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Transport Bill

Volume 981: debated on Monday 24 March 1980

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As amended ( in the Standing Committee), considered.

New Clause 1

Obligatory Test Certificates For Passenger-Carrying Vehicles

'In section 44 of the Road Traffic Act 1972 (obligatory test certificates) in subsection (4) (excluded classes of vehicles) the following words (which relate to the exclusion of large public service vehicles) shall be omitted—

  • (a) the words from "to public service vehicles" to "passengers or"; and
  • (b) the words from "but shall apply" onwards.'.—[Mr. Fowler.]
  • Brought up, and read the First time.

    3.32 pm

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

    With this we are taking new clause 8—Annual inspection of public service vehicles:

    '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.'.
    and Government amendments Nos. 75, 76, 91 and 92.

    I am delighted to open the debate by proposing a new clause that I am sure hon. Members on both sides of the House will welcome. The clause concerns, basically, the safety of vehicles. It paves the way for a new annual test of all large passenger-carrying vehicles. It is a commitment to higher standards.

    On the day after a coach accident in France in which 16 young people lost their lives, we must all be aware of the need to tighten standards. I emphasise again, as I did in Committee, that although this Bill reduces restrictions on the number of services that can be provided in this country—we look forward to an increase in services—it does not reduce safety standards. Our aim has been to produce a system that does not mistake paperwork for effective safety controls.

    The Bill generally attacks the problem in three ways. It deals first with the fitness of the operator—what I might call the first level of prevention. The Bill requires an operator to demonstrate both his competence to run buses and that he has adequate maintenance facilities or arrangements. If an operator cannot meet the standards, he cannot operate.

    Secondly, the clauses on vehicle fitness ensure that the Ministry of Transport's examiners have powers to inspect public service vehicles at any time and to prohibit their use straight away if they are defective. With this clause we are looking ahead to the more formal requirement of the annual test, as my hon. Friend the Parliamentary Secretary undertook to do in Committee. I should like to thank the hon. Members for Holborn and St. Pancras, South (Mr. Dobson) and for Newcastle upon Tyne, Central (Mr. Cowans), who raised the matter in Committee.

    What will the annual test achieve? I believe that it will be a tighter, more foolproof means of ensuring that all buses undergo a thorough examination. The rather informal process of inspection now carried on runs the risk that some vehicles may not be examined as regularly as they should be. Secondly, and just as important, the new test will apply to all passenger vehicles with more than eight passenger seats, regardless of whether they are used for hire and reward. As we discussed in Committee, there has been, since 1930, a rather uneasy distinction between the safety standards required of public service vehicles and the lack of controls over privately run buses. The new annual test takes a major step towards bringing all buses into line. I believe that this will help to give the public the confidence that they deserve to have, whatever kind of bus they are travelling on.

    When will the new test be brought in? Inevitably, there must be time to make all the necessary practical arrangements. We are required by the EEC—this is one EEC requirement, whatever hon. Members' views, that can be welcomed—to have a testing system fully in operation by January 1983. This means carrying out the first tests in January 1982 at the latest.

    We shall shortly be circulating the necessary regulations in draft for consideration by all interested parties. We shall also be discussing with operators the best arrangements for testing. We have already said that we accept the case for using operators' premises to the fullest extent possible consistent with the maintenance of safety standards and a reasonably economic deployment of resources, both public and private.

    I commend the new clause to the House.

    Before I call the right hon. Member for Barrow-in-Furness (Mr. Booth), I draw the attention of the House to the fact that the Government did not move the motion on the order of business, outlined on the Notice Paper. In order that there should be no misunderstanding later, I should like to put on record that the result is that instead of proceeding to Government amendment No. 1 after new clause 9 is disposed of the House will go straight on to discuss the remainder of the new clauses, beginning with new clause 5.

    On a point of order, Mr. Speaker. That is correct. The Government did that with the agreement of, and at the request of, the Opposition.

    I understood that. In case the matter is raised by hon. Members who are not now in the Chamber, the occupant of the Chair will be in a position to say that the matter was explained succinctly.

    Thank you, Mr. Speaker. We always welcome your guidance. It is helpful for the House to be absolutely clear about the order in which it is to proceed with the Bill.

    The Minister's statement on new clause 1 is surprising. In a Committee stage that was pretty barren of joy for Opposition Members, the willingness of the Minister, on the raising of this issue, to agree that there should be some provision within the Bill for annual testing of public service vehicles shines like a beacon. It should have been in the Bill from the outset. There should have been a Government proposition in the Bill for annual testing of public service vehicles.

    When the issue was raised in Committee, the Minister undertook to consider it and to bring forward his own proposition for inclusion at this stage. But his proposition in new clause 1 does not create a statutory obligation for annual testing of public service vehicles. The new clause removes from the Road Traffic Act 1972 the specific exclusion of public service vehicles from the range of classes of vehicle for which test certificate provisions can be made. Those test certificate provisions in the 1972 Act can be for 10-year tests or tests of other periods.

    We want spelt out clearly in the Bill that public service vehicles shall be annually tested. That is a basic safety requirement that we want to see written into the law.

    The Minister touched upon the use of operators' premises. There is nothing in his new clause that touches on operators' premises. I believe that new clause 8 is much better for this purpose.

    I wish to deal first with the question of a statutory requirement for annual inspection. If one was to use the procedure used under the 1972 Act for other vehicles, one would not bring about a satisfactory position on the annual testing of public service vehicles. Public service vehicles are in a special position and their testing is not the same as the testing of other vehicles.

    In Committee the Minister withdrew the requirement for an operator's disc to be displayed on the vehicle, so we have to be assured that this testing requirement can be enforced in its own right. We cannot rely on the operator licence requirement. It is virtually unenforceable, since the requirement to display the discs has been removed from the Bill that we considered on Second Reading, so the link has been removed between the operator and the number of licensed vehicles that he runs. Therefore, in some ways, the annual safety check becomes more important. It means that any safety inspector or policemen can ensure that the fitness to carry passengers of any vehicle on the road has been tested in the previous 12 months. It would be impossible to know from an examination of the vehicle whether it was covered by an operator's licence.

    But a specific requirement for annual safety tests is important because of the nature of the operation. We should all be alarmed that any large vehicles should be able to travel on our roads without safe brakes and steering, for example. A major public service vehicle can affect the safety not only of other road users but of those who travel as passengers on it. The vehicle is in constant use and stops and starts frequently. Safety control is crucial.

    The other question raised by new clause 8 is whether the operator's premises should be available for inspection. The control of PSV safety has, if anything, a longer history than safety control of other vehicles, so it is surprising that annual testing has not been insisted upon before. There is testing provision, however. Good operators often have good testing facilities on their premises. This testing has developed in a way very suited to the needs of the PSV. Major fleet operators have their own engineering facilities which they can use in the interests of greater efficiency. That should be recognised in legislation of this sort.

    However, we know that we are dealing with Ministers who are on record as wanting to put testing facilities in the hands of private operators rather than those of Government inspectors. We put down a marker about the need for independent monitoring by the Department's own engineers. There may be a difference between the two parties as to how safety testing is best achieved and how specific the legislative commitment to annual testing should be, but I hope that there is no difference between us that stringent and impartial requirements should be imposed for annual testing so that it is done to a uniform and high standard.

    3.45 pm

    At some time in the near future we need some assurance that, however the tests are done—in what are now Government stations and handed over to private control, a move that we would oppose; on the operator's own premises; or in Government test stations run by the, Minister's own staff—they will all be subject to independent monitoring by the Department's engineers, in whom we have great confidence.

    In all these circumstances, the annual inspection of PSVs should not be dealt with in general test regulations by removing the ban in the 1972 Act to imposing a test requirement on public service vehicles but should be specifically related to the needs of the special case of the PSV.

    That is why new clause 1 is inadequate. It does not achieve the purpose or the specified period of testing. New clause 8 is vastly superior. It achieves our intention and that which I think the Minister spelt out.

    I am grateful to the Minister for thanking my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) and myself for pointing out that the Bill contained no provision for annual testing of public service vehicles. If the Minister's intention is met by the new clause, we welcome it, because people who travel in PSVs are entitled to high standards of safety.

    However, I must add that it was pointed out on Second Reading that some provisions of the Bill would adversely affect safety. Right at the end of his reply to the Second Reading debate, the Parliamentary Secretary said:
    "I reject completely suggestions that safety is threatened. That is absolute nonsense. If anything, the Bill will improve the safety arrangements."—[Official Report, 27 November 1979; Vol. 974, c. 1246.]
    As originally drafted, the Bill clearly would not have improved safety because it would have got rid of the annual testing of vehicles. I am afraid that the Parliamentary's Secretary's brief was somewhat amiss.

    There is no system of annual inspection of vehicles at the moment, so there could have been no question of the Bill getting rid of it. All that we are introducing in the new clause is the ability to bring in the annual inspection of vehicles as a new concept in this country. We always intended to bring it in anyway, but we had not intended to use this Bill to do so.

    I accept that, but we are getting something worth while from the suggestion of my hon. Friend and myself. We look forward to the introduction of annual testing, which will make things safer both for PSV passengers and for other road users.

    In the spirit in which he moved new clause 1, however inadequate it may be, I hope that the Minister will recommend the House to accept our amendment No. 25. That would extend the provision for the safety testing of vehicles to include vehicles owned by education authorities and used as school buses. There is no requirement at present to test them as there is with public service vehicles.

    I was delighted to hear from the right hon. Member for Barrow-in-Furness (Mr. Booth) that there were some aspects of the Bill about which we agreed. We have agreed throughout on the principle that the safety of passengers should be paramount in the passenger transport industry.

    I repeat without hesitation what I said on Second Reading, that there is no provision in the Bill which threatens or reduces the present protection given to passengers in trying to maintain the proper level of safety on public transport vehicles. There are aspects of the Bill that will strengthen the protection for passengers and make the system more adequate and enforceable.

    The new clause introduces a new system of annual inspection of all public service vehicles. The Government have always contemplated that, and it is an innovation to which we are bound by an EEC directive—the so-called roadworthiness directive. This has not occurred to the Government during the passage of the Bill. We always intended to comply with our legal obligations under that directive and to bring in a new system of annual testing by 1 January 1983. That means that we must get the first tests going by January 1982.

    The only change of policy indicated by the clause is that, following representations made by the hon. Members for Holborn and St. Pancras, South (Mr. Dobson) and for Newcastle upon Tyne, Central (Mr. Cowans) in Committee, we looked at the possibility of using the Bill, while there is parliamentary time, as the appropriate vehicle for bringing in a system for the annual testing of vehicles.

    Given that we are all agreed that this is a desirable innovation, I think it is a pity that the right hon. Gentleman—though I understand that he will advise his hon. Friends to support the idea—feels it necessary to hedge that agreement about with qualifications concerning the chosen method, the precise way it will be introduced and its enforceability thereafter.

    Let me explain why, on the face of it, new clause 1 is expressed in rather obscure language and does not provide in terms that the annual inspection of public service vehicles will begin in January 1982. The wish was expressed repeatedly in Committee that the legislation could be framed in language of that kind. However, upon examination it will be found that the, clause is adequate to pave the way for the regulations. That will be the most appropriate means of fulfilling the terms of the EEC directive. The new clause and the consequential Government amendments bring public service vehicles within the ambit of sections 43 and 44 of the Road Traffic Act 1972 from which they are presently excluded.

    That Act ensures the annual testing of heavy goods vehicles. At the moment public passenger vehicles are excluded from those testing arrangements. The amendments bring passenger vehicles within the terms of that Act, and pave the way for the necessary regulations spelling out the details of the arrangements.

    The alternative way of proceeding as a matter of law would have been to draw up regulations under the European Communities Act 1972 implementing the United Kingdom's Community obligations in respect of public service vehicles. That would have given rise to considerable drafting and other difficulties and probably, for a variety of reasons, would have been a less attractive course, given the present mood of the House, to adopt. We welcome the opportunity, therefore, of paving the way through this Bill to bringing passenger vehicles within the terms of the 1972 Act and then making the necessary regulations.

    There is no policy difference between us and, though the statute will not contain details of the annual inspection, it will pave the way for the regulations. I give the clearest possible undertaking on behalf of the Government that we shall produce the necessary regulations to bring the new system into effect at the required time.

    There is the problem of the enforceability of the new system of annual inspection once it has been put into effect. As with the other safety requirements of the Bill, our view is that they are perfectly straightforward to enforce and that they can be enforced properly. It is obviously in the public interest that public safety regulations should be enforced as strictly as possible.

    Every operator will be required by regulations under this Bill to notify the traffic commissioners of the vehicles he owns and operates. Every vehicle which he possesses will be subject to inspection by the Department's vehicle inspectors. Inspection can take place in a wide range of circumstances and more or less at any place and any time to ensure that a vehicle is fit to be on the road.

    The means by which we shall make sure that an operator submits his vehicles for annual test are that, by bringing passenger vehicles within sections 33 and 34 of the 1972 Act, the test certificates to be issued under this procedure will be linked with vehicle excise duty. That means that the certificate will be producable at the time of paying the vehicle excise duty. There will thus be a ready means of ensuring that a vehicle has gone through the annual test to which it is liable.

    The other point of detail raised in debate was whether it would be possible to carry out these annual inspections on the premises of operators who had the right facilities or whether all buses would be required to go to an approved vehicle testing station elsewhere. I am happy to repeat the substance of what I said in Committee. The Government are quite happy to consider the possibility of operators' premises being designated as approved places for the test. The regulations will pave the way for that possibility. We anticipate that a number of testing centres will be the premises of some of the major operators.

    First, we shall need to consider—and the right hon. Gentleman anticipated this—whether the facilities at particular premises are adequate for the rigorous tests required. I believe that only the major operators will have the kind of depot, garage and maintenance facilities appropriate for the tests. My only caveat is that the adequacy of the facilities will not in itself be the only decisive factor. We must look at various other matters, including the cost of sending our examiners to obscure parts of the country or endless testing centres to chase up specific vehicles. We must have some economy of organisation.

    There must be a proper geographical spread of testing centres to ensure that the bus industry as a whole is properly served and is not inconvenienced. There must be a testing station within easy range of an individual operator. Although we have not proposed these particulars in our discussions, it is possible that, if an operator wants his own premises to be used as a testing station, approval may depend upon the facilities being available to other operators so that their vehicles may be tested at that same station. A station will thus serve a fairly wide geographical area and be of advantage to the bus industry as a whole.

    We are prepared to discuss all these matters. We do not anticipate any difficulties in practice and we envisage that when the system is set up some of the approved centres will be operators' own premises.

    I was asked about the standards of the tests, and how they would be achieved. The standards will be the equivalent of the present rigorous ones that we attempt to apply to heavy goods vehicles and to passenger vehicles as well. We have indicated a policy intention to return the testing of heavy goods vehicles to the private sector. We are still considering the position with respect to passenger vehicles. However, whoever carries out the testing, it is the Minister who bears the responsibility for ensuring that it is of the right standard and adheres to the policy of the Bill. That policy is to ensure that the best possible protection is afforded to the travelling public by way of a regular enforceable system of testing and inspection. We can thus ensure that, once tested and inspected, the bus fleet will be as safe as reasonable regulations can secure.

    4 pm

    With the leave of the House, may I say that I cannot understand why the Parliamentary Secretary insists that this matter must be left with the Minister. I understand that he has agreed that there should be an annual inspection of public service vehicles and that that should be prescribed in regulations. Why, then, will he not support me in recommending new clause 8, which seeks to provide precisely that?

    New clause 1 removes an impediment in the 1972 legislation. That impediment is the specific exclusion of public service vehicles from test certificate requirements. However, that is not good enough. I have no objection to removing that part of the 1972 Act so as to leave the regulation-making powers in the Bill as they stand. That may serve some useful purpose, but it does not impose a specific requirement under the Bill, as we seek, to ensure that the Minister provides for full annual inspection of public service vehicles. The requirement was not in the 1972 Act, but we should take the chance to put it in the Bill. There is nothing in new clause 8 to prevent the Minister from taking the time that he needs to prepare the regulations properly; nothing to prevent him from taking account of all the considerations which the Parliamentary Secretary has very fairly laid before us.

    New clause 8 is confined to public service vehicles. In our proposals we are taking wider powers than that, and our regulations will apply to all large passenger vehicles. The powers that the right hon. Gentleman is offering us in new clause 8 are narrower than those that we propose to take in the regulations.

    I do not accept that. I do not see one new clause as an alternative to the other. If the Parliamentary Secretary will support our new clause we shall happily join him in recommending both new clauses, but the House has an absolute right to demand regulations requiring an annual inspection.

    The Parliamentary Secretary does not need to tell me, given all our debates in Committee, when we pressed upon the Government the need for a wider definition of public service vehicle, that there are vehicles outside that definition which should be covered by it. As my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) pointed out, there are buses conveying children to school which could be outwith the definition. However, conscious though we are of the public service vehicle definition in the Bill, that is not the point at issue.

    If my hon. Friends want the House to recommend an annual inspection by regulation rather than leaving the matter to the Minister, they must vote for our new clause. I ask them to support new clause 1 and new clause 8, and that is a perfectly proper approach because none of us would want to stand in the way of the Minister making wider regulations than those we propose. If, in his wisdom, the Minister decides that other larger passenger vehicles not within the public service vehicle definition should also be subjected to annual fitness tests, we would not wish to be seen, by anything that we said or did, to be opposed to that. We are not. However, we insist that the House should decide whether there should be such annual inspections and whether they should be written into the Bill at this stage.

    Question put and agreed to.

    Clause read a Second time, and added to the Bill.

    New Clause 6

    Carriage Services Competing With Operators Holding Road Service Licences

    "No express service or contract carriage service shall operate on a route which is served by public service vehicles operating under a Road Service Licence and supported by a transport supplementary grant and/or cross-subsidised under a passenger transport policy network agreement unless in the cases where cross-subsidy applies the agreement of the Traffic Commissioner is obtained and in the cases where transport supplementary grant applies the agreement of the local authority is obtained.".—[ Mr. Booth.]

    Brought up, and read the First time.

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

    The clause deals with a matter which is at once complex and far-reaching and relates to one fundamental issue. That issue is whether it is possible, within the combined effects of the Bill in terms of its delicensing, its definition of express service, its opening up of contract carriage, for local authorities to carry out their statutory duty to promote and coordinate efficient public transport systems within their areas.

    We hold that these combined effects will prevent local authorities from doing that. We also believe that, in order to rescue something from the devastating effects of the Bill, our new clause is necessary to inject into the much wider system of free enterprise operation a method of check and agreement as between local authorities and operators, and as between traffic commissioners and operators about what is necessary to maintain network and individual services where they are being supported by transport supplementary grant.

    As the Bill is now drafted, it would be possible for someone to set up a contract carriage operation within an area covered by a networking agreement. Even though the public are making their contribution to that agreement through the transport supplementary grant, and even though major operators in the area are making their contribution by cross-subsidisation as between their profitable and unprofitable routes, along could come another operator who could cream off certain of the profitable routes without regard for the effect that that would have on the public transport service, which is a statutory concern of the local authority, or for the public interest which is at the root of the statutory duty imposed on traffic commissioners.

    A great many services in local authority areas are making a valuable contribution to maintaining other services within those areas. Urban services are making a contribution towards rural services. Monday to Friday services are making a contribution towards Sunday services. Peak hour services are making a contribution towards slack hour services.

    The whole of our public transport network is based upon a complex balancing of financial factors that allow services to run on the basis of a mixture of considerations. There is the consideration of how much should be properly taken from one route to support another. There is the complicated consideration of how much taxpayers' and ratepayers' money should be provided to operators through supplementary grants for them to operate services that the local authorities consider necessary if they are to carry out duties laid upon them by Parliament to promote and co-ordinate efficient public transport systems.

    Many hon. Members are aware that the emphasis on the promotion of services needs to be highlighted. There are still too many areas which, several years after the introduction of transport supplementary grants, have not succeeded in promoting services on a considerable number of routes. There are still many people who complain bitterly about their difficulties in getting to work or attending social functions because of the absence of public transport in their areas.

    It is our experience that even after a few years of those statutory duties and of local authorities receiving transport supplementary grants, far from having an over-provision of public transport services, we are still suffering an under-provision. Those local authorities, shire county authorities and metro-county authorities that have been successful in bringing about an expansion of public services by promoting and co-ordinating the various transport operations are in a minority. Many have been struggling to hold together an existing system.

    Under the provisions of the Bill, a contract carriage operator will be able to take advantage of a lucrative end-to-end route that is being served by a stage carriage service for which a road licence has been obtained, and will be able to operate only at peak hours, and on Mondays to Fridays, or possibly Saturday mornings. He will be able to do so only on those identifiable occasions when it is profitable, and he will be able to cream off money from the route and leave the existing operator to carry out that part of the networking operation that is essential if it is to stand as an operation that can be fairly described as a co-ordinated, efficient public transport system.

    If that happens, we predict that we shall be presented with a number of unpleasant options. Local authorities may tell the Government that they can sustain the operation of bus services—in some cases train services that are supported under the transport supplementary grant system—only if considerably greater contribution can be made. They may tell the Government that they cannot continue sustaining services at the required rate.

    4.15 pm

    Another possibility is that the network operators will tell local authorities that they can no longer make the network agreement or the contribution from cross subsidy required to sustain the network. They will say that they are not prepared to work on that basis. Some local authorities are prepared to play the game by either set of rules. However, at present, operators cannot use one service to cross- subsidise another and simultaneously compete with that service. They can do one or the other.

    Having talked to a number of operators, I suspect that in those circumstances they will pull out of the non-profitable routes. They will say that the TSG support is about one-third of the subsidy that is required, and that they are having to find two-thirds or more by cross subsidy. They will not be prepared to give up the routes where they are now making a profit, even though they are using the profit largely for cross-subsidy purposes. They will pull out. They will cut fares on the few routes that are profitable—10 per cent. of the routes at most—and the overwhelming majority of services will close down. That type of contract carriage operation has not been envisaged previously. Up to now all contract carriage law has covered specific types of operation.

    Another threat that looms large is that of the new definition of the express services. Any operator who is prepared to run a 30 mph or faster service can do so without road service licensing approval. There is much argument about the length of express operation—25 miles, 30 miles, 35 miles or 40 miles—that will affect the ability of the major operators to make a contribution from their carriage operations to other services. The National Bus Company estimated that a difference of five miles would affect its income by about £5 million.

    Under new clause 6 we are pressing for a minimum that is required to bring about reasonable protection of the operations. We are not saying that a new operator should not be able to operate on a cross-subsidised route. There may be cases—this will appeal particularly to the Minister—where local authorities will welcome a new operator on a cross-subsidised route. They may find that a new operator is prepared to operate a substantial part of the service with a lower degree of subsidy. That will be welcomed with open arms. However, where the route is at present subsidised under the TSG arrangements, the local authority concerned must be consulted. Public money is being used to provide a service, and if a new operation can lead to the use of that public money in such a way as to provide as good or better services, with no more, or possibly, less subsidy, it is to be welcomed. However, it is feared that in many cases a new operator will not want to discuss that with the existing company, the traffic commissioners or the local authority, because he will want to operate in a way that does not take into consideration this major factor, which the House has decided must be a responsibility for local authorities.

    I cannot believe that Members of Parliament would seriously wish to pass legislation which would require the majority of operators on stage carriage routes within their constituencies to go through a road service licensing procedure which took account of the public interest through reference to the traffic commissioner and the considerations which he would apply to road service licences, as well as the local authority's careful regard to the provision of taxpayers' and ratepayers' money to operators in order to maintain a network, and at the same time wish to make it possible for a number of others to operate with total disregard for those major factors. To do that would be to make nonsense of the whole business which we are about.

    The Bill is an unhappy mess in this respect. It aims at two completely different objectives, and one so badly conflicts with the other as, in my view, to threaten the destruction of a good passenger transport system in a large number of areas.

    I believe that this new clause provides a mechanism which allows a fair balance of the considerations involved, allowing an operator who is carrying out a desirable cross subsidisation—which was desirable in the view of the traffic commissioner and was taken into account in the determination of his road service licence—to say to the traffic commissioner that he believes that the effect of having contract carriage operation over certain parts of his routes at certain times, would not only be detrimental to his maintaining those routes but would in fact require him to withdraw.

    A traffic commissioner who has granted a road service licence, having looked carefully and in detail at how far that licence and its form and conditions met the public interest, is, I believe, in a better position than are others to judge the effect of having contract carriage operation on such a route.

    It could be held that the operator is biased about it. It could even be held in certain circumstances, though I would not so contend, that local authorities may be somewhat partial in their attitude towards certain routes, having run their own services or having made arrangements with particular operators. But that cannot be said of the traffic commissioner.

    I believe, therefore, that the new clause is of great importance. It offers, as it were, a last chance for us to try to inject some logic, common sense and balance as between the express or contract carriage operations which at present are totally outwith road service licensing and the role of the traffic commissioner. It gives an opportunity to local authorities which have the statutory duty to try to promote good public services and which are spending public money for that purpose to be involved in agreements with those who will operate on routes which, under the proposals in the Bill, can be operated without any regard to these major considerations of the public interest.

    During the 110 hours of our work in Committee, when the right hon. Member for Barrow-in-Furness (Mr. Booth) and his hon. Friends spoke in those grindingly long debates, this question emerged, to a large extent, as the greatest divide between us.

    As I understand it, the right hon. Gentleman's argument is summed up in the belief that cross subsidisation is somehow a beneficial system which will result in the provision of services which otherwise would not be provided. In examining that argument, one has to look at the reality of services in Britain today. I find it strange that the right hon. Gentleman did not remind the House that in every county, every district and every area public bus services are declining.

    This is the second time that the hon. Gentleman has made that assertion, and it is not true. Let him make the comparisons and look at the facts, especially in the metropolitan bus authorities compared with the counties or, indeed, look at the facts even in Tory metropolitan areas. He will see that both the South Yorkshire and Newcastle areas, for example, have been increasing the number of people travelling on their buses.

    I hope that the hon. Gentleman will recognise that I did not speak of the number of people travelling on buses. I referred to the services offered, and this is an important distinction. It is vital to have services offered which are relevant to people's needs. I can only tell the hon. Gentleman that, right in the middle of our lengthy Committee stage, Midland Red, in my constituency, cut services. I hope that the hon. Gentleman will forgive me, therefore, if I find his remarks strange when my constituents tell me that right in the midst of this argument, in which he and his right hon. Friend have argued that cross subsidisation will somehow continue the magic of public bus services, in my constituency those very services were declining.

    My constituency is not the only one where that has happened. This brings me back to the real divide between us. Cross subsidisation and directed traffic under the present system just does not work. I re-emphasise that in North Warwickshire, Solihull and the rest of my area in the Midlands this need has now become a prime priority. There are old-age pensioners, disabled people and families who are abandoned and marooned by the lack of bus services. So we are not starting from the basis of an ideal situation which is beneficial to all.

    Secondly, is it right to define cross subsidisation as a necessity for the provision of bus services? What is cross subsidisation? It is the use of finances generated from one set of services to support another set of services. Is this genuinely sacrosanct? Is it not part of the duty of an elected authority, or of a non-elected authority—even a non-elected authority such as the traffic commissioners —to recognise that if socially needed services should be provided they should in fact be provided? Is it not a better financial discipline to recognise that by defining, without cross subsidisation, what each service provides in terms of its benefits to the customer?

    We are not talking about politics here. We are talking about people who want transport services to take them from one point to another. Could people not have a better service if we allowed ourselves to make judgments? I am sure that many passenger transport executives and bus companies would accept the argument that if they are there to provide services it is up to the elected authorities, whether Members of Parliament, county councillors or district councillors, to decide where and how the public money should be spent. I find it difficult, therefore, to understand why cross subsidisation should be regarded as sacrosanct.

    The right hon. Gentleman said that we should have to face some unpleasant options. Why should they be unpleasant? Under the Bill we are for the first time embodying in law opportunities which in many of our constituencies have already been shown to be genuine opportunities. Private enterprise can often provide at lower cost better services than those provided by public enterprise. This also is part of the great divide which took us over, as I recall it, 130 Divisions in the Standing Committee. By energising the forces of private enterprise we shall get people working at a cost lower than that shown by the passenger transport executives or the nationalised bus companies in the provision of services at times when people want them and in vehicles as they want them.

    We must all be familiar with the sight of huge buses with three people sitting in them. I am not so unsophisticated as to make that point without recognising that at peak times those very buses may well be full. But I put it to the Opposition that there could well be a place for buses run by private enterprise at certain times of the day to provide services which will make a profit for an entrepreneur, providing services for local residents, while at other times of the day on the same routes we could still achieve services in different buses for those of the population who require them. I believe that a complex mixed economy of transport provision, both private buses and public buses, is the only answer.

    Under the Bill, without new clause 6, which I sincerely hope we shall not pass, we have for the first time innovatory legislation which allows entrepreneurs to do just that. Many of us have in our constituencies entrepreneurs who have already battled through the lengthy process of arguing with the established bureaucracies of the National Bus Company, the passenger transport executives and the local authorities in order to get their services going. They are already providing services. In Committee I gave three examples from my own constituency where they are providing excellent services where the institutionalised public provision would just not succeed. I therefore urge the House to reject the new clause.

    4.30 pm

    I did not sit through the long, weary and tortuous hours in Committee, but I took part in the Second Reading debate. In looking at the new clause, I can imagine that it somewhat counters the substance of the Bill itself. However, it does not entirely throw out of the window the main purpose of the Bill.

    In endorsing the argument of my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), it seems to me that the wording of the new clause—which I imagine has been drawn up very carefully indeed, and at first sight appears to be somewhat complex—can be the means of ushering in an element of planning in order partially to accept the fact that the Bill is now going through Parliament because of the inbuilt Conservative majority.

    The Government have applied their mind to transport according to their own light, and they genuinely believe that out of their proposals will emerge a much better service for the people and a much more efficient one than we have had hitherto. I do not think that that is the case at all. Without new clause 6, I believe that the Bill could rapidly lead to a state of anarchy on our roads.

    Like many other hon. Members on both sides of the House, I foresee the time rapidly approaching when more and more car owners will have to look to the passenger services of various kinds in order to get to work. If that is the case, it means that more workers will be involved in those services. There is real fear, particularly on the part of members of the Transport and General Workers Union, that an anarchistic situation will arise from the Bill's central provisions. It is up to the Minister to allay those fears, because it is upon the good will of transport workers and the way in which they go about their daily lives that at the end of his period the right hon. Gentleman will be judged to have been successful or to have failed.

    In addition, there is the question of road slaughter. If efficient public services are used by more people than use our existing services, obviously the question of slaughter on the roads diminishes a great deal, because it arises precisely from the various kinds of transport which at present use our roads.

    These questions are interlocked. I believe that as a result of the requirement in the new clause, whereby local authorities will be under the discipline of a cross-subsidisation system, local authorities will be able to play a greater role in the localities, and throughout the county complex, to ensure that the changes envisaged by the Government and the Minister are successful. I respect the Minister's views, but only the test of time will tell whether the basic Socialist philosophy as applied to public transport is better than his. The proof of the pudding will be in the eating. I believe that at the Tory Party conference the Minister described his proposals as somewhat revolutionary. In so far as his proposals spell out considerable changes, I suppose that they could fall into that category, although we are not accustomed to Tories talking about revolution.

    Nevertheless, the proposals spell out considerable changes that must be ushered in with a good deal of caution. I am open-minded about certain aspects of the proposals, because, as I said, the proof of the pudding will be in the eating. However, as my right hon. Friend said, there is a fear that there will be a wholesale creaming off.

    The trade unions which represent road passenger service workers in the public sector are well organised, but there is a fear that the wages and conditions of those workers will be put in jeopardy as a result of their being left with the Cinderella services. There is a fear that they will be left with the empty vehicles while the fly-by-night operation, which will pass under the sunny title of "private enterprise", will cater only for rush-hour periods or times when the vehicles are likely to be fully used. The danger is that if such an operator gets fed up, if someone goes sick or if a man's son does not wish to carry on with the service, many people will be bereft of any service whatever. That is a real fear.

    There is a need for a balance, and I believe that the terms in which new clause 6 is drawn will ensure that that balance is steadily applied and arrived at.

    I begin by declaring an interest in this matter. Having heard about the length of the Committee proceedings, I am not sorry that I missed them. However, there is one relevant question that should be asked, not only in regard to this part of the Bill but in relation to the new clause. Will what is proposed either halt the decline in services in some parts of the country or improve them? Surely, that is the only relevant question that we should ask this afternoon.

    My right hon. Friend the Minister has put forward what have been claimed to be far-reaching proposals, and the right hon. Member for Barrow-in-Furness (Mr. Booth) has rightly expressed certain fears about what could happen. I am sure that all of us would accept that the present situation is unsatisfactory. Indeed, I remind the right hon. Member for Barrow-in-Furness that over the years the Labour Government introduced new legislation because they realised that what was happening was totally unsatisfactory. For example, bus services were declining and more and more people in various parts of the country, particularly in the rural areas, were finding themselves without public transport.

    I do not entirely agree with what my hon. Friend the Member for Meriden (Mr. Mills) said about cross-subsidisation, because bus service operations are somewhat more complex than many people appreciate. It is not just a question of a driver starting off at point A, driving to point B and back to point A, and doing that throughout the day. Because of the complication of drivers' hours and other legislation which applies, it is often necessary for that driver to make two or three journeys from B to C, or even from C to D, before he reverts to B to A. That may confuse the House. I confess that I have always found the matter confusing. However, it means that in employing that bus and driver we are not dealing with just one service. If anything happens which undermines or removes the need for the service while the driver is operating, the coherence of the whole of the service is undermined. As I understand it, that is the main point that the right hon. Member for Barrow-in-Furness put forward.

    How does my right hon. Friend see the role of the local authorities and the county councils which have the responsibility for the co-ordination of public transport and, indeed, the job of subsidising public transport in the event of that type of situation arising? What will happen if, because of the creation of new contract carriage services, services that are subsidised are undermined? For example, what will happen if the local operator who is perhaps part of the National Bus Company says "It is not just a question of my doing away with the route from B to C. I must do away with the routes from C to D, D to E and E to F because they will no longer pay. On the other hand, in order to maintain those services I require a considerable amount of money from the ratepayer and the taxpayer"?

    Therefore, we must carefully examine the role that the county councils are expected to play. They have been anxious to take on the responsibility in the past. I remember my right hon. Friend and myself arguing vociferously that they should be given the right to control public transport, particularly in rural areas. If they have this responsibility, they should be consulted and have a strong say before we introduce a whole series of new services which could damage what already exists.

    There is one fear that niggles me about this part of the Bill. I do not doubt my right hon. Friend's intention to try to bring new services and life into public transport. For that he deserves every commendation. My fear is that the freedom to be given is likely to bring into public transport not just the fly-by-night operators—I do not go all the way with the hon. Member for Ealing, Southall (Mr. Bidwell)—but those who have not done their sums too carefully, who may think that they can operate an express service and then find that the economics are not going too well.

    The temptation to break the law—the temptation to try to get extra revenue—which existed before there was legislation on bus services could happen again. Because of that, there is a danger that these new services may siphon off passengers from existing services rather than create more passengers and services. If that happens, it will undermine the real purpose of the Bill—the creation of new services and help for people who are without public transport at the moment.

    I hope that, in reply to this short debate, my right hon. Friend will try to spell out for me and satisfy me that the Government are aware of this danger and that they have consulted the Association of County Councils on how they are to meet this need. The danger may not be immediate. It may not be next year or the year after. The real danger is that many of the new services may come in and prove unprofitable and that, in about 1983 or 1984, we shall find ourselves with less public transport than we have today.

    I listened as carefully today to the hon. Member for Welling-borough (Mr. Fry) as I did during the transport debates in 1978. I do not agree with everything that he said, but he introduced a note of realism into the debate today. Without doubt, the new clause tries to put a note of realism into the Bill. One could argue that it is a conservative clause, because it introduces a note of caution.

    Having heard the hon. Member for Meriden (Mr. Mills), one would have thought that entrepreneurs were queueing up to take over these services. The clause makes it abundantly clear that we are talking about rural services—the unprofitable parts of the transport empire. That is the fundamental difference between us.

    I turn to the cross-subsidisation argument. Whether we like it or not, people outside sometimes make the accusation that in this place A votes "Aye" and B votes "Nay" and never the twain shall meet. Put another way, Conservative Members vote "Aye" and Labour Members vote "No" and realism goes out of the window. I hope that that will not transpire in this debate, because there is real worry about this matter.

    As the hon. Member for Welling-borough said, the worry is not immediate. It will not happen the day after the appointed day. The worry goes beyond that point. It would appear that many people hidden away in many constituencies have suddenly discovered that they can run the transport system. One could argue that the opportunity is available to them now. Conversely, it can be argued, as no doubt Conservative Members will argue, that the transport commissioners grind exceedingly slow. But in the pursuit of profit, even when the rules of the game grind exceedingly slow, has anyone who can make that profit been put off before? The answer must surely be "No".

    4.45 pm

    There has been no queue of people to operate these rural services. This matter goes beyond party politics. We are talking about people in rural areas who rely on transport. There has been no queue of people to provide these services.

    The clause is carefully worded. It is cautionary. It urges us to look at the systems which have previously been subsidised before we introduce another system which may not exist for a very long time. One would think that a local authority would look into rural transport before pouring good money into it. Successive Governments have supported the view that rural transport should be subsidised.

    The fundamental issue between us is cross-subsidisation. I appreciate that to Conservative Members the National Bus Company is poison. However, it exists. There is also another clause on this matter, which, for fear of incurring your wrath, Mr. Deputy Speaker, I shall not mention. However, there is the prospect of £5½ million being lost, a percentage of which could be used in cross-subsidisation. If that percentage is taken away, that cross-subsidisation will not exist. It can be likened to a tree. The National Bus Company does not cross-subsidise out of the goodness of its heart. It cross-subsidises in the form of a tree. If the branches feeding into the trunk make the trunk profitable, it makes sense to support the branches.

    Our worry is that, not in the first instance but over a period of time, rural transport will be non-existent because people who have not done their homework will move in. Everything in the garden will look rosy for a short time, but they will kill off existing services, because of the cross-subsidisation agrument, and then move out. What will fill the gap? Perhaps the Minister, in replying to the debate, will take us beyond the appointed day, when this free-for-all is to transpire. If it does not work, will he tell us what he proposes to put in its place by way of rural transport? That is always assuming that the Minister and his hon. Friend are still in the positions that they now occupy.

    The essential point about the debate was put forward by my hon. Friend the Member for Wellingborough (Mr. Fry). He asked whether the new provisions would benefit the travelling public. I agree that, above all, that is the litmus test. It is about not what the lobbies, the operators or the unions want —all these bodies have a right to put their arguments—but what is in the best interests of the travelling public. Therefore, I should paint in the background to what we are doing.

    The aim and purpose of the Bill is to remove unnecessary restrictions on the bus industry and, at the same time, provide the opportunity for new services to develop. As my hon. Friend the Member for Meriden (Mr. Mills) rightly pointed out, some of the new services will undoubtedly be provided by private operators. The obstacles now put in the path of operators wishing to run long-distance coach services do not serve any worthwhile purpose. It is right to remind the House that essentially we are talking about express services which, by definition, are services covering more than 30 miles.. Such obstacles in the long-distance area restrict the choice of the public.

    There are those who want to travel by express bus and who prefer that option either to driving or to catching a train. If a man travels from Bristol to Birmingham he may want to travel by air, rail, car or coach, and the Government see no justification for seeking to restrict this choice of method of travel. That sums up my philosophy, but, what is even more significant, it sums up the philosophy of the Labour Government. In their White Paper on transport policy they said:
    "Provided the terms of competition are fair, if people choose to travel by coach rather than rail or air because lower fares are more im- portant to them than speed, they should not be prevented from doing so."
    That is a sentiment that I support entirely.

    The problem is whether those people will have the right of choice. I remind the Minister that there was an occasion during the Beeching era when the rail service between Scarborough and Whitby in Yorkshire was terminated as the result of an investigation by the traffic commissioner, who was assured that private bus operators would provide an alternative service. But within 12 months that alternative service no longer existed because it was totally unprofitable, and the people who lived in those rural areas were isolated from public transport as a consequence.

    I shall come to those points. We are dealing with contract carriage, but essentially we are talking about express services. In other words, we are dealing with services that are more than 30 miles in distance. That is the aim and purpose of what I am about to say.

    In the area of express services, it is fair to remove the present licensing restrictions that prevent bus operators from competing on equal terms. In other words, contrary to what has been said, there is a demand for travel which at the moment is not being met. I believe, further, that that new demand, and the fact that resctrictions can and will be removed, will lead to new operators coming forward in this area.

    I was attacked on the ground that new operators would not come forward and that there was no great demand for intercity coach services of for new coach services at all. But there are signs at present that exactly what I am predicting is taking place. An article in The Daily Telegraph on 21 January said:
    "New private enterprise companies are planning to challenge the National Bus Company on key express coach routes when unrestricted competition returns to the business later this year for the first time in half-a-century".
    Surely, that is in the interests of the public.

    What was the response of the National Bus Company? To do it justice, its express division controller was quoted in the same report as having said:

    "Competition is a spur; it is not a threat."
    That is surely exactly the approach and feeling that there should be in the bus industry.

    The first point that I make in refuting much of what has been said today, which I believe is not only alarmist but totally wrong, is that in this important area—this point was conceded by the right hon. Member for Barrow-in-Furness (Mr. Booth) in Committee—of inter-city travel there will be more opportunity and more providers. That will be in the interests of the public. Not one word that I have heard this afternoon challenges that.

    If the Minister reads new new clause 6 carefully, which I assume he has done, he will see that the key words are

    "under a passenger transport policy network."
    The fear is that, as with a jigsaw puzzle, many local authorities and the NBC have subsidised a number of branches of the tree in the overall network. If we take out one or two of those branches the network will collapse. That is the main point of new clause 6.

    I shall come to the points made by the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans).

    Basically, the Opposition are still concerned about the freedom that will be provided here. They wish to reimpose restrictions on these services. Indeed, they now wish to go further and extend those controls to services that are not even licensed at present. If the hon. Member for Newcastle upon Tyne, Central refers to the clause, he will see that those services are the private coach parties or contract carriers.

    The Bill does not change greatly the position of those services except in one small but important way. The Bill will make it easier for people to club together to solve their own transport problems. I am thinking especially of commuter clubs which are currently prevented from hiring coaches for journeys to work by the restrictions on the making of regular journeys. This restriction will go, but those which protect the ordinary local bus service will remain.

    Concern for the local bus network—I fully appreciate what the hon. Member for Newcastle upon Tyne, Central is saying—is at the heart of the clause. I have sought to make clear all along that it is no part of our desire to destroy that network. That is why I have retained licensing for all services which are part of the local network. The distinction that I have drawn in the Bill between express on one side and stage carriage services on the other does that. In other words, it preserves the distinction between the express services that are outside the licensing restrictions and the local services where I believe there is a need for control. Although we have changed the presumption of proof, we have accepted that.

    What I do not see is why a non-stop express bus from, say, London to Manchester should damage the local bus network. Contract carriages also serve quite a different market. They are privately run and are organised voluntarily. That is not unfair commercial competition. That kind of commuter coach service will supplement regular services at peak periods and will not damage the network.

    I believe that the Bill makes a proper distinction of the local network. My purpose is not simply to maintain and protect that network in its present form. The public would not be satisfied with that, just as they are not satisfied—as my hon. Friend the Member for Meriden rightly pointed out—with the present level or standard of local bus services. The Bill will change the balance of licensing in favour of the operator wishing to run new or better services. It will be for the established operator to prove that the competition will be detrimental to the public interest.

    Cross-subsidisation may be an important issue here. But the operator will be required to satisfy the traffic commissioners that it is of overriding importance. I understand, obviously, the arguments about cross-subsidisation, but I believe that it is necessary for those who claim that cross-subsidisation is taking place to justify the patterns of that subsidy. That is a healthy discipline for the operators themselves. When it comes to the local services—the services within the 30-mile threshold—as I have said, there is no question but that they will have to go to the traffic commissioners. The commissioners will have to judge whether that is an overwhelming argument.

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    It seems to me, therefore, that the thrust of the Opposition's new clause is to protect the present pattern of cross-subsidisation and local authority support. The thrust of the Bill is to encourage a new look at those patterns to allow competition to be a spur to improving services and efficiency instead of placing an automatic and ever-increasing reliance on subsidy paid for by the ratepayer and the taxpayer.

    When the hon. Member for Kingston upon Hull, East (Mr. Prescott) intervenes and tells me that South York shire is now the model upon which the Opposition's policy is based, I am bound to tell him that for three years I sat on the Opposition Front Bench and heard from the then Secretary of State for Transport in the Labour Government how iniquitous the policy of South Yorkshire was at the time and how it was that the right hon. Member for Stockton (Mr. Rodgers) wanted nothing else but to change that policy. Now we understand, with the change of management on the Benches opposite, that South Yorkshire, rather than being the villain of the piece, has become the hero of the piece.

    We learnt many things during the Committee stage. The great differences in policy that have emerged between the Labour Party in Government and the Labour Party in Opposition have been some of the most dramatic.

    The right hon. Gentleman is being less than fair to my right hon. Friend the Member for Stockton (Mr. Rodgers). Whatever the differences of attitude about bus policies, certainly when my right hon. Friend was Minister he was concerned about the proportion of rates that South Yorkshire might be getting, but he was also concerned about the same argument for Oxford. At that time it was a very difficult argument. Nevertheless, he reached agreement the following year with South Yorkshire, which maintained the very principle that it has today, which has gone from strength to strength in passengers and in the provision of services in that area, to a far greater extent than any other metropolitan authority.

    That strains the matter a bit. I think that anyone with any objectivity who had listened to what the former. Secretary of State said over the previous two or three years about the policies of South Yorkshire could not conceivably come to the conclusion that those were policies that he supported.

    Basically, however, I cannot accept the new clause to reintroduce controls in the way that it sets out. It would introduce new restrictions on contract carriage services, which under the present system are not licensed. The Opposition want to protect the local network. I understand that. I have made it clear—and I say this again to my hon. Friend the Member for Wellingborough, who made a thoughtful and critical speech—that I am in no way out to destroy that network. That is why I have retained licensing for all the services which are part of that network. But I am confident that the distinction that I have drawn between the express and the stage carriage services does just that. I see no reason why the express services should be a challenge to that, nor do I believe that contract carriages, which are serving a different market, should be a challenge to that. In other words, I believe that services such as commuter coach services will supplement regular services at peak periods and not damage that network.

    On a point of information, will the Minister let me know whether the sort of holiday excursions organised in parts of the country such as mine, where people offer services in a number of picturesque areas —say 10, 15, 20 or 40 miles away from the passengers' main residence during a holiday—are derestricted under the express licence regulations? Clearly, it could not be described as "express", but certainly the passengers, at one time on the trip, may be more than 30 miles away wrom where they started. Will that sort of service be derestricted under the Bill?

    The short answer is that if the journey itself is over 30 miles, an express service, it would be outside the restrictions, but there are different derestrictions in the case of excursions and tours. I should need to look at the question in detail if the hon. Gentleman has a particular point, but my straight answer is that I believe that what he is saying would be outside the powers of the traffic commissioners.

    Therefore, it is for operators and county councils to take an objective look at the patterns of cross-subsidisation that occur. I think, however, that it is not right to become obsessed with the subject of cross-subsidisation.

    I am sorry to persist, but it is clearly stated in the regulations outlining the provisions that a person must be set down 30 miles from where he started. The irony of these particular trips is that the passenger is set down precisely where he started from, in exactly the same spot. I am wondering, therefore, whether that is covered by the express service definition.

    As long as any point from which the passenger is taken is 30 miles away, that would take him ouside the ambit of the commissioners.

    With respect, it does say that. Also, with respect, the hon. Gentleman served on the Committee on the Bill and we have been debating it for about 110 hours. I shall not embarrass the hon. Gentleman by pointing out the time he spent on it during the Committee stage.

    Therefore, the greater competition that I hope to see within local services will be a better spur to improving the services and efficiency than automatic and ever-increasing reliance on subsidy. But I beg the House to understand that, when it comes to the question of express services, I hope that there is now, as I believe there was, the start of an agreement, when we were talking in Committee, and that the fact that we are derestricting these important inter-city services—the services between London and Birmingham, and between London and Manchester, intercity services of that kind—is something that is totally in the interests of the public. We look forward to new operators coming forward on these routes and providing low-cost transportation for the public.

    That, I believe, is in the interests of the travelling public. That is what we judge the criteria of the Bill to be.

    As a new Member, it strikes me that the response of Oppositions faced with Government measures falls into two categories. They either denounce them as being likely to have the most far-reaching and disastrous effects or, alternatively, they say that the Minister concerned is leading people on into believing that what he is introducing will have a dramatic effect, when it will have practically no effect at all.

    In an effort to resolve that problem for myself today, I think I can say that the delicensing provisions of the Bill will probably achieve both of those things, because it seems fairly likely that there will be parts of the country which will be very adversely affected by the delicensing measures and parts where there are scarcely any effects at all. I am prepared to concede that on a certain number of what may be described as privileged routes there will be services that will be improved as a result in an increase in the number of operators and, consequently, an increase in the number of services.

    I had not intended to speak until I heard the Minister refer to the boss of the express division of the National Bus Company saying that such competition was a spur, not a threat. Prior to that, I heard the Minister say that we should consider not the interests of various pressure groups, such as the management, unions and so on, but those of the travelling public. I can understand why the man from the express division does not regard the delicensing of the express services as a threat to that part of the company for which he is responsible. It is likely that the National Bus Company will respond to the new situation by concentrating a great deal of effort on the profitable express services.

    I do not know what the NBC will do with the services that are not on express routes and are no longer profitable and no longer capable of being subsidised from the profits of the express services. The manager of the express division may loom larger in the hierarchy of the National Bus Company as a result of the proposals.

    Is not the hon. Gentleman aware that the National Bus Company operates under various headings? It is hardly likely that express services will subsidise the operations of one of the company's sub-divisions. Although we can talk about the overall profitability of that company, the hon. Gentleman's recent remarks tend to mislead the House.

    I had not intended to mislead the House. I rely on the clause put forward by my right hon. and hon. Friends. It refers to the element of cross-subsidisation with transport supplementary grant or to a route upon which there is a cross-subsidy under a passenger transport policy network agreement. Perhaps I did not make clear that some areas may benefit from the Government's proposals. However, others will not. I tried to make a distinction. The clause seeks to protect those which are affected by the transport supplementary grant and by cross-subsidies under the passenger transport policy network agreements. I therefore do not accept the hon. Gentleman's point.

    If the hon. Gentleman refers to Hansard, he will discover that he said that it was the express services of the National Bus Company that would subsidise other bus services. As I said in my speech, it is possible that some express services may affect more services, but the National Bus Company operates through separate companies and those companies are accounted as such. As a result, the hon. Gentleman's forecast will prove incorrect.

    I accept that technical point. Nevertheless, the express services of the constituent parts of the National Bus Company will probably loom larger in the activities of the National Bus Company. The provision of rural services by that company will probably loom much smaller. Those waiting in country lanes for a bus to appear in the distance will probably have to wait much longer as a result of the proposal. Services will become less frequent.

    The same applies to the new contract carriage services. The Minister upbraided my right hon. Friend for wishing to extend coverage to contract carriage services. He would be right to upbraid us if we had wished to extend the limitation to contract services of the type already discussed. However, if one considers the contract carriage services that are to be provided by clubs or by those who club together allegedly to look after themselves, we can see that they will have an impact on those services. It is a matter of dispute whether that impact will be favourable or adverse.

    On Second Reading and in Committee we were concerned about protecting the bus network, particularly in rural areas. The Minister said that he would retain licensing in rural areas as that would help to preserve the network. If that is what he means, logic requires him to maintain a licensing system, or consultation with traffic commissioners, on those parts of the express system that are covered by TSG or provide an element of cross-subsidy for the rural network. The Minister conceded that that network needed protection in the form of licensing. However, he will chuck away part of that licensing. As a result, part of the provision of cross-subsidy from the express services into the rural services will be taken away. That is plain daft. It does not follow the logic of maintaining licensing for rural services.

    5.15 pm

    We therefore return to the fundamental question of whether a free-for-all in certain parts of the country will benefit the bulk of customers. We do not believe that it will. The Minister and his colleagues apparently hold a different view. However, there is little evidence that this burst of free enterprise on profitable routes will favourably affect the provision of services in rural areas. Those networks are already thin on the ground. We repeated one point ad nauseam in Committee. I hope that I shall not nauseate too many hon. Members if I repeat it this evening. The existing network of rural services is, on the whole, maintained by one form of subsidy or another. Such subsidies come from the taxpayer, the ratepayer or other users of the bus routes that pay. Rural networks cannot pay. Anything that lessens these subsidies to rural networks will damage them.

    The categories of express service and contract service that are mentioned in new clause 6 are involved in the cross-subsidy system. They should remain there. That provision should continue, to the benefit of the most deprived areas. We all accept that some routes may have four or five express coaches travelling on them each day. As a result of competition or of an additional operator, such routes may be used by five, six or seven coaches a day. Perhaps that would benefit those travelling on such routes. Such an occurrence may not prevail for long. However, it may pay and benefit the users on that limited number of high-paying express routes. If the clause is not accepted, that change—which may be beneficial in the area concerned—will damage rural networks.

    The hon. Gentleman has already spoken. He cannot speak twice on Report.

    I am greatly concerned, because the Minister has totally misunderstood the new clause. He has opposed it on the ground that it will tend to defend and maintain the existing system and he envisages a superior system emerging as a result of the Bill. We can have many arguments about the effects of the new clause, but it cannot be argued that it will maintain the existing system. It will not. If we had wanted to put down a new clause to maintain the existing system, we should have done so. We have not chosen to do that.

    We recognise that the Minister has a majority in the House and that he can therefore introduce a different type of contract carriage operation that will enable operators to run bus services over short distances within urban and rural areas on a regular basis—for example, every Monday to Friday at nine o'clock in the morning and five o'clock at night. That will be possible under the contract carriage provisions in the Bill.

    The new clause does not take that power away. It does not change the definition of "contract carriage". It provides only that a test—not a prohibition—shall be applied where a new type of service is introduced into an area not currently served under networking agreements or TSG support. Where the service is introduced on a route presently served under a road service licence, a test should be applied by the traffic commissioner who previously decided to grant a road service licence. When granting the licence, he believed that it would enable a service to be operated in the public interest. He decided that without any knowledge of any new contract carriage operations being introduced.

    If somebody proposes to introduce a new service, a new decision must be made by the traffic commissioner about whether it is in the public interest. That should operate only in cases where the traffic commissioner has to take into account whether that licence affects the degree of cross-subsidy in his area. The Minister cannot deny that the commissioner may have specified special conditions on the licence to maintain a certain level of public service within the area. The licence should be issued subject to those conditions.

    When the new contract carriage service is introduced those conditions may not apply, because there may no longer be any need for a degree of cross-subsidy. That is what the Minister and his colleagues want. Someone may be prepared to operate a contract carriage system that will relieve the need for a cross-subsidy.

    We think that such operators will come forward only on the highly profitable routes to cream off the profits. However, we do not know that that will be the case. We are speculating and making intelligent judgments about a service that has not existed for the past half century.

    We are not trying to change the provisions in the Bill. We are saying that where a contract carriage operator wishes to operate on a route where a road service licence has been issued and a cross-subsidy exists, the commissioner should consider the case. It is a matter of establishing protections for the road service licence holder.

    How would my right hon. Friend advise the Secretary of State to divide the services between the new operators, or the express operators, and the present licensed carriers? It is likely that a new operator will pick the most lucrative routes in the network. How can an unfair distribution of routes in the network be avoided?

    I shall try to answer those points later. At this stage I shall deal only with the one affected by contract carriage. If I were seeking to advise the Minister, I should tell him that the new system should operate only in those areas where its introduction would not damage the public interest, namely, where people were already operating subject to conditions of road service licence or with the aid of a cross-subsidy or TSG. In those areas the matter should be considered by the responsible authority. In the case of a cross-subsidy, it should be considered by the traffic commissioner. In the case of a TSG, it would be a matter for the local authority which made the grant.

    I understand the intention behind the new clause. I am not unsympathetic to it. Does the right hon. Gentleman accept that the way in which it is phrased will give rise to an enormous number of applications to the traffic commissioners, because a large number of routes are subsidised? For example, let us consider an express service between London and Manchester. For part of its journey it would run over part of the London Transport ordinary bus system. To refer that application to the traffic commissioner would create an enormous amount of bureaucracy and do nothing to help the freeing of public transport from bureaucratic interference, which many of us feel is necessary.

    It will lead to a great deal of additional work for traffic commissioners only if people seek to run contract carriage operations on routes that are presently subject to road service licences, to either cross-subsidy or TSG, or to a combination of both. It is my fear that some new operators will cut across those elements of the road service licence routes that provide substantial cross-subsidies. They may cover parts of routes at times that are profitable, leaving the remainder to be covered by an operator who is complying with a public interest requirement. The House gave the traffic commissioners the job of judging whether issuing a licence subject to certain conditions was in the public interest.

    On the contract carriage aspect of the new clause, the Minister is not entitled to claim that he is defending the existing position. We are attempting to write into the legislation a check on the first phase of a new type of operation but one that does not preclude its introduction.

    5.30 pm

    I am not sure what the right hon. Gentleman's policy is. His new clause reads as if it refers to giving protection, against the new contract carriages, either to those services supported by transport supplementary grant or to those which are cross-subsidised. Therefore, on the face of it, I thought that his new clause said that the traffic commissioners should be consulted if a new work service or a school bus under contract carriage arrangements competed with a loss-making service which was either receiving revenue support or being cross-subsidised. Now, he seems to be changing his mind and extending the new clause to a great extent. He seems to be claiming that a service should be referred to the traffic commissioners if it is receiving revenue support—that is, if it is loss-making—or if it is profit-making and is cross-subsidising other services. It seems as if the right hon. Gentleman, in his beguiling way, wants to go to the traffic commissioners over every bus service that one can imagine. If that is the case, he is seeking to undermine the whole policy of the Bill.

    It could be that certain operators who wanted to operate contract carriage services would have to go to a commissioner or to a local authority if they wanted to operate on a route already covered by either a loss-maker or a profit-maker. That is true. The limitations are such as to safeguard the wider public interest.

    It might well be that a contract carriage operator could persuade a local authority, and the local authority could quite reasonably agree, that he should cover part of an operation. In fact, the operator could persuade the local authority that considerable public good could result from having another operator on the route at a particular time. It would be for the local authority to judge whether the contract carriage operator was undermining an element of its profit, so that it would have to put back a large part of what he was taking out in order to sustain the route.

    I am not evading the issue. Under the terms of the clause it could well be that a certain operator might have to go to a local authority because he was seeking to operate on a profitable route, and in other circumstances an operator might have to go to the authority because he was seeking to operate on an unprofitable route. However, I stress that in those two cases the local authority's response would not necessarily be the same. It might welcome certain arrangements being made in certain circumstances.

    In Committee it was pointed out that one of the complaints that one received from certain authorities about the running of their services was that they had to maintain an unduly large fleet in order to cover certain peak hours. There might well be a case in the minds of those authorities for having another operator lifting some of the peak load from their shoulders so that the rest of the service load was capable of being covered by a smaller fleet.

    There are many aspects of this matter that must be considered. These things cannot be determined by the House. They must be determined by local authorities, the operators and, in some cases, the commissioners with their detailed and intimate knowledge of the problems of the area concerned.

    The other issue that is covered by the clause is that of express bus services. Here again, there is room for reappraisal. I agree with the Minister that there are some cases in which people may be better served by two or three operators competing for a bus service running from A to B. However, that would be in circumstances which paid no regard to those living in areas between A and B which were currently being served by a single operator who was prepared to stop at various points between A and B. On a 30-mile journey at present, many operators are prepared to stop 10 or 12 times at places where they can pick up or put down passengers.

    The issue at stake is whether that service could be sustained if, at certain times, another operator ran a service which went straight from A to B without stopping but took part of that route's traffic. In an ideal world where no financial considerations applied and there was as much money to support public transport services as operators could wish for, we would love to have an express operator from A to B alongside another operator stopping a dozen times between A and B. That would mean that both needs would be served. But the reality of the financial position of many operators is such that in certain parts of the country there is a genuine fear that such an ideal might not be possible. If there is competition between A and B, where the express operator is subject to no licensing procedure whatsoever, and at the same time a stopping service operator between A and B is subject to the ruling of the commissioners, who have to decide in terms of public interest, the commissioners' role becomes unrealistic. It is unrealistic for a commissioner to judge upon a situation in which there is no possible choice.

    It is possible that someone will come to a commissioner for a variation of the conditions of his road service licence in order to cut down the number of places at which he stops between A and B because he can no longer compete with the express merchant. He may seek a variation of the conditions of his licence so that he has to stop at only two places. That may well be the kind of decision that will come to the traffic commissioner. Under the terms of the Bill, the traffic commissioner cannot have any opportunity of considering the effects on that service and on the public interest. Therefore, it is proper for the new clause to say that where the effect of introducing new express carriage operations is such as to impinge—and only where it is such as to impinge—on network agreements or cross-subsidy arrangements, the commissioner should have a chance to look at the issue again. That is an important proposition.

    I urge one further consideration. We do not have a rigid, inflexible system in this country. Traffic commissioners do not meet week in week out, and month in month out, in order to turn down new applications. All the evidence that I have shows that there is a considerable degree of flexibility in the present situation. Many new road service licences are granted from year to year for all sorts of different services. Also, up and down the country there are a number of county authorities which are only too willing to look at alternative arrangements for passenger transport services in their areas if by any change there is a chance of improving the service or introducing new services. Therefore, the position is not rigid or sterile.

    There is great possibility for improvement or change, given a realistic appraisal of the delicate balance between the amount of public money that is put in and the extent to which those who are operating are prepared to do so in a way that will maximise the service rather than individual profit. It was basically to try to combine those considerations, and bearing in mind the Government's determination to introduce new services, that the clause was tabled.

    Order. It will be in order for the hon. Member for Truro (Mr. Penhaligon) to make a speech, but, as the Minister has replied to the debate, the hon. Gentleman may get an answer.

    That is a disappointment. I thank the right hon. Member for Barrow-in-Furness (Mr. Booth) for this interest in rural areas, but I wish to rebut much of what he said.

    It is not true that rural transport survives on a system of cross-subsidies. Tragically, virtually no bus routes in rural areas make a profit. The question facing the Government, in considering whether there is to be a transport system in those areas over the next five or eight years, is how much money they are prepared to pour in.

    We face a desperately difficult problem on which some difficult decisions will have to be made. I hope that the Government will put in money, otherwise a ludicrous number of people will be more isolated in their home communities than they have been at any time in the past 100 years.

    The hon. Gentleman's opening remarks were correct, and it is right that the House should be reminded of the situation that he outlined, but does he not agree that it is a matter not just of the amount of money but of getting value out of the investment that local authorities make?

    I accept that. Value for money is always a major concern, but I warn the Minister that it will cost quite a lot of money, whether he gets value for it or not, to keep going rural bus services in a county such as Cornwall where there are 100 recognised routes of which only two make a profit. Five or six routes break even—and on the slide rule aproach might make a small profit or loss—while many routes lose a lot of money.

    I took a particular interest in Cornwall during the Committee proceedings. It is clear that only one or two of the NBC routes are profitable and that the non-profitable routes are subsidised from the transport supplementary grant.

    Of course, when the bus company approaches local authorities for assistance from the grant, the authorities usually require that money made on the profitable routes should be ploughed back into non-profitable routes before the deficit on operating costs is made up from the grant.

    I do not deny that. There is some significance in that point, but it does not carry the weight that the hon. Gentleman and his right hon. Friend the Member for Barrow-in-Furness attached to it.

    There is only one profitable bus route in Cornwall, that between Camborne and Redruth, neither of which is in my constituency. Those towns are about four miles apart and a single bus travelling endlessly from one to the other could be quite a profitable operation. I can think of no other bus route of which that could be said.

    The right hon. Member for Barrow-in-Furness argued that the end-to-end merchants—a good description—on the 30-mile routes would take passengers from the stage carriage routes. I doubt that. The Bill refers to 30 miles in a straight line. No one could claim that the roads in Cornwall are anything approaching a straight line, and a 30-mile distance as the crow flies would involve a stage carriage route of about 35 miles.

    I should be interested to know how many people in Cornwall, Devon or other rural areas use stage carriages for journeys of 30 miles in a straight line. I suggest that it is incredibly few. Anyone contemplating such a journey would need to have an enormous amount of time to spare.

    For example, the journey from Penzance to St. Austell is more than 30 miles as the crow flies and the journey time is about three hours. Fortunately, there is still a train service between those towns and anyone making that trip takes the train.

    The amount of business that will be taken away by the end-to-end merchants will be remarkably small, though I must tell the Minister that the number of people who will operate such 30-mile routes in my area will also be remarkably small. I cannot think of a single such route on which a profit is made.

    I am concerned about one form of cross-subsidy in the South-West which may be ended. Many private operators in counties with a large tourist industry survive because of the lucrative trade for 10 or 12 weeks in the middle of the summer when they take thousands of visitors to seaside resorts and places of interest. There is no doubt that, as the Minister said, those who go beyond the 30 miles in a straight line from where they started will operate on an unlicensed basis. A number of operators in Cornwall point out that they survive because of the business of those few weeks, which, by chance, come at the time when there is no school transport business.

    5.45 pm

    For those few weeks they can operate profitably and keep a substantial fleet on the road, and that enables them to keep in business for the rest of the year a fleet of a size that they would not otherwise be able to operate. Under the present licensing system, all the coaches that flood into the South-West bringing tourists from Birmingham, London, Manchester and elsewhere are not allowed to operate journeys over 30 miles in my area unless they have a licence. In effect, the coaches cannot be used during the week and cannot ply for business on a trip from, say, New-quay to Land's End—a trip that tourists always insist on taking, though I cannot understand why.

    The operators in my constituency are worried that they will lose that sort of business to the tourist coaches, because they will ply for hire on the few routes that are more than 30 miles as the crow flies from the starting point.

    Surely, coaches from Manchester which deposit people in Cornwall usually take back the holidaymakers whom they left there the week before. Is not the hon. Gentleman exaggerating the risk?

    I am not making the point that strongly, but what the hon. Gentleman says is not wholly true. I could take him to car parks in Cornwall in the middle of the week where he could see an apparently endless sea of coaches. I am sometimes amazed at how many coaches there are in this country, judged on the evidence of a few weeks in the summer.

    Newquay is the main tourist resort in Cornwall. The native population is no more than 14,000, but in the middle of August there are perhaps 180,000 people in the town. In mid-week periods, there are coaches in Newquay with nothing to do and the local operators, who keep the private end of our transport system in being, are worried that the operators of those coaches will ply for hire in competition with the local operators in trips from Newquay to Land's End. The driver of the tourist coach is paid for the week and the coach has been hired for that time. The marginal operating costs of such a coach would be small and its operator would be able to undercut local services, at least on longer day excursions. I should be disappointed if that happened. The new clause would be a sledgehammer to crack a nut, and I believe that the substitution of 40 miles for the 30 miles in the Bill would remove many of the problems.

    Operators in the South-West have continually put the problem to me. I did not foresee it when the Bill was published. On the whole, the proposals outlined by the Government are reasonable and will do no harm, though only time will tell what good they will do. I mention that isolated example of cross-subsidy in the South-West because it can make a useful contribution to the transport system of the area. I shall not vote for the new clause, because it is too complicated to be true, but I ask the Minister to look at the problem that I have raised and consider whether there is some way of protecting that small industry.

    I had hoped to be allowed to serve on the Committee that considered the Transport Bill, but I was put on the Competition Bill Committee and was therefore unable to take part in the Committee's consideration of the Bill before us.

    My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) adequately argued certain aspects of the matter covered by the new clause and referred in Committee to a problem in his constituency. I wish to draw attention to a problem in my constituency stemming directly from the passage of the Bill through the House. The problem is causing considerable disquiet in West Cumbria among the travelling public, among the trade unions, which recognise the dangers embodied in the Bill, and among the employees of Cumberland Motor Services, who are worried about the passage of the Bill. The problem relates to the trial area aspects of the Bill, although this matter is to be dealt with in a further new clause, and the operation of new licences.

    I cannot understand why great armies of lion. Members are not manning the Conservative Benches. Without the new clause that we wish to insert, the Bill will have a major effect on Conservative constituencies that enjoy cross-subsidised rural transport. I am at a loss to understand why only nine or a dozen Conservative Members are present. Following the defeat of a certain clause in the Education (No. 2) Bill in the House of Lords, one wonders whether those same noble Lords who joined together to defend the interests of the constituents of Conservative Members—namely, those in rural areas—will join together to defeat this aspect of this Bill. The same people will be affected by the absence of the new clause if the House fails to carry it.

    In my constituency of Workington, Cumberland Motor Services operates in the area of Allerdale and Copeland. My constituency covers a number of rural communities and small towns. In my conversations with officers of the transport authorities and members of trade unions involved in transport in West Cumbria, I have established that only 50 per cent. of routes in the area are profitable. I wish to draw to the attention of the House those routes that are profitable. I want the Government to inform the county authority what is to happen to the rural routes that do not produce a profit. The authority has a legitimate right to know from where the money is to come to fund those routes. The public also have a right to know what services will be available to ensure their safe passage to major conurbations for shopping.

    The Whitehaven-Workington, Workington-Maryport, Whitehaven-Carlisle and Keswick-Whitehaven routes, which pass through my constituency, are profitable, but all the public transport provision between the villages and small towns of Aspatria, Brigham, Broughton Moor, Ireby, Bothel, Lamplugh, Deanscales and a number of small communities and villages is losing money. We want to know what action the Government will take to ensure that those routes are pre- served. We do not believe that it is possible that any enterprising young operator will move in and put some transport—

    An Adjournment debate would probably be more suitable for what the hon. Gentleman has in mind. We have had the pleasure of meeting the Cumbria county council. Its nonprofit-making rural routes will be supported, like others, by revenue support and transport supplementary grant. They are not adversely affected by the Bill. The county council, like other shire counties, was reassured by the generous treatment which, even in these difficult times, we were able to give to shire counties in the award of transport supplementary grant for this purpose this year.

    The hon. Gentleman seeks to reassure me. I am told that for 1981 the transport undertaking in West Cumbria is having to bid £600,000, in conjunction with profits, through cross-subsidisation, to subsidise the routes that are not making a profit. Is the hon. Gentleman suggesting that additional money will be made available through the subsidy system to ensure that those rural routes are preserved? I am asking the hon. Gentleman to tell the House and my constituents that all those rural routes will be 100 per cent. protected under the provisions of the Bill.

    We are basically talking about whether the Government are willing to underwrite any added losses that may stem from the loss of profitable routes by the semi-municipal undertaking. It seems that the county Conservatives are on the horns of a dilemma. They have to decide whether to back their political prejudice and carry the Bill through all its stages, ensuring that the ratepayers, or the taxpayers, are asked to pick up the ticket at the end of the day, or to fight the Bill by impressing on noble Lords the need for their support for amendments to the Bill.

    I must appeal to my constituents from this Chamber. I am informed that the districts of Allerdale and Copeland in West Cumbria are under consideration as trial areas, to which I referred. This may be a matter to be dealt with under the next new clause, but I can adequately refer to it now. It is part of the general argument. I am told that meetings are to be convened in the near future. I say to my constituents from the Floor of the House that once again, in the spirit of previous petitioning, they must petition the county authority to ensure that Copeland and Allerdale are not designated as trial areas.

    Order. The hon. Gentleman is now moving on to the next amendment. He must relate his remarks to new clause 6. This may be an important matter, but the House is debating new clause 6.

    If it is the case that the Cumbria authority, in which both my hon. Friend and I have an interest since it is the area in which our constituencies are situated, was reassured by the allocation of transport grant, has the county informed my hon. Friend—it has not informed me—of the extent to which it is alarmed by the provision in the local Government, Planning and Land (No. 2) Bill that gives the Minister power to withdraw the transport supplementary grant?

    Before the hon. Member for Workington (Mr. Campbell-Savours) leaves this matter, may I put a point to him? He is obviously addressing his constituents, and there is a danger that some of his old buck will appear in local newspapers. Will he also inform his constituents that, at the moment, services are supported by revenue support backed by transport supplementary grant? This Government have dealt generously with the shire counties and will, within the limits of financial circumstances, continue to do so. The effect of a trial area will be not to remove that revenue support but to facilitate new operators coming in, if such new operators are available, and to extend the variety of services that might be available in rural and other areas of the county. It is a balanced judgment. I

    Division No. 237]

    AYES

    [6 pm

    Adams, AllenBradley, TomCook, Robin F.
    Allaun, FrankBrown, Hugh D. (Provan)Cowans, Harry
    Archer, Rt Hon PeterBuchan, NormanCryer, Bob
    Ashton, JoeCallaghan, Rt Hon J. (Cardiff SE)Cunlitle, Lawrence
    Benn, Rt Hon Anthony WedgwoodCallaghan, Jim (Middlelon & P)Cunningham, George (Islington S)
    Bennett, Andrew (Stockport N)Campbell-Savours, DaleCunningham, Dr John (Whitehaven)
    Bidwell, SydneyCarmichael, NeilDalyell, Tam
    Booth, Rt Hon AlbertCartwright, JohnDavidson, Arthur
    Boothroyd, Miss BettyCocks, Rt Hon Michael (Bristol S)Davies, Ifor (Gower)
    Bottomley, Rt Hon Arthur (M'brough)Cohen, StanleyDavis, Terry (B'rm'ham, Stechford)

    do not believe that the hon. Gentleman has gone into the matter sufficiently to make a balanced judgment.

    Is the hon. Gentleman seeking to reassure my constituents that those rural services will not be affected by the introduction of trial area designation to West Cumbria?

    Order. Let us stick to new clause 6. It has nothing to do with trial areas.

    I should like to discover from the Minister what will happen to undertakings in counties such as Cumbria if certain routes are removed from the municipal undertakings and given to private enterprise.

    The Minister says that they will not be removed. Is he suggesting that the advent of new competition on the profitable routes will have no effect on the revenue of Cumberland Motor Services? If so, will he give us this undertaking once again? I am trying to establish the effect of the clause on the transport services in my constituency.

    Is the Minister also aware that many transport undertakings are asking what will happen if these new entrepreneurs find that they cannot effectively manage routes or maintain the services required? Will the municipal undertakings then be required to move in and re-establish their services? Has the Minister thought out the implications for municipal undertakings if that be the case? Will he answer that question in the light of the problems that he knows exist in my constituency?

    Question put, That the clause be read a second time:—

    The Committee divided: Ayes 151, Noes 194.

    Dean, Joseph (Leeds West)Jones, Barry (East Flint)Rees, Rt Hon Merlyn (Leeds South)
    Dempsey, JamesJones, Dan (Burnley)Richardson, Jo
    Dewar, DonaldKilroy-Silk, RobertRoberts, Ernest (Hackney North)
    Dixon, DonaldLeadbitter, TedRobertson, George
    Dobson, FrankLeighton, RonaldRodgers, Rt Hon William
    Douglas, DickLewis, Ron (Carlisle)Ross, Ernest (Dundee West)
    Dunwoody, Mrs GwynethLitherland, RobertRowlands, Ted
    Eadie, AlexLofthouse, GeoffreySandelson, Neville
    Eastham, KenMcCartney, HughSever, John
    Edwards, Robert (Wolv SE)McElhone, FrankShore, Rt Hon Peter (Step and Pop)
    Ellis, Tom (Wrexham)McGuire, Michael (Ince)Silkin, Rt Hon John (Deptford)
    Evans, Ioan (Aberdare)McKay, Allen (Penistone)Silkin, Rt Hon S. C. (Dulwich)
    Evans, John (Newton)McKelvey, WilliamSilverman, Julius
    Ewing, HarryMacKenzle, Rt Hon GregorSoley, Clive
    Faulds, AndrewMaclennan, RobertSpearing, Nigel
    Flannery, MartinMcMillan, Tom (Glasgow, Central)Spriggs, Leslie
    Fletcher, Ted (Darlington)McNally, ThomasStewart, Rt Hon Donald (W Isles)
    Foot, Rt Hon MichaelMcWilliam, JohnStoddart, David
    Foultas, GeorgeMarshall, David (Gl'sgow, Shettles'n)Stott, Roger
    Fraser, John (Lambeth, Norwood)Marshall, Dr Edmund (Goole)Strang, Gavin
    Garrett, John (Norwich S)Marshall, Jim (Leicester South)Summerskill, Hon Dr Shirley
    George, BruceMaxton, JohnTaylor, Mrs Ann (Bolton West)
    Golding, JohnMeacher, MichaelTinn, James
    Gourlay, HarryMellish, Rt Hon RobertUrwin, Rt Hon Tom
    Graham, TedMitchell, Austin (Grimsby)Wellbeloved, James
    Grant, George (Morpeth)Mitchell, R. C. (Solon, Itchen)Welsh, Michael
    Hamilton, James (Bothwell)Morris, Rt Hon Charles (Openshaw)White, Frank R. (Bury & Radcliffe)
    Hamilton, W. W. (Central Fife)Moyle, Rt Hon RolandWhitehead, Phillip
    Hardy, PeterNewens, StanleyWhitlock, William
    Harrison, Rt Hon WalterOakes, Rt Hon GordonWilliams, Rt Hon Alan (Swansea W)
    Haynes, FrankOgden, EricWilliams, Sir Thomas (Warrington)
    Heffer, Eric S.O'Neill, MartinWilson, Rt Hon Sir Harold (Huyton)
    Holland, Stuart (L'beth, Vauxhall)Orme, Rt Hon StanleyWilson, William (Coventry SE)
    Home Robertson, JohnOwen, Rt Hon Dr DavidWinnick, David
    Homewood, WilliamPalmer, ArthurWoolmer, Kenneth
    Hooley, FrankPark, GeorgeWrigglesworth, Ian
    Howell, Rt Hon Denis (B'ham, Sm H)Parker, JohnWright, Shella
    Hughes, Robert (Aberdeen North)Powell, Rt Hon J. Enoch (S Down)
    Jay, Rt Hon DouglasPowell, Raymond (Ogmore)TELLERS FOR THE AYES:
    John, BrynmorPrescott, JohnMr, George Morton and
    Johnson, James (Hull West)Race, RegMr. Donald Coleman.
    Johnson, Walter (Derby South)Radice, Giles

    NOES

    Adley, RobertCostain, A. P.Hooson, Tom
    Alexander, RichardDover, DenshoreHordern, Peter
    Ancram, Michaeldu Cann, Rt Hon EdwardHowell, Ralph (North Norfolk)
    Aspinwall, JackDunn, Robert (Dartford)Hunt, John (Ravensbourne)
    Atkins, Robert (Preston North)Dykes, HughHurd, Hon Douglas
    Atkinson, David (B'mouth, East)Eggar, TimothyJohnston, Russell (Inverness)
    Beaumont-Dark, AnthonyFaith, Mrs SheilaJopling, Rt Hon Michael
    Bendall, VivianFaulds, AndrewKershaw, Anthony
    Benyon Thomas (Abingdon)Fletcher, Alexander (Edinburgh N)King, Rt Hon Tom
    Berry, Hon AnthonyFletcher-Cooke, CharlesKitson, Sir Timothy
    Best, KeithFookes, Miss JanetKnight, Mrs Jill
    Bevan, David GilroyFowler, Rt Hon NormanKnox, David
    Biggs-Davison, JohnFox, MarcusLang, Ian
    Blackburn, JohnFreud, ClementLatham, Michael
    Blaker, PeterFry, PeterLawson, Nigel
    Boscawen, Hon RobertGardiner, George (Reigate)Le Marchant, Spencer
    Braine, Sir BernardGarel-Jones, TristanLennox-Boyd, Hon Mark
    Bright, GrahamGorst, JohnLewis, Kenneth (Rutland)
    Brinton, TimGow, IanLloyd, Ian (Havant & Waterloo)
    Brittan, LeonGrant, Anthony (Harrow C)Lloyd, Peter (Fareham)
    Brocklebank-Fowler, ChristopherGray, HamishLoveridge, John
    Brooke, Hon PeterGrieve, PercyLuce, Richard
    Brown, Michael (Brigg & Sc'thorpe)Griffiths, Eldon (Bury St Edmunds)Lyell, Nicholas
    Bruce-Gardyne, JohnGriffiths, Peter (Portsmouth N)Macfarlane, Neil
    Bryan, Sir PaulGrimond, Rt Hon J.MacGregor, John
    Buchanan-Smith, Hon AlickGrist, IanMacKay, John (Argyll)
    Buck, AntonyGrylls, MichaelMcNair-Wilson, Michael (Newbury)
    Burden, F. A.Hamilton, Hon Archie (Eps'm&Ew'll)McQuarrie, Albert
    Butcher, JohnHannam, JohnMarlow, Tony
    Cadbury, JocelynHaselhurst, AlanMarshall, Michael (Arundel)
    Carlisle, John (Luton West)Havers, Rt Hon Sir MichaelMather, Carol
    Carlisle, Kenneth (Lincoln)Hawkins, PaulMaude, Rt Hon Angus
    Chalker, Mrs LyndaHawksley, WarrenMawby, Ray
    Chapman, SydneyHayhoe, BarneyMawhinney, Dr Brian
    Clark, Hon Alan (Plymouth, Sutton)Heddle, JohnMaxwell-Hyslop, Robin
    Clarke, Kenneth (Rushcliffe)Henderson, BarryMellor, David
    Clegg, Sir WalterHicks, RobertMeyer, Sir Anthony
    Colvin, MichaelHiggins, Rt Hon Terence L.Miller, Hal (Bromsgrove & Redditch)
    Cope, JohnHill, JamesMills, Iain (Meriden)
    Corrie, JohnHogg, Hon Douglas (Grantham)Mills, Peter (West Devon)

    Miscampbell, NormanRhodes, James, RobertTemple-Morris, Peter
    Moate, RogerRhys Williams, Sir BrandonThomas, Rt Hon Peter (Hendon S)
    Montgomery, FergusRidsdale, JullianThompson, Donald
    Morrison, Hon Charles (Devizes)Rifkind, MalcolmThorne, Neil (Ilford South)
    Morrison, Hon Peter (City of Chester)St. John-Stevas, Rt Hon NormanTownend, John (Bridlington)
    Murphy, ChristopherScott, NicholasTownsend, Cyril D. (Bexleyheath)
    Myles, DavidShaw, Michael (Scarborough)Trippier, David
    Neale, GerrardShelton, William (Streatham)van Straubenzee, W. R.
    Needham, RichardShepherd, Colin (Hereford)Vaughan, Dr Gerard
    Nelson, AnthonyShepherd, Richard (Aldridge-Br'hills)Viggers, Peter
    Neubert, MichaelSilvester, FredWaddington, David
    Page, John (Harrow, West)Smith, Cyril (Rochdale)Wakeham, John
    Page, Rt Hon Sir R. GrahamSpeed, KeithWalker-Smith, Rt Hon Sir Derek
    Parris, MatthewSpeller, TonyWaller, Garry
    Patten, John (Oxford)Spicer, Michael (S Worcestershire)Watson, John
    Penhaligon, DavidSproat, IainWells, Bowen (Hert'rd & Stev'nage)
    Percival, Sir IanSquire, RobinWheeler, John
    Peyton, Rt Hon JohnStainton, KeithWickenden, Keith
    Pollock, AlexanderStanbrook, IvorWilkinson, John
    Porter, GeorgeStanley, JohnWilliams, Delwyn (Montgomery)
    Prentice, Rt Hon RegSteel, Rt Hon DavidWolfson, Mark
    Proctor, K. HarveySteen, Anthony
    Raison, TimothyStevens, MartinTELLERS FOR THE NOES:
    Rathbone, TimStradling Thomas, J.Lord James Douglas-Hamilton and
    Rees-Davies, W. R.Taylor, Teddy (Southend East)Mr. Tony Newton.
    Renton, TimTebbit, Norman

    Question accordingly negatived.

    New Clause 7

    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.'.—[ Mr. Prescott.]

    Brought up, and read the First time.

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

    We come to the debate on trial areas. The clause is limited to the specific aspect of the duties imposed by other legislation on bus service operators in trial areas. The Transport Act 1968, the Local Government Act 1973 and the Transport Act 1978 impose upon transport operators certain duties which the Opposition believe are in conflict with the concept of the bus services that will be operated in designated trial areas. The purpose of the clause is to consider those duties and suggest to the Government that the acceptance of these duties in a trial area will impose considerable difficulties upon the remaining bus service operators in that area. It is a matter of judgment what kind of bus service will remain in trial areas, and there is a distinctive and qualitative difference of opinion between Conservative and Labour Members about the consequential effect on bus services of the designation of trial areas.

    We must wait to see what happens, but our judgment is that the imposition of these duties in trial areas will be detrimental. Bus operators are being asked to compete rather than to co-operate, and we seek reconsideration of the duties to be imposed. Bearing in mind all the obligations in this legislation, which changes fundamentally the nature of obligations and systems in bus service operation, it is our view that the whole of Britain will become a trial area. However, I shall keep primarily to the definition of "designated trial areas" as contained in the Bill, the general conditions that will apply and the conditions of competition that form part of the experiment.

    6.15 pm

    The concept of experiment is at the heart of the trial areas scheme. Almost by definition, a trial area is one in which one seeks to impose different criteria in an attempt to assess the consequences. We should make it clear from the start that the attitude of the Opposition—as of previous Labour Governments —is that we recognise that experiments are necessary in areas where it has been difficult to maintain regular passenger bus services. At the heart of the 1978 Act lay the case for introducing experiments. In 14 or 16 areas they became known as the Routex experiments. Experiments were tried out that were not allowed under the existing licensing arrangements. Those experiments included the sharing of cars and minibuses, under which there were certain exemptions on driver conditions and bus operation conditions.

    I want to make it clear that we are not against experimenting with new methods. However, the difference in our approach from that of the Government is that we wish to maintain what exists while carrying out experiments. The system that we envisaged under the 1978 legislation—despite its limitations and the criticism that it attracted—provided a public transport network. It provided services in rural areas while allowing experiments to take place. We felt that the safeguard of commissioner licensing, the maintenance of public service licensing, cross-subsidisation, the transport supplementary grant and the development of transport plans—and now the duties related to legislation as outlined in the new clause—all helped to maintain a service on which people could rely. Experiments in those areas were possible at the same time.

    I visited a number of those areas, particularly in North Yorkshire, where experiments were attempted, and it is not clear what conclusions to draw from those experiments. I have seen a report produced by the Transport and Road Research Laboratory. It offers no conclusion. If anything, it says that we had better maintain the public service system because there is insufficient information on which to recommend an extension of experimental systems at present. The Opposition have been in favour of experiments from the outset, but only alongside the provision of a public service as well.

    The definition of a trial area is spelt out in the Bill. Such an area is one where there is no requirement for licensing and where the full force of competition will apply. I presume that it is the kind of free enterprise area that is spoken of in the Government's economic policies. However, the full force of competition will not apply. The competition will be organised because, to an extent, there is a desire to see some elements of coordination. Timetables and a notice clause will be provided. That means that one cannot immediately begin or end a service under the terms of the Bill. I assume, however, that if a firm goes bankrupt overnight no one will insist that that firm carries on because it has an obligation.

    I understand the Bill to provide that where a service is to cease it will not be allowed to do so immediately but will have to continue for a specified period. I am not sure how long that period will be. The designation order refers to three weeks, and I believe that the regulation will spell that out in detail. Will the Minister tell us what sort of time span he has in mind in respect, for example, of existing bus services in a designated area? The burden of our approach is that operators will seek to pull out because the services will prove uneconomic, given that they will cease to receive transport supplementary grant and the benefit of cross-subsidisation.

    This is not an academic point. I believe that 80 or 90 per cent. of the rural services operated by the National Bus Company are likely to come into this category. Indeed, the restriction of TSG by the county authority has led in the areas affected to a direct reduction of services. The economic pressures of operating costs may well therefore lead to bus companies taking the inevitable commercial decision that they cannot maintain services with restricted support.

    If the service were to be forced to operate for a month or two after it wished to cease, that would impose a further penalty on the bus company, since it would have to operate for that period without compensation. It is interesting to see how the Bill will apply when a designated area is discontinued. If the Government felt after two years that the system was collapsing and that services were not being maintained, the Minister could state that the designation order would be revoked or altered. If it were revoked, operators who were still maintaining services in the designated area would presumably be compensated by the automatic award of a road service licence on the ground that if they had invested in bus services on the basis of trial area schemes they should not be penalised by being put out of business just because they did not have road service licences before the schemes were introduced. The aim should surely be not to disadvantage operators.

    That is not the attitude adopted towards the nationalised sector, which will be required to maintain services in these areas without compensation in that way. But that is probably not the only way in which the Bill treats the private and public sectors differently. The trial areas seem to involve the development of organised competition, with order being introduced by way of timetables and the giving of notice.

    It would be easier for us to address specific arguments on this issue if we knew which areas were likely to apply for trial area status. We have to rely on the general information given by the Minister, who said only that there had been 12 applicants. We do not know whether those applicants are in respect of whole areas or parts of them. We do not know whether Tory councils want to designate Labour districts. All that is possible under the Bill. Our job of assessment would be easier if we knew which type of county authority was applying and the transport demands upon it. The publication the Surveyor looked at the 12 areas likely to apply to become trial areas and found that they were the very authorities that spent less per head of the population on transport than the county authority average. They were the authorities that gave a low priority to a public transport system. That factor causes us concern and alarm.

    In Committee the Minister made it clear that his policy did not necessarily mean that if eight or nine authorities survived the various checks and balances they would all necessarily be granted this new status. His attitude was that he would not grant trial area status just because they wanted it. Instead, only two or three of the applicant areas would succeed. Transport operators and transport planning officers in county authorities have often explained to me that the distinctive factor in transport is that no two areas are alike. Therefore, if trial areas were allowed on a broader basis, the scheme could be more effectively monitored. With more areas, the quality of the data used to make an assessment would be higher. However, I do not press that argument too hard, because if, as I believe, the trial areas scheme is a disaster, it would be better if the disaster were restricted to only two or three areas.

    Has the Minister decided whether two or three areas will be designated, and will he name the areas that have applied? It is important for us to know that, so that we may see whether our individual county authorities are among them. I have asked my authority on Humberside whether it has applied, but it has quickly run away from the whole idea. Some authorities were attracted to the scheme because they thought that they would become licensing authorities in the way that the commissioners are. They soon learnt, however, that that was not to be. Their only role was to be in designating part or all of their areas as trial areas—that is, areas in which a road service licence was unnecessary.

    The scheme will inevitably lead to controversy, especially since only the county authority will be eligible to apply. The authority may consult a number of bodies, and is requested to do so. I understand that within three weeks of notice having been given in the press all evidence received is to be attached to the designation order so that the Minister can determine how much opposition there is to the scheme.

    The district authorities are incensed by the whole business. The Minister said in Committee that he would not be put off by the district authorities which have a vested interest and which might not necessarily know what was good for them.

    No, the Minister did not say that, but his words were to that effect. He said, however, that the experiment would require a courageous approach and that he would bear that in mind in deciding on the applications. Forty of the 50 or so county authorities are themselves bus undertakings and they have a great deal of expertise in the business. They are well aware of where their own best interests lie. Tory and Labour districts alike agree that they do not want trial area status imposed upon them against their wishes by the county authority, with the Minister's endorsement. To that extent it is a controversial argument.

    It will help the House if the Minister will indicate which county authorities he is likely to designate. Who are the favourite runners? Which counties are likely to be chosen to lead the way into this new era of free enterprise? We need that information so that we can make a proper assessment of the problem.

    The Minister is aware that some county authorities have no transport operating abilities. Some Conservative-controlled authorities—for example, in the North—will have responsibility over a number of Labour-controlled district authorities. Their attitudes to subsidies and support are clearly different and will lead to controversy. The local authority in my area is a classic example. The Government gave a TSG to the county authority, but my district authority has not received a penny of it. To be correct, it received £40,000 that was left over out of £1 million. The county authority was embarrassed by that sum and gave it to the corporation's largest district operator. An application was made by the district, but the county authority disagreed with its bus policy and, therefore, did not allow it the TSG. There is a recipe for considerable controversy on strong political lines between county and districts, of whatever political colour, and certainly between districts of different political colours within a county authority.

    6.30 pm

    We fear that that will have a disastrous effect on the trial areas. It is a matter of judgment whether that will happen, but it is common criticism that this attack will affect the cross-subsidisation argument. Cross-subsidisation is an essential feature of the network concept. There was much discussion in Committee and on new clause 6 about the concept of cross-subsidisation. It is an important economic means by which responsibility is matched to the duties imposed on local authorities. New clause 7 refers to legislation that imposes duties on local authorities.

    Cros-subsidisation is a means by which a network system is maintained. It does not necessarily mean that the difference between costs and revenue is met out of the TSG. As a means of maintaining the network system, county authorities ask transport operators to provide a service from A to B, which they know is not remunerative, but they then help them by granting a bus service from C to D. That is a means by which county authorities—Tory or Labour—have attempted to main- tain a network service. Cross-subsidisation must be regarded not only as money from the Government but as money that is derived from profitable routes, with the counties making up the difference by means of the TSG.

    The idea of a network concept and cooperation is essential to this clause. It refers to duties imposed by previous Acts of Parliament. The Transport Act 1968 states that where any area has been designated under section 9(1) of the Act it shall be the duty of the bus companies to cooperate with one another in the reorganisation of bus services within, from and to that area, and for that purpose to enter into agreements as to the services to be provided by the company or group or the subsidiaries in or in connection with that area, and as to the terms on which those services are to be provided. Clearly, certain onerous duties are laid on the National Bus Company.

    The Local Government Act 1972 makes clear that it is the duty of the county council
    "To promote the provision of a co-ordinated and efficient system of public transport to meet the needs of the county and, for that purpose, to take such steps to promote the co-ordination, amalgamation and re-organisation of road passenger traffic transport undertakings in the county as appear to the county council to be desirable."
    Those words about responsibilities, duties and co-ordination are included in all the Acts referred to in the new clause.

    Under the Transport Act 1978 the metropolitan county councils were given further duties:
    "To develop policies that would promote the provision of a co-ordinated and efficient system of public passenger transport to meet the county's needs, and … to take such steps as the council think appropriate for promoting the co-ordination, amalgamation and re-organisation of road passenger transport undertakings."
    It further provided that all public transport service operators in the county and district were required
    "To co-operate with one another in the exercise and performance of their respective functions for the purpose of co-ordinating public passenger transport services."
    Those duties are specific, and it is the basic claim of transport operators that if they are expected to co-operate in the way suggested in the Bill and to provide information in the way requested in the Bill, they will be put at a disadvantage.

    We feel that the new Clause is realistic and that the duties embodied in previous legislation shoud be removed. Under that legislation, an operator is required to give information to the local authorities which could be used directly or indirectly against and to the detriment of the first operator. Can we really expect competition to be complementary to cooperation? Are they not antitheses of each other? Is competition the requirement to co-operate, or to compete against? I think that it is to compete against. If those factors are complementary to each other, it is because it is in the commercial interests of the operator who makes the decision and not because of any basic principle of cooperation that is imposed as a duty on operators.

    The Government seem to take the view that co-operation is against the public interest and that competition is the means by which the best co-operation is achieved. Therefore, we feel that the legislation referred to in the new clause should be repealed, since considerable difficulties will be imposed on the operators.

    In our view, the trial areas are the antithesis of the present policy, in which co-operation is a requirement and a duty, and the traffic commissioners have considerable powers to ensure that there is co-operation and integration. Competition will very much undermine that.

    We must consider carefully whether the imposition of a trial area will be against the interests of the people involved. One has to bear in mind here the opposition that one hears. Certainly the operators seem to be against it to a man. I recall what the Minister said in Committee:
    "When it comes down to it, the crucial people in the transport debate are not the operators but the travelling public."
    That is a fair point. It is said that the public are the best placed to judge in this case. But they cannot make their judgment until something has happened. The operator, at least, has a good idea of what is likely to happen and what the consequences may be. Perhaps a dispute between the two sides of the House will not be a matter of common knowledge to the public. In the main, the public tend to react when faced with the con- sequences of legislation rather than before.

    In these circumstances, one hopes that the electorate will look for protection to their elected representatives, in which case, presumably, in a district they will look to their district councillors. But, as we know, the views of the district authorities are likely to be overridden. I think that the Minister has now agreed, through certain amendments, that the views of districts may be taken into account in a context rather more important than just consultation. But when the thing has collapsed, when an order is to be revoked or varied, the district council may be dragged in and all it will be able to say will be "We told you what would happen." Perhaps that is some consolation, but it will not amount to much, I believe for the district authorities.

    The 50 municipal authorities to which I have referred are one important source of democratic opinion and, speaking through their association, they are to a man against the designation of trial areas, as I understand it. Perhaps we see here an overriding of the democratic expression of opinion. We have seen much the same in regard to school transport under the Education (No. 2) Bill. I cannot say that I am very happy to see another place determine what the democratic decision of this place should be, but we have to recognise that there was an overriding of the Government by their own supporters on the question of transport provision for education.

    The Government are trying to override the power of local authorities in education, and now we see the same being done in transport. In all these respects Conservative authorities are expressing considerable alarm, and they are at one with their Labour counterparts in the district authorities against the imposition of trial areas.

    There may well be an overriding of people's choice. I am sure that the Minister will say that people in the districts have representatives on the county authorities and we have now said that the authorities, and we have now said that the county authority should have respon-systems. That is a fair argument but for the fact that the counties, especially the shire counties, where the authorities are Tory-controlled, will overwhelmingly outvote any representations from district representatives, so there is no guarantee in that sense that people who have come to expect a level of service in district areas can be certain that that service will continue.

    We have heard Ministers attack the districts on occasion as being inefficient, but they have never specified any authority as being particularly inefficient and over-protected. The Parliamentary Secretary was directly challenged to name one and refused to do so, and one can readily understand the political reasons which move him to keep away from that. But one cannot then say that the district authorities do not provide a good and comprehensive system overrall, as they are required by the legislation to do. That is what they have been asked to do by the House under both Labour and Conservative Governments.

    The question of taking account of whole areas to be designated as trial areas is causing considerable concern, especially in the light of the political bias which is sensed by district areas such as my own. But the feeling is the same in Conservative areas, too.

    The Minister has said that he believes that the power of decision should be as near to the grass roots as possible. We have quoted what he said on the subject of trial areas during debates on previous legislation when he was in Opposition. He made clear his concern that decisions should be taken as near to the grass roots as possible. I remind him of what he said in Committee on this Bill:
    "But what I must emphasise again is that a trial area will not be imposed on the local population."—[Official Report, Standing Committee H, 5 February 1980; c. 966.]
    I presume that by his reference to the local population the Minister meant, for example, that if a county authority designated a district area as a trial area to see what it would be like, the county authority would be imposing that will on the district authority, but all that the Minister could do in such a case would be to say "I do not think that you are near enough to the grass-roots decisions, and I therefore ask you to reconsider it." Or, I suppose, he could refuse to confirm the designation order. But that gives very little protection to the district authorities, so to that extent we are at one with them and have sympathy with much of the argument advanced by the district authorities.

    6.45 pm

    Although I have put the emphasis of my remarks on the district bus transport areas, they are not really the ones likely to feel the most disastrous effects of these experiments. If these experiments are introduced in rural areas, the rural services that are maintained by an element of cross-subsidisation will begin to be reduced even more than they are at present.

    In this connection, I have in mind the studies done by the Transport and Road Research Laboratory. They have made clear that while the majority of people in rural areas have cars—a greater proportion than in the urban areas, to the extent of about 80 per cent. to 65 per cent.—the remainder of the population in the rural areas is heavily dependent on public transport for journeys for medical and hospital purposes and for shopping. That comes very clearly out of the studies which have been done.

    Does my hon. Friend recognise that even the figure that he has given can be misleading, because they refer to car ownership by family? If the breadwinner in a rural area is out with the car, quite frequently neither his children nor his wife will have access to any form of transport at all.

    Yes, I agree. I was taking what I regarded as a more limited approach to the matter, and I accept that one could put the argument much more strongly in that way. Nevertheless, for the minority of low-paid people who cannot afford a car and who are heavily dependent on some form of public transport for education and other services a serious problem will remain.

    The need has now been recognised for school purposes, but the argument is the same for medical and hospital services. By the reorganisation of the Health Service, we have assumed that there will be encouragement of the provision of public transport services so that people may have medical attention. The same applies to schooling, but it is equally important, if not more important, for National Health Service facilities. But under the Government's scheme it will be the rural areas that will have to carry the brunt of the experiments.

    The Minister should be a little more honest with the House tonight. Perhaps I should withdraw the word "honest" and say that he should give the House more information about which authorities he has in mind. Which are the key leading authorities? Let him tell us so that we may make a better assessment of the effect of his legislation.

    Duties are imposed. The advice of the operators is overruled. The elected representatives, certainly at district level, feel that they will be ignored. The logic of the argument for our new clause is that competition and co-operation are not synonymous but are the antithesis of each other. Our new clause recognises that and would provide that existing public transport operators which have duties imposed on them by the House should not be disadvantaged. The trial area policy is in contradiction to the duties imposed on these operators, and we therefore urge that the new clause be adopted.

    Perhaps I may interpose briefly at this stage and allow my hon. Friend the Parliamentary Secretary to reply to the debate in due course. I wish to give some guidance to the House on what we are about in this matter, and perhaps that may be of help and convenience to hon. Members at this stage.

    The hon. Member for Kingston upon Hull, East (Mr. Prescott) is a rather difficult man to reply to, because at one stage he accuses me of being revolutionary in my approach and at the next he accuses me of being far too cautious.

    Clearly, the debate on trial areas, both inside the House and outside, has been a vigorous one, but it has not shed very much light on the present situation. This is not a plot to destroy the National Bus Company. The purpose of the trial areas is quite simple. We believe that the 1930 licensing system is outdated. We have made it clear that generally our preference is for decontrol and freedom. For example, we are convinced that the licensing of leisure services or excursion tours is utterly unnecessary. We also believe that the licensing of long-distance coach services, which we debated on the last series of amendments, is unnecessary. We also take the view that, if a local authority or a county council believed that such a provision would help its area, it would be wise to allow that authority to be designated as a trial area in which no licensing should take place.

    I emphasise what I have emphasised at every stage—that the Government are not forcing a solution upon the county council in question. We are offering a further option in those cases where no licensing applies. If the local authority believes that it is in its interests, it is an option that we are prepared to offer to it.

    The right hon. Gentleman is saying something in which he does not really believe. He is saying that if the local authority so desires, it should be given an option. But no option is given to a district council which runs its own public service operations. It will not even be consulted. The practice under local government reorganisation, as a result of the 1972 Act, shows that that is what happens now. If a district authority has invested a large amount of ratepayers' money in its successful bus operations in order to support certain profitable routes to the advantage of the community as a whole, will it ever be given the option to protect its investment?

    I am about to come on to that point. That is exactly why I intervene at this stage. If the hon. Gentleman will forgive me, I shall come on to the position of district councils a little later. Nevertheless, the point that I am making is right, and it is one which I stand by.

    The hon. Gentleman may believe that county councils should not be the transport authority. If that is his belief, it is not a policy that is accepted by the Conservative Government, and it was not accepted when the Labour Party was in Government. All these issues were gone into in some detail, as my hon. Friend the Member for Wellingborough (Mr. Fry) will remember, during our debates on the Transport Act 1978, and there was very little light from the then Government at that stage.

    Obviously, the greatest difficulty about the licensing relates to local services, which we are anxious to encourage and to see flourish. I fully understand the cross-subsidisation and network arguments for protection. Many people genuinely believe that licensing is essential in the public interest, and the Bill accepts that, with some loosening of the burden of proof which, I think, has been generally welcomed. However, I do not believe that we must uncritically acquiesce in something which is a restriction on the undoubted freedom of competition and choice simply because everyone has grown up with it and the industry is used to it.

    That is the purpose of what I said in Committee. Again, I underline it. What we are talking about in regard to transport policy is not something that is necessarily in the interests of a particular lobby. The crucial test, as with the last series of amendments, is what is in the interests of the consumer or traveller.

    I believe that we should take up the challenge. When county councils want it, that being their judgment, and if they see advantages that we also see, they should be allowed to take part in one of the trial areas.

    We are currently in discussion with a number of county councils about the trial areas. As I said in Committee, I would expect there to be probably only two or three trial areas within the country. We are not talking about the whole of Britain becoming a trial area. That is the scale about which I am thinking.

    The initiative must come from the county councils themselves. There will be proper monitoring by the Transport and Road Research Laboratory. The trial areas will have to last long enough to enable the results to be significant. Therefore, we hope that they will consist of substantial areas—not necessarily whole counties, but perhaps towns and even suburban and urban services. Those discussions are continuing at present, and it will be as a result of those discussions that we shall come forward later and make our announcement about what areas have been designated as trial areas. However, while discussions are continuing, I do not think that it is reasonable to talk about those counties that are in discussion with us.

    There are two points that I should like to make. First, is the Minister satisfied that the necessary reporting system will exist in the trial areas for the monitoring to be carried out properly? Secondly, in advance of the introduction of any trial areas, does not he agree that it would be rather unwise to assess the whole of the country on the basis of a few trial areas? In the nature of things, trial areas are likely to be introduced only in parts of the country where they are most likely to succeed. It does not necessarily follow that even if they work in one area they can be more widely applied.

    I do not agree with the hon. Gentleman's second point. I do not think that it is right to talk about these areas as experimental, in the sense in which the hon. Gentleman referred to them. It may well be that in certain areas it will work to the benefit of the public, and it may be that that is an example that other counties will want to follow. That is the way in which I look at it. The information which the TRRL will collect will, I believe, be of use. I foresee no difficulties in the reporting system. I believe that it is a reasonable step forward.

    I agree with the hon. Gentleman that this is a cautious step forward. We are not simply saying that the licensing system should be brought to an end. We are saying that if county councils feel that a no-licensing policy will be of benefit they should be allowed to carry it out. I regard that as a significant step forward in the provision of transport, and I do not go along with the fears that are being expressed.

    I do not believe that the new clause will make any practical difference to the operation of trial areas. I appreciate that there is a difference between the philosophy of the Transport Acts of 1968 and 1978 and the philosophy of the Conservative Party as enshrined in the Bill. However, I believe that the provisions of the new clause are unnecessary. For example, there is no proposal to take away the duty of county councils to coordinate public transport in their areas. They will still be able to exercise that duty through discussion with operators and through their revenue support powers. Therefore, it would be wrong to suggest that operators should not co-operate with local authorities in trial areas.

    7 pm

    At this stage I should like to advise the House on the way in which I propose later to proceed on the issue of revocation of trial areas, on which there was a great deal of debate in Committee. I agree that the original Bill was inflexible and that some county councils might have been discouraged from beginning an experiment by fear of the cost of reinstatement after possibly three years of unsuccessful trials. I also agree, as was urged on me in Committee by my hon. Friend the Member for Meriden (Mr. Mills), that district councils have an interest in trial area experiments and that their role should be recognised. Therefore, at a later stage we propose to move a group of amendments which will give flexibility in the minimum period of a trial area. Instead of being three years for all, it will be whatever period between two and five years is specified in the original designation order. That will be a matter for discussion between the Government and the county council in question.

    The balance may be struck differently in different cases between the need to assure would-be operators that the trial will continue for a reasonable period and the desire of some counties not to be locked into an experiment for too long.

    The later amendments will also involve local authorities more in the revocation procedure than was envisaged in the original Bill. That comes back to the point that was raised in Committee. Revocation, like the original designation, will be left to the initiative of county councils. The county will have to consult the district councils and notify widely before applying to the Minister for revocation. The difference in nature between designation and revocation is such that consultation will not have the same delaying effect as in the case of a designation order. Therefore, if the initiative to start experiments comes from local authorities, so should the initiative to bring them to an end. That is the second change that we shall be making.

    There is one further change, which is designed to encourage new operators to undertake the investment in vehicles which will be necessary for new stage carriage services. New operators might be put off by a fear that there could be revocation before they had recouped their investment and that, after revocation, the licensing procedure would be exploited or used by competitors to deprive them of their routes. Therefore, there will be an auto- matic right to a road service licence for anyone who provided an established service while the area was a trial area. What is meant by "established" may vary according to cases, but a service will have had to be run for at least three months.

    We hope in this way, first, to provide more flexibility by having a period between two and five years; secondly, to involve the local authorities and district councils more than was originally planned; and, thirdly, to give an assurance—this is of the utmost importance—to new operators who want to come in and who clearly want to invest in new buses—and we want them to invest in new buses, because it is in the public interest that they should—that the fact that a trial area is revoked will not leave them in the lurch. They will have an automatic right to road service licences if the situation reverts to road service licensing and traffic commissioner control.

    Will that be a priority right over and above the existing service —for example, if the National Bus Company pulled out because it could not afford to run it?

    The operator would have an automatic right to continue the service that he was operating in the unlikely event of the trial area being revoked. We do not expect this to take place, but we are anxious to give as many assurances as we can in this area. It is important to give assurances not only to district councils but to the new operators whom we hope will come forward. Therefore, what we are doing is right. We are giving an assurance and encouragement to them. I hope that the message that will go out from the House after the Bill becomes law will be that there is an opportunity here for new operators to come forward.

    I thought it right to intervene at this stage to give the House this indication of future policy. My hon. Friend the Parliamentary Secretary will sum up the debate.

    I listened with considerable care to what the Minister said, and I have fleetingly cast my eye down the Official Report of the Committee proceedings dealing with trial areas and found that, far from the option principle propounded by the Minister suggesting a process in which consultation could help to put his clause into practical operation, the right hon. Gentleman removed himself from that stance. My right hon. and hon. Friends placed an amendment before the Minister in Committee. That amendment sought to give district councils the right to raise objections. If the Minister has confidence in what he suggested, I cannot understand why he objects to the elected representatives of a district council, whether in a metropolitan or non-metropolitan county, seeking to put forward matters about which they know better than he does.

    It follows that if we are to have competition and co-operation, the principle must be carried forward. Therefore, the Minister should say something far more positive to the House of Commons than he said in Committee.

    The district council in Hartlepool is an outstandingly good transport undertaking, with a policy of renewal of its buses and an investment programme which has served the people well. If, by any chance, the Conservative-controlled Cleveland non-metropolitan county, in formal or informal discussions with the Conservative Minister of Transport, sought a designation order, my district council would have no say in the matter. No county councillor or officer at county level in Cleveland has the knowledge and experience of the transport management committee and councillors of my district council.

    While my lion. Friend is pursuing the argument of the Hartlepool district council, will he cast his mind to a possible situation that could arise? Will he assume the Hartlepool district council not being able to express a view but running a transport undertaking, the Cleveland county council approaching the Minister for a designation order and people presumably waiting in the wings to move in during the trial period? During the trial period, the Hartlepool district council will possibly say "These people are running the transport services, so we shall not run ours". After the trial period, those who had been waiting in the wings may say "It is not economical". Therefore, it could be that, those people having said that it is not economical and the district council having no say and having disbanded its good services, we shall have no services at all. What would the Minister do in such a situation?

    Experience shows that that is the consequence. What about circumstances in which someone actually contracts out? Transportation coverage has been based upon a policy of supporting non-profitable routes with revenue from profitable routes. Any new operator, albeit without a licence, unless he is a damned fool, will not take up the unprofitable routes. He will take the profitable routes of the already established operator. But the Minister is not prepared to see sense. Unless he wishes to avoid the charge of a dogmatic determination to set his mind against the experiences of others, he is running in the wrong direction.

    We want to persuade the Minister to try to understand that there will be grave consequences in urban areas. The new clause also asks for protection, through consultation, of boroughs and shires, where, I accept, there is great concern for the rural problem. The Bill will not help. Who will invest as an alternative operator, even without a licence, in the rural areas? It will not happen, so that provision might as well be taken out of the Bill.

    I ask the Minister how many applications he has had for trial areas. He will not answer. I suggest about three. Have any Labour-controlled councils applied? The answer is "No". Possibly, if we examined and scrutinised the three that have applied, we might find a couple of opportunists who would support what is in the Bill. We might discover that they have said "We would like to be a trial area, Minister". But we do not know the reasons.

    Before the hon. Member for Hartlepool (Mr. Leadbitter) gets carried away, I should point out to him that, as I said earlier, about 10 or 12 county councils applied. Perhaps I had better repeat what I have said several times. We expect that there will be about two or three trial areas, but that is not the sum total of those who applied.

    There is no need to worry about my being carried away. If anyone has been carried away on this subject it is the Minister. Indeed, he does not have many friends as regards this part of the Bill. If we assume that the principles of the House are based on a democratically supported constitution, I am sure that the Minister will agree that he is in the minority. There is no question of my being carried away. The right hon. Gentleman is on the Government Front Bench and is in a minority. He said that 10 applications had been received of which possibly three would operate. But the question that I was about to ask before the Minister challenged me so exuberantly was how many public service operators there are and how many of them will be affected. What is the extent of the clause?

    Wherever the Minister looks, he will find that nothing to the advantage of the people living in the rural areas will arise from the Bill. On the contrary. There is another answer to the problem, but this cannot be done by this clause. In the urban areas, anyone can see that, should there be operators who are given the opportunity to use buses without a licence, they will not go for the unprofitable routes. Those routes are sustained by a service provided by a public authority already licensed which uses the profitable services to provide overall coverage for the community. The Minister does not see that. But that is what will happen, I am sure that he is forcing this through because it is his own pet hobby-horse.

    7.15 pm

    Perhaps the Minister is lacking in transport experience. I served with a transport undertaking, and I know that the Minister did not. He should have the courage to remove this clause, because it will not work. In two or three years, or under amendments Nos. 14 and 16, which mention a trial Period of between two and five years—and we have not discussed revocation, which is another problem—the Minister will find that his clause has achieved the advantages that he has sought to persuade the House it will bring to communities.

    I hope that the Opposition will support the new clause put forward by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) and divide the House on it.

    As a vice-president of the Association of District Councils, I appre- ciate the new thought that my right hon. Friend brought to this subject when he spoke. I sat here somewhat dumbfounded for about 35 minutes, listening to two or three sentences on the new clause and what appeared to be a long discussion which really belonged to the Committee stage.

    There is one main aspect only that is worth considering: will the new clause make any substantial difference to the idea of trial areas? The point that my right hon. Friend put forward, which I am sure is most significant, was that the powers of co-ordination of county councils still existed. Unlike the hon. Member for Hartlepool (Mr. Leadbitter), I should have thought that the most likely areas to be designated are not those in densely urban areas. Surely this is an attempt to try to tackle those parts of the country where public transport is either non-existent or sparse.

    The hon. Member for Wellingborough (Mr. Fry) is trying to make a positive point and is entitled to a response. However, will he take into account that the rural areas with bus services are those that have highly subsidised bus services? How can an entrepreneur who wishes to make a profit on his investment achieve that when the established services have to be subsidised?

    I can answer that by saying that in an area of Northamptonshire that is exactly what happened. A service with which the company was not happy was operated by a subsidiary of the NBC. That service was taken over by a private operator. I am in no position to judge whether that service will be running three, four or five years from now, but, through the co-ordination of the county council, a new operator has been brought in and the service is now operating. Therefore, we must give the Minister and the Government the benefit of the doubt and the opportunity to tackle this problem.

    From what my right hon. Friend said, it is clear that he does not expect hundreds of applications from people who wish to run trial services, especially in the urban areas. But surely it is right to try to find ways of providing transport for those who are denied it at present. I am sure that the hon. Member for Hartlepool would be the first to agree with that. However, we can disagree about whether the idea of trial areas will work.

    There is one weakness in this whole approach, and it is not the fault of my right hon. Friend but is due to the peculiarity of the licensing system. Any scheme for dealing with public transport in rural areas which ignores the place of the rural taxi will not deal with the problem. We all know that there are many small villages and hamlets where only a handful of people need to move at any one time. In many of the rural areas, the rural taxi can cope. For some peculiar reason, through the processes of government over the years, taxis come under the Home Office and other public transport comes under the Department of Transport. If we are to move forward in trying to deal with the problem of parts of the country and talk about delicensing, for goodness sake let us look at what transport could be available in those areas. Many of the problems could be solved by a new look at the taxi service in rural Britain. I hope that that point will not be forgotten.

    There is a danger, and, surprisingly enough, it is totally the opposite to the danger that has been advanced from the Opposition Benches. I do not think that it will be the large operators who may well suffer if there is no licensing. The people about whom I shall be worried are the small private operators, because the organisations with large resources will be able to subsidise their operations and run at a loss much longer than the man with one or two coaches or rural buses. He is the person who could be really vulnerable in this situation. Therefore, we must be aware that there is this other side to the picture, as distinct from that put forward by the Opposition.

    I am in favour of experimentation. In his contribution tonight, my right hon. Friend has already answered nearly all my queries. It is the last one that remains. We must be careful that we are not undermining some of the other services that are being provided, particularly by the small operator. In any case, the county council has a serious responsibility and a chance to help here, because it is the county council which co-ordinates not only public transport but the schools service. Therefore, I hope that when they are looking at this matter the county councils will be very sympathetic to those who are trying to supply a bus service and will certainly continue to bear them in mind when they are awarding school transport contracts.

    I always listen to the hon. Member with great interest. However, it seems that the case that he has made is equally true in respect of the National Bus Company. Basically, what he is saying is that small operators could suffer because of operators moving in on the more profitable routes. That seems to be a reasonable case to argue. But is it not also the same case to say that the National Bus Company should withdraw from rural transport and that the subsidy that it was putting into rural transport should be galvanised into its long-route services to make them more competitive? Therefore, rural services, whichever way the hon. Gentleman has the argument, will suffer.

    As the hon. Gentleman knows, I feel that that is a possible danger. However, my right hon. Friend is not considering making the whole of rural England the designated area. He is deliberately asking for one or two areas in which experiments can take place. Surely it is right to try to have one or two areas where these experiments can take place. I shall be joining in watching very closely indeed how the experiments are taking place and seeing what dangers may befall them. My right hon. Friend will be looking to one interest and I shall be looking to another. But we have one thing in common: we shall be considering the public interest above all else.

    I should like the Minister to tell the House how many Scottish local authorities have made application to be designated as trial areas. My own authority, Strathclyde regional council, which covers some 5,000 square miles and encompasses large urban areas as well as very large remote rural areas, might well be thought of as an ideal example of an authority which could be considered fit to be designated as a trial area. Yet, when we examine the figures for subsidies paid to transport operators, we find that in Strathclyde regional council in the 1979–80 financial year the local authority will be paying transport operators a subsidy of £23·9 million, and that at present it subsidises about 25 bus and post bus operators as well as seven ferry service operators.

    As far as I am aware, no rural bus operator in the Strathclyde region operates at a profit, and many of these operators would simply cease to exist without this subsidy from the local authority. There is no rush by entrepreneurs in Strathclyde to set up in business as transport operators, because there is simply no profit in it in the rural areas. If there were, the local authority could well save some of the £24 million that it pays in general subsidies.

    The Scottish Bus Group, which is far and away the largest bus operator in Scotland, made the following comment on trial areas:
    "The idea of trial areas where road service licensing for all bus operators would be temporarily waived, is viewed with some trepidation unless bus operators are well represented in the discussions and organisation of such a scheme. The danger foreseen is that if abstraction results from established services during the trial period and these services are consequently reduced or withdrawn, it is unlikely that on the termination of the experiment passengers will return in sufficient numbers to justify restoration of these facilities. Generally the industry is not against positive experimental schemes but doubt must be cast as to whether operators would be prepared to make the necessary investment in vehicles and plant for a trial period only with no guarantee of continuity. Finally it must be said that transport in any area is a product unique to that area reflecting peculiar local circumstances and the results obtainable from one area do not necessarily become applicable to any other part of the country without modification."
    The present road service licence system ensures that in general only companies with serious intentions to run a viable and efficient service will make application. There is no evidence to support the Government's claim that the system is daunting to new entrants or difficult to understand. Under the present arrangements, very few applications for new licences are ever refused. It is not bus licensing that hampers initiative or restricts competition. It is simply the inability to make a profit.

    I agree with my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) that there is little doubt that in the short term the public interest would be served by having State-sponsored trial areas free of road service licensing, but only if some public money is used to initiate them. We have seen nothing of lasting value under the experimental areas legislation of 1977, and nearly all of these schemes have financial and staffing problems.

    It is in the long term that the real danger of trial areas exists. The damage that could be done to the existing service could never be repaired except possibly at considerable public expense. I should have thought that that was not something for which the present Government would like to be responsible.

    The hon. Member for Glasgow, Shettleston (Mr. Marshall) sums up the views of all those with fears by a defence, largely, of the existing licensing system, with a distinct reluctance to contemplate any change and a dismissal of recent experiments which, in his opinion, have not got very far, as such under the 1977 Act. I concede to those who have raised the matter that that is the reaction of quite a lot of people in the passenger transport business, which has become quite accustomed to 50 years of rigid licensing and is somewhat worried to contemplate change of any kind. But we are contemplating change generally and change particularly in the trial areas. It is right that hon. Members should express their further fears about it in this debate.

    First, I think that the comparisons with the 1977 Act and Routex and so on rather put the trial area concept into the wrong context as an experiment, a very limited project. As my right hon. Friend emphasised, our approach to the idea of trial areas is a cautious one. The Bill is riddled with caution so far as the mechanics for consultation and so on are concerned. Nevertheless, we are envisaging something much more significant than the 1977 Act experiments. We are in the hands of the local authorities. Where local authorities agree with us that the time has come for change, we think that very considerable change in passenger transportation could come from these experiments.

    Our approach to trial areas and what led us to look at the possibility of trial areas free of quantity road service licensing altogether was an underlying belief that a great deal of the licensing system in many parts of the country had probably outlived any useful purpose. Perhaps we shall discover—if enough trial areas are designated—that the licensing system exists because it has existed for 50 years but that it serves no worthwhile purpose. Trial areas provide a way of challenging that in an adequate number of diverse circumstances.

    7.30 pm

    That belief is partly based on a study of present circumstances. People agonise about the delicate network arrangements that now exist, that cross-subsidise and support rural services and help outlying areas of municipalities. It is surprising to hear such arguments. The real background is one of continuous decline in the passenger transport networks of Britain.

    The hon. Member for Truro (Mr. Penhaligon) reminded us of the disasters that had hit parts of Cornwall. My hon. Friend the Member for Meriden (Mr. Mills) pointed out that rural parts of his constituency were losing the services of a National Bus Company subsidiary. It is no good saying that the present system supports a viable network in all rural areas or that it is fulfilling all passenger needs. It is very much in need of change. We shall, therefore, make that change.

    Trial areas must be contrasted with the position that will exist in the country as a whole. We shall change the burden of proof, whether in trial areas or not, in attempts to resist new operators seeking new services. The traffic commissioners will be enjoined to give licences, unless those licences are against the public interest. Express services that travel more than 30 miles without setting down a passenger will be free from licensing throughout the country. The commuter coach will be given priority. Regular contract services serving works and schools will be a reality throughout the country outside road service licensing. Within that context, county councils may ask my right hon. Friend to designate the whole or part of the county as a trial area. Such councils may share our belief that in practice road service licensing serves no purpose.

    About a dozen councils have expressed interest. I am told that two regional councils in Scotland have expressed interest. That information may be of benefit to the hon. Member for Shettleston. However, as yet no one has formally applied. Many councils are consulting. Some have not yet reached the consultation stage. We hope that two or three will put it into practice. We would like variety. However, we are in the hands of local authorities. The question of how many trial areas and how big they are will depend upon local authorities. They are the transport authorities. It would be nice to have a trial area in a large city or town as well as a rural one.

    The hon. Gentleman has stressed the word "consultation" and the phrase "in the hands of local authorities". Perhaps he will heed his own remarks. In Committee he said:

    "Such procedures will certainly be demanded by those district councils which are flatly against the whole idea of trial areas in their or any other district. Some of those councils are controlled by people who are as hostile to the whole idea of competition in transport, as well as trial areas, as many members of the Committee are, and who will use the statutory consultation procedures deliberately to delay and obstruct the implementation of the county council's intentions."—[Official Report, Standing Committee H, 5 February 1980; c. 938.]
    In other words, he has said that there will be no consultation. He distrusts district councils. He is saying that they are prejudiced.

    I am glad that the hon. Gentleman reads my speeches. I remember well what I said. If the hon. Gentleman has read the whole of that speech, he will know that earlier in it I answered the questions that he has posed. He asked how local authorities could set up trial areas. He wanted to know the position of district councils. He said that we did not want to know the views of district councils. He queried the position of areas such as Hartlepool. He said that if the county council had considered designating a trial area its representations would not be made known. He knows that I made those remarks about a demand that there should be formal statutory consultation when the Bill is enacted, even if consultation has already been held. I pointed out that it would give an opportunity to those districts that are hostile to the idea as a matter of principle to delay the proposals indefinitely. However they will have information and be able to make representations.

    The hon. Gentleman will also know that I referred to schedule 2. I made clear that when a county council wishes to designate a trial area it must begin by informing many bodies about its intention to apply to my right hon. Friend. It must inform all district councils. The district councils may then make representations to the county council. If the county council still wishes to persevere with the desire to be a trial area, its application to my right hon. Friend must be accompanied by all the representations that have been received.

    Before designating a trial area, the Minister will consider all the representations that a district council may choose to make. The hon. Gentleman is merely prodding at a passage in Committee that he has taken out of context. In that passage I dismissed the idea of going beyond the adequate arrangements that I have already described and of writing statutory consultation into the Bill in addition to all the requirements of information and of representations. He knows that formal statutory consultation will provide opportunities for delay.

    Of course, we appreciate the position of district councils. That position was pressed upon us by Conservative district councils and by my hon. Friends in Committee. Indeed, my hon. Friend the Member for Wellingborough (Mr. Fry) again stressed it tonight. My right hon. Friend has dealt with the changes that we made concerning the revocation of trial areas and a district's desire to be consulted. That will be accommodated in later amendments.

    The apparent desire to write out the duty to co-operate was merely a means of obtaining a debate. The Opposition proposed to wipe out large portions of the 1968 and 1978 Acts, to which they are so wedded. The hon. Member for Workington (Mr. Campbell-Savours) jumped the gun and asked what would happen in these trial areas. He wanted to know how we could be certain that they would not be of great disadvantage to the areas concerned. That is the main point.

    I stress that we are not advocating trial areas because we believe that there will be a collapse of public transport as we know it. By that I mean that which is urged upon us by the most cautious of operators, by all trade unions and by the ideological opponents of the Bill. We do not envisage dramatic overnight changes in trial areas. Those who find themselves within a trial area will wake up the morning after their area has been designated and find that nothing has changed. The same bus service will be operating. However, the climate may change because the traffic commissioners' road service licensing powers will have gone.

    What might happen? The hon. Member for Workington put his case succinctly. He spoke of the rural areas in his constituency and of the profitable urban parts. I shall not go into detail about Cumbria as that is a matter for Cumbria county council and for local operators. Let us take an imaginary county.

    We are concerned not so much about ideological changes but about the effect of those changes upon community life in certain areas.

    I accused my opponents of being interested in ideological changes.

    I wish to return to the practical arguments put forward by the hon. Member for Workington. In an imaginary county, half of the services need to be profitable and half unprofitable. It may be thought that the profitable ones generally subsidise the unprofitable ones and that the county council chips in a bit of revenue to support the network. That is a fairly typical set-up. If the traffic commissioners' arrangements are withdrawn, what will happen? There will be no dramatic change unless the National Bus Company, or one of its subsidiaries, starts behaving in a foolish and precipitate way—as they have said that they might. However, I do not think that the subsidiaries will take such action in practice. The hon. Member for Workington dwelt on the first thing that might happen. People might move in on the profitable services. The first sign of change will be that a proportion of the better services will have more buses and reduced fares. Operators will move into the better routes—

    The hon. Member for Hartlepool (Mr. Leadbitter) flits in and out of the debate like Fairy Blackstick without listening to the parts in between. All his right hon. and hon. Friends have referred to pirates moving in to cream off the profitable routes. A profitable route is vulnerable to competition. Somebody might move in and provide more buses or lower fares, or do other wicked and heinous things to those who live along the route. No one is arguing with that except the hon. Member for Hartlepool. We are told to consider the consequences to the rest of the network. Those who live along the routes will discover that they have been paying high fares and tolerating a poor service to cross-subsidise the network—to use the jargon of the passenger transport industry.

    What happens to the unprofitable services where there is a defined public need for operators? Revenue support is given to subsidise the network as a whole. Very few counties give revenue support to specific services. An operator with a certain piece of territory asks the county for a subsidy and probably receives it. It is possible to move away from that system with the MAP—market analysis project—arrangements, but it is the norm. Counties must realise that trial areas are not a substitute for revenue support. There is nothing wrong with revenue support. However, trial areas will provide counties with an opportunity to use revenue support in an intelligent, creative and better way.

    Trial areas will identify not only the present routes, who operates them, what are their losses and how much finance is required to keep them running—most of the present networks are a combination of history and chance—but which routes the county council, as the transport authority, considers to be fulfilling a public need but which are not being served or which might not be served if there were change to a more commercial regime. The county councils must identify the routes and the public need, and decide how to make intelligent use of their revenue support to provide the necessary services.

    I know of a council that has invited tenders for revenue support for certain routes, to discover who will come forward, what services and vehicles such operators can provide and at what price to meet the county council's desire. That option is open to the National Bus Company because there is no bias in the Bill as between the public sector and the private sector.

    The Minister's remarks read like something from Hans Christian Andersen. There is no need to look into a crystal ball when one can read the book. We heard similar remarks during the Beeching era. We were told that there would be no change and that the only difference was that one would ride on a bus instead of a train. Lo and behold, the fairy descended and the buses started. But the fairy's wand rusted and there were no buses and no trains. What will the Minister do in that context?

    7.45 pm

    The hon. Gentleman has said a lot about fairies, Beeching and trains, but I do not see the analogy with what I have described. The revenue support given by the public service obligation to the railways is not for specific routes. The Beeching operation predated the PSO by some years and was a national attempt to stop the deliberate closure of routes. We are not closing any routes. We are indicating that counties can, if they so wish, take away the restrictions on road service licensing where they can make better use of revenue support. Once the restrictions have been lifted, there will be a wider choice of operators and types of service. It is for the county councils to use the purse strings that are in their possession and their duties as transport co-ordinating authorities to make the best use of the moneys provided.

    Does my hon. Friend believe that the same principle should be applied to British Rail? Surely, it is unfair to treat road transport in one way and rail transport in a completely different way.

    7.45 pm

    We are not responsible for the present financial arrangements for British Rail. I am biting off my tongue before launching into the analogy of British Rail. It should be run on the basis of the subsidy being applied to certain services where an accepted public need is defined by the Government. Sir Peter Parker is fond of talking about the contract between British Rail and the Government to provide certain passenger services at a certain price. That is a system that bus companies could arrive at with their county councils. Nothing within a trial area system would prevent them from doing so.

    The Minister has announced certain concessions for private operators. Will there be a degree of compulsion to ensure that they provide the service required by the rural communities and do not opt out if they find that it is not profitable?

    I emphasised that there was no concession to private companies. The public sector and the private companies are left on precisely the same footing. Each sector can take advantage of the Bill in whichever way suits it best. Each can lose out if it is uncompetitive and is forced to give way to more efficient competition.

    My hon. Friend the Member for Wellingborough made it clear that many private companies were cautious about the proposals. Operators must give notice to serve routes, and must give notice if they seek to withdraw from those routes. A bus company cannot be compelled to provide a service that will lose money and for which the county councils will not pay. Under the present licensing system, rural village after rural village is losing its services. We are not doing away with a system that protects the small operator in the rural areas or removing an unqualified success. We are altering the terms under which revenue support and other assistance is given. We hope that counties will use that support more intelligently.

    We accept the importance of rural taxis, mentioned by my hon. Friend the Member for Wellingborough. In many of the smaller communities we must find alternatives to the traditional bus service. Other parts of the Bill deal with shared cars, community bus services, post buses and other experiments that we wish to encourage.

    Taxis are the responsibility of my right hon. Friend the Home Secretary. Nevertheless, parts of the Bill touch on that subject. We have consulted those with taxi interests to ensure that we shall not damage them by our proposals. Other new clauses, tabled in the name of the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans), refer to the provincial taxi service. I believe that the hon. Gentleman discussed his new clause with those concerned. We hope to meet the legitimate fears of taxi owners.

    Other parts of the Bill provide for revenue support for shared car schemes, which is a matter of some doubt in rural areas at present. We have not lost sight of the fact that taxis will have a part to play in rural areas. We must move away from the half-empty large bus rumbling through the leafy lanes. Some claim that it is subsidised by profitable services elsewhere. Others claim that it is supported by the county through the network but argue that it is not supported sufficiently. Nobody really knows the cost of the service or whether it serves the needs of the area. It is provided only because it has always been provided and because the operator has held a licence since goodness known when. Nobody else has been allowed to apply to the commissioners to service the route. We think that that must change considerably. That is the purpose of this part of the Bill, and it certainly would not be helped by the addition of the new clause.

    The Parliamentary Secretary has made a number of interesting statements, some connected with the clause and some not. Certainly we were interested in the reply to the hon. Member for Wellingborough (Mr. Fry)—whether there is any new Government thinking about the financial obligations of British Rail and whether a different principle has been considered since the Minister met the chairman immediately after Question Time last week. The Parliamentary Secretary was clearly pointing out that there is a difference between British Rail as it is at present financed and a future approach to that financing. We await with interest further developments in the Conservative approach to the financing of British Rail.

    The new clause is largely concerned with showing the contradictions in the obligations and duties placed upon the authorities in relation to trial areas. The legislation gives a rather lax interpretation of the word "duty". I always thought that duty had something to do with responsibility. This is not a recommendation; it is a duty clearly imposed by the legislation. I cannot accept that it can be dismissed in such a cavalier manner.

    The trial area argument will be judged by experience. It is a matter of judgment between the two sides of the House. The unfortunate thing is that if we on these Benches are right, it will have been at considerable expense to many people in those areas, and that is our major fear.

    When I accused the Minister of being somewhat timid and cautious, I was referring to the fact that he was not prepared to experiment with the system beyond two or three areas. Undoubtedly, the implementation of the trial area scheme is a considerable and fundamental change in our transport system, and I would be the last to condemn a really challenging fundamental change. In fact, I hope to see a great deal of such change in the future.

    Nevertheless, our concern about the trial areas is based on the judgment of the consequences. I note that a considerable amount of praise has already been given to the existing licensing system. There is a reliance on the licensing system to maintain in other areas outside trial areas, within the 30-mile area, a basically similar transport system to the one we have at present. It might be a good idea to maintain the licensing system with commissioners and so on until we have witnessed the achievements of the experiments in the trial areas. It could be an extension of the previous Government's ideas of having experiments in certain areas but maintaining them against the background of commission control. To a great extent, that is the difference between us in our approach to the experiments. We like to have the safety of the backdrop.

    The services in rural areas are far from satisfactory and tend to reflect the competition aspect that has crept in during the last 20 years under a number of Governments. This has led to an unfortunate reduction in the extent of services. That must be seen against the background of the increase in the number of cars. The problem with the rural areas is that only a few people are dependent on the transport system and, whether these transport services are private or public, there is no way in which they can pay commercially.

    All sorts of minibuses and different kinds of vehicles have been tried, and the reports of the experiments conducted so far have not necessarily shown them to be a considerable financial success. Indeed, a number of them show quite clearly that if these services are breaking even at present, that is happening without the money for investment. The recommendation is that the Government should provide money for investment in vehicles and then have a kind of break-even system on the operation of the vehicles. That is clearly not envisaged in the trial area experiments, and to that extent we feel strengthened in our view.

    We have concentrated a considerable amount of time on the rural areas—and rightly so—but I am still a little confused about the position of rural taxis. I understood that taxis outside London were not controlled by the Home Office. I might be wrong, but I thought that we had a Bill not so long ago which gave control of taxis outside London to local authorities. I thought that the Home Office's jurisdiction applied only to the London area.

    In so far as there is a sponsoring Department, the Home Office is the relevant Department, just as the Ministry of Transport is the sponsoring Department for bus services even though it does not run any.

    Then, presumably, any kind of policy for rural taxis would be determined not by the Home Office but by the Ministry of Transport, which has established the experimental areas under the 1978 Act.

    The fact of the matter is that the Home Office is now fully responsible for taxi drivers in the cab service in London, and local authorities are now responsible for taxi drivers in their areas. While it is true that the Home Office is the overall sponsoring body, in effect the Home Office supervises London cabs but it does not supervise provincial cabs.

    Yes, and the Home Office is not very effective at that. The demands for changes in that area have come over a period of time from the taxi drivers themselves.

    Nevertheless, we are convinced about our case in making the judgment by the fact that there is a combined alliance of opposition. All the established operators appear to be against the trial area principle. Also, the districts are very much against the imposition of a trial area.

    We note the point made by the Minister that money will be available for these services and, therefore, there will not be a difference in that sense. The operator may be different. He may no longer be the network public transport operator; he may be "Jones the Bus" or whatever. The Minister may find that he may be able to produce a service more cheaply under the present economics, but that may not necessarily be so when the new National Bus Company and the new operators adjust to the changes which will inevitably mean fewer buses, and these will be concentrated on profitable areas.

    We have made great play of profitable routes, because we do not believe that bus operators will want to look for unprofitable routes. The Minister answered that by saying that money will be provided by subsidies. Therefore, presumably, the competition will now be between companies for the subsidy, and the one that applies for the lowest amount of subsidy will get the bus. That begs the question as to the fare policy in those areas. There is a considerable correlation between fares and the number of journeys that people make by bus.

    The point was made earlier in the debate that if the Hartlepool authority found that cowboy operators were coming in and undermining the present network system of the district authority, this would be extremely disadvantageous. Whether that is right or wrong, it is clear that if the scheme were to collapse the licence presumably would go to the existing operator. Therefore, we are likely to replace the old-established operator, for one reason or another, and to remain with the one-man company or the two- or three-bus companies which come in to take these routes. These are not the people who co-ordinate transport services, nor are they the people who provide network services.

    My hon. Friend has mentioned the objections of the district councils, but will he confirm that the Association of District Councils, the official representative of all district councils, has protested and proclaimed its opposition to the proposal and that that formal opinion represents the great body of local authority opinion, as well as public opinion?

    8 pm

    We have constantly made that point to the Minister in representations and debates.

    The Minister mentioned the case of a new operator receiving subsidies but, pre- sumably, offering cheaper fares. He will have to agree that, if companies are prepared to operate services and profit from them, though they may need a subsidy in order to do so, the profits of "Jones the Bus" will presumably not be used to subsidise the overall service.

    The Parliamentary Secretary seemed to indicate that if new operators started up with two or three buses they might be able to offer a network service, and the local authority could say that although it would not subsidise one route it would be prepared to give subsidies on the basis of three or four routes. That is basically the system that we have at present. Is the Minister saying that the profits made on the profitable route will be used, as the NBC uses the gains from its profitable routes, as a contribution towards revenue and as part of the information given to local authorities when the operator applies for a subsidy? If so, that is similar to the existing situation, except that we should be exchanging one operator for another. It is a matter of judgment. We shall have to see what happens. The question before us is whether we should repeal the duties imposed on operators in trial areas.

    The Minister said that the co-ordination role of local authorities would remain the same and, therefore, there was no need to remove that. There are a number of arguments on that matter, particularly if we take into account the definition of integration of public services. We dealt with that in Committee, and the question turns on the interpretation of "network" and "integration".

    A requirement under the Transport Act 1978 makes clear that the NBC and other operators have an obligation to provide such information concerning their services, including the cost of providing them, as may be reasonably required by the local authority. That causes considerable concern to the operators, and we share that concern. The operators feel that they will be severely disadvantaged by that requirement and they ask us to put the issue of those obligations and duties before the House. We intend to do that by voting on the new clause.

    Question put, That the clause be read a Second time: —

    The House divided: Ayes 144, Noes 189.

    Division No. 238]

    AYES

    [8.03 pm

    Adams, AllenGrant, George (Morpeth)Park, George
    Allaun, FrankHamilton, W. W. (Central Fife)Parker, John
    Archer, Rt Hon PeterHardy, PeterPowell, Rt Hon J. Enoch(S Down)
    Ashton, JoeHarrison, Rt Hon WalterPowell, Raymond (Ogmore)
    Benn, Rt Hon Anthony WedgwoodHaynes, FrankPrescott, John
    Bennett, Andrew (Stockport N)Heffer, Eric S.Race, Reg
    Booth, Rt Hon AlbertHolland, Stuart (L'beth, Vauxhall)Radice, Giles
    Bottomley, Rt Hon Arthur (M'brough)Home Robertson, JohnRees, Rt Hon Merlyn (Leeds South)
    Bradley, TomHomewood, WilliamRoberts, Albert (Normanton)
    Bray, Dr JeremyHooley, FrankRoberts, Ernest (Hackney North)
    Brown, Hugh D. (Provan)Horam, JohnRobertson, George
    Buchan, NormanHowell, Rt Hon Denis (B'ham, Sm H)Rodgers, Rt Hon William
    Callaghan, Jim (Middleton & P)Janner, Hon GrevilleRoss, Ernest (Dundee West)
    Campbell-Savours, DaleJay, Rt Hon DouglasRoss, Wm. (Londonderry)
    Cartwright, JohnJohn, BrynmorRowlands, Ted
    Clark, Dr David (South Shields)Johnson, James (Hull West)Sever, John
    Cocks, Rt Hon Michael (Bristol S)Johnson, Walter (Derby South)Shore, Rt Hon Peter (Step and Pop)
    Cohen, StanleyJones, Barry (East Flint)Silkin, Rt Hon John (Deptford)
    Coleman, DonaldJones, Dan (Burnley)Silverman, Julius
    Cowans, HarryKilroy-Silk, RobertSnape, Peter
    Cryer, BobLeadbitter, TedSoley, Clive
    Cunliffe, LawrenceLeighton, RonaldSpearing, Nigel
    Cunningham, George (Islington S)Lestor, Miss Joan (Eton & Slough)Spriggs, Leslie
    Cunningham, Dr John (Whitehaven)Lewis, Ron (Carlisle)Stewart, Rt Hon Donald (W Isles)
    Dalyell, TamLofthouse, GeoffreyStoddart, David
    Davidson, ArthurMcElhone, FrankStott, Roger
    Davies, Ifor (Gower)McGuire, Michael (Ince)Strang, Gavin
    Davis, Terry (B'rm'ham, Stechford)McKay, Allen (Penistone)Summerskill, Hon Dr Shirley
    Dean, Joseph (Leeds West)McKelvey, WilliamTaylor, Mrs Ann (Bolton West)
    Dempsey, JamesMacKenzie, Rl Hon GregorThomas, Dafydd (Merioneth)
    Dixon, DonaldMaclennan, RobertThomas, Dr Roger (Carmarthen)
    Dobson, FrankMcMillan, Tom (Glasgow, Central)Tinn, James
    Douglas, DickMcWilliam, JohnUrwin, Rt Hon Tom
    Dunnett, JackMarshall, David (Gl'sgow,Shettles'n)Weetch, Ken
    Dunwoody, Mrs GwynethMarshall, Dr Edmund (Goole)Wellbeloved, James
    Eadie, AlexMarshall, Jim (Leicester South)Welsh, Michael
    Eastham, KenMaxton, JohnWhite, Frank R. (Bury & Radcliffe)
    Edwards, Robert (Wolv SE)Mellish, Rt Hon RobertWhitehead, Phillip
    Ellis, Tom (Wrexham)Mitchell, Austin (Grimsby)Whitlock, William
    Evans, Ioan (Aberdare)Molyneaux, JamesWilliams, Rt Hon Alan (Swansea W)
    Ewing, HarryMorris, Rt Hon Charles (Openshaw)Williams, Sir Thomas (Warrington)
    Faulds, AndrewMorton, GeorgeWilson, William (Coventry SE)
    Flannery, MartinMoyle, Rt Hon RolandWinnick, David
    Fletcher, Ted (Darlington)Newens, StanleyWoolmer, Kenneth
    Foot, Rt Hon MichaelOakes, Rt Hon GordonWrigglesworth, Ian
    Foulkes, GeorgeOgden, Eric
    George, BruceO'Neill, MartinTELLERS FOR THE AYES:
    Golding, JohnOrme, Rt Hon StanleyMr. James Hamilton and
    Gourlay, HarryPalmer, ArthurMr. John Evans.
    Graham, Ted

    NOES

    Adley, RobertChalker, Mrs LyndaGriffiths, Eldon (Bury St Edmunds)
    Alexander, RichardChapman, SydneyGriffiths, Peter (Portsmouth N)
    Alton, DavidClarke, Kenneth (Rushcliffe)Grimond, Rt Hon J.
    Ancram, MichaelClegg, Sir WalterGrist, Ian
    Aspinwall, JackColvin, MichaelGummer, John Selwyn
    Atkins, Robert (Preston North)Cope, JohnHamilton, Hon Archie (Eps'm&Ew'll)
    Atkinson, David (B'mouth, East)Corrie, JohnHamilton, Michael (Salisbury)
    Beaumont-Dark, AnthonyDover, DenshoreHannam, John
    Bendall, Viviandu Cann, Rt Hon EdwardHaselhurst, Alan
    Benyon, Thomas (Abingdon)Dunn, Robert (Dartford)Havers, Rt Hon Sir Michael
    Berry, Hon AnthonyDykes, HughHawkins, Paul
    Best, KeithEden, Rt Hon Sir JohnHawksley, Warren
    Bevan, David GilroyEggar, TimothyHeddle, John
    Blackburn, JohnFaith, Mrs SheilaHenderson, Barry
    Blaker, PeterFenner, Mrs PeggyHicks, Robert
    Body, RichardFisher, Sir NigelHiggins, Rt Hon Terence L.
    Boscawen, Hon RobertFletcher, Alexander (Edinburgh N)Hill, James
    Braine, Sir BernardFletcher-Cooke, CharlesHogg, Hon Douglas (Grantham)
    Bright, GrahamFookes, Miss JanetHooson, Tom
    Brinton, TimFowler, Rt Hon NormanHordern, Peter
    Brocklebank-Fowler, ChristopherFox, MarcusHowell, Ralph (North Norfolk)
    Bruce-Gardyne, JohnFreud, ClementHunt, John (Ravensbourne)
    Bryan, Sir PaulFry, PeterHurd, Hon Douglas
    Buchanan-Smith, Hon AlickGardiner, George (Reigate)Johnston, Russell (Inverness)
    Buck, AntonyGarel-Jones, TristanJopling, Rt Hon Michael
    Butcher, JohnGorst, JohnKaberry, Sir Donald
    Cadbury, JocelynGow, IanKershaw, Anthony
    Carlisle, Kenneth (Lincoln)Gray, HamishKing, Rt Hon Tom

    Kitson, Sir TimothyMurphy, ChristopherSpicer, Michael (S Worcestershire)
    Knox, DavidMyles, DavidSproat, Iain
    Lang, IanNeale, GerrardSquire, Robin
    Latham, MichaelNeedham, RichardStainton, Keith
    Lawson, NigelNelson, AnthonyStanbrook, Ivor
    Le Marchant, SpencerNeubert, MichaelStanley, John
    Lennox-Boyd, Hon MarkNewton, TonySteen, Anthony
    Lester, Jim (Beeston)Nott, Rt Hon JohnStevens, Martin
    Lewis, Kenneth (Rutland)Page, John (Harrow, West)Tebbit, Norman
    Lloyd, Peter (Fareham)Page, Rt Hon Sir R. GrahamTemple-Morris, Peter
    Loveridge, JohnPage, Richard (SW Hertfordshire)Thomas, Rt Hon Peter (Hendon S)
    Luce, RichardParris, MatthewThompson, Donald
    Lyell, NicholasPatten, John (Oxford)Thome, Neil (Ilford South)
    Macfarlane, NeilPenhaligon, DavidTownend, John (Bridlington)
    MacGregor, JohnPercival, Sir IanTownsend, Cyril D. (Bexleyheath)
    MacKay, John (Argyll)Peyton, Rt Hon JohnTrippler, David
    McNair-Wilson, Michael (Newbury)Pollock, AlexanderTaylor, Teddy (Southend East)
    McQuarrie, AlbertPorter, Georgevan Straubenzee, W. R.
    Marshall, Michael (Arundel)Prentice, Rt Hon RegViggers, Peter
    Mather, CarolProctor, K. HarveyWaddington, David
    Maude, Rt Hon AngusRaison, TimothyWainwright, Richard (Colne Valley)
    Mawby, RayRathbone, TimWakeham, John
    Mawhinney, Dr BrianRees-Davies, W. R.Walker, Rt Hon Peter (Worcester)
    Maxwell-Hyslop, RobinRenlon, TimWalker, Bill (Perth & E Perthshire)
    Mellor, DavidRhodes James, RobertWalker-Smith, Rt Hon Sir Derek
    Meyer, Sir AnthonyRidsdale, JulianWaller, Garry
    Miller, Hal (Bromsgrove & Redditch)Royle, Sir AnthonyWatson, John
    Mills, Iain (Meriden)Scott, NicholasWells, Bowen (Hert'rd & Stev'nage)
    Mills, Peter (West Devon)Shaw, Giles (Pudsey)Wheeler, John
    Miscampbell, NormanShaw, Michael (Scarborough)Wickenden, Keith
    Moate, RogerShelton, William (Streatham)Wilkinson, John
    Montgomery, FergusShepherd, Colin (Hereford)Wolfson, Mark
    Morgan, GeraintShepherd, Richard(Aldridge-Br'hills)
    Morris, Michael (Northampton, Sth)Silvester, FredTELLERS FOR THE NOES:
    Morrison, Hon Charles (Devizes)Speed, KeithMr. Peter Brooke and
    Morrison, Hon Peter (City of Chester)Speller, TonyLord James Douglas-Hamilton.
    Mudd, David

    Question accordingly negatived.

    New Clause 8

    Annual Inspection Of Public Service Vehicles

    '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

    Division No. 239]

    AYES

    [8.15 pm

    Adams, AllenDixon, DonaldHaynes, Frank
    Allaun, FrankDobson, FrankHeffer, Eric S.
    Alton, DavidDouglas, DickHolland, Stuart (L'beth, Vauxhall)
    Archer, Rt Hon PeterDunnett, JackHome Robertson, John
    Ashton, JoeDunwoody, Mrs GwynethHomewood, William
    Benn, Rt Hon Anthony WedgwoodEadie, AlexHooley, Frank
    Bennett, Andrew (Stockport N)Eastham, KenHoram, John
    Booth, Rt Hon AlbertEdwards, Robert (Wolv SE)Howell, Rt Hon Denis (B'ham, Sm H)
    Bradley, TomEllis, Tom (Wrexham)Janner, Hon Greville
    Brown, Hugh D. (Provan)Evans, Ioan (Aberdare)Jay, Rt Hon Douglas
    Buchan, NormanEvans, John (Newton)John, Brynmor
    Callaghan, Jim (Middleton & P)Ewing, HarryJohnson, James (Hull West)
    Campbell-Savours, DaleFaulds, AndrewJohnson, Walter (Derby South)
    Cartwright, JohnFlannery, MartinJohnston, Russell (Inverness)
    Clark, Dr David (South Shields)Fletcher, Ted (Darlington)Jones, Barry (East Flint)
    Cocks, Rt Hon Michael (Bristol S)Foot, Rt Hon MichaelJones, Dan (Burnley)
    Cohen, StanleyFoulkes, GeorgeKilroy-Silk, Robert
    Coleman, DonaldFreud, ClementLeadbitter, Ted
    Cowans, HarryGeorge, BruceLeighton, Ronald
    Cryer, BobGolding, JohnLestor, Miss Joan (Eton & Slough)
    Cunliffe, LawrenceGourlay, HarryLewis, Ron (Carlisle)
    Cunningham, George (Islington S)Graham, TedLofthouse, Geoffrey
    Cunningham, Dr John (Whitehaven)Grant, George (Morpeth)McElhone, Frank
    Dalyell, TarnGrimond, Rt Hon J.McGuire, Michael (Ince)
    Davidson, ArthurHamilton, James (Bothwell)McKay, Allen (Penistone)
    Davies, Ifor (Gower)Hamilton, W. W. (Central File)McKelvey, William
    Davis, Terry (B'rm'ham, Stechford)Hardy, PeterMacKenzie, Rt Hon Gregor
    Dempsey, JamesHarrison, Rt Hon WalterMaclennan, Robert

    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.'.—[ Mr. Booth.]

    Brought up, and read the First time.

    Question proposed, That the clause be read a Second time.—[ Mr. Prescott.]

    Question put:

    The House divided: Ayes 147, Noes 183.

    McMillan, Tom (Glasgow, Central)Powell, Raymond (Ogmore)Strang, Gavin
    McWilliam, JohnPrescott, JohnSummerskill, Hon Dr Shirley
    Marshall, David (Gl'sgow,Shetles'n)Race, RegTaylor, Mrs Ann (Bolton West)
    Marshall, Dr Edmund (Goole)Rees, Rt Hon Merlyn (Leeds South)Thomas, Dafydd (Merioneth)
    Marshall, Jim (Leicester South)Roberts, Albert (Normanton)Thomas, Dr Roger (Carmarthen)
    Maxton, JohnRoberts, Ernest (Hackney North)Urwin, Rt Hon Tom
    Mellish, Rt Hon RobertRobertson, GeorgeWainwright, Richard (Colne Valley)
    Mitchell, Austin (Grimsby)Rodgers, Rt Hon WilliamWeetch, Ken
    Molyneaux, JamesRoss, Ernest (Dundee West)Wellbeloved, James
    Morris, Rt Hon Charles (Openshaw)Ross, Wm. (Londonderry)Welsh, Michael
    Morton, GeorgeRowlands, TedWhite, Frank R. (Bury & Radcliffe)
    Moyle, Rt Hon RolandSever, JohnWhitehead, Phillip
    Newens, StanleyShore, Rt Hon Peter (Step and Pop)Whitlock, William
    Oakes, Rt Hon GordonSilkin, Rt Hon John (Deptford)Williams, Rt Hon Alan (Swansea W)
    Ogden, EricSilverman, JuliusWilson, William (Coventry SE)
    O'Neill, MartinSnape, PeterWinnick, David
    Orme, Rt Hon StanleySoley, CliveWoolmer, Kenneth
    Palmer, ArthurSpearing, NigelWrigglesworth, Ian
    Park, GeorgeSpriggs, Leslie
    Parker, JohnStewart, Rt Hon Donald (W Isles)TELLERS FOR THE AYES:
    Penhaligon, DavidStoddart, DavidMr. James Tinn and
    Powell, Rt Hon J. Enoch (S Down)Stott, RogerMr. Joseph Dean.

    NOES

    Adley, RobertHamilton, Michael (Salisbury)Myles, David
    Alexander, RichardHannam, JohnNeale, Gerrard
    Ancram, MichaelHaselhurst, AlanNeedham, Richard
    Aspinwall, JackHastings, StephenNelson, Anthony
    Atkins, Robert (Preston North)Havers, Rt Hon Sir MichaelNeubert, Michael
    Atkinson, David (B'mouth, East)Hawkins, PaulNewton, Tony
    Beaumont-Dark, AnthonyHawksley, WarrenNott, Rt Hon John
    Bendall, VivianHeddle, JohnPage, John (Harrow, West)
    Benyon, Thomas (Abingdon)Henderson, BarryPage, Rt Hon Sir R. Graham
    Berry, Hon AnthonyHicks, RobertPage, Richard (SW Hertfordshire)
    Best, KeithHiggins, Rt Hon Terence L.Parris, Matthew
    Bevan, David GilroyHill, JamesPatten, John (Oxford)
    Blackburn, JohnHogg, Hon Douglas (Grantham)Percival, Sir Ian
    Blaker, PeterHooson, TomPeyton, Rt Hon John
    Body, RichardHordern, PeterPollock, Alexander
    Boscawen, Hon RobertHowell, Ralph (North Norfolk)Porter, George
    Braine, Sir BernardHunt, John (Ravensbourne)Prentice, Rt Hon Reg
    Bright, GrahamHurd, Hon DouglasProctor, K. Harvey
    Brinton, TimJopling, Rt Hon MichaelRaison, Timothy
    Brocklebank-Fowler, ChristopherKaberry, Sir DonaldRathbone, Tim
    Bruce-Gardyne, JohnKershaw, AnthonyRees-Davies, W. R.
    Bryan, Sir PaulKing, Rt Hon TomRenton, Tim
    Buchanan-Smith, Hon AlickKitson, Sir TimothyRhodes, James, Robert
    Buck, AntonyKnox, DavidRidsdale, Juliian
    Butcher, JohnLang, IanRoyle, Sir Anthony
    Cadbury, JocelynLatham, MichaelScott, Nicholas
    Carlisle, Kenneth (Lincoln)Lawson, NigelShaw, Giles (Pudsey)
    Chalkor, Mrs LyndaLe Marchant, SpencerShaw, Michael (Scarborough)
    Chapman, SydneyLester, Jim (Beeston)Shelton, William (Streatham)
    Clarke, Kenneth (Rushcliffe)Lewis, Kenneth (Rutland)Shepherd, Colin (Hereford)
    Clegg, Sir WallerLloyd, Peter (Fareham)Shepherd, Richard (Aldridge-Br'hills)
    Colvin, MichaelLoveridge, JohnSilvester, Fred
    Cope, JohnLuce, RichardSpeed, Keith
    Corrie, JohnLyell, NicholasSpeller, Tony
    Dover, DenshoreMacfarlane, NeilSpence, John
    du Cano, Rt Hon EdwardMacGregor, JohnSpicer, Michael (S Worcestershire)
    Dunn, Robert (Dartford)MacKay, John (Argyll)Sproat, Iain
    Dykes, HughMcNair-Wilson, Michael (Newbury)Squire, Robin
    Eden, Rt Hon Sir JohnMcQuarrie, AlbertStainton, Keith
    Eggar, TimothyMarshall, Michael (Arundel)Stanbrook, Ivor
    Faith, Mrs SheilaMather, CarolStanley, John
    Fenner, Mrs PeggyMaude, Rt Hon AngusSteen, Anthony
    Fisher, Sir NigelMawby, RayStevens, Martin
    Fletcher, Alexander (Edinburgh N)Mawhinney, Dr BrianTaylor, Teddy (Southend East)
    Fletcher-Cooke, CharlesMaxwell-Hyslop, RobinTebbitt Norman
    Fookes, Miss JanetMellor, DavidTemple-Morris, Peter
    Fowler, Rt Hon NormanMeyer, Sir AnthonyThompson, Donald
    Fox, MarcusMiller, Hal (Bromsgrove & Redditch)Thorne, Neil (Ilford South)
    Fry, PeterMills, Iain (Merlden)Townend, John (Bridlington)
    Gardiner, George (Relgate)Mills, Peter (West Devon)Townsend, Cyril D. (Bexleyheath)
    Garel-Jones, TristanMiscampbell, NormanTrippier, David
    Gorst, JohnMoate, Rogervan Straubenzee, W. R.
    Gow, IanMontgomery, FergusViggers, Peter
    Gray, HamishMorgan, GeraintWaddington, David
    Griffiths, Eldon (Bury St Edmunds)Morris, Michael (Northampton, Sth)Wakeham, John
    Griffiths, Peter (Portsmouth N)Morrison, Hon Charles (Devizes)Walker, Rt Hon Peter (Worcester)
    Grist, IanMorrison, Hon Peter (City of Chester)Walker, Bill (Perth & E Perthshire)
    Gummer, John SelwynMudd, DavidWalker-Smith, Rt Hon Sir Derek
    Hamilton, Hon Archie (Eps'm&Ew'll)Murphy, ChristopherWaller, Garry

    Watson, JohnWickenden, KeithTELLERS FOR THE NOES:
    Wells, Bowen (Hert'rd & Stev'nage)Wilkinson, JohnLord James Douglas-Hamilton and
    Wheeler, JohnWolfson, MarkMr. Peter Brooke.

    Question accordingly negatived.

    New Clause 9

    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 use 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.'.—[ Mr. Prescott.]

    Brought up, and read the First time.

    We may discuss at the same time Government amendments Nos. 71 and 72.

    Like the earlier new clauses, this one is designed to provoke a debate on a principle—in this case, the duty to exhibit an operator's disc. The new clause is almost exactly the same as the clause which the Government removed from the Bill. On Second Reading, in Committee and in the consultative document, they were apparently convinced by the argument that, as part of the enforcement of the operating licensing system, a vehicle should exhibit such a disc. We seek to put that requirement back into the Bill.

    There is probably a balance of judgment here, but our view is that without the display of such a disc the licensing system for buses will be less enforceable. That was apparently the Government's view until the Committee stage. Their argument for removing this provision was that the commissioners would have less clerical work and bureaucracy would be reduced.

    This shift to "quality control", from an emphasis on the vehicle itself to an emphasis on the operator's conditions, was clearly recommended in EEC legislation and was already embodied in the 1968 legislation. The report of the Foster committee into road haulage operating licensing was much concerned with certification and display of discs in the operation of this licensing system.

    The lorry licensing system has been a trail blazer for bus licensing. Licensing was first imposed on lorries and buses in the 1930s to ensure safety, fair competition and the provision of services. The first departure from that principle was with denationalisation in 1953, but it was the 1968 Labour legislation which emphasised the safety aspect and the quality of the vehicle, not only by more stringent tests on the vehicles themselves but by improving the quality of the operators. The emphasis was, therefore, placed more firmly on the operator who was considered to be of good repute, was of good financial standing and possessed certain qualifications laid down by legislation covering the road haulage industry.

    8.30 pm

    The disc was retained as evidence of the enforcement system. It is interesting to note that Professor Foster—in view of criticisms—looked at the operation of the system and the avoidance of enforcement techniques by a number of cowboy operators. He made certain recommendations that I believe are relevant to this debate.

    One matter of immediate concern—and perhaps the Minister can reassure us—is this. If we are to retain the disc for heavy goods vehicles as part of our system of ensuring safety, why is it not considered necessary for the passenger transport service? Obviously, the carrying of great numbers of passengers demands greater safety precautions than those needed for heavy goods vehicles. That may be a cynical point to make, because only one or two cowboy lorry drivers are involved, but we should be stricter where greater numbers are involved.

    Concern for safety should be an important part of our deliberations. The disc system is not the most essential part of our safety control mechanisms. Other control features have been developed. Nevertheless, the Foster report considers the disc system to be important in relation to safety and operator licensing. That inquiry was concerned with cowboy operators.

    In Committee we said that we wished to tighten the procedure, and we considered the possibility of the vehicle registration number being included on the disc. We considered restricting the flexibility of use of the disc because of the possibility that an operator might have 15 buses and only 10 licences. That situation might be decided by his operating centre and other factors determined by the commissioner. The industry did not necessarily agree with that point but it concerned me when I considered those operators who had more buses than they had licences. That situation tends to encourage the avoidance of the control intended to be exercised by the disc system.

    After all, the commissioner decides the number of discs issued to a company. If a company is using more vehicles than it is licensed to use, that is an avoidance we seek to prevent. In the face of our desire to tighten up the procedure, the Government removed it completely. That took the Opposition by surprise. A pattern seemed to have developed in Committee. Every time we pointed out a difficulty or expressed a desire to tighten up the procedure in an attempt to follow the logic of a clause, the Government immediately dropped it.

    I have in mind car sharing and the cost involved. We pointed out the difficulties about car insurance in relation to those who shared a car. The Government's response was to remove the provision on car sharing. We are still not satisfied with that response. Nevertheless, passenger service appears to be following the path established by the road haulage industry in the matter of safety procedures, enforcement procedures and licensing controls.

    It is relevant to bear in mind what Professor Foster had to say in his recent report to the Department about operator licensing in the road haulage industry. In the light of what has happened, it seems that Professor Foster is, on balance, recommending in the 90-odd provisions of his report—not all of which are devoted to discs—that there should be a tightening up of the procedures and not a loosening of them. He points out how some operators can get round the licensing procedures and he indicates to the Government how the system might be tightened up.

    We are concerned—and I trust that the Parliamentary Secretary will address his mind to this—that if the duty to display a disc is not to be imposed upon passenger service operators, that may mean that the Government will also remove that obligation from heavy goods vehicle operators. What are the Government's reasons for not imposing that duty on the passenger service operators? Some reasons have been given in the report, and it is to those reasons that we address our minds. Foster was concerned only with minorities, so that we are concerned here not with mass evasion but with creating a system that can bring to order the minority who wish to break the law or disregard their obligations under operator licensing. Any administrative system involves bureaucratic control, and safety administration requires some form of bureaucracy. Its extent must be a matter for judgment.

    In Committee the Government took the view that the same purpose could be achieved by a different means. Instead of operators having to apply for a licence by filling out a form and getting a disc, they would rely on the name and licence number being painted on the side of the vehicle. That idea is not new. Regulations already use that arrangement. The Public Service Vehicles (Conditions of Fitness, Equipment and Use) Regulations 1972 state in paragraph 40:
    "Every vehicle shall be marked in readily legible characters not less than 1 inch in height and painted in a conspicuous position on the near side of the vehicle in colours which contrast with their background, with the name and address of the authority, company, firm or individual to whom or to whose representative the public service vehicle licence under Part III of the Act was granted in respect of the vehicle".
    The Government said that if all that information were painted on the side of the lorry, that would be sufficient; There was no need for a disc to be displayed.

    Certain problems arise out of the procedure that the Government propose. The obvious difficulty is of getting a sign-writer. Advice to me from the industry states that that is difficult, but that claim is not conclusive. Past practice has tended to throw up problems in that respect. A considerable amount of evidence shows that the writing is not kept up to date. It is not easy to change the painting on the side of a lorry that is in regular use. I am told that a number of lorries are currently in contravention of the regulation. It is much easier to amend the informaon a disc, which would be prominently displayed, than to change a painted sign.

    The other point concerns the number of vehicles that an operator can run. Under the previous proposals, if an operator had 20 vehicles he would have to have 20 discs. But now the possession of 20 discs does not mean that an operator has 20 vehicles. He can own more vehicles than he has discs as long as the number of vehicles actually in operation does not exceed the number he is registered to operate. It is much easier to transfer a disc from one lorry to another than to transfer a door. Those are the sort of practical difficulties which could lead to evasion. It is much easier for an operator to plead difficulties in getting information painted on the door of a lorry than to plead difficulties over a disc which is available for all to see. The problem is how to check that and how to enforce the system. On balance, there is a better argument for using the disc system. I hope that the Minister will say why he feels it is necessary to retain it for lorries but not to exempt buses. The question is whether the disc indicates more clearly that the operator is licensed to carry out his duties.

    It is interesting to recall the words of Professor Foster. In chapter 8.90 of his report on the enforcement of safety, he says:
    "In our judgment, the first and by far the most important step to check illegal operation is to require all vehicles to carry a visible licence plate in a conspicuous place, and we recommend that this should be done as soon as possible."
    He continues in paragraph 8.95:
    "These changes should make it far easier to detect illegal vehicles. If, as we recommend in Chapter 13, they are backed up by a computer record system immediately accessible to policemen and vehicle and traffic examiners in order to check quickly on a particular vehicle, it would become much harder for individual vehicles or whole fleets to operate illegally through falsification … of plates."
    Police computers are impressive when they are used to check cars. On one occasion I was stopped by the police and asked whether I owned the car that I was driving. It was checked by a police computer in a few seconds. To that extent, Foster recommended an important law enforcement procedure. The Government should give better reasons why they think it is necessary for information to be painted on the sides of vehicles.

    The industry and the operators prefer the disc system. I am also informed that they cannot accept that the chairman of the traffic commissioners would be able to devise an acceptable system of sign-writing.

    In Committee, the Minister said that the burden of evidence was that we should do away with the disc system. I challenged him on that. I said:
    "Apart from the traffic commissioners and the Government, I wonder whether there are other organisations which … are strongly for retaining this disc or symbol—organisations such as the police or other authorities."
    The Minister replied:
    "I take the hon. Gentleman's point. We considered and consulted on the matter. I examined the clause, having seen the system, and asked whether it was necessary. We decided that it is not."—[Official Report, Standing Committee H, 7 February, 1980; c. 1280.]
    Can the Parliamentary Secretary say how that decision was reached? Presumably, when discussions started, the commissioners agreed with it. The Minister must have had consultations with the commissioners and with the operators, who apparently wish to retain the disc system. What was the new insight? Surely it was not bureaucracy. That was clearly known before publication of the Bill. Will the Parliamentary Secretary also confirm that the commissioners are prepared to abandon the disc system for buses but presumably to retain it for lorries?

    I think that the balance of the argument both by Foster and by others concerned is that the disc should be retained to help in enforcement. It would make it more difficult for the minority of cowboy operators to continue their practices. We must make a judgment on the balance between bureaucracy and the enforcement of standards. In our view, it would be better to maintain the disc as a helpful contributory factor, as in the road haulage industry, for the enforcement of both safety and other standards in the industry.

    8.45 pm

    There were two occasions in Committee when we shot the Opposition's fox on two rather difficult points. One was the regulation-making power which we were proposing to take to govern the costs of car sharing, and the other was the requirement to display a disc on public service vehicles.

    On both those matters, the Opposition tabled a number of amendments and pointed out the considerable difficulties which might arise in practice from the Government's suggestions as they then stood. We looked at both those points and, after reconsidering them, we decided that in both cases the best answer to the difficulties was not to go ahead with what we were proposing. I shall not deal with the regulation-making power in respect of car sharing costs because we have an amendment about that.

    On the question of discs, we came to the conclusion, after further consideration, that there was no substantial reason for having a disc inside the vehicles at all. The hon. Member for Kingston upon Hull, East (Mr. Prescott) asked how we reached that conclusion. Plainly, we had a change of mind. We told the Committee that we had. Obviously, I cannot give blow-by-blow details of what went on within the Department and the Government—although I was fairly frank with the Committee quite often—but it was more or less as I have put it.

    We had a second look at the matter, prompted by the amendments put down in Committee, and we asked ourselves the fundamental question of why bother with discs at all before we went on to think of assembling arguments to answer amendments about what might or might not have to be on them.

    It seemed to us that there was no sensible answer to that question, and the enforcement problems at which the requirement was aimed were not such as to need the disc, and certainly not such as would justify the immense bureaucracy involved in issuing thousands of them.

    One was led to reflect that probably the reason why we had the clause in the Bill at all was that public service vehicles had always carried discs in the past. Such vehicles have had a PSV licence disc exhibited in the cab for perhaps as long as 50 years, and no one had actually thought of buses going around in modern circumstances without these little pieces of paper or some up-to-date equivalent in the corner of the cab.

    That was really how we arrived at our decision. I do not want to give the impression that we arrived at it lightly. I realise that there is considerable concern in the industry. The Opposition remain concerned about the enforcement problems if there are no discs in vehicles, and I know that the Confederation of Passenger Transport feels strongly on the point. It feels that enforcement of the safety provisions of the Bill will be difficult without discs.

    In fact, the representations which I have received from the Confederation of Passenger Transport are pretty close to the new clause now before us. The Opposition have changed their view compared with their position in Committee, when, as I recall it, their amendment was designed to ensure that there was a disc for every vehicle. What we have now is a proposal which is in agreement with the Confederation of Passenger Transport—

    I know that it had to be a different proposal if it was to be selected, but the point of what we now have before us is that each operator will be issued with a given number of discs, and on any given day he will be able to put those on whatever vehicles he wants to use, while making sure that he does not have more out on any day than his operator's licence would allow.

    Having considered this matter seriously, my conclusion is that I still cannot see what the point is that so troubles the Opposition and the CPT. I have looked at the matter carefully and done my best to be sure that I am not missing some obvious safety point. I ask the House to consider the safety provisions and to think of precisely what the discs are supposed to achieve.

    I had left the Chamber for a minute or two in order to telephone a colleague of mine who is a haulier and has an operator's licence. I was interested in the procedure whereby people applied for MoT certificates in the case of private vehicles and, in the case of commercial vehicles, the certification about which my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) had spoken to me privately. Is it not possible that, in the event of someone removing the disc which is provided by an authority, operators will misuse the system when they apply for licensing, as in the case of MoT certificates? Perhaps the Minister will comment on that, because that was the instant response of my colleague when I telephoned him. He said that the system was open to abuse.

    I am not sure whether the hon. Gentleman's colleague is engaged in road haulage or passenger transport. Perhaps as a relevant aside I can deal with the point raised by the hon. Member for Kingston upon Hull, East with regard to lorries. The Government will produce soon their response to the Foster report, which lays heavy emphasis on plating as an enforcement procedure in heavy goods vehicles. That is slightly different, but it aims at roughly the same point.

    Without anticipating what we shall say about Foster, there are clear reasons for distinguishing between heavy goods vehicles and passenger buses. Indeed, the systems have always been different in the past. Obviously, there are vastly more lorries than there are buses. There as vastly more operators. Lorry operators do not have the same contact with the licensing authority as is envisaged in the case of buses, where in most areas the bus operators will have regular contact with the traffic commissioners to whom they apply for the licences or services and to whom they notify all their stage carrying services. However, such operators also provide a service even if they are no longer involved in road service licensing—for example, if they are involved in excursions or tours. In that case, they advertise the availability of their tours to the general public. Therefore, there are reasons for distinguishing between the two.

    Nevertheless, we must be satisfied about the safety requirements for passenger buses. I agree that they are no less important than lorries. Indeed, it could be argued that they are even more important because of the number of people they carry.

    As I have emphasised, the safety provisions in the Bill depend on three features. First, there is the system of operating the licensing itself, whereby an operator has to be of good repute and sound financial standing and to have someone who is competent to manage the business and so on. In giving an operator a licence, the traffic commissioner has regard to his facilities, experience and competence, and he may attach conditions to the licence which may affect the number of vehicles which a person operates because of the limitation of his premises, his experience and his work force.

    In addition to operator licensing, there is the power of the vehicle inspectors to inspect the vehicle at any stage in a wide range of circumstances, and penalties can be imposed on the operator if the vehicle turns out to have defects. Certainly a prohibition can be put on any vehicle which proves to be defective.

    The third feature relates to the annual inspection of vehicles. For the first time, it will be carried out at a prescribed place by either our own inspectors or people under their supervision, so that annually every passenger vehicle carrying more than eight passengers will have a certificate saying that it has got through its annual inspection. That inspection will be much more rigorous than, for instance, the MoT test as applied to cars, which is a quite different system that is much more akin to HGV testing.

    What is it that a disc on a vehicle, whether it describes the particular vehicle or the operator, is designed to achieve? So far as I can see, there are two main purposes. The first is to ensure that at all times when a vehicle is on the road, someone is saddled with the responsibility for it. Someone, as it were, acts as the operator who carries the can for safety defects and who is liable for the penalties that will arise if he is not operating it safely. I suppose that the only slight footnote is that whoever is the operator on any given day should not be operating more vehicles than he is supposed to do if the main operator has a condition attached which limits him to a given number of vehicles.

    Let us deal with the first rider: that at any given stage somebody should be saddled with the responsibility for having the bus on the road. Perhaps I should say that someone has to be fixed, rather than saddled, with the responsibility for having the bus on the road. It is an obligation that we do not want people to shrug off. I cannot see how it is inadequate to have the name and address and licence number of the operator painted on the side of the bus. I cannot see the additional quality that a disc would have over and above the name and address painted on the side of the bus that would fix the operator with liability.

    If the operator hires out his bus and driver to another tour operator, that will not affect liability. If the operator has hired out his coach or bus with the driver, his employee, it remains the operator's liability. He is responsible for the driver's hours, the condition of the vehicle and so on. His name and address remain on the side of the bus.

    If by any chance the operator hires out his vehicle to another operator—sometimes another operator will use a vehicle, the property of another establishment in the same industry, but using his own drivers and routes—there will be a sign indicating that the vehicle is on hire to that other operator. Therefore, it will still be possible to identify who is fixed with responsibility at any given time if the vehicle is stopped by the police or by a vehicle inspector.

    That leads to the second rider: how does one know that an operator has more vehicles on the road than he is supposed to have if he has that condition imposed upon him?

    We propose by regulations—and the Bill gives the power—to provide that the operator must furnish to the traffic commissioners a list of the vehicles that he proposes to operate. There will be penalties for failure to comply with that regulation. Therefore, the traffic commissioners will have a complete list of the vehicles that an operator proposes to run. If, upon annual inspection of the vehicles, stopping the vehicles or any infringement arising from their use, it appears that an operator is operating a vehicle which is not on the list notified to the traffic commissioners, he will be liable to penalties. He will also incur the wrath of the traffic commissioners, who retain wide powers over the renewal of operators' licences and so on.

    I suppose that it will be possible on any one day, if we do not have the disc system, for someone to try to get away with it. I do not shut my mind to the possibility of the cowboy operator——to use the favourite phrase of the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans), who has disappointed me by not using that phrase today—trying to get away with operating more vehicles than he has licences to operate. It will be difficult to detect.

    The problem will arise only when he is caught operating a vehicle about which he has not notified the traffic commissioners.

    I am not blinding myself to that possibility. We have to consider the possibility of that occurring in practice. It is not inconceivable that there might be such an operator. Ultimately, he will be detected, and the traffic commissioners will take appropriate action. The Opposition and the CPT suggest that operators should be issued with paper discs to be displayed on all vehicles that they operate every day of the week to guard against that eventuality. The bureaucracy, the time and the cost involved would be out of proportion to the risk involved.

    I shall not disappoint the Parliamentary Secretary, because what we are talking about is the cowboy operator. There are two questions here. First, whose is the responsibility? Is it the responsibility of the policeman stopping the bus, presuming that the operator has his name and address and telephone number on the side? What kind of bureaucracy is that? But there is a more important question. There is a fundamental difference here. Though I am not suggesting for one minute that everyone does it, the man or woman boarding the bus can look at the disc and make sure that it is a licensed bus. Under the Government's system the potential passenger cannot do that.

    9 pm

    The last point put forward by the hon. Member for Newcastle upon Tyne, Central was not his strongest. He is a rare passenger who, before boarding a bus or coach, studies the PSV disc to make sure that he is safe and knows where he is going. If it is envisaged that when such a new system comes into effect a generation of passengers will study the operator's disc before they board the bus, I shall be very surprised. The only people likely to do so are the members of the Standing Committee who have had to listen to the debates about the disc. I do not think that any ordinary members of the public would do so. If the bus crashes, is stopped for speeding or an infringement of driver's hours or is involved in an accident with another vehicle, what is needed is not a disc, a paper or any regulations backing up that paper, or the issuing of thousands of bits of paper all over the place. I suggest that a passenger should be able to look on the side of the vehicle where he will see the name and address and any other features that may be required to discover who is involved in the infringement.

    In this country we run a series of programmes to help people with problems of illiteracy. There are many old people whose eyesight is such that they cannot see. How does the Minister suggest that they cope with what he is proposing?

    First, I insist that all my vehicle examiners are literate. Secondly, I am led to believe that a high proportion of the police are literate. If an illiterate member of the public has difficulty reading the name and address on the side of a bus, I suggest that he may have difficulty reading what is on the disc which the clause suggests should be on the bus.

    The Parliamentary Secretary well knows that we are concerned that it should be recognised in the Bill that a bus company can have more buses than it has discs. Our point is that though the operating centre may have determined that an operator shall operate no more than 10 buses, he may ignore that and begin to operate more vehicles and offend against the conditions laid down in the Bill. The law enforcement agencies will not be able to ascertain that too easily, because the company will have its name and address painted on the side of all its vehicles but will be licensed for only 80 per cent. of those vehicles. With a disc it will be easier to,identify which bus is operating officially on the day. That is the point to which the Parliamentary Secretary should address his remarks.

    I accept that enforcement is the only point about which we are concerned. An operator who has a condition on his licence that he should operate a given number of buses may for some reason buy more buses than he is licensed to operate. An operator has to be a really strange man to put money into buying more buses than he is allowed to operate, though that can happen sometimes. I accept that if that condition is attached to a licence, penalties should accrue if it is broken. Such an allegation will require investigation by the traffic commissioners.

    The traffic commissioners tend to look with more care at the operations of operators whom they suspect to be at the risky end of the business or whose activities do not often come to their attention because those operators do not go in for any business activity that requires road service licensing. But in the end someone will be required to check the vehicle.

    If that person sees a vehicle with a certain registration number or name and address on the side, it will be for him to check that the traffic commissioners have that name on their records. That could be done by the police or by the traffic commissioners.

    At present I am still not persuaded—although I agree that the disc is a more foolproof system—that what we are talking about is such a serious aspect of our safety requirements, such a serious risk, that it justifies this provision being imposed on every single operator licence, for every vehicle that an operator has on the road, every day of the week, to cover it.

    With respect, the Opposition, as their first amendment in Committee showed, are just shying back to the tradition of having discs in buses, which we always had under the PSV system, which is no longer required because of our new arrangements for annual inspections. They are now trying to find new details to put on new discs. I shall continue to consider the matter carefully. There are responsible bodies that are convinced that somehow this is necessary. We have taken many soundings on this matter and we continue to do so. It has not been established to our satisfaction that there is a serious enforcement problem here which justifies this quite out-of-proportion bureaucracy. In a Bill which is designed to get rid of a great deal of the unnecessary bureaucracy and control in an area which has had far too much of it for years and years, it seems that we should concentrate on the essentials. The Bill without the disc achieves the essentials of having safe passenger vehicles on the roads.

    The Parliamentary Secretary's analogy between the power to make the car-sharing cost regulations and the disc clause is not one that I can accept. We had amendments down to both of these provisions, but in the case of car-sharing costs from the outset, right from Second Reading, we were showing just how difficult it would be, if not impossible, to make effective regulations in that area. It was a point that was finally somewhat grudgingly conceded by the Minister in Committee and withdrawn. That was the end of that.

    The position is not the same in relation to the initial proposition in the Bill about operators' licence discs, because there it was the view, and still is the view, of the Opposition that if that original clause was at fault it was because it was not sufficiently stringent. There was no question of our ever suggesting that such objections as we had to the clause would be solved in any way by taking the clause away.

    As my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has pointed out, we are concerned about two aspects of this matter. It is fair to say that we have changed our position from what it was at the Committee stage. I shall explain why—quite apart from needing a different amendment in order to have a discussion on the matter. One reason is that we were convinced after discussions with people about the original clause that the way in which we were proposing to change it—namely, by requiring the disc to be coupled with the registration number—had a considerable drawback, namely, the lack of flexibility. People working in the industry are of the view that the original clause had a considerable advantage over the present law—namely, that by merely limiting the number of discs to the operator there would be the possibility of the operator switching the disc from one vehicle to another, where it was advantageous and sensible to do so. Provided that he switched the disc to another vehicle, which was sound, safe and properly maintained and which had its certificate of fitness, it would be better that he did that than to run a vehicle which was doubtful in any way as to the purpose of its operation.

    What the Minister has done in seeking to meet our objections between the Committee stage and the present time has destroyed that one advantage of the system originally proposed. By relating the number of discs to a list of registration numbers of vehicles, the flexibility has again gone. It has entirely disappeared. The Minister has rejected our proposition in Committee and the one aspect of the original clause that operators had favoured. He is therefore right to say that a policeman or an inspector could check a vehicle. He could then get in touch with the traffic commissioner and ask whether the vehicle was on the list. If it were not on the list, he could go ahead with a prosecution.

    In order to attain that limited degree of enforceability, flexibility will be lost. As there is a limitation on the number of vehicles that can be operated under a particular operator's licence, it will be impossible to enforce the provision by a quick visual roadside examination. That has been pointed out several times. If an operator is licensed to run 20 vehicles, the police must catch him operating not one but 21 vehicles. If he is licensed to operate 25 vehicles, the police must simultaneously catch the operation of 26 vehicles if they are to prosecute.

    We have already mentioned bureaucracy. However, another danger is that enforcement costs may become prohibitive. Which of my hon. Friends has a big enough police force in his constituency, suitably equipped with cars, to chase every vehicle that is simultaneously being run by a public service operator? The police would need to contact each other by telephone in order to count and see whether the operator was in breach of his licensing conditions.

    The condition relating to numbers is important. It involves the question of safety. If a traffic commissioner, in issuing an operator's licence has said that a particular operator should be allowed to operate only 10 vehicles, he has done so for a reason. Perhaps he is not satisfied that he can supervise more than 10. Perhaps he feels that the operator does not

    Division No. 240]

    AYES

    [9.12 pm

    Adams, AllenFoulkes, GeorgeMellish, Rt Hon Robert
    Allaun, FrankGeorge, BruceMitchell, Austin (Grimsby)
    Archer, Rt Hon PeterGolding, JohnMitchell, R. C. (Soton, Itchen)
    Ashton, JoeGourlay, HarryMorris, Rt Hon Charles (Openshaw)
    Benn, Rt Hon Anthony WedgwoodGraham, TedMoyle, Rt Hon Roland
    Bennett, Andrew (Stockport N)Grant, George (Morpeth)Newens, Stanley
    Booth, Rt Hon AlbertHamilton, James (Bothwell)Oakes, Rt Hon Gordon
    Brown, Hugh D. (Provan)Hamilton, W. W. (Central Fife)Ogden, Eric
    Buchan, NormanHardy, PeterO'Neill, Martin
    Callaghan, Jim (Mlddleton & P)Harrison, Rt Hon WalterOrme, Rt Hon Stanley
    Campbell-Savours, DaleHaynes, FrankPalmer, Arthur
    Cartwright, JohnHeffer, Eric S.Park, George
    Clark, Dr David (South Shields)Hogg, Norman (E Dunbartonshire)Parker, John
    Cocks, Rt Hon Michael (Bristol S)Holland, Stuart (L'beth, Vauxhall)Powell, Raymond (Ogmore)
    Cohen, StanleyHome Robertson, JohnPrescott, John
    Coleman, DonaldHomewood, WilliamRace, Reg
    Cowans, HarryHooley, FrankRees, Rt Hon Merlyn (Leeds South)
    Cryer, BobHoram, JohnRoberts, Albert (Normanton)
    Cunliffe, LawrenceHowell, Rt Hon Denis (B'ham, Sm H)Roberts, Ernest (Hackney North)
    Cunningham, George (Islington S)Hughes, Roy (Newport)Robertson, George
    Cunningham, Dr John (Whitehaven)Janner, Hon GrevilleRodgers, Rt Hon William
    Dalyell, TamJay, Rt Hon DouglasRoss, Ernest (Dundee West)
    Davidson, ArthurJohn, BrynmorRowlands, Ted
    Davies, Itor (Gower)Sever, John
    Davis, Terry (B'rm'ham, Stechford)Johnson, James (Hull West)Shore, Rt Hon Peter (Step and Pop)
    Dean, Joseph (Leeds West)Johnson, Walter (Derby South)Silkin, Rt Hon John (Deptford)
    Dempsey, JamesJones, Barry (East Flint)Silverman, Julius
    Dixon, DonaldJones, Dan (Burnley)Snape, Peter
    Dobson, FrankLeadbitter, TedSoley, Clive
    Douglas, DickLeighton, RonaldSpearing, Nigel
    Dunnett, JackLewis, Ron (Carlisle)Spriggs, Leslie
    Dunwoody, Mrs GwynethLofthouse, GeoffreyStewart, Rt Hon Donald (W Isles)
    Eadie, AlexMcElhone, FrankStott, Roger
    Eastham, KenMcGuire, Michael (Ince)Strang, Gavin
    Edwards, Robert (Wolv SE)McKay, Allen (Penistone)Taylor, Mrs Ann (Bolton West)
    Ellis, Tom (Wrexham)McKelvey, WilliamThomas, Dafydd (Merioneth)
    Evans, Ioan (Aberdare)MacKenzie, Rt Hon GregorThomas, Dr Roger (Carmarthen)
    Evans, John (Newton)Maclennan, RobertUrwin, Rt Hon Tom
    Ewing, HarryMcMillan, Tom (Glasgow, Central)Weetch, Ken
    Faulds, AndrewMarshall, David (Gl'sgow, Shettles'n)Wellbeloved, James
    Flannery, MartinMarshall, Dr Edmund (Goole)Welsh, Michael
    Fletcher, Ted (Darlington)Marshall, Jim (Leicester South)White, Frank R. (Bury & Radcliffle)
    Foot, Rt Hon MichaelMaxton, JohnWhitehead, Phillip

    have a repair and maintenance contract that is suitable for more than 10 vehicles.

    We are therefore discussing something that may have a direct effort on the safe operation of vehicles. Some bureaucracy may be involved in the printing and issuing of discs. However, that is nothing like the problem that will result if we seek to enforce effectively a system without discs. If an operator has 20 discs and puts 21 vehicles on the road, one will be running without a disc. The police would have to catch only that vehicle in order to enforce the law. That is a major reason behind pressing this issue.

    I am sorry that the Minister, in so far as he has sought to meet the enforcement problem, has chosen to set up a list. It will take away from the operator the one advantage that had originally existed, that of flexibility. I therefore urge my hon. Friends to vote in favour of the new clause.

    Question put, That the clause be read a Second time:—

    The House divided: Ayes 134, Noes 184.

    Whitlock, WilliamWinnick, DavidTELLERS FOR THE AYES:
    Wigley, DafyddWoolmer, KennethMr. George Morton and
    Wilson, William (Coventry SE)Wrigglesworth, IanMr. James Tinn.

    NOES

    Adley, RobertHaselhurst, AlanPage, Richard (SW Hertfordshire)
    Alexander, RichardHastings, StephenParris, Matthew
    Ancram, MichaelHawkins, PaulPatten, John (Oxford)
    Aspinwall, JackHawksley, WarrenPattie, Geoffrey
    Atkins, Robert (Preston North)Heddle, JohnPenhaligon, David
    Atkinson, David (B'mouth, East)Henderson, BarryPercival, Sir Ian
    Beaumont-Dark, AnthonyHicks, RobertPeyton, Rt Hon John
    Bendall, VivianHill, JamesPollock, Alexander
    Benyon, Thomas (Abingdon)Hogg, Hon Douglas (Grantham)Porter, George
    Berry, Hon AnthonyHooson, TomPowell, Rt Hon J. Enoch (S Down)
    Best, KeithHordern, PeterPrentice, Rt Hon Reg
    Bevan, David GilroyHowell, Ralph (North Norfolk)Proctor, K. Harvey
    Blackburn, JohnHunt, John (Ravensbourne)Raison, Timothy
    Body, RichardHurd, Hon DouglasRathbone, Tim
    Boscawen, Hon RobertJohnston, Russell (Inverness)Rees-Davies, W. R.
    Braine, Sir BernardJopling, Rt Hon MichaelRenton, Tim
    Bright, GrahamKaberry, Sir DonaldRhodes James, Robert
    Brinton, TimKershaw, AnthonyRhys Williams, Sir Brandon
    Brooke, Hon PeterKing, Rt Hon TomRoyle, Sir Anthony
    Bruce-Gardyne, JohnKitson, Sir TimothyScott, Nicholas
    Buchanan-Smith, Hon AlickKnight, Mrs JillShaw, Giles (Pudsey)
    Buck, AntonyKnox, DavidShaw, Michael (Scarborough)
    Butcher, JohnLang, IanShelton, William (Streatham)
    Cadbury, JocelynLatham, MichaelShepherd, Colin (Hereford)
    Carlisle, Kenneth (Lincoln)Le Marchant, SpencerShepherd, Richard (Aldridge-Br'hills)
    Chalker, Mrs LyndaLester, Jim (Beeston)Skeet, T. H. H.
    Chapman, SydneyLloyd, Peter (Fareham)Speed, Keith
    Clark, Hon Alan (Plymouth, Sutton)Loveridge, JohnSpeller, Tony
    Clarke, Kenneth (Rushcliffe)Luce, RichardSpence, John
    Clegg, Sir WalterLyell, NicholasSpicer, Michael (S Worcestershire)
    Colvin, MichaelMacfarlane, NeilSproat, Iain
    Cope, JohnMacKay, John (Argyll)Squire, Robin
    Corrie, JohnMcNair-Wilson, Michael (Newbury)Stainton, Keith
    Dover, DenshoreMcQuarrie, AlbertStanbrook, Ivor
    du Cann, Rt Hon EdwardMarshall, Michael (Arundel)Stanley, John
    Dunn, Robert (Dartford)Mather, CarolSteen, Anthony
    Dykes, HughMaude, Rt Hon AngusStevens, Martin
    Eden, Rt Hon Sir JohnMawby, RayStewart, John (East Renfrewshire)
    Eggar, TimothyMawhinney, Dr BrianTaylor Teddy (Southend East)
    Faith, Mrs SheilaMaxwell-Hyslop, RobinTebbit, Norman
    Fenner, Mrs PeggyMellor, DavidThompson, Donald
    Fisher, Sir NigelMeyer, Sir AnthonyThorne, Neil (Ilford South)
    Fletcher, Alexander (Edinburgh N)Miller, Hal (Bromsgrove & Redditch)Townend, John (Bridlington)
    Fletcher-Cooke, CharlesMills, Iain (Meriden)Townsend, Cyril D. (Bexleyheath)
    Fookes, Miss JanetMills, Peter (West Devon)Trippier, David
    Fowler, Rt Hon NormanMoate, Rogervan Straubenzee, W. R.
    Fox, MarcusMolyneaux, JamesWaddington, David
    Freud, ClementMontgomery, FergusWainwright, Richard (Colne Valley)
    Fry, PeterMorgan, GeraintWakeham, John
    Gardiner, George (Reigate)Morris, Michael (Northampton, Sth)Walker, Bill (Perth & E Perthshire)
    Garel-Jones, TristanMorrison, Hon Charles (Devizes)Walker-Smith, Rt Hon Sir Derek
    Gorst, JohnMorrison, Hon Peter (City of Chester)Waller, Garry
    Gow, IanMudd, DavidWatson, John
    Gray, HamishMurphy, ChristopherWells, Bowen (Hert'rd & Stev'nage)
    Greenway, HarryMyles, DavidWheeler, John
    Griffiths, Eldon (Bury St Edmunds)Neale, GerrardWickenden, Keith
    Griffiths, Peter (Portsmouth N)Needham, RichardWilkinson, John
    Grist, IanNelson, AnthonyWolfson, Mark
    Grylls, MichaelNeubert, Michael
    Gummer, John SelwynNewton, TonyTELLERS FOR THE NOES:
    Hamilton, Hon Archie (Eps'm&Ew'H)Nott, Rt Hon JohnMr. John MacGregor and
    Hamilton, Michael (Salisbury)Page, John (Harrow, West)Lord James Douglas-Hamilton.
    Hannam, JohnPage, Rt Hon Sir R. Graham

    Question accordingly negatived.

    New Clause 5

    Signs On Private Hire Cars And Cars Giving Lifts For Payment

    '.—(1) Notwithstanding anything in any enactment:

  • (a) no passenger vehicle of less than eight seats which carries passengers for hire or reward, or for payment of any kind, other than a hackney carriage licensed to ply for hire under the several enactments in force within the United Kingdom for licensing such hackney carriages, shall have affixed to the roof, thereof, a sign of any kind or description.
  • (b) nothing in subsection (a) of this section shall prevent a District Council from requiring, or allowing, an idenification sign, or mark, on a Private Hire Vehicle licensed under Part II of the Local Government (Miscellaneous Provisions) Act 1976, provided always that any such sign, or mark, so required or allowed, shall have no means of illumination and shall be fitted, or affixed, on the side doors, and, or, rear of the vehicle and below the window line of the said vehicle;
  • (c) no vehicle being used to give lifts for payment under this Act, or the Transport Act 1978, will carry any sign of any kind or description on any part of the vehicle indicating that the vehicle was being, or is used, to give lifts for payment.
  • (2) If any person contravenes the provisions of this section he shall be guilty of an offence and liable to a fine not exceeding two hundred pounds and to a daily fine of twenty pounds.'.—[ Mr. Cowans]

    Brought up, and read the First time.

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

    When debating a Bill of this nature, it is always wise to look at previous legislation to consider whether we can put right the mistakes of that legislation. I do not wish to lecture the House—I have not been an hon. Member long enough to do that—but sometimes legislation does not achieve the intended objectives.

    The problem dealt with by the new clause is not a new one. A number of attempts have been made to solve it. The effort made in the Local Government (Miscellaneous Provisions) Act 1976 was a dismal failure, partly because it was no deterrent. We seek to differentiate between the hackney carriage licensed to ply for hire and the private hire car. Many hon. Members will have been grateful for the taxi with its light on which they have been able to flag down on their weary way home.

    We have to consider the interests of the public, on which great emphasis has been laid during our debates. Not long ago, a friend of mine dashing from Heathrow airport spied a vehicle with an illuminated sign and jumped into the vehicle. He asked the driver how much he would charge to take him across London and was told that the cost would be £5. Also in the car was another passenger who was being taken to London for £5.

    The driver was not breaking the law, because he was driving a private hire cab. When a passenger takes a private hire cab, he makes a contract with the driver to be conveyed to a destination at an agreed price. The fares of taxis are registered by local authorities in the provinces and by the Home Office in London. On entering a taxi one can ascertain the fare.

    We have to consider what is the neces- sity for an illuminated sign. The answer is self-explanatory in the case of hackney carriages. When its sign is lit, the driver is plying for hire. When the sign is not lit, the driver may be going for his tea or be on his way to pick up a fare.

    When a member of the public sees an illuminated sign, he will, nine times out of 10, associate it with a taxi cab. The new clause attempts to solve the problem by saying that the only vehicle that may show an illuminated sign on the top of the vehicle is a taxi cab plying for hire.

    Some of the signs on private hire cars are like hire-purchase agreements. One sees the sign lit up, but only later does one notice in small print "private hire". A taxi cab plying for hire is obliged to pick up a member of the public, and such vehicles should be clearly identified and should be the only vehicles allowed to show an illuminated sign. The only reason for the illuminated sign on private hire cars is to advertise.

    We are not opposed to advertising. Subsection (1)(b) of the clause would allow a district council to continue to permit an identification sign on a private hire vehicle under the Local Government (Miscellaneous Provisions) Act 1976. A sign could be placed anywhere on the cab door but it could not be illuminated. This would protect the public. It would also protect large private hire firms that wanted only to carry on their business. If, however, a driver is returning from a journey and someone jumps into the vehicle, is it realistic to expect the driver to refuse to accept that passenger? This is why previous attempts have fallen down. There was no deterrent. It is no good the House passing legislation that merely reads nicely. If there is no deterrent, no one will take any notice of it.

    Subsection (2) of the new clause lays down for anyone guilty of an offence a penalty of a fine not exceeding £200 and a daily fine of £20 if he continues to contravene the new clause. That is not unreasonable when one considers the fares that can be obtained illegally when people wish to use cabs.

    9.30 pm

    The hon. Member for Wellingborough (Mr. Fry) mentioned the demise of the taxi trade. The clause is concerned with one of the reasons why the taxi trade is failing. It seems reasonable, in the interests of the public, that someone seeing a vehicle with an illuminated light should know that it is a taxi cab plying for hire and not a private car in which he can be "ripped off" without knowing. The new clause seeks to make clear the difference between cabs plying for hire and private hire cars that can go about their business and advertise but will not be mixed up with cabs.

    I apologise to my colleagues who have sat through long hours in Committee and today's Report stage.

    I should perhaps declare an interest since the new clause refers to the Local Government (Miscellaneous Provisions) Act 1976. I was the principal author of part II of the Act and was responsible for getting on to the statute hook the present legislation concerning hackney carriages and private hire vehicles. I was able to get part II into the 1976 Act because it was supported in Committee by the members of the then Opposition. I hope that Government members tonight will extend the same hands across the sea to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) when it comes to a vote.

    I should like to remind the House of the hornets' nest across which I stumbled, perhaps unwittingly, in 1976. As soon as I put down amendments to the Local Government (Miscellaneous Provisions) Bill, I was inundated with vehemently angry letters from hackney carriage drivers complaining of the activities of private hire operators, private hire owners and private hire drivers. Their first criticism was that the licensing system operated at that time for hackney carriages but did not operate for private hire vehicles. That was overcome in the 1976 Act.

    The second main source of anger was the restriction upon fare rates that hackney carriages could charge and the complete freedom—Conservative Members would call it the entrepreneurial spirit—of private enterprise operating private hire cars. On the one hand, restricted rates were set down by local authorities for hackney carriages and, on the other, there was complete freedom of the market for private hire vehicles. That remains the position.

    The third main source of anger is that the signs used by private hire vehicles are intended to convince the public that they are hackney carriages. Private hire operators have the same rights as anyone to advertise their business, but the purpose of an illuminated sign on the roof of the vehicle is to convince the public that it is a hackney carriage.

    The results are obvious in the correspondence in my local newspaper, in which irate members of the public have complained about private hire vehicles displaying a lighted sign late at night—when perhaps more policemen are around in the centre of Leicester—and driving past those seeking to hire them. The sign is solely intended to deceive the public.

    I wish that we could have done this in 1966, but I have mentioned the concordat which operated in Committee between the then Government and the Opposition. One reason was that the then Opposition were not prepared to support the restrictions that my hon. Friend now seeks to introduce.

    I fully agree with the words in subsection (1)(b) of the clause that private hire vehicles may have signs, although not illuminated,
    "on the side doors, and, or, the rear of the vehicle below the window line of the said vehicle".
    That would enable the operator legitimately to advertise but without misleading the public.

    I congratulate my hon. Friend on the new clause and I hope that Tory Members will support it.

    I detect an agreeable disposition in the Government's approach which seems likely to end today's debate in a satisfying way.

    There is a good deal of sense in the clause. We should have regard to the investment of taxi drivers. I can only go by what London taxi drivers tell me, but I think that it costs about £7,000 to finance a new London taxi. We have a responsibility to protect those whom we license to ply for hire and who provide a community service. The habits of licensing authorities differ, but generally taxi drivers in the provinces are obliged to wait on agreed taxi ranks. To that extent, they are not plying for hire in the fullest sense.

    I said that this happens in some places. It happens in my constituency.

    "Plying for hire" does not apply simply to vehicles in motion. It also applies to stationary vehicles. When the hackney carriage is on the rank, it is still plying for hire.

    That confirms my point—that the efforts of taxi drivers are negatived by private hire cars which drive around town creaming off the trade of the licence holder, whether he is plying from a mobile or a static position. A man who invests to satisfy the licensing conditions of a local authority about the standard and maintenance of his vehicle and about his compliance with passenger safety requirements is at a disadvantage when compared with the private hire operator who uses his private car supplemented by a temporary, illuminated sign showing his telephone number on the top of his car. That sign indicates to the innocent passer-by that he is possibly a taxi driver. The private hire operator has invested much less than the taxi owner.

    I think that my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) dealt adequately with the provisions of the clause. The clause seeks not to change the law but simply to make it more enforceable and effective. The Opposition do not say that the private hire car is illegal. We are simply saying "Horses for courses". Let us make it abundantly clear that "private hire" means exactly what is suggested by the clause and that the community realises the difference between the private hire operator and the man who has been licensed by a local authority and is plying for hire. That being so, the common sense of the clause should satisfy the purposes and interests of both private hire operators and the owners and drivers of taxis as well as those of the community. I detect a sense of agreement from the Government Benches on this issue. I hope that my sense of the matter is correct.

    I represent a considerable number of taxi drivers in the London area who are concerned that they should be protected. Taxi drivers who are licensed should be able to continue their work. I am particularly concerned about what will happen with vehicles with a passenger capacity of eight or fewer people which are able to move between London stations such as Victoria and Charing Cross.

    Under the proposed legislation, people can be carried in such vehicles. That gives little chance to the licensed trade to operate in the way that it has done for many years. I make that vital point because we are talking about the livelihood of the licensed operators. They provide an important and specific service as part of London's transport system, and I ask my hon. Friend the Minister to give serious consideration to that point.

    My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) is to be congratulated on taking the opportunity to enlist the sympathy of the Government, through the medium of the Bill, to remove an anomaly in the 1976 Act. That is the best way to describe the situation. I do not believe that what has gone on since 1976 in the car hire business was intended.

    In my capacity as a sponsored member of the Transport and General Workers Union, apart from looking after the interests of those in my union who work in the passenger carrying business, I have also been asked to look at the position of taxi drivers who are still members of the Transport and General Workers Union. I believe that in London most of them are now in the owner-drivers' organisation, the Licensed Taxi Drivers Association. I have met members of that association and have conferred with the hon. Member for Ilford, North (Mr. Bendall) on more than one occasion. Recently he and I took part in a London Weekend Television programme which highlighted some of the questionable activities of some of those engaged in the car hire business. This applied particularly to London, with the charging of extortionate fares and so forth.

    9.45 pm

    At one stage the hackney cab drivers did not like the growth of the minicab trade. They have learnt to live with it now and accept the role of the legitimate car hire business. However, hackney cab drivers have to carry overheads and maintain standards under the law in London, supervised by the Home Office. They are not allowed to charge what they like. Their fare increases are negotiated and they have to undertake continual negotiations to obtain recognition of the extent of their overheads in an attempt to secure improvements in their conditions. These requirements do not apply to the car hire business.

    Something has, therefore, gone out of balance. The hackney cab drivers are owed something. They provide great support for the tourist industry. They seek only fair play, and the clause goes some way towards that. If the Minister accepts it, he will be the pin-up boy of the cab trade tonight.

    I am grateful to the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) for initiating this short debate on this important point. It has shown that there is widespread interest in the problems of taxi drivers. My right hon. Friend the Minister and I have not forgotten the interests of the taxi drivers in bringing forward the Bill. We have had regular meetings with various representatives of the taxi trade. They have voiced considerable fears about the implications of the Bill, and we have gone out of our way to try to reassure them that Ministers in the Department and the Government generally do not intend to damage the interests of the taxi trade.

    We all respect the part that the cabs play in the transport system. At any time of day or night a taxi can be hoarded by a passenger, who can have complete confidence that the driver is a respectable and reputable person and that the fare that he will charge will be strictly related to the mileage covered. These drivers operate under rigorous conditions which would put them in some ways at a disadvantage with other sectors of the trade were unfettered competition to be allowed.

    No one disputes the right of the private hire car operator to pursue his business. But the taxi drivers are full of complaints, as the hon. Member for Leicester, South (Mr. Marshall) said and as has been brought to my attention by my hon. Friend the Member for Word, North (Mr. Bendall) on at least one occasion, about the unfair basis upon which they often find themselves competing with hire cars.

    The issues in the new clause cover one of the problems that taxi drivers say that they face repeatedly at the moment. In many cities it is difficult to distinguish between taxis and hire cars because hire car operators have developed the practice of putting illuminated signs on the roofs of their vehicles. That is particularly so in provincial cities where hire cars are not distinctive large black vehicles but are saloon cars of the same kind as those used by hackney carriage operators.

    I shall not allow myself to be drawn into what the hon. Member for Leicester, South said about private car hire operators deliberately intending that their signs should look like those of taxis. However, that is a firmly-held belief among members of the taxi trade. The Act with which the hon. Member was involved allowed local authorities to restrict roof signs. However, it also allowed for an appeal to the magistrates against the decision of the authority. In a number of cases recently private hire car operators have appealed and have been successful in two-thirds of the appeals. The result is that the legislation passed by the previous Parliament does not give the protection to the taxi drivers that they feel they deserve.

    As I said earlier, this is largely a matter for my right hon. Friend the Home Secretary, but we have consulted the Home Office because this new clause has considerable appeal to my Department. We are anxious to try to give some indication to the taxi drivers that our aims are not hostile to them and that we accept their distinctive place in the passenger network. Therefore, it is possible that we may be able to meet the main purposes of the new clause. However, the hon. Member for Newcastle upon Tyne, Central will not be surprised if I say that the drafting of it is defective and needs to be improved.

    Does the Minister recognise that the Bill applies only to areas outside London? Will the clause apply to the metropolis as well as to areas outside London?

    I undertake to consult my right hon. Friend the Home Secretary on that point, and I shall draw his attention to it. It is a point that is strongly felt by my hon. Friend the Member for Ilford, North and the hon. Member for Ealing, Southall (Mr. Bidwell). Subject to those consultations, the Government propose to move amendments in another place that will meet the objects of paragraphs (a) and (c)—to restrict roof signs on vehicles capable of carrying fewer than eight passengers and used to carry passengers for hire or reward, and to make sure that vehicles used for car-sharing exercises do not carry similar offending signs.

    Paragraph (b) is sweeping in its possible application, and at least one hon. Member has said that we are attempting to stamp out signs for private hire cars. Illuminated signs, so long as they are of a kind that would not be confused with a hackney carriage sign, would be perfectly legitimate. I am not anxious to adopt the spirit of paragraph (b), but, subject to further discussions with my right hon. and hon. Friends, and subject to the advice of those involved, the Government hope to meet the substance of the new clause in another place.

    Until now the Minister has ignored subsection (2). It is no good passing legislation unless there is some form of deterrent. If the Minister accepts the spirit of the Bill, does he also accept the spirit of deterrence?

    If we proscribe signs on vehicles, it follows that there must be some sort of penalty when that directive is not obeyed. There have been references to previous declaratory statements in the Transport Act 1968 which proved to be ineffective in practice because they were not enforceable. We seek to avoid that. The final form of the Bill must be the responsibility of the Ministers who are involved. I give an undertaking that the Government will seek to meet the spirit of the new clause in another place. I hope that in the light of that assurance the hon. Member for Newcastle upon Tyne, Central will seek to withdraw his clause.

    In view of the helpful words of the Minister, and on the assurance that wisdom has not fallen upon stony ground, I beg to ask leave to withdraw the motion.

    Motion and clause, by leave, withdrawn.

    Further consideration of the Bill adjourned.—[ Mr. Newton.]

    Bill, as amended ( in the Standing Committee) to be further considered tomorrow.