very well to remember that when we were young there were neighbourhood shops; if one did not have something, one could walk a couple of 100 yards or even half a mile down the road and get it. Those days have gone. Nowadays I go shopping with great regularity because it is educational at the very least. It is good for me although it may be soul-destroying. My wife believes that it improves my character or something of that sort.
  It is remarkable when one sees ordinary people shopping with a supermarket trolley filled with goods. That sort of shopping is not capable of being carried by most systems of public transport because the trolley cannot be taken away by the shopper. For the vast hulk of the population today that is the way they shop and that is modern transportation. It is not 40-tonne trucks going down the high street, vexing though they may be. It is the little things which affect little people. We need to bear that in mind.
  Amendment No. 90 adds three letters, the word "all" where we consider persons living, working or travelling through a district. It might be thought that that is tautologous and unnecessary. I suggest that it is helpful. If those responsible for transport planning do not consider the needs of all, it would be very easy for them to consider the needs of particular groups and, most importantly, those groups with whom they are directly concerned: their own community.
  We had some debate on this issue in a different context. One can understand that the people of Portsmouth might have a view about transport which requires to go through the heart of their city in order to arrive at the Isle of Wight. I believe that the addition of the word "all" is important. It may call for the judgment of Solomon by local authorities. I think that they are capable of taking such a broad 'view.
  I do not apologise for bringing forward the amendments. I hope that the Government will look with favour on one or other of the amendments, or will agree to consider them. I beg to move.
  9.45 p.m.
  The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, I join the noble Lord in welcoming a movement across to integrated transport and applaud his eloquence in describing it. The two clauses seemed relatively straightforward to me. I had not realised that we should engage in quite such a wide sweep of modern civilisation involving

  587
  disposable nappies! I shall have to consult with my noble friend Lord Macdonald on whether we need an extra section on supermarket trolleys.
  However, I confine myself to the words proposed by the noble Lord and ask him to consider whether the amendments are necessary. As drafted, the Bill already contains such requirements. The amendments seek to add to the definitions of either the policies to be developed in a local transport plan or what is meant by "transport facilities and services". At present, Clause 107(1)(a) places a requirement upon a local transport authority to,
  "develop policies for the promotion of and encouragement of safe, integrated, efficient and economic transport facilities and services to, from and within their area".
  Clause 107(2) then defines "transport facilities and services".
  The wording of the Bill is deliberately broad to ensure that local authorities and others can face up to a wide range of circumstances in their areas. The danger in trying to be more specific about what can be a facility or service is that if it is defined in a list doubt is raised if other factors are excluded.
  The definition is sufficiently broad to ensure that it covers issues such as freight, pedestrians, people from outside and inside the area and those who live, work and shop in the locality. I hate shopping, but it is undoubtedly an activity which determines many of our transport patterns; therefore we should cover that. However, the broad general approach in the Bill covers that. Were we to use the term "all" in Amendment No. 90, it would place local authorities in difficulty. On one single person's slightly anomalous requirements, the authority might be deemed to have failed even if it has fulfilled very well the requirements for 99 per cent of the population. So there is a difficulty in using his three letter word in that respect.
  I hope that we can keep the provision broad and give local authorities the flexibility that the noble Lord usually seeks. I hope that he will not press the amendment.
  Lord Dixon-Smith: My Lords, the Minister's reply is along the lines I expected. Our difficulty is that we can Box and Cox with these words and have these charming debates. However, underlying the debate are some important principles.
  I shall consider again what the Minister has said. There is no absolute answer. One answer might have been to leave it to local authorities and not have the Bill. My bet is that they would have got on with the job quite happily without any legislation if they had been told to do so—but there you go; that is the difference between us. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 90 not moved.]
  Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 91:
  Page 65, line 23, at end insert (", and
  (c) those required to minimise noise and damage to the environment;").
  The noble Lord said: My Lords, this amendment is more specific. It would require local authorities to consider measures needed to minimise noise and damage to the environment. The Minister may say that the requirement already exists under other legislation.
  Some aspects of transport are destructive. One has only to consider the ambient noise level in London to realise that. When the Science and Technology Committee was examining the impact of vehicle exhausts on pollution, one of the papers that we considered, although it was a somewhat unrelated and tangential source of evidence, was written by a German doctor who claimed that 50 per cent of heart attacks were caused by noise. That was a published paper that has not been quarrelled with. If the claim has any validity, it is very serious.
  Minimising transport noise is an important consideration. There are also the usual considerations of minimising damage to the environment and the problems of atmospheric pollution caused by exhaust emissions.
  We come back to the point about reducing the need for transport. We need to produce an environment in which more people get back on to their feet and walk. About a quarter of all journeys are less than a mile and could easily be walked. We also need to get more people back on to bicycles, because another quarter of all journeys are less than four miles and could easily be cycled. Those are environmentally friendly means of transport. Whatever the Minister may say about the impact and requirements of other legislation, the Bill would be improved by such an explicit requirement. I do not apologise for returning to that worthwhile issue.
  Amendment No. 92 is slightly different. It would require each local transport authority that was also a planning authority to review its unitary development plan or structure plan at the earliest possible stage with a view to ensuring that the objectives and policies of the two plans were consistent.
  Good development planning or structure planning can diminish the need for transport. I have a long experience of planning in local government. The philosophy of incremental development rather than what I would call rational strategic development planning is too widespread. It is all too easy to build a little development here and a little development there rather than to sit down and consider what is required if one wants a community where transport needs can be reduced.
  I do not apologise for bringing forward this amendment. It may be implicit in other legislation and the Minister may say, "Well, they will have to do that because …". However, here we are dealing with an integrated transport philosophy and a Bill that is specifically directed to ensuring that small decisions in local places are taken with that in mind. It would help

  589
  if such matters were explicit on the face of the Bill rather than implicit as a result of other legislation which exists elsewhere. I beg to move.
  Lord Whitty: My Lords, again, it is difficult to disagree with the noble Lord's analysis and we welcome his commitment to green transport policies. Of course, by the definitions that we have used elsewhere, integrated transport policies include walking and cycling The problem with inserting environmental requirements at this point is that this clause seeks to define what is meant by "transport facilities and services". His wording, with references to noise and environmental damage, does not fit easily with that. Therefore, I do not believe that the amendment is appropriate here and the wider point is covered elsewhere.
  Amendment No. 92 seeks to require authorities which are both local transport authorities and planning authorities to review their development plans in order to ensure consistency between both the LTP and the unitary development plans. Of course, that is necessary and there is nothing objectionable in it. However, the issue of consistency between the two planning regimes is best dealt with in guidance or under the powers in Clause 111. I believe that, because of the different scope and timing of such matters, that can be dealt with by more detailed guidance rather than on the face of the Bill. Therefore, I hope that the noble Lord will not pursue these two amendments.
  Lord Dixon-Smith: My Lords, I was afraid that the Minister would mention the question of guidance. I was waiting for him to do so, but we shall come to that later. An awful question arises in the Bill as to when guidance is guidance and when it is something else. None the less, I shall consider with care what the Minister said. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 92 not moved.]
  Lord Swinfen Lord Swinfen moved Amendment No. 93:
  After Clause 107, insert the following new clause—

  LOCAL TRANSPORT PLAN: ACCESSIBLE TRANSPORT FOR DISABLED PEOPLE
  (" .—(1) In addition to containing the proposals and policies required by section 107 above, the local transport plan—

  (a) shall contain the Authority's proposals for the provision of transport which is accessible to disabled people;

  (b) shall specify a timetable for the implementation of the proposals contained in the transport strategy by virtue of paragraph (a) above.

  (2) In preparing or revising the transport strategy the Authority shall consult—

  (a) the Disabled Persons Transport Advisory Committee; and

  (b) such other persons or bodies which represent the interests of disabled people as it considers appropriate to consult.").

  The noble Lord said: My Lords, in moving Amendment No. 93, I wish to speak also to Amendments Nos. 94 and 95. I had originally asked for Amendment No. 118 to be grouped with Amendment No. 94. I must admit that I do not understand why
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  nearly all my suggested groupings have been changed. There was a logic in the groupings that I had proposed. However, I shall do my best.
  The purpose of Amendment No. 93 is to require that transport plans include provisions for disabled people. The plans should be drawn up in consultation with organisations of disabled people and include an action plan for improvements to accessibility. The Greater London Authority Act 1999 contains a provision in Section 142(2) and (4) to that effect. That forms the basis of the amendment. If it is in the Greater London Authority Act, why should it not be included in this Bill which, when an Act, will cover the whole country?
  The purpose of Amendment No. 94 is to ensure that in statutory consultations over their local plans, local authorities include and make the consultations accessible to a range of disabled people—the blind, deaf and those with learning difficulties—for whom ordinary printed material will not be effective.
  The purpose of Amendment No. 95 is to require local authorities to have a local walking strategy as part of their local transport plan in order to ensure proper improvements to the street environment.
  I welcome the placing of local transport plans on a statutory footing and see the Government's transport strategy as a considerable opportunity for local public transport to be greatly enhanced to the benefit of disabled people. Those plans have a vital role to play in providing more coherent and comprehensive solutions and creating a safer street environment for everyone, particularly those with disabilities.
  Each local transport authority must develop and implement policies for the promotion and encouragement of safe, integrated, efficient and economic transport facilities and services to, from and within their area. I note that the transport facilities and services include those required to meet the needs of persons living or working in the authority's area or visiting or travelling through that area.
  I am pleased that Clause 111(2) requires authorities to have regard to the needs of those with mobility problems in preparing local transport plans. However, the disability movement's experience is that many well-intentioned proposals for making transport more accessible to disabled people failed because of a lack of consultation with disabled people themselves. Therefore, that provision should be on the face of the Bill.
  In Clause 108(4), the authority must publish the plan, or the plan as altered, in such a manner as it sees fit and subsection (4)(c) provides that a copy, or any part of it, must be supplied to any person on request either free of charge or at a charge representing no more than the cost of providing a copy. But I should expect that the provision of information would be in the preferred format of the individual requesting it, thus ensuring that service providers meet their obligations under the DDA 1995.
  The quality of a pedestrian environment seriously affects disabled people's independent mobility and the ability to reach bus services. Organisations of disabled people consider it vital that a walking strategy is

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  required to ensure access within the pedestrian environment. The requirement of a local walking strategy would help to ensure the implementation of the Government's strategy to encourage walking, which is designed to address the decline of walking. I beg to move.
  10 p.m.
  Baroness Darcy de Knayth: My Lords, I support these amendments most warmly. The noble Lord, Lord Swinfen, has given an extremely comprehensive introduction. I am not sure that there is much that I can add.
  I agree with the noble Lord when he says that the provisions need to be on the face of the Bill. There has been much experience of well-meaning local authorities simply not knowing what are the needs of people with disabilities. The reference to disabled people's needs should be spelt out on the face of the Bill. It is essential that local authorities should be required to consult the Disabled Persons Transport Advisory Committee, just as the mayor of the GLA must do.
  As regards Amendment No. 94, I agree that it is important that the consultations should reach those with sensory impairments and learning difficulties and, indeed, the deaf-blind, although I am not sure how one does reach them with that sort of information. Perhaps someone may enlighten me or think of something in0020relation to that. They are the most excluded of all people and I feel that we should try to do something for them.
  I support Amendment No. 95, the local walking strategy without which, as the noble Lord, Lord Swinfen, said, disabled people will not be able to get to buses. It is also useful for mothers and children with prams.
  Lord Addington: My Lords, I rise briefly to support the amendments. I am sure that the Minister may be thinking of replying by saying, "Don't worry; it's all covered." However, it is 10 or 12 years since I first heard discussion on these provisions. The fact that we are now returning to the issue means that the lobby groups outside think we need to remind people who make these decisions to bear disabled people in mind.
  Unless we are told to consider these problems, we often do not realise that they exist. It is also the case that when we talk about the disabled, we receive the reply, "Oh, that's somebody in a wheelchair", or "That is somebody who is blind" and the problem is not taken further. We must try to reach a situation where people look across the whole spectrum of disability and ensure that all needs are addressed. Unless we have this type of legislation, and are permanently prompted, something will be missed and we will not move forward. That is one of the battles that is constantly being fought. That is why we shall keep returning to this issue until we have something conclusive in law which means that people must take such problems seriously.
  I support the noble Lord when he says that Amendment No. 118 should be included in this grouping. It follows almost directly from Amendment
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  No. 94. We need to reach those who have difficulty with print. That includes the visually impaired and those with literacy problems. We must try to help them overcome the barrier of the printed word, which excludes people from what is available to the rest of the community. The technology is now available. We may find it irritating on buses and trains to be told when we are stopping, but for those who cannot read the signs, it is necessary.
  The amendments are necessary, not because they are not implied in law but because in practice these areas are simply missed.
  Lord Berkeley: My Lords, I rise to support Amendment No. 95. A walking strategy is important, both for able bodied and disabled people. I do not know whether or not the wording is right. However, I continue to find that people who produce strategies and local authorities who mend pavements or roads travel only in cars. I have been soaked on pavements recently because the drains were blocked and cars were rushing past. Even in the local authority of Oxford where the noble Lord, Lord Bradshaw, sometimes has an involvement, five miles of road have been beautifully resurfaced but the road gullies are about two inches higher than the surrounding road just by the bus stop. As a result everybody who is waiting for a bus is soaked by the bus.
  How on earth can one get local authorities, and the politicians who run them, to realise that walking needs to be enjoyable without having to wear oilskins and gumboots, while those in cars have air conditioning and heating? If the amendment contributes to that view being accepted, I support it.
  Lord Whitty: My Lords, like other noble Lords, I sometimes find the groupings illogical. However, we will probably have to deal with them as they are. I, too, am anxious to make clear through the Bill that the Government want disabled people to have the kind of transport facilities which are accessible to them so that they can play a full part in the life of the community. We have made clear, both in the White Papers and guidance that we have given through the local transport plans, that that is the objective. Current guidance is clear about precisely how local authorities should address the transport needs of the elderly, mobility impaired and so on. That specific criteria in relation to disability issues has been supported by our statutory advisers, DPTAC, to which the noble Lord, Lord Swinfen referred. Like DPTAC, we acknowledge that the emphasis in the guidance may need to be changed or strengthened over time. But guidance included under Clause 111 gives us the means to do so. Of course, we shall work with DPTAC in developing the guidance in relation to the transport needs of disabled people. Clause 111 (2) makes clear that authorities, when developing their policies under Clause 107 and their bus strategy, must,
  "have regard to the transport needs of persons who are elderly or have mobility problems".
  Amendment No. 93, therefore, is not necessary. The requirements are already placed on the authorities and developed in that guidance, and we are developing the

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  strategy very clearly in conjunction with the main national body which represents the needs of disabled people.
  Amendment No. 94 seeks to amend the requirement upon a local transport authority that when requested to supply a copy of its local transport plan it must do so in the chosen format of the person making the request. Part III of the DDA places specific duties on those providing goods, facilities or services to the public. The Act makes it unlawful for service providers to discriminate against disabled people in defined circumstances. Those circumstances include where a service provider has failed to comply with a duty to make reasonable adjustments if the effect of that failure is to make it impossible for a disabled person to read, understand or receive the service.
  Sc the position is already covered in the DDA. Since our discussion in Committee it has become more apparent that there is uncertainty about whether an LTP is covered by the requirements of the DDA. I wrote to the noble Lord, Lord Swinfen, on that point. Because that position is not straightforward, we consider that the best approach will be to issue guidance to local authorities in relation to alternative formats. I want to put on the record that that is our commitment. Of course, in drawing up that guidance we will be consulting DPTAC as our statutory advisers in this area. I believe that meets the objectives of Amendment No. 94.
  Amendment No. 95 relates to a walking strategy. Again, integrated transport has already been defined as including the needs of pedestrians and specifically requires authorities to include facilities and services for pedestrians. So it is already clear, without spelling out the structure of a walking strategy as the amendment seeks to do, that walking is a major dimension of our transport strategy. As the noble Lord, Lord Dixon-Smith, said in relation to an earlier amendment, a move to more appropriate modes definitely includes moves to modes which involve our own two feet. We are certainly keen that walking should be part of the structure. But that is already covered without it being specified in detail as Amendment No. 96 attempts to do.
  I hope that, with those remarks, the noble Lord, Lord Swinfen, will feel that we are committed to the same objectives as himself and that these amendments are not necessary in order to achieve them.
  Lord Swinfen: My Lords, before the noble Lord sits down, I am not sure that I heard him speak to Amendment No. 95. Does the requirement under the Disability Discrimination Act to make physical adjustments to premises, which I appreciate does not take effect until the year 2004, affect the physical adjustments to streets? Is that included under the Disability Discrimination Act?
  Lord Whitty: My Lords, I shall need to take advice on that matter. The answer is that it probably is not, except
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  in so far as the streets provide facilities to access premises. It may be therefore that the noble Lord has a point. With his leave, I shall write to him on that matter.
  Lord Swinfen: My Lords, I should be delighted to receive another letter from the noble Lord and I thank him for his letter of 20th October. I appreciate that he took the trouble to write to me after the Recess.
  I appreciate the support which I have received from around the Chamber. The noble Lord, Lord Berkeley, was right in saying that in had weather one sees many pedestrians being splashed. The local authorities, when looking after their roads, could do something about that if they took the trouble and so could their contractors. Such incidents are not unusual; sometimes they occur accidentally but on other occasions they are due to nothing more than the drivers' lack of consideration. Inside their nice cosy cocoons, they are not prepared to realise that other people are freezing outside in the slush of January and February.
  I have commented on Amendment No. 95 and I wonder whether Amendment No. 94 is properly covered by the Disability Discrimination Act. The Minister said that my Amendment No. 93 was not necessary and the issues would be covered by guidance. He also stated that in his letter to me. Most of us in the Chamber have children and grandchildren and we know that we give them guidance. The trouble is that they do not follow it—neither do local authorities! The law does not state that they must do so. If they have not followed the guidance and something goes wrong, they have a deeper hole to climb out of. I believe that the measure should be on the face of the Bill and if it were not so late at night I should be inclined to ask the opinion of the House. But it is late at night and due to that—and that alone—I beg leave to withdraw the amendment. I shall not move the next two amendments but reserve my right to return to them at Third Reading.
  Amendment, by leave, withdrawn.
  Clause 108 [Further provision about plans]:
  [Amendment No. 94 not moved.]
  [Amendment No. 95 not moved.]
  Clause 109 [Bus strategies]:
  Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 96:
  Page 66, line 29, after ("authority") insert ("or where appropriate. Passenger Transport Authority").
  The noble Lord said: My Lords, Amendment No. 96 has slipped through the net. I had not intended to move it as it is answered elsewhere in the Bill. However, Amendment No. 97 is important. Clause 109 is worded obscurely, to say the least. It provides that an authority should provide whatever bus services and facilities it, the authority, thinks it should provide. One must ask: to what end, for what benefit and for whose purpose that is directed? All that is completely avoided on the face of the Bill.
  The Bill should not be about an authority providing bus services to suit itself. What are we talking about?

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  And so I thought that a more appropriate purpose was required. We have therefore tabled the amendment, which proposes that authorities should
  "develop bus services in their area on behalf of their communities and those wishing to travel in those communities having regard to the economic and social well-being in their area".
  Even that is a dreadful generalisation but a least it is a purpose above and beyond that of their own requirements as authorities. I accept that an authority acts on behalf of its community and all those other matters. However, we are framing legislation which people are to follow. If we cannot come up with something better than Clause 109 as it is presently drafted, in that regard we fail in our duty. Certainly, the Government have failed in their drafting. I hope that the Minister will consider my amendment, however unpalatable it may be. I do not believe that the Bill as drafted is a suitable piece of legislation.
  Amendment No. 98 which is also part of this group simply draws attention to a very simple problem. In developing a bus strategy the authority should have regard to the need for school transport. For those authorities which are involved in education school transport is a vexed issue. When I was involved in this matter at local government level I remember impassioned debates as to whether an education authority should be required to provide transport. If somebody did not provide transport, education could not be provided because children could not get to school. These may be basic statements of the facts of life. However, in this Bill transport authorities are specifically directed to consider what is involved in bus strategies and how they can help their communities. If school transport is not part of that I do not know what is. I beg to move.
  Lord Whitty: My Lords, we accept that school transport is important. However, Clause 109(3) already requires an authority to have regard to any measures that it is required, or proposes, to take to meet transport requirements in carrying out its functions as a local education authority. The issue of school transport is already covered.
  I understand that the noble Lord does not intend to press Amendment No. 96. Therefore, in effect he spoke to Amendment No. 97. Whatever the noble Lord may see as the inadequacies of the present clause, I do not believe that his amendment does what he suggests. From the way that the noble Lord described the objective of his amendment, I would have thought that it was not desirable. It would substitute alternative wording for much of subsection (1), with the loss of important requirements on local authorities, particularly in paragraphs (a) to (c); for example, the need to consider the standard of bus services, any additional facilities and services connected with bus services, which would mean items such as bus stops, waiting facilities, interchanges and so on. The clause was drafted to reflect the fact that local authorities would have a wider range of bus functions as a result of the Bill. The noble Lord's amendment would delete some of those functions. I am not convinced that the present
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  drafting is all that wrong, but in my view the amendment would make it worse. I hope that the noble Lord will not pursue his amendment.
  Lord Dixon-Smith: I have an awful feeling that the Minister and I have a simple difference of opinion over this matter. I do not regard Clause 109 as presently drafted as in the least satisfactory. The clause is convoluted and unclear and does not direct the attention of a transport authority to the need to serve its community. I accept that my amendment may delete certain parts of Clause 109, but that is a matter which I can address at Third Reading. I shall study the Minister's response. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 97 and 98 not moved.]
  Clause 110 [Consultation and publicity about bus strategies]:
  [Amendment No. 99 not moved.]
  Lord Swinfen Lord Swinfen moved Amendment No. 100:
  Page 67, line 16, at end insert (", and representatives of potential users of such services").
  The noble Lord said: My Lords, in moving Amendment No. 100, I shall speak also to Amendments Nos. 104, 108 and 121. I have already spoken to Amendment No. 118. I asked for Amendments Nos. 103 and 104 to be grouped together because that is the logical grouping. Therefore, I shall include Amendment No. 103 in my remarks.
  At the moment, not all disabled people can use buses because many are still inaccessible to them. Amendment No. 100 requires local transport authorities to consult disabled people, whether or not they are currently able to use buses. As buses become accessible they will be able to use them. Therefore, why not consult them now and make certain that they will use them? It will reduce congestion if they no longer use their cars on the public highway. Part of the Government's agenda is to reduce congestion.
  Amendment No. 103 seeks to allow quality partnerships to specify details of timing and frequency of services. Amendment No. 104 requires local transport authorities to consult organisations of disabled people, whether or not they are users of local services, before introducing quality partnerships. That is why I wanted the two amendments grouped together.
  Amendment No. 108 requires local transport authorities to consult disabled people and their organisations, whether or not they are current service users, before introducing quality contracts. Amendment No. 121 requires local authorities to have regard to the needs of those with sensory impairments and learning difficulties in deciding the appropriate way to provide information.
  The organisations for disabled people tell me that they have little faith in local democratic processes when it comes to safeguarding the interests of those with disabilities. Disabled people are in a minority. Their needs are not generally well known to the non-disabled

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  majority. Consequently, the demands of the non-disabled majority generally overwhelm the needs of disabled people. Therefore, I should like local transport authorities to be specifically required to consult disabled people and their organisations, whether or not they are currently local transport users. One should bear in mind that transport suitable for people with disabilities is also suitable for the elderly, those whose health is deteriorating and also parents with small children and large quantities of shopping.
  Noble Lords will frequently have seen young mothers with two or three small children struggling with numerous plastic bags, baskets and packages of one form or another. It is terribly difficult for them to get on to an old-fashioned bus. It is quite a hike up. Transport which is suitable for people with disabilities would be suitable for them as well.
  I turn now to Amendments Nos. 103 and 104. Timing and frequency of local transport are key factors that often stop disabled people being able to go out independently. If an authority proposes to make a quality partnership scheme, it should give notice of the proposed scheme and, inter alia, consult such,
  "organisations appearing to the authority to be representative of users of such services",
  as it thinks fit That includes organisations of those with disabilities. The same applies to quality contracts.
  Local transport authorities, either alone or jointly, are required to determine what bus information should be made available and how to arrange with operators for its provision. If such an agreement cannot be made, the local authority will provide the information and the bus company will be charged. Before making such a decision, the authority must consult such organisations as it thinks fit. particularly those who use local services. That should include disabled people and should be in an appropriate format that all disabled people can use. I beg to move.
  10.30 p.m.
  Baroness Darcy de Knayth: I support these amendments which the noble Lord, Lord Swinfen, has covered comprehensively. This business of not consulting non-users seems curious to me. If the intention is to improve the bus service and make buses suitable for more people, those who for one reason or another do not use the services at that moment should be consulted. That is particularly important in the case of disabled people because those who use the services will inevitably be non-disabled people who will not understand what disabled people need.
  A manufacturer who is selling a new product or a new version of an existing product does not survey only his satisfied customers; nor does a company seeking to expand its services to new customers ever only survey its existing customers. In Surrey recently there was a survey of bus services which had the aim of increasing the number of passengers carried. The survey was sent to non-users but became the subject of ridicule throughout the area because it did not ask why non-users failed to use any of the services. All the questions were directed at users and, what is worse, at users of the existing services.
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  As a result, those conducting the survey did not discover either the need for a new service to a neighbouring town or the need to move several bus stops and adjust schedule timings to attract more passengers.
  Experience has shown that local authorities need to be told exactly who to consult. They will not make progress if they are not told clearly to consult new users. Amendment No. 121 provides that the local authority must have regard to those with visual and hearing impairments and people with learning difficulties. I hope that the Minister can give a positive response to these amendments.
  Lord Shutt of Greetland: My Lords, I was inclined to think that the groupings rather suited me. But perhaps they do not after all. I rise to speak to Amendment s Nos. 106 and 179. However, as I want really to speak to Amendment No. 103, and Amendment No. 103 has now been referred to, perhaps it is right to speak to it at this stage.
  Several amendments stand in my name which were previously in the name of the noble Lord, Lord Morris of Manchester, who cannot be with us today. There has been a kind of trans-Pennine transfer and have taken the amendments on. It appears to me that Amendments Nos. 106 and 179 can be left alone if we look carefully at Amendment No. 103, which has been referred to, particularly with reference to disabled people. However, there is far more to this issue than just the needs of disabled people.
  Clause 113 is about quality partnership schemes and about implementing the policies in bus strategies. It is about the authority providing particular facilities and the operators of local services providing local services of a certain standard. The clause refers to facilities, which will include bus shelters and so forth, and then states:
  "The standard of services which may be specified … do not include requirements as to frequency or timing of the services".
  Little could be more fundamental to a bus service than when it operates and whether the service is frequent. For example, if an environmentally friendly bus with full facilities for the disabled turns up on1y once a day at three o'clock in the morning, I do not believe that that would bring quality to the service. Furthermore, I do not believe, if that is what is provided for in this clause, those who will be required to produce facilities to meet a certain standard will have the confidence to invest in bus shelters, bring in traffic regulation orders and so forth. They will not implement those measures unless they know, with some confidence, that a "quality of service" will be introduced.
  Frequency and timing are imperative as regards bus services. For that reason, I believe that paragraph (b) should be deleted from this subsection. Indeed, most people who need to use buses would consider that frequency and timing are rather fundamental.
  Lord Berkeley: My Lords, perhaps I may also speak briefly to Amendment No. 103, which has joined this grouping. The noble Lord is right: frequency and timing are absolutely essential. I believe that we argued this point at some length at an earlier stage in our deliberations.

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  The Transport and Environment Committee of the Scottish Parliament discussed exactly the same issue a few days ago, on 24th October. It is interesting to note that the Scottish Transport Minister has herself proposed an amendment to the Transport Bill (Scotland) which states that:
  "Any specified standard—
  may include

  (i) requirements which the vehicles being used to provide a service shall meet; and,

  (ii) requirements as to the minimum frequency of services".

  I believe that we should welcome what is being done by our colleagues in Scotland. I hope that my noble friend will agree that, on this occasion, they appear to be taking the lead on us here in Westminster. Perhaps we should use their example as a precedent and accept that setting a minimum level of frequency would be useful in this subsection.
  Lord Addington: My Lords, I should like to speak briefly on this point because my name has been added to amendments in this grouping. It is essential to consult those groups that will form part of the improved client base if there is to be any chance of meeting their needs.
  It has been said before, but I cannot repeat it often enough, that when it comes to considering the needs of the disabled, all too often those groups are simply left out. I hope that the Minister will be able to give the House a further assurance that sufficiently wide consultation will take place. All too frequently such groups are either not consulted at all or not consulted widely enough.
  Lord Whitty: My Lords, I can assure all noble Lords who have spoken that it is our intention that consultation carried out under this Bill should be both effective and inclusive. We want in particular to take account of the needs of those who are disabled in various ways. We want to ensure that matters such as ticketing arrangements and accessibility are developed for the convenience of all users, not only the fit and able.
  The question that arises from these amendments—or at least the amendments that were originally included in the grouping—is whether further provisions are required to deal with that. Amendments Nos. 100, 104, 108 and, indeed, Amendment No. 99, refer to potential users. I accept some of the points made in relation to the need for consultation to involve those who are not already users of a service, but exactly what are organisations representing potential users? I find it difficult to envisage the kind of organisations that might be included here, other than those representing disabled people—which is one specific area and which the general requirements on consultation contained in the Bill would require local authorities to consult in any case.
  I suppose there are other potential users. For example, bus users may be members of motoring organisations or motor cycling organisations and so on. I am not entirely sure whether it is intended that such organisations should have a specific role, other than the one they have in relation to the integrated transport plan
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  in general. References to "organisations of potential users" require definition before we can take such a change seriously.
  Amendments Nos. 104 and 108 relate specifically to organisations representing disabled people. The Bill already acknowledges the needs of disabled people in Clause 111. It is an overarching duty on local transport authorities to have regard to the needs of disabled people, including within quality partnerships and ticketing schemes. They must be taken into account. The consultation requirements therefore. follow that and it is not necessary to make an additional reference to them here.
  The procedures are made abundantly clear in the guidance—I am sure that the noble Lord, Lord Swinfen, will come back with his general view of the guidance—and that will specifically gear local authorities into following them in detail. The guidance will state the minimum requirements for a local transport plan, which should show a clear commitment to meeting the needs of disabled people and evidence of consultation with organisations which represent them in the decision-making process. That is all spelt out clearly in the guidance in pursuit of the general requirement to meet the needs of disabled people.
  Amendment No. 103 raises the wider issue of the nature of quality partnerships. It is an issue on which we had lengthy debates at earlier stages of the Bill. It concerns the inclusion of frequencies and timings within statutory schemes. Clarity is needed. First, we need to explain the legal principle involved here. A key feature of a quality partnership is that the local authority can set quality standards which are applicable to all-comers. Any bus operator who wishes to enjoy the benefits of the scheme must meet the standards imposed.
  The legal requirements would mean that if we conceded this amendment we would blur the distinction between quality partnerships and quality contracts. Quality partnerships are about giving local authorities new powers, following consultation, to set these overall standards. Quality contracts concern giving local authorities the powers to prescribe the details of bus services in a given area, which includes a detailed timetable of frequencies and services. If we were to rewrite frequencies and services into the quality partnership part of the Bill we would blur that distinction.
  It is, of course, always open for local authorities voluntarily to reach agreements with operators which specify frequencies and services, but to give that statutory backing without moving into the area of quality contracts would blur the distinction.
  My noble friend Lord Berkeley referred to the position in Scotland. It may be that our colleagues in Scotland see these matters slightly differently. That is a matter for the Scottish Parliament and the Scottish Executive. We wish to maintain a clear distinction between what are basically voluntary arrangements with bus operators and what is an imposition by local authorities where other methods have failed under the quality contract provisions. That kind of detailed

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  intervention, with statutory backing, is appropriate in the quality contract scheme but not in the quality partnership area.
  Lord Berkeley: My Lords, before my noble friend sits down, is he saying that quality partnerships in Scotland are the same as quality contracts in England? That will be very confusing. If quality partnerships in Scotland—given the different Parliament, the different legal system and so oh—require prescription of the minimum requirement for services, it is a bit odd to have the same title for something which is different here.
  10.45 p.m.
  Lord Whitty: My Lords, one of the consequences of devolution is that bits of policy operate differently in different parts of the United Kingdom. I personally regard that as relatively healthy. It may be that the Scots have a better prescription than we do; it may be that ours is better than theirs. Time will tell. All I am saying is that the UK Government, in legislating for the English provisions on this matter, want to maintain a clear distinction so far as statutory requirements are concerned between the voluntary partnerships and the quality contracts.
  On a voluntary basis, anything can be included on an agreed basis between the operator and the local authority. That includes frequency and timing. But to give statutory backing takes us into a different field. We want to maintain that distinction, whatever the Parliament in Edinburgh wants to do.
  Lord Swinfen: My Lords, I think the Minister should talk to his noble friend Lord Sainsbury whose firm has for generations attracted potential new customers to its stores. I am sure that he would receive a few clues on how public transport companies could encourage potential users and on how to advertise what is on offer.
  The proposal that there should be a definition of potential users is interesting. However, I should have thought that anyone who is not a regular user of public transport is, ipso facto, a potential user. I should not have thought that there was a great deal of difficulty on that point.
  I shall read carefully the Minister's response to Amendment No. 103 on the difference between quality partnerships and quality contracts. Like his noble friend Lord Berkeley, I am rather puzzled by his reply. To be honest, I do not think that it holds water.
  While voluntary quality partnerships can be entered into, as I understand it no bus company would do so—because it would not be protected from being sued for anti-competitive practice. I understand that a bus company would potentially be abusing a dominant position if other bus companies did not have access to certain facilities which it had because of the voluntary quality partnership scheme. It would also be the bus company and not the local authority that would be sued.
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  As I said, I shall consider what the Minister has said on Amendment No. 103, which we have not actually come to. Technically speaking, it is not in this grouping. Does the noble Lord wish to intervene?
  Lord Whitey: My Lords, I thought that the noble Lord made it clear that he wanted to transfer Amendment No. 103 into this grouping and indeed spoke to it at some length. I therefore replied at some length.
  Lord Swinfen: My Lords, it was the noble Lord's noble friend who, I thought, was disagreeing with me. I am quite happy to have spoken to the amendment. In the meantime, I beg leave to withdraw Amendment No. 100.
  Amendment, by leave, withdrawn.
  Clause 111 [Plans and strategies: supplementary]:
  Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 101:
  Page 67, line 30, leave out subsection (1).
  The noble Lord said: My Lords, Clause 111 is important. It states that,
  "In carrying out their functions under sections 107 to 110, a local transport authority must have regard to any guidance concerning …the content of any local transport plans (and bus strategies)",
  and so on. I do not apologise to the House for returning to this matter—not so much for the content of the clause, but for what I see as the implications for our legislative process of what we are doing. I have in mind the document on guidance. I do not intend to talk about it in any particular detail. It was issued in March this year and is a revision of the guidance issued about nine months earlier.
  In the olden days, guidance used to be issued under the authority of existing legislation. I believe that it was customary to say what that authority was, but I have found no reference to that in this guidance. I have no doubt that the Minister will take care of my ignorance in his response and tell me exactly how the guidance came into being. My concern is that what we are doing here is turning this document into legislation. I say that because a local authority "must have regard" to it. Of course, that is a common form of words and guidance is commonly used; indeed, it is an increasing trend. However, in this instance, we are changing the funding system for local authorities in relation to highways programming. We are changing it from transport policies and programmes that are produced annually to local transport plans that are quinquennial, with what I would call "rolling reviews".
  When you go into the detail, you actually find that this is a bidding document; in other words, the content and quality of the document regarding the local transport plan will be used by the Government to assess whether or not this or that authority receives the funding for which it is applying. I then turn back in the document to Annex D and the 27 paragraphs that the noble Lord, Lord Berkeley, reminded me about in Committee, because I had not counted them properly. 'Those paragraphs are directed at defining the contents for the criteria for assessing the quality of local transport plans.
  However, the situation is worse than that because there are 133 defined characteristics of a "good local transport plan". If you are bidding for funding from the Government, would you dare put in a plan that is not a good one? What are we about here? Indeed, the Minister has criticised me for trying to get a slightly greater degree of definition here and there on the face of this Bill. This is an amazing situation. But that is as may be.
  We have this document being given the force of statute by Clause 111. I do not raise that issue in order to criticise; I raise it because the amendment that I have moved seeks to remove subsection (1) of Clause 111, not so much because I think that I will have any success with it but because I believe that this House—and, indeed, the whole parliamentary process—now needs to consider quite carefully what it is about when it allows this sort of procedure to continue. I do not believe that we can stop it, but I do believe that we need to be very wide awake as to what it is that we are agreeing to and how far we are eroding the system of parliamentary control with which we expect to run our country. I do not apologise for raising that matter in the House although I do not expect that the Minister will be able to give me a satisfactory answer.
  Amendment No. 102 is grouped with Amendment No. 101. Here I am simply concerned with clarity and trying to simplify the wording of the Bill. I am sure that the Minister is relieved at that. It seems to me that subsection (2) of Clause 111 is somewhat obscurely worded. It refers to "policies under section 107(1)" in relation to a bus strategy. However, bus strategies are defined under Clause 109. It seems to me that subsection (2) needs to concentrate on the transport needs of elderly persons or those with mobility problems. Amendment No. 102 seeks to remove the extraneous words "under section 107(1)". I consider that would render the subsection much clearer. I believe that that was a worthwhile effort even though the Minister has on other occasions resisted my attempts to improve and simplify the wording of Bills. I beg to move.
  Lord Whitty: My Lords, As regards Amendment No. 102, I am always grateful to the noble Lord for attempting to edit the Bill. His amendment would certainly simplify it in seeking to delete three words but I am not entirely sure that it would clarify it. I understood the noble Lord's explanation of what he is trying to do but I am not sure that the amendment achieves that. However, we shall, as ever, consider the amendment but I do not think that it achieves what the noble Lord thinks it does.
  As regards Amendment No. 101, I believe that the noble Lord knows perfectly well that the guidance he mentioned in relation to local transport plans is currently non-statutory. However, future versions of it will become the guidance mentioned in Clause 111.
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  Amendment No. 101 would delete any requirement to have regard to that. I understand the noble Lord's desire to have near complete autonomy for local authorities but that measure goes a little far.
  As regards transport objectives, any government must provide a comprehensive and consistent framework while avoiding being unreasonably restrictive in guidance. If we did not issue any guidance at all, we would have to put more measures on the face of the Bill which would reduce the flexibility that the noble Lord seeks. That is why we provide guidance. The requirement in subsection (1) of Clause 1ll to have regard to guidance means that local authorities cannot disregard the guidance but does not require the guidance to be followed slavishly, as the noble Lord implied. There is plenty of scope for authorities to develop their own policies having regard to the guidance. The purpose of guidance is to provide a relatively light touch. The alternative of putting everything on the face of the Bill would make it inordinately longer, or even more inordinately long—as I am sure the noble Lord would say. I do not think that that would be appropriate. It certainly would not give local authorities the flexibility they need. I hope that the noble Lord will not press the amendment.
  Lord Dixon-Smith: My Lords, the Minister has given me the reply that I expected. He will not be disappointed in that, even though he knows that I must be. I am not disappointed in what he said in relation to the purposes of the Bill. I was not criticising that. The point I raised concerned the wider issue in relation to the way in which we approach legislation, guidance and control.
  In that regard the Minister avoided the issue that I attempted to raise. Therefore, I infer that I may not have raised it with sufficient clarity. It may be that it is an issue which needs consideration at a different time and in a different place. Would the Minister consider what I have said in relation to Amendment No. 102? I ask no more than that. He might find it helpful if he does. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [[Amendment No. 102 not moved.]
  Clause 113 [Quality partnership schemes]:
  [Amendment No. 103 not moved.]
  Clause 114 [Notice and consultation requirements]:
  [Amendment No. 104 not moved.]
  Lord Burlison: My Lords, I beg to move that further consideration on Report be now adjourned.
  Moved accordingly and, on Question, Motion agreed to.
  House adjourned at one minute past eleven o'clock.