Sitting of 16 May 1980

Preamble
The House met at half-past Nine o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

BRITISH LEYLAND 1980 CORPORATE PLAN
9.35 am
The Minister of State, Department of Industry (Mr. Adam Butler): I beg to move,
That this House takes note of the statement made on 20 December 1979 by the Secretary of State for Industry about the British Leyland 1980 corporate plan.
We very much welcome a debate on this subject. British Leyland, with its public shareholding through the National Enterprise Board standing at more than 99 per cent., and as a recipient of massive injections of taxpayers' money, is properly the concern of the House.
The central point of the debate should be the 1980 corporate plan, with its vital importance to British Leyland. Sir Michael Edwardes and his board have stated that the strategy embodied in the plan forms the only feasible means of survival for British Leyland. I am sure that hon. Members will accept that, because of commercial confidentiality, the whole of the plan cannot be made freely available. However, they will have been able to study the report prepared by the BL support staff at the National Enterprise Board. That covers British Leyland's 1979 performance as well as the main features of the plan. That report has been laid in the Library and has also been available in the Vote Office, both at the time of my right hon. Friend's statement and in the past week.
Mr. Les Huckfield: I apologise to the hon. Gentleman for asking him to give way so early. Will he accept that we are in some difficulty? The report to which he has just referred contains only four pages, at the end, on the corporate plan, most of which was prepared on the basis of
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information given almost a year ago now. Therefore, for him to say that the House of Commons has before it sufficient information to enable hon. Members to debate the 1980 corporate plan really is asking too much for the House to bear. The only information on the corporate plan itself is contained in four pages, and that says precious little.
Mr. Butler: I make it clear that it was not possible—and this follows precedent—to publish the whole of the corporate plan because of commercial confidentiality. I am sorry if the hon. Gentleman does not feel that the NEB's report covers the situation fully enough. But surely it is because of that and other things that we are having a debate today.
The hon. Gentleman pointed out that matters have moved on. Of course they have, because, as I shall point out in my speech, the main elements of the corporate plan were spelt out in September last year. That is some months ago. Therefore, it is appropriate to debate this matter today, and I believe that there is sufficient information in the report at least to appreciate the essential factors which lie behind the Plan.
This plan is like a path through a quicksand, because it offers to British Leyland a way to a secure future out of a hazardous present. It offers a way forward, provided progres is maintained and a steady nerve is kept. A faltering or wayward step could spell disaster. That, I believe, fairly sums up the position of British Leyland today.
In assessing this highly important plan, I do not intend to trace history too much. Suffice it to say that, after three years of trading profits, British Leyland was back in loss in 1979. By the end of the year, £775 million of public money, out of the £1,000 million proposed under the 1975 Ryder plan, had been committed.
Looking back at the 1979 plan, one sees a fair degree of optimism. In comparison, I judge the 1980 plan to be a sober document, even if it still expresses some underlying confidence. We should examine what has brought about that change in mood. The year 1979—the year on which the plan is based and of which details are given in the NEB report—began quite well. During the first six months, productivity, measured in output per man year, showed some improvement, especially at key plants such as Cowley

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and Longbridge, and although, measured statistically, it fell some way behind the performance of some of BL's international competitiors, at least the improvement was welcome.
I want to mention especially the considerable improvement in man hours lost. In 1978, internal disputes had dropped by one-third compared with 1977. In 1979, that reduction was accelerated so that the year end figure totalled only one-third of the 1977 figure. That is a remarkable achievement, and improvements measured in that way have continued into the present year.
However, those figures were marred by the 13 weeks of the Confederation of Shipbuilding and Engineering Unions dispute which added considerably to the damage by the road haulage drivers' strike earlier in the year. Those two disputes—both of them beyond the power of British Leyland to resolve—cost the company dear. As Sir Michael Edwardes said yesterday at the annual general meeting, they cost the company over £60 million. The country as a whole and the trade union movement in particular must pay attention to those figures. It is a sad commentary that it would have been the intention of the TUC to have done further financial damage to British Leyland on the day of action last Wednesday, but in the event the vast majority of British Leyland workers turned up for a proper day's work. The engineering strike—I have mentioned the financial penalty—cost 59,000 vehicles in lost production.
In 1979, British Leyland managed to turn in a small increase in overall sales volume as a result of a buoyant market but still recorded a drop in its car market share to only 19·6 per cent. In a record year for car sales in the United Kingdom, it is nothing short of a tragedy that BL was not able to take advantage of it. A similar story exists on the commercial vehicles side, which was constrained from benefiting from a United Kingdom buoyant truck market.
Nevertheless, there were some underlying improvements within British Leyland and they were encouraging. But, as the year progressed and as we are seeing now, it seems that the new decade will prove to be an even more difficult economic environment than the late 1970s.
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First, there is a slowing down in the rate of growth in the car markets of the developed world. This is already evident in the United States and several European countries, and it is now beginning to be felt in the United Kingdom.
In contrast, there is the trend among manufacturers to maximise economies of scale to spread design and unit manufacturing costs over longer production runs. That is practised particularly by multinational companies which can manufacture the same design in various countries. In a sense, the car market is now embraced by the world as a whole and these factors lead to intensified competition. British Leyland, with an older model range, has been less well equipped to cope with that intensified competition. It has also been hit by increased petrol prices, because its larger, thirstier cars, such as the Rover and the Jaguar, naturally tend to miss out in such a situation.
I should also refer to the strength of the £ sterling which, in the immediate context, must make it harder for British Leyland to compete both at home and abroad. This is a problem, as the House is all too well aware, for much of British industry, which is having to learn to live with a strong petro-pound, but undeniably it adds to the immediate burden that British Leyland has to carry.
It is reported that Sir Michael Edwardes, at yesterday's annual general meeting, made special reference to the problems for British Leyland associated with inflation, interest rates and the high pound. I assure him—as assurance has been given in the House many times before—that inflation remains the main priority of the Government's economic strategy; it has to be overcome, and certain means have to be used to overcome it. The high exchange rate is a contributor in helping towards that objective.
The world picture, the domestic and the internal situation within British Leyland demanded a complete reappraisal—a reappraisal reflected by the 1980 corporate plan. As I have already mentioned, the main changes to the structure and activities of the company set out in the plan were announced by Sir Michael when he introduced the company's half-yearly results on 10 September last year. I think that it is important that I should

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quote from his statement which went out to all British Leyland employees:
" As against our level of market share, we have facilities and fixed expenses designed to cope with higher volumes … We cannot afford to spread costs and other resources too thinly over too many plants and models. In short, we must streamline facilities and model programmes and slim down the company, while bringing forward the model programme in the mid-car sector."
The chairman then went on to detail his streamlining proposals—the closure, completely or partially, of several plants, concentration of vehicle assembly on key sites and a reduction in United Kingdom manning levels as a result of these proposals by not less than 25,000 over two years. These details will be familiar to all hon. Members, and certainly to those of us who are here this morning with an immediate interest in British Leyland, and they are deployed in greater detail in the NEB report.
However, at that time Sir Michael also emphasised—this is another important point—that the company's goal had not changed: British Leyland was still aiming at longer term viability, but the route to viability was now narrow and difficult. At one time British Leyland had perhaps several options before it, but now there were only two—survival on the basis of the plan, or collapse.
It was with these points very much in mind that the Government examined the plan after they had received it from the National Enterprise Board. The House will be aware that the NEB board felt that, in the short time that it had been there, it was not qualified to comment on the plan, or form the kind of view that it would otherwise have liked to form, and how it would affect British Leyland's future, so the plan was passed to my right hon. Friend in that manner.
Whereas earlier plans relied much on optimism, the present plan draws its strength and greater credibility from realism. Part of that realism is to be found in the board's request for funds. As my right hon. Friend made clear in his statement on 20 December, the plan looks for £430 million of Government funding over the years ahead. Significantly, Sir Michael asked only for the £300 million needed for 1980–81. The Government approved that limited funding with the same realism as that with which it was requested.
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With Government approval for its 1980 corporate plan, British Leyland entered the new decade. The first year of it is crucial, as nearly everyone concerned with the company realises. It is crucial that British Leyland brings to fruition its investment in the new Metro facilities at Longbridge. The plant has received a stream of ministerial and other visitors. All visitors will have been greatly impressed with the new body plan, the layout, the up-to-date facilities and the major use of robotics. We all hope that the plant will be fully utilised. The facilities provide a major hope for the future of the company and its work force. The degree of automation will improve the quality of the product as well as the working environment for British Leyland employees at Longbridge. The new facilities will certainly help to increase British Leyland's competitiveness.
It is crucial for British Leyland to maintain its market share in 1980. Even if a company produces the best product in the world and it does not sell, that company is out of business. The new Morris which is to be forthcoming this summer to replace the Marina should give a welcome boost to sales. It is vital that the Metro, on which so much money has been spent, gets the chance that it deserves with a sound market base for British Leyland products generally. The company says that that programme is fully on schedule for a launch in the autumn.
It is crucial for British Leyland to maintain its cash flow in 1980. That was pointed out graphically in Sir Michael's letter to my right hon. Friend of 19 December which was published in the Official Report. The position has not changed. Progress on the corporate plan cannot be maintained in the face of a significant shortfall in cash flow. That must be accepted if the company is to survive 1980 in the form envisaged by the board.
Mr. John Bruce-Gardyne: I hope that my hon. Friend will tell us a little more about the concluding comments in the corporate plan about British Leyland's future financial duty. The corporate plan states:
" It is clear that BL will not achieve a return on assets of 10 per cent. in 1981. However, the plan suggests that BL will achieve its financial duty in 1982 and that it will then

1905
be on course for achieving its longer term objective of a return of 15 per cent."
Sir Michael's comments yesterday do not make the position sound like that.
Mr. Butler: My hon. Friend should look at that part of my speech in which I refer to the intense realism shown by Sir Michael in his application for funding for 1980–81 only, despite the forward thinking in the plan, and to my remarks about the realism of the Government's acceptance of that funding for that period. We all recognise that British Leyland is facing an extremely difficult commercial time and a thoroughly difficult financial time.
Yesterday Sir Michael drew attention to many of the difficulties. However, he expressed an underlying confidence that the company can survive provided that the improvement in industrial relations is maintained and that suppliers do not pass on inflationary wage settlements. With those provisos, he can look forward to attaining the return on assets referred to in the corporate plan. My right hon. Friend and I are probably as realistic as anyone. My hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) should not press me harder at present. There has to be confidence in the present management. I believe that it is taking the necessary steps. If the momentum is maintained, the future is there and the investment will pay.
There have been some encouraging events since my right hon. Friend's statement. The Honda deal, signed at the end of December, is of great importance to the future beyond the Metro launch because it provides another new car to fill a gap in British Leyland's fleet. It enables British Leyland to concentrate its design and engineering resources on the next major step—a new medium-sized car. The Honda deal is an excellent example of international collaboration. Many leading companies in the world motor industry have fixed up similar deals. British Leyland cannot afford to be an exception. I understand that the plan is to investigate, and proceed if appropriate with, further collaborative activity of different types.
I turn to the question of the market share. The performance was depressing
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in January and February. However, the sharp come-back in March was welcome. If the market share can be retained, it will go some way towards providing the firm basis needed for the Metro launch.
There is tangible evidence that British Leyland's investment programmes are coming to fruition, with the two new truck series produced this year by Leyland Vehicles. The Landtrain was introduced in January. It is a robust heavy duty truck developed specifically for developing countries. The prospects are good. That was followed by the T45 truck called the Roadtrain. Trade response so far has been favourable and there are high hopes that the new truck will sell well at home and abroad, reversing the present downward trend in market share. The new products, together with Leyland Vehicles' bus products in which BL is a world leader, have put the company on that side in a good position to prosper throughout the 1980s.
There is another encouraging sign. In his statement, my right hon. Friend said that he was looking to British Leyland to contribute to its funding needs from internal resources, including disposal of assets where that made commercial sense. The board is fully alert to the need to raise money in that way. Proof of what the board is prepared to do when a deal makes commercial sense is shown in the agreement that was made in principle in the arrangement with Aston Martin Lagonda about the future of the MG plant at Abingdon. That agreement in principle provides a welcome conclusion to an issue about which many of my hon. Friends have been concerned.
I now turn to the question of progress on implementation of the pay and working practices package. Many British Leyland employees have not welcomed the details of the package. It is difficult to accept change, and a demand for an element of sacrifice, especially if that demand is compared with the pay increases that some other workers achieve. However, unless British Leyland can contain its costs, jobs will suffer. The way in which the vast majority of the work force has responded to this package is evidence that it accepts this fundamental truth.
We should also be encouraged because the problems encountered on the pay

1907
package have so far been resolved by negotiations. The next few months will not be easy. However, reasoned discussion and co-operation should be the norm. That will be to everybody's benefit. These events give grounds for hope. They are very welcome. As I said to my hon. Friend the Member for Knutsford, we all need to be intensely realistic about the situation. The time taken to reach acceptance of the wages and working practices package was time lost to the vital job of producing and selling motor cars.
British Leyland's low market share of January and February only made a difficult financial position more precarious. I have already referred to the effect of strikes, both external and internal. The steel strike caused British Leyland more problems. The problems of maintaining British Leyland's recovery programme, against a background of world-wide recession, have been well illustrated by the events of March. After two months of good production, British Leyland had to lay off workers because sales had been poor and stock levels had built up.
I experienced the management's determination when I visited Longbridge and talked to members of management earlier in the week. The determination of management and of the vast majority of workers at British Leyland has enabled them to weather those problems. As each problem is added, there is a cumulative effect that cannot be ignored or minimised.
British Leyland is not yet out of its difficulties. Any setback could be fatal. The chairman of British Leyland wrote a letter on 19 December which recognised that hazards existed both within and without the company. The board said that the future of the plan would be thrown into jeopardy by shortfalls in performance or by shortfalls in the cash flow. Everyone must be aware that, if British Leyland cannot sort out its problems, it will not be in a position in the 1980s to compete either in the United Kingdom or internationally.
The board believes that the problems will be sorted out and that British Leyland will be able to compete. That is why Sir Michael Edwardes has announced, in a most welcome step, that he will stay with the company beyond October
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of this year. That is why there is a fresh spirit and determination among the work force. That is why the Government approved funding for 1980. I am glad to say that I detect a new willingness on the part of British people to take British Leyland seriously and to stop knocking it. There is a new willingness to respect its achievements. For the sake of the country and of the company, let us hope that all faith is not misplaced. We must hope that the company can succeed.
10.5 am
Mr. Les Huckfield: On behalf of the Opposition, I must say that we would have preferred a proper debate on British Leyland. It was not our idea to debate the British Leyland corporate plan on a Friday. We protested against the Government's intention to hold the debate today. It has placed many of my right hon. and hon. Friends in severe difficulties. Many of them had transport difficulties earlier in the week.
Mr. Hal Miller: I wonder why.
Mr. Huckfield: Many of my right hon. and hon. Friends have to be in their constituencies today. On behalf of the Opposition, I give notice that we do not consider that the subject will have been properly debated. We expect a complete debate at a later date. I shall ask my right hon. and hon. Friends to take note of the Minister's remarks. However, we hope and expect there to be a fully furnished and equipped debate—as we are working with incomplete information—at a proper time during the week.
I am an ardent supporter of British Leyland's products. I have an Austin Princess in the garage downstairs. I have put 24,000 miles on the clock since last October. I have not had any trouble. I could tell the same story about all the other British Leyland cars that I have had. I therefore speak as an owner and proud defender of the products made by British Leyland, and by my constituents. All my right hon. and hon. Friends hope that the company will survive, and that it will go from strength to strength. We hope that it will take its rightful place as part of the world motor manufacturing scene.
We want British Leyland to survive, and to go from strength to strength.

1909
We want it to do so in a big way. However, it is our duty, on behalf of taxpayers and on behalf of our constituents, to criticise constructively. About 25,000 of my constituents in Nuneaton and Bed-worth are directly or indirectly tied up with British Leyland. We must therefore ask the Government whether they want British Leyland to survive. That has hardly emerged from the Minister's statement. Both the Minister and his right hon. Friend the Secretary of State for Industry say that British Leyland must stand on its own. I know that they will have the support of the hon. Member for Knutsford (Mr. Bruce-Gardyne). If that is their attitude, I must tell the Government that the Opposition will take a different line.
All other major motor manufacturers enjoy considerable support from their Governments. This Government propose to pursue a different policy. It is our duty to point out to taxpayers, constituents and customers just how different that policy is.
Mr. Bruce-Gardyne: The hon. Member said just now that British Leyland's competitors around the world enjoyed considerable support. Can he mention one car manufacturer anywhere in the world that has already taken £1,000 million from its taxpayers?
Mr. Huckfield: If the hon. Member cares to total up the support that Renault has received from the French Government, if he cares to examine the support that will be given to Chrysler in the United States, if he looks at the other support which has been given through the Japanese banking system and to Volkswagen in various forms of regional aid, he will see that the sum that we are discussing for British Leyland—which is not a grant or a subsidy, but a loan on which interest must be paid—is not at all out of line with those sums given more generously by other Governments.
We are in some difficulty in this debate today because we do not have the information. The Minister referred to the document that was put in the Vote Office and the Library last December. If one looks at that statement, supplied by the British Leyland support staff of the National Enterprise Board, one sees that it was prepared last December, before the
1910
Secretary of State's statement just before Christmas, and that most of the information contained in that mere four pages at the back of the statement on the corporate plan was based on information gathered six months previously.
This is another reason why we shall ask for a proper, fully-equipped debate. This morning we are debating the 1980 corporate plan of British Leyland on the basis of a mere four pages of words, with hardly any figures at all, on information that was prepared at least a year ago. We do not consider that to be equipping the House of Commons with sufficient information. We are talking about a company which has had committed and pledged to it £1,000 million of taxpayers' money. We are talking about a company into which the Secretary of State has announced that he will inject £300 million of new money. We are talking about a company which has already received a tremendous amount of Government support and all that we have for the debate this morning is four pages at the back of an NEB report, which is at least a year out of date.
Mr. Adam Butler: The hon. Member is making rather a meal of this. The House has had available to it the report and accounts of British Leyland which go into considerable detail. We are also extremely fortunate to follow by one day the annual general meeting of British Leyland, at which the chairman gave a review of the present situation and was asked questions. We can draw information from that. The hon. Member should move on to make some remarks about the industry instead of making too much of a meal about this point of information.
Mr. Huckfield: The Minister is in danger of misleading the House. The information that I have here—the British Leyland Limited report and accounts 1979—coincidentally appears before the House this morning only because the annual general meeting of the company was held yesterday. The only information that was available before that meeting was a short press statement of last year's results which was given by the company in March. In fact, it was not until the annual general meeting yesterday that the report appeared. That is far too short notice. I do not want to

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dwell on that point, but I must protest at the fact that we are having this debate today on the basis of insufficient information.
The statement issued by the National Enterprise Board talks about a build of some 900,000 units. That figure is on page 15 of the statement about company utilisation. Of course, that has been overtaken by events. We are now talking about a build of only 750,000 units, if that. I see that Mr. Ray Horrocks told the press conference yesterday of a total United Kingdom vehicle sale this year of 1·4 million car units. He might also have included the fact that the total number of units sold in this country that were actually built in this country might be less than 600,000 this year. How has that 600,000 figure been worked into the 1980 corporate plan when the reference that we have here is to 900,000 units? This shows that the forecasts must have been changed quite dramatically since the NEB information was prepared.
Both the Metro build and the Honda build have been reduced. One of the variants of the Metro will not now be produced. I give those as examples, and I can give many others, of the forecasts being utterly and completely out of date.
I thank the company for the helpful information that it has given me as the Opposition spokesman. But that does not help my colleagues—my hon. Friend the Member for Birmingham, Stechford (Mr. Davis) who has been very much involved in the motor industry, and my hon. Friend the Member for Birmingham, Erdington (Mr. Silverman), who has as many constituents involved in British Leyland as I have. It is very good of the company to help me as Front Bench spokesman, but I only wish that the Government had been just as helpful to my colleagues.
Having said that we would have expected more information and that we still want a proper debate on the company, I shall now concentrate the Minister's mind for him, because on many occasions I wondered what company he was talking about. After all, British Leyland is possibly the smallest and the weakest of the world's major motor manufacturers. It is only one-quarter the size of the leading European car manufacturers. It is only one-twelfth the size of the world's leader,
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General Motors. It is a company which is desperately short of new models and which has seen many dealer defections. It is also a company which faces, as does the whole of Europe, a possible market fall of at least 5 per cent. this year. It is probable that there will be no upturn in that market until at least 1983. It is a company that is very much exposed to short-term shocks.
While we recognise that the company has achieved a 19 per cent. market penetration in the first three months of this year, a great deal of that has been achieved by heavy promotional expenditure which every other motor manufacturer is using. I hope that the Minister will recognise that if Michael Edwardes was able to boast yesterday about a 20 per cent. market share in March, that kind of share was achieved because a great deal of propaganda and promotional spending has been done.
Mr. John Patten: I do not disagree for one minute with the general drift of the hon. Member's comments. He has given a straightforward description of the present state of the company. Does he agree that British Leyland has a dealer network of some 1,900 outlets, which is considerably more than Ford, and that in recent months, while some dealers have gone from the BL network, others in rural areas have been recruited?
Mr. Huckfield: British Leyland still has a substantial dealer network. The question arises whether it can be maintained. The critical factor will be the building and supplying of the LC10.
Regardless of its critically exposed position, the company is our largest manufacturing exporter and earner of foreign currency. It should not be left to stand on its own. The Government should be much more positive. In a world where most of the major competition is much larger, the future of British Leyland probably lies in a network of international collaboration. We are not against British Leyland collaborating with other manufacturers. The issue is on what terms. From what we know of British Leyland, and from what the hon. Gentleman said this morning, it does not have much to bargain with. Protectionism would give British Leyland more of the bargaining power that it needs.
I have always opposed the Edwardes

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strategy of retrenchment, and I make no apology for that. I have tried to expose the flaws in Sir Michael Edwardes's plan. However, I want British Leyland to survive. I want the 1980 plan to work and the planned model range to be put into full development.
Because of decisions taken at the Government's behest, I am worried that the company is dangerously exposed. For example, why does British Leyland have to put so much of its sports car production at risk? Throughout the United States, at whatever price, there is a definite market for British sports cars—the MG, TR7 and TR8. Sir Michael Edwardes has said that the company is making a loss on the MG, but that market could still be satisfied. Unfortunately, because of the sale of the MG works at Abingdon and the transfer of TR7 production from Canley to Solihull, that profitable market could suffer interruption of supply. Despite the success of Jaguar and Rover, there is no hint of a Jaguar and Rover replacement. Castle Bromwich has currently been supplying at least four plants with bodies, but an integral part of the Edwardes plan is to close it down. About £30 million was spent on modernising the plant, with a paint shop and other equipment. Those factors lead us to be severely critical of the plan.
We are dangerously dependent on the LC10 coming to fruition in order to cope with what by 1985 will be about 54 per cent. of the market. If it does not come through properly and on time, British Leyland will be in severe difficulties, if it is able to continue as a major motor manufacturer. I make those criticisms based on information supplied by many people in the car industry. They, too, cannot see how the plan will work.
Indeed, in the past anyone who has tried to analyse the Edwardes plan has been warned off. Television producers and serious and informed press commentators, who wanted to do a constructive analysis of the Edwardes strategy, have been dissuaded, fobbed off or warned off. I hope that we shall have the serious analysis that the company deserves when we get the full debate for which we are still asking.
The previous Labour Government heavily supported the company and committed
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about £1,000 million. Significantly, in October 1979 the company went to the Government with the Confederation of Shipbuilding and Engineering Unions and asked for £2,000 million for model development It felt that it needed that sum to enable the planned model range to be developed. The hon. Gentleman appears to have concealed from the House the fact that, although the company and unions asked his Department for £2,000 million last October, they got only a mere £200 million from the Secretary of State in new money just before Christmas. As the Secretary of State said, most of that was for additional compensation for closures and redundancies. Is this the end of Government support or will more money be put into British Leyland?
Mr. Adam Butler: I do not know how the hon. Gentleman has dreamed up the figure of £2,000 million. The chairman of British Leyland drew up his plan not at the behest of Government but on the position as he saw it. There were certain sums of money that he thought were necessary for the future. Sir Michael Edwardes asked the Government only for the necessary funds for 1980–81.
Mr. Huckfield: The company and unions agreed that the planned model strategy needed an expenditure of £2,000 million until 1985. The only response that the Government made just before Christmas was a mere £200 million. Page 5 of the annual report says:
"The Company has indicated that further funds will be required between 1981 and 1983 to carry through the Corporate Plan."
I wish that the hon. Gentleman had been a little more forthcoming on that this morning.
The Government have been niggardly, and we are worried whether the depreciation allowances—the return that the company can expect—will be sufficient to generate the investment capital required. Ford, for example, has probably calculated that it needs about £400 million gross profit for its replacement investment. If Leyland is to go in for a similar pattern of investment, it may need a similar gross trading profit. There are then the losses which were announced in more detail yesterday. That is the investment strategy and profit expectation of another major motor manufacturers. The

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Government treat British Leyland as though it has to limp from year to yeaar. It is ridiculous to expect our major manufacturing currency earner to limp along on a hub cap and a prayer from year to year. When the company has to plan from model to model, year to year, almost month to month, because it does not know the Government's intention, the situation becomes ridiculous.
The trade unions wanted to see a longer-term commitment by the Government to British Leyland's future, and the shop stewards produced their pamphlet. I wish that the Government would study the pamphlet in more detail. On the bottom of the controversial page 13, there are figures that sum up the whole argument. They show conclusively that all our major motor manufacturing competitors have an annual investment per head and in total at least twice that of British Leyland. That is the basis of the shop stewards' argument. If we are to enable the company to survive we must ensure that it gets the investment that other Governments ensure that their vehicle producers enjoy.
The shop stewards do not oppose international collaboration. They realise that such collaboration and further investment are necessary. That is why they produced their pamphlet.
I wish to say a few words about what we understand to be the facts and figures in the corporate plan. I have to say that we understand them to be the facts and figures, because we do not have the plan before us. I understand that it makes an assumption that inflation will continue at 15 per cent. and will be down to 12 per cent. by 1985. However, the most recent figures show that inflation is running at about 21 per cent. What adjustments will the Government and the company make to the corporate plan in the light of their wrongly calculated inflation figures?
What adjustments will be made in the light of the fact that interest payments are running at about 2 per cent. of sales? That is a vastly different situation from those of most of British Leyland's competitors, which have a positive interest rate relationship. In 1978, BL's interest payments totalled about £56 million.
Bearing in mind that the LC10 critically depends upon the cash flow of the company, which is about 2 per cent. of
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sales, compared with cash flows of between 6 per cent. and 10 per cent. among major competitors, which thereby generate the investment that they have planned, some alteration will surely have to be made to the corporate plan in the light of those cash flow difficulties.
The company has complained about the exchange rate, and even the Minister referred to that subject. We also have a 5 per cent. market decline for the whole of Europe. Surely that requires some alteration to what we understand to be the corporate plan.
Is it a fact that British Leyland will find great difficulty getting the Honda into France? The Honda planned build has already been reduced from 90,000 units to 70,000. If the company cannot get the Honda into France, the planned BL-Honda car at Cowley could become increasingly competitive with the Metro. How do the Government see that situation? Inward investment has been planned on a collaborative basis with the Japanese, but it may have to compete with the company's planned Metro output.
What standby guarantees might the Government be prepared to give to the LC10? The Minister has constituents working in the car industry and he knows a fair amount about it. Having had difficulties in planning expenditure on the LT80 gear box and the O series engine and knowing that the LC10 is critical for Leyland, because it will ultimately replace both the Princess and the Marina in that middle range segment of the market, what will the Government do if the LC10 does not go ahead? It will mean that Leyland will not have a new model programme in the biggest and fastest expanding part of the range. The Government must comment on that. As I said to the hon. Member for Oxford (Mr. Patten), if the LC10 does not go ahead, particularly as a British car, it will be difficult for the company to hold the confidence of dealers and components manufacturers.
Those are questions which must be answered on what we understand to be the corporate plan. I say again that we are hampered by not having the corporate plan before us.
We believe that, if the plan is to survive, something will have to be done

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about imports. We have an understanding with the Japanese that they will not take more than about a 10 per cent. share, but the biggest increase in import penetration has been by European multinationals and some Comecon countries.
Sir Michael Edwardes said in his speech yesterday that Britain is a profitable market except for those who make cars here. Japanese profits from this country have almost quadrupled. We are a lucrative market because of the exchange rate and other factors, and adjustments will have to be made to the corporate plan in the light of that fact.
Even if we applauded the corporate plan—which we do not—we feel that some standby credit should be provided by the Government to ensure that British Leyland is better able to withstand any short-term shocks.
We also believe that there needs to be an improvement in the attitude of the management. Such a company cannot be run by continually putting the jobs of middle and senior management on the line and by imposing wage deals and working conditions on the trade union movement. The company needs the cooperation of the trade unions.
I was glad that the Minister mentioned that, as Sir Michael Edwardes pointed out yesterday, there was a 52 per cent, reduction last year in the number of man hours lost. Even page 8 of the NEB statement refers to the fact that the number of man hours lost last year was only one-third of those lost in 1978. There has been a significant improvement.
On the basis of my contacts with many of the trade unions involved, I can say that every steward, convenor and national union officer wants to see that improvement continue and wants to see the company go on from strength to strength. The AUEW and ASTMS have given their broad endorsement of what they understand to be in the corporate plan, but, of course, the TGWU and TASS find great difficulty in accepting the plan and are severely critical of it.
The management cannot afford to go on riding roughshod over the view of such unions. The active opposition and constructive criticism of the union that represents 75 per cent. of the British Leyland work force must be recognised by the
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management and discussed with the union. All the trade unionists want to see the company survive. Above all, they want to see the Metro launch succeed, the Honda deal go through and the LC10 launched.
Let me put the matter in more of an international perspective. We want British Leyland to survive not only for domestic manufacturing and employment reasons, but because of its position in international motor manufacturing. As I told the House on Tuesday, many of us believe that, because of the Government's decision to impose sanctions on Iran, there is a possibility—I put it no higher—that Talbot could pull out of this country completely. That would leave the British car industry dangerously dependent on American-based and dominated multinationals which have an internationally complex manufacturing pattern.
Volkswagen produces for the EEC in Brazil, Fiat produces in Poland, Ford produces in Spain, Renault produces in Romania, and General Motors produces in Ireland. A Volvo sold in this country has a higher British content than does even the Ford Granada. Those are indications of the internationally complex pattern of production.
We now find that it is probable that Ford will not produce more than about 400,000 units a year in this country. In the case of General Motors, of course, the Chevette is the only car which is properly made here. If that is followed by the T-car, there is no guarantee that that will be assembled here.
In a very complex international manufacturing pattern of trading, that is the context into which British Leyland has to fit.
Mr. Bob Cryer: Does my hon. Friend accept that even the present Government have understood that it is not enough simply to leave external trade in the textile industry to market forces and that the multi-fibre arrangement is one which they have up till now at least endorsed? If the motor manufacturing industry, on which so many jobs in both engineering and textiles depend, continues to decline, some quota arrangement and some international agreement on imports will have to be undertaken.
Mr. Huekfield: My hon. Friend has given me an excellent lead into my next

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point, which is to refer to the policy of the Transport and General Workers Union and, indeed, of the Labour Party since that policy was adopted by the National Executive Committee a couple of weeks ago.
We believe that we shall have to move towards some form of protectionism. If my hon. Friend consults this morning's Financial Times he will be interested to see three different stories of international collaboration or of moves towards some kind of protectionism. This is the way that the rest of the world is going.
It is interesting to note that General Motors has to export from Austria. That is a condition for General Motors being allowed to manufacture in Austria. Ford has to export from Spain. Volkswagen has to export from Brazil. The French Government heavily protect Renault; and actively and continuously they are putting money into PSA-Citroen. The Italians have a very effective restriction against the Japanese. The Germans and the Japanese have some very effective trictions on imports, my hon. Friend the kets. When even Ford and the UAW in the United States are demanding restrictions in imports, my hon. Friend the Member for Keighley (Mr. Cryer) is right to make the comment that he does because that is the way that the rest of the world is going.
It is into that kind of drift towards protectionism, coupled with an intricate and complex international pattern of manufacturing and trading that British Leyland has to fit. That is why the Transport and General Workers Union and the Labour Party have put forward the policy that by 1982 all cars sold here must be assembled here. They do not think that that is completely impracticable. By the time that Michael Edwardes has carried out his rationalisation programme the capacity will be there. It will be fairly easy initially for some of those who sell cars here to set up KD or CKD assembly units here, as PSA-Citroen does already at Ryton and as the Japanese will be doing at Cowley as part of the Honda deal. That policy is not impracticable. It is inherently practicable. It is being done already by the French and Japanese here, and it is being done already by other major motor manufacturers all over the world.
It would also be well in line with the
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policies already being practised by many of our major competitors. We have an effective French restriction on Japanese penetration. The French have effectively curtailed it to about 3 per cent. Spain is fairly effectively closed to all kinds of imports. The Italians already have their quota on with the Japanese, although that may have to be renegotiated following the Alfa deal with Nissan.
That is what is happening already in the rest of the world. Our proposal is not entirely novel. If it were adopted, we should simply be following the patterns and precedents set elsewhere.
That kind of policy has to be pursued in conjunction with a strategy for the revival of and reinvestment in British Leyland, provided to a large extent by Government finance. However, the Opposition accept that it is not just a matter of the Government putting more money into British Leyland. That alone would not do it. That alone would not ensure the survival of British Leyland. If we could get back to the Ryder strategy of 33 per cent. of the market, we do not believe that that by itself would be enough.
We accept that British Leyland has to be part of some international collaborative deal. However, we do not believe that if British Leyland is to drift more and more, as it shows signs of doing, to being an assembly-only operator, that will guarantee the future of British Leyland and the British components industry. The difficulty is that if British Leyland concentrates only on assembly, importing the power train and other more advanced technical parts of the car, as with the Honda deal, we shall lose the skilled people we need for the more technically advanced parts of the car and we shall put a severe strain on the components industry to adjust to that.
To survive, we believe that British Leyland will have to go forward on the basis of collaborative partnership and more protection. That is the policy being pursued by all other Governments. It is the policy being pursued by all other major motor manufacturers. But even if this Government cannot accept that, and even if they cannot accept the mixture of protectionism and increased Government funding which I propose, I am sure that the Minister will agree that to protect Leyland from some of the

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short-term shocks and exposures to which it may be subjected, some kind of standby credit facility and understanding should be available.
I say that especially in respect of the LC10. To survive and to be taken seriously as a major motor manufacturer, Leyland will desperately need the LC10. If it does not proceed with the LC10, it will not have a vital new model for a large section of the market and it will also find the components industry, the dealers and the customers losing confidence in the company. If a collapse of confidence takes place, with an accompanying collapse of confidence in the components industry, we may lose not only Leyland but many other parts of the components industry and many other assemblies as well.
I hope that the Minister will be able to comment on the standby facility which we think is necessary even in his strategy. I hope, too, that he agrees that we want to see an increased Metro build and an increased LC10 building programme. We believe those factors to be necessary even in his plan.
Above all, we ought not to debate British Leyland in this kind of atmosphere on a Friday. We want a proper debate. We want adequate information. Most of the information that I have been fortunate enough to have given to me and which I have been able to provide to the House this morning is not available to my hon. Friends. I regret that. If the Government think that they can get by with debating the affairs of our major motor manufacturing exporter and currency earner on a Friday with four pages of information which is at least a year out of date, they insult the House of Commons.
We want a proper debate. We want to see British Leyland survive. We want to help British Leyland to survive. But we have to ask the Government whether they want to see British Leyland survive.
10.59 am
Mr. Hal Miller: Listening to the hon. Member for Nuneaton (Mr. Huckfield"), one begins to understand the Australian expression " wingeing Poms ".
Hon. Members know that the hon. Gentleman is wingeing because the
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Conservative Government provided the funds that BL requested for it to continue in production. The hon. Gentleman is wingeing because the work force did not follow the advice of leaders of his union, in particular, but accepted the plan for the survival of the company. He is wingeing because the work force accepted the pay and conditions of work, again despite the opposition of the union leaders. He is wingeing because the day of action failed to stop production at BL, except in Glasgow. He is wingeing because there is, once again, management control of the company and Mr. Robinson, instead of taking his case on time to the tribunal, thought he could exercise industrial muscle to prevent the company from moving on to successful realisation of the plan. The hon. Gentleman has talked of " no go " areas in the West Midlands. He has done his best to make certain that nothing goes in the West Midlands.
I should like to confine my remarks to four aspects of the company: the context in which it finds itself, the dealer network, the question of imports, and the necessity for some kind of collaboration, on which I find myself very much in agreement with the hon. Member for Nuneaton whose knowledge of the industry is profound. One only wishes that his contribution had been more constructive.
I share the hon. Gentleman's surprise that the debate is being held today, but not simply because it is a Friday. I am surprised that it is being held at all. It does not seem to me an opportune moment for the debate. There are no land marks. There is no decision point on which it is possible to bring debate to bear in order to influence the outcome.
Mr. Bruce-Gardyne: Is my hon. Friend seriously advancing the proposition that taxpayers should be dunned for £300 million without any discussion?
Mr. Miller: The taxpayers are not being dunned. The money advanced has been the final instalment of the Ryder plan for which this House gave approval several years ago. I am in favour of a serious discussion on how nationalised industries should be financed and the relative priorities that should be accorded to the motor industry as against the

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steel industry, British Rail or shipbuilding. I had not intended to go so far in my remarks. I hope, however, that some hon. Members will take up that necessary discussion. It is not clear to me that there is a coherent Government policy towards the financing of these industries.
It does not seem to me that the present situation calls for a debate. It should have occurred, I agree, in December when the statement was issued, at a time when the information available would have been more up to date. We are fortunate, however, that the company held its annual general meeting yesterday and that the chairman illustrated the context for us. He rightly drew attention to the difficulties being caused to the company and all manufacturers by the present high exchange rate, high interest rates and high inflation rates.
We should take on board and pay tribute to the improvements that have taken place in BL over the past year. My hon. Friend the Minister of State mentioned the greatly improved industrial relations record. This has been achieved despite the efforts of the hon. Member for Nuneaton, but with some statesmanlike assistance from the AUEW that has shown a most refreshing grasp of the situation and a determination to move forward into the future. In contrast, the hon. Gentleman's union has concentrated only on the arguments of the past and on the assumption that a great deal of money will cure everything.
One of the difficulties of which the hon. Gentleman must be aware from his knowledge of the industry is that the company simply does not have the engineering and human resource to deploy vastly increased sums of money at this stage.
Mr. Ernie Ross: The hon. Gentleman seeks to suggest that my hon. Friend is among the few people in the country who believe that the plan put forward by the Leyland shop stewards, his union and my union is not likely to succeed. Would he comment on the " Weekend World " programme, hosted by Brian Walden, that came to exactly the same conclusions, if there is to be an indigenous motor car industry in this country?
Mr. Miller: I did not see that pro gramme.
I wish to continue to highlight the improvements that have been made and to point out that productivity at the Long-bridge factory is at the moment equal to the highest in Europe. This should be taken on board. I agree very much with the Minister of State that we must get out of the habit of regarding BL as a sick Joke. There is real, concrete achievement. The Minister and some hon. Members have seen the Metro line there and the new investment. Even more striking to anyone who has paid a recent visit is the great improvement in morale of management and work force, who at last see a real possibility of successful volume production and are concentrating their efforts to that end.
Part of the context of this debate is the heavy losses that have been made. It should be borne in mind that similar experience is being shared by motor manufacturers all round the world. I have a large list illustrating the situation in other countries. The hon. Member for Nuneaton mentioned MG and talked about a profitable market. The losses on every MG being sold in the United States are colossal. The stocks are enormous. There would not seem to be the demand that he suggests.
Even if the hon. Gentleman is correct, the deal to ensure the future of MG is being held up by the reluctance of the consortium and not, as my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) has tried to suggest, by the reluctance of the BL management. Unless the consortium can reach a decision fairly quickly, I fear that there will be a serious threat to continued production of the MG and employment at the Abingdon plant.
I wish to move on to the subject of the dealer network. Following my remarks about the improvement in manufacturing and of attitudes in the company, it seems that the main question mark over the future of the company has now moved from the manufacturing side to the dealer network and the sales side. I should have welcomed some information on the dealer network in the document about the corporate plan. I am concerned how the dealer network is to be maintained. One

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can readily understand that a network established to sell 35 per cent. of the market and now with a throughput of only 18 per cent., on average, will have great difficulty in financing the considerable fixed investment necessary to bring about the improvement in quality that is now being achieved.
The dealers are vitually dependent on the new models. They need to have confidence that they can survive until the new models come through. There was a misleading article recently in the Economist on dealers' margins. It suggested that they are 20 per cent. I think that the correspondent must have misunderstood the position and must have been referring to the gross margin. Even so, he exaggerated the margin considerably. My understanding is that the net margin in a dealership is about 4 per cent. We must consider the continued viability of the dealer net work.
The network is not getting a profitable new model until nearly the end of the year. That will be only one car and not a product range. It will be a smaller car and the dealer margin will, therefore, be smaller. There must be continuing doubts about how the dealers will sustain their sales operation so that they are able later to sell the increased volumes that we hope and expect will result.
I cannot share the prescription on imports of the hon. Member for Nuneaton. We all need to take on board what is happening in the import market and the threat that that poses to entire United Kingdom production and not only that of BL. Yesterday Sir Michael Edwardes referred to the exchange rate and the fact that margins for importers had effectively been doubled for other European manufacturers and quadrupled for the Japanese.
My research shows that the margin on a cheap Japanese model such as the Datsun Cherry is about £600 per vehicle, which is significant. In Japan there is currently being installed additional capacity for up to 2 million cars a year. It is already the largest manufacturer in the world. One can only fear that the extra capacity is intended for the export market. Japan already exports 50 per cent. of its production. There is a real fear among all manufacturers that the extra production is largely intended for the
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European market. I must ask my hon. Friend the Minister of State to institute discussions on a European level to ascertain what view Governments should be taking about the imbalance of trade.
I do not want to detain the House much longer, so I shall not go into all the reasons why Japanese vehicles are so much more competitive. Only about 50 per cent. of the reason lies in automation. The remaining 50 per cent. is due to various work practices and the organisation of production. They have only one half day spare and on an engine line only 40 castings at the start of the line and one hour's supply of engines at the end of the line.
Japanese imports are increasing in areas that are directly threatening the investment made on behalf of the taxpayer in BL. I refer especially to increased Land-Rover production. The import of four-wheel drive vehicles from Japan has increased dramatically. It doubled last year and it now accounts for about 30 per cent. of the total United Kingdom market. At the same time we are facing the prospect of greatly increased imports of four wheel drive vehicles from Eastern Europe. I do not wish to go into the political arguments and revive discussions about the Olympic Games and whether the Government should be seen to be taking some other concrete action rather than merely asking our athletes to abstain from going to Moscow.
The importance of Eastern European imports is that they are concentrated at the bottom end of the market. When I asked the previous Labour Government about these imports, I was always brushed off with the reply that they amounted to only 1·6 per cent. or 2· per cent. of the market, that they were not significant and that there was nothing to worry about. However, if one does a little more work and examines where the incidence of these imports lies, one finds that they account for 25 per cent. of sales in Britain of cars costing less than £3,000. They are a significant market force in that sector. Further, they act to depress the profitability of superior models because they are equipped and specified at a level that in Europe is reserved for the next higher range of car. They are, therefore, seriously affecting the price structure in the market.

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Eastern European imports of cars last year were equivalent to the BL production that was lost when the company had to lay off the work force in February and March because of excess stocks.
Increased capacity in Spain means that Spain equals and will soon outstrip production in Britain. It is a heavily protected market. The rate of duty or tax is 63 per cent. Local manufacturers are allowed to import models not produced in Spain to complete the range without payment of tax. There is no reason to allow this discriminatory state of trade between Spain and Britain in motor vehicles. I say to my hon. Friends on the Treasury Bench that, in concert with our European partners, serious attention should be given to the question of the policy that European Governments should adopt towards Japanese motor imports. Europe should be taking action against those politically priced vehicles that are damaging the very investment that the British Government are making with British taxpayers' money. There should be a more realistic balance in the terms on which we trade with Spain.
Europe is one of the world's growth markets. It is estimated to increase at about 3 per cent. per annum. However, the United Kingdom industry and the United Kingdom market are too small to support a full product range. We must consolidate and repay the efforts being made in the company by the management and the men to " recreate it," to use Sir Michael Edwardes's phrase, by giving support to collaborative ventures which can secure the industry's long-term future.
The Japanese venture with Honda is by no means sufficient. Part of the answer to the question posed by the hon. Member for Nuneaton about the future of the LC10 and its funding is, realistically—I have been saying this for a long time—that it will need to be secured on a collaborative basis.
Mr. Les Huckfield: The hon. Member has raised an important point. Does he not understand that in the components industry and among the dealers there is a great fear that the LC10 will be outsourced and bought out? If, for example, the LC10 has a foreign gearbox, a foreign engine and roughly the same percentage of foreign components as in the Honda deal, does not the hon. Gentleman understand
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that that could cause a complete collapse of confidence in the components industry and among the dealers? It is vital that the LC10 goes ahead and is seen as a British car.
Mr. Miller: I am aware, in the interests of my constituency, let alone as a result of my personal interest, of the importance of the components industry. I did not intend in this debate to examine the components industry. What I say in the context of collaboration, if not for the LC10 then certainly for future models, is that we need to improve the technical and engineering resources currently available to the company. That is mentioned in the company plan at paragraph 45 which deals with augmenting the technical resources of the company.
In his speech yesterday, Sir Michael Edwardes made it plain that such collaboration is an essential element in the recovery of the company. I welcome that because cars are now being made on a European scale. For that reason, I part company from the hon. Member for Nuneaton on the issue of import controls. It is no longer realistic to conceive all the English companies manufacturing a full range of products. There will have to be European-based production in order to have a full product range. It has always been my worry in relation to the future of BL that neither the Ryder plan nor any subsequent Government action—this is not a political point—envisaged the need for that. I think that it is the only way of securing the long-term future of the company.
I welcome, somewhat reservedly, the the chance to discuss the affairs of British Leyland. I think that it is better for the debate to have taken place on a Friday in a less political atmosphere, thus enabling issues to be discussed on a more factual basis. I also welcome the support that the Government have given to the company, just as I welcome the presence of two Ministers who have had practical experience in industry.
The problems to be tackled centre on the issue of imports. The company will also have to deal with the need for collaboration with other countries. Apart from the general problems which the Government are tackling in a most resolute way there are the problems of the inflation rate and high interest

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rates. We should all pay tribute to the efforts and achievements of those who work in British Leyland and the great steadfastness which has been shown, in particular, by the work force, despite a great deal of provocation and politically motivated but misguided leadership.
11.14 am
Mr. Julius Silverman: I join in the criticism of the timing and scope of this debate. Not merely are the facts of the report somewhat out of date—time has marched on—but, as the hon. Member for Bromsgrove and Redditch (Mr. Miller) has said, the debate should have taken place at least five months ago.
We are now locking the stable door after the horse has gone. Redundancies under the plan are already taking place. Many of the measures are already in operation or are now being put into operation. Largely because of that, I believe that many hon. Members, even some with constituency interests in British Leyland, have not been able to put off their previous engagements to be here today because they probably feel that a debate at this time with the information available can have little impact upon the course of events in British Leyland.
I speak as an hon. Member with a special interest in the British Leyland corporate plan because in my constituency lies the Castle Bromwich plant of British Leyland Pressed Steel Fisher which was scheduled for almost complete closure under the plan. Only the tool room would survive after the phasing was complete. That plant has existed for almost 34 years and its closure will be an extremely severe blow to industry and employment in the north of Birmingham. Closure will create an industrial desert in that area. I have seen that happen before in some areas of my constituency when, for instance, GEC closed a number of its plants.
I am also critical of the distribution of the impact of the corporate plan because, in addition to the Pressed Steel Fisher plant, the major plant at Canley is to be closed. That means that the West Midlands will embrace substantially more than 50 per cent. of the total redundancies contemplated. It should be borne in mind that the West Midlands, which used to be a prosperous and resilient area, is no
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longer so. Industries have disappeared. Redundancies have taken place. Quite recently, at Fort Dunlop, in my constituency, there were 1,200 redundancies. Old industries have tended to disappear or decline. There is a serious fear in the West Midlands for the future. That fear is not merely confined to the present recession.
That is why I am concerned about the distribution of the impact of this plan. I asked, when the plan was announced, to see the Secretary of State to discuss with him the general impact of the effect on my constituency and others. Though I persisted in my request, he declined to see me, on the basis that these were commercial decisions to be made by the company and that he as Secretary of State was not prepared to intervene in any way or to discuss these matters with me. I have been a Member of the House a long time and that was the first time that that had happened to me in such a context.
I appreciate that the Minister would not be prepared to intervene generally in commercial decisions of the company. I do not complain about that. The Labour Government adopted the same attitude towards British Leyland and other plants. However, I should have thought that, when a decision, either by a publicly owned company or even, indeed, by a company in the private sector, affected the economic geography of a particular area and the whole employment situation there, that would transcend the commercial decisions of a company and that it was a matter about which the Government should certainly consult Members and not just shelve it and say " This is a commercial decision for the company." That is one of my first criticisms of the plan.
For Pressed Steel Fisher the plan was to close everything apart from the tool room. There has been some reprieve. Originally it was intended that the paint shop, only recently constructed at a cost of about £25 million, should be dismantled. I was not quite clear what was to happen to it, or whether it was to be transported elsewhere. However, this appeared to the workers in the factory, and to myself, as a piece of nonsense. Fortunately, there seems to have been a reprieve. There seems to have been another minor reprieve—I do not know whether it is temporary—in that a part

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of the press shop is being kept open in order to manufacture the bodies of the Jaguar. That would mean that rather more than 2,000 jobs out of 9,000 would survive. But the result would still be quite catastrophic. Already in this plant about 3,000 employees have been declared redundant or have left in the last year or 18 months. Morale is shocking. Let us face that fact, and let us not assume that there is all this so-called enthusiastic support for the plan, which previous speakers in the debate have suggested. It is not true. I have been to the plant. Many of the workers live in my constituency and that of my hon. Friend the Member for Birmingham, Stetchford (Mr. Davis). There is a grim feeling of foreboding.
When the scheme was first put forward, there was a certain amount of dazed disbelief among the workers. They did not think that it could happen. They thought that this was probably something intended to scare the workers into greater co-operation and fewer industrial disputes. That period has gone. Now there is a feeling " To heck with it all. We do not care. The sooner we get our redundancy pay and get out, the better." That is certainly nothing like the morale which is necessary to back the corporate plan. The situation may be somewhat better in Longbridge and some other areas, but from my knowledge it is not all that good there.
The corporate plan has been accepted by the workers—but what does that mean? What is put to them is this: " You either accept the corporate plan, with a slimmed work force—this is closed, that is closed, and there is this alteration in restrictive practices and all that—or there is no plan at all and the eventual closure of the factory. This is your job under the plan or you will have no job at all." In those circumstances, it is not surprising that the majority of workers voted for the plan. But we must face the fact that, regrettably, it was not with great enthusiasm. They have accepted the plan as their only alternative.
With the wage proposals, similarly, there is a good deal of resentment in the industry. I appreciate that the company says that the money is not available and that it must be competitive. However, we must bear in mind that the going rate
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for pay increases seems to be about 20 per cent. The workers are getting 5 per cent. plus certain dubious additions which may or may not come into operation, depending upon productivity. That is the company's attitude. Even in the plants which are not affected by closure, there is a good deal of resentment about the offer. This does not augur well for the morale of the work force or for the complete co-operation which is necessary to put any plan into operation.
In his reference to the plan, Sir Michael Edwardes has referred to what he calls " winners and losers "—one closes down the losers and one keeps the winners. I think that that was his language. What are losers and what are winners? For instance, it is true that in Castle Brom-wich, up until some time ago, there was a loss of profitability—at any rate, on paper. What I am told by the work force is that this is, to no small extent, a matter of accountancy. When a component is produced in one factory and it is sent to another factory for completion, how does one calculate the economic cost and the economic price of such a component? That is the point. One can deal with things on paper so that a profit becomes a loss, and vice versa.
I am told by people in my constituency who work in the press and assembly shop that 45 hours of work were allocated for the assembly of a complete car, whether it be a Mini or a Jaguar. The 45 hours allocated means, in labour terms an allocation of £80 for the assembly of the whole car body, which seems to be to be ridiculously low. Labour costs are set on that basis. Therefore, I am not too impressed by talk about losers and winners, especially bearing in mind particular circumstances in a particular factory.
I went around the Pressed Steel Fisher factory quite recently. I was shown a good deal of the press machinery which has been there since the present factory was started 34 years ago, some of it even before then. This is bound to affect productivity and profitability. Therefore, the expression " winners and losers" is a term that relates to something which has not been examined sufficiently.
As far as my constituency is concerned, as the company has shown at any rate some flexibility, I am hoping that it will

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reconsider some of its decisions with regard to these matters, especially in relation to the general effect in northern Birmingham.
I appreciate many of British Leyland management's difficulties. It is operating in exceedingly difficult circumstances. There is a world recession in the car industry, which I suppose neither British Leyland nor the Government, on their own, can do very much about. It has occurred in Europe and in America. But there are other factors. Europe and certain other countries, faced with the possibility of unemployment in their car industries, are exporting their unemployment to this country. The enormous 584 per cent. import penetration is not simply a problem for British Leyland. There has been a great increase in the foreign share of the market, even corresponding to a slight decline in British Leyland's share of the market. That is not due merely to the foreign car taking over the shortfall in British Leyland.
There has been discussion about import controls. There is a belief in this country, probably going back 50, 60 or 70 years, in the efficacy of free trade. We live in a different world today. Britain used to import its raw materials, and export manufactured goods to pay for them. At present we import almost as much in manufactured goods as we export. The situation has altered entirely. The practice of free competition based on free prices is out of date because there are so many non-tariff barriers which prevent British or other goods from entering a particular country. For example, Japan and certain European countries have hidden import controls. Therefore, this is a matter which must be taken into consideration, if this country is to survive as a manufacturer. I shall not suggest what form those controls should take, how selective they should be, or the basis of selectivity. It is a complex problem which must be worked out if we are to survive.
Similarly, we must consider the question of the rate of the British currency. The Minister still believes that this will be of assistance to British industry in the long run. I cannot agree with that. I was alarmed at the report that was published yesterday that showed a drastic decline in the rate of interest in the United States. That will almost certainly result in an inflow
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of hot money into this country, probably an increase in the rate of sterling and in the price of British goods, and more difficulties for our exporters.
The Government can do something about those matters. They all affect the climate in which British Leyland operates, and they are matters to which Sir Michael Edwardes drew attention in his speech yesterday and in his report on the corporate plan. They must be considered in order to try to find a solution to the problem. I do not think that it can be solved by British Leyland alone.
I reiterate the remarks of my hon. Friend the Member for Nuneaton (Mr. Huckfield). There must be continuing support by the Government for British Leyland—if it needs it. Other countries support their industries in many different ways, either by concealed subsidies—sometimes, they are not even concealed, as my hon. Friend the Member for Nuneaton pointed out—or by other methods which facilitate their exports. There is a whole range of support in Japan, Europe and elsewhere, including provision of finance.
It has been asked what other international company has had as much support from the taxpayer as British Leyland. If the taxpayer had not supported investment in British Leyland to the extent that it has, the cost to the taxpayer would have been greater. If the consequences of closing down British Leyland are analysed—the effect on the balance of payments, the export industry and the home market of British Leyland, unemployment pay, the loss of income tax and revenue, and all the other factors connected with unemployment—the cost to the taxpayer would have been several times as great.
That must be borne in mind when we talk about support. We must not talk in terms of support to just any commercial concern. In this respect British Leyland is unique, and we must not forget it. It is the only British-based manufacturer of cars that is a currency earner. This matter must be considered not only on a British Leyland basis but in terms of cost to the nation. Therefore, I reiterate the advice that was given by my hon. Friend the Member for Nuneaton with regard to support by the Government. Although I have doubts about the plan, I hope that it will succeed and that it will bring British

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Leyland back as a major manufacturer of cars.
11.37 am
Mr. John Patten: I am glad that the hon. Member for Birmingham, Erdington (Mr. Silverman) was able to get away from my constituency, because it has permitted us to hear his very well-informed speech about the present state of British Leyland. I am sorry that so few Labour Members who represent constituencies with strong BL interest have felt able to be present on a Friday. Hon. Members, such as my hon. Friends the Members for Bromsgrove and Red-ditch (Mr. Miller) and Birmingham, Northfield (Mr. Cadbury), with strong constituency interests would also have wished to be in their constituencies, but, like me, they thought it important to come to the House and take part in the debate.
The hon. Member for Nuneaton (Mr. Huckfield), who, unfortunately, is not in his place at the moment, has already been criticised as a wingeing Pom by Conservative Members. The hon. Member for Nuneaton has been truly " wet "—to use the term by its old-fashioned sense rather than in its new-found Conservative news-peak sense—to complain that to hold the debate today is somehow unfair and below the belt. I am pleased that the debate has been relegated to a Friday, because I think it is unfortunate that the House should be asked to debate the corporate plan. It is a good thing that we should be asked to debate the matter of financial assistance to a company. Equally, it is a good thing that we should be asked to debate the overall strategy of the economy as it relates to the motor car industry, but it is totally wrong for us to be asked to debate a corporate plan as such.
One of the great strengths of the Government has been that they have not been prepared to involve themselves in detailed negotiations about pay, productivity, industrial relations, and so on, within BL. The Government have not interfered with British Leyland on a day-today, month-to-month basis, and it is this, above all else, that has contributed to a new-found sense of realism within that hitherto strife-torn company.
Is it not extraordinary that, although we were told by many Labour Members and their trade union colleagues before
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the general election that immediately the Tories got in there would be disaster for BL, that BL would be allowed to go down the plughole, that it would not be supported financially and that there would be industrial warfare within our greatest motor manufacturing company, exactly the opposite has happened? We have seen the greatest period of industrial peace within BL that the company has enjoyed since it was first put together in its present form. During the course of the last year, as my hon. Friends representing constituencies with BL interests know, we have seen a much greater record of industrial peace and productivity. So much for the threats and the implications that were made on no sound evidence by Opposition Members before the last general election.
Far from withdrawing support from BL, Her Majesty's Government have given a substantial amount of taxpayers' money in support of the company. On 20 December last year, my right hon. Friend announced support of £300 million to BL—a matter that we are debating today—and he has promised to consider another £130 million over the next two years—1981 to 1983—dependent on the performance of the company.
My right hon. Friends the Prime Minister and the Secretary of State, and Ministers on the Treasury Bench this morning, have lime and again supported BL and congratulated Sir Michael Edwardes and the work force on what they have done during this year which we were told would be disastrous for BL but which, relatively speaking, has turned out to be a more successful year for the company than Labour Members had predicted.
The hon. Member for Erdington, whose knowledge and great experience of the motor car industry I respect, said that the imposition of the Edwardes pay settlement on the work force would store up trouble for the future and would make the trade unions feel that they had not been adequately consulted and that their part in the planning process of BL would receive no attention from the management. That was also one theme of the speech by the hon. Member for Nuneaton.
In my constituency there are some 20,000 people working at Cowley, but a yawning gap has opened up between the trade union leadership and the

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men on the shop floor. The trade union leadership says " Take us into the planning process. Pay attention to our demands for greater Government involvement, more import controls and the rest. Do not accept the Edwardes plan; do not accept the pay deal." But the men on the shop floor—the men who produce the motor cars, the men whose jobs and families depend on the success of BL—have listened to common sense and to the management. That new sense of realism which has come over the shop floor will contribute to the success of BL in the incomparably difficult years ahead.
I think that trade union leaders—there are many articulate, well-informed trade union leaders in my area who care passionately about the motor car industry—should stop and think about the complaints that they have made thus far. They should think for a second that they might be wrong. They should consider " Even if I do not believe I am wrong, is it not odd that my members—thousands of members of the Transport and General Workers Union in Oxford, thousands of members of the AUEW and hundreds of members of TASS—have decided that they do not wish to go down the path that the trade union leadership has suggested is right and that they prefer to let management get on and manage?" That should make intelligent and able trade union leaders—we are lucky to have many of them—pause for thought in the aftermath of the day of action.
I believe that it is a mistake for us this morning to worry about the corporate plan in its details. I am pleased that in the debate hon. Members on both sides of the House have not been fighting over the corporate plan like dogs over a bone saying " This plant should not be closed, but my plant should be kept going." We have largely avoided that this morning. To have politicians involving themselves in the management of the company will produce a dog's dinner, not a successful company.
We have only to consider the history of Government intervention in heavy and manufacturing industry over the past 30 or 40 years. Every time politicians have got their hands on plant and industrial location—this applies both to Labour and to Conservative Governments—there has been trouble, for example in the
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steel industry. What a disaster it was to site the steel works at Ebbw Vale in 1936. Consider the trouble that caused. It has probably been a disaster to locate the Ravenscraig and Llanwern plants where they are—and a Conservative Government did that for reasons of intervention.
It is a great mistake for politicians to think that they have the right to tell the board of directors and management of a huge industrial combine such as BL how to run their affairs day after day, week after week. That is why I deplore the fact that in a sense we have had to debate the corporate plan. I would have welcomed a more general debate on the motor car industry within the framework of which one can set BL or, as we must from time to time, a debate on financial support for a company like BL in a specific sense. But to debate the overall corporate plan is a great mistake.
I wish to restrict my remarks to the area of international collaboration; I do not wish to talk about the corporate plan in detail. I believe that the future of the motor car industry in this country will be inexorably caught up with foreign collaboration. The Minister of State and other hon. Members have mentioned this important point. There is no doubt that BL in its present shape is too small a company in the world context to generate, first, the engineering resources and, secondly, the investment resources that it needs for the 1980s.
There is no doubt that a small to middle-sized volume car-producing company, such as BL, for historic reasons of foreign competition and misapplication o resources in the past is unable to produce the engineering skills and expertise that it needs. The only way for BL to survive in its present shape as a small to medium-sized volume car-producing firm is in cooperation with foreign firms, whether European, Japanese or North American.
Equally, we all know that, although the Government have most generously continued to support BL, BL will be unable to find from internally generated profits enough of the capital that it will need in the next four or five years. Therefore, it will have to look abroad not only for engineering and technical skills but for capital and capital investment. That is why I wholeheartedly welcome, as did the hon.

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Member for Nuneaton, the collaboration that is beginning to take place between BL and Honda. I think that the hon. Gentleman saw, as I see, the Honda deal as extremely important in developing international links. I hope that the BL-Honda deal, which will begin the production of the BL Bounty at Cowley in 1981, is only foreshadowing increased international involvement by BL.
I think that this is an area in which the Government can involve themselves without intervening in the corporate affairs of BL. I think that the Government can do a great deal to encourage BL to involve itself in more international collaborative projects.
Much of the debate has focused properly on the short-term. The longer-term debate should involve international collaboration.
11.50 am
Mr. Ernie Ross: The hon. Member for Oxford (Mr. Pattern) said that it was a mistake to debate the corporate plan. That ties in with what Conservative Members believed prior to the election in May. That is made clear in the report by the Conservative Party policy group on nationalised industries. The report stressed that Conservatives intended to demand that each nationalised industry achieved a set rate of return on capital employed and that, if managers did not achieve that, they would be replaced. The report said that they would, however, be supported in whatever other action they had to take to achieve that return even if that meant that men were laid off. It said that uneconomic plants should be closed down and whole businesses sold off or liquidated.
The group made it clear that public corporations should not compete with private industry. That is shown in the Conservatives' attempt to denationalise the aerospace industry and the way in which they regard the shipbuilding industry.
The corporate plan suggests that Conservatives do not believe in an indigenous motor industry.
The document stated that there would be no direct Govenment control of prices or wages in nationalised industries. The only control would be the insistence on a rate of return on capital,
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even if that involved the industries concerned raising prices, selling off surplus land or assets or closing uneconomic activities. We know where that has led us.
The document also states that the re turn on capital figures should be rigged so that an above average wage claim can be paid to the " vulnerable " industries. The document groups industries into categories—those which are vulnerable and which might demand Government support and others, which should be allowed to go to the wall. The document states that the trade unions could be taken on in the railway industry, British Ley land, the Civil Service and the steel industry. The Government's recent actions confirm the contents of that document.
There are no British Leyland facilities in my constituency, but I am sponsored by AUEW/TASS which organises over 7,000 qualified engineers and technicians in British Leyland. In April 1977 that organisation produced a booklet called " Leyland Cars—the Crisis of Design and Tooling Capacity." It was a response to growing concern among members about British Leyland. It became apparent quickly during the discussions on the report that the problems were common to the whole of the British motor industry.
According to the Society of Motor Manufacturers and Traders, imports continued at a high level last month. Imports accounted for 58·46 per cent. of the total sales compared with 57·51 per cent. a year ago. In the first four months imports were 57·55 per cent. against 54·87 per cent. a year ago.
Both my union and the one to which my hon. Friend the Member for Nuneaton (Mr. Huckfield) belongs suggest that one of the ways forward for the motor car industry is to introduce some form of import control to allow us to rebuild the British motor car industry.
My union has produced a booklet entitled "Import Controls Now". We set out some of the problems facing the industry and try to point the way forward. The booklet states:
" The figures produced by the SMMT clearly indicate where the growth in imports has come from in the last ten years. Despite spectacular growth from other areas and countries, in particular periods, the EEC countries have

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consistently produced the majority of cars imported into Britain. For example imports from Japan rose rapidly between 1971 and 1975, increasing their market share from 1·0 per cent. to 90 per cent. But in 1975 an unofficial agreement was reached with the Japanese Automobile Manufacturers Association to limit sales and since then the Japanese market share has been steady around 10 per cent. Imports from the EEC countries have continued to rise and now two thirds of all imported cars come from the EEC."
In April, cars assembled outside the United Kingdom accounted for 51·33 per cent. of Ford's registrations, compared with 41·89 per cent. in April 1979. In the first four months Ford imported 53 per cent. of the cars that it sold, compared with 50·4 per cent. in 1979. Ford has a 32 per cent. share of the cars sold in this country. The figures represent a direct attack on our balance of payments. It is a problem that should be tackled.
In our report we set out some of the causes for the decline in sales. One cause is the bad publicity that the company consistently receives. A major factor is also the range of models that British Leyland has to offer. With few exceptions, British Leyland cars are older and were developed earlier than cars produced by its major competitors. That is one of the reasons why we do not object to the liaison between British Leyland and Honda, although we believe that there would be no real need for it if we concentrated investment in our own industry.
British Leyland is unable to offer a modern range of models because it has invested less than its major competitors. Our booklet contains a table setting out investment as a proportion of sales. We give figures for Volkswagen, Renault and BL. Although there are fluctuations from year to year, the overall under-in-vestment in British Leyland is clear. The figures also show that the biggest gap between BL and its competitors was in the early 1970s when it was privately owned. The figures bear out some of the conclusions in the Ryder report of 1975. It stated:
" In the automotive industry most manufacturing equipment is replaced after 8–12 years. In BL more than half the machines and equipment are over 15 years old."
The money which should have been invested in new models and new equipment was instead paid to the shareholders. The report stated:
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" Despite the low level of profits BL has over the period distributed nearly all of them as dividends. In our view, this policy is clearly wrong."
That view is shared by many workers in BL.
The mistaken policy of linking investment to industrial relations meant that, even after the State took a majority shareholding, the rate of investment was low. Many of British Leyland's current problems stem from the fact that there was an inadequate level of investment when the company was in private hands. Even if British Leyland had not been weak, imports from multinational companies would have increased dramatically at the end of the 1970s. Multinational corporations decided to import cars into Britain, rather than to make them here. Detailed figures are available only from 1976. However, they show a trend towards imports and against production in this country.
Conservative Members and others made promises about the benefits that would accrue if we joined the Common Market. They said that our accession to that body would help the British motor car industry. In 1975, the Society of Motor Manufacturers and Traders said:
" The EEC offers a vastly increased home market for British industry as a whole, allowing economics of larger scale production."
Events have demonstrated that American and Western European companies have chosen to maximise economies of scale in their French and West German plants. The United Kingdom has become an easily accessible home market. The import of finished cars has had a knock-on effect. The sharp decline of our motor car industry has greatly damaged the supply industries. In its report, the tyre sector working party stated:
" The decline of Britain's vehicle industry has wide implications for component manufacture in the United Kingdom... BL alone is estimated to provide work for 250,000 people in the component industries in addition to directly employing 165,000."
A combination of reduced United Kingdom car production and other internal difficulties meant that the United Kingdom tyre industry made five million fewer tyres in 1978 than in 1970.
Other component industries may not have contracted as severely as the tyre industry. However, they have felt the impact of the import of finished products.

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The Secretary of State suggested that Lucas might wish to buy some shares in British Aorospace. That company has expanded by buying 50 per cent. of the shares in the French company, Ducellier, in July 1979. Associated Engineering bought the leading French maker of plane bearings Société Industrielle des Cous-sinets, in December of last year. The knock-on effects harm not only British Leyland but the component industry.
The decline of the component industry has also affected the machine tool and chemical industries. It has had an adverse effect on the steel industry, and has contributed to its decline. British Steel used to be a major supplier of British Leyland. The decline must have contributed to the loss of 52,000 jobs in that industry.
Mr. Adam Butler: The hon. Gentleman has spoken about the effect on the components industry of low production at British Leyland. Perhaps he would care to reflect on the figure that I gave earlier. I pointed out that, thanks to the strike by the CSEU last autumn—I understand that the hon. Gentleman's union is a member of the CSEU—59,000 Leyland vehicles were lost. That had a very serious effect on the component industry.
Mr. Ross: Obviously, any dispute will have an effect on the industry's ability to supply a product. That does not alter the fact that strikes and the loss of man hours do not have the same impact as a lack of investment. Some of the disputes have concerned levels of manning and track times. Those problems are linked with under-investment. Workers have sought to protect their wages. British Leyland has lost profits as a result of its inability to compete with foreign imports.
We shall continue to argue in favour of some form of import control, especially for British Leyland. It is essential to reduce imports and to increase production in the United Kingdom, if the motor industry and those industries that depend on it are not to go into further decline. Without direct State intervention and import controls, it is difficult to see how that can be done. Multinational companies will continue to import cars and kits into the United Kingdom, and to have those kits assembled here. The rebuilding of British Leyland's model range will be slowed. British Leyland's declining market
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share endangers its programme for new models in two ways. First, it reduces its income and makes the company more dependent on a hostile Government for the massive investment that it needs. Secondly, if the decline continues, British Leyland will begin to lose one of its most valuable assets, namely, its extensive dealer network. Dealers will either go bankrupt or move to other manufacturers.
If British Leyland's decline in sales is allowed to continue, those two factors will combine to destroy the programme of investment that is essential for the company's survival. Import controls are therefore essential. They will ensure a stable and growing domestic market for British Leyland. It will enable the company to generate the funds that it needs to revitalise its model range.
My union has prepared many reports and has appeared before a Select Committee. We have suggested a way forward and an alternative for British Leyland. We have pointed out that it is no accident that the British Leyland Honda deal was followed almost immediately by record import penetration from the Common Market countries. That highlights the crucial weakness in the British motor industry. It is the inevitable consequence of a short-sighted policy that has been pursued by the company, the NEB and the Department of Industry.
There are three major weaknesses in British Leyland. First, the British motor car industry is increasingly reliant on imported technology. That adversely affects employment levels, training and the provision of skilled engineers and designers. Secondly, the import of technology—whether in the form of design or of finished products—leads to a drain on Britain's balance of payments. One would expect Conservative Members to be concerned about that. It puts a constraint on our development as a technologically advanced industrial nation. It seriously threatens future skills, because there will be fewer and fewer apprentices to continue the skills that are generated and required for the success of that industry. Thirdly, one must consider commercial independence. Commercial secrecy and future model plans are linked with competitiveness. It therefore cannot be healthy if the only indigenous British

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motor car industry has to rely on machine tools and design companies—as a result of the first two weaknesses—that have direct links with their multinational competitors.
The proposed reductions in model volumes, together with an investment programme that is substantially smaller than those of our competitors, will not achieve one of the major planks in British Leyland's plans—namely, competitiveness irrespective of the manning levels that are agreed. Inevitably, British Leyland cars will be unable to compete successfully against other major producers. That will lead to further contraction and the eventual extinction first of British Leyland, and then of the British motor car industry. The multinational corporations will then retreat to Europe or areas of unorganised labour where they can produce cars even more cheaply. I believe that both Sir Michael Edwardes and the Tory Government understand and support that idea. They appear to be trying to ensure that that occurs with a minimum of fuss and disruption, and they are trying to lay the blame for the demise of British Leyland anywhere but themselves.
Mr. John Patten: Is the hon. Member really suggesting that the present Government wish to see British Leyland collapse? If so, can he explain why the Government put £300 million into British Leyland last December?
Mr. Ross: I am glad that the hon. Member intervened then because I was just about to give a clear example of the way in which Tory Members are collaborating with Sir Michael in bringing about the rundown of British Leyland.
Mr. John Patten: Rubbish.
Mr. Ross: An example is the decision to cancel the new aluminium foundry which was designed to meet 60 per cent, of British Leyland's requirements for aluminium castings, particularly for cylinder blocks. Perhaps Conservative Members are not engineers and they may not understand the significance of what I am saying. When one wishes to sell a car, one must consider two component parts—design and capability. The design is very much up to the market. It depends on what people want and the shape of car that they wish to drive. The capability
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is the " tiger under the bonnet". That depends on the engine that is put into the car. It is crucial that we should manufacture and design our own engines so that the technology and specifications of those engines are not readily available to our major competitors, and so that we can ensure that our cars will be sold on the market.
One of the requirements for the engine is the cylinder block. The foundry was designed to meet 60 per cent. of the BL requirements for aluminium castings and the cancellation of this project leaves British Leyland entirely at the mercy of our European competitors. Originally it was the intention that these castings would be bought rough from Fiat, the company which, because of its growing monopoly in this area, would determine the terms, financial and otherwise, on which we obtained the castings. Looking at the way in which the corporate plan is structured, and knowing full well the Conservative views. I believe that it is likely that these castings will be bought as finished products. It makes much more sense to the Government not to employ skilled tool-makers to finish the product. As a result, our balance of payments will suffer and consequently there will be a further loss of skilled jobs in British Leyland.
The original investment of £24 million was described initially by Sir Michael Edwardes as absolutely essential for the survival of British Leyland cars. Yet the decision not to proceed with the foundry has not raised any comment from Conservative Members.
One of the other areas which concerns us is that of salaries paid in the industry. If we are to have a viable and healthy industry, clearly we must ensure that we attract the right kind of skilled workers. This debate about the corporate plan illustrates a critical weakness in the strategy pursued to regenerate the British motor industry. If the nation fails to reward workers in the nationalised industries, the nation will suffer. We cannot expect high productivity from low-paid workers. If the company fails to reward adequately those qualified technicians and engineers we shall lose them and we shall lose their ability to design and develop new products.

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In 1978 France produced a report which highlighted the acute shortage of design staff. British Leyland Cars' staffing establishment in 1978 was 148 for design engineers. However, at that time only 90 designers were employed. One of the reasons why BL could not attract designers was the low rates of pay operating in the industry. If we continue to fail to reward these people we shall shortly become a nation of assemblers, increasingly relying on imported technology. Skills and jobs will go, and British engineering, which once led the world, and could do so again, will become an also-ran. One of the missing elements in this plan is the commitment to reward workers fairly.
I welcome this debate, although I would have preferred it to take place when more Members were present. I hope that we shall continue to have debates about British Leyland and its corporate plan. My union does not believe that the corporate plan is the way forward. It is our responsibility as elected representatives to explain to the electorate that if we lose British Leyland we can say goodbye to the whole British motor industry. Without the existence of a major British manufacturer the constraint that is placed upon the American and French multinational corporations, such as Ford, Vauxhall and Peugeot, to retain a substantial manufacturing capacity in Britain, will disappear. That rationalisation will be considerably accelerated without British Leyland, and this will lead to the eventual demise of an indigenous British motor car industry.
This debate has been crucial because it is vital that we discuss the future of the British motor car industry. I hope that we shall establish within the industry working practices which will ensure that we have a healthy and viable motor industry in the future. I only wish that Conservative Members understood that some of the efforts made by workers and others to put forward plans, as alternatives to those of the employers, are reasonable and responsible moves. It does not help this debate that one of the managers of British Leyland should accuse the Transport and General Workers Union of making a deliberate and concerted effort to stop the company from imposing its new pay and work practice package. That is not the kind
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of language that is required in British Leyland. Instead a commitment is required to expand the company—an expansion in both volume production and the range of models in order to ensure that we have a healthy and viable indigenous British motor car industry in the 1980s.
12.19 pm
Mr. Jocelyn Cadbury: At the heart of this debate is the question whether a British-owned indigenous motor car industry is to survive. I was interested in the point raised by the hon. Member for Nuneaton (Mr. Huckfield). He suggested that much more Government money should be made available to British Leyland. How much is the hon. Gentleman suggesting—an infinite supply? However, we must be clear that, without the £300 million assistance for 1980–81 and the further £130 million for 1981–83, the company will not be able to carry out its investment plan for new models and plant. If that plan is not carried out, BL will effectively be renouncing the hope of remaining a volume car producer. It will almost cease to exist as a viable manufacturing unit. We should therefore consider what the country will lose.
I wish first to emphasise the importance of BL to the British economy and the West Midlands. I also wish to mention what the company has achieved in the past year, and assess the chances of success for the future plan.
BL is unique among domestic car manufacturers in that it buys almost exclusively British components. It spends £2,000 million a year among 7,000 United Kingdom businesses. A significant proportion of sales by motor component manufacturers such as Lucas, GKN and Rubery Owen, are dependent on Leyland. Diverse industries such as glass, rubber and carpets are strongly linked to the fortunes of BL. I agree with the hon. Member for Birmingham, Erdington (Mr. Silverman) that, when British Leyland loses its market share, jobs are lost at companies such as Dunlop and Triplex in Birmingham. BL employs about 9 per cent. of the working population of Birmingham.
The second aspect of British Leyland's strategic importance is its contribution to the balance of payments. In 1979 the

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company earned a trade surplus of £700 million. We should compare British Leyland's performance with that of other domestic motor car companies. For example, the Ford company's effect on the balance of payments is negative. It imports more than it exports.
Despite many external factors, 1979 was a turning point for BL. Those external factors have tended to overshadow Sir Michael Edwardes' achievements, particularly over industrial relations. Much has been achieved. A tremendous improvement has been made in communications by BL management to its employees. The favourable outcome of the ballot last year on the company's recovery plan, in which 87 per cent. of those participating voted in favour, was due to the excellent communications and presentation of the plan to the work force. Strenuous efforts are being made to brief junior management and use it as a vehicle of communication to the work force. Previous generations of British Leyland management did not do that. It is a major step forward and the key to raising morale among the work force. Sir Michael Edwardes is setting a good example which the remainder of British industry should emulate.
It took many months to get agreement on the annual wage deal and the introduction of new working practices.
Mr. Les Huckfield: There was no agreement. That wage packet and the 92-page document was imposed on the work force. I hope that the hon. Gentleman will not try to mislead the House into believing that the trade unions agreed to the proposal.
Mr. Cadbury: The majority of the work force accepted it. The fact that the work force returned to work and only sporadic strikes occurred, against the advice of union officials, shows that the proposal was accepted. It is not easy to get people to change habits and customs built up over many years. To have got this far is a major achievement. We should not expect too much too quickly.
Mr. Huckfield: I do not believe that the hon. Gentleman understands what he is talking about. The 5 per cent. has been put into pay packets, but the imposition of the 92-page document and the
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changes in working practices have not started. The hon. Gentleman cannot claim that putting an extra 5 per cent. in the wage packet is a great achievement.
Mr. Cadbury: Many of the problems surrounding working practices are being tackled. It was never intended that these proposals would be introduced overnight. The new working practices are being introduced.
Against that background of change, during 1979 we saw a 52 per cent. reduction over 1978 in the number of days lost by strikes. That is a remarkable achievement. Certainly at Longbridge there is a new mood of realism. One should not confuse that with enthusiasm, as the hon. Member for Erdington pointed out. However, the new realism was demonstrated on Wednesday during the so-called day of action, when Longbridge continued to work normally and no production was lost.
A second major achievement last year and during the first part of this year was the introduction of the new model programme. Revised models of the Mini, the Allegro and the Jaguar-Daimler range have been launched, as well as the convertible TR7 and the Land-Rover V8, and the new Morris is to be launched in July to replace the Marina. Perhaps the most critical feature of the new programme—the Metro—is on target for launch in October. I had the opportunity to visit the new plant with other hon. Members some time ago. I was tremendously impressed to see what will be the most modern car assembly plant in Europe. About 50 per cent. of all the robot equipment in this country is inside that plant in my constituency.
Thirdly, a further major achievement was the signing of the deal with Honda. Critics say that this deal will lead to a Japanese invasion and loss of business for British manufacturers. However, the Honda bounty will generate new business for British Leyland. Without that deal there would have been no replacement for the Triumph range. BL does not at present have the design and engineering capability to develop a new car of that type by itself. Without that deal it would have to withdraw from that part of the market.
We must judge BL's performance over the past year against the background of

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the extremely hostile environment in which it had to operate. It must have been a source of extreme frustration for the company that it lost far more production from external disputes last year than from internal troubles. The lorry drivers' strike and the engineering strike did terrible damage to the company. Average weekly production fell from a consistent 16,000 cars a year in May and June last year to 7,000 in September. The management could not control those external disputes.
A further area beyond the company's control is the high value of sterling. As has been said, the United Kingdom is now a highly profitable market for importers. For example, if the Japanese made a 10 per cent, return on the import of cars last year, they are now making the equivalent of 40 per cent. The converse of that is that BL's exports are that much less profitable, and that is particularly important in the American market, where so many of the luxury and sports car models are sold.
There is also the whole problem of the world recession. We have only to look to America to see that there are terrible problems for motor companies in the United States where 200,000 out of 758,000 hourly paid employees are laid off. Of course, we know the problems facing Chrysler.
In those circumstances, it is inevitable that competition will become more intense. The Japanese are experiencing increased competition in the United States and they will be looking to Europe to ensure continued expansion of their already immensely powerful motor industry.
I am totally opposed to general import controls, which I gather are advocated by some Labour Members, though it is not clear whether all Labour Members agree on that subject. The hon. Member for Nuneaton must make it clear whether in putting forward that policy he is advocating that we should tear up almost every free trade agreement that we have signed with the Common Market and the rest of the world.
I agree with my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) that there are certain areas in which the United Kingdom is suffering from unfair imports. My hon. Friend mentioned Spain and Eastern Europe. If we send cars to Spain we have to pay a 63 per cent. tariff, whereas cars sent here
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from Spain bear only a 4 per cent. tariff. I understand that that will be rectified if the negotiations for Spain to join the Common Market are successful, but the Government should take account of that situation.
Last year, about 40,000 vehicles were imported from Eastern Europe, representing 2·3 per cent. of our market. They come in at about 25 per cent below the price of the equivalent Western products. Although the figures are comparatively small, we should beware, because the Japanese started their invasion of this country at the bottom of the market and built on to the niche that they established. I should like the Government to take note of what could be a further long-term threat.
Mr. Ernie Ross: I find it difficult to follow the hon. Gentleman's claim that imports from Comecon are a threat. Like him, I obtained from the Library the motor industry's figures of the import penetration of new cars into the United Kingdom. The hon. Gentleman suggests that the penetration of 1·78 per cent. by Comecon countries is a threat, because that is how the Japanese got started.
However, will the hon. Gentleman reflect on the fact that the industry's figure for Comecon penetration between December 1978 and December 1979 was 2·05 per cent. and the fact that it was reduced to 1·78 per cent. between April 1979 and April 1980 hardly supports the hon. Gentleman's claims.
Mr. Cadbury: The figure that I have for last year is 2·3 per cent., but the hon. Gentleman's intervention does not detract from my point that the Comecon vehicles are sold at well below the price of equivalent Western vehicles.
I agree with my hon. Friend the Member for Oxford (Mr. Patten) that it is ridiculous that we should consider debating details of a corporate plan which is the business of the company's management. However, I should like to say something about the likelihood of the plan's succeeding.
A great deal of momentum has been built up under Sir Michael Edwardes' dynamic leadership and there is a good chance of success if that momentum is kept up over the next three years. But

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success depends on certain aspects of the plan being carried out.
First, the new models that are planned in the next three years must be launched on time. Secondly, there must be further collaborative deals over the next few years. British Leyland is only the fifteenth largest company in the world motor car manufacturing league. It is significant that Renault, Volvo and Peugeot share a joint engine plant at Douvrin in France. Collaboration is the only way to obtain economies of scale and the only way that British Leyland can overcome the serious shortage of engineering capability, which cannot be made up in time. There is no alternative to collaboration with other countries.
Thirdly, BL must continue to raise its productivity. I do not believe that it is over-optimistic to expect that at least European levels of productivity can be achieved as the new equipment is introduced. Fourthly, the trend towards better industrial relations must be maintained. The new mood of realism needs to be converted into one of enthusiasm. There is still a long way to go in that respect, but I believe that the tremendous efforts that are being made to improve communications will eventually succeed in rebuilding confidence among employees in their management.
A fifth element, which is crucial, is that the company must continue to improve the quality of its vehicles. That is the only way in which the public will begin to regain confidence in the products.
If all those objectives are achieved, British Leyland will begin to earn a reputation as a reliable producer of good quality vehicles and the car dealers will regain confidence in the company. That is crucial, because as long as the dealers are deserting to other companies, the market share of BL will decline.
I am optimistic enough to believe that those objectives can be achieved and that is why I support the Government's decision to put more public money into the company. To fail to support Leyland over the next two critical years would be to condemn to death Britain's only indigenous car company.
I should like to add that the problems that British Leyland is trying to overcome
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are the problems of British industry as a whole. That is why Sir Michael Edwardes' achievement is so important. He is showing the rest of British management that British industry can be revived and that one can win in this country.
12.38 pm
Mr. Terry Davis: Unlike the hon. Member for Oxford (Mr. Patten), I welcome the opportunity afforded by this debate.
I was very surprised to hear the hon. Gentleman say that it was totally wrong for the House to be asked to debate the corporate plan for British Leyland for 1980. It is not a matter of interfering in the day-to-day or month-to-month decisions of the management of British Leyland. It is a matter of accountability for taxpayers' money. I am amazed that any hon. Member should say that it is not the job of Parliament to hold the management of a nationalised industry accountable for the money which it has had for its investment programme and to monitor its achievements.
It is wrong to describe an annual debate on the performance of British Leyland as interfering in the day-to-day decisions of the management of British Leyland.
Mr. John Patten: The hon. Member accurately reported to the House the first of my words, but I went on to say that I would have welcomed a general debate about the financial framework of British Leyland or about the framework of the economy as it affected the motor industry.
Mr. Davis: There is no difference between us about what the hon. Gentleman said. My point that it is right for hon. Members to debate the performance of a nationalised industry and not simply the financial framework of the industry or the motor industry in the wider sense as opposed to the nationalised company which we are discussing today.
I am interested in this debate for two reasons—first, because I worked in the motor industry for several years, and I worked for British Leyland for five years from 1974 to 1979. Secondly, I am interested because a large number of my constituents work for British Leyland and its suppliers, and many more of my constituents used to work there but have either retired or lost their jobs through

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the redundancies which have occurred and which are now occurring.
Since I intend to express some criticism of the document that is before the House, I hope that I shall not be accused of wanting British Leyland to fail. On the contrary, it is because I am so anxious for British Leyland to succeed that I am critical of the document and the plan that it represents.
For reasons that I have explained, I approached the document with great interest, and I was disappointed with its contents. I am appalled that the House of Commons should be expected to debate the future of British Leyland—in effect, the future of the British motor industry—on the basis of such inadequate information. Bluntly, I regard it as a pathetic document that has been presented to the House of Commons and that we are asked to take note of today.
I should like to comment first on the section dealing with the performance of British Leyland in 1979. I have never seen such a mish-mash of figures. In some places, we are given figures for the first half of 1979. Elsewhere, we are given figures for January to September 1979. In one place, we are given figures for January to November 1979. To some extent, that is understandable because the document was published in December at the time of the decision by the Secretary of State to continue the financial support which had been promised by the Labour Government. It was entirely proper in the circumstances for the Secretary of State to publish the latest information available at that time, although it is a little peculiar to set out the information in tables which compare six months, nine months or eleven months of 1979 with the complete years of 1977 and 1978.
Even the present Secretary of State must appreciate that it is not possible simply to extend the figures for part of a year to get any idea of the performance of British Leyland in a full year, bearing in mind that we are dealing with an industry which is seasonal in sales and production. In any event, the figures were published five months ago. In the meantime, the full figures for 1979 must have become available. I cannot understand why the Secretary of State has failed to provide Parliament with the
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figures for the full year of 1979.
My hon. Friend the Member for Nuneaton (Mr. Huckfield) raised this matter, and the Minister of State intervened to point out that the annual accounts were now available. But that is not good enough, for two reasons. First, those accounts are not available in the Vote Office—at least, they were not available this morning. A copy of the annual accounts is not even available in the Library. Hon. Members can get copies for themselves, of course, but the Secretary of State has an obligation to provide information to the House, and he has failed to meet that obligation.
Secondly, it is not good enough to refer hon. Members to the annual accounts, because there is a world of difference between a performance review and the annual accounts. There is much more information available for part of the year 1979 in what is called the performance review, but that sort of information is not available in the annual accounts. Therefore, it is right for hon. Members to complain that the Secretary of State has neglected to supply the proper information to bring hon. Members up to date. When the Under-Secretary of State replies, I hope that he will simply apologise to the House instead of wriggling in the way that the Minister of State did when he intervened in the speech of my hon. Friend the Member for Nuneaton.
Mr. Les Huckfield: I agree with all that my hon. Friend has said because, during the week, I telephoned the office of the Minister of State to ask what information his Department intended to furnish to the House. Considering that I had specifically requested more information because I thought that the statement of December 1979 was not enough, what my hon. Friend says is right. It is an insult to the House of Commons if it is to be provided with so little information.
Mr. Davis: I simply hope that the Minister will apologise for the failure of his Department and the Secretary of State to provide the information to us. I shall respect him much more for that than if he tries to wriggle, as the Minister of State did.
Then we have a peculiar insistence on comparing performance in 1979 or part of 1979 with performance in previous years. I am not sure why the Secretary of State

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has decided to use only two previous years, 1977 and 1978, unless it is intended to compare the performance of British Leyland under Sir Michael Edwardes with its performance during the year before he was appointed. Leaving that on one side, surely the best way to judge the performance of management is to compare what it has achieved against what it undertook to achieve.
Nowhere in the document can I find any comparison of actual performance with budget or target except where we are told that United Kingdom car sales were slightly above budget for the first half year but probably below budget for the year as a whole. We are not given any clear information about the extent of the difference, nor told the extent to which sales exceeded budget for the first half of 1979 thanks to the market being higher than forecast as distinct from sales effort.
I should also like to point out that there is an apparent inconsistency between the information in paragraph 15 and the statement in paragraph 11 that sales revenue suffered from lower than planned sales volume, unless paragraph 11 is intended to refer to the combined sales targets and actual sales volumes for BL Cars and Leyland Vehicles, in which case the sales performance of Leyland Vehicles must have been significantly worse than the performance of BL cars.
I come to my next point about this inadequate document. In some places, we are given separate figures for BL Cars and Leyland Vehicles. In other places, we are given aggregate figures for BL Cars and Leyland Vehicles together and presumably also including information for BL Components and SP Industries. I am forced to the conclusion that the information has been presented to Parliament in a way that is designed to prevent hon. Members from forming a considered judgment about the performance of the company and its management.
I take one specific example of what I mean. We are told in the document that the average productivity for cars during the first nine months of 1979 was 5.2 cars per man year compared with 5·8 during the first six months of 1979 and 5.7 in 1978.
Incidentally, the hon. Member for Oxford said that productivity had improved
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during the last 12 months. I do not know where he got the figure from. It is not contained in the document before the House.
Everyone knows that, in any case, these figures are affected by the mix between Austin-Morris and Jaguar-Rover-Triumph vehicles. In 1978, Austin-Morris produced nearly twice as many vehicles per man as Jaguar-Rover-Triumph. That is no criticism of Jaguar-Rover-Triumph; it takes more labour to produce the more expensive and specialised vehicles. At the same time, it is obvious that if BL Cars made proportionately more JRT vehicles than Austin-Morris vehicles in 1979 than in 1978, productivity will appear to have declined when, in fact, it has not declined. We do not know because the information is not given. It has not been presented to us in the document before the House. If Sir Michael Edwardes did not give this sort of detailed information to the Secretary of State, the right hon. Gentleman should have asked for it.
This lack of information is even more striking when we look at the BL 1980 corporate plan. I understand the need for some figures in the 1980 plan to be regarded as confidential, although I suspect that BL's competitors have much more information than we have been given about what BL is trying to do.
Productivity is nearly always regarded as the key indicator. Why cannot the Secretary of State tell us BL's productivity target for 1980? No such figure appears to be contained in the document before us. We know what the target was in 1979. Again, that is not in the document. It should be in it, but it is not. The productivity target for 1979 was 6.0 cars per man year. For 1978 the target was 6.4 cars per man year. In that year the performance was about 10 per cent. lower than the target, so Sir Michael Edwardes set a lower target for 1979. He missed that by about 10 per cent. as well. And I am not surprised because, in my view, the approach of Sir Michael Edwardes and that of the BL board is wrong.
There are two ways of improving productivity. The first is the one that has been chosen by BL—namely, to keep the same level of production and to reduce the number of employees. The second is to keep the number of employees the same and to increase production. That means, that it is necessary to sell more vehicles.

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That is BL's real problem. It is not a production problem. The company has a sales problem. When this has been raised in the House, we have been told by the Secretary of State that there are waiting lists for some vehicles. That is true as far as it goes, but the waiting lists are usually for specialist vehicles, and what matters in this context is the volume car business. For this purpose I am including the Rover saloon in the phrase " volume car ".
My most serious criticism of the plan is that it is a plan for contraction whereas we need a plan for expansion. We have already been told that the plan has been accepted by those who work at BL. The hon. Members for Bromsgrove and Red-ditch (Mr. Miller) and Oxford told us that the work force has accepted the plan against the advice of trade union leaders. If the English language means anything, those statements were rubbish.
The engineering union, ASTMS and other unions accepted the corporate plan. It was not accepted by some other individual unions, but it was endorsed by the Confederation of Shipbuilding and Engineering Unions, which recommended to those who work for BL that they would vote for the plan. It is true that some individual unions continue to oppose it, but if words such as " trade union leaders " mean anything it was the trade union leaders who urged employees to vote for the plan.
I am not surprised that employees voted for it or that trade union leaders suggested that they should do so. They had no alternative. They were given two options. They were described by the Minister today—namely, " Vote for the plan or collapse." In effect, there was no choice. It was a matter of accepting death or hoping for survival. That was the " choice" presented to the work force, and it was not an attractive one.
There are problems in arguing that BL should set out to increase its sales. There are problems with the model range. The, company needs to introduce new models. That will take time. In the meantime, BL salesmen are trying to sell the company's vehicles against a difficult background. That does not mean that we should sit back and accept that nothing can be done. We must not allow British Leyland salesmen to use the model range as an excuse for poor performance. To be
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fair to them, it is not their fault only. They are selling in an increasingly difficult market.
The best part of the corporate plan is the introduction, particularly paragraph 3, which sets out the reasons for the crisis that hit British Leyland last year. It is clear that the crisis had nothing to do with strikes. It is clear that it had nothing to do with trade unions or with the quality of the cars.
Three factors are listed in the introduction to explain the crisis at British Leyland last year. The first is the substantially lower forecast of world-wide demand for vehicles following the 1979 oil crisis. The second is the strengthening of sterling affecting both overseas revenue and British Leyland's competitiveness against imports. The third is a drop in BL's United Kingdom market share for both cars and trucks due largely to the increased competitiveness of imports.
Those are the real reasons for the crisis which hit British Leyland last year. It is obvious that the Government cannot do anything about the first factor—the size of the world market—but they can do something about the value of the pound and the level of imports.
The tendency is for Conservative Members and Ministers to suggest that they have done everything necessary by agreeing to finance the British Leyland investment programme. Their theme is " We have given them the money and it is now up to management and the work force to make British Leyland succeed." That view came across clearly in an intervention by the hon. Member for Knutsford (Mr. Bruce-Gardyne), who referred to the amount of support given by other Governments to their national motor industries. He sought to suggest to my hon. Friend the Member for Nuneaton that the amount of financial support given by those other Governments was less than the support given by the previous Labour Government and by this Government.
That intervention was significant because it is clear that some Conservative Members, and the Government, think in terms of financial support only. They believe that they have done everything that needs to be done by making the money available for the investment programme. Foreign Governments do not see support simply as a matter of money.

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They support their own motor industries in other ways.
It takes time as well as money to introduce new models. Without time, it can be a waste of money to finance the investment programme because by the time that programme bears fruit the market, unless we are careful, may have disappeared.
The Government can take action to help in the retention of British Leyland's market. We have heard about interest rates. The hon. Member for Bromsgrove and Redditch said that the Government were tackling the problem of high interest rates with resolution. I hope that we never see the Government being flabby. Everybody deplores the fact that the exchange rate is so high and the Minister referred to the petro-pound. It is within the power of the Government to take action to stabilise the exchange rate or, if necessary, reduce it to ensure that our exports remain competitive and that imports do not remain as cheap as they are now.
Mr. Ernie Ross: Would my hon. Friend care to comment on the absence from the statements made by Conservative Members of any reference to the rate of inflation which is affecting British Leyland's export market and the effect of Government policy on the rate of inflation?
Mr. Davis: My hon. Friend is tempting me to stray much further than I wish to go in this debate. Of course, the inflation rate is a major factor. I believe that it featured prominently in the remarks of Sir Michael Edwardes yesterday. However, from this document it can be seen that the major factors are the exchange rate and the competitiveness of imports. It is not simply a matter of price; there are other factors as well. It will take time for British Leyland to be able to compete. It is not enough simply to pay out the money for the investment programme, only to find that when it bears fruit and the new models are available the market has disappeared. The Government have an obligation to protect taxpayers' money by trying to protect the market.
I agree with the comments of my hon. Friends. All of them have referred to the problem of imports and to the need to control them. One of the points that has
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not been brought out by any speaker is that a significant cause of increased imports of foreign vehicles is not the Japanese, the Spanish or the Comecon countries, or indeed, the motor industries of other Common Market countries. A major cause of increased imports lies in the decision of three motor manufacturers, Ford, Vauxhall and Talbot, to import more vehicles than they previously imported. There has been a switch in their sourcing policy. Their combined market share has remained relatively stable. What has changed is that the vehicles that they sell here under those brand names are no longer manufactured almost entirely in this country and an increasing proportion are manufactured in their factories in other European countries.
It is time for the Government to take whatever measures are open to them to reduce the import share of the British car market. I have never been an enthusiastic pro-Marketeer, but I understand the problems of being in the EEC and trying to do something about the import problem.
Mr. Michael Brown: The hon. Gentleman has rightly drawn attention to the regrettable step which has been taken by a number of motor car companies, such as Ford, and the fact that they use a lot of labour and materials to assemble cars in other parts of Europe. However, would he care to speculate on some of the reasons that have driven them to take those regrettable decisions?
Mr. Davis: I think that the reason that they have taken those decisions lies in the search for increased profits. It is more profitable to manufacture cars if one is in the centre of the Common Market than-if one is on the periphery.
Mr. Brown: What about industrial relations?
Mr. Davis: I am not avoiding any of these subjects. If the hon. Gentleman had been present throughout our debate, he might have heard several references to industrial relations. As his hon. Friends have pointed out more than once, there has been a significant improvement in industrial relations in British Leyland in recent years. I am not saying that the improvement is good enough; but the

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responsibility for improving industrial relations rests with management as well as trade unions.
It is true that at present any investment decision about where to locate one's manufacturing facility would be greatly influenced not only by the exchange rate as it is today but by the exchange rate as it is forecast for the future. The future, for the next few years at least, will mean that we shall continue to have a high exchange rate as a result of North Sea oil. That is the problem.
This country has changed from being a country which lived, as my hon. Friend the Member for Birmingham, Erdington (Mr. Silverman) said, by exporting its manufactured goods and importing its raw materials into a country which imports manufactured goods and exports one raw material—North Sea oil. That does not provide employment for my constituents or those of my hon. Friends who represent West Midlands seats. That is one reason why I object to the present policies.
I return to my most important criticism of the Government. They must not just talk about the problem of imports, or just regret the increase in imports; they must do something about it.
1.5 pm
The Under-Secretary of State for Industry (Mr. Michael Marshall): This has been an interesting debate, and there have been important contributions from both sides of the House. But some of the argument about the nature of the corporate plan has tended to overlook the fact that our debate today is on a motion to take note of the statement made by my right hon. Friend the Secretary of State on 20 December 1979, and, in effect, to take note of the Government's responsibility for British Leyland's 1980 corporate plan. That is an important point. Clearly, from the Government's standpoint, it is relevant to discuss those actions related to the corporate plan for which we have responsibility and on which it is sensible to give our view.
There is a wide range of matters to be considered, and this important debate gives us an opportunity to discuss British Leyland and the industry as a whole. I shall consider all those wider issues, but I shall concentrate on those which are matters for the Government. There is a
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slight problem of distinction here as to whether we were seeking to intervene, or whether we were trying to be too withdrawn. Those arguments have not addressed themselves to the procedural mechanism—a mechanism which is directly in accordance with the precedent followed by the previous Government. Therefore, when I discuss the timing of the debate and the provision of information, the hon. Member for Nuneaton (Mr. Huckfield) will no doubt be quick to remind me that in my time I have pressed for information from Ministers in debate. I understand that, but we must be sensible. The precedent is that the mechanism for discussing these matters is on a motion to take note of a statement on a corporate plan. That precedent has been followed by successive Governments.
I enjoyed the remarks of the hon. Member for Birmingham, Stechford (Mr. Davis). I listened with interest and curiosity, as did other hon. Members, because many of us wondered whether a Whip could still manage to raise a gallop on his feet—which he did. We recognise that his experience as a manager in BL gives him a useful standpoint. But when he complained about the quality of information, he was complaining about the NEB response both to the corporate plan and to that wider document. There are difficulties. I had the same difficulties when I tried to use the same argument when we were in opposition. Having now had the opportunity to look at the problem from both sides of the House, I am much more in sympathy with the sort of arguments put by the hon. Member for Nuneaton than perhaps I was at the time.
However, there is the problem of providing such information as was available as at December 1979; and there is the genuine problem of commercial confidentiality. All hon. Members would wish so to arrange matters as to make debates such as this valuable. The debate has been valuable, and we have received the benefit of hon. Members' experience in putting their views and suggestions of both management and trade unions. But we must not stray into areas which simply make the commercial standing of BL more difficult in a tough, competitive world.

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My right hon. Friend the Secretary of State has made a statement, a document has been provided from the NEB, and the timing of the debate has been so arranged that we have had an opportunity to see the annual report and accounts of BL. As the hon. Member for Nuneaton said, copies of the annual report and accounts were in the Library earlier this week.
Mr. Les Huckfield: The hon. Gentleman is in danger of seriously misleading the House. The only information that was provided to the House of Commons, and upon which we are supposed to be basing our debate today, was the statement issued by the NEB last December. Through the House of Commons Library I was able to get further detailed information on the company's first press statement on its annual figures, which was issued in March. I did not get that through the Department of Industry. I got it through the Library. Only by pressing the Minister of State's office this week was I able to get that far. The annual report and accounts to which the Under-Secretary referred are still not in the Vote Office. The sum involved is £1,000 million of taxpayers' money, and we cannot read about it.
Mr. Marshall: The hon. Gentleman should know from his experience that annual reports and accounts are not put into the Vote Office. However, at our own instigation we made sure that copies were in the Library, and they have been available this week.
Mr. Huckfield: At my instigation.
Mr. Marshall: I leave it to the hon. Gentleman to decide whether he wants to claim credit for that. The fact is that the annual report and accounts have been published since April. Any hon. Member who wanted to take an intelligent interest in these matters knows that these can be obtained freely from the company. There is a limit to how far we should go down the tortuous path of who did what in relation to making available the annual reports and accounts which have been freely available since April.
We have had the opportunity to have the debate, the annual report and accounts having been made available and the annual general meeting having taken
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place—a substantial input of information. The question is how we have been able to use that information.
We have had to consider the situation since last December, and in that respect in a sense all Governments are on a hiding to nothing about the timing of debates. When the statement was made in December, clearly there was then no time for a debate. The problem of a debate subsequently, which is not a matter for me, is related to events which are moving from day to day. We have seen the way in which the developments following the agreement by the Government to the financing of the corporate plan have begun to take effect, and the annual report and accounts and the annual general meeting yesterday have enabled us to look at the view of the company. I suggest that that has given us a fair basis on which to have a valuable debate.
I should like to state the Government's basic response to the corporate plan in its perspective. As I see it, this is principally concerned with matters of finance. If one had to characterise the view of BL and of the Government in these matters, I think one would say that the Government accept the need for the step-by-step approach. We think that there are problems in the marketing sense and in the whole way in which the company has sought to resolve some of its industrial relations problems.
I think that hon. Members on both, sides of the House have paid tribute to the progress that has been made. It is possible to make criticisms and objections, as did the hon. Member for Nuneaton, on the pay proposals. But—I do not think that this has been challenged by any hon. Member on either side of the House—there is a feeling that progress has been made in tackling these real problems.
Looking at the Government's financing of and support for the company, it is absolute nonsense to argue as the hon. Member for Dundee, West (Mr. Ross) argued. Unfortunately, the hon. Gentleman is not in his place. He seemed to imply that this was some kind of hand-to-mouth, stay of execution, approach. But £300 million is not chicken feed. It is a substantial sum of the taxpayers' money. It is a sum which pre-empts resources which hon. Members on both sides of the House argue might be directed

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in other ways. These are substantial resources and this is a major commitment.
I remind the House that on page 15 of the annual report and accounts the view recorded by the company is:
" In addition to the funds to be provided in 1980, the Plan envisaged a requirement for a further £130 million of equity in later years. The Government will consider this in the light of BL's performance in 1980 and the 1981 Corporate Plan."
Therefore, further opportunities to consider these matters will arise on a step-by-step basis.
I turn now to a number of points made by the hon. Member for Nuneaton in his long and detailed speech. He raised a whole range of questions which, as I said earlier, I regard as matters for the company. There are a number of aspects of the corporate plan which the company will no doubt wish to consider in the light of what the hon. Gentleman said, and I recognise his diligence in putting a number of those points.
The hon. Gentleman raised the valid concern over the Honda and whether it should be allowed to be imported into France. The answer is that France is not in a position to ban the access of another Community-manufactured car. However, I recognise the type of approval that has to be obtained and the mechanism that has first to be overcome. It would be a matter of great concern if there were any suggestion that a ban was envisaged. If the hon. Gentleman has any evidence in that regard, I should be interested to look into it.
Mr. Huckfield: The Minister will be aware that BL is aiming at a 40 per cent. United Kingdom content and 50 per cent. United Kingdom value-added. The " Blonda" might be recognised by the EEC Commission as a European car, but there is no guarantee that the French will take that view. The company is still uncertain about whether it can get the car into France. Does the Minister recognise that that is important?
Mr. Marshall: I recognise the importance of the hon. Gentleman's argument. The question of the way the industry is changing and the point about international collaboration will be examined within the Community in the coming
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years. I take on board the hon. Gentleman's point.
The financial situation was set out clearly earlier. The hon. Member for Nuneaton implied that there was a lack of a standby facility. Perhaps he has overlooked the fact that the package included a £150 million credit line facility which can be drawn on in need. That is in operation.
The hon. Member raised a number of wider issues which the company might wish to consider. It is not right for me to seek today to deal with such issues as marketing considerations and production management.
Mr. Huckfield: Will the Minister amplify what has been said about the standby facility? Does he recognise that the LC10 is critical? If it is not built, BL will no longer be able to regard itself as a major motor vehicle manufacturer. Is the Minister saying that as part of the standby facility the Secretary of State might be prepared to underwrite the LC-10 in some way? That is the type of guarantee that I had in mind.
Mr. Marshall: No, I am not saying that. The provision of that standby or credit line facility is part of the overall financing which the Government have agreed within the £300 million which was the subject of the statement last December. The take-up of that and the way in which it is used is a matter for BL. I have nothing to say to the House today on the question of the LC10. That is a matter for BL. I hope that the project will go ahead.
I turn to the question of imports about which hon. Members on both sides of the House have expressed anxiety. My colleagues in the Department of Trade have direct responsibility and there is a limit to how far I can respond. I appreciate the arguments.
The hon. Member for Nuneaton said that BL was locked into a complex international trading regime. In a sense that is true of BL, as it is of all car manufacturers. We must remember that the situation is evolving. We cannot expect to find easy and happy short cuts as we try to solve the problem. With the Japanese car industry there are inter-industry voluntary restraints. We

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have made it clear that we attach importance to that. They have worked pretty well within the parameters.
Hon. Members have asked about Spain. We must seek to act in concert within the Community. Representations have been made through the European Commission and direct with Spain. I agree that the present discriminatory position is intolerable. These matters will continue to receive further attention. However, we are entitled to look at them in relation to the proposal that Spain should become a member of the EEC. The attitude of future trading partners is relevant to those negotiations.
The Government continue to keep a close watch on imports from Eastern Europe. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) has had to leave the Chamber, but he has sent his apologies. He is particularly concerned about such imports and their relationship to the dealer network. Indeed, other hon. Members have also expressed concern. I recently had an opportunity to talk to representatives from the British Leyland dealer network. I understand the significance of their concern that imports from Eastern European and other countries may siphon off key elements in the dealer network. In turn, that may seriously undermine British Leyland's ability to sell cars in Britain.
If we wish to make an argument about anti-dumping, we must prove injury. The level of imports—at 2 per cent.—is relatively small. I appreciate the point made about the low-priced bottom end of the market and the consequent concentration of East European trade. There is scope for continuing consultation. It is in the interests of Eastern European exporters—if there is a price differential—to see that it is not maintained. At that level of trade, they have no particular incentive to sell at below a proper and remunerative cost.
The wider question of imports is interrelated with international collaboration. I am glad that the hon. Member for Nuneaton gave his clear support for ventures such as the British Leyland-Honda deal. That deal is part of a valuable international development which will help us to see our import problems in a better perspective. The hon. Member for Dundee, West was perhaps foremost in his criticisms of the level of imports.
1970
However, it is a two-way trade. He spoke about the effect of imports on our components industry. However, the House will be aware that this country has a considerable trade in castings for Volvo and Saab in Sweden. There is considerable trade in respect of diesel fuel injection components for General Motors from Lucas. Several examples could be given of two-way trade.
I hope that there will be future developments in international collaboration, and that they will prove mutually beneficial. The collaboration between British Leyland and Honda will be a test case. We shall have to see whether it resolves the problem of British Leyiand's middle range in a shorter period than might otherwise be the case. We shall have to see whether we can achieve a healthier approach.
I recognise that hard, difficult and tough decisions have had to be taken, which affect constituency interests. The hon. Member for Birmingham, Erdington (Mr. Silverman) spoke about his constituents. His points were entirely legitimate and I understood what he had to say. However, he was less fair than usual when he spoke about my right hon. Friend's reaction to his suggestion for discussions. I saw the correspondence and I shall now speak from memory. I recall that it was suggested that the Government felt that these decisions had been reached on a commercial basis, and that they could not intervene. They did not wish to take up the hon. Gentleman's time by discussing rehashed arguments. The Government did not believe that those discussions could effectively be reopened. However, the Government are willing to see the hon. Gentleman. If matters were left as they were, it was because we did not think that we could help him. However, if hon. Members wish to raise such matters with the Government, we are always willing to consider that.
However, the hon. Member raised one point of significance. He argued that the recent 5 per cent. wage increase, together with further productivity conditions, related to a going rate. He talked about 20 per cent. That is part of the danger of trying to live in a twilight world in which one does not have an incomes policy or free collective bargaining. I should like to know which side of the

1971
fence the hon. Member wants to be on. As far as I am concerned, this is a typical example of responsible free collective bargaining. The hon. Member for Nuneaton would argue that it had been imposed, but the fact is that the levels being considered related to the competitive pressures and the particular difficulties facing the company. That is a more realistic and sensible way of going about the matter. The increase was related to the future of a company which must not price itself out of the market on wages. That would not be in the interests of any one in this country.
One of the arguments that always appeals to me about a Friday debate is that one has a chance to go into details and to draw on the expertise of hon. Members. Very often under the pressures of mid-week debates, we do not get the same input. The contributions today have reflected this.
My hon. Friend the Member for Bromsgrove and Redditch gave the hon. Member for Nuneaton a left and a right, but he took it in good part. Perhaps he recognised that a number of points that were put by my hon. Friend were valid, particularly when he spoke about the dealer network and import penetration. My hon. Friend the Member for Oxford (Mr. Patten) was also sensible in arguing the case against overly detailed examination of the corporate plan today. I believe that we have struck the right balance in looking at these matters. My hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) was helpful in reminding the House that the value of the United Kingdom component industry as represented by British Leyland is about £2,000 million. This emphasises that there is an important inter-relationship, and above all, when we come back to the question of imports, there is a crucial relationship between British Leyland's own trading needs and the needs of the country as a whole.
British Leyland is our largest manufacturing exporter. In many ways it takes a very different view from that urged by some hon. Members who seek protection ism. BL's own thinking must weigh most heavily in all our thinking—
Mr. Silverman: Has not the view of
1972
Sir Michael Edwardes himself swung in favour of import controls of some sort?
Mr. Marshall: I think that the hon. Member has confused Sir Michael's interest in the "Buy British" campaign, which is perfectly legitimate, with the call for import controls. In this regard British Leyland and the rest of the vehicle industry does not take that view. After all, the 250,000 vehicles that British Leyland exports every year were worth £800 million last year and as a major exporter, BL is very much aware of its reputation. The component industry, too, because of its commitment, is very well aware of the arguments for free trade. We cannot pull ourselves out of the world at large. If we talk about the industry, we are talking about an international industry.
One-half of the United Kingdom's motor assembly industry is overseas-owned. That is another matter which some hon. Members argue has implications for the freedom to move component manufacture and so on. But our major component companies and BL also have key subsidiaries overseas which attract substantial earnings. I remember from my time in India the BL activity in that country which is a significant operation and in many ways a springboard to trade in the Third world. It is a two-way street.
If British Leyland realises why international trade and an open market are important, I accept that where action can be taken the Government will want to do all that they can to help. I have tried to outline some of the specific areas in which the Government will act.
Beyond that, the way that the Government have shown a commitment to help BL by putting forward funds and looking to those being remunerated by dividends in future is an expression of faith in the way in which BL, on a step-by-step, phased approach, hopes to make progress and return to a more competitive framework.
Mr. Ernie Ross: I had to leave the Chamber during the hon. Gentleman's speech and I apologise if he has covered this point, but I stated that one of the major drawbacks in developing British Leyland as a British industry is its failure

1973
to go ahead with the aluminium foundry plant.
If the Under-Secretary has not covered that point, will he comment on it? I am sure that he understands the necessity for us to produce our own aluminium castings if we are to retain an indigenous motor car industry.
Mr. Marshall: I did not cover that point, except to the extent that I covered a number of other aspects by saying that they are specific matters for BL. I am sure that the company will take note of the hon. Gentleman's remarks, but if we tried to make decisions on what is right or wrong in such matters we would be moving down a dangerous path of the worst possible sort of intervention. I accept the hon. Gentleman's interest in the matter and I am sure that his point will have been taken on board.
The debate has been valuable and I believe that we should take note of my hon. Friend's remarks and the speeches in the debate and wish British Leyland a fair wind in its future efforts.
Question put and agreed to.
Resolved,
That this House takes note of the statement made on 20 December 1979 by the Secretary of State for Industry about the British Leyland 1980 corporate plan.

TOBACCO AND ALCOHOL
Motion made, and Question proposed, That this House do now adjourn.—[Mr. MacGregor.]
1.32 pm
Mr. Tristan Garel-Jones: I am grateful for the opportunity of raising this important subject. My purpose is not to discuss the merits of the case against smoking and drinking but simply to underline the fact that most reasonable people accept that abuse of tobacco and alcohol causes serious damage to health, not to mention the economic and social side effects.
It is also common ground that it is legitimate for the State to seek to discourage the abuse of those drugs and that one of the weapons in its armoury is the imposition of duties. It is an open secret that my right hon. and learned Friend the Chancellor of the Exchequer wished to
1974
place heavier duties on tobacco and alcohol in his recent Budget but was inhibited from doing so by the effect it would have on the retail price index. Suffice it to say that a 10 per cent. increase in the price of alcoholic drink and tobacco would increase the index by 1·22 per cent.
The fact that this inhibition has had an effect on successive Chancellors of the Exchequer can best be illustrated by taking the price of a bottle of whisky and a packet of 20 cigarettes as a percentage of gross earnings in October 1945 and October 1979. For whisky, the figure was 21·3 per cent. in 1945 and 4·9 per cent. in 1979. For a packet of 20 cigarettes, it was 1½7 per cent. of gross earnings in 1945 and 0·7 per cent. in 1979. For those items to have maintained the same cost in relation to gross earnings, the price of a bottle of whisky today should be £20·60 and a packet of cigarettes £1·60. That is the effect over the years of the inhibition.
Support is growing for the Chancellor and his successors to be given a free hand to tax these drugs as severely as they deserve. Suggestions have been put forward to give Chancellors more freedom of action. I shall outline the main suggestions in the hope that my hon. and learned Friend will give the House an indication of which suggestion, if any, the Government feel merits further consideration.
The first, and superficially the most attractive, is to remove alcohol and tobacco from the RPI. Referring only to tobacco, that suggestion was made first by my right hon. Friend the Member for Worthing (Mr. Higgins). Support has come from both sides of the House. However, at the end of the day, my hon. Friend the Financial Secretary may prove to have been right in saying that the purpose of the RPI is to measure what happens to the retail prices of the items that people buy. People buy cigarettes, tobacco and alcohol, although some of us may regret that. An index that excluded them would not be regarded as properly measuring retail prices. The Financial Secretary is merely saying that the RPI is the RPI is the RPI. Blunt and crude instrument though it may be, I suspect that it will remain the RPI for some time to come.
Another suggestion mooted is an alter native index, which would not take account of the cost of dying, to borrow the

1975
expression of my right hon. Friend the Member for Worthing. Few hon. Members have a more honourable and consistent record in the fight to raise the levels of assistance given to poor families than my hon. Friend the Member for Kensington (Sir B. Rhys Williams), who had hoped to be present today. He points out that those of us who hope that the Government are committed to regular uprating of child benefit, linked to the RPI, cannot argue that that linkage should take place with the RPI as it stands. I have already pointed out that a 10 per cent. increase in the costs of alcohol and tobacco would push up the RPI by over a point and add £33 million to the cost of child benefit. None of us could argue that an increase in the cost of alcohol and tobacco would add one penny to the cost of supporting children.
When arguments about the effect of a rise in prices on needy families are advanced, the RPI is quoted. However, it takes no account of family size and makes no distinction—nor should it—between essential and non-essential items. What are the Minister's views on setting up a family budget index which would include only those items essential to the budget of poor families with children? I do not advocate such an index as a challenge or alternative to the RPI, but it would give us a clearer and more accurate picture of the problems facing the poor.
The third possibility is to index-link the duties on alcohol and tobacco to the RPI and increase them quarterly by at least the amount shown in the RPI. That would have several advantages. First, it would stop dead the trend over the past 30 years for those drugs to become steadily cheaper. At the least, their prices would keep pace with other prices. Secondly, by uprating on a quarterly basis, the increases would not have such a direct step effect on the RPI. Thirdly, the Chancellor would retain the option to increase the duties by more than the figure indicated in the RPI.
I cannot end without referring in general terms to the general knock-on effect that the RPI figures have on the wage bargaining process and on the most important role that the trade union movement could play in this area, although I recognise, of course, that to do so goes beyond the area of responsibility of my
1976
hon. and learned Friend the Minister of State.
The trade unions are in business to get the best wage bargains that they can for their members. In the conduct of their negotiations, it is obvious that they will use the RPI as a marker and a bargaining counter. The trade unions are also rightly proud of the role that they have played in ensuring the health and safety of their members.
I draw attention to some recent remarks by Mr. John Ellis, the national welfare officer of the Civil and Public Services Association, Britain's biggest Civil Service union. He said:
" There is growing danger to health from alcohol throughout our society. Alcohol ought to be treated in the same way as soft drugs."
He went on to talk about the growing trend of midday drinking and the danger that this posed to workers in industry in control of machinery, and so on.
I appreciate that this is outside the scope of the Treasury's responsibilities, but I ask my hon. and learned Friend to comment on and speculate about the possibility of the Government and the TUC agreeing to disregard the alcohol and tobacco input in the RPI in wage bargaining. If the TUC was prepared to move with the Government on that front, I believe that it would make perhaps the most significant contribution to the health, welfare and safety of its members that it has made for many years.
I believe that the widespread concern expressed from both sides of the House about the impact made by alcohol and tobacco on the RPI and its effect on the capacity to levy duties thereon cannot and should not be ignored any longer. I hope that my hon. and learned Friend will be able to give some intimation that the Government are now considering seriously ways of resolving this problem.
1.42 pm
The Minister of State, Treasury (Mr. Peter Rees): I offer my congratulations to my hon. Friend the Member for Watford (Mr. Garel-Jones) on raising an issue of prime importance which we have touched on only cursorily in our debates of late.
The matter was raised during the Budget debate, and the House will recall that my right hon. and learned Friend the Chancellor of the Exchequer said on 1

1977
April, when winding up the Budget debate, that he was willing to listen to arguments that tobacco and alcohol should be removed from the RPI, which is one of the prime suggestions of my hon. Friend the Member for Watford.
However, my hon. Friend will recall that during the Second Reading of the Finance Bill, as recently as 8 May, in answer to my right hon. Friend the Member for Worthing (Mr. Higgins) to whose contribution in this area J pay tribute, my right hon. Friend the Chief Secretary said that this might be a matter for consideration by the Treasury and Civil Service Select Committee. Indeed, there may be competition between the various Select Committees about which should take on board this prize, if it is a prize, but, as I am charged only with certain limited responsibilities, it would be inappropriate for me to commend it to any other Select Committee. I am not sure that it is altogether appropriate for me to recommend it to the Treasury and Civil Service Select Committee, which is appropriately at arm's length with the great Department with which I am associated.
The comments of my right hon. Friend the Chief Secretary were endorsed enthusiastically the next day by my right hon. Friend the Secretary of State for Social Services.
It is right to observe that the retail price index has become in our society and in public life a yardstick of importance. I need not go over the ground which has been covered so eloquently by my hon. Friend the Member for Watford. In the fiscal area, it governs the threshold to a degree. In the area of social security, various benefits ultimately, directly or indirectly, are determined by it. As my hon. Friend has pointed out, wage negotiations are considerably, if not explicitly, affected by the retail price index.
It is fair to observe that successive Chancellors of the Exchequer, judged by their public utterances and not from any indiscretions at the Treasury, when considering fiscal changes, have been affected by the impact of what they might be doing on the retail price index. It might interest the House to know the weighting of the particular ingredients in the retail price index at 1980. Tobacco represents
1978
4 per cent., beer 4·9 per cent., spirits 2·2 per cent. and wines 1·3 per cent. That is a fairly considerable element. As my hon Friend has pointed out, this means that the RPI cannot really be regarded as an absolutely accurate indicator of what the average family consumes.
The impact of this year's proposals on the RPI, as reflected in this month's increase, is 1·1 per cent. That covers the whole raft of indirect tax measures. The duties on alcohol represent about 0·4 per cent. and tobacco 0·3 per cent. It is fair to observe that the increases this year represent only one year's revalorisation and do not take us back to 1977, the last occasion when there was a substantial increase.
My hon. Friend has properly and relevantly put the case on health grounds. It would not be appropriate for me to analyse the evidence; my hon. Friend and the House have it well in mind. It would probably be a more appropriate subject for a Minister from the Department of Health and Social Security. If, however, I may be permitted one observation, I feel that possibly the health case against tobacco is slightly stronger than that against alcohol. I do not know whether I am expected to develop that theme or set any personal example. I do not see myself as the Mendes-France of the Treasury team, confining myself to milk. It is not perhaps for me to draw attention to the stern puritan approach of my hon. Friend, limited though that approach may be.
My hon. Friend has raised several practical proposals, the first being that alcohol and tobacco should be removed from the RPI altogether. The House will know that the Government do not have direct responsibility for the RPI. An advisory committee reports to my right hon. Friend the Secretary of State for Employment. The difficulty is practical. If one constructs an alternative index, how long will it take to command the interest and respect of those who have to determine their actions, in any degree, by reference to it? That is a matter of speculation, but it could and should be considered.
To get the problem in perspective, may I say that I had an analysis prepared of the difference it would have made if alcohol and tobacco had been excluded from the RPI at January 1980 and preceding

1979
years. The percentage change in the RPI in 1980 over the previous January was 18·4 per cent. If alcoholic drink and tobacco had been excluded, the increase would have been 18·2 per cent., a difference of only 0·2 per cent. That was obviously before any considerable alterations in duties had taken effect, leaving aside perhaps VAT, the full effect of which had not worked through. It is interesting that there was not a very considerable difference.
Taking the position in January 1979 against the position in 1978, if alcohol and tobacco had been excluded, there would have been an increase, curiously enough, in RPI. The increase over the preceding year on the existing RPI was 9·3 per cent. If alcohol and tobacco had been excluded, the increase would have been 10½1 per cent. That is a curiosity that reflects on the indirect taxation policies of the previous Administration. We know from their published utterances that they were deeply concerned about the impact on wage bargaining and other similar matters.
In 1978 the increase over the previous year's RPI was 9·9 per cent. If alcohol and tobacco had been excluded, it would have been 9·8 per cent. I could take the House back to 1975, but I merely say that the pattern remained the same. The impact is not as considerable as my hon. Friend might have supposed. I know that he has undertaken considerable research. He could argue that if my right hon. and learned Friend the Chancellor of the Exchequer were to introduce the increases that he is canvassing the difference might be much more considerable. He could also argue that only minor discrepancies have been revealed because we were in an era when Chancellors were rather more sensitive to the possible impact of such increases.
Could we construct an alternative index for specific purposes? Should we have a family budget index? My hon. Friend takes a close interest in child benefits, and, as he has fairly said, the RPI is not an accurate measure of the cost of bringing up children. The general observation may be made that, whatever alternative or specialised index were to be constructed, it would have to command approval and understanding in the areas in which it was to be used. To a
1980
degree, we have a pensioner index. There are measurements of how price changes or fiscal charges have an effect on pensioners.
My hon. Friend asked whether duties being index-linked and revalorised quarterly. Some duties are ad valorem. We know that VAT, which is one of the biggest revenue raisers in the Chancellor's bag, is ad valorem. My hon. Friend's proposition would mean restructuring many of our indirect taxes. I agree that we should not shrink from that, although the administrative upheaval would be fairly considerable. We should never be oppressed by that, although it is a factor that should be taken into account.
As my hon. Friend will be aware, it would probably be necessary to collect the duty on alcohol at an earlier stage. As I said briefly in my reply on Second Reading of the Finance Bill, it would probably mean shifting the alcohol duties to the retail outlets. I doubt whether that would be entirely welcomed by those outlets. However, if it were to be shown to be in the national interest, it would have to be contemplated. My hon. Friend's proposal might make calculating difficulties for the tobacco companies. It might be necessary to consider pushing collection forward and collecting at retail or wholesale outlets. There are difficulties—I do not pretend that they are insuperable—that have to be taken into account.
My hon. Friend suggests, perceptively, that revalorisation should be quarterly. There would be a considerable element of forestalling. For example, it would not be beyond the wit of the public to discover what the change in the RPI had been and to rush out before every quarter day to stock up their cellars or tobacco cabinets.
Mr. Garel-Jones: That happens before Budget day.
Mr. Rees: As my hon. Friend correctly says, the gloomy assumption is nearly always made that the Chancellor, of whatever party, will increase alcohol and tobacco duties. There is considerable forestalling in the week or month before the Budget. My hon. Friend's proposition would produce an interesting change in the pattern of retail sales.
My hon. Friend will not expect me to come to any firm conclusion at this stage.

1981
He has raised a far-reaching issue that requires careful examination. The side effects in areas for which I am not directly responsible may be considerable. That is why I commend the suggestion that one of the Select Committees should take the issue on board.
My hon. Friend raised the question of wage negotiations. I am not qualified to speak on that subject, but I am sure that certain members of the trade union movement would see the force of his observations. They are responsive to their own electorate—the people for whom they are negotiating. Though they may be impressed by the health argument advanced by my hon. Friend—for which I have a certain sympathy—equally those on whose behalf they are negotiating may be less responsive to that kind of argument. It is no good their negotiating for their members a deal that may be good for the health of their members but not so good for their pockets. We must take into account certain realities, and that is perhaps as far as we can take this interesting question today.
I congratulate my hon. Friend, who is right—dare I say it to him and to the House—to force this particular question
1982
upon our consciousness. It is a matter that we shall need to examine more widely and deeply. Whether that can more appropriately be done on the Floor of the House, before a Select Committee or before some outside body is no doubt a matter for debate.
We are grateful to my hon. Friend for having raised the matter, and if I have not given him an absolutely conclusive answer I hope at least to have demonstrated to him that we have not entirely neglected the question. We have reflected upon it, but it is a matter that will demand over the weeks, months and perhaps years to come considerably deeper examination than we have been able to give it today.
The more these problems are aired, the more our fellow countrymen will, I hope, come to realise that if a different yardstick is to be contructed by reference to which we are to determine fiscal, and indeed other, questions perhaps we should be more conscious of the health implications which my hon. Friend has raised today than we have been in the past.
Question put and agreed to.
Adjourned accordingly at four minutes to Two o'clock.

DEFENCE
  Territorial Army Reserves
  Territorial Army Reserves
  Newburgh Beach (Explosion)
  Newburgh Beach (Explosion)
  Cruise Missiles
  Cruise Missiles
NATIONAL FINANCE
  European Monetary System
  European Monetary System
  Burmah Oil Company Ltd.
  Burmah Oil Company Ltd.
  Value Added Tax (Handicapped Persons)
  Value Added Tax (Handicapped Persons)
  Exchange Control Act 1947
  Exchange Control Act 1947
  Parliamentary Costs
  Parliamentary Costs
CIVIL SERVICE
  Manpower
  Manpower
INDUSTRY
  Motor Cars
  Motor Cars
  European Planning (Consultant)
  European Planning (Consultant)
OVERSEAS DEVELOPMENT
  Developing Countries (Baby Foods)
  Developing Countries (Baby Foods)
HOME DEPARTMENT
  Drunkenness
  Drunkenness
  Children and Young Persons
  Children and Young Persons
  Police National Computer
  Police National Computer
  Local Radio Stations
  Local Radio Stations
  CIVIL DEFENCE
  CIVIL DEFENCE
  MASTER OF THE ROLLS
  MASTER OF THE ROLLS
EMPLOYMENT
  Unemployment Statistics
  Unemployment Statistics
  Professional and Executive Register
  Professional and Executive Register
EDUCATION AND SCIENCE
  One-Teacher Schools
  One-Teacher Schools
  Warnock Committee (Special Educational Needs)
  Warnock Committee (Special Educational Needs)
  Scottish Universities
  Scottish Universities
  Members' Correspondence
  Members' Correspondence
  Teachers (Early Retirement)
  Teachers (Early Retirement)
  Inner London Education Authority
  Inner London Education Authority
  Finniston Report
  Finniston Report
WALES
  Land Authority for Wales
  Land Authority for Wales
TRADE
  Gas and Pressure Fittings (Imports)
  Gas and Pressure Fittings (Imports)
  Full-line Forcing and Tie-in Sales
  Full-line Forcing and Tie-in Sales
  Frozen Cod Fillets (Imports)
  Frozen Cod Fillets (Imports)
FOREIGN AND COMMONWEALTH AFFAIRS
  Argentina (United Kingdom Ambassador)
  Argentina (United Kingdom Ambassador)
NORTHERN IRELAND
  Alcoholism
  Alcoholism
  Housing (Vandalism)
  Housing (Vandalism)
  Heating Costs
  Heating Costs
  Dog Licences
  Dog Licences
  Shrigley Monument (County Down)
  Shrigley Monument (County Down)
  Foreign Investment
  Foreign Investment
  Recreational Projects (South Belfast)
  Recreational Projects (South Belfast)
  Quangos
  Quangos
  Wet Shelters
  Wet Shelters
ENVIRONMENT
  Gipsy Caravan Sites
  Gipsy Caravan Sites
  British Waterways Board
  British Waterways Board
  Allotments
  Allotments
  Noise Insulation
  Noise Insulation
TRANSPORT
  Motorist-free Zones
  Motorist-free Zones
  A27-M27, Worthing
  A27-M27, Worthing
  High Speed Train Service (North-East Scotland)
  High Speed Train Service (North-East Scotland)
SOCIAL SERVICES
  Out-patient Prescribing
  Out-patient Prescribing
  Rent and Rate Rebates
  Rent and Rate Rebates
  Secure Places (Children)
  Secure Places (Children)
  Sick Pay
  Sick Pay
  National Insurance Levy (Class 4)
  National Insurance Levy (Class 4)
SCOTLAND
  Quangos
  Quangos
  National Health Service
  National Health Service
  Universities
  Universities
  Ellon Bypass
  Ellon Bypass
  Eye Examinations (Charges)
  Eye Examinations (Charges)
  Fishing Industry
  Fishing Industry
  Health Clinic, Cuminestown
  Health Clinic, Cuminestown
  Fraserburgh Hospital
  Fraserburgh Hospital
  Grampian Health Board (Membership)
  Grampian Health Board (Membership)
  Fish Imports
  Fish Imports
AGRICULTURE, FISHERIES AND FOOD
  Fishing Industry
  Fishing Industry
  Fisheries
  Fisheries
  Cod Fillets (Imports)
  Cod Fillets (Imports)
  British Sugar Corporation
  British Sugar Corporation
  Sheep Worrying
  Sheep Worrying
ENERGY
  National Coal Board
  National Coal Board
  Operating Grants
  Operating Grants
  Nuclear Power (Costs)
  Nuclear Power (Costs)
  Uranium
  Uranium
  British National Oil Corporation
  British National Oil Corporation
  North Sea Oil
  North Sea Oil
  Drilling Rigs (Safety Standards)
  Drilling Rigs (Safety Standards)
  Offshore Supplies Office
  Offshore Supplies Office
  Uranium
  Uranium
  Offshore Installations
  Offshore Installations
  Fuel Costs (Elderly and Disabled Persons)
  Fuel Costs (Elderly and Disabled Persons)

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Peterborough.

ILEA: DISCUSSION OF FUTURE
Baroness DAVID: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what arrangements they are making to invite representations from parents, teachers, and residents of Inner London Boroughs who have not hitherto been involved in the discussion about the future of the ILEA.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, as my right honourable friend the Secretary of State for Education and Science and my noble friend the Minister of State have made clear, all written representations received on this matter will be given full consideration in the course of the internal Government examination.
Baroness DAVID: My Lords, while thanking the Minister for that reply, may I ask whether a closing date has been fixed for representations to be received and is any timetable planned for the whole operation?
Lord BELSTEAD: My Lords, written representations should be sent to my right honourable friend the Secretary of State for Education and Science as soon as possible, and, so far as the timetable is concerned, in any event not later than the end of June.
Lord MISHCON: My Lords, can the Minister give an undertaking that, in considering the future of the Inner London Education Authority— which has had such a very fine history in the educational world— political considerations will not be in the Minister's mind, only educational ones?
Lord BELSTEAD: My Lords, the examination will indeed need to assess and to take account of the Inner London Education Authority's performance, to which the noble Lord, Lord Mishcon, has just referred, in the light of the situation in inner London. My right honourable friend and his colleagues are concerned to ensure that the administrative structure for education is such that teachers, their advisers and officials, are able to give their best performance and that taxpayers and ratepayers are getting good value for money.
Lord WYNNE-JONES: My Lords, will Her Majesty's Government also pay attention to the political performance of those who have been agitating for the abolition of the ILEA?
Lord BELSTEAD: My Lords, this is, in essence, an internal Government review which was commissioned really by the London Government Act 1963 which said that such a review should be put before Parliament in 1970. But, of course, that provision was removed by the Labour Government in 1967. In undertaking this review the issues which I have indicated to the noble Lord, Lord Mishcon, will be before the review.
Baroness DAVID: My Lords, do I understand from the Minister that, as only written representations will be received, there will be no public meetings at which teachers, parents and students— and we must remember that the ILEA area provides for a quarter of a million adult students— will be able to say what they wish to say?
Lord BELSTEAD: My Lords, the reason why I made a point about the nature of the review and from what it stems— namely, originally the London Government Act 1963— is that this is not a public inquiry. However, I should like to repeat the assurance that I gave at the beginning of this exchange with the noble Baroness, that all the representations which my right honourable friend receives will be very carefully considered.
Lord PEART: My Lords, is the Minister not aware that there is a strong feeling in London that the Government will be spiteful about this matter because they dislike comprehensive education in

453
particular, and that it would be a tragedy if the ILEA were harmed in any way? I speak as a parent of a son who went to a comprehensive school in the ILEA area.
Lord BELSTEAD: My Lords, in all friendliness to the noble Lord, and recognising his long experience of politics, I really think that the first assertion which he has made in his question is unfounded. As regards what will be the outcome of the review, I must say that that is precisely why the review is being undertaken and I think we must await its result.
Baroness DAVID: My Lords, I should like to ask one final question. When the review is completed, I take it that it will then be circulated for comment?
Lord BELSTEAD: My Lords, I think that my noble friend the Minister of State, who cannot be here today, in fact said during the previous exchange on 28th April that it would be published.

CONCESSIONARY TRAVEL FOR HANDICAPPED PERSONS (SCOTLAND) BILL
Read 3a.
Lord ROSS of MARNOCK: My Lords, I beg to move that this Bill do now pass. I should like— as one whose "L" plates are still being displayed— to express my appreciation to the officers of the House for their guidance, to the Government for their co-operation, and to noble Lords for their support. I beg to move.
Moved, That the Bill do now pass.— (Lord Ross of Marnock.)
On Question, Bill passed.

TRANSPORT BILL
11.11 a.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, that the House do now again resolve itself into Committee.— (Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ALPORT in the Chair.]
Clause 11 [Duration of road service licences]:
Lord TEVIOT Lord TEVIOT moved Amendment No. 41:
Page 11, line 37, leave out from beginning to ("on") in line 7 on page 12 and insert—
("(1) Subject to section 10, a road service licence shall continue in force until surrendered by the holder unless at the time of the granting of the licence the traffic commissioners for special reasons determine that it shall continue in force only up to and including a date specified in the licence, in which case it shall continue in force only up to and including that date.
(2) If, where an expiry date has been specified, ")
The noble Lord said: I beg to move Amendment No. 41 and to speak to Amendment No. 42. I notice that my amendments have the same effect as Lord Underbill's Amendment No. 43. They would, in fact, rewrite Clause 11 so as to allow permanent road service licences rather than increase the period from three to five years, as is presently provided in the Bill.
The intention is solely to remove bureaucracy, for fear of that word becoming rather overplayed, and, indeed, would in no way cause stagnation to the licensing system. I would expect my noble friend to approve of this amendment, or anyway the intention behind it. After all, driving licences are issued to persons until they reach 70 years of age, so there is already a precedent for this kind of thing.
One way in which this can be done is normally by making road service licences permanent. That need in no way be equivalent to stagnation, as I have mentioned, because powers of surrender, revocation, suspension and variation are provided in the Bill, as in existing legislation. It cannot be stressed sufficiently that the intent of the revised Clause 11, here proposed, is in no way to protect existing operators. It is entirely to streamline the system, and reduce costs to all concerned. Indeed, it can be foreseen that the traffic commissioners would be more likely to revoke a permanent licence in favour of another operator, or to grant a competitive licence, if they

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thought that it was in the public interest so to do, than they would be to act against a licence which would shortly be coming up for renewal.
Your Lordships will appreciate that the proposed wording for this clause goes to some lengths in stressing the revocation, suspension and variation provisions, precisely because the adoption of permanent licences should not be seen as a negative step. In fact, subsection (3) (b) is repetitive, certainly in respect of Clause 10, the revocation clause, and could be left out with no loss to the practical working of Clause 11 in the wider context of road service licensing. It is largely window- dressing to allay doubts and suspicions, which may be expected in some quarters. Yet any such opposition would be illogical and unfair because the Government, themselves, are proposing to extend licences from three to five years' duration.
From a comparison of the proposal with the existing clause in the Bill, one sees that subsection (1) is omitted because it is not relevant if licences are either, and normally, permanent or expire on a date fixed by the traffic commissioners. In subsection (2) the effect is to substitute permanent validity for a five-year term while retaining shorter period licences where the traffic commissioners consider it appropriate. Reference to the right of the holder to surrender the licence as well as the traffic commissioners' powers under Clause 10, is also intended to emphasise the flexibility of the proposed system.
Subsection (2) exactly copies the wording of subsection (4) in the Bill, except with the addition of the words, "where an expiry date is specified". The addition seems desirable if this is to be the exception rather than the rule. Subsection (3) is also substantially a repetition of the Bill's subsection (4), although the general reference to
"…operation in the public interest of sections 5 to 10"
in paragraph (b) is added to emphasise that not only the powers of revocation and suspension under Clause 10 apply but also that the traffic commissioners have powers of variation, and that the whole intention is to use the licensing system to serve the public interest. I beg to move.
Lord UNDERHILL: It is with pleasure that I support the noble Lord, Lord Teviot, in the amendment that he has moved. As he has rightly said, the effect of the two amendments in his name and that of the noble Lord, Lord Morris, is precisely the same as the effect of the amendment which stands in my name and that of my noble friends.
The effect would be that if the two amendments moved by the noble Lord were approved, the wording of the new clause would be precisely the wording which is in our amendment. In addition to what the noble Lord has said, I need only add that this is an effort— which I am sure is what the Government want— to reduce some bureaucracy in the licensing procedure. In particular, I would urge that it does not remove one iota the safeguards that are essential, and which can be found in Clause 10; they remain. Therefore, so far as I and my noble friends can see, there is no reason whatever why the Government should not accept this amendment.
Lord MORRIS: I rise to support my noble friend and, indeed, noble Lords opposite on this particular amendment. I believe that it would be an improvement to the Bill. I do not wish to repeat the argument, but I should like to raise one particular matter which I believe is important. It may be argued that with permanent licences there will be more variation of licences and less income from licensing fees, which at present cover the traffic commissioners' costs when dealing with variations. That is true, and it was considered whether or not there should be reference in the proposed clause to fees for variations of licences. This was not done because it was considered that it would be out of keeping with the general practice in this respect.
Fees are generally provided for in the 1960 Act, but details are left to regulations, currently the Public Service Vehicles (Licences and Certificates) Regulations 1952, and that would seem to be the appropriate way of meeting the present situation. However, it can be said that the operating industry accepts that, with permanent licences, fees for variation would probably have to be introduced. This point should certainly be considered.

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I should be very much obliged if my noble friend Lord Mowbray and Stourton could meet this point when he responds to this amendment.
Lord MOWBRAY and STOURTON: The three noble Lords who have tabled amendments have spoken to them and explained just what they seek to do. I also understand that this is a matter about which the Confederation of Passenger Transport feels quite strongly. Obviously, we in the Government welcome the interest which is being shown in saving paper work and bureaucracy, and I pay tribute to noble Lords on all sides of the Committee who have this in view. However, timeless road service licences, I agree, would allow services to be made, but there are some advantages in having regular renewal procedures. The Bill, as it is, will make it easier for new applicants to obtain licences. The competition they would afford established operators is, we believe, a healthy discipline, a challenge, but we fully recognise that there may be routes where the commissioners are satisfied that it would not be in the public interest to grant more than one or two licences.
Once the licences, or licence, had been granted, other operators would not, under the amendment, ever be able to challenge and replace the incumbents, even though they might be able to provide a better service, except when a licence was surrendered or came up for renewal. That is why we regard it as important, because, if you entrench somebody in something— it is the same with all of us— we tend to get monopoly conditions and tend to be idle, and we do not tend to think up new ideas to see whether the service can be improved, or even cheapened.
But the knowledge that a licence will have to be renewed, and objections possibly faced that the service can be run better, is a further spur to operators to provide the best service they can. At the end of the day that is what we are trying to see happen— the best service. We have cut down the paper work by extending the usual duration up to now of three years for a licence to five years, but we believe that renewal serves a useful purpose. I hope that noble Lords will consider what I have said, because I think there is a strong point not to entrench someone for ever.
11.32 a.m.
Lord MISHCON: I hope that in the course of today's deliberations noble Ministers opposite will find occasion to admit arguments which appear sound, and not then succeed their tribute to the soundness of the arguments by that fatal word "however" which the noble Minister has just used. I wonder whether the Minister could tell us, in view of the way in which this House and another place have been treated by the Government, of examples of economy— which, on this side of the House, we welcome— where efficiency is not impaired and where administration is improved.
I would ask the Minister whether, with the usual efficiency of this Government, they have worked out the saving that would be caused if this amendment were passed. That is the first question I ask the Minister. I shall be so surprised, having regard to the time that this amendment has been before the Government, if such an exercise in their economy campaign has not been carried out. No doubt the Committee will be treated to a full answer.
The next thing I should like to say is that the Minister's point that this would grant licences in perpetuity, and therefore would prevent the ability to look at the situation when a normal renewal date came about, is negatived, if he will look at the amendment in the name of the noble Lord, Lord Teviot, supported by my noble friend Lord Underhill and others. It is negatived by the words in the fourth line of subsection (1) in the amendment:
"that it shall continue in force only up to and including a date specified in the licence ".
That means that if the traffic commissioners have ever got in mind the considerations that the Minister has mentioned, what they can do perfectly easily is to insert that the licence shall last for five years, or whatever it may be, in which case the licence then expires. But in cases where a permanency is the obvious thing to have, subject to the safeguards of Clause 10, they will be enabled to save an awful lot of administration and cost. I wonder whether the Minister, in the light of what I have ventured to say, will give an answer to my first question on the saving of cost, and an answer to my second question as to why, in his view, those words do not entirely meet the point he has made to the Committee.
Lord MOWBRAY AND STOURTON: I am sorry, I have not got the exact information on the noble Lord's first question about the amount which would be saved. There obviously would be a saving, I agree. I think that the arguments are finely balanced. I think that the noble Lord, Lord Mishcon, has pointed out that it need not be an open- ended perpetuity situation. It might appear to be that, but the arguments are finely balanced, and what he has said has obvious truth in it. I will, if my noble friends will allow me, take this back and have a look at it again because there is no absolute right or wrong at all. The arguments are finely balanced indeed.
Lord LUCAS of CHILWORTH: Might I support my noble friend Lord Mowbray and Stourton in his answer. I do not think that Lord Mishcon's argument is terribly good. In fact, there is already provision in the Bill for the commissioners to award licences so far as they wish. One of the great difficulties of entering into an in perpetuity situation is that, provided all goes well, at least on the surface, no applicant at the earlier stage will find himself with an opportunity of getting in.
One of the rather poor things about the licensing system over the years concerns the position which arises where an appeal against an application is made. There are, because of the very nature of the grounds of appeal and the way in which an appeal is conducted, difficulties in some appellants being able to make their points. While here in the Houses of Parliament we can make all sorts of suggestions, while in a court of law all sorts of suggestions and questions can be properly asked and answered, at an inquiry for a licence some of these questions may not be dealt with. Therefore, appellants tend not to make their appeal, waiting for the next time around where they may be able to put a better case.
If one enters into a perpetuity situation, a reasonable licensee may not be able to get in at all. It would seem to me that, even if there is some element of bureaucracy in the system, that is perhaps to the good in that it can act as something of a long stop. I think that on balance my recommendation to the Committee would
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be to leave the matter as it stands in the Bill.
Lord TEVIOT: I am still not terribly happy about this amendment, but my noble friend has said that he will look at it again. My noble friend Lord Lucas of Chilworth has put in a different opinion from those already expressed, apart from my noble friend. I do not think there is any worry about the perpetuity situation. This is a perfectly good and valid amendment, and something which we can all do to cut costs. This is not the time to decide today. It would be better to leave it to my noble friend to look at it again, and perhaps even to see him and see whether we can come to some better arrangement. On that understanding, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 42 and 43 not moved.]
Clause 11 agreed to.
Clause 12 [Designation of trial areas]:
11.29 a.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 44:
Page 12, line 30, at end insert ("which shall first have consulted district councils concerned and sections 2 (3) (b) and 2 (5) of the Transport Act 1978 shall apply to such consultations.")
The noble Lord said: This amendment provides that, although an application to be treated as a trial area must be made by the local authority concerned, and the Bill goes on to explain that that is the county councils in England and Wales and the regional and islands councils in Scotland, it shall be laid down quite clearly that the authority shall first have consulted with the district councils concerned.
The amendment also provides that such consultations with the district councils must be meaningful and carried out in accordance with the provisions of the Transport Act 1978, which set out the manner in which consultations shall be carried out between the local authority concerned and the district council in regard to county public transport plans. The amendment provides that this same type of consultation shall be carried out in connection with the consultation we desire between the local authority concerned and the district council.
A number of district councils— about 50, I believe— have their own public transport undertakings and for those alone it would be absolutely wrong if a trial area were imposed over their heads without adequate consultation with the district council concerned. I will give a few examples of these. Bristol should surely be taken into full consultation by Avon County Council. Nottingham, which has an excellent transport system— I know that because I go to Nottingham quite frequently— should surely be adequately consulted by Nottinghamshire County Council if it wished to consider a trial area. The noble Lord, Lord Bellwin, knows from his local government experience the merry dickens there would be if his local authority was not consulted fully in a matter of this kind.
It should be emphasised also that many counties assumed public transport responsibilities only under the recent Act, whereas these 50 undertakings have been running their own bus undertakings for many years, and most district councils over a long period have had experience of transport policies working with operators. It may be said in reply that of course the county council will carry out consultations. As we have said on previous occasions: Why, then, not write that into the Bill? Why not also write in that those consultations shall be in accordance with those laid down in the Transport Act 1978? I hope the Government will accept the amendment, which I believe meets the wishes of the Association of District Councils.
Lord LUCAS of CHILWORTH: On this occasion I find myself supporting the noble Lord, Lord Underhill, although I should tell the Committee that I am speaking more on behalf of my noble friend Lord Sandford who, but for a most urgent and pressing engagement, would have been here today. He has asked me to speak on his behalf, although it is a matter with which I have sympathy. It is also right that I should tell noble Lords that my noble friend Lord Sandford is president-designate of the Association of District Councils. My noble friend and I take the view that, particularly in a trial area where the role of the traffic commissioners would be absent, it is even more necessary that the local transport undertakings and the people involved should be consulted.
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Consultation is something I have argued in your Lordships' House and in other committees, notably on the Energy Bill. It is hard to describe. An exchange of letters could be held to be a consultation, but that is not quite what is meant by the amendment; that wants full and proper consultation. It is in the spirit of this Government that the amendment should be accepted, in that their aim is to get local people to manage their local affairs. How can they do that unless they are consulted?
The noble Lord, Lord Underhill, mentioned a number of undertakings and, as he said, about 50 local districts are operators. I would pick out two groups of examples. The first is Plymouth, Portsmouth and Southampton, with varying degrees of success in their transport undertakings, which are quite substantial and which have important business, commercial and port facilities behind them. If any change in transport arrangements were being considered, it is vital that full consultation should take place with those important factors. My second group might be Blackpool, Brighton and Cleveland, all heavily involved in the tourism business. Again, it is vital in promoting and regulating tourism that any matters affecting transport should come to the attention of those concerned.
The amendment might best be described as one in the sweet reasonableness bracket. I cannot at the moment see any objection to full consultation being written into the Bill. It would ensure that everybody knows where they are. It would put on the authorities a positive obligation and give those district councils which wish to engage in it the opportunity to respond, and I hope the Government will accept the amendment.
Lord BELLWIN: This is one of the few amendments to which I have been anxious to rise and reply. Indeed, I have been sitting here with pins and needles because if anything has bedevilled local government in the years since reorganisation it has been the whole business of the division of functions and the requirement, statutory and otherwise, for consultation. Considering the frustration and aggravation that have occurred between councils of county and district status in the metropolitan and shire areas throughout the

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country over this matter of consultation, I ask noble Lords not to think of this as a simple matter. By all means let us talk of sweet reasonableness. When the original local government reorganisation took place, it was assumed that once the different tiers had been set up they would work together and collaborate, but it just does not normally happen like that. On the other hand, perhaps the worst aspects of it have occurred where it has been laid down that there shall be consultation. That is where the problems start.
County and regional councils will, of course, hold discussions about trial areas with district councils, operators and others. The Bill fully recognises the interests of district councils in trial areas. For example, I draw attention to Clause 14 (2) which requires would-be operators in trial areas to give notice to district as well as county councils; and to the provisions in Schedule 2 about the revocation of designation orders. Moreover, the notification requirement in Schedule 2 (2) makes it obligatory for county councils to notify district councils and others of any proposal to apply for designation and to forward any representations received to the Minister.
The noble Lord, Lord Underhill, said I would say— and I certainly do say— that it is inconceivable in practice that a county council would not be prepared to establish a dialogue with the major interested groups; and several of the counties actually interested in trial area experiments are already holding such discussions. But we are not willing to require consultation— which, as I know so well from much experience in recent years, can be a cumbersome and a delaying procedure— before (and that is the operative word) a county council applies for designation; nor are we willing to forge a link with the over-elaborate consultation procedure which the last Government devised for public transport plans.
If a county council wants to combine the two sets of discussions, there is nothing in the Bill which stops it from so doing. Not for a minute do I believe that the degree of useful discussion of trial areas will in any way be increased by compelling county councils to discuss these areas as part of a statutory consultation process. This entire matter of the division of
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functions between the different tiers in local government is a sensitive one, and, as I have said, it has caused much heart- searching and other problems for local government. I hope that we do not allow ourselves to become involved in this issue and thus make the situation more difficult. I hope that in view of what I have said, the noble Lord will feel able to withdraw the amendment.
11.42 a.m.
Lord ROSS of MARNOCK: I had hoped that a Scottish Minister would have been present to give us his reaction to this matter. I should like to remind your Lordships of the Bill, which later became an Act, for reorganising local government. When that Bill was before your Lordships one thing stuck in the gullets of everybody. That was the creation of a regional authority which included within its area five county councils and half of the population of the whole of Scotland. Your Lordships threw out that proposal; you would not wear it. However, it went to another place where it was of course restored by the Conservative majority.
When one considers both what we are doing here and the power that has been given to a regional authority— that particular regional authority to which your Lordships objected, and to which I objected when in another place— surely it makes sense to insist upon consultation. Here is a regional authority which stretches from Oban right down to Ballantrae, and which takes in Glasgow itself. I can assure your Lordships' Committee that there is very considerable heart-searching about this. Where do we want these trial areas to be?— not in the great industrial areas, such as the area covered by the Greater Glasgow Passenger Transport Authority, but rather in many of the rural areas.
The Minister pleads difficulties in regard to the statute, but it was his Government who were responsible for the statute and who left the definition of some of the functions very blurred indeed and, who, at any rate in Scotland, caused functions to be duplicated by district councils and regional authorities. I do not think it good enough to plead the matter in that way. There is a case here for ensuring that the regional authority, which is the initiating authority, does not act over the heads of district authorities, such as Kyle

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and Carrick, which is far away from the Glasgow area— the heart and centre of Strathclyde— or some part of Renfrewshire, or some part of Ayrshire. I believe that this approach is very sensible and is the minimum that should be expected.
It is all right for the Highlands and Islands, because the Islands authorities are all-purpose authorities. But where there is a division of authority, and where transport is so vital— far more vital to the rural areas than it is to the industrial areas, which already are fairly well catered for— there should be some measure of consultation before the trial area is decided on.
I hope that the Minister will look at this matter again. I, too, have had all the kind of experience that he has spoken about regarding division of authority between district councils. Very often the division was between large city areas— which became district authorities— and the regional authority. It is no use denying rights to a district authority, which is vitally concerned in this matter, in respect of statutory consultation involving the regional authority before a scheme is initiated.
Lord BELLWIN: With respect, in the context of this discussion, it is absurd to speak of denying rights to district authorities. We are discussing a right, that has been requested, to statutory consultation. That is what we are talking about. To suggest, as did the noble Lord, Lord Ross of Marnock, that a trial area would be designated without a district having the right to make its representations and views known is absurd. As I have said, there is a clear requirement for discussion; Schedule 2 refers to this sufficiently clearly. If I am right, I think that this is covered on page 54, though perhaps my memory is wrong there. Can your Lordships' Committee imagine that a county council in contemplating this kind of very extensive proposal would take no notice of the district councils? That would be unheard of.
As your Lordships may know, I come from a district council, not a county council. That is my background, and I was on what might be called the receiving end of this kind of thing. I can tell the Committee that it was not lack of consultation that we complained about. We
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may have complained about the lack of ability to influence the decisions made after the consultation, but lack of consultation certainly was not a problem. It was not a problem then, and I suggest that it will not be one now. I am absolutely certain that, if only as a result of this discussion in your Lordships' Committee today, those who are contemplating— and already there are some, as I have said— applying for trial areas within their areas, will ensure that the degree of discussion that takes place will not be less than is required.
I have no hesitation in asking the Committee to look at the practicality of what we are talking about, and then it will be seen that it would be wrong to require a statutory notification to be written into the legislation. That would make the position far worse than it otherwise would be.
Lord LUCAS of CHILWORTH: Before the noble Lord sits down, may I say that he is of course quite right in that the protection to which he referred appears on page 54 of the Bill. But in line 41 of page 53 that protection is preceded by the following requirement:
"Before making such an application the local authority concerned shall … notify … "
To use the expression of the noble Lord, Lord Ross of Marnock, what is sticking in the gullet is this rather dictatorial, autocratic word "notify".
I can appreciate what my noble friend has said about the tiers of authority, but in another context I can think of one county council whose interests include commercial cities as well as a rather sparsely populated area. A place such as the New Forest is a large area with many ponies but few people, and in such a case it may be decided by the county authority that a trial area would be appropriate. I do not think it is good enough merely to issue a notice in a newspaper or to write to the district council, in order to "notify". There should be a better word— one that does not place too heavy an obligation on the county authority, yet which at the same time allows the reverse situation to apply; that is, gives the district councils an opportunity to put matters forward, rather than merely respond to a notification. I think that is where the difficulty

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lies. I hope that my noble friend can find a better way to describe what he wants and one which would perhaps meet some of our objections.
11.50 a.m.
Lord MISHCON: I will not trouble the Committee for long, and I hope I will not repeat any point which has already been made. As one who has always been a lover of local government, I must say that I listen with deep respect to anything that a colleague of mine, and a very worthy colleague of mine— the noble Lord, Lord Bellwin— has to say on the subject. I regard him as such an expert that, indeed, I would hope that the words that he has uttered this morning will be given in evidence to the inquiry that we were discussing at Question Time— namely, that involving the Inner London Education Authority— because I regard his comments on the division of functions as being so pertinent that I am sure the Government will be most interested in his observations on what happens when functions are divided and art not looked after by one authority which can plan the matter with some amount of competence. But having dived away and dealt with that point with a twinkle in my eye, and having observed an accompanying twinkle in the eye of Lord Bellwin, may J revert to the question which is before us.
This is not an urgent matter for decision by an authority. We are dealing here with a new concept, and that is one of a trial area, where, as we know, there will not be any question of licensing restrictions. That is by no means a matter that one has to decide as a matter of urgency, where one is held up, as it were, from making a practical decision by the necessity for statutory consultation, which the Minister seems to feel is always an elongated process. On this occasion, in the case of the matter with which we are now dealing, it is no embarrassment whatsoever. I do not understand what the difficulty is in regard to the Government's acceptance of this amendment. It has been pointed out by the noble Lord, Lord Bellwin, that notification is imperative. Indeed, in his closing remarks he mentioned notification when I think that Hansard ought to correct the matter. I think he was dealing with consultation, and I am sure the Official Report will correct it. But he
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then went on to say that after notification there is bound to be consultation, and he said, indeed, "Who could imagine an authority, given the power under this section, which would not consult? "
In fact— and I think it is within all your Lordships' experience— there are authorities which, by reason of their size (and I will mention none in particular at this moment), are looked upon by other bodiee in local government as being somewhat dictatorial. They resent it; and, just in order that we may cover (I ask the Minister) those authorities that may not behave in the way in which he imagines they should, just in case they behave in a very autocratic manner and say, "We have notified; that is our duty, and we will consign the representations that are made after notification to the local government wastepaper basket"— always a very full one, if I may say this in Committee— we believe it should be written into the Bill. I see no difficulty in the Government accepting this amendment. Consultation, they say, will take place. Let us try to cover those authorities which do not behave as they should behave, and see that consultation in fact takes place in all circumstances because it has been written into the statute.
Lord BELLWIN: Perhaps the only comment I can make that might be helpful is that if there is concern, as my noble friend Lord Lucas has said, about the word "notify", as opposed to any other word, certainly I would undertake to consider that word and discuss it with my right honourable friend. If the word "notify" is what really is the problem, then, by all means, there may be a better word. I would not presume to be so sure as to say that there is not— that I do not know— but I would gladly undertake to discuss it. But I would still have to stand on my basic argument, because I know from so much bitter experience of the terrible problems and the cumbersome delays to which this statutory requirement could lead. I feel more strongly about this, perhaps, in the case of this amendment, than I have in the case of any other amendment to this Bill— and noble Lords opposite have seen me discuss many of them. Here more than in any other instance is where I am so sure what it would lead to if we laid it down that there should be a statutory requirement to

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consult. If those words go into the Bill, then there will be all sorts of trouble and your Lordships who had put them there would not be very happily thought of by those who had to be on the receiving end of what we had done. Therefore, with the assurance that I will certainly take it away and discuss the word "notify", and pass it on to my right honourable friend in case there may be a better word, perhaps the noble Lord will feel able to withdraw the amendment.
Lord UNDERHILL: I know the noble Lord, Lord Bellwin, is trying to be very helpful, but, really, what different word can there be which conveys what we want? Instead of "notify" there could be "inform"; there could be "intimate". But they have nothing to do with consultation; there can be no other word but "consultation ". Therefore, much as I should like to agree to withdraw, I do not think we possibly can on this occasion. If it is suggested that these words should not be put into the Bill, why is it necessary to put into the Bill under Clause 14, to which the noble Lord referred, that operators must give information to local authorities and district councils? If that is going to be done automatically, why put that into the Bill? Schedule 2, on page 53, says that they must notify district councils. If there is going to be this automatic goodwill, why put that into the Bill? It is put into the Bill to make certain that it is done. Therefore, we want this put into the Bill, the district councils want it put into the Bill, as my noble friend Lord Mishcon has said, to safeguard the situation. Therefore, much as I should like to be helpful, on this occasion I think we must insist on this amendment.
Lord TEVIOT: Before the noble Lord sits down, I think I can give a few words of comfort to my noble friend on this, having listened very carefully to what has been said. The industry, which detests the idea of trial areas— there is no other word for that; or, rather, not "detest", it distrusts the idea of trial areas— I do not think feels terribly strongly about this one. I think the Committee should pay attention to my noble friend's long experience. Also, we have listened to other noble Lords with long experience in local government saying that consultation can go on and on. I think that on
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this amendment I shall be voting with the Government.
Lord LUCAS of CHILWORTH: Before the noble Lord, Lord Underhill, presses his amendment, I should in fact like to ask him not to do so, in that my noble friend has made a positive effort, which I find really quite acceptable. The kind of words that I should have preferred to see are such words as "shall consider such representations". That would cut out, as it were, this long harangue that my noble friend Lord Bellwin foresees. At the same time, it would require the county authority to consider representations. It gets away from this wretched dictatorial word, "notify". If the goodwill expressed by my noble friend Lord Bellwin is there— and I believe it is— I should have thought that we could find a phrase which was totally acceptable to all of us.
The Earl of SELKIRK: May I venture to point out to the noble Lord who has just spoken that these very words appear in Schedule 2, paragraph 3, where it says
"… before making a designation order the Minister shall consider any such representations",
and any representation whatever must be sent to him when the application is made. I make this remark because I really think that this is totally unworthy of a Division in this Committee. We have had far too many Divisions in this Committee on trivial matters, and I think this is quite unworthy of a Division.
My noble friend Lord Bellwin speaks with the utmost authority on local government matters, and I cannot believe that district authorities and county or regional authorities are not on speaking terms. I entirely agree with what the noble Lord, Lord Ross, said about Strathclyde, and, indeed, I helped the noble Lord, Lord Hughes, in what he did there; but, really, to pretend that there is no communication between district authorities and county or regional authorities is a piece of nonsense. If there is disagreement, then we must reform the whole Local Government Act. I hope the noble Lord will not divide the Committee. That really would be carrying this matter much too far.
12 noon
Baroness FISHER of REDNAL: As somebody who served for 20 years on

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what was the largest local authority in Great Britain with all-purpose powers— Birmingham— I must say that I get a little dismayed when people in Whitehall— and, it might be, people in this Palace also— always feel that they know best. I think that the noble Lord who is answering must have felt in his previous office that the local representatives, those at the grass roots, very often know more about their particular areas and their particular points of emphasis than do, with all respect, the people in Whitehall who bring forward recommendations. We are arguing about semantics: whether it be on the issue of "consider representation" or anything like that. What we are asking for is that those locally democratically elected representatives should be consulted. In this connection, it is important to note that in the other place on 24th March (col. 1007) the Minister said, regarding the trial areas, that they will be not necessarily whole counties but perhaps towns and even suburban or urban areas.
There are examples of dissatisfaction not only because of what my noble friend Lord Mischon has said— that in, perhaps, one area there is a council that feels superior to all the others— but because in parts of the country, in the shire areas, there are political considerations that must be taken into account. If one looks at the results of the recent local government elections one sees that quite clearly in some of the large towns; and I particularly draw attention to those in the North East. It is important, I think, for those political considerations also to be taken into account.
What surprises me more is that Government Ministers always hide behind Answers to Questions in both Houses by saying that consideration of the problem is still going on with many interested bodies. What we are saying is that perhaps it could be taken into consideration that these are interested bodies. In the same way as Government hide behind things when they do not want to come to a firm conclusion, surely we can say that local authorities in Great Britain should have this consideration in the first instance and not at the end when there is an appeal to the Minister.
Lord BELLWIN: With respect to the
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noble Baroness, there is no use in complaining that the Government are not making up their mind when an amendment is moved to which noble Lords object because we say that we have made up our minds. What is requested by this and by other amendments is that the Government should change their mind. We should not be criticised then for not making up our minds. What is important is that we come along to Committee stage to consider line by line and word by word, if necessary, all the possible implications of what this could mean as legislation. Therefore, it is right and proper, by all means, that we should discuss; but please do not criticise the Government for (if you like) being willing to discuss. I should have thought that— despite the reservations that the noble Lord, Lord Underbill, had about what is in a name, what is in a word— it was very much a gesture on the part of the Government that we said that we would be willing to look to see whether there is a better term than "notify". I did not say that there was a better term; I said that we would undertake to look to see whether there was.
As my noble friend Lord Selkirk said, basically we ought to accept what happens in practice. With respect, I will not accept from anyone that I am not aware of what takes place in local government. I spent years involved in it. I, too, was an elected member. I was on the receiving end. I was from a district and not from a county. How long will it be— at Report stage— before the county councils get a pressure group to come along and bring their representatives to put forward an amendment against what the district councils suggest should be done today? We must come to some conclusion on this. I said that I would take away and consider the word "notify"; and I repeat it. Beyond that I cannot go.
Lord DRUMALBYN: Before we come to a conclusion on this, may I put to my noble friend that there seems to be very little between the sides on this. Everybody agrees that it is inevitable, essential and sensible that there should be some consultation of some sort before an application is made. The question is whether we make it statutory or not. If we make it statutory, I should have thought that we should express it in rather more detail; and I am not certain that the amendment

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is quite appropriate for that reason. Would my noble friend consider the possibility, for example, that before making an application the local authority should be under an obligation at that stage to notify the district council that they have under consideration the possibility of making an application? They should then convene a meeting of the district council within a certain time in order to consider the various implications and whether, say, the applications should relate to the whole area of the council or to parts of it, and to which parts of it— and, in Scotland, to the whole area of a regional council. This is what ought to happen. The only question is whether it be mandatory or not. If it is not mandatory, the 21 days is far too short. That is a point to which my noble friend must have regard.
Lord SPENS: If I may speak for a moment, I have no experience of local government, but I have had a little experience of the law, albeit a long time ago. I should like to draw the attention of the Minister to the very page, page 54, that he quoted— Schedule 2. In paragraph 4 on that page, there appears, in (a) , "shall notify ", and in (b), "shall consult". That, to my mind, means that there is an indication of two different meanings of the two words. I would ask the Minister to consider that when he takes this away.
Lord UNDERHILL: I thank the noble Lord for his comments and my noble friend for his concern, but I have to say
again that it is laid down in Schedule 2 that there should be notification. I have no doubt in my mind that there will be notification and if any application came forward— and this surely is the key to the whole matter— where any district council was able to say, "We were not notified, not consulted properly", is it seriously thought that the Minister, in those circumstances, would then approve a trial area? It is just not on. The longer we discuss this, the more I get confused as to why the Government do not accept this. There must be some reason why the Government will not accept it. What we are trying to do is not to leave an issue for the Minister to sort out; but to ensure that, before the application goes to the Minister, it will have been sorted out between the county and the district. I do not accept that we are trying to waste time on a trivial matter. It is right of this Committee to exercise the democratic will. We believe the right of the district council must be written into this Bill and they should be given the chance to put their point of view before it goes to the Minister. This would save a lot of time. We must therefore insist on the amendment.
12.8 p.m.
On Question, Whether the said amendment (No. 44) shall be agreed to?
Their Lordships divided: Contents, 47; Not-Contents, 52.

CONTENTS

Amherst, E.

Hale, L.

Oram, L.

Aylestone, L.

Hall, V.

Peart, L.

Banks, L.

Halsbury, E.

Robbins, L.

Beswick, L.

Hatch of Lusby, L.

Ross of Marnock, L.

Boston of Faversham, L.

Henderson, L.

Sainsbury, L.

Brockway, L.

Houghton of Sowerby, L.

Spens, L.

Collison, L.

Janner, L.

Stamp, L.

Cooper of Stockton Heath, L.

Kaldor, L.

Strabolgi, L.

David, B.

Kilmarnock, L.

Underhill, L.

Davies of Leek, L.

Leatherland, L.

Wade, L.

Elwyn-Jones, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Wallace of Coslany, L. [Teller.]

Fisher of Rednal, B.

Wedderburn of Charlton, L.

Gaitskell, B.

McNair, L.

Wells-Pestell, L.

Galpern, L.

Maybray-King, L.

Wigoder, L.

Goronwy-Roberts, L.

Meston, L.

Wilson of Radcline, L.

Gosford, E.

Mishcon, L.

Wynne-Jones, L.

NOT-CONTENTS

Airey of Abingdon, B.

Auckland, L.

Cathcart, E.

Alexander of Tunis, E.

Avon, E.

Cottesloe, L.

Alport, L.

Bellwin, L.

Craigavon, V.

Ampthill, L.

Belstead, L.

Cullen of Ashbourne, L.

Atholl, D.

Bessborough, E.

de Clifford, L.

Do Freyne, L.

Hylton-Foster, B.

Rawlinson of Ewell, L.

Denham, L. [Teller.]

Kinnaird, L.

Redmayne, L.

Derwent, L.

Kinross, L.

Reigate, L.

Drumalbyn, L.

Long, V.

St. Davids, V.

Ellenborough, L.

Lucas of Chilworth, L.

Sandys, L. [Teller.)

Emmet of Amberley, B.

Lyell, L.

Selkirk, E.

Fortescue, E.

Mancroft, L.

Soames, L. (L. President.)

Fraser of Kilmorack, L.

Margadale, L.

Swinton, E.

Gainford, L.

Marley, L.

Teviot, L.

Glasgow, E.

Morris, L.

Trumpington, B.

Grey, E.

Mowbray and Stourton, L.

Vickers, B.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Orr-Ewing, L.

Vivian, L.

Powis, E.

Moved accordingly and, on Question, Motion agreed to.

12.17 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 45:
Page 12, line 40, leave out (" Subject to subsection (5) ")
The noble Lord said: In moving this amendment, may I speak also to Amendment No. 49, which is conditional upon Amendment No. 45? In the interests of time, I am going to speak only briefly; but this is a really vital amendment. The provision at present in the Bill proposes that a trial order shall not be revoked— that is, terminated— before the end of the period laid down in the designation order. We regard it, frankly, as somewhat irresponsible that an order cannot be revoked until the end of the period for which it is designated. It is permissible for an order to be for up to five years and, assuming that the agreement was given by the Government for an order for a trial area to be for five years, there could be utter chaos in that area. The whole of the experiment could be falling down, complete failure.
Unless the Minister has power to revoke the order before the date on which the order should expire, then not only are the operators going to be in a difficulty but the travelling public in that trial area may be placed in complete difficulty. Therefore we are asking that this subsection be totally removed. There will be other provisions which we shall come to after this amendment which will deal with how an order can be revoked; but for the Government to say that once they have given authority for a trial area designation it cannot be ended, it cannot be revoked under any circumstances until the end of the period, is irresponsible and is not playing fair with the travelling
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public in that particular area. I beg to move.
Lord TEVIOT: My Lords, on this amendment, I entirely agree with the noble Lord, Lord Underhill, in all that he said regarding the industry and the travelling public.
I gather that in the House of Commons amendments were moved which would act as a safety valve permitting the discontinuance of a trial area within the period of three years— then prescribed as the minimum period— should it be found that the trial was agreed by all concerned to be a failure, and that it would be damaging to continue it. In Committee my right honourable friend the Minister, Mr. Norman Fowler, said:
"I have listened carefully to my hon. Friend's arguments and those of the hon. Member for Kingston upon Hull, East and I think that they have presented a strong case, not least on the point mentioned by the hon. Gentleman at the end of his speech. Therefore, I give the Committee an undertaking that we shall examine the arguments once more."
The Minister later went on to say:
"However, as a reservation, I must seek to preserve the position of the new operators who will come in, and I believe that, too, is reasonable, because in seeking to achieve the change that my hon. Friend and I both want, we must have a position whereby they will have some sort of guarantee that their investment in new equipment will not be wasted. But I think that there are ways in which we can tackle that problem.
Therefore, I advise my hon. Friend and the hon. Gentleman that I will gladly give an undertaking, since I recognise the strength of their arguments, that by Report we shall examine their arguments further and have talks with the Association of District Councils on the matter… "
In the event, at the Report stage the Government claimed to give flexibility to the Bill by allowing the designation order to specify a minimum period which would be not less than two years and not more than five years. In reality this did

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nothing to improve the situation. Indeed, it could mean that a trial area would have to continue for five years causing the utmost damage to the public transport, as the noble Lord, Lord Underhill, said.
Protection of the operator providing new services in the trial area was by way of a road service licence—for an unspecified duration—following termination of the trial. As the Minister has made it clear that he regards three years as the necessary period to encourage investment on the part of the operators, the proposal is unnecessarily open-ended. The amendments now proposed seek to meet the specific points made by the Minister, while maintaining the principle of permitting a safety valve in the event of a trial area proving unworkable.
Lord BELLWIN: I am sure that the Bill is right to make trial area designation orders irrevocable for a period of at least two years: it was reduced to two years. For a trial to be taken seriously by operators, the public or local authorities, it will have to last for a significant period of time: otherwise the opponents of trial areas will press from the first day for revocation, adducing any withdrawal of any bus service as evidence that the trial has failed, and the energies of local authorities will be directed to dealing with such pressures rather than getting on with the trial itself. Similarly, new operators need an assurance that a trial will last long enough for markets to be tested and, presumably, some profits made: otherwise they will never make the investment needed.
I have listened to what has been said and I have read in other places about some of the disasters it is presumed may ensue in a trial area; and I must say that they seem to me to be gross exaggerations. I think we are right to give county councils the option. Let us be absolutely clear. We are imposing nothing on anyone: they will have the option of having route licensing entirely abolished in their area. We shall then see whether freedom or control best serves the public interest. Noble Lords will not be surprised to know in what direction my instincts lead me. I entirely accept that many people sincerely disagree with me. Well, the trial areas will provide evidence, but I am sure they must be proper trials undertaken
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seriously by all concerned, and I am convinced that these amendments will militate against a proper trial.
If trial areas are a sucess then a future direction will have been pointed—and what a prize that would be. If, on the other hand, they show themselves not to be a success, then so be it, but to give the right to set them up and then so to dilute that right that it cannot in practical terms succeed is really to make a mockery of the whole idea. That is why we cannot accept the amendment.
Lord MISHCON: I am sure the Committee will have listened with respect to what the Minister has just said but I do not know that the respect will necessarily be accompanied in this case by sympathy or understanding. Under the Bill it is not an irresponsible person who will be dealing with the question of ending trial periods: it will be the Minister. The Minister cannot do it, as I understand the position, unless it is on the application of the local authority. From what the noble Lord has just said, one would have gathered that it was the local authority which had been given the power to end the trial period designation order. It is the Minister. Obviously, he will have before him all the considerations that the noble Lord, Lord Bellwin, has pointed out—the harm that would be done, the reckless nature of making this application so far as the local authority is concerned, before it should be. But to write into an Act of Parliament a definite prohibition so far as the Minister is concerned so that he cannot, in spite of the local authority having applied, end the trial period of experimentation, in spite of all the chaos that was referred to by the noble Lord opposite in his, if I may say so, very useful speech, and to bar the question of ending the experiment in an Act of Parliament is, I feel, foolhardy.
I hope that the Minister, on reflection, will have faith in the Ministers of his own Government or of any other Government that may be democratically elected, and I also hope that he will have a little bit of touching faith in local authorities, whose virtues in regard to fairness, consultation and so on he so eloquently described a moment ago. I hope he will have enough faith in both to see that the trial period would not be ended without all the considerations he mentioned being taken

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into account. But, as I say, to stop anybody from being able to end the experiment not before a minimum period of two years as the Minister said, but before the period specified in the original trial order, which cannot be less than two years or more than five, is a very different consideration. He may be faced with a Minister, a local authority and everybody else who want to end the experiment and cannot, so that this House and another place will presumably have to be burdened with an amendment Act in order to enable this to be done. It is foolhardy.
Lord BELLWIN: It really turns upon the point of the minimum period and, as we saw from the discussions in another place, my right honourable friend moved from three years to two, I think in recognition of the validity of the fears expressed then. They have been expressed again today. I think that is right. The fact is that if you are to have trial areas at all— and I accept there are many people who would not wish to see them— if you accept for the moment that they are going to take place, then you need to draw a balance between, on the one hand, a guaranteed period of time sufficient to encourage operators to, if you like, have a go and, on the other hand, the need to take into account the real concerns that have been— I think, not unfairly— expressed as to what happens if it all goes adrift—
Lord MISHCON: Will the Minister allow me to intervene only in order to help him? I think the Committee might be assisted if they were reminded that in another section of this Bill the operator will be protected. It may be that through an amendment he may be protected for a lesser or a longer period, but if the Minister were to say that this would be subject to all the proper protection for the operator, who may be allowed to continue for a certain time in spite of the revocation of the trial period designation order, I think the Committee might know they were then dealing with a very just issue. Since the operator is going to be protected under this Bill anyway, what, please, is the validity of the noble Lord's argument?
Lord BELLWIN: I shall come back to the point I was trying to conclude— namely, whether two years is, on the
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one hand, a sufficient period to make worthwhile the investment and all that goes with it and, on the other hand, is not too long should in fact there be some failure on the part of the services being provided. That really is the dilemma and that is the point we are talking about now. Clearly, my right honourable friend in another place felt that moving from three to two years was an attempt to get that balance, and, so far as I am aware, that is still the position today. I accept the point that the noble Lord, Lord Mishcon, made about the difference between two and, possibly, up to five. If it were two. I do not know how far he and the noble Lord, Lord Underhill, would feel happier—
Lord MISHCON: Much happier.
Lord BELLWIN: I presume of course that they would be happier. Whether they would be happy enough, I do not know. I suppose in some ways, as I am putting the point at the moment, it is slightly academic, but it is a very interesting and important point that they have raised. As regards what the amendment calls for, I do not know that I can be helpful. I think I have to recognise that if there was any shifting on this point, there would be a very real danger.
Let us be frank about it. Might it not be that that is what those who very fairly, but very vigorously, oppose the idea of trial areas would like to see? Might it not be that the whole thing would fall on its face, because no one would be willing to come in, make an investment and take a chance? That is really the nub of why I do not think I am able to make a move in the direction of the proposers of the amendment. But just as my right honourable friend did in another place, I entirely take and understand the points being made, and appreciate the concern. But I fear that I cannot take it further than that.
Lord TEVIOT: I should like to come in briefly here. It is said that if the period is two years, people will not have a go and make the necessary investment, and that is fine. But, equally, if anybody is to embark on something like this, they must plan ahead. They must know what they are doing even before they do it, and they must ensure reasonable success.

481
They should not take a gamble on something like this. We are thinking about the public in this issue.
To take another situation, we moved from Greenwich Mean Time to British Standard Time, which I think was brought about by Mr. Roy Jenkins some years ago. We had British Standard Time for three years and it greatly inconvenienced the people in the North of England. There was wide consultation and I believe that, after three years, there was a unanimous decision to revert back to Greenwich Mean Time. That is quite different from this situation and there was no investment involved. I am sorry that the noble Lord divided the Committee on the last amendment, when the Committee was quite full. At the moment, the attendance is quite thin, but if there is a point to make it is this one, and I hope that the noble Lord will press the amendment.
Lord BELLWIN: Before the noble Lord responds, I think, on reflection, that the point I was making earlier about two and five is very apposite. I wonder whether it might meet the concern, if I say that the Government will take this away to consider seriously making the minimum period two years and, possibly, abandoning the five. It is a point that I touched on a moment ago. I said that it seemed to me that there could be merit in that, and the more I think about it, the more I am inclined to think there is. That could possibly be a halfway house, which I am sure will not satisfy those who are against the trial areas. But, at least, it will allow sufficient room for us to proceed with the trial areas, to which we are quite committed. I offer that as a suggestion.
Lord UNDERHILL: The noble Lord is being extremely helpful. Even before he got up, I was going to surprise him by saying that he had been helpful so far as he had gone, because what we are arguing about is not the minimum period of a trial area being two years, or the maximum period of a trial area being five years. What the Bill says is that the period for the trial area can be a minimum of two or a maximum of five years, and whatever period is designated it cannot be revoked before then. If the noble Lord is saying that he will give serious consideration to writing into the Bill— I do not mind
482
whether he keeps the minimum of two and the maximum of five years— that no designated area shall be revoked before two years, which I gather is what he was saying, then we should be prepared to accept that. In other words, it would give a period of two years for the operators to run, to see whether a scheme was successful. That would be reasonable. What we are worried about is the fact that the Minister could make an order for four or five years, which could not be revoked before the end of four or five years. That seems nonsense. If the Minister will give serious consideration to putting in that, regardless of its length up to five years, an order shall not be revoked before a period of two years, we shall consider that very reasonable and will withdraw the amendment.
Lord BELLWIN: I do so confirm. That is the point I was making.
Lord HOWIE of TROON: Before the noble Lord sits down, I wonder whether he is undertaking to bring in a change in the Bill at Report stage.
Lord BELLWIN: We are talking about the procedural way of dealing with the matter. I think I have made it quite clear. It would always be open to noble Lords opposite to return to the attack in any way they wished, if such adjustments as were made by Report stage were not in line with what I have intimated. But I feel quietly confident that they may well be so.
The Duke of ATHOLL: I hope that my noble friend will not bring in a two-year minimum and maximum period. As a great believer in free enterprise, I am sure that it is essential to give the trial areas a reasonable amount of time to work, and I should have thought that the original three years minimum might have been a fair compromise, if it was also going to be the maximum. Obviously, as has been frequently said, a great deal of investment will be involved, and I do not see how people can be expected to put up the amount of money required if they have a guaranteed time of only two years. I have the feeling that the experiment may well take considerably longer to prove either a success or a failure. I very much hope that my noble friend will not be taken in entirely by the blandish-

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ments of noble Lords opposite, attractive though they are, making it a minimum and maximum period of two years.
Lord BELLWIN: I am grateful to my noble friend for his help. It is, as I have said, a difficult point but we are not talking of a minimum and a maximum. It is the minimum that we are concerned about. Noble Lords opposite were concerned that if a period of over two years was designated, then below that it would not be possible for there to be revocation. Clearly if something is going quite well and is being successful, that is what we all want. The concern of noble Lords was that if something had fallen on its face and was a disaster, no one could move below what could have been a period of up to five years. I recognise that, and that is the point that I want to make. But I think that my noble friend need not be too concerned that we would talk of maxima and minima in this way. A two-year period is the key one here, and it is the revocation aspect that we are concerned with.
Amendment, by leave, withdrawn.
12.38 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 46:
Page 12, line 41, leave out from ("order") to ("and") in line 42.
The noble Lord said: With the leave of the Committee, in order to save time I should like to speak on Amendments Nos. 46, 47 and 48. These are all part of a package and here we are again trying to be helpful to the Minister. What we are asking for is that the Minister should be able to take steps himself to revoke a scheme, not necessarily only if he has to wait for a request or an application to come from the local authority concerned. That would be the point of our Amendment No. 46. That would enable the Minister, if he himself thought that a scheme was getting into a mess, to consider revoking a scheme if the local authority had not made any application.
The second amendment would give to the Minister the power to act if the local authority concerned made an application for a revocation. The same principle is contained in the third amendment. All we are saying is that we do not want it
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to be left only to the local authority concerned to apply to the Minister to revoke an order. We think that the Minister ought to have the authority to take steps himself, though still leaving power with local authorities to make an application if they so desire.
Lord BELLWIN: I must confess that when we were discussing the last amendment I thought we were dealing with all the amendments up to Amendment No. 49. If I may deal with the point which has just been made, I do not think that I can move any further on this group of amendments. I understand quite clearly the point which the noble Lord is making about who it is that applies for revocation, but in view of what I said previously about the two-year period I do not want at this point to go any further.
Lord UNDERHILL: I accept the point made by the noble Lord: that if at Report we do get an amendment to Clause 5 which permits earlier revocation than the maximum period contained in an order, these three amendments may be affected. Under the circumstances, we wish at this stage to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 47, 48 and 49 not moved.]
Clause 12 agreed to.
Schedule 2 [Orders designating trial areas]:
12.42 p.m.
Lord UNDERHILL Lord UNDERHILL had given notice of his intention to move Amendment No. 50:
Page 53, line 42, leave out ("notify") and insert ("consult with")
The noble Lord said: This amendment involves the same principle as we discussed previously and I should like to have the noble Lord's reaction to it. We do not want to spend too much time upon it, but Schedule 2 lays down that there must be notification. We still believe that the simple word "notify" ought to be changed to "consult with". If, however, the noble Lord feels that he must take the same view as before, in the light of the last decision there will be no point in moving the amendment.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 51:
Page 55, line 2, leave out from (" for ") to end of line 3 and insert (" a period of one year or, if the service has been operated for less than two years, until the expiration of three years from the date on which it was introduced.")
The noble Lord said: This amendment deals with the same issue as we discussed before but from the viewpoint of the operator. It is laid down in the Bill that whenever a trial order is ended, the operator of a bus service shall be entitled, as of right, to a road service licence for an unspecified period in order to continue that service in the new circumstances. We agree that an operator must be allowed to see if he can make a success of his operation, but to lay down in the Bill that he must have a road service licence as of right, without there being any specified period, seems to us to be giving far too much to a new operator. As I have said, we recognise that if persons are to be induced to invest in a trial area they must be given some security, but in our view the security proposed in the Bill is far too open-ended.
Our amendment proposes that, in the event of a trial area scheme being revoked before the end of the period designated in the order, the operator should be entitled to continue for a further period of 12 months and that there should be an additional proviso; that if the service which the operator has been operating has been in existence for less than two years, that particular operator shall be entitled to continue the service for a period of three years from the time when the service was started. We are trying to take a balanced, sensible view so as to give to the operator certain rights. We agree completely with the Government about this. However, it must not be an open-ended right for no specified period which is what is laid down in the Bill. I hope that our very simple amendment on this point will be accepted. I beg to move.
Lord BELLWIN: Paragraph 6 (2) of the schedule is important. It means that entrepreneurs will not be discouraged from starting services in trial areas and undertaking the necessary investment by the fear that the trial area will be revoked. In those circumstances, they would be unable, because of opposition from others,
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perhaps even major operators who have been unwilling to provide services while the trial was going on, to get the licence they need. I see no reason why a licence won in this way, which provides a service in a competitive environment, should be discriminated against. It will be a genuine licence, properly granted. Under the Bill as it stands, it will last for five years. I have already said, however, that we are going to look at the period. If noble Lords believe, as they said earlier, that licences should generally be timeless, then so should these.
Lord MISHCON: I wonder whether the Committee have considered the situation that could arise in a matter of this kind. A designation order for a trial area could be made for five years. However, the Minister might decide, as a result of representations and on the basis that the other clause is amended, after a period of two years that the way in which the service has been operated is unsatisfactory. The licence to the operator we are thinking of might have been given for five years. Despite the fact that one of the reasons for ending the experiment might be the way in which that operator had functioned, it would mean that the operator— who may have been the cause of chaos in the trial area— would continue to operate for another three years without the need for any other licence. As the noble Lord, Lord Underbill, said, it is only reasonable that some protection should be given. Your Lordships may feel that to allow this to go on for such a period is unreasonable.
Lord BELLWIN: Whether or not an alteration of the kind I intimated earlier when dealing with the previous amendment— a two-year minimum period— would influence the thinking of noble Lords opposite on this amendment I do not know. If it would, then I think they may well care to hold their fire and see whether it takes place. I should have thought that this was relevant. If you are talking about a five-year period and then of a period of renewal beyond, one could talk about a period of three years. But if you are talking of a period of two years, as may well come about, the position might be rather different. I wonder whether noble Lords would care to think of it in that way.
Lord TEVIOT: I understood that Amendment No. 51 was in line with Amendments Nos. 45 to 49. My noble friend is going to look at this, so perhaps the period will be a minimum of two years. In the words of the noble Lord, Lord Underhill, perhaps this will be quite satisfactory. Obviously, you cannot have one situation for one thing and another situation for another. I hope therefore that noble Lords opposite will have faith in my noble friend's words.
Lord UNDERHILL: We will look carefully at what the noble Lord has said when we reach the Report stage. There is just one point I should like to make now: let us say that the order was for five years and it is revoked after two years; that means that he will have the continuation of his licence for another three years. That is what we are worried about but in the light of what the noble Lord has said we will see what comes forward on Report, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
Clause 13 agreed to.
Clause 14 [Duty to publish particulars of stage carriage services in trial areas]:
12.52 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 53:
Page 14, line 16, leave out ("stage carriage").
The noble Lord said: For the convenience of the Committee, with this amendment I should like to speak to Amendments Nos. 54, 55 and 56. The Standing Committee in another place agreed to a group of amendments which brought the terminology of the clause into line with that of the Bill as a whole. The drafting was certainly improved by these changes, but on looking at the clause closely we have noted that the term "stage carriage" is redundant in four places and that the clause can be shortened by removing them. I should not have thought this was in any way controversial and I hope the Committee will feel able to accept it. I beg to move.
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 54, 55 and 56:
Page 14, line 19, leave out ("stage carriage")
line 22, leave out ("stage carriage")
line 23, leave out ("stage carriage")
Lord BELLWIN Lord BELLWIN moved Amendment No. 56A:
Page 15, line 12, leave out ("without reasonable excuse")
The noble Lord said: I spoke to this amendment when dealing with Amendment No. 20. I beg to move.
Lord MISHCON: On the basis of the previous understanding reached with the Minister I will say no more but just wait for the Report stage.
Clause 14 agreed to.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 57:
After Clause 14 insert the following new clause:
Exemption from duty to co-operate in trial areas
(" .— (1) Within a trial area the duty of public passenger transport operators to co-operate with one another and with local authorities and to provide information in respect of their operators shall not apply.
(2) The duty referred to in subsection (1) is that specified in—

(a) section 24 of the Transport Act 1968 (in passenger transport areas);

(b) section 151 of the Local Government (Scotland) Act 1973 (in Scotland otherwise than in a passenger transport area);

(c) section 1 of the Transport Act 1978 (in non-metropolitan counties in England and Wales).

(3) Section 3 (5) of the Transport Act 1978 shall not have effect within a trial area.")
The noble Lord said: This amendment proposes the insertion of a new clause which is in effect an amendment of the trial area provisions. In our view it is absolutely unrealistic for operators to be expected to co-operate with one another and with local authorities in a trial area experiment in the absence of any regulatory machinery, and it has been confirmed again this morning— even if we had not noted it from the Bill— that there will be no regulatory machinery in a trial area in respect of the services that may be

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operating there and also the competitive nature of the operations within a trial area.
Within a trial area there will be complete abolition of all road service licensing; nor will there be any attachment of any conditions of operating. The only penalty in a trial area is a requirement that an operator must notify the starting, alteration or withdrawal of a service, subject to a fine of £ 200. There is no question of his having to keep to the terms of what he has said he was going to do. If he fails to notify he is fined £ 200, but if he notifies and does not keep to the terms nothing will happen to him at all.
That is what complete freedom of competition means, presumably, and unless we put this clause into the Bill the existing operator will be expected to co-operate with the new operator, giving him full details of how he runs his services. Surely that is asking too much of anyone: no operator can be expected to do that and possibly help to put himself out of business and, what is more, not provide the sort of service that he ought to provide for the people living in the area. If there is to be competition in these areas then surely what is required is that each new operator must stand on his own feet and not expect another operator to give him all the information as to how he does things.
When the matter was discussed in another place the Secretary of State said that he could see that a distinction must be drawn between the duty of operators to co-operate with and supply information to the council because the county council— or in Scotland the bodies to which it was referred— will have some authority in the area; therefore he thought there would still be a duty for the operator to cooperate with the local authority concerned. But he stated, on 5th February at column 1011:
"Because trial areas clearly mean more competition, as the right honourable gentleman has suggested, it may be sensible to relieve operators of the duty to co-operate and tell each other what they are doing. I fully accept the force of what the right honourable gentleman has said on that. We would like to give further thought to the intention of seeking to meet his point on Report."
I have looked through the Official Report and I cannot see that, on reflection,
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anything was done; but I hope this morning the Minister will be able to say that there has been reflection and, while the Government cannot accept our amendment in so far as it includes the provision that operators should not be expected to co-operate with the local authority concerned, he accepts the point— as apparently the Minister did in the other place— that it would be foolish and nonsense (he did not use those words; they are mine, but that is what he meant) to expect operators to co-operate one with another when there is competition in the operation of services.
I hope that the noble Lord will be able to give some assurance that this matter is still receiving consideration, and that on Report we shall know definitely that the Government will be bringing forward an amendment to meet that particular point. I beg to move.
Lord BELLWIN: I do not believe that the clause which is now being moved will make any practical difference to the operation of trial areas. I appreciate that there is a difference between the philosophy behind the 1968 and 1978 Transport Acts and the Conservative philosophy behind this Bill. But these clauses are unnecessary. First, there is no proposal to take away the county council's duty to co-ordinate public transport in their areas. They will still be able to exercise this duty through discussion with operators and through their revenue support powers; that is, their powers to make grants. It is wrong therefore to suggest that operators should not co-operate with local authorities in trial areas.
Second, I am not at all sure whether the operators' duty to co-operate with each other, as defined in law, was ever anything more than a pious hope. It is certainly very vaguely expressed in the relevant statutes and, I would think, is virtually unenforceable. There is no evidence, as far as I can discern, that it has ever impeded the way operators behave and, by the same token, it is unlikely ever to be an impediment.
Having said that, and having listened to the noble Lord, Lord Underhill, and his observations about what my right honourable friend said in another place, I have to say that there is merit in his

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point, and in those circumstances the least I could do would be to give him what at the moment I am not able to give him, namely, a satisfactory comment on whether or not my right honourable friend intended to do as he intimated in the passage that was read out. In the circumstances, I will undertake to speak to the Minister and to find out whether he intends to make an amendment at the Report stage.
Lord UNDERHILL: I am grateful to the noble Lord for that offer, and in those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 [Powers of, and facilities for, inspection of public service vehicles]:
1 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 58:
Page 15, line 25, at beginning insert—
(" (1) The Minister shall prescribe in regulations arrangements for the annual inspection of public service vehicles at either official public service vehicle testing stations or, if the equipment provided is adequate, the operator's premises, but no such regulations shall be made until a draft thereof has been laid before, and approved by a resolution of, each House of Parliament.")
The noble Lord said: In moving this amendment what we are seeking to do is to lay down statutory provision for the annual testing of public service vehicles. We recognise that there is an EEC directive on this matter and that this will make a start on annual testing as from 1st February 1983. But we can see no reason whatever why this should not be written into the Bill immediately so that annual testing can be laid down now and can start forthwith, as far as testing can start forthwith. The regulations which will have to be framed would, of course, be in accordance with the EEC directive.
With this amendment, perhaps I may speak on a proposal we have later on, that Clause 27 should not stand part of the Bill, because on this issue we support the view of the passenger transport industry that it is desirable that testing of public service vehicles be kept distinct from other vehicles, and the Minister in another place seemed to imply that that may be a view
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as well. We all know that there have been some unfortunate accidents involving public service vehicles. I am sure the whole Committee will be in full agreement on the desirability for the maximum safety provisions. Therefore, we believe that the passenger public service vehicles should be treated on their own and that the provision for annual testing should be accepted.
In this matter I make no apology on some of these issues for putting the point of view of the industry. Noble Lords opposite will often make criticism of us on this side of the Committee that we do not consult industry. On this issue we have consulted the industry, and they are somewhat concerned that there may be a view in Government circles to change the type of public service vehicle testing. The industry is concerned, and we on this side of the Committee fully support their view, that it is absolutely essential that public service vehicle testing should be in the hands of impartial non-commercially motivated engineers; in other words, the practice now— professional mechanical engineers employed through the Department of Transport— is the way in which the testing should continue. We hope that this provision will be accepted, despite the fact that there is an EEC directive which will make it compulsory later on, so that it can be written into the Bill. Your Lordships will notice that our new clause also provides some points on the question of how the testing should be carried out. I beg to move.
Lord TEVIOT: Your Lordships will notice that there is an amendment tabled in the name of my noble friend Lord Morris and myself, No. 63, which is in almost identical form. The only difference between the noble Lord, Lord Underhill, and myself is where we think the provision for annual testing of public service vehicles fits into the Bill. It seems to me that Clause 15 deals with general powers of inspection, Clause 16 with the certification of initial fitness and Clause 17 with spot checks. I see annual inspection as fitting between the last two. No matter, the important thing is that the specific provision should be made for annual inspection of public service vehicles; not that annual testing is new, but with the new European regulations it should now be formalised in primary rather than in secondary legislation.

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The arguments in favour of the amendment have already been very well expressed by the noble Lord, Lord Underhill. I only wish to emphasise the importance of these special vehicles to which are entrusted so many lives being placed on a professional and not a commercial basis. If the impartiality of our law courts is guaranteed by the State's intervention, so, too, if on a different plane, must the objectivity of the PSV examiner be ensured by his status under the traffic commissioners. It is for Parliament to ensure that safety in this way is maintained.
The uncertain future for official testing stations means that we are at present in no position to fulfil our obligation to the public. For this reason, and remembering what has already been said in this Committee, and having regard to the Negative Resolution procedure, the Bill must be amended in a way that clearly allows Parliament to form a'proper judgment when the full facts are known, including the extra cost to PSV operators, which could amount to many millions of pounds if only a limited number of testing stations are allowed. This is a secondary factor, but nevertheless one to be taken into account, because it is the travelling public who have to pay the bill. I strongly support the substance of this Amendment.
Lord MOWBRAY and STOURTON: I do not think there is any great difference between noble Lords and the Government on this amendment, which is on the very important point of annual testing of public service vehicles. I totally appreciate the desire of all noble Lords opposite and noble Lords on this side of the Committee to see such a requirement written into this Bill. However, this amendment would pose a number of difficulties. It is not of itself sufficient to set up a scheme for the annual testing of public service vehicles, and it is, moreover, unsatisfactory in that it would oblige us always to have a different set of regulations for public service vehicles from those applying to other large passenger vehicles. I can assure your Lordships that its incorporation in Clause 15 will not produce regulations relating to the testing of public service vehicles one jot more quickly or more certainly.
Clause 27 removes the present impediment to the making of such regulations,
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and my right honourable friends in another place have given the firm undertaking that they will be prepared without delay. We are indeed required to make provision for testing of all large passenger carrying vehicles, including public service vehicles complying with our Community obligations. But it would in any event be our wish to do that. I can repeat to your Lordships the clear assurance that draft regulations are going to be circulated as soon as they can be prepared.
I can also repeat the assurance given in another place that the Government accept the case for making use of operators' premises whenever appropriate. There is, however, not only the adequacy of equipment to consider, which is all that is mentioned in noble Lords' amendments, but also a number of other factors which can be relevant, especially the point of geographical distribution, for example. We are discussing with operators details of the arrangements to be made.
It might be appropriate if I say a word on Clause 27 now because it does directly apply to this. The clause was framed in the way it was because we were anxious to make comprehensive regulations relating to the testing of all large passenger vehicles. As I said, the EEC roadworthiness directive requires us to test all vehicles in that broad group, not just the PSVs. All we differ on is the mechanism by which we should achieve our objective. It is, surely, the obvious and sensible course for all our vehicle testing requirements to be prescribed under the same set of powers. If that is not done the possibilities of anomaly are endless. What we are doing in Clause 27 is tidying up the legislation to make this possible.
By seeking to delete Clause 27 you would be saying in effect that we should always have two sets of regulations to lay down the testing for large passenger vehicles, depending on whether they are PSV or not. If we had proposed at the outset to proceed in that way I have no doubt we should have been rightly criticised for adding unnecessary complications to the burden of regulations with which industry has to cope. I have assured your Lordships that regulations will be prepared for discussion as soon as possible. I hope that, with that explanation, noble

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Lords will see the strength of the Government's argument.
Lord UNDERHILL: In the light of the assurances that have been given, I shall withdraw the amendment. However, we shall, of course, wish to ensure that the industry will be consulted before the regulations are drawn. I gather from the noble Lords opposite that they are both nodding their heads in agreement. In the light of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord TEVIOT Lord TEVIOT moved Amendment No. 59:
Page 15, Line 35, at end insert—
(" (1A) Notwithstanding subsection (1) a certifying officer or public service vehicle examiner shall not detain a public service vehicle which is in service unless he has reason to believe it to be so unfit as to constitute a hazard to its passengers or to other road users.
(1B) In subsection (1A) "in service" means being used on a journey in the course of which it is intended that passengers shall be carried or at a time when the vehicle is proceeding to or is at a point at which passengers may be taken up.")
The noble Lord said: I beg to move Amendment No. 59 in my name and in the name of my noble friend Lord Morris. Clause 15 deals with the powers of inspection of public service vehicles by officials of the Department of Transport. It specifies that a certifying officer or public service vehicle examiner may detain a vehicle for as long as it is necessary to inspect it. Department of Transport officials do not have power to stop public service vehicles on the highway; that power is limited to the police. In the 1960 Act— Section 128 (3) — it was specifically stated that these officials
"may require any public service vehicle to be stopped."
The omission of these words is not, however, significant because it is clear from Section 159 of the Road Traffic Act 1972 that only a police constable in uniform has the power to stop a vehicle on the road.
It is not unusual for the police and department engineers to make roadside checks on the safety of goods vehicles, but fortunately they do not often use their power to stop public service vehicles
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carrying passengers. It is more usual for such checks to be made at coach parks, or in other circumstances in which a large number of passengers will not be inconvenienced. Obviously, if there is reason to believe that a bus or coach is in an unsafe condition so as to be a source of danger to the occupants, or other road users, it would be irresponsible not to stop it. That is not at issue. The purpose of this amendment is to ensure that the public are not unnecessarily inconvenienced by casual spot checks.
It may be thought that the above comments hardly need to be expressed— it goes without saying that the public should not be unnecessarily inconvenienced. However, coaches are stopped in this way from time to time and it is a cause of considerable embarrassment because, even if the coach is completely free of defects, the passengers have their confidence undermined, and they wonder whether something might, indeed, be wrong.
Recently the police in the West Midlands— and I notice that the noble Baroness, Lady Fisher of Rednal, is not with us today— have been active in this way. I have been given two examples of this. Obviously I can give no names, but I can give details to my noble friend later. They are clearly two quite recent instances where there has been considerable embarrassment to passengers. In one instance mothers and children were delayed for about 20 minutes when I do not think there were any defects to the vehicle concerned. In another case there were only two marginal defects alleged, of which one is disputed and I think is now coming before the courts.
This is no way to treat public transport. I know that these two cases involved the police, but in this Bill we have the opportunity to establish a principle. It should not be necessary to do so, but unfortunately it does seem to be necessary. Moreover, there is another field in which it is the growing practice to stop and detain coaches on a purely haphazard basis— that is, the inspection of drivers' hours records, log books or tachographs. It is for these reasons that the bus and coach industry has become particularly aware of the need for guidance regarding spot checks.
It will be seen that there is a close relationship in principle between the two

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reasons for stopping and detaining public service vehicles and the effects on both passengers and drivers, who are already difficult enough to find. One cannot stress that, but it is what one might call a Second Reading point. It is again stressed that there is no intention whatever of limiting the powers of the police to stop a vehicle for any good reason. It may be argued— and it has been argued in another place— that an examining officer cannot know if there is a hazard until he has spot checked a vehicle. I discount that argument. As motorists we have all, on occasions, seen vehicles which we thought were positively unsafe. Let us leave it to common sense, but let us give guidelines to avoid the misuse of authority.
The only concern is to avoid random checks which not only upset the passengers on the vehicle, but also undermine the service which the industry can give the public. This clearly applies when a bus or coach is laden with passengers. It is equally true if a vehicle is running empty, say, between the depot and its first pick-up point. It is almost worse if the empty vehicle arrives late because the passengers have no way of knowing that the delay was caused by the police or departmental action— they will merely consider that the operator is unreliable. It should not be difficult for the driver to satisfy relevant officials that he is on his way to a pick-up point, because the documents he carries should clearly indicate the nature of the service he is undertaking. The amendment is framed with the intention of reducing unnecessary inconvenience to the public without, in any way, prejudicing road safety. I beg to move.
Lord MOWBRAY and STOURTON: My noble friend's amendment is, I suggest with great humility, slightly illogical because the Bill is only providing for a vehicle to be detained during the time actually necessary for inspection. But how can an examiner be expected to know whether a public service vehicle in service constitutes a hazard if he cannot even detain it for inspection? In any case, although I have every sympathy with the noble Lord's concern for the convenience of the travelling public, I cannot believe that an amendment of the kind proposed is really necessary. I do not really think
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that the assiduity of the department's examiners is so important a cause of delay to scheduled services, or is likely to become so. It would indeed be nice to know that operators had nothing else than that to contend with.
However, my noble friend has said— and this gives me cause for some worry— that he knows of two cases of which he will be able to give me details in private. I promise him and your Lordships that they will be looked at by my right honourable friends and officials. The last thing we want to do is to have over-zealous officials in the department. We like to think that the department's examiners are not over-zealous, but act only where the safety of the public is at risk. I shall be most glad to accept his offer and I promise to have the cases which he has mentioned looked at. However, in the light of the department's intention that this should not prove to be an inconvenience to the public at large, the travelling public, I ask your Lordships to accept that these powers are sensible in so far as they go.
Lord TEVIOT: In the light of what my noble friend Lord Mowbray has said, I shall certainly afford him details— at any rate without names— of the two incidents of which I know. I take the point that he does not want officials to become over- zealous in any way. I could not be more happy with the answer that he has given. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clause 16 [Certificate of initial fitness (or equivalent) required for use of public service vehicle]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 60:
Page 16, line 29, leave out ("Subject to subsection (4) ")
The noble Lord said: I spoke to this amendment when we dealt with Amendment No. 20. I beg to move.
Lord BELLWIN Lord BELLWIN moved Amendment No. 61:
Page 16, line 32, leave out subsection (4).
The noble Lord said: Again, I spoke also to this amendment when I dealt with Amendment No. 20. I beg to move.
Lord UNDERHILL Lord UNDERHILL had given Notice of his intention to move Amendment No. 62:
Page 16, line 35, at end insert—
(" (5) A bus run by a local authority for providing transport in pursuance of arrangements made under any Education Act shall be treated as a public service vehicle for the purposes of this section ")
The noble Lord said: Although we feel very strongly about this matter, for we believe that security and safety of school buses is as important as anything else, in the light of the Government's amendment No. 110 which we regret was given approval, and which excludes consideration being given to school buses, it would appear that I would be out of order if I move this amendment. Is that the interpretation of the noble Lord, Lord Bellwin, on this?
Lord BELLWIN: Lord Bellwin certainly would not be qualified to give an interpretation as to whether the noble Lord is in or out of order. In the light of what he said a moment ago about what transpired previously, I would hope that he might feel that he would wish to withdraw the amendment.
Lord UNDERHILL: In those circumstances, might I be permitted not to move the amendment, and perhaps the noble Lord will check the position for me, because if it is still possible for us to move this amendment, despite Amendment No. 110 being carried, we should wish to do so. We feel very strongly about this. Having said that, I do not wish to move the amendment.
[Amendment No. 62 not moved.]
Clause 16, as amended, agreed to.
[Amendment No. 63 not moved.]
Clause 17 [Power to prohibit driving of unfit public service vehicles]:
1.23 p.m.
Lord TEVIOT Lord TEVIOT moved Amendment No. 63A:
Page 17, line 1, leave out subsection (2).
The noble Lord said: With this amendment I should like to speak to Amendment No. 66. Together they follow the theme of Amendment No. 58, for which my noble friend has expressed some sympathy. I shall just make my comments as I have them. The industry feels uncertain of the future of testing stations. Therefore, the amendments seek to leave out the requirement that certain prohibition notices can only be removed at a testing station. It is my belief that the vehicle examiners of the Department of Transport are well-qualified to deal with suspension notices on vehicles on a practical basis, ensuring that the public service is protected. The industry readily accepts the need for safety control over its vehicles, but it needs a minimum of bureaucracy and the greatest freedom, consistent with safety, to enable it to give the best possible service to the public, when it comes to prohibition notices removing only at official testing stations.
I suggest that this is going too far, particularly when, under subsection (6), any certifying officer or public service vehicle examiner may, by endorsement on the notice, cancel a direction under subsection (2). In another place my honourable friend the Parliamentary Secretary to the Department of Transport specifically drew attention to this provision. The reference can be found in the Official Report for Standing Committee "H" for 5th February, at column 1061. It follows that there is a contradiction, as it is said in subsection (2) that the prohibition is irremovable until the vehicle has been to an official testing station. Moreover, no official PSV testing station exists at the present time.
Reverting to the question of ownership of such stations, it is thought that in respect of PSVs it would be a highly unsatisfactory arrangement to introduce through this legislation a requirement tying the clearance of a stop notice to an official testing station. The safety can and will adequately be ensured by the surveillance of certifying officers and PSV examiners, and there is no need to introduce a specific requirement of the kind indicated.
At a later stage, when the position has stabilised, it will, regardless of subsection (2), but completely reflecting the thought underlying the subsection, be within the

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power of these officials should they think it necessary to withhold their clearance of a stop notice until the have had a vehicle tested, with the use of whatever facilities they consider necessary, including, if such things can exist, those of official PSV testing stations. For these reasons the deletion of subsection (2) is sought with consequential amendments. I beg to move.
The DEPUTY CHAIRMAN of COMMITTEES: I should inform your Lordships that if this amendment is agreed, I cannot call Amendments Nos. 64 or 65.
Lord BELLWIN: In this part of the Bill we seek to introduce procedures for ensuring the safety of public service vehicles which are comparable to those already in the Road Traffic Acts for ensuring the safety of heavy goods vehicles. The power sought to make prohibitions clearable only at testing stations is similar to that which already exists in relation to heavy goods vehicles which are subject to prohibition; and the same reasoning applies; namely, that in certain cases there will exist only at testing stations the facilities necessary for the proper verification that the faults which led to the prohibition have been remedied.
Having said this, I appreciate that unforeseen difficulties can arise in a requirement for clearing a prohibition at a testing station. That is why subsection 6 (b) (ii) tempers the goods vehicle prohibition arrangements with a new element of flexibility (examiners may cancel a direction under subsection (2)). I believe we now have it just about right.
I really cannot accept that a requirement that a vehicle should be inspected at an official PSV testing station constitutes an unacceptable burden in principle on operators. I am sure that noble Lords opposite will accept the road safety case for such a provision. One might comment that operators can avoid its burden by maintaining their vehicles in such a way as to avoid prohibitions in the first place. I have no reason to suppose that our examiners will abuse their discretion to impose directions under subsection (2) by applying them in trivial cases; but naturally I assure noble Lords that we shall be prepared to look into any such allegations.
Lord TEVIOT: With that assurance given by my noble friend, I can only say that I should like to look at this again and, if necessary, come back to it on Report. However, I think that he has made his position quite clear. In that light, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
1.28 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 64:
Page 17, line 2, leave out ("making it irremovable") and insert ("prohibiting the driving of a vehicle on a road").
The noble Lord said: This is an appeal to fellow parliamentarians now sitting in Committee to ensure that, on the face of it, an Act of Parliament, read by the ordinary layman, does not seem to be absurd. I refer to the fact that this subsection reads as follows:
" (2) A prohibition under subsection (1) "—
and that, of course, is the prohibition after an inspection by a certifying officer or public service vehicle examiner leading to a prohibition on the driving of a vehicle—
"may be imposed with a direction making it irremovable"—
to the ordinary reader that means that it cannot be removed—
"unless and until the vehicle has been inspected at an official PSV testing station".
Anyone reading that subsection— be it a lay magistrate, quite apart from the question of an ordinary layman— would wonder what Parliament was about in saying that the vehicle cannot be removed unless it has been taken and subsequently released at a testing station, which obviously must be at a distance from the place where the prohibition was imposed.
I have no doubt that I shall be told by the Minister that regulations will be made which will say that it is not deemed to be irremovable if, in fact, the sole purpose of the journey is to take it to the testing station. In addition, I have no doubt that the Minister may refer to other legislation relating to heavy goods vehicles and so on, where the same sort of situation may apply. But in my humble submission, when you are drawing up an Act of Parliament, you ought to be able to find words which, as I said, do not make the ordinary reader think that he is looking upon an absurdity, and indeed a complete Gilbert and Sullivan

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situation. We, therefore, suggest— and we do so very respectully— that everything that is intended to be covered under subsection (2) could be covered if one uses the words:
"prohibiting the driving of a vehicle on a road",
which would obviously mean that it would have to be towed to the testing station.
If the words that we have chosen in this amendment are not suitable to the Minister because there is some aspect of the matter which may not be covered by the use of those words, all I would ask him to do— and I shall not trouble the Committee further— is to take the amendment away and look at it, and sec whether there are words other than the absurd word, "irremovable", which could be used. I repeat that the answer cannot be in regulations which the layman will not have in front of him, nor even the lawyer at the time he reads this subsection, and certainly not any lay magistrate or other person who may be required to look at this subsection.
Lord MOWBRAY and STOURTON: I appreciate the noble Lord's desire to have readily understandable legislation. As a simple non-legal-minded Peer, I have always wished myself that it would be made easier, and I am sure that that applies to everybody in the country. However, I am advised that this amendment does not appear to make any material change to the sense of subsection (2). The subsection would still provide that aprohibition may be imposed, with a direction as to inspection of the vehicle at an official PSV testing station. That is a provision that we regard as important for ensuring that vehicle examiners can check properly that vehicles are fit for service. There is nothing between us here. In some cases it will only be possible at places where a full range of equipment is available. But it does not seem that noble Lords opposite dissent from that general principle.
There was some discussion in another place as to whether or not "irremovable prohibition" would prevent operators getting their vehicles to the testing station for the required inspection. I should perhaps reiterate the explanation given by my right honourable friend that this will not in fact cause difficulties, as in the
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goods vehicles regime appropriate regulations will be prepared exempting vehicles on their way to testing stations. In other words, if the inspector finds a vehicle which needs attention he will say, "You will proceed at once to the nearest place, and as from that moment you are going to stop or go to prison". You know: you will take it there and from that moment it will be irremovable.
Lord MISHCON: Will the Minister forgive me for this intervention which, with his usual courtesy, he has allowed me to make? The Minister is repeating in far clearer language than I used the situation which is common ground. Of course it has to be taken to a testing station if it is in a bad condition. Obviously, regulations may be made hereafter which will allow that to be done. The point that I was on is that it is so absurd in an Act of Parliament to say, without any definition clause at all on what "irremovable" means in this subsection, that it is irremovable but it has to be taken to a testing station. That is the only point I am trying to cover. I do not want to waste the time of the Committee. If the Minister will, in his kindness, take this back and see that we do not do something which is unnecessarily absurd, I shall be grateful and the Committee can go on with its other business.
Lord MOWBRAY and STOURTON: I am grateful for those kind words of the noble Lord. As regards his wording, we have no really great objection to it since we do not think that it is going to change the effect very much. On the other hand, it might be thought to introduce an element of tautology, and we do not see any great advantage in moving from the current formulation. I shall certainly take it back and ask my learned friends in the drafting section whether they can find words to meet the noble Lord's common-sense reaction to them. I shall certainly undertake to do that. Whether he will be able to do so, I do not know.
Lord MISHCON: On that very courteous assurance, I ask for the leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
1.35 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 65:
Page 17, line 3, at end insert ("or, if the equipment provided is adequate, the operator's premises")
The noble Lord said: This again is a further tidying up amendment— at least, we think it is— to this same clause. In the light of what the noble Lord said on a previous amendment we are certain that it is not the intention that an official public service vehicle testing station shall be necessarily away from the operator's premises. I understood that the noble Lord, Lord Bellwin, intimated on a previous amendment that this could be so.
Therefore, what we want to do in this amendment is to make the position absolutely clear, so that we add after the words,
"official PSV testing station"
the words
"or, if the equipment provided is adequate, the operator's premises".
That would seem to be common sense. It would remove any doubt there may be in the minds of operators and, I believe, would fit what is the Government's intention. I beg to move.
Lord MOWBRAY and STOURTON: As the noble Lord, Lord Underhill, has said, the object of this amendment is to establish beyond doubt that operators' premises can be used for the testing of public service vehicles. On this central point, I would reiterate completely the assurances given by my right honourable friends in another place that we are committed to the principle of designating operators' premises. There is no fundamental difference between us there.
The amendment proposed is, however, I am advised, unacceptable. In the first place, I am advised that it is unnecessary because the term "official PSV testing station" already includes any premises designated for that purpose. But, most seriously, it restricts unacceptably the Minister's discretion as to designation in its implication that any premises with the right equipment must be designated. Equipment is, indeed, an obviously important consideration: but as my honourable friend made clear in another place it is not the only one. We need to have regard to such things as a proper distri-
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bution of testing facilities, and a sensible use of resources— whether they be public or private. Detailed discussions are in hand with operators as to the appropriate criteria for designation, and I do not think that there will be any insuperable difficulty in drawing up sensible guidelines. But equipment alone is not the only factor.
Lord UNDERHILL: In the light of what the noble Lord has said, I shall withdraw this amendment, on the assurance I understood he was giving that, first, there will be discussion with the operators.
Lord MOWBRAY and STOURTON: Yes.
Lord UNDERHILL: And, secondly, that it is not the intention to omit operators' premises for testing stations. I should add that one reason that one wants to be clear on that is because of the suspicions— maybe suspicions that should not be there— in the transport industry that the Government will not permit operators' premises to be used, unless they take the form of official testing stations to which other operators must be allowed to bring their vehicles. If that is to be looked at as well, we shall be happy to withdraw this amendment.
Lord MOWBRAY and STOURTON: My understanding is that any premises designated by the Government would, ipso facto, get some sort of official approval.
Amendment, by leave, withdrawn.
[Amendment No. 66 not moved.]
1.39 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 67:
Page 17, line 43, at beginning insert ("Subject to any subsisting direction under subsection (2),")
The noble Lord said: The substance of this proposed amendment occupied a whole subsection in the Bill as introduced in another place. That subsection was later removed from the Bill. The present amendment preserves the essence of it much more simply. It makes it clear for the avoidance of doubt that the general powers of certifying officers and PSV examiners as to removal of prohibitions when they consider a vehicle is fit shall not override any direction that may have been imposed under subsection 2 that the

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vehicle shall first be inspected at an official PSV testing station. This is really purely drafting. I beg to move.
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 68 and 69:
Page 18, line 11, leave out ("subject to subsection (9) ").
line 75, leave out subsection (9).
The noble Lord said: I spoke to these amendments when dealing with Amendment No. 20. I therefore beg to move.
Clause 17, as amended, agreed to.
Clause 18 [PSV operators' licences]:
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 70 and 71:
Page 18, line 40, leave out (" Subject to subsection (6) ").
Page 19, line 1, leave out subsection (6).
The noble Lord said: I also spoke to these amendments when dealing with Amendment No. 20. I beg to move.
Clause 18, as amended, agreed to.
Clause 19 [Classification of licences]:
1.42 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 72:
Page 19, line 10, at end insert (" and may further provide whether or not and to what extent such vehicles may be used in the operation of extended tours ").
The noble Lord said: I will, with permission, speak at the same time to Amendment No. 136 to the interpretation clause, Clause 36. I feel certain there will be general agreement with the principle behind the amendment, and on this issue the industry considers that the addition of these words is vital for what is a fast- developing aspect of the bus and coach industry. The amendment seeks to insert a provision that for applications for standard licences for use on international and/or national operations there should be this extension, whether or not they are to be used in the operation of extended tours.
Perhaps I should point out that the industry has put the strong case to us that, as noble Lords may be aware, problems have arisen in the package holiday industry involving the collapse of, in some cases, quite large holiday companies. Expertise is required in dealing with matters of extended tours, which are totally different, as the industry points out, from running, say, a school contract bus. Until now, coach operators have not experienced a single failure of the type which has been all too common with other types of package holiday. The industry believes that this is due to the safeguards of the road service licensing system. With the disappearance of this protection under the Bill, there is concern lest problems arise similar to those in other holiday sectors and lest the reputation of the coaching industry as a whole be severely damaged.
The amendment seeks to say that consideration must be given to this aspect in granting a licence. We hope the Minister will accept that the industry is looking at this not particularly from its own point of view but from that of passengers, to ensure that the industry is able to keep to its very high standard; so this should be a qualification which should be considered in dealing with the issue of licences. If the Minister cannot accept the wording of the amendment, we hope he will regard this as such an important matter, affecting the whole question of package holidays— which, as I say, is growing and is now involving the coach industry to a very large extent— that he will give an undertaking to give it serious consideration.
Lord BELLWIN: I appreciate the concern which has led the noble Lord, Lord Underhill, to move this amendment. The philosophy behind the Bill, however, is that licensing and controls should be removed wherever they are not essential in the public interest, and I have not been entirely convinced that a control of this sort is essential. We believe that operators' licensing will itself provide the necessary safeguards in the public interest on the good repute and financial standing of the operators, and it is really doubts about these, I suspect, that are at the back of the amendment. I do not think the traffic commissioners should concern themselves with the organisation of the

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leisure market, and I must resist any attempt to add to the number of controls in the Bill.
Having said that, I think the issue raised by the noble Lord, and the way he raised it, are of sufficient importance for me, without giving any commitment— I could not give one— to promise to have a word with my right honourable friend about it. I will talk to him again about the matter and see what may be said.
Lord TEVIOT: I entirely agree with the purpose of the amendment and had I spoken before the Minister replied to the noble Lord, Lord Underhill— I apologise to the Committee for not speaking then— I probably would have spoken at some length on it. However, in view of my noble friend's promise to look at the matter again, I need say no more.
Lord UNDERHILL: I appreciate the Minister's offer and I gather he is saying that if it cannot be included in the Bill he will ask the Secretary of State to look into the general problem. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
1.47 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 73:
Page 19, line 18, leave out from ("passengers") to end of line 21.
The noble Lord said: The intention here is to delete from the Bill the provision which would enable a person to hold a restricted licence to operate merely because the greater part of his business is in some field other than that of public service vehicle operation and he operates with vehicles adapted to carry between nine and 16 passengers. The fact that a person may operate with 20 such vehicles or minibuses, but that this is not his main occupation, should surely not provide that person with the opportunity to be accepted with a lower standard of qualification than another person who operates, say, 10 small buses but has few or no other interests. Surely that is not equitable or fair and cannot be justified.
The simple point of the amendment is that those who operate passenger vehicle
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services, no matter how large or small the number of vehicles involved, should all have the same standard of professional qualification, but that appears not to be so from the wording of the clause as drafted. I beg to move.
Lord TEVIOT: In supporting the amendment, I recognise that subsection 3 (b) seeks to reflect Article 1 (3) of the EEC directive on access to the profession. This article permits member states, after consulting the Commission, to accept those to operate for non-commercial purposes, also those having a main occupation other than that of road passenger transport operator. The article limits this exemption by adding:
"in so far as their transport operations have only a minor impact on the transport market".
I do not now by what is meant by "the transport market". It may mean at EEC level, at national level or at local level. However, I do know that if I operate a number of small vehicles and somebody is competing with me— possibly in the way the noble Lord, Lord Underhill said, having a larger fleet— that operator is affecting my market. I do not see why he should be exempted from having an O licence, which is the safety and quality licence, when I have to be so licensed, and I therefore support the amendment.
Lord MOWBRAY and STOURTON: We have here a small, but important, point. This is part of the Government philosophy of trying to make matters easier, especially in rural areas, so as to enable a man who runs perhaps a taxi service or a small hire car business to run a mini-bus, too. This sub-paragraph in the Bill continues a derogation from the access directive allowed to us by the Community. The sort of operation referred to is the taxi or hire car proprietor who also runs a few minibuses. Under the present law he does not require standard public service vehicle licences for these minibuses. The Bill will not require him to have a standard operator's licence. The amendment would. I do not wish to impose on him the need to satisfy the "professional competence" requirement when the access directive itself does not. We want to encourage hire car proprietors to run a minibus or two; they can provide a real service in rural areas. I simply do not accept that

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there is any unfair competition here with ordinary bus and coach operators.
Lord UNDERHILL: I was unable fully to follow the case put forward by the noble Lord. I am not saying that he did not put the case extremely well, but he referred to the EEC directive on this matter, and so I should prefer to withdraw the amendment so that we can consider what the noble Lord has said, and perhaps study the EEC directive. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 agreed to.
Clause 20 [Grant and duration of licences]:
1.52 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 74:
Page 20, line 8, leave out (" proposed to be used under ") and insert (" authorised in ").
The noble Lord said: The phrase,
"proposed to be used under the licence",
which appears in the Bill, creates doubts in the minds of operators. This is a rather technical matter to understand fully, and so I should like to take a little time to explain it. Let me put it in this way. The word "use" would seem to cover vehicles hired by, say, operator A, with or without drivers, from operators B or C for use in fulfilling his contractual obligations. Of course, this inter-hiring is a fundamental part of public service vehicle operation. It ensures maximum vehicle utilisation and consequent efficiency of operation, which has the effect of reducing cost to the public.
However, when operator A is using a public service vehicle owned by licensed operator B, that vehicle is covered by B's licence. Therefore, the traffic commissioners have already been satisfied that operator B has adequate facilities or arrangements for maintaining the vehicle in a fit and serviceable condition. So clearly there is no need for these facilities or arrangements to be linked to operator A's licence. We believe that the use of the phrase "authorised in the licence" which is what is suggested by the amendment, voids any possible ambiguity in this
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matter. The position would be made quite clear, and safety would be protected; and those points would justify acceptance of the amendment. I beg to move.
Lord MORRIS: I wish to make a small comment on the amendment. I see the necessity for using the phrase, "proposed to be used under …", because if noble Lords look at subsection (3), they will see it is quite clear that the future tense is used throughout the subsection. The subsection starts:
"Notwithstanding that it appears … shall not be granted …

(a) that there will be adequate facilities or arrangements for…

(b) that there will be adequate arrangements for securing compliance … "

et cetera. The tense is very much future, and I think that the phrase "proposed to be used under …" is correct drafting.
Lord MOWBRAY and STOURTON: It is at first a little difficult to understand what noble Lords seek to achieve with these amendments. They are hardly drafting amendments, since they appear to import some idea of an operator's licence authorising particular vehicles. But this is not, of course, how the provisions on operator's licensing proceed, and the amendments would not of themselves seem to change anything, but merely perhaps to add confusion.
The noble Lord, Lord Underhill, has expressed some anxiety about the wording in Clause 21 of the Bill, which speaks of the maximum number of vehicles which a licence-holder
" may at any one time use ".
It is indeed the case that this means just what it says. What matters is how many vehicles are actually being operated at any one given moment. But that will always be the case— and indeed would be so if these amendments were made— unless we make a quite different distinction and seek to restrict, through licensing, the total number of vehicles which may be in an opeator's possession at any time when he holds a licence. We should then cover vehicles which were awaiting sale, or being refitted, vehicles normally hired out to other operators, and so on. It is a possible approach, but one which seems to be unduly restrictive and to take us back to the existing régime of individual vehicle licensing.

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What the Bill instead seeks to do is to separate the essential quality controls on individual vehicles— that is the provisions we have already discussed on Clauses 15 to 17— from the controls on the fitness of operators to run their businesses. We should prefer to maintain that distinction. This amendment goes very closely with Amendment No. 86, and perhaps I should say a few words on the point about hired vehicles. Surely noble Lords do not propose to argue that the vehicles which an operator may "hire in" should be ignored by the commissioners when they are assessing the operator's capability. Hired vehicles may be an essential part of a business. Indeed, to ignore hiring would leave a massive loophole in the licensing control.
Your Lordships may ask: What about hiring for the odd day— but how is that to be distinguished from hiring for a much longer period? It is for the commissioner to assess the total scale of a business, including the incidence of hiring, when he fixes the maximum number of vehicles that may be operated under the licence. Questions about financial standing in relation to a business, and about an operator's arrangement for complying with driver's hours regulations must of course take account of the operator's total operation.
If the industry is really concerned with regard to the technical framework of the system, I would very strongly advise them to discuss their worries with our officials without delay. I am bound to say that from the earliest stages of the Bill they have been given every invitation to sit down with our officials to make sure that the details are right, but so far they have been too busy to find the time to do that. However, I make the offer again, though time is not of the longest in this case.
Lord UNDERHILL: I am grateful to the noble Lord for his detailed reply which will enable us in the Official Report to see precisely what is the Government's view on this matter. I am also grateful— and I am sure that the industry will be, too— for his offer to consider any representations that the industry wishes to make. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 75 not moved.]
Lord MORRIS Lord MORRIS moved Amendment No. 76:
Page 20, line 30, leave out ("on the date on which") and insert ("immediately before").
The noble Lord said: This is a purely drafting amendment which I think will clarify the Bill. By inserting "immediately before" in subsection (7) in place of "on the date on which", the matter becomes much clearer, and I think that the English is rather better, too. The date referred to is the end of the particular day, and I commend this amendment to the Committee.
While speaking to this amendment I should like to raise a point regarding subsection (5), in which the draftsman uses rather strange drafting in the phrase
" the date with which it is to expire … ".
I originally put down an amendment to leave out the expression "with which" and insert instead, the term "on which", which is in rather more common use. In fact, if you look at Clause 11 (1), it says,
"the dates in the year on which road service licences are to expire".
Similarly, in subsection (3) of the same clause, it says,
"on the date on which a road service licence is due to expire".
This is the only place in the Bill where the phrase "with which" is used.
I think it will be quite clear to your Lordships that time, rather like space, has a beginning and has an end. To take a case in absurdum, if I were to issue a licence for one day only with the date of commencement, say, 1st January, 1980, the date of expiry would be written "1 January 1980", and it would be quite clear to everybody that that licence would run from the first second of that day and that it must expire at the end; namely, at the last second of that day. I am a little puzzled at the somewhat esoteric drafting of" with which "in subsection (5), but that is another issue. I merely wanted to give the Minister notice that I shall be looking at this one again. Notwithstanding that point, I beg to move.
Lord MOWBRAY and STOURTON: I thank my noble friend for his very useful amendment which, I quite agree, adds greater clarity to this subsection; and, on behalf of the Government, I am very pleased to accept it. With regard to

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his other remarks, I shall certainly look very closely at them to see whether there is substance in the point he makes, and if there is we shall deal with it when the Bill reaches us again.
Clause 20, as amended, agreed to.
Schedule 3 [Supplementary provisions as to qualifications for PSV operator's licence]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 77:
Page 55, line 11, leave out paragraph 1 and insert—
("1.— (1) In determining whether an individual is of good repute, traffic commissioners shall have regard to all the relevant evidence and in particular to—

(a) relevant convictions of his and of his employees and agents; and

(b) such other information as the commissioners may have as to his previous conduct, in whatever capacity, in relation to the operation of vehicles of any description in the course of a business.

(2) In determining whether a company is of good repute, traffic commissioners shall have regard to all the relevant evidence and in particular to—

(a) relevant convictions of the company and its officers, employees and agents;

(b) such other information as the commissioners may have as to the previous conduct of—

(i) the company's officers, employees and agents in relation to the operation of vehicles of any description in the course of any business carried on by the company; and

(ii) each of the company's directors, in whatever capacity, in relation to the operation of vehicles of any description in the course of any other business.").

The noble Lord said: The present paragraph 1 confuses the criteria for judging the repute of individuals with those for judging the repute of companies. It also fails to make it clear that the commissioners must have regard to all the relevant evidence, and not just to previous conduct and relevant convictions; and speaks of
"relevant convictions … during the preceding five years",
which is inappropriate in view of the overriding provisions of the Rehabilitation of Offenders Act 1974. The new paragraph spells the matter out at somewhat greater length, but with a great gain in
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clarity. I beg to commend this amendment to your Lordships, and to move it.
Lord MISHCON: We on this side of the Committee would like to congratulate the Minister on the very attributes which he modestly gave himself in describing this amendment; namely, that it is now a much clearer amendment. There is one point which he mentioned which is important, and that is that the Bill's previous definition of convictions of five years obviously should have been improved and has been improved by this now becoming "relevant convictions".
Lord DAVIES of LEEK: There is just another question. May I ask the Minister, not intending to hold up the Committee, concerning the influence of the EEC and the ultimate application of the 42-tonne axle weight provision and the longdistance inter-continental travelling that is now done, what would be the position if a firm should have bad luck in Spain or in Turkey and something happened which was considered a tort under Turkish or Spanish law? What happens to a company which has had that and then, ultimately, comes before our commissioners or before the Ministers, the people who operate this Bill? What happens in that case, and what protection have the British public in that case?
Lord BELLWIN: I would not even pretend to try to answer the noble Lord on the points that he raises. I think it would be fair to say that I do not think that the matters on which he has just touched come within the province of this Bill. If I am proved to be wrong, then of course I will get in touch with him; but, so far as I am aware, I do not think it is apposite to this.
Lord DAVIES of LEEK: I thank the noble Lord.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 78:
Page 55, line 30, leave out ("an undertaking") and insert ("a company").
The noble Lord said: With your Lordships' permission, with Amendment No. 78 I will also speak to the following Amendments: 80, 82, 85, 116, 117, 118, 119, 120, 134 and 135.
Lord MORRIS: Before my friend resumes, perhaps I could point out that there is no Amendment No. 80. It has been withdrawn.
Lord MOWBRAY and STOURTON: I am sorry; I had not updated my notes. I am most grateful to my noble friend. After that rather lengthy introduction, what I now have to say is that this is really only a small group of amendments. The word "company" is now used throughout Part I of the Bill and related schedules. It is defined, by the amendment to Clause 36, page 33, line 13, as meaning "body corporate". It is therefore not limited to United Kingdom companies, and the need for a term "undertaking" in this schedule, and its definition at the end of the schedule, now disappears. This block of amendments makes for a simple and consistent terminology. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 79:
Page 55, line 38, at end insert—
("4A. Where the holder of a PSV operator's licence relies on a transport manager to satisfy the requirement as to professional competence and that manager—

(a) dies or ceases by reason of physical disability or mental disorder to be capable of discharging his duties as transport manager;

(b) ceases to work for the business; or

(c) ceases to be of good repute,

the holder shall nevertheless not be treated as failing to satisfy that requirement until the expiry of such period as in the opinion of the relevant traffic commissioners is reasonably required for the appointment of a new transport manager.").
The noble Lord said: Again with your Lordships' permission, with this amendment I would also speak to Amendment No. 91. This is a small but useful amendment. It will ensure that no operator will be put out of business just because he can no longer rely on a transport manager who satisfies the requirements of the Community access directive. A transport manager may die, become incapacitated, lose his good repute or simply just leave the business.
This may leave the operator high and dry through no fault of his own. The amendment will allow the operator to
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carry on without a professionally competent person for as long as the traffic commissioners think he needs in order to appoint a new transport manager. In the case of a large firm there will usually be a qualified man who can take over immediately, but a small operator could well experience some difficulty in finding a manager who has "professional competence". The traffic commissioners will be given discretion to decide in individual cases what a "reasonable" period would be in which to find a new manager, but the principle is that the gap should be as short as possible. I beg to move.
Lord MISHCON: I rise merely in order to probe into whether or not there is complete cover here. It may be that the noble Lord can help me. If he cannot do so at the moment, I shall understand it if he wants time to consider the point. This deals with the question of some mishap occurring with a transport manager upon whom the business relies— whether he ceases to be of good repute or dies or becomes mentally unstable. What is the position if it is an occurrence which does not terminate the transport manager's services, but suspends his services. Take the obvious example of an employer who is very considerate but may not operate for the benefit of the public or the safety of the public and who waits for his transport manager who has taken a prolonged holiday for an unreasonably long period and the business is not properly covered and the transport manager is the one relied upon. If one goes into the realms of crime, which this deals with in some way, what happens if it is not a question of finding a new transport manager but of waiting for a prosecution to be concluded where a transport manager is charged with something and the employer— and again dealing with (I almost said "undertaking") a company or business which is reliant upon the transport manager's skill— says, "I know he has been remanded in custody for all this time. In the circumstances, I feel I ought to wait until the prosecution is finished. It is unfortunate that he keeps on being remanded in custody all this time". As I said, I am not quite sure that my own investigations were complete, and it may be that this is covered in some schedule or clause that I have not traced. It may be that it is something which ought to be covered.

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I realise it is unfair to throw this at the noble Lord from this Dispatch Box at this moment. If he can answer, I shall be delighted, but if he cannot, I shall understand if some intimation reaches me before Report stage so that at least I can put something down on Report if the position is not covered.
Lord MOWBRAY and STOURTON: I can promise that the noble Lord will receive a letter from me before Report stage. I do not know the further details of the Community directive. I know the gist of it. The advice from my department is that this is a matter which will be left to the traffic commissioners' discretion because it is thought one cannot cover every possibility. That is why I gave merely some examples. I think that the kind of case referred to by the noble Lord will also be left to the traffic commissioners' discretion.
Lord MISHCON: I rise again only to clarify the question that I put. I am taking it for granted that it is something which would not reach the traffic commissioners' knowledge. The employer will have no duty, as I understand it, to notify if there was a question of illness or of such matters as I have indicated. If the noble Lord will have the whole of that matter looked into where it does not come necessarily to the notice of the Traffic Commissioners, I should be grateful.
2.13 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 81:
Page 56, line 23, leave out ("before 1st January 1978").
The noble Lord said: With the Committee's consent, with this amendment I will speak to Amendments Nos. 83 and 84. These are purely technical amendments intended to ensure that paragraphs 7 to 9 of the schedule really mean what we intended them to mean all along. In fact, what they have to do is to reproduce the provision in the EEC access directive (74/562). The previous draft was to some extent inconsistent, or at least misleading, in two respects. I will not trouble the Committee with details. I hope these changes now put the matter right. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 82:
Page 56, line 38, leave out ("undertaking") and insert ("company").
The noble Lord said: I have already spoken to this amendment with Amendment No. 78. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 83 and 84 en bloc:
Page 57, leave out from beginning of line 3 to first ("for") in line 4 and insert ("he was authorised to engage in the occupation of road passenger transport operator before 1st January 1978, and was so authorised—
(a) ")
line 7, leave out ("he was so authorised").
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 85:
Page 57, leave out lines 9 to 12.
The noble Lord said: I have already spoken to this amendment on Amendment No. 74. I beg to move.
Schedule 3, as amended, agreed to.
Clause 21 [Conditions attached to licences]:
[Amendment No. 86 not moved.]
Lord MORRIS Lord MORRIS moved Amendment No. 87:
Page 21, line 5, leave out from ("use") to ("under") in line 6.
The noble Lord said: This is another drafting amendment of sublime simplicity. It is directed solely to the fact that the words in brackets in Clause 21 (1) —
" (no matter whether at a stage, express or contract carriage) "—
are in effect tautology. They are not necessary because the conditions attached to the licences which are being handled by this particular clause can only mean licences attached to a stage, express or contract carriage. I beg to move.
Lord MOWBRAY and STOURTON: Once again, I am grateful to my noble

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friend for producing a drafting amendment which, in our opinion simplifies the subsection. We are very pleased to accept it.
Lord BELLWIN Lord BELLWIN: moved Amendments Nos. 88 and 89 en bloc:
Page 21, line 39, leave out ("Subject to subsection (8)").
line 43, leave out subsection (8).
The noble Lord said: I spoke to these amendments with Amendment No. 20. I beg to move.
Lord BELLWIN Lord BELLWIN moved Amendment No. 90.
Page 22, line 2, at end insert—
("() Compliance with any condition attached to a PSV operator's licence under this section may be temporarily dispensed with by the traffic commissioners by whom the licence was granted if they are satisfied that compliance with the condition would be unduly onerous by reason of circumstances not foreseen when the condition was attached or, if the condition has been altered, when it was last altered, ").
The noble Lord said: The purpose of this amendment is to add some flexibility to the way in which conditions attached to operators' licences work. The most important kind of condition we are talking about is the one which limits the maximum number of vehicles which may be used under the licence. But there may be other conditions attached under subsection (3) which apply more general restrictions on the use of vehicles. One example is that envisaged in subsection (4) — that is, the regulation of stopping places to alleviate traffic congestion.
Unforeseen circumstances can always arise which make existing conditions quite inappropriate, or indeed impossible, to comply with. If the problem is a permanent one, the right remedy is to alter the conditions; but if there is some temporary difficulty it would be unnecessarily bureaucratic to require formal alteration of conditions, perhaps just for a few days. This amendment will instead provide a quick power for conditions to be temporarily dispensed with by the commissioners where unforeseen circumstances make compliance with conditions unduly onerous. I would point out that a similar dispensing power for road service licences
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was added to the Bill in another place. I beg to move.
Lord MISHCON: May I at once make it clear there is no argument at all with the principle of this amendment so far as my friends and I are concerned? One little doubt creeps into one's mind, however, at the use of this power by the traffic commissioners allied to the word "temporarily" without any definition. The Committee can well understand that applications for licences may be heard with opposition which is withdrawn upon a condition being agreed to be put into a licence. The traffic commissioners, because of something unforeseen, will have an application made to them for the removal of that condition. It is absolutely right, as the Minister says, that if this were a matter of a day or two it would be quite absurd to ask that there should then be consultation with other applicants or consultation with other authorities before the condition is waived. Unfortunately, however, the Bill now talks in terms of the word "temporarily" without any definition, without any limitation, on those words. I do not know whether the Minister has in mind some direction by way of regulation— or whatever it may be— with a rather neater definition of what "temporarily" means, so that the traffic commissioners realise exactly where they stand and the limitation of their powers.
One can well imagine examples where this may turn out to be very unfair if somebody opposing the original licence has withdrawn the opposition, saying: "Well, this condition is now being imposed and I am therefore withdrawing my opposition".
Lord BELLWIN: I am not quite sure whether the noble Lord, Lord Mishcon, requires a further comment from me. It was always interesting to me during the past, in another incarnation, to know how "temporary" is "temporarily". There is really no answer. One can set out "temporary" or "temporarily" in the light of given sets of circumstances or situations, but without something more specific it is very difficult so to do. I could give to your Lordships a list, which I have before me, of situations which would without argument, I think, be shown to be "tempor-

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ary", but I suspect that your Lordships would not want me to do that.
However, can I say that it is a fascinating point that the noble Lord, Lord Mishcon, has made, as are so many of them. I can do no more than say, "Yes, I will take it away and talk to colleagues about that in another place, to see whether it is possible". If not, we will have to leave it at that and he will have to decide what to do.
Clause 21, as amended, agreed to.
Clause 22 [Revocation, suspension, etc. of licences]:
Lord MOWBRAY Lord MOWBRAY and STOURTON moved Amendment No. 91:
Page 22, line 8, leave out subsection (2).
The noble Lord said: I have already spoken to this when dealing with Amendment No. 79. I beg to move.
Clause 22, as amended, agreed to.
2.22 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 92:
After Clause 22, insert the following new clause:
" Duty to exhibit operator's disc
(.—(1) A vehicle shall not be used on a road as a stage, express or contract carriage unless there is fixed and exhibited on the vehicle in the prescribed manner an operator's disc.
(2) In this section "operator's disc" means a disc in the prescribed form issued to the holder of a PSV operator's licence by the traffic commissioners by whom the licence was granted and containing particulars of the licence, which shall include the serial number, the name of the holder and the address of his operating centre.
(3) Traffic commissioners on granting a PSV operator's licence shall supply the person to whom the licence is granted with a number of operators' discs equal to the maximum number of vehicles which that person may operate under the licence in accordance with the condition or conditions attached to the licence under section 21 (1); and if that maximum number is later increased on the variation of one or more of those conditions, the traffic commissioners on making the variation shall supply the holder of the licence with further operators' discs accordingly.
(4) Regulations may make provision—

(a) with respect to the custody and production of operators' discs;

(b) for the issue of new operators' discs in place of those lost, destroyed, or defaced;

(c) for the return of operators' discs on the revocation or expiration of a PSV operator's licence or in the event of a variation of one or more conditions attached to a licence under section 21 (1) having the effect of reducing the maximum number of vehicles which may be used under the licence.

(5) Subject to subsection (6), if a vehicle is used in contravention of subsection (1), the operator of the vehicle shall be liable on summary conviction to a fine not exceeding £ 200.
(6) In any proceedings for an offence under subsection (5) it shall be a defence for the person charged to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence.").
The noble Lord said: This amendment proposes the insertion of a new clause which imposes a duty to exhibit an operator's disc. In effect, the amendment would reinstate the former Clause 23 which was in the Bill as originally drafted but was then taken out. The main point of the new clause which we propose is again to require the display of an O-licence disc. Without such a disc the whole O-licensing system becomes absolutely unenforceable. The Government believe it would be possible to rely on the one-inch lettering which is statutorily required to be painted on the nearside of the vehicle. That merely says that the vehicle has been fitted. The problem of sign-writing vehicles when they are brought into use clearly is much greater than merely slipping a disc into a holder. Indeed, there are practical experiences which show the problems created by the sign-writing, because unfortunately there are times when many public vehicles are not kept properly up-to-date with this one-inch writing; but that would not matter when there is a passenger service vehicle disc. But to rely upon lettering, as opposed to the display of a disc, we submit is wholly unrealistic. If an operator is issued with, say, 12 discs he can have only 12 vehicles on the road at any one time. If he has more, it will be readily apparent that the additional vehicles have an empty discholder.
Because of the importance of this enforcement aspect, we on this side of the Committee are prepared to accept O-licence discs which do not relate to the

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individual vehicle; but we say there must be a sufficient number of discs issued to each operator as otherwise there can be no possible enforcement. If, say, he has 20 vehicles on the road and he has licences for 20, he is all right; but if by any chance he was running 24, nobody would know whether that was within his licence or not. But if he was supplied with the number of discs covered by the licence, then any empty disc-holder would indicate that a vehicle was being run in excess of the allocated number. This we regard as a most important matter, because it covers enforcement, and I hope that the Government will see fit to reinstate the clause. The Government had it in the Bill originally, and with the slight modifications which we have made we believe that it ought to be reinstated. I beg to move.
Lord TEVIOT: As the noble Lord, Lord Underhill, said, this is a most important amendment and a very important clause. We want to get some strong assurances from the Government, because this is very much a "crunch" amendment. I can talk about this because of my own experience in the bus and coach industry. In that industry, one probably notices points which would not even occur to other people, although, with great respect to the noble Lord, Lord Underhill, I think that he has made the case very clearly.
It is for this reason that I have doubts when I see that, for identifying vehicles in an O-licence, the Government seek to place total reliance on the one-inch lettering required by Regulation 40 of the PSV (Conditions of Fitness, Equipment and Use) Regulations 1972. It might be worth mentioning that I know that if the noble Earl, Lord Minto, were here, he would reiterate that point, because he had a word with me on Tuesday. As a lay commissioner, he knows that traffic commissioners are more concerned about this amendment than about any other.
If your Lordships examined a sufficient number of coaches, I think you would find that in quite a few cases the lettering was not up-to-date. If you went to a smart car or coach park, such as at Victoria Coach Station or Vauxhall Bridge Road, you might find that the National Bus Company's vehicles lettering was in order, but if you went anywhere else,
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such as to a sporting event, you would probably find that the lettering was not there.
It is a cumbersome system, very much unsuited to enforcement, and I suggest that it should be abolished. In its place, there should be a system of discs, interchangeable between the vehicles in an operator's fleet. That is the basis of the argument which has been so cogently presented by the noble Lord, Lord Underhill. It is a mistake to confuse the controls placed on an operator with the safety of any vehicle; that is a matter which is dealt with in Clauses 15 to 17, not in Clauses 18 to 26.
There are many connected arguments which can be related to this question of discs, but they are not of immediate relevance to this Bill and I do not wish to detain the Committee. Therefore, I conclude by noting that this new clause would follow original Government thinking on this subject, apart from the possibility of relating discs to individual vehicles— which, as I have indicated, is a confusion of functions— and I commend it to the Committee.
Lord BELLWIN: My right honourable friend and I do not share the alarmist view that the system which we were proposing, without discs, would cause safety standards to slip. After all, the vehicle testing and inspection provisions in the Bill are the most comprehensive that this country has ever seen. But we do not wish to create additional problems for the enforcement agencies, which have a hard enough task as things are. We are therefore considering the reinstatement of a clause on discs, similar to the one which stands on the Marshalled List. So, in many ways both my noble friend Lord Teviot and the noble Lord, Lord Underhill, are pushing at an open door, because I am happy to be able to say, without going into a lot more detail, as I could and, if pressed, will, that while I cannot agree to this clause in its present form, I can give an assurance to the noble Lords who have spoken that we shall introduce a very similar clause at Report stage. Therefore, I ask the noble Lord not to press his amendment.
Lord UNDERHILL: I am very grateful to the noble Lord and delighted that

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the Government are reinstating a clause of some kind. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 [Duty to inform traffic commissioners of relevant convictions, etc.]:
2.30 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 93:
Page 23, line 21, leave out from ("of") to ("whose") in line 23 and insert ("any person").
The noble Lord said: I think that this is merely a drafting improvement. If one looks at page 23, line 21, of the Bill, it appears to me that the wording is otiose. I hope that the noble Lord, Lord Morris, who has now become a drafting committee of his own on all Bills, will support me. The wording is as follows:
" (1) A person who has applied for a … licence shall forthwith notify the traffic commissioners to whom the application was made if, in the interval between the making of the application and the date on which it is disposed of, a relevant conviction occurs"—
then the words are recited—
"of the applicant, or any employee or agent of his, or of any person proposed to be engaged as transport manager … ".
One would have thought that the proper thing to say here was that the notification should be of any person whose repute and competence are relied upon in connection with the application.
I remember very well ministerial replies— one can well understand that these were proper replies— to the effect that in a Bill it is foolish to limit oneself by description, because one can never tell what other matter might arise in the future which would make those limitations irrelevant or ineffective. It must be right that it should be the duty of the applicant for a licence to inform the traffic commissioners of the relevant convictions of any person whose repute and competence are relied upon in connection with the application without having to define whether or not they are an employee or an agent, which may be a matter of some dispute, or whether or not it is a partner, albeit a sleeping partner, or somebody who, it could be argued, did not come within this subsection.
I hope that this is a helpful suggestion in order to ensure that we are not limiting ourselves but are legislating for the fact that the applicant shall inform the traffic commissioners of any person whose convictions are relevant.
Lord TEVIOT: May I ask for your Lordships' permission to speak to my own and my noble friend's amendment, Amendment No. 94, and at the same time to comment on the amendment which is now before your Lordships' Committee. These amendments are clearly alternative to one another and seek to overcome what seems to be a strange piece of drafting in the Bill.
After reading and rereading Clause 23 I am still confused. I find one difficulty over the amendment moved by the noble Lord, Lord Mishcon: the different ways in which the word "person" is used in the same subsection. It seems to me that the amendment standing in my name and that of my noble friend Lord Morris offers a sensible and comprehensive solution. It would relate the words "whose repute and competence are relied on" to anybody proposed to be employed, whether as worker or agent. I hope that the simplicity of this approach will find favour with the Committee.
Lord MORRIS: I rise to support my noble friend Lord Teviot. As I am sure my noble friend Lord Bellwin is aware, this is an attempt at clarification. It has no object other than that. I am sure that he will be as sympathetic to this amendment as he has been to the previous amendments standing in my name.
Lord MOWBRAY and STOURTON: These are important matters, of course, and the noble Lord's Amendment No. 93 and my noble friend's Amendment No. 94 also tie up with Amendment No. 95. All these amendments overlook the fact that the wording of the Bill reflects the terms of the EEC access directive (74/562), which, as we have said, requires an applicant to fulfil the conditions of good repute, financial standing and professional competence, as set out in Schedule 3. If the applicant cannot claim professional competence, or is a company rather than an individual, there must be a transport manager who is of good repute and profes-

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sional competence. That is what is meant by the proposed transport manager
"whose repute and competence are relied on in connection with the application".
The words do not apply with such force to other employees and agents. Therefore, the clause is correctly worded as it stands.
Perhaps it might be useful if I explained in more detail how all this will work. The access directive is very specific in defining a "professionally competent" person as someone with relevant paper qualifications or practical experience, but it calls for member states to determine "good repute". We have applied the yardstick of "relevant convictions" which has existed to goods vehicle operator licensing since 1968. Whereas only one person in the undertaking need be professionally competent (in the EEC sense) the convictions of any employee may be relevant to the operator's good repute. Naturally the traffic commissioners will use their discretion. They are not going to penalise a large operator just because he has one or two black sheep among his staff. And even if an operator himself is convicted of a relevant offence, the traffic commissioners may not regard it as sufficiently damaging or pertinent to his good repute as to mean that his licence has to be withdrawn.
However, there will be some cases where, even if the operator and his transport manager have kept out of trouble, the offences of their employees are such as to suggest that the whole business is shady. We need to give traffic commissioners the power to deal with those cases even if it is seldom needed in practice. That is why the clause requires operators to notify the relevant convictions of all their employees.
I should emphasise that we are not asking operators to pry into the private affairs of their employees. They are only required to report convictions which come to their notice, which will normally be those related to the business— for example, drivers' hours offences. In a well-run company the management will see to it that such offences do not occur, but if they persist it may suggest that the company is not properly managed or is deliberately evading the law. In such cases there may well be cause for action against
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the operators' licence, suspension, curtailment, or in extreme cases revocation.
With regard to the amendment tabled by my noble friends Lord Teviot and Lord Morris, we think that the amendment in this case is perhaps misconceived and would not have any real effect because the transport manager is by definition the only person whose repute and competence are relied upon in connection with the application and then only if the operator himself is not a professionally competent person in the sense of the Community Access Directive. In any case as I have said already, an applicant cannot be held responsible for the conduct of a prospective employee with whom we suppose he has no contractual relationship.
The only reason why a transport manager is any different is that the access directive requires a professionally competent person relied on by the applicant to be of good repute in his own right. Any relevant convictions of that person may affect his good repute so they must be reported. That does not apply to any other prospective employee. This is a complicated matter, which is why I have spoken at some length. I hope it will explain to noble Lords why we think our wording is better than the suggested amendments.
Lord MISHCON: I rise only briefly to save the Committee some further time and to spare them another speech from me. I have in fact moved Amendment No. 93 and I did not mention that I was speaking then also in regard to Amendment No. 95. The reason for that was that if the objection was that "any person" was too wide and one ought to limit the definition, I was going to plead, on Amendment No. 95, for better English by defining what "any person" meant and making it perfectly clear as a result to whom "whose repute and competence are relied on" really referred in this Clause 23 (1).
Without wasting the time of the Committee any more on what really amount to semantics and clarification, I would ask the Minister whether he would not care, if he wants to limit the person to the definition contained in this subsection at the moment, to look at the wording in order to make it absolutely clear beyond peradventure as to which is the category— namely, applicant, employee or transport

531
manager—to whom the "repute and competence" subsection of this clause refers. At the present moment it is capable of interpretation that those words cover all the categories mentioned in Clause 23 (1). If he would be kind enough to look at purely the tidiness of the matter, so far as I am concerned I do not intend to weary the Committee any more.
Lord MOWBRAY and STOURTON: I will certainly look at it, and I hope the noble Lord will look at my speech in detail. I think if he looks at the small print in my speech he may see that some of the words are covered. But I will certainly look to see if we can make matters any clearer.
Amendment, by leave, withdrawn.
[Amendments Nos. 94 and 95 not moved.]
2.42 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 96:
Page 23, line 27, leave out from first ("of") to end of line 33 and insert—
(" (a) any relevant conviction of the holder; or
(b) any relevant conviction of any officer, employee or agent of the holder for an offence committed in the course of the holder's road passenger transport business, and to do so within 28 days of the conviction in the case of a conviction of the holder or his transport manager and within 28 days of the conviction coming to the holder's knowledge in any other case.").
The noble Lord said: This amendment is the result of a re-examination of Clause 23 following discussion in another place. Some concern was expressed
there at the wideness and indeed the impracticability of the present obligation on operators in Clause 23 to notify the traffic commissioners of relevant convictions of his employees or agents. Under this amendment a licence holder will only have to notify the commissioners of employees' convictions for offences committed in the course of his business, not in anyone else's, and in the course of his road passenger transport business, not in, say, some unconnected greengrocery run by the same man. I hope this narrowing will be welcomed. The essential system is maintained which is needed to protect the public, but the amendment ensures that the licence holder's duty is a realistic one. I beg to move.
Lord MISHCON Lord MISHCON moved Amendment No. 97 as an amendment to Amendment No. 96:
line 7, leave out ("28") and insert ("14").
The noble Lord said: May I first deal with the speech that the Minister has just made, in which he outlined the reason for the use of these additional words which do not appear in the Bill, namely "in the course of the holder's road passenger transport business", so that this is the only relevant conviction which is dealt with in this clause. It is all very well for the Minister to say that this is now to be limited to the business of the holder of the licence and that this is a satisfactory way of dealing with the matter.
I entirely accept the fact that a conviction in the course of carrying on a part-time occupation in a greengrocer's business would not be particularly relevant from the point of view of the transport business in a transport Bill. However, this wording, if I may say so with the utmost respect, is extremely clumsy and I do not think that it meets what the Minister was trying to say. What happens, for example, if an employee is, in fact, lent to another holder of a transport licence, or indeed to somebody who does not hold a transport licence at all, but it is in connection with traffic and transport that there is a conviction? Although the holder of the licence knew about this perfectly well, it would mean that, although it has a very strict transport relevance, it is not something which has to be notified. Can that be right?
There are all sorts of examples of which one can think. For example, there is a part-time employee in the transport holder's business. That employee may be someone upon whom he relies and it may well be that the licence was granted upon the basis of that employee being there. However, he is only part-time and for the rest of his time he is not engaged in transport. Suppose there is a conviction and the holder of the licence knows about it. Are those convictions not to be disclosed, although very relevant to transport and safety matters? With great respect, the situation cannot be right with the limitation which is imposed at present by this wording.
The DEPUTY CHAIRMAN of COMMITTEES (Viscount Hood): The noble Lord is supposed to be talking to Amendment No. 97.
Lord MISHCON: As I understand it, the Minister moved Amendment No. 96. I am talking on Amendment No. 96 and the words:
"in the course of the holder's road passenger transport business".
The DEPUTY CHAIRMAN of COMMITTEES: The noble Lord has put down two amendments to Amendment No. 96. We must dispose of the figure before we can decide on the clause itself.
Lord MISHCON: I am most grateful for that guidance. There is a procedural matter that I had overlooked. I apologise to the Committee for my ignorance. Before I go into the question of the wording— and I promise not to repeat my speech because members of the Committee will be aware of the point that I am making— all I wish to say as regards these amendments; namely, Amendments Nos. 97 and 98 (which I shall speak to together with the Committee's leave) is that questions of convictions are obviously of great materiality. It may be a question of a conviction which implies that the public may be at danger because of what has happened in regard to a charge that may have been brought, and very relevant, too, to matters of transport.
It is quite wrong in my submission that a period as long as 28 days should be allowed for that sort of notification. Surely, to give a fortnight for the notification of a conviction of this nature is quite sufficient? One would have thought that it was necessary, in order to safeguard the public and to enable the commissioners to carry out their duty, that 14 days should be the period within which the conviction is to be notified. That is the reasoning behind those two amendments.
Lord MOWBRAY and STOURTON: As regards this matter the noble Lord would be seeking to change the law. At present the law specifies 28 days in this connection. I am not aware that any problems have ever arisen on this point, especially of the import that the noble Lord attaches to the matter. It does not
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seem to me over-generous. I do not really see a need for any reduction. It is a moderately trivial matter which was heavily debated in the Commons.
It is suggested to me that his friends in another place argued rather the opposite way to that which the noble Lord has just argued. I do not think that there is any question of danger to the public in any way. I should expect any normal operator or company to inform the commissioners well within 14 days; but let us suppose that something happened just before Christmas or a time like that; one can appreciate that it would, perhaps, not be practical for them to get the relevant information to the authorities concerned. We must remember that the penalties in this matter are heavy, and one would not want to put people at risk to the law by changing it in this case.
Lord MISHCON: I make only one comment in regard to what the Minister has said. I am quite well aware that this, indeed, would mean an alteration of the law on the time limit. The whole purport of this Bill is, indeed, to impose an onus in a very different way on the question of the granting of licences. It appears to be the Government's ambition to have many more licences granted than have been granted in the past. Therefore, in the new circumstances I should have thought that this safeguard was a relevant one.
Lord MOWBRAY and STOURTON: I thought that the noble Lord was just making a final point. Of necessity, I do not accept his arguments. I agree that we are changing the law, but we are not changing the law of 28 days in the main 1968 Act. I do not think that it is necessary. One must have regard to every possible contingency, however remote, and I think that the noble Lord is assuming that everything will always be nice and easy. There are exceptional occasions and this gives 28 days for those occasions. I think it is reasonable to leave the figure as 28 days.
On Question, amendment to Amendment No. 96 negatived.
[Amendment No. 98 not moved.]
The DEPUTY CHAIRMAN of COMMITTEES: The Question is that Amendment No. 96 be agreed to?
Lord MISHCON: As I promised, I shall not repeat my speech, but I hope that in courtesy it will be answered.
Lord BELLWIN: The most courteous way in which I can answer that is to say that I, too, shall not repeat my speech.
Lord MISHCON: That does not cover the point. I am afraid that the Minister forces me to my feet again, only because, with great respect, his speech did not cover the point I made. Perhaps I may summarise it, and I hope that the patience of the Committee will be as generous as it always is while I do so. I can well understand why it is necessary that a conviction to be reported should be one relevant to the transport industry and to the whole conduct of a transport business. I do not seek to make any point that any other conviction should be notified, but the wording as now included in this amendment restricts the matter to:
"an offence committed in the course of the holder's road passenger transport business",
That means what it says, that it must be an offence in the holder's own transport business of any officer, employee or agent of his.
I was putting to the Committee a point with which the Minister did not deal, where there was a secondment, a permission, for this employee or officer to go to another transport business where that person was not the employee or agent of the person to whom he was loaned, if that is the correct word to use, or might not even be the holder of a licence, but the offence is very relevant to transport.
I was asking the Minister whether he would kindly direct his mind to that, and whether he would not, on reflection, concede that it is narrowing it too much to limit the conviction where there is an offence committed in the course of the holder's own—I am putting in the word "own" but that is obviously what it means—road passenger transport business, and whether it should not in fact read (and I am not asking for these words to be precisely used, but only giving the meaning behind my argument) "in the course of a road passenger transport business",
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which might even be an improvement. It is an unnecessary and wrong limitation in the present wording. If the Minister would merely say that he would look at it and consider the argument so that we knew where we were before Report stage, I personaly would be quite content.
Lord BELLWIN: I certainly and gladly give that undertaking. I follow the line of argument, and, Yes, I think perhaps the best way to deal with it would be as the noble Lord suggested. We will have a look at the definitions and the terms and see whether we can be helpful.
2.57 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 99:
Page 23, line 33, at end insert—
(" () Where an applicant for a PSV operator's licence notifies the traffic commissioner of a conviction of one of his employees which may result in his having to dismiss or transfer that employee as a condition of obtaining the licence he shall at the same time as he notifies the traffic commissioner notify the employee that he has done so.").
The noble Lord said: The Committee has been considering the clause which requires operators to notify the traffic commissioners if any one of their employees has an appropriate conviction. In another place, an amendment was proposed that would have made it obligatory for an applicant for a passenger service vehicle operator's licence to inform an employee's trade union that they had notified the commissioners of that conviction. We do not consider it the responsibility of anyone other than the employee concerned to notify his trade union. It must be left to the individual himself as to whether he will notify the trade union, no one else.
On the other hand, we consider it absolutely essential that if the commissioners are notified about an employee's conviction, when that is done the employee himself should be told that the commissioners have been so informed. That is the simple point of this amendment: one of elementary justice that the individual should be told that the commissioners have been given this information, so that then if he wishes to raise it with his trade union it is a matter for him to do and nobody else.
Lord MOWBRAY and STOURTON: I have every sympathy which much of the reasoning behind this amendment, but with great respect it is not relevant to this Bill. It is rather a matter of good industrial relations practice. I hope that individuals concerned will be informed in circumstances like this. In any case, very few relevant convictions of employees are likely in the period between application for licence and the determination of application, which is the only period covered by this amendment. I should add that dismissals of employees are nothing to do with the traffic commissioners. Employees of course will have all their usual rights under the law.
Lord TEVIOT: I do not want to weary the Committee, but I am not clear about this, having been in the position myself. I must say that the union were extremely kind to me in providing legal services. The position at the moment is that if a man is convicted his employer knows about it, and also even if you are convicted for speeding, which is completely outside your own duty— perhaps I am talking completely at cross purposes, and if so I apologise— one gets a piece of paper from the traffic commissioners anyway saying, "If you go on doing this sort of thing you might have your licence withdrawn". Perhaps my noble friend or the noble Lord, Lord Underhill, can clarify this point.
Lord MOWBRAY and STOURTON: I would hardly think it likely that traffic commissioners would make the dismissal of an employee or anything of that sort conditional on the granting of a licence. The noble Lord should not worry too much; any employee will know if he has committed a traffic offence. This only concerns technical information for the traffic commissioners. I do not think any employee should be too upset by this. It will not be published in any local newspapers or offices; it will be private information.
Lord UNDERHILL: At this hour, when noble Lords are suffering from exhaustion if not hunger, I will not delay the Committee on this matter. I am sorry the Minister seemed to imply that this is an unimportant issue. It could be very important to the individual.
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On the understanding that we shall look further into the matter and at what the Minister said in reply, I beg leave to withdraw the amendment. I do so also on the understanding that we may wish to return to it at a later stage.
Amendment, by leave, withdrawn.
Lord BELLWIN Lord BELLWIN moved Amendment No. 100:
Page 24, line 7, leave out ("knowingly").
The noble Lord said: I spoke to this amendment with Amendment No. 20. I beg to move.
Clause 23, as amended, agreed to.
Lord SANDYS: I think the moment has been reached in the Committee stage when we would agree that an adjournment would be advisable. I therefore move that the House do now resume.
House resumed.

  PENAL ACCOMMODATION AND IMMIGRATION DETAINEES
  PENAL ACCOMMODATION AND IMMIGRATION DETAINEES
  APPEALS FROM MAGISTRATES' COURTS
  APPEALS FROM MAGISTRATES' COURTS
  HOLLOWAY, STYAL AND RISLEY PRISONS: FEMALE POPULATION AND ACCOMMODATION
  HOLLOWAY, STYAL AND RISLEY PRISONS: FEMALE POPULATION AND ACCOMMODATION
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  POLICING DEMONSTRATIONS: OVERTIME PAY
  DRUGS: SEIZURES BY HM CUSTOMS AND EXCISE
  DRUGS: SEIZURES BY HM CUSTOMS AND EXCISE