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Highlands And Islands Air Services (Scotland) Bill

Volume 980: debated on Tuesday 4 March 1980

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Considered in Committee.

[Mr. BERNARD WEATHERILL in the Chair]

Clause 1

Assistance To Persons Providing Air Services Serving The Highlands And Islands

10.34 pm

I beg to move amendment No. 1, in page 1, line 5, after 'maintaining,' insert 'reorganising.'

The purpose of this amendment is to add the word "reorganising" to clause 1. Existing legislation on this subject can be found in the Scottish Development Agency (No. 2) [Lords] Act 1975. That Act simply designated the purposes for legislating about maintaining and improving air services that serve the Highlands and Islands. The Government have brought forward a measure to establish, maintain and improve air services for the Highlands and Islands.

My amendment would extend the Bill. It would give the Government the necessary powers to reorganise whatever air services might be available.

Air services in the Highlands and Islands, or, indeed, anywhere in the British Isles, are subject to regulation by the Government. The Government can use formal and informal methods to ensure that too many carriers do not fly on too many routes. It is therefore logical, when considering a new measure concerning air services for the Highlands and Islands, that as many powers as possible should be made available to the Government.

In the Industry Bill the Government were intent on removing the word "reorganisation" from the functions and powers of the Scottish Development Agency, the National Enterprise Board and the Welsh Development Agency, on the ground that reorganisation did not accord with the scope of bodies supervised by this new free-market orientated Government.

This Bill is different, and we have some hope that the Government will accept the amendment. The principle behind the Bill, based as it is on public subsidies to private carriers, breaches the convention and ideology that is so often displayed on the Government Benches. The corollary of public subsidy to private enterprise must be that if the public good is to be advanced the power should exist to provide whatever the public service needs.

It is conceivable that the reorganisation of existing or potential carriers that will provide the services covered by the Bill will need to be rationalised. I accept that powers may already exist for the Government to achieve the necessary reorganisation. It may be possible under the Bill, and through the way in which grants or loans are disbursed, for the Government to influence the type of carrier, the service provided and the locations to which carriers fly.

The Bill leaves a great deal of discretion with the Secretary of State. At the same time, if the Bill is to be as comprehensive as the Government's amendments to the 1975 statute appear to indicate that they want, we should include as many powers as possible to establish rationalisation.

In speaking to the money resolution I said that the only beneficiary of the measure since 1975 was one airline—Loganair. That airline happens to be a subsidiary of the Royal Bank of Scotland. Commercial clearing banks are involved on repeated occasions in restructuring industries where their money is at stake. I do not believe that we are breaching any fundamental principle, whether Conservative or Labour, in establishing a power within statute that will stand for a long time and enable the Government to involve themselves in reorganising the services provided.

The Government have already created for themselves a new flexibility by including the word "establishing" in clause 1. It was not present previously. It is not a word that has been used since 1975. If we accept the principle that has motivated the Government in other aspects of the Bill, the Government have established that the purposes of the Bill should be extended. By including the word "reorganising" we are attempting to strengthen the powers that may not be necessary now but may be later, given the complexity and seriousness of the provision of an air service to a vast area like the Highlands and Islands. That is a pragmatic and practical solution, which the Government may yet need. I therefore commend the amendment.

There does not seem to be much point in extending the purposes of the Bill if we do not also extend the money. There is so little money already that I hardly think that it would cover establishing, maintaining and improving air services.

The question of reorganisation allows me to make one point. Economy is of paramount importance to these services. As I said in a recent debate, there is a grave danger that air services will price themselves out of the market in the Islands of Scotland. Only expense account travellers and officials will be able to fly in them.

I appreciate that the Bill deals exclusively with services. It does not deal with the companies or airports. It is impossible to separate all the costs. Fuel and security costs are going up all the time. Even if the Government cannot undertake to reorganise the services, which I accept, if they are giving them money the Government might bring to bear the greatest pressure they can to ensure that fares are kept down. The smaller airlines certainly do that. Loganair and, to some extent, Air Ecosse are of great importance to my constituency and other parts of the Highlands and Islands. The travellers are, for the most part, people who cannot find the money for higher and higher fares. Anything that the Government can do to assist them to keep down the general expense of travelling would be most welcome in Orkney and Shetland.

I support what the right hon. Member for Orkney and Shetland (Mr. Grimond) said about the desirability of the Government's using their influence upon the operating companies to improve services—an influence that it is legitimate for them to use in cases where the Government are directly subsiding them. There are many other circumstances in which their influence would also be welcomed, for instance, in the holding down of air fares and in respect of the time-tabling of air services in the Highlands and Islands, which are frequently quite inconvenient and changed every six months, to the great inconvenience of travellers. Connecting times are unsuitable and forward travel is difficult to plan.

With the withdrawal of British Airways from a number of the Highlands and Islands air routes, this problem of co-ordination of timetabling is becoming ever more acute. As the British Airways timetables are not made public sufficiently in advance for some of the smaller airlines to adjust accordingly, it is almost beyond the capacity of the companies to resolve the problem without Government pressure being put on them to get together and work out a coherent network of schedules.

I hope that the Government will give an assurance that they recognise that there is a problem here which is exercising many travellers in the Highlands and Islands. The power recommended by my hon. Friend will go some way towards tackling or recognising this need.

10.45 p.m.

I do not necessarily disagree with the view of the hon. Member for Hamilton (Mr. Robertson) that there may be circumstances in the future when some form of reorganisation of air services will be appropriate. The question really is whether the amendment is necessary to meet that requirement because under the Bill as it stands assistance can be given wherever assistance would be desirable for the purpose of maintaining or improving existing air services, and I do not find it possible to envisage circumstances in which reorganisation would be desirable where it was not either maintaining or improving the existing air services. Therefore, the existing wording of the Bill covers exactly the sort of eventuality to which the hon. Gentleman referred.

The hon. Gentleman said that the Government have included the word "establishing" for the first time, but he will appreciate that establishing a new air service, if this were thought to be appropriate, would not be covered by the words "maintaining or improving existing air services". Therefore it was necessary to put that additional word in, in case that circumstance should arise.

As for the points raised by the right hon. Member for Orkney and Shetland (Mr. Grimond), the Government of course recognise that the level of air fares is important to the viability of Island communities, and we have indicated that that is of considerable priority to the Government. It is for that reason that, as the right hon. Gentleman will be aware, the Government have, for example, given £1 million extra assistance to the Civil Aviation Authority to deal with the problem of excessive landing charges that might otherwise have been made at Highland airports. As a result of that extra contribution, any increase in air fares will be far less than would otherwise have proved to be necessary.

It is not clear from the statement that was made by the Minister to the press exactly what effect the subsidy that he has agreed to with the Highlands and Islands airports will mean. Can the hon. Gentleman tell us what the percentage increase in landing charges will now be in the Highlands and Islands airports, so that we can see it in its full perspective?

What I was able to state was that an extra £1 million was being made available to the Civil Aviation Authority for the purpose of reducing the increases in landing charges which would otherwise be required at certain Highlands and Islands airports. I said at the time, and this remains the case, that the detailed way in which this money is to be used is a matter specifically for the Civil Aviation Authority. Naturally, in coming to a decision the Authority will consult the Scottish Office and other interested bodies, and we are expecting views to be forthcoming from the local authorities affected and other interested bodies on how these new resources could best be utilised.

I am not trying in any way to be critical of the Government, because I think the introduction of the £1 million subsidy was a welcome move, but I think that the hon. Gentleman should be able to tell us what the increases are likely to be, anticipating what the Civil Aviation Authority might be able to do as a result of this extra subsidy. Obviously the increases will be less, but they are now something of the order of hundreds per cent., so that to be less will still mean hundreds per cent. increase. Assuming that the Civil Aviation Authority will make decisions roughly in line with what it was going to do previously, can the right hon. Gentleman tell us what the level of increase in landing charges might be now that the authority has the extra £1 million.

I can only tell the hon. Gentleman that the increases will be very much less than they would otherwise have been. I am sorry that I cannot assist him further. There is a whole series of possibilities, depending on the conclusions that the Civil Aviation Authority comes to. There is no statutory power other than that of the Civil Aviation Authority to determine appropriate landing charges. It cannot be directed by the Government, and although it will no doubt be taking into account the comments of interested bodies and, indeed, of my right hon. Friend the Secretary of State, it is a matter for the Civil Aviation Authority. I am afraid that I cannot go beyond saying that the increases will be relatively modest compared with what they would otherwise have been. It is a matter over which the Scottish Office has no direct control.

The only other comment made was that by the hon. Member for Caithness and Sutherland (Mr. Maclennan), who referred to the question of timetables. He will appreciate that that is essentially a matter for the airlines and he might like to make direct representations to them. It is clearly not a matter on which the Government could dictate or make changes, even if we were to agree with the important points raised by the hon. Gentleman.

Amendment negatived.

I beg to move amendment No. 2, in page 1, line 15, after 'repayment', insert

'in whole or in part'.
The last part of subsection (2) is new language that has been imported into legislation since the Scottish Development Agency Act 1975. It reads:
"and in the case of a grant, the terms and conditions may include provisions for repayment in specified circumstances."
The amendment provides that in addition to repayment partial repayment should be permitted.

On the surface that amendment may appear to be nitpicking in its effect, but that could hardly be further from the truth. The new phrase seems to have been constructed specifically to exclude the possibility of partial repayment.

The amendment also provides the Opposition with the opportunity to ask the Government in what sort of specified circumstances they would see the repayment of grant being considered. The House of Commons has churned out many statutes over the years in which is included provision for the repayment of grant, and the conditions for the repayment are usually specified clearly. Are we talking about circumstances in which profit is made on the services for which subsidies are provided and, if so, what criterion is to be used to measure the profits?

Is partial repayment of grant to be dependent on a judgment on the services provided which from time to time come in for criticism, as we have heard tonight from the right hon. Member for Orkney and Shetland (Mr. Grimond) and my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan)? Are these circumstances in which the Government would feel that, however small the amount of money, partial or full repayment would be considered? The Government must have in mind some circumstances, otherwise this new phrase would not have been included in subsection (2).

The amount of money that we are talking about for the coming year is £100,000. That is a tiny sum in comparison with the sort of expenditure that the House of Commons considers, but the sums that we are talking about are of enormous significance to the people in the areas affected by the Bill.

It is certainly not intended that clause 1 should exclude the possibility of repayment in whole or in part. I am advised that it is implicit in the existing wording that that would be possible. I have no objection to making it more explicit. The words suggested in the amendment would not change the purpose of the provision and, in so far as they would make clearer the scope of possibilities available to the Secretary of State, I am happy to recommend to the Committee that the amendment be accepted.

As to the circumstances in which the provision might be used, it is a matter at the discretion of the Secretary of State, dependent on the circumstances existing at the time.

In general terms, where it was thought likely that a recipient of public funds, as a result of the extra capital available, would be able to make a substantial return on his capital over a period of time, it would be right to make some provision for the return, either in whole or in part, of the public assistance received by him. In most cases that will not apply, but we accept that the possibility might arise where it would apply. In those circumstances it would be sensible to ensure that where public funds had led to substantial extra profitability for the recipient, who was able to make a return on his capital largely or solely as a result of the assistance that had been given, some provision of the kind proposed would be appropriate. In these circumstances, the Secretary of State would be inclined to use his power under the clause.

Amendment agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

I shall not detain the House for too long. It would be wrong not to make some remarks on clause stand part. Clause 1 makes up a substantial part of this short measure. I would be the last to pretend that the attendance in the House at this late hour has much to do with the Highlands and Islands Air Services (Scotland) Bill. At the same time, a number of my hon. Friends and hon. Members on the Government side have an interest in this subject. Since much has been made of transportation in the Highlands and Islands in recent weeks, some comments should be made on the clause.

The question that has to be answered, even if the answer is self-evident, is why the Bill is necessary and why a Conservative Government should continue to promote a measure conceived by the Labour Government in 1975. The answer is simple. If Highland communities are to remain alive and to thrive, public support and subsidy from the rest of the United Kingdom is necessary. The grant for basic air services to remote parts of the Highlands will be maintained only by the public subsidies that are derided and criticised by the Treasury Bench in other areas of the economy.

Before the debate, my right hon. Friend the Member for Leeds, South (Mr. Rees), when he looked at the Bill, said "Not much of a free market here". That was a perceptive remark. If my right hon. Friend were more aware of the local circumstances that prevail in Scotland, he might be even more astounded to know that only 10 days ago the Minister himself—the hon. Member for Edinburgh, Pentlands (Mr. Rifkind)—featured on the front page of The Scotsman, in the company of a variety of councillors, Labour, Conservative and Independent, all with gleaming smiles and cheering the announcement by this Government, implacably opposed to public subsidies of all sorts and the propping-up of lame ducks, of a new subsidy for the airfields of the Highlands and Islands. That subsidy was not the £100,000 with which this Bill is concerned but an extra £1 million that was to be disbursed to keep down the scale of landing charges that the Civil Aviation Authority had been obliged to impose by financial limitations.

Does my hon. Friend agree that it would be wrong for the Under-Secretary of State and for the Government to be euphoric over this aspect of their policy? This very morning the Government were soundly and resoundingly beaten in the Standing Committee on the Civil Aviation Bill. That indicates the foolishness of Government policy in civil aviation.

11 pm

I knew that the Civil Aviation Bill was in Committee and that the Government were defeated today. However, I have spent today attending the Tenants' Rights, Etc (Scotland) Bill. I have not a clue on which issue the Government were defeated. I doubt whether it has anything to do with highlands and islands development. I accept the point made by my hon. Friend the Member for South Ayrshire (Mr. Foulkes) who represents the interests of the Lowland airfields. There is a contrast between the Government's normal parsimonious attitude to public spending and the glowing term "relief for Highlands airfields" that featured in such grand terms in the speech by the Minister.

I am a member of the Civil Aviation Bill Committee. Is it suggested that the Government should withdraw the £1 million facility?

I do not see what this has to do with the Civil Aviation Bill Committee. I do not suggest that one penny should be removed from the £1 million. But the hon. Member for Perth and East Perthshire (Mr. Walker) might consider that some local authorities are being told by the Government that they must slash their expenditure on a variety of transport programmes. They must have looked askance at the headlines and the smiling faces in The Scotsman.

Through the large cuts in the rate support grant this year the Government told local authorities, either formally or informally, that road and road maintenance programmes were to be cut. They told local authorities in Scotland, England and Wales that they must make substantial savings on school transport. Not one Conservative Scottish Member went into the Lobby with us to vote against that Government proposal, although we were supported by Members from south of the border.

The implications of the Government's lack of transport policy must be judged against public support for air services to the Highlands and Islands. I wonder how the Government can justify an extra £1 million expenditure on the Highlands airfields to provide the most expensive form of transport for the remote rural areas at a time when Scottish transport has had its resources curtailed, when the railways are under increasing pressure to cut rural transport and when school transport and road programmes are under siege.

Normally, we consider such a measure in the Scottish Grand Committee, but the Government dare not present their proposals to that Committee. They believe that even a Bill of five clauses would become stuck there, so fierce would be the debate. The Government are outnumber- of a transport policy in all the other areas that affect the majority of people who travel in the Highlands and Islands of Scotland.

ed in the Scottish Grand Committee. They are trying now, in the dead of night and before other important measures are debated, to get clear of the legislative programme as quickly as possible.

Clause 1 highlights the serious aspect of Highland transport as a whole. No doubt the Government will claim credit tomorrow for a Bill that was originally created by a Labour Government, while at the same time they will ignore the increasing vocal criticism about their lack

It appears to me that the only reason why we are debating at this time of night is that the hon. Member for Hamilton (Mr. Robertson) is so used to filibustering in Committee that he cannot stop doing so on the Floor of the House. When I closed my eyes, ever so slightly, I received the distinct impression that the green Benches opposite had turned into green cheese at the thought of my hon. Friend the Under-Secretary of State for Scotland being able to make the announcement that he made in Edinburgh two or three weeks ago. I am sorry that the hon. Gentleman has had his stereotype of the Government so badly spoiled tonight, and during the past few weeks.

On behalf of my constituents, who are involved in air transport, I welcome the Bill. I hope that they do not read the speech of the hon. Member for Hamilton. He, of all people, should know better, having in his youth—as he explained earlier, in a moving exposition of his early days—lived on one of the islands in my constituency. Unfortunately that did not do his political education much good.

I welcome the announcement by my hon. Friend that is allied to the Bill—because aeroplanes need somewhere to land—that he intends not only to continue to help the Civil Aviation Authority but to increase the grant this year from £1.1 million to £21 million. I was not surprised at that announcement, because my hon. Friend made it clear on 18 December in the Scottish Grand Committee that he had no intention of allowing the grant for the Civil Aviation Authority to disappear, but that he had every intention of ensuring that it would carry on its work.

I regret to say that the hon. Member for Caithness and Sutherland (Mr. Maclennan), at a meeting in Edinburgh, cast severe doubts upon my hon. Friend's good faith. I am delighted that my hon. Friend's good faith has been seen to be perfectly justified. I told my constituents that they could look to my hon. Friend for help in the matter of the Civil Aviation Authority grant, and my confidence in him has been absolutely justified.

Without being too much out of order, I suggest that if you, Mr. Weatherill, fly to my constituency with the help of the Government's Bill and the Civil Aviation Authority, you may also be able to return by sea with the help of a further increase in the subsidy paid to Caledonian-MacBrayne, announced by my hon. Friend this week. You could do a round tour of my beautiful constituency with the help of my hon. Friend's sensible methods of subsidising the transport in those areas where transport is difficult. In those areas, my constituents would find it difficult to pursue any sort of reasonable economic life if it were not for the help given by the Government in this specialist area.

I wish to thank my hon. Friend for that help. I commend the clause to the House. I hope that the Opposition will give grudging support—I accept that it has to be grudging—to the Bill.

The hon. Member for Argyll (Mr. MacKay) has not been in the House long enough. If he had he would have recognised that sometimes, when dealing with problems that affect the Highlands and Islands, it is necessary to adopt a somewhat less partisan stance.

If he had done me justice he would have acknowledged that it was on a motion of mine, at the meeting in Edinburgh to which he referred, that it was agreed that representations should be made to the Secretary of State for Scotland. The meeting at which the Minister announced the bounty of an extra £1 million was a direct result of the motion that I put to the earlier meeting. As far as I can remember, the Minister was not at that meeting to support my motion.

The question that arises out of clause 1 relates to the circumstances in which the Government might foresee the use of the Bill in future. Much has been made of the fact that so far a total sum of only £500,000 has been used under the Scottish Development Agency legislation, which the Bill replaces, over a period of five years, and that only £100,000 was used last year. But during that five-year period, British Airways and Loganair largely divided up the Highlands and Islands air routes between them, and British Airways still remain responsible for many of what are now called the third-tier sectors. That is decreasingly so. Therefore, the internal losses that were subsidised, and I believe to some extent offset, by the more profitable routes of British Airways will no longer enjoy similar cross-subsidisation.

One of the difficulties that British Airways faced was the doubt whether this was an appropriate use of its financial powers. The question therefore arises whether small companies coming into these third-tier sector flights will be able to sustain losses of the kind that were sustained over many years by British Airways in operating these flights throughout the Highlands and Island. One such link is that between Wick and Aberdeen, and another is that between Wick and Inverness—routes that suffered heavy losses over a number of years but in respect of which British Airways continued to provide a service.

Those services have now been taken over by Loganair, in the case of Wick-Inverness, and by Air Ecosse, in the case of Wick-Aberdeen. With regard to Wick-Inverness, Loganair has received subsidy from the local authority, but I understand that the local authority is reluctant to go ahead with that in the future and that there may be an application from Air Ecosse to take over that route. In the circumstances, the question must arise whether it can be run profitably, or whether it will require a central Government subsidy in the absence of a local government subsidy to maintain these links.

Although in the past the sum involved was only £100,000 a year, it could be a substantially larger sum that is sought. Can the Minister say whether the criteria that the Government have laid down for the use of these central Government subsidies are wide enough to enable firms such as Air Ecosse or Loganair to continue to fly routes that have hitherto been subsidised by local authorities? I am not entirely clear what statutory underpinnings these criteria have, or whether, in essence, they are simply the codification of the Secretary of State's discretion. If that is the case, no doubt the Secretary of State can alter the criteria in order to take account of changed circumstances.

Can the Minister also say whether, in the light of changing financial and economic circumstances, it is appropriate to look at all to the local authority for financial help for these routes, or whether it would not be better for central Government to shoulder the responsibility? After all, these links are largely used for the provision of services. Although air links throughout the Highlands and Islands are very important—indeed, in some respects crucial—to the provision of services, the maintenance of connections with governmental centres, and the provision of supplies and transport for business men coming in and out, they are not used by the general travelling public to the same extent as is the other unsubsidised transport in the Highlands and Islands, such as road transport. We must therefore ask whether it would be sensible to remove the powers from local government and to look to the Secretary of State for subsidisation in the future.

11.15 pm

My hon. Friend the Member for Hamilton (Mr. Robertson) is correct. There is great irony in the Government making play of their generosity in subsidising air transport, which, although of great importance, is not the form of transport that most people in the Highlands and Islands use. It is regrettable that so little money is available and that the principle embodied in the Bill is not being extended more widely.

In some respects the Government are contracting the availability of central Government subsidy, notably through the provisions of the Education (No. 2) Bill on transport in the rural areas. That has been roundly condemned in the Highlands and Islands. However, I hope that the Minister will attach himself to my point about the criteria and about the desirability of central Government subsidy rather than local government subsidy at this time.

I am sorry that I must disappoint the hon. Member for Hamilton (Mr. Robertson), who obviously suggests that the help being provided under the Bill and the help that is being given to the Civil Aviation Authority is contrary to the Government's statement of policy on such matters. If he will read the manifesto on which the Government fought and won the last general election, he will see a specific commitment to ensure the viability of Scotland's island community. That was a specific commitment into which the Government entered.

In relation to both this matter and the commitment to move towards a road equivalent tariff in Scotland, the Government indicated in advance that in terms of the viability of Scotland's island community they saw no objection, or much advantage, in giving help to the Islands for the purposes indicated.

Indeed, there is a clear distinction between help of that kind to preserve the viability of an island community and to help particular industrial concerns where viability on an industrial or economic level is a separate issue. The Government made that clear in their election manifesto. The help that we have been giving has honoured that commitment, as my hon. Friend the Member for Argyll (Mr. MacKay) indicated in his contribution to the debate.

I turn to the specific point raised by the hon. Member for Caithness and Sutherland (Mr. Maclennan) about the criteria under which help is given and might be given in the future. He is correct in saying that there are no statutory criteria. Nevertheless, certain criteria were applied when the decision to help Loganair was made by the previous Administration. We would be unlikely to want to change those criteria, because they are relevant and sensible.

There are basically four conditions that have to be fulfilled before the Secretary of State will consider aid to be appropriate. First, the air service in question should cross regional boundaries, and not therefore be the responsibility of any one authority. Secondly, it should cross water, thus providing a fast alternative to surface transport. Thirdly, the route should be uneconomic. Fourthly, and perhaps most important, the air service should be essential to the life of remote communities. If there are further applications in the future which meet those criteria, the Secretary of State would consider them sympathetically. I have not yet heard anything, either tonight or elsewhere, to suggest that the criteria are basically unfair or unsound. The Government retain an open mind, and if evidence is brought—

On the question of Loganair, may I draw the Under-Secretary's attention, and through him, the attention of his right hon. and learned Friend the Chancellor, to the fact that Loganair is suffering severely under the penalty for the type of fuel that it uses, which is essential for the short journeys that it makes. It has agreed that if it receives a concession it will be passed on to the passengers in toto. In fairness, the Exchequer should be reducing fuel costs to Loganair. That would assist the airline and the passengers.

I know that the right hon. Gentleman has made representations to the Treasury. This is a matter for my right hon. and learned Friend the Chancellor of the Exchequer. No doubt he will have noted the right hon. Gentleman's views.

The Government feel that the present criteria are fair. They are sensible, because they emphasise that assistance should be given only when it is essential to the viability of an island community. It is highly probable that any further or future applications for assistance will be judged on that basis.

I ask the Minister to consider again the two examples to which I drew his attention, namely, Wick-Inverness and Wick-Aberdeen. The latter route appears to fall squarely within the criteria that he has described. In fact, an island community is not involved. The first route does not fall into the criteria because it neither crosses water nor spans two local authorities. I cannot see what issue of principle separates the two routes. Both are important. One links Wick with the regional area's headquarters, while the other links Wick with another part of the North, which is important for administrative and commercial purposes. It seems slightly nonsensical that one of the routes might be eligible for central Government assistance and the other not. It seems that the criteria require revision in the light of the change circumstances to which I drew attention, especially the difficulty that local government faces in financing routes of this sort.

Specific applications concerning these routes have been submitted to by right hon. Friend. If and when any applications are made we shall consider them in the light of the criteria and in the light of any other relevant factors that are felt appropriate in coming to a decision. The criteria are not rigid or statutory. If a convincing case is advanced for departing from the criteria, it is within the power of the Secretary of State to decide accordingly.

Question put and agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

Clauses 2 to 5 ordered to stand part of the Bill.

New Clause 2

Report By Secretary Of State

'For the financial year ending on 31st March 1981 and for each subsequent year the Secretary of State shall prepare a report on the discharge of his functions under this Act and shall lay the report before Parliament not later than six months after the end of the financial year to which it relates.'.—[Mr. George Robertson.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

The purpose of the clause is to provide for the preparation of an annual report by the Secretary of State on the discharge of his functions under the Bill. This would be a normal recurring feature. The amounts that we are talking about may not seem large. They are not large by the standards by which public expenditure is usually measured. On the other hand, there is at least the prospect that the sums that could be available could be increased. If circumstances prevail, it is clear from the Government's apparent generosity in the past two weeks that they might make such money available.

It is only right that the Secretary of State should, as he does in so many other areas in which he has a responsibility, make a report to Parliament on how the money was spent and to which carriers the money was directed. Perhaps consideration will be given within the report to the level of fares charged, the standard of service that is being provided and the level of complaints that might have been received by the Secretary of State. It would provide the Secretary of State with a forum for debate and discussion each year. It would establish a standard whereby the public and Parliament could consider the methods by which the Secretary of State has use of these powers.

This is not a controversial issue. The language that I have used in formulating the new clause is specifically taken from the provisions of the Industry Act 1972, the Conservative Government measure that instituted a number of unique phenomena in industrial investment. The principle has been established in many pieces of legislation. It seems that we would be strengthening the methods by which consultation takes place in these important areas of public policy if the Secretary of State, as part of this legislation, were to explain to Parliament and to the Public how he has spent the taxpayers' money. That would provide them with the means of making their view known on whether they think that the money has been spent wisely and properly on their behalf.

I cannot advise the Committee to accept this amendment, for a number of reasons. First, the powers existed for four years under the previous Administration. At no time did they consider it appropriate that a return of this kind should be made, and the hon. Gentleman has not indicated why the Opposition have changed their minds now. Secondly, the information is already available in the annual return of the Scottish Development Agency. Thirdly, anyone who wants this modest amount of information can obtain it through the normal processes of the House. To produce a statutory obligation would involve expense, time and resources that are not necessary, given that the information is already available to anyone interested in obtaining it.

Therefore, I advise the Committee not to accept the new clause.

Question put, and negatived.

Bill reported, with an amendment; amended, considered.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 ( Third Reading) and agreed to.

Bill accordingly read the Third time and passed.