Lords Chamber

                    The text on this page has been created from Hansard archive content, it may contain typographical errors.
                

House Of Lords

Thursday, 18th July, 1985.

The House met at three of the clock: The LORD CHANCELLOR 011 the Woolsack.

Prayers—Read by the Lord Bishop of Lincoln.

Diplomatic Cars: Parking Spaces

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will remind local authorities in London that the provision of parking spaces where use is restricted to diplomatic cars only should be limited to spaces adjoining premises actually at the time occupied by diplomatic missions.

My Lords, the provision of specially marked parking spaces for diplomatic missions, and their removal when they are no longer required, is a matter for the local authorities. They are well aware of the position.

My Lords, I thank my noble friend for that Answer. Can she indicate whether her department has recently given local authorities any particular advice, or whether the apparent policy of the City of Westminster to duplicate the allocation of these spaces where one has sufficed before is based on its own initiative?

My Lords, the position is that the formula which has been agreed between the Foreign and Commonwealth Office and local authorities, subject to local traffic conditions, is that for each mission up to three parking spaces outside its office buildings, plus one for the head of mission's residence, is allowed.

My Lords, can the noble Baroness say whether the objectives of the White Paper, which was published last April, are being achieved? She and the House will recall that the number of parking offences committed by diplomats had increased to 4.3 per cent. of the total, from about 2.8 per cent. two years previously. Can she say whether these figures have come down as a result of the efforts made by her department?

My Lords, we believe that the White Paper, which has of course been drawn to the attention of all diplomatic missions in London, has been helpful in the present situation. I shall have to write to the noble Lord on the specific point that he raised about the number of car-parking offences committed since its publication.

Wave Energy Power Generation

3.8 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether, in view of the likely developments in the economic viability particularly of small-size wave generators and the lead Britain had in this field, they will allocate more funds for research and development.

My Lords, it is unlikely that wave energy generators, except possibly on a very small scale, such as navigation buoys for example, will be cost-effective in the United Kingdom, and it is appropriate to round off our research in this field, although of course we shall be receptive to any realistic new ideas which could lead to major cost reductions.

My Lords, I thank the Minister for that reply, which has been much more encouraging than I imagined it would be. May I ask him whether he is aware that there is a wave generator which is being constructed in Norway on, I gather, the lines of our own research and that the Japanese are following on? Does he not think that perhaps it is a pity that our thinking about wave generation has always been in too ambitious terms, and that there is a great advantage in keeping in being a small research team which can quickly take advantage of any breakthrough that may come? Finally, does the noble Lord agree that we can never quite tell what will be useful because we do not know what will be the price of competitive energy in the years to come?

Yes, my Lords, I am grateful to the noble Viscount for drawing my attention to that. I was in fact aware of the Norwegian project to which he referred; but I am bound to say that we are rather sceptical of the figures produced by the Norwegians with regard to that. We think that they are rather over-optimistic. However, I can assure the noble Viscount that we would certainly not set aside any new ideas if they were seen to be genuinely cost-effective.

My Lords, can my noble friend say whether the researches so far conducted in Norway and elsewhere have reconciled the problems of something light enough to operate in summer water and waves, and strong enough to stand up to winter water and waves, to say nothing of the problem of storage?

No, my Lords. I am afraid that I cannot give my noble friend an exact answer to that. What I can tell him, as I said a little earlier, is that we are not satisfied that the figures at present being projected by the Norwegians are realistic.

My Lords, can my noble friend say something about wind power? There is almost an equal and perhaps a greater field for endeavour in power generation from wind sources. Is this receiving equal attention?

Yes, my Lords. I can confirm to my noble friend that we are very interested in a number of projects concerning wind energy. Indeed, my figures tell me that we can expect, post the year 2000, that for large production turbines there will be a cost per kilowatt hour of something between 2.5p and 3.2p, which is a competitive price.

My Lords, the noble Lord suggested that he would be receptive to new ideas. Does not current research cover new ideas as well?

My Lords, I am not aware that the research about which we are talking today is under particular threat. But of course research, and what transpires from research, must always ensure that the funds available are directed to where they are likely to produce the best results. That is why we are discontinuing our major research in the area about which the Question was asked.

My Lords, in view of the fact that it is necessary for this country, as a primary producer and user, to be permanently looking at new sources of energy, is the noble Lord satisfied that we are allocating sufficient resources to those ends?

My Lords, yes. Over the past five years the Government have invested in excess of £68 million on alternative sources of energy, and of course about £12 million of that investment was on wave power. That investment was not wasted because we learned a great deal from it; but the conclusion is that the money can now be better spent developing other alternative sources.

My Lords, will my noble friend not agree that common to both wind and wave generation is the problem of storage when the wind dies down or when the waves calm?

My Lords, my noble friend is correct. That principle would also apply of course to solar heat generation.

My Lords, does the noble Lord consider that the Atomic Energy Authority establishment at Harwell is the best agent through which to channel research funding and the evaluation of renewable energy projects? Would not the Science and Engineering Research Council be a more appropriate body, considering the possible competing nature of renewable energy and atomic energy? I am sure that the noble Lord has read the report which comes from the energy technology support unit of the Department of Energy—

Question!

My Lords, has the noble Lord read this report which comes from the Atomic Energy Authority?

My Lords, if I judge the mood of the House correctly, I think that the noble Lord is perhaps straying a little from the Question. If I may return to wave power, I would advise him that the wave energy decisions have been taken by us as a result of the information that we have had and the guidance we have received from the energy technology support unit. I do not think that I should allow myself to be diverted on this point.

My Lords, is the noble Lord aware that in spite of his doubts about the Norwegian figures, they claim to be producing energy from wave power at less than 5p per unit? Is it not conceivable and is it not possible that in Orkney, Shetland and the West of Ireland we could be producing energy from wave power at less than 5p a unit? Will the noble Lord look at this?

My Lords, perhaps I may reiterate that we have been doing so. While we can certainly produce energy from wind power at the figure that the noble Lord suggests, we are extremely sceptical as to the future of wave power. But as I indicated earlier, we certainly would not cast aside any new ideas which showed a reasonable prospect of being cost-effective.

Diplomatic Immunity: Claims For Losses

3.16 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will study as a method of compensating individuals for any losses they may incur which they are unable to recover through legal action in cases where the defendants have diplomatic immunity, the method used in the United States of America of requiring embassies to carry insurance policies for this purpose.

No, my Lords. I understand that the United States Foreign Missions Amendment Act 1983, which the noble Viscount must have in mind, covers only vehicle insurance. In the United Kingdom the position is as described in the Answer I gave to the noble Viscount on 24th June. We would normally request the transfer of any diplomat found to be driving without third-party insurance.

My Lords, I agree with the noble Baroness that if we did start on this road we ought to start very gently and in a narrow field, as the Americans are, with their very limited Act. Nevertheless, they now have some years of experience. Should we now not be asking them how well they have done in the course of these years of experience, particularly at this moment when we have so many very eminent American lawyers present with us?

My Lords, I have given the Government's view of the value of this piece of American legislation in British circumstances, but the noble Viscount must understand that should a diplomat be found not to have carried third-party insurance and to be involved in an accident, we would normally request the transfer of such a diplomat. If there were damage and the mission or the diplomat refused to pay, I understand that the victim could expect compensation from the Motor Insurers' Bureau.

My Lords, is the noble Baroness aware that the head of a mission can always waive the benefit of diplomatic immunity on behalf of the agents of the mission? In these circumstances, would it not be reasonable to ask the head of a mission to waive diplomatic immunity in respect of any claims that can be covered by insurance, not only motor vehicle claims but property claims and the like? Would it not be wise in advance to ask the head of a mission to give such an assurance?

Yes, my Lords, I think I can assure the noble and learned Lord, Lord Denning, that it would frequently be the case that, if there was a matter in which a diplomat had committed a criminal offence and the police would have preferred charges had the person not been a diplomat, there would be an opportunity for the police to report the matter to the Home Office, which in turn would report to the Foreign and Commonwealth Office which would raise it with the head of the mission. It is then possible for the Government sending the diplomat to give a waiver of diplomatic immunity, and the matter can then be brought before the court.

My Lords, I am sorry to press this matter further but I was not referring to criminal cases. I was referring to civil claims for damages in our civil courts.

Yes, my Lords, this too is perfectly possible. Diplomatic immunity can be waived by the Government of the country sending the diplomat to this country.

My Lords, can the noble Baroness say whether the embassies have co-operated in this matter of waiving diplomatic immunity? Have any countries said that they will be prepared to waive diplomatic immunity in the case of parking offences, to which the earlier Question referred? If I may return to the subject of the White Paper, is the noble Baroness aware that it refers to the need for a stricter code of practice under the Vienna Convention? Can the Minister say whether such a code is being produced by the department?

My Lords, there are many cases where diplomatic immunity is waived. Indeed, it may in effect be waived by the diplomat himself, who may go before the court and not indicate that he is a diplomat with immunity to waive. It is perfectly possible that such might be done.

In answer to the noble Lord's second point, we are following up the White Paper, which we believe has been helpful in clarifying the position over parking offences and other matters which concern diplomats.

My Lords, does the Minister of State's first Answer imply that the United States does not like expelling diplomats and so diplomats there need an insurance scheme, whereas we do not mind expelling diplomats and so they do not need an insurance scheme?

My Lords, I could not possibly comment on what the United States might or might not like in these circumstances. I simply stated what the law is. So far as the United Kingdom is concerned, nobody can like such a circumstance as asking a diplomat to leave. It is a question of whether or not it is the right thing to do.

My Lords, do we make arrangements for reciprocity concerning the granting of diplomatic immunity in respect of our own diplomats? Having asked that first question, is it not the case that our record is pretty good in that field?

My Lords, as the noble and learned Lord has rightly said, the Vienna Convention applies to diplomats all over the world. Whatever ruling we may wish to apply here, we must recognise that it may be applied also to our diplomats in whatever country they are serving. So far as motor vehicle insurance is concerned, we of course insist on third-party cover.

My Lords, supposing that in a civil case diplomatic immunity is not waived, could not consideration be given to compensating the person concerned out of public funds, provided he can satisfy the appropriate tribunal that but for the diplomatic immunity he would have a valid claim?

My Lords, that point was raised earlier in the Question of the noble Viscount, Lord St. Davids. The position is as I have given in my original Answer to that Question. We believe that it would be impossible for officials or a special tribunal to determine the facts of any case without compulsory powers to obtain documentary or written evidence.

Where the facts are clear there is no difficulty in applying political pressure, such as the threat of withdrawal of a diplomat who is found to have committed an offence. The difficult cases are those where the facts or law are in dispute. We could not award compensation simply on the basis of the claimant's version of the case. Furthermore, the existence of the right to compensation could encourage diplomats to flout their obligations, and claimants to inflate or invent claims against diplomats.

My Lords, can the noble Baroness give the House any indication of who should be expelled or what should be done in the matter of a cargo of American strategic oil bought commercially abroad and shipped on a normal merchant vessel which is subject to a salvage claim at this moment, and where the American Government is apparently claiming diplomatic immunity?

Not without notice, my Lords.

Breast Cancer: Screening Policy

3.24 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they have any plans to introduce a national breast cancer screening service.

The Parliamentary Under-Secretary of State, Department of Health and Social Security

(Baroness Trumpington)

My Lords, my right honourable friend the Minister for Health announced in another place on 2nd July that the Government were establishing an expert working group to consider the information now available on breast cancer screening by mammography and advise on policy options. He has asked the chairman to report as soon as possible. Any change in policy on screening must await that report.

My Lords, I thank the Minister for that very encouraging Answer. Nevertheless, does the Minister not agree that there is a need for urgent action to deal with this situation, where out of the 24,000 women who develop breast cancer annually, 14,000 die? Many of those women would not die were the disease detected in time.

Will the Minister give the House some indication of when she anticipates that the report from the working group will be published? Also, can she say how many hospital units to deal with the diagnosis and treatment of breast cancer have been closed? Will the Minister give an assurance that no further hospital units dealing with breast cancer will be closed while this very serious situation continues?

My Lords, I agree with the statements made by the noble Baroness. The working party was set up in order that a decision could be reached as soon as possible. The question of any closures is a matter for local health authorities.

My Lords, can the noble Baroness tell the House whether there is any truth in the apprehensions expressed by some specialists working on breast cancer, who believe that they are within an ace of curing this horrid disease without removal of the breast, and that there will be no inhibitions on the finance they require to complete their research?

My Lords, with regard to funding, each option for a screening service has implications, as the noble Lord will know, for National Health Service manpower and financing. We cannot decide what resources health authorities will need until the implications have been assessed.

My Lords, while warmly welcoming the establishment of the working party to which the noble Baroness has referred, may I, in support of my noble friend Lady Ewart-Biggs, ask the Minister whether she has seen the recent statement made by the director of the Cancer Research Campaign that a substantial number of the 14,000 women who die each year could be saved by a breast cancer screening service; and that regular screening of women over the age of 50 by mammography has, under trial, reduced the number of deaths by at least one-third? We are dealing with some staggering figures here.

My Lords, in answer to the noble Lord, the information I have—and let us not split hairs—is that 13,277 women died from breast cancer in England and Wales in 1984. I agree that a significant number of those deaths might have been avoided if cancer had been diagnosed sufficiently early.

My Lords, should there be a non-profit making breast cancer screening service, might not some women who could pay contribute towards it?

My Lords, no doubt that is one of the matters which might be discussed by the working party.

My Lords, is the noble Baroness aware that there has been a considerable improvement in treatment for breast cancer recently? I can give evidence of patients who are surviving very well using anti-oestrogen treatment. Will the noble Baroness see to it that her right honourable friend makes sure he anticipates that the committee will recommend more funding, and be prepared for that as part of the inevitable increase in health service expenditure which is necessary as new technology is developed?

My Lords, I will see to it that my right honourable friend reads the noble Lord's remarks.

My Lords, will the noble Baroness assure the House that the research already done in the United States, Sweden and Holland, where it has been proved that mammography screening is most effective, will be taken into account by our own working groups, and that the cost will not deter the Government from taking that method seriously into account?

My Lords, the previous studies in the United States produced conflicting evidence on the effectiveness of mammographic screening, but the recent Swedish study, which I know the noble Baroness is aware of, has removed many of the doubts previously attached to the value of mammographic screening. However, it is right to ask leading United Kingdom experts to confirm its scientific validity, and that screening would be similarly effective in the United Kingdom.

Business

3.30 p.m.

My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Transport Bill will be adjourned at approximately 7 p.m. for a short period. During this adjournment the Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) Regulations 1985 and the Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Amendment Regulations 1985 will be taken.

Summer Recess

My Lords, it may also be for the convenience of your Lordships if I announce that, subject to the progress of business, it is proposed that the House should rise for the Summer Recess on Wednesday 31st July and return on Monday 14th October. The House will sit at 11 a.m. on Wednesday 31st July.

Cambridge City Council Bill

Bill read a second time, and committed to an Unopposed Bill Committee.

Business Of The House

My Lords, I beg to move the first Motion standing in my name on the Order Paper.

Moved, That Standing Order 38 ( Arrangement of the Order Paper) be dispensed with to enable the Motion standing in the name of the Lord Soames to be taken before the Second Reading of the Oil and Pipelines Bill on Monday the 22nd of July.—( Viscount Whitelaw.)

On Question, Motion agreed to.

Business Of The House

My Lords, I beg to move the second Motion standing in my name on the Order Paper.

Moved, That Standing Order 44 ( No two stages of a bill to be taken on one day) be dispensed with to enable the Finance Bill to be taken through all its stages on Tuesday the 23rd of July.—( Viscount Whitelaw.)

On Question, Motion agreed to.

Housing Bill Hl

3.32 p.m.

My Lords, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read a third time.—( The Lord Chancellor.)

My Lords, I was allowed by your Lordships to intervene at Second Reading as one of those concerned with the acceleration of this consolidation to express our gratitude to, and to congratulate, my noble and learned friend on the Woolsack, the Law Commission and their draughtsmen, on the formidable work that they had done so rapidly.

The Bills have now returned from the Consolidation Committee and are about to leave your Lordships' House. I think that your Lordships would not wish them to go without recognition of what the Consolidation Committee has accomplished. Of the three methods of consolidation the ones concerned with these Bills—consolidation with Law Commission amendments—is by far the most onerous. In this case there were 37 Law Commission recommendations, which I think is unexampled, and many of them were multiple. In those circumstances a quite exceptional burden fell on the Consolidation Committee. Your Lordships will wish to recognise the way that, under their brilliant chairman, they accomplished this consideration and report of the four Bills in three meetings, and to express to them your gratitude and admiration, too.

My Lords, may I add that the brilliant chairman who piloted the committee through this formidable piece of consolidation was, of course, the noble and learned Lord, Lord Brightman.

My Lords, I rise merely to associate this side of the House with the complimentary and highly deserved remarks in regard to the progress on the work of consolidation, including the contribution of the noble and learned Lord the Lord Chancellor himself in being a spur in this matter, and to express our gratitude for the progress that is taking place.

My Lords, I am most grateful to the noble and learned Lords and the noble Lord who have given this encomium on the work of consolidation and for the special mention by the noble Lord on the Liberal Benches of the work of the noble and learned Lord, Lord Brightman, as chairman.

On Question, Bill read a third time, and passed, and sent to the Commons.

Housing Associations Bill Hl

Read a third time, and passed, and sent to the Commons.

Landlord And Tenant Bill Hl

Read a third time, and passed, and sent to the Commons.

Housing (Consequential Provisions) Bill Hl

Read a third time, and passed, and sent to the Commons.

Weights And Measures Bill Hl

3.36 p.m.

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.

Moved, That the order of recommitment be discharged.—( The Lord Chancellor.)

On Question, Motion agreed to.

Town And Country Planning (Amendment) Bill

Read a third time, and passed.

Transport Bill

3.38 p.m.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—( Lord Belstead.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 47 [ Transfer of operations of the Bus Company to the private sector]:

[ Amendments Nos. 170 to 172 not moved.]

Clause 47 agreed to.

moved Amendment No. 172A:

After Clause 47, insert the following new clause:

(" Application of s. 60 of Companies Act.

.—(1) Where it is proposed in connection with the disposal of shares in or other securities of a subsidiary or an associated company pursuant to sections 47 or 69 respectively to offer any shares or other securities of a qualified company to an exempt person for the purpose of raising money in connection with the acquisition by the qualified company of such shares or securities the Secretary of State may at the request of the qualified company order, upon such conditions as he shall think fit, that the offer shall be treated as falling within section 60(1) of the Companies Act 1985.

(2) For the purposes of this section a qualified company is a company which—

(a) is incorporated with limited liability; and

(b) the Secretary of State is satisfied that it is intended to be an employee controlled company as defined for the purposes of paragraph 10C of Schedule 1 Finance Act 1974, and

an exempted person is a person of the kind described in section 60(4) and (8) of the Companies Act 1985.")

The noble Lord said: This amendment may require some redrafting. I am well aware that if the Archangel Gabriel came down in the guise of a Lord of Appeal in Ordinary and drafted amendments to any Bill, they would certainly be found out of order, and probably rightly so. There are two points to which I should like to draw the attention of the Committee before I reach

the substance of the amendment. First, I have taken some trouble to obtain legal advice on the matter, and I am informed that the amendment may require further words after subsection "(2)( b)" to make clear that it applies to employee controlled companies. Secondly, some Members of the Committee who have looked up the details of this amendment may be rather surprised by the reference to,

"paragraph 10C of Schedule 1 Finance Act 1974".

At first sight that particular schedule to that Finance Act seems to bear no relation whatever to the matter in hand; but I am assured by my legal advisers that that is the correct way to refer to the definition of an employee-controlled company. Actually, it was made in a later Finance Bill but referred back to that Finance Bill.

Having dealt with some of the drafting points, I wish to turn to the purpose of the amendment, which is extremely simple. It is to facilitate the buying-out by their workers of companies which are to be privatised as a result of this Bill. I am not asking the Committee to approve or disapprove of the main proposals of the Bill. All I am saying is that if, as a result of this Bill, certain bus undertakings change hands, then the workers should be given an opportunity to take them over; and I have put down a later amendment in more general terms to ensure that if this Bill is passed then the workers would have what one might call a first refusal when the companies come to be offered.

I would have thought that I should carry your Lordships with me when I say that it would be a very good opportunity to take advantage of this Bill in order to spread worker ownership. I myself believe that wider worker ownership and a wider spread of wealth are absolutely essential to the wellbeing of the country. I believe that if this Bill is passed it will offer an opportunity for encouraging that movement. Unless this amendment is passed, it seems to me that it will be very difficult for the workers in a bus undertaking to complete a worker buy-out.

Your Lordships will remember that the National Freight Corporation was taken over by its management and workers and that it has proved extremely successful. How was that done? It was done because Mr. Thompson (as he then was) and his associates formed a company and issued a prospectus asking the workers in the National Freight Corporation and certain financial institutions to take shares in the company. The company then made a bid for the National Freight Corporation and procured it. I am told that it required 25 drafts of the prospectus before it was finally agreed. I am also told that the formation of the company issuing the prospectus was extremely expensive. I believe that to issue a prospectus for the smallest company which might seek to be listed on their listed market would be of the order of between £100,000 and £150,000. If this point is insisted upon, it would make it quite impossible for the workers in small bus companies to take over the operation. They would simply never find that kind of money. It would be far beyond their resources. No doubt your Lordships noticed the costs of the British Telecom issue. They actually ran into millions, though admittedly that sum takes account of various other matters.

3.45 p.m.

Therefore, unless the Government are able to assure me that there is something in the Bill which makes it unnecessary, I suggest that this amendment is essential if we are going to see any bus undertakings taken over by their workers. I should also say that the workers would almost certainly need to associate themselves with financial institutions. That was done in the case of National Freight, and it would seem to me to be highly desirable, both so that they can obtain the expertise that is available in the institutions and so that they can raise capital, because they will probably be unable to raise the whole of the capital themselves.

What I am asking is that the company laws which insist upon these elaborate prospectuses should be waived to some extent in regard to this Bill, and what I hope are the consequent proposals by the workers to take over some of the bus undertakings. I emphasise that such a relaxation is already allowed and I refer to that in my amendment.

I also draw the attention of your Lordships to the fact that the Secretary of State for Industry in another place, when speaking in the debate on the financial services, indicated that the Government would indeed relax the full requirements of the prospectuses in regard to smaller businesses. Your Lordships will be aware that under the present law the full prospectus is extremely elaborate, and to my mind to a great extent is poor and somewhat ineffective. It is a goldmine for lawyers and punters. It deals very largely with the past, and it gives not very much guidance as to the future prospects of the undertaking. Your Lordships may well think that the people who will know about the prospects of the undertaking are those who already work in the buses, and they will be in a fairly good position to judge whether it will be profitable or not. Therefore I do not see that this is a case in which a great mass of shareholders, widows and small people who know nothing about the undertaking, must be safeguarded to the hilt. In any case, I rather doubt whether the present Companies Acts do in fact safeguard them.

Here we have what I hope will be a proposal limited to workers in a bus undertaking and possibly to one or more financial institutions. I should have thought that in those circumstances it would be perfectly proper to extend the relaxations which are already made in certain cases. If, as I hope, your Lordships wish to encourage worker ownership, then I think that this amendment should commend itself to your good wishes; and unless the Government can show that it is unnecessary, it should be passed. I beg to move.

I appreciate that the noble Lord, Lord Grimond, has moved this as a probing amendment and that he himself has expressed some doubts about the wording of it. But even in those circumstances I should like to give a welcome from these Benches to the thinking behind the amendment and to express our view that, although of course we are in favour of public ownership of undertakings of this kind, which in our view and as expressed in this Bill do not readily lend themselves to the kind of privatisation proposed, there should be some opportunity for the workers involved in the industry to participate in it. I think there is a limit to that from the participants' own point of view.

After all, we have expressed the view on a number of occasions that jobs will be at risk with privatisation and deregulation coming at the same time. The possibility of financial loss, if any of those undertakings go to the wall, added to the loss of jobs, could be very serious for a family. I am sure that the noble Lord, Lord Grimond, is aware of that problem and would wish there to be some limit on participation. With that minor disagreement, I think that we would support the noble Lord in his amendment.

I had intended to speak to the second of the two amendments on this subject tabled by the noble Lord, Lord Grimond, Amendment No. 172E, and I shall still do so if he is going to move it. But if he has now said all that he is going to say on both amendments, I shall speak now. I wonder whether he can guide me.

Subject to your Lordships' opinion, I had proposed to move the second amendment very briefly, but I am open to argument. I am a new boy in this House. It was my intention up to now to speak briefly on the second amendment and to move it.

Perhaps I may say what I wanted to say now, but by way of preliminary to make it clear that what I am saying is not to do with the National Bus Company, whose part of the Bill we are in, but the municipal bus companies. The Committee will have heard me say on many previous occasions that the municipal bus companies have a number of objections not so much to this policy but to the way that it is being implemented—to the fact that we have departed from our manifesto commitment. We are tackling this in one great swipe rather than by stages, and it is being undertaken, in our view, with insufficient consultation, research, study, testing, and so on.

The matter is already beyond question. We have reached the stage on this Bill in the two Houses of Parliament when buses will no longer be part of a public service but part of private enterprise, and we are all going into full-blooded competition with each other. Therefore I and the municipal bus companies very much welcome the noble Lord's introduction of this topic and the chance to debate it.

If there is to be full-blooded competition, the sooner the municipal bus companies start to consider full-blown privatisation, and employee participation in addition to that, the sooner they are likely to get themselves into a strong position to face the competition that is undoubtedly awaiting them. That means that discussion of employee participation as a part of the process of privatisation is very welcome at this stage.

I hope that the Government will be able to respond to the noble Lord, Lord Grimond, by indicating that they too are in favour of this process, particularly in the light of the good experience of the National Freight Consortium, and will agree with me that the sooner the existing municipal companies can consider and start to move into privatisation the sooner they will be able to escape from the coils of legislation that will surround them if they stay within this Bill.

I very much welcome the introduction of this topic and look forward to hearing what my noble friend on the Front Bench has to say about it, not only in relation to the National Bus Company but in relation to the municipal companies.

If I may first address myself to the first amendment of the noble Lord, Lord Grimond, I want to say that the Government have considerable sympathy with his aim of encouraging employee ownership of public transport companies. Indeed. Clause 48(4) of the Bill requires the National Bus Company to give employees a reasonable chance to acquire a controlling interest in the part of NBC's operation for which they work. Employee share ownership is thus something the Government wish to encourage. The amendment would enable an employee controlled company to raise capital for acquiring a subsidiary or associated company by offering shares to employees or financial institutions without being subject to the obligation to publish a prospectus.

As some of your Lordships will no doubt know, in January the Government published a White Paper on financial services in the United Kingdom. This contained proposals for a new framework for investor protection. Legislation is planned to be introduced as soon as possible. The White Paper included a chapter on public issues in which it was proposed that derogations from the requirement to publish a full prospectus should be allowed for offers of securities to professional investors and offers by a company of its securities to its employees. The details of the proposals have yet to be finalised. But the White Paper recognised that the cost of preparing a full prospectus could act as a disincentive to employee share ownership and accepted that the standard prospectus may not be the best way of communicating the necessary information.

I believe that it would be undesirable to pre-empt the financial services legislation by including in the present Bill a prospectus provision limited to the public transport sphere. Prospectus law is a complex subject and details of the Government's proposals are still evolving—for example, on the balance between the burden on companies of issuing a prospectus to employees and protecting the employees' position as investors by ensuring they have sufficient information.

In addition there is a potential defect in the amendment to which the noble Lord referred when he spoke earlier, but I should like to make it clear that I am not opposing the amendment solely on technical grounds.

Thus I am able to confirm that the amendment is broadly in line with our thinking and that we are, in preparing the forthcoming financial services legislation, giving sympathetic consideration to the encouragement of employee share ownership. I hope that the noble Lord will agree that it would be sensible to consider the subject in that context instead of proceeding on a piecemeal basis, and that accordingly he will not wish to press his amendment. If he remains dissatisfied with our more general proposals, he will have an opportunity to take another bite at the cherry when the financial services legislation is introduced in due course.

For the benefit of some of us, may we have a timetable? Will the legislation be in time for the employees of the NBC?

As the noble Lord will be well aware, I am not in a position to anticipate what this or any other Queen's Speech may contain, and so I cannot give him the categoric assurance for which he is asking; but we certainly wish to proceed with this matter as soon as we can.

I am most grateful to noble Lords who have supported me—the noble Lords, Lord McIntosh and Lord Sandford—and to the Minister for showing sympathy at least to the thinking behind the amendment. I realised that it would be desirable to legislate in general and not piecemeal. As I mentioned in moving the amendment, I am aware of the proposals in the White Paper which were endorsed by the Secretary of State for Industry. But, as has been mentioned, the trouble is that the financial services legislation will, I imagine, almost certainly come into operation considerably after this Bill. It may be that the provisions will still be useful, but I think that your Lordships will agree that it would have been highly desirable that the provisions which the Government themselves say that they at any rate contemplate introducing in the financial services legislation should be available when this Bill is passed into legislation, if it is.

Therefore I ask the Government to look at this matter again, as they have expressed sympathy with it, to see whether the provisions which they outline in their White Paper and their desire to see greater employee ownership in this Bill cannot somehow be brought together. But in view of the Government's general—

Before the noble Lord withdraws the amendment, if that is what he is about to do, may I put this to him? I am very disappointed at the lack of urgency registered by my noble friend on the Front Bench. I have in front of me the transition timetable for the formation of those companies and for the tendering that they have to be capable of. On top of that we are now contemplating privatisation of those companies when they are newly formed; and on top of that we are contemplating offering their employees share ownership.

They will need a lot more help than my noble friend has offered so far to be anywhere near being capable of carrying that through within the timetable set by the Bill. Either there has to be a lot more give and take on the final date for deregulation or a warmer response for what the noble Lord, Lord Grimond, has just been saying.

I am grateful to the noble Lord, Lord Sandford. What he says is absolutely true. As he divined, I intend, with the approval of the Committee, to withdraw the amendment. However, I certainly should like to return to it at a later stage of the Bill because I feel it is highly unsatisfactory, if Members of the Committee and the Government want this, that some way cannot be found for it to be made more realistic than appears possible at present. Subject to a determination to return to the matter, with the agreement of the Committee I wish to withdraw the amendment.

Amendment, by leave, withdrawn.

4 p.m.

Clause 48 [ General duties of the Bus Company]:

moved Amendment No. 172B:

Page 45, line 26, after ("shall") insert—

("(a) take such steps as may be necessary fully to secure the payment of the benefits that, but for the operation of this Part, would have been payable under any pension scheme or in accordance with customary practice in respect of the employment, before the coming into operation of this section, of persons employed or formerly employed by the Bus Company or in any undertaking or part of an undertaking which is to be the subject of a disposal under the programme, and so to secure the due performance of the employer's obligations in respect of those benefits; and (b)").

The noble Lord said: In moving my amendments to this Bill, at Clause 48, I have no political objective in view. I am speaking from conscience. I should like to speak also to Amendments Nos. 172C and 172D.

Amendment No. 172C: Page 45, line 27, leave out from ("any") to ("are") in line 29 and insert ("such undertaking or part");

Amendment No. 172D: Page 45, line 37, after ("(4)") insert ("(a) or (b)");

I have some experience of pensions issues. For over 15 years it has been my duty to serve as a Government-nominated member of the Far East (Prisoner of War) and Internee Fund, and I have given longer service on the executive committee of the Overseas Service Pensioners' Association. I have to say also that I do not move this amendment with a light heart, and only after persuasion.

It is a matter of hours since I became aware that an amendment identical to the amendment I am now moving was moved in another place and defeated by the Government by 241 votes to 178. I have to say that in the time available to me I have carefully considered the Government's arguments in Hansard in attaining their defeat of this amendment and I respectfully submit that I am not persuaded. The reference is Hansard, Report stage, House of Commons, col. 1031, on 22nd May.

It appears that at this stage I should briefly outline to the Committee the issues about pensions as I see them. The existing pension funds of the National Bus Company are well funded and soundly based. It is a condition of employment that employees on entry were, and still are, contributing to those funds. Indeed, the funds which have been entrusted for some years have been drawn up to give varying pensionable entitlements to the employees who are subscribers to these funds. The National Bus Company had every reason and the subscribers had every reason to believe when the time comes for them to enjoy pensionable status that they, the subscribers would enjoy a pensionable entitlement laid down in the pensionable schemes of the company, schemes which they joined in good faith. In justice, in that situation I do not think we can ignore it.

The pension funds are administered by trustees under the legal provisions applicable to such funds to honour pensionable entitlement to employees which they have earned by subscribing, but under privatisation and fragmentation of the company the contingent liabilities which fall on accrued pensions to be paid cannot be foreseen with any precise exactitude by the trustees. I shall come to that in a short time.

It is apparently the Government's case that while this amendment is admirable in its way, and the Government accept that the existing pension entitlement of the employees of the National Bus Company are extremely important, they nevertheless consider the amendment in another place (similar to the one I am moving here) hampers the present NBC-Government negotiations. I am not aware of the full details of the Government negotiations with the National Bus Company, and if I was it would be improper of me to refer to them.

But in Hansard of another place there is admission by Government, when an amendment similar to the one I am moving now was considered, that the pension entitlements of the employees of the National Bus Company are extremely important. If they are extremely important, and considered so by Government, it is difficult not to believe that there have been discussions about these pension requirements already.

There are other problems, for under this Bill the National Bus Company will be dissolved, resulting in the fragmentation of its business and the privatisation of its fragmented parts. But the liability to honour pension entitlements for the NBC now and in full remains. The National Bus Company has covenanted with the trustees of the National Bus Company pension schemes to pay the balance of the cost of the schemes but this Bill will remove that covenant which effectively guarantees payment of pension entitlements earned today by 50,000 employees and 16,000 pensioners over varying years of service.

To be fair to the Government, they have indicated that they will top up any liabilities that exist at the time of privatisation of its fragmented parts and the dissolution of the company, but it is not known what this liability is meant to cover and perhaps the Minister when he replies will let me know.

At present the NBC pension funds are soundly based and financially well balanced. I believe that view is held in Government. The NBC also ensures, by three-year actuarial valuation, that these will be topped up if this actuarial valuation discloses any deficiency. Thus the NBC guarantees the solvency of its funds, and so there would appear to be no problem here.

The National Bus Company's concern is that the Bill gives no protection for accrued pension rights in respect of service before privatisation and after the company is dissolved, and when the company as it now is has been fragmented into smaller companies; that is to say, pension rights already earned at present by monthly or weekly deductions from wages and salaries, and when the contingent liabilities in the future on pension funds are unknown.

I happen to believe that the bus industry might achieve greater prosperity in due course when privatised, but I cannot believe in justice that the Government should dissolve the bus company and proceed with the fragmention proposal before present and prospective pensioners have been fully assured that they will enjoy all the scales and emoluments of the present NBC pension funds that they would have enjoyed had there been no policy to dissolve the National Bus Company.

The difficuty for the company and the pension trustees—who, after all, have to abide by the laws which govern the management of these pension funds—is that it is impossible for them to calculate with any accuracy the precise liabilities of those funds after the company has been dissolved; that is to say, the amount of pension funds which will enable them to honour pensioners' entitlements to payment.

It has been suggested with regard to this contingent liability that recourse might be made to the insurance industry in order to take out insurance to cover accrued benefits. I have to say in regard to this that I am advised by the National Bus Company that after it pursued this question with two of the most prominent insurance companies in this country, the advised answer it received was that no insurance was possible unless there was a dilution of the pensionable payments paid to pensioners. This the National Bus Company and the trustees of the pension funds regarding dilution of payments to pensioners cannot accept; nor in fact could they, if they are to honour pension entitlement to employees which at present exists.

A considerable number are involved: 50,000 present employees; 9,000 pensioners and 6,000 deferred pensioners—a total of 65,000 people; to which must he added other dependent beneficiaries, making a total number well in excess of 100,000. That includes widows and orphans.

My final submission is this. There are millions of people in Britain who enjoy pensionable status because they believe in the security of a pension. In the present context 100,000 employees of the National Bus Company can be included in this belief. If ever the belief in the security of a pension was broken and not honoured, quite apart from the hardship to pensioners, the repercussions throughout the pension industry and elsewhere would be immense. The amendment that I have moved and those to which I am speaking were drafted by parliamentary lawyers and included under Clause 48 of the Bill. They make clear the legal obligations that lie on the National Bus Company and the trustees of its pension funds to obtain full security to all accrued pension entitlement.

The amendment does not exclude any of the options that might be suggested by the Government regarding the contingent liability to be met. And the solution thereafter in no way precludes the solution to the present problem which I have indicated, provided that all pensionable entitlements are met. I hope that the Minister and the Government will be able to accept the amendments or to give full consideration to them.

I should like to say at once that I am delighted to support the noble Lord, Lord Gridley, in an amendment that is clearly not of a party political nature. I am also delighted to support the noble Lord because I know that he is held in the greatest respect in the House not least because of his knowledge of the pension industry. The amendment would be necessary regardless of the conclusions arrived at in any discussions to which neither of us is party between the Government and the NBC. There is no other way, as the noble Lord, Lord Gridley, has indicated, of ensuring that the pension rights are adequately and fully protected.

When I say that this is not a party political matter, I mean that there is, in fact, virtually no dispute between the noble Lord, myself and the Government, as I understand it, with regard to the objective of the amendment. In that sense I should like to refer to what the Secretary of State said at the Report stage in another place on 22nd May. He said at col. 1042:

"I accept that the obligation about which my honourable friend talked relates to the first two categories—existing pensioners, and rights earned up to the dissolution of the NBC. The difficulty is not whether we should achieve that objective—I agree that it is vitally important—but how we achieve it".

So there is no dispute between us as to whether it should be done. The only dispute is how we should do it.

It seems to me that if there is no difficulty with the objective of protecting pension rights up to the point of privatisation, there is no reason why the Government should not give the appropriate guarantee. The Secretary of State certainly has absolute and total reserve powers as to how this should be achieved. Indeed, there is no other way, as I believe the noble Lord has indicated, and as I hope to show, in which the Secretary of State's own objective can be achieved. Unfortunately, the Secretary of State went on to say:

"The best that any company can do",

in the pension field

"is to ensure that the money invested in the fund, as a free-standing entity with its own assets and liabilities, is adequate to provide benefits earned to date".

I am afraid that he is wrong. That is not the situation. I am glad to see the noble Lord, Lord Gridley, nodding. It is not true, because the NBC and very many companies in both the public and private sectors have an obligation to provide additional funds if problems arise. In the case of the NBC the trust deeds and rules require it to pay the balance of the costs under schemes after allowing for the assets. It may well be the case that this would not be necessary because, as the noble Lord rightly said, the pension fund is a very soundly based one. In normal circumstances unless inflation once again went through the roof, or something else happened, those pension funds would be adequate. But, of course, at this stage we do not know. It is not possible to give an adequate assurance to those pensioners who are now pensioners and to those who have accrued rights up to the date of privatisation.

4.15 p.m.

The Secretary of State went on to say that,

"it is wrong in principle for the Government to give an open-ended guarantee to a private sector fund".

But the guarantee we are talking about—that kind of guarantee—has been given to the trustees of the Industrial Training Board pension schemes. The ITB close schemes are covered by trust deeds and rules that are no different from any private sector close fund except that they have a Government guarantee. That is all that would be necessary here to meet the Government's own objective.

It so happens that the Secretary of State went on to say that,

"there is no such legal guarantee at present",

by the NBC.

"I should tell my honourable friend the Member for Portsmouth, North (Mr. Griffiths) that the NBC does not legally guarantee its pension fund. Neither the Government nor the NBC guarantee for all time the present NBC pension fund".

In fact, under the trust deeds and rules of its pension funds the NBC presently effectively guarantees any potential deficit in that fund. The NBC can break this guarantee only by giving notice of discontinuing the fund, in which event it avoids liability only for new deficits that may arise after the expiry of that notice. The Transport Bill will break this guarantee by dissolving the NBC. The question of whether one agrees with the objectives of the Bill is irrelevant. What we are concerned with here—the Government have indicated that they are concerned with it as well—is to ensure that pensioners and those who have earned rights up to the date of privatisation are protected.

It seems to me that a guarantee is required in respect of pension entitlements relating to service up to privatisation. If this is not granted, it will mean that the legislation has retrospective effect. There can be little doubt about that. If it turns out—much as we may all like to believe that the pension fund is adequate—that it is inadequate, pensioners who would have expected and who would have been entitled to expect, under the pension fund and under the arrangements which oblige them to join it, that they would have a certain pension, may, in the event, not be able to have that pension. Surely that cannot be right. I hope that the Committee will agree—unless the Government have some other way of meeting the objectives which they have indicated they want to meet—that there is no other way but that suggested by the amendment.

The Secretary of State also said in the debate that he felt that the NBC pension fund would be put in a privileged position if this amendment was carried. That is simply not true. It would only be put in exactly the same position that it was in up to the date of privatisation. It would be no better or no worse, but just in the same position. The Secretary of State has indicated that he will see that the funds are at an adequate level. But that simply is not possible, as the noble Lord, Lord Gridley, indicated. Neither the Secretary of State, nor I, nor anyone else, can say what will happen to inflation or earnings over the next 50 years. It is quite impossible. I do not dispute the good intentions and the good will of the Secretary of State. But no one can give an adequate assurance as things stand. The only way is something like the amendment moved so well by the noble Lord. As he indicated, you can give as much money as you like to an insurance company from the funds, but no insurance company will give cover for any possible rates of inflation or earnings over the years. It is impossible to get that kind of insurance cover.

So there is no other way of meeting what the Secretary of State wants to do—to ensure that the pension funds are adequately protected. In those circumstances I hope that the amendment will have the support of your Lordships as being the only way to avoid a gross unfairness to employees and effectively introduce retrospective legislation on rights which people were very much intended to enjoy whether or not they ceased employment at the date of privatisation. I beg to support the amendment.

I should like to support the purpose of Amendment No. 172B, moved by the noble Lord, Lord Gridley, and, with the leave of the Committee, to speak to Amendment No. 173 standing in my name and the names of a number of other noble Lords.

Amendment No. 173: Clause 52, page 48, line 3, at end insert—

("( ) The Secretary of State shall guarantee that in respect of service with the National Bus Company or one of its subsidiary Companies participants shall receive at normal retirement date pensions no less than those which they were entitled to receive at normal retirement date on the day the National Bus Company and its subsidiary Companies ceased to operate.")

Both these amendments have the same objective.

We already know that the National Bus Company is to be dissolved and broken up into parts. These amendments are concerned with the employees of the National Bus Company; they are concerned with their pension rights, and in particular with the accrued pension rights for service up to the time when they cease to be employed by the National Bus Company. As has already been said, there are about 65,000 people in that category.

The noble Lord, Lord Gridley, pointed out that the National Bus Company has formally covenanted the trustees of its own pension schemes to pay the balance of the cost of the schemes. The National Bus Company can only break that guarantee by giving notice of its intention to dissolve the funds. However, as the noble Lord, Lord Barnett, said, the Government are ending that guarantee by dissolving the National Bus Company.

As we have heard, the Bill provides that the pension funds should be adequate at the time of transfer, but of course the test of adequacy will be an actuary's opinion that the assets of the funds at that time will be sufficient in the future to meet the liability to provide the accrued benefits to which the employees are entitled at the time of transfer—that is, the benefits that they are entitled to receive at normal retirement date. As the situation is at that point, the National Bus Company will make up any deficiency so that the assets are those that the actuary says are required.

However, as we have heard, the actuary has to make certain assumptions with regard to inflation, to the rate of interest that may be anticipated and to mortality experience. These assumptions can be proved wrong through no fault of the actuary. That is why pension schemes are revalued every three years: to monitor progress and to correct any deviation between assumption and experience. Such deviation may well require higher contributions being paid after such a review.

If, in relation to the accrued rights at transfer, the assumptions prove wrong, it could be that further contributions are necessary to the funds. If that should be the case, who would pick up the bill? There is no guarantee that the successor bodies will do it; there is no guarantee that the successor bodies will even be there. As the Government are abolishing the body which had guaranteed to find the money if necessary, surely the Government should replace that guarantee.

There is no precedent for the disintegration of a nationally-owned organisation prior to the privatisation of the residual parts. With all previous privatisations protection has been provided either by a financially equivalent successor—for example, British Telecom—or, where the successor body was not financially equivalent, the Government, or a Government-owned body. For example, in the case of the royal ordnance factories it was the Government, and in the case of Sealink it was British Rail. The only precedent for dissolution has been that of the industrial training boards, to which the noble Lord, Lord Barnett, referred, where the Government gave a guarantee to the trustees of the industrial training board pension schemes in respect of accrued benefits of members and pensions as at 31st March 1982.

It is important to stress that these two amendments, as I understand that of the noble Lord, Lord Gridley, and certainly as regards the one in my name and the names of others, are not asking for statutory protection for prospective pension rights for future service; they are asking for statutory protection to ensure payment of pension relating to service prior to the dissolution of the National Bus Company. The Government have decided to carry out that dissolution. They have a moral obligation to replace the guarantee which the National Bus Company gave. The National Bus Company are themselves asking that this should be done, and I hope that the Government will respond favourably.

If noble Lords would allow me, I wonder whether it would be of some help if I intervene briefly on behalf of the Government at this stage and then listen to the rest of the debate before making some brief remarks in reply at the end. I do so on the understanding—which I think I have right—that my noble friend Lord Gridley has moved Amendment No. 172B, with which go Amendments Nos. 172C and 172D, and the noble Lord, Lord Banks, has now spoken to Amendment No. 173, to which three other noble Lords' names are added. That means that we are having a debate about the National Bus Company, accrued pensions and we are not touching at all on the local authority pension scene, which will be the subject of more than one debate a little later on this afternoon.

Briefly, we are talking here about pension benefits which were accrued in the NBC pension funds before privatisation, and I take the point which has been made by all three noble Lords who have spoken that this is a very serious issue for Parliament and, of course, most especially, for those who are affected: the pensioners and employees of the National Bus Company.

Amendment No. 173, to which the noble Lord, Lord Banks, spoke, presses for a Government guarantee for these benefits. It is of course a case that has been put in another place as well as outside your Lordships' House, and the Government recognise that the proposed privatisation of the National Bus Company will be unusual in that the company is to be split up at the time of privatisation so that there will be no single continuing employer. It is this that has lead to the proposal for a Government guarantee, which is called for in Amendment No. 173, and to the reference to the due performance of the employer's obligation, which is contained in Amendment No. 172B, which is being moved at the present time.

I ask your Lordships to bear in mind that even today, with its status as a single employer, the NBC does not actually guarantee the pension funds in the complete open-ended way that, in essence, is being requested in both of these amendments. As the noble Lord, Lord Barnett, said, it is true that the fund rules require the NBC to make employer's contributions to maintain the benefits. But it is also true that the rules of both the funds—because, as we know, there are two funds—provide for the termination, suspension or reduction of employer's liability, and a provision of that kind really cannot be equated with a complete guarantee in the full sense of the word.

I say that not as a debating point, because it is not a very attractive debating point, but in order to direct your Lordships' attention to the funds themselves rather than to the employer behind them. I really think that many of the fears which have been expressed in another place, outside your Lordships' House, and indeed at the beginning of this debate today, would not have been raised if the NBC had stood to be privatised as a single unit. Had that been the case, the NBC could not responsibly guarantee the funds, as indeed it does not now, simply because such a guarantee would depend upon the trading environment of the company, and that is a guarantee that no company can give. Indeed, that is why pension schemes have funds: so that they possess their own independent assets, independent of the fortunes of the parent company. Indeed the NBC funds already have their own independent assets, which are worth about £0.5 billion, which have been responsibly built up over the years in order to meet their obligations. I think it is worth stressing that nothing in this Bill diminishes those assets. They are in the funds to provide pensioners' benefits and we are not reducing or removing a penny of them.

4.30 p.m.

I hope that what I have been saying indicates just how remarkable a step it would be for the Government to give a complete guarantee of the funds. Not only would it be to maintain a link with a privatised organisation, which I have to say is contrary to the whole principle of privatisation, but it would above all be to put the funds in a privileged position. It would guarantee the past service element of the fund against any economic event in the future, no matter how widespread its effects on the rest of the citizens of this country. It would be to pledge taxpayers' money to put a private sector fund in such a special position.

The noble Lord, Lord Barnett, said to me, "Well, that is all very well, but what about the industrial training boards?" Of course, in the case of the industrial training boards the Government were in the position of the employer, having been responsible for the running costs of the boards, and making the employer's pension contributions. That really is not the case so far as NBC is concerned.

May I repeat the undertaking given by my right honourable friend in another place. My right honourable friend has undertaken that at the time of privatisation the Government will make sure that the assets of the funds are sufficient to meet their liabilities. That will be done following a fresh actuarial valuation on a prudent and reasonable basis, and the Government will ensure that, if necessary, extra assets are put into the funds from NBC resources. In so far as that eventually would mean a reduced revenue to the Government from the sale of NBC, then that is something that we would accept.

My noble friend Lord Gridley asks, exactly what does that mean? It means that the words I have just spoken would cover everyone who is in the pension schemes whether they are already on a pension or are the newest qualifying member of the schemes. This undertaking reflects our view that it is the assets of the funds which represent the best and most appropriate security for the fund members, and it is also our view that we must ensure, with the trustees, that those funds are adequate for their obligations.

I realise that the noble Lord, Lord Barnett, the noble Lord, Lord Banks, and my noble friend Lord Gridley each in their different ways have great experience of matters of this kind and have each drawn the attention of the Committee to the fact that, in so far as the accrued rights are concerned in the future, the trustees of the funds would probably very well feel that, in the circumstances I have outlined, they would need further security.

I realise it, too. I realise that if the funds were closed on privatisation then the advantage of cash flow from contributions as a means of easing the purely short-term peaks and troughs would not be available, just to give one example. In that case there would be the possibility for the trustees to seek backing for the fund's assets from a private insurance company on a reasonable basis.

Although this is something which has not commended itself to the three noble Lords who have spoken, the Government hope that the trustees will look carefully at that option. Certainly the Government for their part are doing all they can to help the trustees. Already insurance companies have been approached and negotiations are under way. But your Lordships will understand that this is a negotiating situation and that more than one insurance company is involved. I am sure that your Lordships will agree that it would be wrong for me at this time to say anything which might prejudice the interests of the pensioners in those negotiations.

My noble friend Lord Gridley made some remark about his understanding of the way in which the negotiations were going. I hope that my noble friend will forgive me if I say that I think that his understanding, so far as that is concerned, is out of date now. I am hopeful on behalf of the Government that a solution acceptable to all parties could be arrived at before the Report stage in the autumn, but of course that depends on whether your Lordships will allow the Government to go that far with this matter.

I am saying that instead of agreeing to the first of these amendments, which is what the noble Lord, Lord Barnett, has already said in his speech the Committee ought to do, it would be wiser to allow the negotiations to continue so that on behalf of the Government I can report further to the House at the next stage of the Bill, in the expectation that a solution satisfactory to all parties can be made available to the trustees.

Would the noble Lord give way? It is important, if we are to accept the noble Lord's advice and leave it to Report stage, to know whether he is telling your Lordships that the insurance company negotiations could conclude with giving the kind of assurances that other noble Lords and I have sought in the debate this afternoon.

I was not wishing to go into detail because I was waiting to see what other noble Lords were going to say. Perhaps I ought to say that there are, in a most important position, the existing pensioners under the schemes, and no doubt something will be said about them. As I understand it, the existing pensioners under the two schemes have their pensions kept in line with prices. As my right honourable friend has said on more than one occasion in another place, it would be our intention to try to see that they were in no worse, but at the same time in no better, position than they would otherwise be because of privatisation.

I realise that the accrued benefits of the preserved pensions have to be carefully thought of. Here I can respond to the noble Lord, Lord Barnett, by saying that I know that one option which is being looked at is the possibility of preserved pensions being treated in line with prices with a percentage being put on the top of that. But this is all subject to negotiation. As the noble Lord, Lord Barnett, will be the first to realise, there is no way that I can possibly go further than try to give an indication, as I have in reply to the noble Lord, in I hope a reasonable way, to what was a reasonable request.

Before we resume the main theme of the debate so far, I hope that the Committee will allow me to raise a more limited point. I appreciate that it may be more appropriate for another amendment, but the noble Lord will tell me if that is the case. In 1974 London Transport improved the benefits of the London Transport 1970 superannuation fund, but the London Country Bus Services, by that time an independent company as a result of the London Transport Act 1970, indicated that it could not afford the additional cost falling on the management.

In the result, the London Country Bus Services staff were given an option to transfer to the national bus pension fund, the fund of their old parent company. The majority of the staff accepted the transfer terms, but of those who did not there remain a number, including 150 pensioners. These staff and pensioners are in a separate section of the London Transport fund.

The Government have undertaken to ensure adequate funds on an actuarial basis at the dissolution of the NBC to pay the NBC pensions. Mr. Nicholas Ridley said in another place on 22nd May at col. 1043:

"We must make sure—absolutely sure—that the assets are adequate to discharge the funds' responsibilities".

I should like to know from the noble Lord whether these LCBS people, whether present employees or pensioners, will be covered in that assurance.

I should like to thank my noble friend for his helpful reply, which at any rate goes some way to meet this major anxiety which is shared by noble Lords on all sides. It was rightly said by my noble friend Lord Gridley, and I think by the noble Lord, Lord Barnett, that this is an unprecedented situation, where we have a nationalised industry which is being privatised, not as one unit but split up into a number of units. Indeed, it is the essence of the Government's plans that they should be a number of relatively small units. The commercial structure is going to be completely different from what it was.

The point has already been made in answer to the precedent which the noble Lord, Lord Barnett, thought he had of the industrial training boards, that that was not a true precedent because the Government were the employer, and continued to employ the same people afterwards and to guarantee their pensions. We have here an unprecedented situation; one which gives anxiety to everybody. There is a major conflict of principle. On the one hand, there are the existing employees and pensioners of the National Bus Company, with their right to expect the pension scheme to maintain its value and the value of their pensions after privatisation, but on the other hand, it is the Government's duty to protect the taxpayers from the burden of underwriting the value of pensions in private industry. Nobody would be more aware of this principle than the noble Lord, Lord Barnett, with his distinguished ministerial career on the financial side in another place. I am certain that noble Lords in all parts of the Committee will recognise that this is something the Government must do.

The Government have argued that the trustees can best provide for the interests both of existing pensioners and the employees, and the employees who already have a claim against the pension fund, by making a deal with an insurance company that they will, on dissolution of the National Bus Company, see that the funds are topped up on a generous scale following the advice of the consultant actuary. That goes a long way, but much depends on just how far it does go. My noble friend has told us that he hopes to be able to tell us more about that when the negotiations have been concluded, when he can see what the situation looks like.

I follow the point made by the noble Lord, Lord Barnett. I do not believe that any insurance company, whatever the fund, will give an undertaking to underwrite index-linked pensions for the future, because they are underwriting something which is unforeseeable. Here is a basic difficulty in the situation. I am familiar, as are other noble Lords, with the process in nationalised industries that usually every three years there is an actuarial valuation and the consultant actuary advises the trust, and through the trustees the employers, what the employers' contribution should be for the next three years to maintain the solvency of the fund at the required level of pension which will be needed for the numbers expected in the future. That is combined with the foreseeable investment income which will be coming in from investment funds managed in a prudent and skilful manner.

That process goes on every three years and employees have that security which they can look to. They know that this is happening every three years and it is unlikely that their contributions will be significantly increased, but the employers' share undoubtedly will be increased as necessary. If inflation is bad in any particular period the employers' contribution will have to be increased accordingly. The employers then have to take that burden on board, the extra cost goes into the income and expenditure account, and that is paid for either by reduced profits in the undertaking or by increased charges that the undertaking has to pass to consumers and the public.

All that will change when we have a number of small individual bus companies. There is no way in the world I can see of reproducing that position. I have thought about this because I feel, just like my noble friend Lord Ridley, that the Government have a major obligation to meet and to try to find the right balance between their obligations to the employees and pensioners in the National Bus Company on the one hand and the taxpayers on the other.

I read with care what my right honourable friend said in another place and the fairly sharp exchanges that took place on the subject. But here, in this calmer atmosphere, all of us want to try to find a satisfactory answer. I think it might be possible—I am not sure whether my noble friend can accommodate such a thought—to differentiate between the past and the future. I am clear in my mind that the Government cannot rightly underwrite the pensions for the employees of the new range of private bus companies which will come into being. That would be wrong in principle and every Government would resist it. But I think it would be terribly hard on the existing pensioners if they received something less good than they have already because that, so far as they knew, was a solid pension scheme, as good as the credit of this country.

I wonder whether my noble friend might consider, maybe he will give a complete answer, the negotiations which the National Bus Company will carry out with the insurance companies, with the generous provision which my right honourable friend in another place has undertaken to see is provided in topping up the fund. That may be good enough. But I admit that I feel that out of it should come an absolute guarantee that the existing pensioners' position, their existing pensions with their index-linked nature, should be maintained for the future, either by that means or by the alternative that inevitably they would be transferred to the public purse for the Treasury to take on.

I do not think that suggestion breaches the general principle that the Government should not in any circumstances underwrite pension schemes in private business. It does not. This is an unusual situation, whereby we have a nationalised industry in the course of transition from one kind of body into another. I hope my noble friend will be able to consider that thought. It could be fulfilled by the method he has suggested, and I hope it will be; but if it is not, I seriously urge that he and his right honourable friend should consider the alternative that this is not an improper burden for the public fund to shoulder.

4.45 p.m.

I am happy to follow the noble Lord, Lord Nugent, because with the latter part of his speech I found myself in more than broad agreement. The noble Lord said it would be quite wrong for the Government to guarantee the pension of any employee of the National Bus Company as and when he moved into the private sector. That is not the purpose of this amendment. That has never been the case that has been made to the Government by the trustees of the pension fund. The limited objective is that at privatisation no employee or pensioner should be worse off in his pension entitlements, earned and paid for by members. That limited objective falls closely to the final words of the noble Lord, Lord Nugent. I am so glad that we have agreement on that.

I am deeply distressed that this matter has had to come before your Lordships because there has been immense anxiety within the National Bus Company ever since the introduction of this Bill in another place. I have to say frankly to the Government that whereas the National Bus Company management took a very positive attitude on the proposals in the White Paper and in this Bill, the sense of injustice that has arisen as a consequence of debates in another place has been a most destructive element in the morale of those in management and the work force on whom much of the future of the Bill which is now before us will so greatly depend.

The noble Lord, Lord Belstead, raised the question of whether there is a legal guarantee by the board. My noble friend Lord Barnett referred to the deed of trustees and the rules of the pension funds. A board, of which I was not a member, firmly undertook in an agreement on the setting up of the pension funds that there would be the provision of moneys to ensure that the assets could meet the liabilities of the pension funds.

Through all my six years as chairman, when we looked at the pension funds situation to ascertain that all was properly in balance, that undertaking, that guarantee, to the trustees was never questioned at any stage. It has always had the firm support of the board; and, if I may say so, Secretaries of State of successive Governments have never raised this issue with the board.

It is perfectly true, as the noble Lord, Lord Belstead, has said, that in the agreement (if that is the right expression) by the company over the trust funds there is provision that in the event of the company being unable to make contributions to the fund, it can give notice. If my memory is right, in giving notice, its liability would remain exactly the liability on the date of giving notice. The ability of the National Bus Company to pay its contributions to the fund—and the funds have been recognised in all quarters as being properly managed—has been acknowledged within the recent actuarial review to be broadly in line with the liabilities. The point that I am trying to make is that the liabilities of the fund have been fully covered by the assets. The board, without any question, has seen itself able to fulfil its commitment; and the resources of the National Bus Company would always encourage it to that view.

I wish to remind your Lordships' Committee that the National Bus Company has been a good profit earner for the state and the taxpayer. Apart from the £20 million a year which it pays on its capital and its interest, it has repaid since the end of 1983 and should have repaid by October of this year some £63 million of its capital and its borrowings. So on a commercial track record the board would have no difficulty in saying they can guarantee the fund. But that has never been in question.

The noble Lord is quite right. The problem arises not through the privatisation of the National Bus Company, but through the possible fragmentation of the group as a consequence of this Bill. The noble Lord, Lord Belstead, in the earlier part of his speech departed very little from the speeches that were made in another place, except that perhaps they were delivered in a more agreeable form; but then that is the characteristic of the noble Lord, Lord Belstead. But he advanced very little. Then, right at the end, he put your Lordships' Committee into what I would say was almost an impossible position. What he was saying was this: "If you insist upon this amendment, you will prejudice us (the Government) in finding a solution to this problem". I would have had more confidence in this respect if the noble Lord, Lord Belstead, had made known his position a little earlier. I then might have had time to think and to take advice, as no doubt the noble Lord, Lord Gridley, would have so wished.

We are now being asked to accept a particular assurance—and I accept that sincerity of the noble Lord, Lord Belstead—which places us, I would suggest, in a difficult situation. If the Committee wishes this amendment to be withdrawn, I think that it should be withdrawn on condition that this particular clause of the Bill should be recommitted at Report stage so that this matter could be freely and frankly discussed in a Committee situation and not in the more formal restraints of the Report stage. I think that the Government ought to give that undertaking if they wish to press the noble Lord, Lord Gridley, and my noble friend Lord Barnett, not to proceed with this amendment. I may be more persuaded if the noble Lord can give me an answer to the following question—

Is not the undertaking that the Committee needs an undertaking that if negotiations were to fail, the Government would come back with a similar provision to the one in this amendment?

That certainly would be the case. But I should like to put this question because I think it is very central to the issue and much depends on how the noble Lord replies to it. The noble Lord has said that there were discussions with various insurance companies. The insurance companies have made their position clear, and I suspect (as the noble Lord, Lord Barnett, has said) that the question arises of how to guarantee these funds for 30, 40 or 50 years hence on the present assets of the company. Clearly, there would have to be some topping up.

This is the question to which I referred. If an insurance company were prepared to take over the assets and to guarantee the benefits at a price (which would include a profit element) to be determined by its own actuaries, does topping up—that is a phrase that the Secretary of State in another place has used—mean that the Government would pay whatever is required by the most competitive insurance company which is prepared to take on the risk without dilution of the benefits?

If the Minister will say that in the Governments's view the topping up meets that point, I certainly would have greater ease in not pressing this amendment today. But the noble Lord, I am sure, will understand that he has placed some of us who have great responsibility in this matter and great commitments of past service, in a difficult situation because of the manner in which he has made this statement this afternoon. I do not say that in any way it was a political ploy; but it has placed some of us in an intolerable position as to the best decision on behalf of the 50,000 employees and the 16,000 pensioners. I think that is enough for the moment, but I hope that the Minister can give me a direct answer to that question.

It is only because my name is on the amendment that I might be allowed a few minutes briefly to address the Committee. I should like to say to my noble friend that so far as I am concerned, as a late signatory to the amendment, I thought that the undertaking he gave was helpful and forthcoming—and in some contrast, may I say, with a rather more dismissive attitude taken to this amendment when it was moved in the same words in another place.

So far as I am concerned therefore I think it would be quite wrong to press my noble friend's amendment to a Division at this stage. I want to be brief and I want to try very hard not to repeat what has already been said. I added my name to this amendment because it seemed to me to raise a question of important principle which did not depart in any way from the object of the Bill.

Also, for some 10 or 12 years, I was a director of a bus company before it was nationalised and I was a consultant to another; therefore I know quite a number of former employees of the National Bus Company who are now enjoying their pensions. We have just been reminded that there are some 16,000 involved. I have tried, therefore, to put myself into their shoes and, speaking as if in their shoes, I feel that the Government are under an inescapable obligation to ensure somehow that the promised benefits are secured. As I see it, we are debating not whether it should be done but how it can be done.

5 p.m.

How then can the rights of NBC pensioners and employees with pension rights be most effectively and inexpensively underwritten? I think that is the right phrase to use. My noble friend Lord Gridley and other noble Lords have talked about what contribution might be made by an insurance company by covering all risks and covering all contingencies—and, incidentally, making a goodly profit at the same time. It goes without saying that this would surely be very expensive indeed, and I cannot for the life of me see how any insurance company can think half a century ahead in trying to cover contingencies and risks which might arise.

We have discussed the option of a Government guarantee—although my noble friend Lord Belstead does not like the word, and perhaps he will have to find a better one—that all pension rights can be fully secured at the moment of privatisation. That would certainly be cheaper and simpler. There is the precedent—and I regard it as a precedent—of the industrial training board; and my noble friend made a sharp distinction, which did not seem to me a distinction with a real difference.

But there is a third option, or part-option, which nobody has yet mentioned—that is, that the companies tendering for the NBC routes, however many of them there may be, will be making offers for assets and liabilities. The existing pension rights of those now employed and of those who have retired are one of the liabilities. Why not apportion existing pension obligations between the successful bidders? Of course that might be much too complicated; it might be impossible. But that option has not yet been mentioned and I certainly think that it ought to be most carefully considered. Perhaps it would be possible even to dovetail all three options.

As I see it, therefore, it is for the Government to recommend how this problem should be solved, and it is for Parliament to approve it. In that connection we look forward very much to the Report stage. This is the Government's Bill and it is their problem. As I see it, we want a firm assurance that somehow a way will be found to underwrite the trustees' present covenant under seal, which, although my noble friend Lord Belstead does not like the word "guarantee", does amount—at any rate to a layman like me—virtually to a guarantee. The mechanics, given that assurance, can follow later. The Bill at present retrospectively expunges the NBC guarantee, and that cannot be right.

I should like very much to support what my noble friend has just said. I was going to say much the same, though of course not so expertly. I am absolutely definite that the pension rights of the NBC employees must be secured. To do otherwise would be quite dishonourable.

I hope that the fragmentation of the NBC into companies will not be too great. I understand that is entirely in the hands of the Secretary of State. He is enabled to sell these assets to people who send in their tenders. However, I think there would be some safeguard if the only people to be accepted to run the buses were big companies, and those with a very good background, because fragmentation into dozens, if not hundreds, of small private companies could be highly dangerous. It is probable that one or two of them might go into liquidation, and one wonders what would happen then to pension rights.

I am quite definite that the Government must find a solution—even though not necessarily by way of a guarantee—which so far as human ingenuity can ensure it, should be foolproof. I hope that will be possible. Of course I favour a Government guarantee, and I do not think the taxpayer would object to that: certainly I myself, as a taxpayer, would not object. When one considers how some of our taxes are squandered on the most useless endeavours, I would far rather see them being spent to ensure a guarantee for the pension rights of the employees of the NBC.

I added my name to the amendment of the noble Lord, Lord Banks, because my views on this matter are similar to those put forward by the noble Lord and by my noble friend Lord Gridley, and indeed by practically every noble Lord who has spoken. I have no wish to repeat all the statements that have been made already.

The important points I should like to comment upon are, first, that I do not think my noble friend the Minister is right in talking about underwriting pensions of companies in private industry. We are not talking about that: we are talking about underwriting pensions of companies before they were in private industry, which is a very different matter.

My second point concerns training boards, which have been mentioned by several noble Lords. My noble friend dismissed them because the Government was the employer. I was an employee of a training board, although when I went to another company I transferred my pension and so I am not in that pension scheme. But at the time I was with my training board all the training boards were independent, and the result is not quite the same as saying that the Government have always been the employers. I make the point because, as other noble Lords have said, this is a special case, and therefore it requires special treatment. I think the Government can afford not to be swayed by people who might say, "You must not set up a precedent", because it will be difficult to envisage another precedent quite like this.

I thought that my noble friend Lord Nugent in his closing remarks really put his finger on the point: what we must have is some sort of undertaking from the Government which satisfies us as meeting the basic requirement of giving the pensioners what they would have got if nothing new had happened. That is what we must have. I think my noble friend has said that is what he is aiming for and that is what is in negotiation. I understand the point made by the noble Lord, Lord Shepherd, that it is infuriating not to know in advance what the outcome of that negotiation will be, but I would suggest to your Lordships that we are extremely fortunate that this Bill has hit us at this particular time so that there is a gap of two and a half months between Committee and Report. That really does give time for these negotiations to reach the right conclusion.

In that connection I agree with the suggestion made by the noble Lord, Lord Shepherd, that we should, if necessary—I would qualify it in that way—have a recommitment of this clause, as was done in the Insolvency Bill with Clause 7, and for somewhat similar reasons. There is a precedent there. Perhaps that course could be adopted when we resume in October. However, I say that should be done only if it appears to be necessary, because I hope that my noble friend the Minister will put down an appropriate amendment of his own which will give us the reassurances that we need. Indeed, perhaps he might write to us to say that he has completed his negotiations satisfactorily.

What I think would be unwise at this stage is to take either of these two amendments to a Division. I personally, if I have to choose between them, think that the much more simple one, (that is No. 173), which clearly puts the weight on the Secretary of State, is the better of the two. I am just about to sit down; but I should not like to go into the Division Lobby at this stage of the game in support of Amendment No. 172B, and I hope that the noble Lord, Lord Banks, will not push his Amendment No. 173, either.

Before my noble friend sits down, may I ask very briefly whether he is aware that Amendment No. 173 does not deal with existing pensioners—or has he not noticed that? He has put his name to it.

So far as I am concerned, it does.

I lay no claim to any specialised knowledge of the pensions industry. I concede, of course, to my noble friend Lord Gridley, who moved the amendment, and to the noble Lord, Lord Barnett, opposite, that they have such a specialised knowledge. Therefore, most of my remarks will be in the interrogative, seeking from my noble friend on the Front Bench an understanding of the position. There can be no challenge anywhere in your Lordships' Chamber of the need to show care to safeguard the accrued rights of pensioners. Like others of your Lordships, I have received many letters on this subject. An official of the Transport and General Workers' Union kindly came to see me the other day to express the anxieties of his members and I told him that I was very ready to consider those and to repeat them here.

But I think—and I am not referring to anything which has been said today in your Lordships' Committee—that it is also incumbent upon others who oppose the Bill not to stir up unnecessary and irresponsible anxieties on this very delicate matter. We are, I think, united that employees ought not to lose, but I want to be clear myself as to the likelihood, as things are at present, of their actually doing so. My first question is: how absolute is the so-called guarantee which pensioners, either present or prospective, enjoy? As I understand it, the rules of these funds provide for the reduction, suspension or termination of employers' liability, which at least gives me the impression that the guarantee is not quite as absolute as has been suggested.

The Government are now asked to give a guarantee which is not qualified in the way that the present National Bus Company's guarantee is qualified. I am concerned to know whether pensioners are at present protected—and I hope that my noble friend will be able to give me a clear answer to this—against, for instance, a storm of inflation. The noble Lord, Lord Barnett, opposite, in the course of his very temperate remarks, suggested that one of the dangers was a recrudescence of inflation which would immensely damage the rights of pensioners. What I am inquiring about is whether, in fact, today pensioners are fully protected against such a return of inflation.

I come to my second question. If it were the intention of the Government that the National Bus Company should be sold as a whole would it, or could it, have replaced its present limited guarantee with one such as is now suggested; in other words, something very much wider? My last question is: does any private employer give any such guarantee now, and if he did how could he be sure of being able to honour it? The Government have stated very clearly—and I think this has been generally welcomed—that if, following a prudent actuarial valuation, any deficiency in the fund should appear, then that could be topped up from National Bus Company funds. The possibility of some insurance arrangement has been aired, and I share with others of your Lordships a considerable interest in learning what progress has been made.

I think the suggestion that the noble Lord, Lord Shepherd, made towards the end of his speech, that this was putting your Lordships in very great difficulty was, if I may say so, slightly unfair, for it seems to me that my noble friend has done, and is continuing to do, his best to resolve what is generally admitted to be an exceedingly difficult problem and one without precedent.

I hope that my noble friend will give me answers to those questions, because I have a feeling that some of the things that have been said on this subject have given the impression that present pensioners enjoy a very much wider guarantee and a wider degree of certainty than in fact they do. I may be wrong, but I should like to be reassured about that.

The last point that I want to make is this. Some of the arguments that have been adduced during the passage of this Bill have led me to believe that some of your Lordships, and some of my noble friends even, would really stop at nothing in their attempts to wreck this Bill—

Oh!

5.15 p.m.

I am so sorry, but I am entitled to my opinion. I do not interrupt other noble Lords. We have had a very great number of amendments which seem to me to be designed to undermine the working of the Bill. If all of your Lordships do not agree, that is my misfortune, but it is my view. What I fear is that this very sensitive aspect of the Bill might well be used by others, not in your Lordships' House, in an irresponsible manner, and that the very delicate subject of pensions will be treated as yet one weapon in the arsenal of those who wish to destroy this Bill.

The noble Lord, Lord Peyton, has really cast a massive slur upon the noble Lords, Lord Gridley, Lord Barnett and Lord Chelwood. They put their own names to this amendment. Certainly, I had no involvement in their names being put to it. What the noble Lord is saying is that, because some of us have spoken on the general nature of the Bill, we are using what is a sensitive and very serious matter, like the noble Lord, Lord Nugent, has said, for narrow reasons to cause difficulties for the Government and for the Bill. I hope that the noble Lord will withdraw that statement.

I was very careful to say in the course of my remarks that nothing of what has been said in your Lordships' Committee this afternoon was anything other than completely responsible. I am sorry if the noble Lord, Lord Shepherd, misunderstood me, but he certainly did.

Will the noble Lord allow me to intervene, as he was so kind as to exclude me! Probably, he meant his criticism to say: present company excluded. But may I say to him that not only does the amendment not seek to wreck the Bill; it effectively assumes that the Bill will become law.

I do not wish to detain your Lordships for too long, but the whole point of what I had to say was to refer to amendments which were, in my view, designed to undermine the Bill. I was not referring to the one which your Lordships are at present discussing and which was moved very responsibly by my noble friend Lord Gridley and supported by the noble Lord, Lord Barnett.

The National Bus Company has two very good pension schemes, and I think it is common ground in the Committee that the members should enjoy those schemes. The problem with which the Government have to deal is that they are both fully related to the retail price index. This inevitably leads to the uncertainties, to which the noble Lord. Lord Barnett, referred in achieving some completely insured scheme for the future. The companies are undertaking to fund these schemes, in one case up to 1995 and in the other case to 1998, but these schemes can clearly fall under the terms of the Bill before your Lordships' Committee.

The scheme of a good and well-run private company is fully funded and it is backed by the company, though probably not by any written undertakings. But the company and the pension plan are run under the authority of the same board of directors. It is an essential element in the judgments of the directors to see that their employees are happy, and a pension plan is an important element there. Clearly, the Government will have to make up the full funding of both these schemes. This can be on certain assumptions arrived at with a given figure, but the problem is how to be sure, that having been achieved, that the funding will remain intact for the forty or fifty years ahead of these schemes. I do not think that this is an insoluble problem.

It is also fair to say that the unwritten guarantees of any company are only as good as the company. The guarantee of the Government is necessarily better than that of any company, including the National Bus Company. This is the Government's problem. I think that the amendments go too far with a complete guarantee of Her Majesty's Government, and that the Government should be given time to work out some scheme which is acceptable to your Lordships and to the members of the scheme.

Perhaps I may reply briefly to what your Lordships have said. That is not an entirely easy thing to do as practically every noble Lord who has spoken has a first-hand knowledge of pensions or a very close knowledge of the bus industry or of the National Bus Company, or has a knowledge of both areas. Nonetheless, I shall do my best.

Briefly, and without more ado, perhaps I may pick up a point which was put to me by my noble friend Lord Peyton. My noble friend asked about the rules of the two funds which are the pension funds for the National Bus Company. My reading of the rules, which I have with me, is clear. They provide for the termination, the suspension or the reduction of the employer's liability. I feel on behalf of the Government that no company could guarantee its trading position and therefore the fortune of its pension scheme without any peradventure at all.

I should like immediately to make the point that I am not saying that as a defensive screen for an argument that the Government are attempting to put before your Lordships, but as the reason we believe that we need to ensure that the funds of these pension schemes are adequate. That is why my right honourable friend in another place has given an undertaking that, following a fresh actuarial valuation on a prudent and a reasonable basis, the Government will ensure that, if necessary, extra asets will be put into the funds from the sale of NBC assets. It could mean a reduced revenue to the Government from the sale of NBC, but we accept that in order to fulfil our undertaking to all who are in the pension schemes, whether they are already drawing a pension or are the newest qualifying members of the schemes.

It is, though, the further security to protect the funds in the future against any unforeseen eventualities which is at issue now, the point spoken to by so many of your Lordships, in particular by my noble friend Lord Gridley in opening this debate, by the noble Lord, Lord Barnett, and by the noble Lord, Lord Banks. I have said on behalf of the Government again today that the Government cannot pledge taxpayers' money to give an open-ended guarantee, but it is here that there is the possibility for the funds to be backed for the future by private insurance. The difficulty in which I find myself with regard to this afternoon's debate is that, although all noble Lords who have spoken have been at one in expressing their concern for the future position of NBC pensioners, either those who are pensioners now or when they take the pension, there has been some difference of emphasis coming out of this last hour and a quarter's discussion.

We have two different sets of amendments—one would place a duty on the National Bus Company itself to give a form of guarantee; the other would place a duty on the Government, although the nature of the exact guarantee that would fall upon the Government does not seem to be entirely agreed between all your Lordships. My noble friend Lord Nugent, although by no means being uncritical of the position in which we find ourselves at the moment, put his finger on the position of the existing pensioners as being more special almost than anything else. My noble friend Lord Mottistone and my noble friend Lord Chelwood were both generous in saying that they felt that, on behalf of the Government, I had endeavoured to come forward with a helpful and forthcoming statement earlier on. But both my noble friends went on to examine very carefully what they believe the options might be for the future. Indeed, I must be fair about this: they expressed doubt and at any rate hesitation about what insurance could do when one was looking many years ahead.

On that point, may I pick up the view that was expressed by my noble friend Lord Hood in the intervention that he made at the very end of this debate. My noble friend said that he felt that this was not an insoluble problem. As a layman in this matter I have been reflecting for many days now. Surely, it is the case that although no insurance company or any other body can predict precisely what will be the rates of inflation and rates of interest for periods for many years ahead, nonetheless, it is not the business of many insurance companies, not least the life insurance companies in this country, to try to do just that, although very often it is more difficult to underwrite one form of cover than it may be for another?

In reply to the emphasis on the different views which have been put forward, and indeed in reply to the two different sets of amendments which have been put forward, the Government are saying that in addition to the absolutely cast-iron guarantee that we give for the topping-up of the funds at the time of privatisation, we are now negotiating with insurance companies for further security for the funds. Negotiations so far have shown a good basis for fruitful further progress if the trustees decide that they want to pursue the insurance option. My noble friend Lord Nugent drew particular attention to the position of existing pensioners. Here I would say to my noble friend that any insurance option which we can secure would of course be for the members as a whole, most certainly in order to cover existing pensioners.

So far as preserved pensioners are concerned, as I said to the noble Lord, Lord Barnett, he asked me to respond about the detail, we are looking at an option, which would be connected with prices. The noble Lord accepted that I could not go further than what I said about three-quarters of an hour ago. If I may say so to the noble Lord, Lord Shepherd, we are most certainly not talking about dilution. However, we may have to talk about the same package of benefits in a different shape in return for insurance cover and certainly—not worse benefits but different benefits, but equivalent. Here again, this is subject to negotiation.

I will end by answering three questions put to me by noble Lords. The first came from the noble Lord, Lord Irving of Dartford, who referred to the London country bus service. I am hopeful that this particular situation will not be an obstacle to any satisfactory settlement. We recognise the point which the noble Lord made in his speech and we are certainly taking account of it.

5.30 p.m.

Secondly, in reply to my noble friend Lord Peyton I should like to say that we are seeking to ensure that employees do not lose out. I have to say that the present rules of the funds are indeed, as my noble friend suggested, not absolute. Negotiations with insurance companies have shown, as I have said, that there is a basis for fruitful further negotiation. I do not see how the National Bus Company, if privatised as a unit, could have given a complete guarantee. However, that is ground I have already gone over.

Thirdly, the noble Lord, Lord Shepherd, asked me an absolutely direct question: would the Government be prepared to pay whatever an insurance company demanded in order to guarantee the existing benefits? At least, I thought that was the question which the noble Lord put to me.

I meant a guarantee that was competitive, whereas the noble Lord suggested that I referred to a guarantee at any price. My question assumed a competitive situation. Clearly I am not suggesting that the Government should pay whatever price any insurance company demanded. Obviously one is talking about a competitive situation.

I am grateful to the noble Lord, and he was quite right to intervene. My answer is that the Government will be prepared to pay what is necessary to achieve adequate insurance cover, as we would be to top up the funds adequately in the way that we have given an assurance that we would do.

I am asking as a result of this debate that the Committee will agree that the negotiations to which I have referred should continue, so that the Government can report again to the House at the next stage of this Bill. I make that request not in order to try to evade responsibility. As sure as night follows day, and whatever may happen to anybody in this life, your Lordships' House will meet again for the next stage of this Bill a little later this year. And, again, as sure as night follows day, it will be in the hands of your Lordships as to what your Lordships consider should be done with this particular part of the Bill and with this particular issue.

I earnestly ask your Lordships, after what has been a valuable exchange of views which has taken us a little further today, to allow the Government to try to pursue the option which the Government are genuinely trying to pursue, and then allow me to report back to your Lordships' House, if that is the way events turn out at the next stage of this Bill.

Can my noble friend the Minister say whether or not there was a covenant between the National Bus Company and their pensioner! If so, does he have any idea of what were the terms of that covenant?

A covenant has been referred to in today's debate. I certainly accept anything that has been said about it and about an undertaking by the National Bus Company about the payment of contributions. But that is part of the rules. The rules are, as I understand them—and I have the rules with me—subject to the overriding stipulation that they can be terminated, suspended or reduced by the National Bus Company if it wishes to do so, by way of the employer's liability, if that is necessary. That is an overriding stipulation.

Before the Minister concludes, will he give an answer to a proposal which I found to be of the greatest interest? It was made by the noble Lord, Lord Shepherd, who suggested that at Report stage we should recommit this matter, as if it were. We would then all feel very much happier about letting the Government go forward with their negotiations. We could be the judge of whether recommitment was necessary. The noble Lord, Lord Mottistone, used, I believe, the words "if necessary". I say that we should have it as an assurance. After all this debate we could then wait and see.

Before the Minister replies to the noble Earl, perhaps I may make a point in a similar vein. Of course this matter depends very much on what your Lordships wish to do. Clearly this is an on-going situation. I believe we are due to return to this Bill at Report stage on 14th October. We will not therefore have the usual facilities for discussion and information.

In the pursuit for a settlement will the noble Lord the Minister undertake that he will be willing to see those who have expressed an interest in this question, so that they may be brought up to date on the situation before we meet on 14th October for the next stage of this Bill? We would then be in a position to take a view as to how far the negotiations have progressed, how successful they have been, and how closely the genuine anxieties expressed have been met. Such a meeting could be the basis of that information.

the noble Earl, Lord Selkirk, spoke about a covenant. As I understand it, the position is that at present the National Bus Company has covenanted with the trustees of the National Bus Company's funds that if there is any shortage in those funds to pay the entitlement of pensioners, the company will see to it that those funds are met. That agreement covers 50,000 pensioners. I believe that is the covenant to which the noble Earl was referring.

Perhaps I may reply specifically to the noble Earl, Lord Perth, and to the noble Lord, Lord Shepherd. I give without hesitation the undertaking for which the noble Lord, Lord Shepherd, has asked. The Government give an absolute undertaking that in the week before we reach the Report stage of this Bill there will be a meeting with any noble Lord who has spoken on this particular amendment this afternoon. I shall make sure that we are in touch with noble Lords to that effect. I will go further. When that meeting takes place, if it is to take place in good faith, there clearly must be an understanding that if the Government's report is not to the liking of your Lordships, the Government will agree to recommittal of this particular clause. I give that undertaking.

The noble Lord the Minister has, as usual, been very courteous. I am most grateful to him for the way in which he has responded, particularly in his concluding remarks. In those circumstances I am sure that your Lordships will feel that the House should have an opportunity to consider the matter again. Because it will be a couple of months before we reach that stage I believe one or two points of clarification still need to be placed on the record.

I know the noble Lord too well, even in the short space of time I have been in this House, to believe that he would wish in any way to mislead the Committee. However, I noted in particular what he said about the Government's undertaking in reply to my noble friend Lord Shepherd. I shall return to that point in a moment.

I shall now take up the point made by the noble Lord, Lord Peyton, concerning the present rules. In the case of the rules of any pension fund, it would be absurd if there were not a clause allowing them to be discontinued. It is not surprising that such a clause exists in this case, but in respect of the NBC all that would happen is that the NBC could break the guarantee only by giving notice of discontinuation, and it would cease as from that time. However, this would not affect the position before that time.

What we are talking about in these amendments and what I thought almost every noble Lord who has spoken in the debate—the noble Lord, Lord Peyton, included—wanted to ensure was not that there should be some open-ended guarantee for new pensioners but that it should be for existing pensioners and the existing pension rights of employees at the date of dissolution. I thought that that, however much they disagreed or agreed with the amendment, was what everybody was in favour of doing.

We are not, therefore, talking about a link with a private company. We are talking about a link for employees of a publicly-owned company up to the date before it becomes a private company. So there is no dispute about that. Nor is there dispute, I should have thought, about the case for the industrial training boards. Frankly, and I hope that on reflection the Minister will agree, one is a state-owned board and another a state-owned company, and to argue whether one is right to give a guarantee and one not is no more than a quibble.

I now turn to the point to which we shall return at a later stage. I said that I would not wish to accuse the noble Lord of misleading the Committee. I noted very carefully what he said about the Government's proposals in these negotiations. He told us that the undertaking would be to top up the funds on a reasonable actuarial assumption. Those are the words he used. That makes it quite clear. In reply to my noble friend Lord Shepherd a moment ago he gave an undertaking that the Government would ensure that there would be adequate funds; but they cannot, by the very nature of things, be adequate to ensure the guarantee. They cannot be; that just cannot happen.

I do not know what actuarial assumptions will be given to the actuary but I must tell noble Lords that when I was Chief Secretary to the Treasury I gave a few assumptions to the actuary and he had no choice but to take them. I have to say that they did not always come true, as many assumptions do not; yet here we are talking about assumptions that will have to last for some 50 years. The Minister tells us that in those circumstances he will ensure that the funds will be adequate but, frankly, we all know that no insurance company would accept whatever money anyone is prepared to give it in order to provide a 50-year undertaking that was previously given to workers in a pension fund at the date of dissolution.

However, I hope I am wrong. As I said, I know the Minister did not wish in any way to mislead the Committee. Therefore, when he comes back to this issue he will be able to tell us the extent to which the insurance companies are unable to give the sort of guarantee that most noble Lords want and that there will be a further topping up by the Government to ensure that the guarantee is met.

I have just one point to make. It seems to me that the central issue at stake is whether the successor bodies will be as good a guarantee for providing any extra funds which may be necessary to secure the accrued benefits as is the National Bus Company. Can the noble Lord, Lord Belstead, say whether he thinks that the successor bodies will be as good a security from the point of view of making up any deficit in the funds in the future, relating only to the accrued benefits at the time of transfer? If he does not think so, obviously the employees must be in a worse position.

I listened with very great interest to what the Minister said about the negotiations with the insurance companies. I am not very hopeful about that, but it may turn out better than I expect. However, in view of what the Minister said I would not want to move Amendment No. 173 when we reach it.

Perhaps I may just say to the noble Lord, Lord Banks, who is an expert in this field, that the question of accrued benefits for those who are moving off to the subsidiaries is of course all part of the calculations and negotiations one must go into when considering the position of those people for the future. This is a matter to which we must return on Report.

5.45 p.m.

I have heard with interest the reply given by my noble friend the Minister to this rather long debate on pensions. I feel that my amendment has drawn the attention of your Lordships to all the provisions regarding pensions with which the National Bus Company has to comply in honouring pension schemes to its employees.

Constructive speeches have been made, but I am in a little doubt in withdrawing my amendment because I cannot see why it should in any way fetter the Government's future negotiations. It clearly lays down what are the existing legal requirements in obtaining satisfaction for pensioner entitlements. My noble friend said that he is prepared to meet the requirements in a way which can be dealt with on Report. If it is the feeling of the Committee that it would be right to consider an amendment on those lines at Report, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. I 72C and 172D not moved.]

Clause 48 agreed to.

Clauses 49 and 50 agreed to.

moved Amendment No. 172E:

After Clause 50, insert the following new clause:

(" Employee acquisition of business.

. Before granting or withholding his consent to any scheme of disposal submitted to him for approval by either the National Bus Company or a controlled authority, the Secretary of State must first be satisfied that the employees concerned have had an opportunity to acquire the business for themselves.").

The noble Lord said: In the debate on an earlier amendment I said that I wanted to move this amendment but intended to be brief in doing so. I hope that the amendment speaks for itself. It lays upon the Secretary of State an obligation to see that employees are given an opportunity to acquire the successor businesses, whether they come from the National Bus Company or a controlled authority. In the debate on the earlier amendment I explained that I am much in favour of employee-owned and controlled companies, co-operatives, and so on.

This is a general amendment calling attention to the possibilities existing under this Bill for promoting ownership by employees, in all its forms. I also said earlier that my amendments are relevant to the question of whether or not your Lordships consider this is a good or a bad Bill, but my personal feelings are that it at least gives a chance for the setting up of small businesses and the promotion of competition. In that respect at any rate it is in my view much preferable to some of the earlier privatisation measures which merely turned public monopolies into private monopolies. It seems to me that the Secretary of State could well be given the power indicated in this amendment.

But whether the Committee decides that he should be or not, what I think is quite certain is that if the Government are to tell us that they are in favour of spreading ownership, in my view they must go very much further than some of the rather cosmetic allocations of small numbers of shares which have been a feature of earlier Bills, and they must also be in favour of encouraging small businesses. As the Bill stands I am afraid that, without some amendment and without the positive good will expressed not only in words but in actions by the Secretary of State, the excellent intentions which the Government express will never come to fruition. Therefore I think the amendment is perfectly clear and with those few words I beg to move.

Again, I should like to thank the noble Lord for introducing this subject and particularly this amendment, the purpose of which is, if anything, a little clearer than the earlier one which was linked with it, certainly to a layman like myself. I should like to stress that at any rate as regards the municipal bus operating authorities it will, so far as I can see, be very greatly in their interest, once they have formed the company required by this Bill, immediately and at the same time to consider not only privatising that company but also embarking on the possibility of employee acquisition. We want a lot of help from the Government in that area because it is a major undertaking to step from being a public service within a local authority to being an employee-owned private enterprise, and I should like further assurances from my noble friend on the Front Bench not only about the timing but also about the assistance and encouragement that we can expect from central Government in this field.

There is really nothing between the Government and the noble Lord, Lord Grimond, on the objective. As the noble Lord recorded in his remarks, the Government have made it clear that they believe in employee acquisition. In the White Paper of last July we made it clear that we would welcome bids from employees for the units in which they work. This is now reflected in Clause 48(4) of the Bill which places on the company a duty in carrying out their disposal programme to take such steps as may be practicable to secure that employees are afforded a reasonable opportunity for acquiring a controlling interest in the part of NBC in which they work.

But as regards putting this on the face of the Bill, perhaps I may first of all make clear to my noble friend Lord Sandford that in the case of the public transport companies to be created from the PTEs and the municipal bus undertakings, it is not our policy at this juncture to secure their privatisation. I felt from an earlier discussion that my noble friend felt that it was. We should not wish to stand in the way of that happening, particularly if the employees were disposed to make a bid, which of course they would be quite free to do.

Clause 71 contains the necessary powers to facilitate disposals, and that clause indeed requires my right honourable friend's consent. This provision was included to stop the possible misuse of the power of disposal rather than to secure that particular parties should be the beneficiaries of such a sale. I say that because the noble Lord, Lord Grimond, will readily appreciate that there is a difference in the relationships between my right honourable friend and the National Bus Company, on the one hand, because the Government are a 100 per cent. shareholder, and the public transport companies which are to be formed on the other, in which of course my right honourable friend will have no equity interest at all.

Really, in the last analysis the controlling authorities have to be free to exercise their control as shareholders over the affairs of the public transport companies in the same way as shareholders are in any other company. Although I hear my noble friend Lord Sandford saying that help from the Government is needed, I should have thought that this really would come very close to Government interference.

As for the public transport companies, the amendment would place the Secretary of State in the position of deciding how assets for which he has no responsibility ought to be sold, and this is a task which the Government consider should be more properly placed on the controlling authorities. It is not that I do not agree with the noble Lord, Lord Grimond, in the objective which he is trying to achieve, but I do not think that it can be done by Government interference—and I think it would be seen as interference.

I should like just briefly to support the noble Lord, Lord Grimond, the more so since, when some years ago I was chairman of the Co-operative Development Agency, he was very helpful with the work of that agency on a number of occasions. I rise merely to point out to your Lordships that cooperative ownership of transport undertakings is a perfectly feasible and viable proposition. Perhaps I may give two examples. The first is that the buses in Israel are run by the workers in that undertaking. The second is that the gondoliers in Venice are run by a co-operative. So I feel very sure that with such variety of example it ought to be possible in this context for the workers to run co-operative undertakings in the transport industry.

May I at once say that of course I was not inviting central Government to interfere in the affairs of local authorities. My constant song is that they should do less of that. What I was saying was that they are in a position to encourage us, not the least by removing various impediments. What happens if we saddle the new municipal bus operating companies with unacceptable pension liabilities in respect of their pensioners? This is one of the ways in which the Government can help—and we shall come to that in a moment. When we get to the subsection of this Bill concerning municipal bus operators, I shall explain to the Committee how the various structures at present on offer in the Bill are all entirely unsatisfactory and that therefore the best option for the municipal bus companies is to privatise themselves. Another impediment in our way, which I alluded to at an earlier stage, was the impossibly tight timetable that we have set. It is impossibly tight as it is now, but if the municipal bus operating companies decide that their best option is to become fully privatised and at the same time they enable their employees to take up shares in the ownership of the company, then we need time to give effect to all these measures. It is that kind of encouragement for which I was asking.

I am obliged to the Minister for his response to my argument and also to the noble Lords, Lord Sandford and Lord Oram. Indeed, I remember well the noble Lord, Lord Oram's, distinguished chairmanship of the Co-operative Development Agency, and I rather look forward to visiting Venice with him, where no doubt we shall be well received by the gondoliers. But I was rather surprised at one remark made by the noble Lord the Minister, which was that it was not the Government's intention to interfere in transport. I understood that the whole of this Bill was an interference in transport. If it is not an interference in transport, it appears to me that we are wasting our time. But I suppose that the noble Lord the Minister meant that he did not want the Secretary of State to do any more than is his duty in regard to the National Bus Company.

As to what the noble Lord, Lord Sandford, said, it is not so much a question of the Minister taking only positive action, but of removing impediments to worker ownership. Indeed, I believe—and here again I think I have the support of the noble Lords, Lord Sandford and Lord Oram—that unless the Government remove the impediments to ownership and take a more positive line about this—I know full well that they are nominally in favour of worker ownership and that there are parts of this Bill which actually advocate it—it will not take place. Therefore if the Government are sincere about this matter, I beg them to look not necessarily at the proposals in this particular amendment, but at the general tenor of the Bill, and at least to remove some of the obstacles and persuade the Secretary of State to take up a very positive attitude where groups of employees are willing to take over a bus company.

I end by reiterating what has already been said by the noble Lord, Lord Oram. This is the kind of small business which is very suitable to the co-operative system. If the Government are sincere about spreading that type of ownership, this is a great opportunity for them. Nevertheless, in view of what the Government have said, I would, by leave, withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 51 agreed to.

[ Amendment No. 173 not moved.]

Clause 52 agreed to.

6. p.m.

Unless your Lordships wish to speak on any of these clauses, may I put the Question that Clauses 53 to 56 stand part of the Bill?

Clauses 53 to 56 agreed to.

Clause 57 [ Passenger Transport Areas, Authorities and Executives]:

moved Amendment No. 174:

Page 51, line 9, leave out ("consists") and insert ("is a body corporate with perpetual succession and a common seal consisting")

The noble Lord said: This is a small technical amendment. Clause 57(1) substitutes new subsections for subsections 9(1) to 9(4) of the Transport Act 1968. While most of the essential provisions have been reenacted in Clause 57, the Bill does not re-enact the provision in Section 9(1)( b) of the 1968 Act that the executive shall be a body corporate with perpetual succession and a common seal. That provision is obviously essential to enable the executive to carry out the functions provided for in the Bill together with its normal day-do-day business. I beg to move.

I hope that I can answer my noble friend very briefly and to his satisfaction. I can assure your Lordships that those words in Section 9(1)(b) of the 1968 Act have already operated in the case of each PTE. That means that each executive is already a body corporate with perpetual succession and a common seal and will remain as such. The provision in the original version of the 1968 Act therefore has now no further function to perform. Its replacement will not alter the position of the existing PTEs. I hope that with those remarks my noble friend will be satisfied.

My noble friend sounds very reassuring. I shall read exactly what he says and be advised accordingly. I thank him very much indeed, and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 174Z:

Page 51, line 34, at end insert—

(" (bb) in subsection (5), as it applies to Scotland, for the word "designated" there shall be substituted the words "passenger transport";")

The noble Lord said: With the leave of the Committee, I should also like to speak to Amendments Nos. 174Y and 174X.

Amendment No. 174Y: Page 51, line 36, leave out ("subsections") and insert ("subsection")

Amendment No. 174X: Page 52, line 16, leave out from beginning to ("and") in line 17.

These are technical amendments. They reinstate Section 9(5) of the Transport Act 1968 for Scotland. The provision which allows district councils to assist a PTE and vice versa was proposed to be repealed because district councils in Scotland no longer have transport functions. However, we have received representations from the Strathclyde PTE that under this power it enters into agreements with district councils for such matters as the cleaning and maintenance of bus shelters. We propose therefore to reinstate the provision but subject to a minor drafting change to alter the description of the area from "designated" to "passenger transport" as the Bill does elsewhere in the 1968 Act. I beg to move.

On Question, amendment agreed to.

moved Amendment No. 174Y:

[ Printed above.]

On Question, amendment agreed to.

moved Amendment No. 174X:

[ Printed above.]

On Question, amendment agreed to.

moved Amendment No. 174W:

Page 53, line 19, leave out second ("section") and insert ("sections").

The noble Lord said: With the leave of the Committee, I should like also to speak to Amendments Nos. 178D: 208CA and 211ZCA.

Amendment No. 178D: Page 54, line 31, at end insert—

( "Consultation and publicity with respect to policies as to services.

.—(1) When considering from time to time the formulation of policies for the purposes of section 9A(3) of this Act, the Authority for a passenger transport area shall consult—
(a) with every Passenger Transport Authority, county council or regional council whose area may be affected by those policies; and
(b) either with persons operating public passenger transport services within their area or with organisations appearing to the council to be representative of such persons.

(2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, the Authority concerned shall publish a statement of all policies so formulated by them on that or any previous occasion which for the time being apply in relation to the performance by the Executive for their area of their duty to secure services under section 9A(1).

(3) When the Authority publish such a statement, they shall send a copy of the statement—
(a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and
(b) to each of the persons or (as the case may be) organizations whom they consulted under subsection (1)(b) above; in relation to the formulation of their policies on the occasion in question.

(4) The Authority shall also—
(a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and
(b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected." ").

Amendment No. 208CA: Clause 61, page 60, line 1, leave out subsection (4).

Amendment No. 211ZCA: After Clause 61, insert the following new clause:

( "Consultation and publicity with respect to policies as to services.

.—(1) When considering from time to time the formulation of policies for the purposes of section 61(1)(b) or (2)(b) of this Act, any council to whom either of those provisions applies shall consult—
(a) with every Passenger Transport Authority, county council or regional or islands council whose area may be affected by those policies; and
(b) either with persons operating public passenger transport services within their area or with organisations appearing to the council to be representative of such persons;
and where the council's area is in England and Wales the council shall also consult with the councils of districts comprised in their area.

(2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, any such council shall publish a statement of all policies so formulated by them on that or any previous occasion which they propose for the time being to follow in the performance of their duty to secure services under section 61(1)(a) or (as the case may be) under section 61(2)(a).

(3) When any such council publish such a statement, they shall send a copy of the statement—
(a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and
(b) to each of the persons or (as the case may be) organizations whom they consulted under subsection (1)(b) above;
in relation to the formulation of their policies on the occasion in question.

(4) The council shall also—
(a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and
(b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected.")

I shall not detain your Lordships too long with these amendments. They are important and useful amendments which arise from undertakings given in another place, and I hope that they will find favour in your Lordships' Committee.

First, they requires PTAs, county councils, regional councils and in the case of Clause 61, islands councils before formulating their general policies for securing public passenger transport services to consult each other where those policies may affect each other's area. Clearly authorities' policies for subsidising services will have an important effect on neighbouring authorities, particularly in areas close to the boundaries of authorities, and I believe this new requirement will be welcomed by authorities and passengers alike.

Secondly, they require the authorities to publish a statement of their general policies for securing services. It was impressed upon my right honourable friend in another place that such a requirement would usefully improve accountability to the electorate. My right honourable friend agrees, although his natural concern was to avoid placing an unnecessary extra burden on local authorities. These amendments are not intended to require authorities to produce an annual report. The intention is that members of the public should always be able to see a statement of the authority's policies. I believe these amendments will increase accountability, which we all welcome, while keeping the burden on authorities to a minimum. I beg to move.

On Question, amendment agreed to.

[ Amendment No. 174A not moved.]

moved Amendment No. 175:

Page 52, line 32, after first ("to") insert ("(a)").

The noble Earl said: In moving Amendment No. 175, I should like to speak also to Amendments Nos. 176 to 178, 180 to 183, 188 to 206, 212 to 217, 219C and 219D, 220 to 225, 230 to 238, 241 and 243 to 245.

Amendment No. 176: Page 52, line 34, after ("subsection;") insert ("and

(b) the manner in which the powers of the Executive under subsection (4) below are to be exercised in securing such services").

Amendment No. 177: Page 52, line 36, leave out ("duty under that subsection") and insert ("functions under those subsections").

Amendment No. 178: Page 52, line 43, leave out ("; but their power to do so is subject to") and insert—

("(4A) The functions of the Authority and the Executive in securing the provision of passenger transport services by agreements providing for service subsidies shall be exercised in accordance with").

Amendment No. 180: Schedule 3, page 130, leave out lines 2 to 8 and insert ("subsections (1)(a), (2) and (3) shall be omitted").

Amendment No. 181: Page 130, leave out line 10.

Amendment No. 182: Page 130, line 11, leave out ("(b)").

Amendment No. 183: Page 130, leave out lines 13 and 14.

Amendment No. 188: Clause 58, page 56, line 18, leave out subsection (8).

Amendment No. 189: Page 56, line 24, at end insert ("but subject as provided in section 71(2) of this Act").

Amendment No. 190: Page 56, line 27, leave out ("otherwise than in accordance with subsection (8) above").

Amendment No. 191: Clause 59, page 57, line 7, leave out subsections (5) and (6).

Amendment No. 192: Page 57, line 24, leave out ("; and").

Amendment No. 193: Page 57, leave out line 25.

Amendment No. 194: Page 57, line 29, leave out ("or have the powers under section 10(1)(i) and (viii)").

Amendment No. 195: Clause 60, page 57, line 38, leave out from ("the") to ("place") in line 40 and insert ("initial company has been formed by the Executive,").

Amendment No. 196: Page 57, line 41, leave out ("Authority") and insert ("Executive").

Amendment No. 197: Page 57, line 42, leave out ("Authority") and insert ("Executive").

Amendment No. 198: Page 58, line 15, leave out ("Authority") and insert ("Executive shall consult the Passenger Transport Authority for their area and").

Amendment No. 199: Page 58, line 24, after ("the") insert ("Executive and the").

Amendment No. 200: Page 58, line 28, after ("the") insert ("Executive and the").

Amendment No. 201: Page 58, line 32, leave out ("Authority") and insert ("Executive").

Amendment No. 202: Page 58, line 43, leave out ("Authority") and insert ("Executive").

Amendment No. 203: Page 58, line 44, leave out ("Authority") and insert ("Executive").

Amendment No. 204: Page 59, line 11, leave out ("Authority") and insert ("Executive").

Amendment No. 205: Page 59, line 16, leave out ("Authority") and insert ("Executive").

Amendment No. 206: Page 59, line 18, leave out ("Authority") and insert ("Executive").

Amendment No. 212: Clause 68, page 69, line 26, leave out from ("Executive") to end of line 27.

Amendment No. 213: Page 69, line 29, leave out ("Authority") and insert ("Executive").

Amendment No. 214: Page 69, line 31, leave out ("Authority") and insert ("Executive").

Amendment No. 215: Page 70, line 5, leave out from ("Executive") to ("of") in line 6.

Amendment No. 216: Page 70, line 17, leave out paragraph (a).

Amendment No. 217: Page 70, line 21, leave out from ("Executive") to ("are") in line 22.

As amendments to Amendment No. 219B:

Amendment No. 219C: Clause 69, in line 2 of paragraph (a), leave out ("Authority") and insert ("Executive").

Amendment No. 219D: In line 4 of paragraph (a), leave out from ("within") to the end of the paragraph and insert ("their powers for that area").

Amendment No. 220: Page 71, line 26, leave out ("Passenger Transport Authority or").

Amendment No. 221: Clause 71, page 73, line 39, leave out ("a Passenger Transport Authority").

Amendment No. 222: Page 74, line 7, leave out ("Authority") and insert ("Executive").

Amendment No. 223: Page 74, line 10, leave out ("Authority") and insert ("Executive").

Amendment No. 224: Page 74, line 13, leave out ("Authority") and insert ("Executive").

Amendment No. 225: Page 74, line 23, leave out ("Authority") and insert ("Executive").

Amendment No. 230: Clause 74, page 76, line 31, at end insert—

("(3) In exercising or performing their functions under this Act, a Passenger Transport Authority shall have regard to any administrative, professional or technical services which may be provided for them by the Passenger Transport Executive for that area.").

Amendment No. 231: Clause 75, page 76, line 32, leave out ("Authority") and insert ("Executive").

Amendment No. 232: Page 77, line 3, leave out ("Authority") and insert ("Executive").

Amendment No. 233: Page 77, line 17, leave out ("Authority") and insert ("Executive").

Amendment No. 234: Page 77, line 20, leave out ("Authority") and insert ("Executive").

Amendment No. 235: Page 77, line 33, leave out ("Authority") and insert ("Executive").

Amendment No. 236: Page 77, line 42, leave out ("Authority") and insert ("Executive").

Amendment No. 237: Page 78, line 1, leave out ("Authority") and insert ("Executive").

Amendment No. 238: Clause 76, page 78, line 12, leave out ("Authority") and insert ("Executive").

Amendment No. 241: Clause 78, page 79, line 13, leave out ("Authority") and insert ("Executive").

Amendment No. 243: Clause 82, page 83, line 33, after ("Executives") insert ("or Passenger Transport Authorities in accordance with subsection (8) below").

Amendment No. 244: Page 83, line 36, at beginning insert ("subject to subsection (8)").

Amendment No. 245: Page 83, line 36, at end insert—

("(8) In any passenger transport area the Passenger Transport Authority shall be responsible for determining which (if any) tenders for agreements providing for service subsidies are accepted and, subject to any direction which may be given to the Executive by the Authority, the Passenger Transport Executive shall be responsible for issuing invitations to tender, advising the Authority on tenders submitted and the publication of statements and shall be party to all such agreements.").

My arithmetic may be wrong but I think that it is around 50! That may encourage some of your Lordships during the tedious hours that lie ahead of us.

I should like to make it quite clear at the start that this big series of amendments fully accepts the principles and the practice of the Government's policy of deregulation and everything that goes with it. There is absolutely no intention at all to question the main thrust of the Government's intentions either directly or indirectly.

The amendments deal with the ownership and operation of buses in the metropolitan counties alone. This is a subject of which many noble Lords will not have a great deal of knowledge, and so I must do a certain amount of preparatory explanation. First of all, let me say this. The amendments have two simple objects. They aim to leave control of bus operations with the professionals—that is, the transport executive—in each metropolitan county—and to give responsibility for subsidised services and making the decisions about them to the transport authority—that is, the political arm.

Let me enlarge on what the situation is now, and then go on to deal with what is proposed. The existing set-up in a metropolitan county is this. The transport authority is the metropolitan county council. It will shortly become the joint transport board and it will continue to be called the transport authority. The present function of the authority is to appoint the director-general and the members of the executive, to give general directions on policy, to approve the executive budget and to control to a large extent its fare structure.

The transport executive is a statutory body. It is staffed by professionals and its present function is, first of all and primarily, to own and operate the buses. That means that in each metropolitan county in some cases the executive is operating many thousands of buses—a very large operation indeed. In addition to owning the buses it may in some cases own ferry services and in one case underground services. That is the first function. The second function is operating agreements with other operators and with British Railways. Thirdly, they are required generally to oversee public transport. However, I repeat that their main object, their raison ďêtre, is to run the buses. Thus, if I may sum up, on the one hand one has the authority, a political body drawn from democratic elections, and, on the other hand, business people who are professional in their job of running buses but are a statutory body. That is the present set-up.

Under the new Bill, some remarkable and curious changes are to be made. First, the bus assets are to be formed into a Companies Act company. That is quite straightforward and no problem. As soon as that has been done by the executive, they are to transfer the shares in those assets to the authority—that is, to the political arm. It is the authority who will then run the buses because it owns them and because the Bill specifically forbids the executive so to do. The authority will in addition to that allocate funds to the executive to do the job which it has to do.

So the executive will be left with no buses, although they are staffed by professional busmen, and it will be asked to administer the tendering process for the subsidised services, the services that are to be subsidised following competitive tender and, in order that it can do this, to make the decisions that have to be made as to what services are socially necessary and therefore fit to receive subsidies. That seems to me to be an odd task to give to the officers of the executive. Social judgments are to be made about the services that are to be available to people, with the taxpayers' money and the ratepayers' money, whereas surely that is something that is more properly done by an elected authority.

6.15 p.m.

I simply do not understand the reasons for what I call this "looking glass" situation. As somebody who has been involved with buses for quite a long time but in the service industries for the whole of my business life, I have to say that it appears to me to be an arrangement which makes no business sense at all. Why remove the buses, the ownership and their operation from the profession? Why deny to the elected body, the authority, the right and the duty to spend the money that they receive from Government and from the ratepayers, and to decide how it shall be spent? I would suggest that that is what elected authorities are all about.

Is it surprising that in these amendments we have sought to reverse this situation? We have sought to leave the buses where they are and where they should be, in the hands of the executive, the professional, and to give the authority the job of operating the tendering process and to decide what services shall receive subsidies.

We have gone along one route with the Secretary of State. He wants to keep the staff of the authorities small, and he may be right on that. If the staff of the authority is small and there will be no one else to do the job, therefore we have suggested that it is for the executive to do the administrative work on behalf of the authority; but the authority must decide where its money is to be spent.

Many may think that this subject is obscure, and indeed esoteric. I assure them that this is not the case. We are talking about thousands of buses; we are talking about millions of passengers. I repeat that we are seeking no interference with the main thrust of the Bill. We are seeking only greater operational efficiency, and that means the best service to the travelling public. I very much hope that my noble friend, even though it may be difficult, will be able to give me some encouragement, even if only to the extent that he will say that these matters can be discussed in the light of this debate.

I shall make the assertion, but I will not enlarge on it, that there are a number of apparently false premises behind the method that the Secretary of State has chosen to go about this matter. With the help of professional advice, we badly want to feel that, as a result of what I am saying and what we are going to discuss now, further talks will follow. As I have said, I am well aware that this is a new subject. It is unfamiliar to many members of the Committee. I hope that your Lordships will feel, as a result of what I have said, that there is a need for further consultation between now and the time when we deal with this Bill at a later stage. I beg to move.

My noble friend has presented what I think can be described as an alternative configuration for the ownership of bus companies and the administration of tendering in the passenger transport areas in a selection of some 50 amendments to which he has spoken. My noble friend's plan would involve the passenger transport executives who are, as my noble friend said, the transport professionals, retaining control of the bus operations, although in company form and broken down into smaller units, and the diivision of the tendering function between the executives and the passenger transport authorities which, in England, will be joint boards made up of district councillors nominated by the councils to which they are elected.

My noble friend argues that the bus company is to be operating in a free commercial market and therefore requires professional control motivated to succeed in its business. The Government could not agree more. But the Government's proposals do not mean that the company will be deprived of such expertise. A considerable number of skilled managers with considerable experience of bus operations will transfer to the companies when they are formed.

The Bill provides for there to be at least a required minimum number of full-time employee directors on each company's board. The board will also have a number of directors who are not drawn from the company's management staff. Some of these may well be councillors nominated by the joint board to supervise the ratepayers' interest in the company. Those interests are considerable. These bus undertakings have been built up on the basis of local rate income over many years. The Government are convinced that it is the ratepayers, though their elected representatives, who should benefit directly from any profits generated by the companies and from the proceeds of any disposals.

My noble friend suggests that the joint boards may set objectives for their companies which are of a political nature rather than the companies needing to face the commercial reality of competition. But if the joint boards are minded to follow uncommercial policies, there are going to be important limits placed on them. The company must remain solvent as there is no automatic right to subsidy to make good any losses. Any rescue plan is subject to the agreement of my right honourable friend, who would not, as I am sure your Lordships will realise, agree to continuing commercial folly.

To remain solvent, the company has to be competitive. It must control its costs, organise its services to win passengers and bid effectively when invitations to tender for service subsidy are issued. I tend to think that controlling the company may bring a much greater sense of reality to the PTA than might prevail under my noble friend's alternative. I am sure that the company will have the expertise to succeed and that its success will quickly become an objective of the joint board.

My noble friend also spoke of the role of the PTE in connection with the whole tendering process. The PTEs are, as my noble friend stressed, the transport professionals. As such, they are well able to evaluate tenders from operators and to determine the most cost-effective way of meeting the objectives set for them by the joint board. Let us be clear that this is the split of responsibilities. The PTA, at least initially, has no expertise in these matters. It is a point of agreement between my noble friend and the Government that it would be undesirable for the joint board to develop its own bureaucracy with the sole aim of second-guessing the PTE's evaluations. It is surely better for the PTE to carry out the whole tendering process within the general policy framework which the PTA has set.

Within the framework provided for in the Bill the PTEs functions in relation to tendering will complement their other functions of negotiating subsidies for local rail services under Section 20 of the 1968 Act and taking measures to secure the coordination of commercial and subsidised services and the convenience of passengers. All these functions are to be formed within the general polices of the joint board, the PTE having clear duty to follow those policies.

What I have been trying to say on this very complicated string of amendments is that the Government, for their part, are convinced that the bus companies, formed from the restructuring of both PTE and municipal bus undertakings, should be controlled ultimately by the ratepayers' representatives. There is really no inconsistency of approach here between our proposals for the passenger transport areas and for other authorities. The function in relation to tendering, however, is one which, in our view, can best be performed by the PTEs and is consistent with their wider co-ordination role. The PTE must act in accordance with the PTA's general policies throughout. The joint boards themselves would not be equipped to decide upon tenders independent of PTE advice. There is nothing to be gained, we feel, by placing such a role upon them.

I hope that my noble friend will forgive me if I add one last thing. My noble friend really asked two questions: first, whether this had been considered, and, secondly, would it be possible to discuss it further? My noble friend, as he has taken great trouble to do before and throughout the Bill, warned me that his string of amendments would be put down. I was most grateful to my noble friend for mentioning the matters and for explaining the broad thrust of them. And, indeed, I consulted my right honourable friend.

I am sorry. Although this is an interesting string of amendments, we disagree with them fundamentally. They would change totally the functions of the PTAs and the PTEs under Part IV of the Bill. I hope therefore that my noble friend will not think that I am being unhelpful when I say that, for once, there is not anything to sit down and talk about in relation to these amendments. It is always a pleasure to meet my noble friend, but not on this string of amendments.

The Minister has explained very reasonably his objections to the amendments and has tried to give an explanation of how he sees the Bill operating. The noble Lord was absolutely correct in saying that this is a complicated string of amendments. I believe, however, that the amendments are an attempt to examine a very complicated method of operating a bus service. I am in complete agreement on one issue at least with the noble Earl, Lord De La Warr There is nothing political in this. It is a business arrangement connected with running the transport service in an area.

Having had some connection with the setting up of the PTEs, I thought that they were a reasonable way of organising things. I cannot, for the life of me, understand why the same method has not been used and could not be used even now. The Minister said that he was concerned that at present the PTEs are in control of the buses although they are ultimately owned by the PTAs. The PTAs themselves will be broken up and become joint boards when the Local Government Bill goes through. The joint boards will then own the buses. The more that one gets into PTEs and PTAs the more confused one becomes. If the noble Lord the Minister spent as much time as I did last night looking over this stuff, he was probably rather punch-drunk himself at the end of it.

The position, so far as I can understand it, is that the buses owned by the authority, by the PTA, even though once removed (there are separate companies but the buses will actually be owned by the authority) will be competing with private operators for the ordinary, commercial services and for the uneconomic services, although, on the uneconomic services, the subsidy will be paid by the authority to the buses that it owns. To me this seems to be real grounds for confusion.

It will be the PTAs which will be paying any balance from their rate support or from the transport support funds to their own companies once removed for running services that are uneconomic as well as, on some occasions, doing it with private companies. To me this is a recipe for considerable confusion and there is a good possibility of political influence, depending on which particular group ran the local authority at the time or which group had the strongest representation on the joint boards.

6.30 p.m.

I am almost convinced that between now and the Report stage, or at some stage, another memorandum will come from some other section of the Department of Transport saying, "Perhaps we have it wrong and should look at it again". I can assure noble Lords that I have looked at the matter with a number of people who are experts on this particular subject and we do not always reach the same conclusion when we talk it over for any length of time. I believe that there is a strong possibility that that will happen when the Minister takes the matter away over the Summer Recess. I am sorry that he was quite so positive about it. I certainly accept that he will not agree to any of the amendments now, but I hope that over the recess period better counsel will prevail.

For the sake of simplification of the system, I do not see why he cannot return to the system that operated before, with the PTA being the authority that decides the wide political aims—and when I say "political", I mean the social desirability of a network in an area—and with the PTE, including the joint board company, finding the operators to operate this network. Then the PTE would need to return to the PTA and tell them that the cost would be so many million pounds. The PTA would perhaps say, "We are sorry, but we cannot meet that sort of cost, so you will need to trim it in certain places". I believe that that is a much better way to organise it than the way which the Minister has suggested. I hope that he will look at what has been said, particularly by his noble friend Lord De La Warr, who has great experience of the running of the bus industry.

I know that it is unusual for two speakers to rise to this Dispatch Box one after another, but I am emboldened to intervene by having been in this position; I do not know whether any other noble Lords have. I was a member of the Transport Committee of the Greater London Council at a time when London Transport had the relationship which the noble Earl, Lord De La Warr, described. I am perfectly familiar with the powers of an elected authority—in this case it would be a joint board—over London Transport and of the limitations of those powers. Perhaps I may give an example of the limitations of those powers. In those days the Greater London Council had the power to issue directives to London Transport, and indeed it had the duty to do so every year when it came to consider London Transport's budget proposals; it had to consider them in the light of its own transport policies and programmes, and to consider what financing from the ratepayers was required in order to meet the objectives agreed with Government for an integrated transport policy and, therefore, to agree a transport budget for public transport with London Transport.

The power of direction existed for other purposes, but in my experience the only occasion when the Greater London Council ever came close to issuing a direction to London Transport was when London Transport insisted on the name "Heathrow Central" for the new station which they were just about to open, and the GLC was convinced that that was the wrong name and that is should simply be called "Heathrow". Needless to say—I should not say this, should I?—it now turns out that London Transport was right and the GLC was wrong, because there has to be a separate station for Terminal 4.

The other use of the GLC's powers over London Transport was to nominate members to the executive, and when I was involved it was done with care and discretion, and there was never any conflict between the GLC and London Transport. It is only in the last couple of years that the GLC has sought to dominate the London Transport Executive by the appointment of part-time members. If I remember correctly, this policy was widely execrated by the Government in this House and in another place.

The thought that the Bill is now proposing a situation where the joint board is composed of politicians—these very local politicians who are so despised by the Government and whose powers have been taken away to such an extent by the newly passed Local Government Act—who will have 100 per cent. of the shares of the operating companies, which means that the only restriction on them is that they cannot order the directors to do anything illegal (they can do everything else), seems to me to be absolutely extraordinary.

I believe that the Government have turned the whole matter on its head. Surely the joint board should have what is proposed by the noble Earl; it should have responsibility for the disbursement of public funds, the financing of socially necessary services, and the allocation of public resources. Then it should have a general oversight of the PTEs and of the appointment of members, as has been the case in London and as will be the case in the shire counties. On the other hand, the PTEs comprise the bus men who ought to be owning the bus undertakings and they ought to be giving professional advice to the elected authorities about the tendering process and about the way in which the concessionary fares policy determined by the elected members is actually operated.

I have listened very carefully to the noble Lord, Lord Belstead, and he has not convinced me in any way that the Government have not stood this completely on its head: the politicans are left to run the buses and the bus men are left to take the political decisions. It says in the Bill that the PTEs have responsibility for the assessment of public transport requirements of the area. That is a political decision, not a decision for a bus company.

If the noble Lord will give way, he is absolutely right, but that is not the way the Government see it. The noble Lord takes the same view as I take and as the noble Earl takes. But the view that the Government take is that the running of buses is not a political matter. They maintain that it is not a social matter, but that it is a managerial matter and is simply a matter of business. If you take the Government's view, of course you stand the matter on its head because they are standing on their head.

I am sorry to disagree with the noble Lord, but that is not the case. The noble Lord is suggesting that the Government are taking a business view of the matter, whereas in point of fact they are failing completely to take a business view and are failing to meet their own objectives. If they were wise, they would listen to the words of the noble Earl, because it is the noble Earl who has the experience and who, as the noble Lord, Lord Tordoff, properly says, is making the right distinction, between business and politics.

The amendment accepts—I do not—that the running of buses is to be primarily a commercial undertaking, separate from Government. That is included in the amendment. The amendment says that where public money is to be involved—and inevitably public money will be involved because there is a whole series of processes for the involvement of public money—it is the elected members who shall have the responsibility for ensuring that public money is properly allocated. The Bill does the exact reverse of that.

I am extremely grateful to the noble Lord, Lord McIntosh, for the way in which he puts a punch into the points I made. I think he probably put the arguments a great deal clearer than I did. At least, I hope that noble Lords are clearer about these esoteric problems than they were when we started some 25 minutes ago.

I want to say two things. First, I want to comment on something that my noble friend Lord Belstead said. In practical terms, this is a crucial point. My noble friend said that we can assume that a lot of people will come over from the transport executive and run the buses for the authority. I think that the Government are depending a great deal too much upon that happening. If it does not happen they are going to find themselves in the cart. I have to tell them that I think it might well not happen.

The members of the transport executive are not civil servants, they are members of a statutory body. They will not wish to see their pensions interfered with even to go on running buses, because they would then have to become municipal servants. For that reason alone, while I cannot aver that the assumption the Government have made is false, it is extremely risky, and there is a danger that instead of the highly-professional management you get now there may be a second-rate management as a result of this, and that would be a shame. This is the only new point that I should like to raise which arises out of what my noble friend said.

If I may comment in general terms, I am deeply disappointed in the answer that my noble friend gave. I did not find his arguments persuasive, and in part I did not find them persuasive because I thought they were so short as to verge on the border of being dismissive. Nevertheless, despite that, partly because I am an optimist and partly because I am extremely determined in this matter, we shall carry on with this affair until we get it put to rights.

It will be argued inside the Chamber and outside the Chamber; it will be argued in the regions and in Marsham Street. My noble friend may be certain that we shall be extremely busy between now and the autumn, because for sure we shall return to this at Report. With the permission of the Committee, I beg leave to withdraw this amendment, and we have got through 50.

Amendment, by leave, withdrawn.

[ Amendments Nos. 176 to 178 not moved.]

6.45 p.m.

moved Amendment No. 178ZA:

Page 53, line 13, after ("public") insert ("including persons who are elderly or disabled)").

The noble Lord said: I beg to move Amendment No. 178ZA. With your Lordships' permission, I shall speak also to Amendments Nos. 178C, 210ZA and 211ZBA.

Amendment No. 178C: Page 53, line 30, at end insert—

("(6A) It shall be the duty both of the Authority and of the Executive for any passenger transport area, in exercising or performing any of their functions under the preceding provisions of this section, to have regard to the transport needs of members of the public who are elderly or disabled.").

Amendment No. 210ZA: Clause 61, page 60, line 36, after ("public") insert (" (including persons who are elderly or disabled) ").

Amendment No. 211ZBA: Page 61, line 15, after ("Act") insert (", other than services provided wholly or mainly to meet the needs of the members of the public who are elderly or disabled.").

Several of your Lordships emphasised in the debate we had last week on elderly and disabled travellers how important it is that the powers of local authorities should extend beyond subsidised services to commercial or, as they have sometimes been called, mainstream services. The Government recognise the need for this and the first two amendments, 178C and 178ZA, impose a duty on both the PTA and the PTE to have regard to the transport needs of members of the public who are elderly or disabled in securing both subsidised services and exercising their wider coordinating powers for subsidised and commercial services.

The first of our amendments also reminds authorities that the public, whose convenience is to be promoted under subsection (5)( b), includes members who are elderly or disabled. I would ask your Lordships to accept that these amendments impose quite a comprehensive obligation on authorities in the metropolitan areas.

As to Clause 61, our amendments apply to the power of non-metropolitan district councils to secure the provision of subsidised services under Clause 61(6), or again to the power of the non-metropolitan county councils and Scottish councils to co-ordinate the provision of all services, commercial as well as subsidised, under subsection (7). Our amendments cover all these duties and powers and would also secure, as in metropolitan areas, that attention is specifically drawn to the presence of elderly and disabled people among the public whose convenience authorities should be promoting.

I accept that when we come to the amendment in the name of my noble friend Lord Ingleby and other noble Lords, 211ZA, that amendment covers all the powers and duties which Clause 61 confers on the different authorities. I shall have to say, when we come to that amendment, that I am concerned about the specific requirement which the amendment would impose on operators to co-operate with authorities in the performance of their duties.

It is my hope that co-operation will exist, but we have before been through the difficulties that there are if one lays a duty on operators so far as concerns excluding some operators who would be exceedingly good at their job but perhaps unable to offer the facilities required in a particular amendment. I say no more about that because it is for the noble Viscount, Lord Ingleby, to decide whether he would wish to speak on the amendment I move now, in regard to his amendment.

The final Government amendment, 211ZBA, relates to services provided under permit under Clause 19 of the Bill, which is a point which has not yet been brought out in our debates. The Government appreciate that it is precisely mini-buses of the kind that would be provided under Clause 19 that would be used in many, if not most, cases to operate the Dial-a-Ride and other voluntary services now making such a welcome contribution to the mobility of elderly and disabled people.

This amendment recognises this by providing that the exclusion of these mini-bus services from the definition of public passenger transport services shall not apply in those cases where services are provided wholly or mainly to meet the needs of members of the public who are elderly or disabled. This means that it would be possible, if the amendment is agreed to, for authorities to provide support for these services through subsidies in a way that would not be possible unless the amendment were to be made. Those are the Government's amendments which flow from the first of the amendments I am moving which is Amendment No. 178ZA. I beg to move.

I should like to thank the Minister for the Government amendments to which he has just spoken. I am delighted to hear that this duty will apply to unsubsidised services as well as to the subsidised services. But I should like to make a few further remarks when we reach Amendment No. 211ZA.

Amendment No. 211ZA: Clause 61, page 60, line 43, at end insert—

("(8C) It shall be the duty of the authority in exercising its duties and powers under this section to have regard to the public transport requirements of the elderly and disabled in respect of—
(a) the services to be provided;
(b) the types of vehicles to be used; and
(c) the facilities to be provided at stops and terminals.

(8D) It shall be the duty of each operator of registered local services in the area to co-operate with the authority in performing its duty under subsection (8C) above.").

May I from these Benches say how much, in the light of the debate that took place on 10th July on this issue, we welcome the fact that the Minister has taken on board many of the concerns that were expressed from both sides of your Lordships' House. I welcome all of the amendments that he has proposed, especially the reference to services such as Dial-a-Ride which is described in Amendment No. 211ZBA, and also the fact that this relates to unsubsidised services as well as to subsidised services. This was one of our principal fears when we were debating this matter on 10th July.

I find it surprising, though it is not for the Minister to decide, why we are not discussing Amendment No. 211ZA at the same time. I know that we will reach it and then no doubt we shall want to argue the case strongly that there should not only be a duty upon PTAs and PTEs, the licensing authorities, but that there should be a duty upon operators as well. That amendment is not in this group so we shall have to wait until it comes. In the meantime, I warmly welcome the fact that the Minister has taken several steps forward both from the time when it was debated in another place and from the Bill as we saw it when we debated it on 10th July.

I add my thanks to the noble Lord, Lord Belstead, both for the substance of the amendments and for bringing them forward at the Committee stage with great effort on his behalf and on behalf of the department. It has been extremely helpful that these are to be put into the Bill at this stage so that we can look at the Bill on Report as it has been amended now, to see whether any improvements need to be made.

Will the Minister confirm my understanding of what he said and what was obviously the understanding of the noble Viscount, Lord Ingleby, that the amendments that he is proposing apply both to subsidised and non-subsidised undertakings or operators?

Secondly, I think he referred obliquely to Amendment No. 211ZA—I gather that we are to have a separate debate on that—when he said that Amendment No. 211ZA was unacceptable if only because it specified the requirements, which is perhaps not the best thing to do. If one specifies requirements one might inadverently leave out other requirements which have not been specifically mentioned. At this stage I think that paragraphs (a), (b) and (c) of Amendment No. 211ZA were put in only in response to the noble Lord, Lord Belstead, who said in reply to a previous amendment that it was hard to see what the amendment was getting at because it was not specifically specific. One cannot win! However, that is mere detail and when we came to debate Amendment No. 211ZA perhaps we can address ourselves particuarly to the duty of the operators, which some of us believe ought to be mentioned in the Bill together with one or two other matters.

At this stage I should merely like to thank the noble Lord, Lord Belstead, for the extremely constructive start to the provisions for the elderly and the disabled.

On behalf of these Benches, we too thank the Minister for these amendments. Many people will be relieved especially concerning the point that this will cover subsidised and normal services.

While one welcomes the points that the Minister has made, one must read the amendment:

"it shall be the duty of any council".

Obviously, the duty of any council will be governed by the amount of finance that they will be able to put into the scheme to subsidise the needs of the elderly and the disabled. While I welcome what the Minister has said, and though it sounds nice, I am a little worried lest it will not go all the way to cater for all the needs of the elderly and the disabled that one might expect.

I think we should be dealing with local government finance with the question raised by the noble Baroness, Lady Fisher. However, I should reply to the noble Lord, Lord Henderson. Yes, the Government amendments apply both to subsidised and to commercially-provided services, but they apply in different ways in the sense that they impose a duty with regard to the needs of the elderly and disabled people when authorities are carrying out their duties in exercising their powers to secure the provision of subsidised services and their power to co-ordinate all services, both commercial and subsidised. There is a duty. However, although the power to co-ordinate covers all services, both commercial or subsidised, this leaves us in the position which I endeavoured to explain a week ago, which is that local authorities, be they PTEs or non-metropolitan county councils, only have power under these amendments to stipulate that an operator shall provide certain facilities on subsidised services. The power to stipulate that an operator shall provide certain facilities does not, under the amendments to which I have spoken, extend to commercial services.

It seems to me, from his last sentence, that the Minister almost used the words of Amendment No. 211ZA, subsection (8D) which reads:

"It shall be the duty of each operator of registered local services in the area to co-operate with the authority in performing its duty under subsection (8C) above."

I know that the Minister has doubts about "(8C) above" and those matters we shall deal with, but did he not say that the operator shall have the responsibility of co-operating with the licensing authority, PTA or PTE, in terms of making provision as required by the licensing authority? In that case, is he not accepting the principle that lies behind an amendment shortly to be debated?

I think the answer is, no, because we still have to debate Amendment No. 211ZA tabled by the noble Viscount, Lord Ingleby. But this lays a duty on the local authority to have regard to various things connected with elderly and disabled people in providing services, and then lays a duty on each operator of local services in the area to co-operate, be those services subsidised or commercial. Therein lies the difference.

On Question, amendment agreed to.

I think this is an opportune moment to move that the House do now resume. In moving that Motion I confirm that we shall not come back to consider this matter further until 8 o'clock.

Moved accordingly, and, on Question, Motion ageeed to.

House resumed.

Town And Country Planning (Fees For Applications And Deemed Applications) (Amendment) Regulations 1985

7. p.m.

rose to move, That the draft regulations laid before the House on 25th June be approved. [27th Report from the Joint Committee.]

The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I understand that it will be convenient to the House to discuss the Scottish Motion at the same time.

These two sets of amending regulations which were laid before the House on 25th June are laid under powers contained in Section 87 of the Local Government, Planning and Land Act 1980. They basically provide for a general increase in the level of fees prescribed in the Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1983, and the corresponding Scottish regulations. These latter regulations, which came into operation on 1st December 1983, consolidated with revisions the original regulations of April 1981, as amended in June 1982. We have again taken the opportunity to make a small number of (mostly minor) changes to the fees scheme itself, in the light of our further experience of its operation.

It may be for the convenience of the House if, before I go on to explain the proposed changes, I give a brief outline of the way the fees scheme works. Whenever it is necessary for a specific application to be made to the local planning authority for planning permission to carry out development—usually either for the construction of buildings, or the making of a material change in the use of the land—the applicant is required to pay a fee to the authority (normally the district council) when submitting his planning application. The fee must be as prescribed by the regulations, and it cannot be waived or (except in defined circumstances) refunded, though provision is made for certain concessions in circumstances where a requirement to pay the full normal fee, or any fee at all, would be unreasonable.

Subject to this, applications are charged according to the nature of the development proposed, and its size where that is relevant. The fees scheme is designed so that, first, there is a fair balance in the charge made between the specified categories of development in the regulations; secondly, that the fees charged should reflect in broad terms similar proportions of the local planning authority's likely handling costs; thirdly, that fees should not be so high as to discourage sensible planning applications; and, fourthly, that the scheme should be easily understood and, so far as is practicable, be free of areas of dispute.

When the fees scheme was originally set up in 1981 it was thought that the scale of fees prescribed would lead to an overall recovery of about 60 per cent. of local planning authorities' development control costs. In the event, however, the actual level of recovery has come out at only around 40 per cent. We have kept this matter under review in the light of the wider need to control public expenditure, and we have now come to the view that a fair balance would best be obtained if we were to aim for a 50 per cent. recovery. However, in order to avoid what would otherwise be a substantial "once-and-for-all" increase at this time, we propose to proceed by annual stages. On this present occasion therefore we propose an increase of approximately 12½ per cent. to apply across the whole range of the presently prescribed scale of fees. In so far as this increase will more than cover the effects of inflation since the present scales came into operation on 1st December 1983 there will be a contribution—probably of the order of 2½ per cent.—towards the projected higher level of costs recovery. On the question of what further element of costs recovery should be included in the next uprating of the scale of fees, we will put proposals before the House in 1986.

My Lords, I turn now to the other changes proposed in the regulations. The House will recall that the extensive changes made at the time of the 1983 regulations reflected the outcome of a thorough review of the working of the fees scheme up to that time. As a result, the regulations reached a level of refinement and sophistication that generally points to the need for a long clear run, with further changes being kept down to a minimum.

Consequently, we propose that there should be only one change of substance to the fees scheme itself at the present time. This change concerns the fee payable for an application to continue an existing use, or to retain an existing building, without complying with a condition attached to an earlier permission (including one which requires cessation of the use, or the removal of the building, at the end of a specified period). At the present time such applications are charged a fee of £47—which would rise to £53 on the basis of the general increase now proposed. We have, however, received a number of representations that this requirement can operate harshly. Most of the concern has been directed at those cases where applications need to be made for the renewal of planning permissions granted for short periods. Examples might be the continued stationing of a caravan on land, or the retention of a garage constructed in temporary materials.

We are satisfied that the fee requirement as it stands can result in genuine cases of hardship, and we have therefore decided that such applications should in future attract a fee of only half the normal rate: which under the new arrangements, will be £27.

We remain of the view that, even after taking into account the increases proposed in the amending regulations before the House, and the longer-term aim of moving towards a 50 per cent. development-control costs-recovery objective, fees for planning applications remain modest—in some instances virtually negligible—in relation to the overall costs of the development that is the subject of the application.

Finally, my Lords, I need to say a word about Scotland. The basic Scottish fees regulations are in most respects the same as those for England and Wales, although they incorporate some very minor differences to reflect different circumstances north of the Border. The relevant amending regulations before the House provide for a similar general 12½ per cent. increase in fees for Scotland, and also include the concession for conditional permissions to which I have referred in the English and Welsh amending regulations. I commend the amending regulations to your Lordships.

Moved, That the draft regulations laid before the House on 25th June be approved. [ 27th Report from the Joint Committee.]—( Lord Skelmersdale.)

My Lords, the House is grateful to the Minister, both for the brevity of his speech and also for its clarity. In effect, this exercise is about cutting public expenditure and any other words that the Minister or his colleagues might care to use would be a sham because, as the Minister points out, at the moment the balance of moneys received by councils for planning applications, which it was hoped by the Government would be 60 per cent. of the costs of the planning control departments, has resulted in about 40 per cent. of those costs; and now they want to increase that to 50 per cent.

My comments will be in the form of a series of questions, but if in fact there is to be an increase of the costs gained from the public of 10 per cent. (that is, from 40 per cent. to 50 per cent.) would the Minister care to tell the House what consequence or effect this has on the level of the rate support grant? I appreciate that how a council manages its affairs is to some extent up to the council itself, but the extent to which the Government take "into account" various things needs to be commented on.

The Minister told us about 60 per cent. and about 40 per cent. and about the £47 and the £53. Would the Minister care to tell us the global sum which it is estimated or known is actually to be clawed back from the public under these particular schemes?—so that, in effect, by comparison with 1980, that will be the additional sum which the public are paying. The Minister is aware that on this side of the House—and this applies to both Houses; I served on the 1980 Bill and the Minister and I have talked about these matters before—we are not in favour of the principle of charging; but this is neither the time, place nor opportunity to make that particular argument. Nevertheless, we need to make sure that what the Minister is proposing is reasonable.

The Minister talks in terms of a fair balance. The Minister says that the fair balance that the Government are looking for is to reduce public expenditure as much as possible by one means or another. I wonder whether the noble Lord would care to tell us, in view of the announcements that were made earlier this week by the noble Lord, Lord Young, in introducing Lifting the Burden, when great play was made about the easements in planning controls, whether any assessment has been made about the impact of those particular regulations on the planning control system. It must have a bearing. The planning department will need to have either more or less staff to look after a greater or less volume of work that will go through the department arising from Lifting the Burden.

On the other hand, if the cost of the department is the raison d;être and it needs to be reduced, does it mean that if in fact there is less work for the planning officers to do because the burdens have been lifted and there is no planning control, the cost to those who need planning applications will be increased? In other words, are the Government in the business, regardless of the number of planning applications, of trying to reduce the cost of the department?

Is the Minister able to tell the House what has happened to the size of the planning departments since 1980? The "Manpower Watch" exercise of the Government is well understood, and so is the pressure on the different departments of all councils to reduce the size of manpower. Can the Minister tell us the extent to which there have been reductions in the size of the personnel in planning departments who look after the kind of work which is covered by these regulations? If the Minister is able to tell us there has been no reduction, then the Government have failed in their exercise. On the other hand, if there has been reduction, then I think we ought to know.

Also, could the Minister tell us this evening what has been the effect of the Government's plans in respect of approved inspectors? The Minister is well aware of the exchanges that took place two or three years ago in this Chamber over the Housing and Building Control Regulations, where in effect there was to be a reduction in the number of building inspectors employed by councils under privatisation in the building inspector sector.

I realise that planning applications still need to be made and fees still need to be paid, but I should like to take this opportunity to ask the Minister whether he can tell us if the "approved inspector" syndrome is now working—and, of course, it should be working, as it concerns legislation which is now more than a year old. Could the Minister tell us what impact that has had upon the quality and quantity of the work going through?

The Minister talked in terms of 12½ per cent. (which is a broad uplift) being more than required to meet the rate of inflation. If one looks at the last increase, which was about 14 months ago, one does not require 12½ per cent. The Minister then tells us significantly that he will be coming back again next year. Can he say why he was not satisfied with 10 per cent. this year, leaving a greater sum until later? I know that everybody who makes a planning application, if it is a choice of getting it or not, will pay for it; and so I am not talking about paying in order to get a planning application. However, the Minister must realise that all these marginal additional costs—for planning, for approval, for building, for labour and for materials—all add to the cost of housing. I think that perhaps it would be helpful to the House if the Minister could answer some of the questions I have put to him.

So far as the official Opposition is concerned, we shall of course do nothing to oppose the passage of these regulations except to say that this is a highly unsatisfactory way of encouraging the public to use a proper planning system of control which has stood the test of time over many years. This is simply another gimmick used by the Government to reduce the cost of ensuring that the environment, and the built environment particularly, is dealt with in a proper manner. After all, it is the public itself which insists upon these regulations, quite properly, and the public as a whole ought to pay.

7.15 p.m.

My Lords, I must apologise to my noble friend because I was not in the Chamber when he moved these regulations. However, I was glad to hear that he moved them briefly and very distinctly, and I would congratulate him on that. I was going to agree with much of what the noble Lord, Lord Graham, said until almost his very last sentence, when I believe he said that the public were suffering, as I understood it, and I believe that his party is committed to abolishing the fees. Perhaps the noble Lord will correct me if I am wrong.

No, my Lords. Unless I am advised otherwise, I do not think we are on record as saying that we shall abolish them. I stand to be corrected, of course. We opposed the introduction of them, but, as with most oppositions, there are certain things one makes commitments about which are matters of great principle. This is important, but it is not in that category; and what my party does after gaining power—which, of course, we shall do after the next election—remains to be seen.

My Lords, I am glad to be corrected. I thought that the noble Lord was criticising the whole principle of charges and was therefore implying that his party might take a different view should they form a Government. I do not know how far my noble friend's brief goes, but I should like to ask a few questions because this is an opportunity to discuss an important side of planning and, indeed, the whole ambit of town and country planning. I should like to ask my noble friend, in regard to these regulations, whether his department has received a large postbag of complaints on the level of charges. Also, has there been any case made out that the charges are set too high? I have never met that myself, quite frankly, and I welcome the realism of these regulations in the reductions they make, because clearly they have arisen from the experience of having introduced the charges; and that is obviously very helpful.

I should like also to ask my noble friend what are the latest figures he has on the numbers of applications made over the last three years. It would be very interesting to see what those figures are. May I also ask him what currently are the systems of delay in the whole system of planning? That is a very important aspect. I hope that he can reply to these points. I have not given him any warning, and basically it is of course unfair to ask him about these things; but if he is able to give some figures I am sure the House would be very grateful to him.

My Lords, I am most grateful to both the noble Lord, Lord Graham, and my noble friend Lord Kinnoull for expressing approval of these regulations. Because they are specifically about paying for a service, I regret that I shall be unable to answer some of the questions that have been raised by them this evening, but I undertake to write to them on the wider points that they have raised.

I do not really want to go back to the arguments of the 1980 Act, which of course is the parent of these regulations, because we went through that stage some four years ago. But I think it would be appropriate to wish the noble Lord, Lord Graham, many happy returns of the day—the day being 10th November 1983 when on last year's regulations he made his maiden speech from the Front Bench opposite and I was able to respond to him on that occasion.

The subject of these regulations—namely, the paying of fees for planning applications—is of course part of the Government's drive to make costs be borne by those people who use particular services, and we do not see any reason why the general ratepayer, or indeed the taxpayer, should necessarily pay development costs of this kind. It is therefore perfectly reasonable that the applicant for planning permission should be asked to pay a proportion—

My Lords, that is a fair point, if one looks at the purpose of the planning application as being to give the applicant a benefit. But we take the view that the whole community is the beneficiary of a planning system. In other words, it is the public who get the benefit of ensuring that development is controlled.

My Lords, we obviously differ. If the Government were seeking to get 100 per cent. of the costs from the applicant, then it would be clearly wrong. But since we are seeking to have a proportion from both the applicant and general public expenditure, we have to decide what that proportion should be. My right honourable friend has come to the conclusion that what we should aim at is the 50 to 60 per cent. range, and we have not yet reached that. As I said in my opening speech, we are at 40 per cent.

The noble Lord, Lord Graham, asked what the fee income to be recovered is expected to be in the next year, to which the answer is £32 million. This will be from planning applications of, I expect, the order of 430,000. The figures for which my noble friend Lord Kinnoull asked earlier are: at 1980, 527,000; at 1981, 450,000; at 1982, 399,000; at 1983, 429,000, and at 1984, 426,000. So in the last couple of years they have been broadly static. I made the point earlier that the real increase in these fees was about 2½ per cent. The fees were last raised 19 months ago and the increase in inflation over the 19 months is of the order of 10 per cent. Therefore, if any progress towards a 50 per cent. cost recovery is to be achieved, one must go slightly over that and I should have thought that 24 per cent. was reasonable.

The noble Lord, Lord Graham, asked about the possible effects on the rate support grant. As the noble Lord will know, the overall amount of rate support grant is a finite sum. For all authorities, RSG is calculated using criteria applicable to classes of authorities and these criteria include a weighting for planning. But with this very small extra amount of money I would rather doubt, certainly in this year, that there would be any effect at all on the rate support grant. If I am wrong, I shall of course write to the noble Lord.

As regards the subject of planning delays, if I remember rightly these are published roughly quarterly. I shall willingly send the latest statistics to my noble friend. But the determinations are fairly speedy and have improved over the last couple of years, I am glad to say.

My Lords, I wonder whether the Minister is in a position to relate whether the planning application fee system has anything to do with the speeding-up of the backlog. For instance, I can well imagine that if people are paying for something they will be just a little more impatient and perhaps a little more aggressive. I can also see that a planning department, which before had simply processed applications as fast as it could, is now under pressure from people who can say, "I have paid you £53" or "I have paid you £120". Is the Minister in a position to say whether the fee system has a bearing on the speed with which the planning applications are processed?

No, my Lords. I am afraid that the department has done no research into that, nor, to the best of my knowledge, has it asked local authorities for their opinion on the situation. But one reason for the speeding-up of the time taken to determine planning cases is that more and more people, since they have to pay a fee, are first going along to the planning officer and getting an off-the-cuff opinion as to whether something is likely to succeed in a particular form or whether it is desirable to change it at the outset.

My noble friend Lord Kinnoull asked whether the department had received a large post-bag of complaints since the introduction of planning fees. The answer to that is a straight, no. Nor have we had any complaints about either this order or the order to which the noble Lord, Lord Graham, and I spoke on 10th November 1983.

The noble Lord, Lord Graham, asked about deregulation as it applies to the White Paper Lifting the Burden. So far as these regulations are concerned, I do not see that there will be much effect on the planning system. But, again, for the more detailed questions perhaps I may write to the noble Lord, and I shall include in that letter the whole subject of approved inspectors, about which he also asked. I feel that I have answered most of the questions to which I am able to reply and which pertain directly to these regulations.

On Question, Motion agreed to.

Town And Country Planning (Fees For Applications And Deemed Applications) (Scotland) Amendment Regulations 1985

My Lords, I beg to move.

Moved, That the draft regulations laid before the House on 25th June be approved. [ 27th Report from the Joint Committee.]—( Lord Skelmersdale.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[ The Sitting was suspended from 7.27 to 8 p.m.]

Transport Bill

House again in Committee on Clause 57.

moved Amendment No. 178A:

Page 53, line 28, at beginning insert (" (i) ").

The noble Lord said: It may be for the convenience of the Committee if we also discuss Amendments Nos. 178B, 208Z, 208AA and 242.

Amendment No. 178B: Page 53, line 30, at end insert—("; and

(ii) to consult persons representing the users of passenger transport services within their area.").

Amendment No. 208Z: Clause 61, page 59, line 31, at end insert—("; and

(c) to consult persons representing the users of passenger transport services within their area.").

Amendment No. 208AA: Page 59, line 41, at end insert—("; and

(c) to consult persons representing the users of passenger transport services within their area.").

Amendment No. 242:

After Clause 80 insert the following new clause

( "Public Transport Consultative Committees.

.—(1) It shall be the duty of each Passenger Transport Authority, county council, regional and islands council to establish, not later than six months after the vesting date, a committee to be known as the public transport consultative committee (hereafter "the committee").

(2) The Passenger Transport Authority (or as the case may be) the county council, regional or islands council shall provide that—

(a) members of the committee appointed by the Passenger Transport Authority (or as the case may be) county council, regional or islands council shall not exceed one-sixth of the membership of the committee; and

(b) members of the committee appointed by district councils shall be equal in number to members appointed by voluntary organisations.

(3) It shall be the duty of the Passenger Transport Authority (or as the case may be) county council, regional or islands council to provide such staff, office and other accommodation and expenses as they consider necessary to enable the committee to perform its functions.

(4) It shall be the duty of the Passenger Transport Authority (or as the case may be) county council, regional or islands council to provide the committee with such information as the committee may reasonably require in order to carry out its duties.

(5) It shall be the duty of the committee to consider—

(i) any matter affecting the supply and use of road passenger transport services, ferry services and rail services (other than those provided by British Rail) and to make recommendations to the Secretary of State or the Traffic Commissioners or the Passenger Transport Authority or (as the case may be) county council, regional or islands council; and

(ii) any matter that has been the subject of representations (other than representations appearing to the committee to be frivolous) made to the committee by or on behalf of users of any services or facilities provided within their area; and

(iii) any matter referred to the committee by the Secretary of State or the Traffic Commissioners or by the Passenger Transport Authority or (as the case may be) county council, regional or islands council; and

(iv) any matter which otherwise appears to the committee to be a matter to which the consideration ought to be given.

(6) Copies of the minutes, conclusions and recommendations of the committee with respect to any matter shall be sent:

(a) in the case of any matter referred to the committee by the Secretary of State, to the Secretary of State;

(b) in the case of any other matter to the Passenger Transport Authority or the county council or the regional or islands council; and

(7) Where the Secretary of State or the Traffic Commissioners or the Passenger Transport Authority or (as the case may be) the county council or regional or islands council receives a recommendation under subsection (6) above he or they may give such directions as he or they think fit with respect to matters dealt with in the recommendation; but before giving any such direction he or they shall consult with such authorities as he or they think fit.

(8) On reaching a decision with respect to matters dealt with under subsection (6) above the Secretary of State or the Traffic Commissioners or the Passenger Transport Authority or (as the case may be) the county council or regional or islands council shall give notice in writing of that decision to the committee.

(9) The committee shall elect its Chairman and Vice Chairman from amongst the members.

(10) The committee may co-opt persons deemed by the committee to be knowledgeable in transport affairs within its area.

(11) The committee may appoint sub-committees to exercise, subject to such restrictions and conditions as the commitee thinks fit, some, but not all, of the committee's functions and such subcommittees may consist wholly or partly of persons who are members of the committee.

(12) Meetings of the committee, which shall be open to the public and the press, shall take place at least once 3in every three months, the time and place of meetings to be publicly notified.

(13) The committee shall make an annual report which shall be published.").

These amendments are not consequential upon each other, but they all touch on the question of consumer consultation. Therefore, although Amendment No. 242 is not directly related to the other four amendments, I thought that it might be for the convenience of the Committee if we discussed this whole area together. I should like to say a few words about Amendment No. 242, because it is the major amendment, and then come back to the others in a minute or two. These amendments, in particular Amendment No. 242, have the support of the National Consumer Council, the National Federation of Bus Users, the National Association of Local Councils, the National Federation of Women's Institutes, the National Association of Passenger Transport Users, Transport 2000 and Friends of the Earth. I am sure that the Government will see that as being an irresistible combination of consumers.

One important omission from the Bill is any provision for bus users to express their views through statutory consultative bodies; that is to say, ones that can officially represent their views to both the transport authorities and the providers of the services. Where consumer consultative committees have been set up on a pro tem basis they have worked well. East Sussex is one of the few shire counties to have them. We believe that bus users have benefited from that. The metropolitan counties have 10 years of experience of transport advisory committees working quite successfully with PTAs and PTEs. Drawing on this

experience, the new clause in Amendment No. 242 meets this need for statutory consumer representation.

The clause requires the responsible transport authority to establish a public transport consultative committee. This committee would have the power to make recommendations to the Secretary of State, the transport authority or other appropriate bodies. Members would be appointed by the transport authority, district councils, local consumer groups and other organisations with an interest in transport matters. Such committees would enable public transport users to register complaints about all aspects of service provision, to suggest improvements, and to help influence local transport policies. There has been criticism from the Government Back-Benches during the earlier stages of the Bill that many of the speeches and many of the amendments were too producer oriented. I am glad to redress that balance with this series of amendments because quite clearly the passenger—who in this case is the consumer—is the most important factor in the whole equation of improving bus services, if that is what we are succeeding in doing; we are certainly trying to do it, but whether we succeed is a different matter.

The Government have so far implied in another place that user representation of this kind will be unnecessary in a deregulated environment. They argue that market forces will ensure that the users' needs are met. That seems to me to be a too simplistic view of the situation in what is not a perfect market. It represents a negative attitude to consumer representation which I believe is unacceptable in principle.

But there are also important practical arguments for these proposals. Public transport consultative committees are necessary because the Bill envisages enormous changes in public transport service provisions. Changes of this magnitude to existing public services, particularly those with a 50-year old history, need systematic and authoritative monitoring both before and after the event. Public transport is not like general merchandise on the supermarket shelf. This comparison is misleading. It is not possible for consumer preferences to be signalled directly through the market mechanism. Some attitudes will of course be directed through the market mechanism, particularly in those areas where the bus services are profitable. In the centres of cities choice will much more easily establish the demands of the customers, but in remote areas this is far from being true.

The existing transport users consultative committees deal with rail transport only, except in London where the bus users are included, but provincial bus users deserve no less support. The National Consumer Congress, which brings together delegates from more than 100 consumer groups, passed a resolution on bus services in March of this year. They reiterated their belief in the need for a statutory system of consumer representation covering all sectors of public transport. If the aim of the Bill is to benefit passengers, which is what the Government claim, I believe that consultative committees of this kind working alongside each passenger authority would help everybody to know quickly, accurately and systematically—"systematically" is the word to underline—how well the new system is working.

There is a danger in allowing merely the market mechanism to determine what is going to happen. One gets into a position of anecdotal evidence only when really rather more professional and scientific evidence is required by the passenger undertakings in order for them to determine how well they are meeting the needs. Therefore we certainly urge the Government to adopt a more positive approach to this issue.

Perhaps I may back track now to the shorter amendments, Amendments Nos. 178A, 178B, 208Z and 208AA. These amendments are so worded as to leave open the matter of which representatives we are talking about. In other words, it will be for the authorities and the executives concerned to decide what would be appropriate representatives. There are a number of precedents in legislation and draft legislation for employing this formula or variations of it. The Consumer Safety Act 1978, the Weights and Measures Act 1973 and the Trade Descriptions Act 1968 are worded in a similar way.

If Amendment No. 242, which provides for the establishment of consultative committees, were to be agreed to by the Government, it would be much more straightforward. But as I say, these amendments are complementary. In some ways they may be mutually exclusive, but, nevertheless, they touch on this whole area of consumer consultation which we believe needs to be regularised in a way which is not at present provided for in the Bill.

I do not intend to press this amendment to a Division, as your Lordships will understand, but it would be interesting to know the Government's most recent thoughts on this matter to see whether they can go some way towards meeting the requirements of a wide number of organisations in the country which are extremely worried about formal consultation procedures, and who are not happy about relying merely on market forces to enable the producers—in this case, the bus companies—to make sure that their needs are met.

On an individual or anecdotal basis, as I have said before, the needs of users may be met; but on a network or wider basis of knowing what the market really needs from a consumer's point of view, I believe that a structure such as that proposed is necessary and that it would be wise of the Government to go some way down that road. I beg to move.

I understand precisely what the noble Lord has been saying, but what worries me are the words:

"persons representing the users".

The whole object of the Bill is to encourage more people to use the buses because usage has sunk to a very low level.

We really want to make sure that people who might use the buses are consulted, rather than those who will never use the buses. The point of the exercise is to find out where the demand lies in order to expand the bus services. I am very serious about this. It could be done by having a proper inquiry—one of those silly things where they ask people how they are going to vote. The information has to be found out in that kind of way. But one has to consult the people who are not using the buses just as much as the people who are. I am not sure that having a formal body of people representing the users will give the right answers or that the proposed addition to the Bill will help. We want to get at the non-users rather than at the users.

I forgive the noble Lord, Lord Mottistone, his insult to the survey and research trade, in which I have earned a living for many years. In fact, his contribution was constructive. I support the noble Lord, Lord Tordoff. He makes a very valid point. Whether or not we approve of the detailed provisions of this Bill, all thinking is to persuade more people to use public transport—as has been achieved in London by better marketing and better services without privatisation. I say that as an aside.

I realise that the Government are in some difficulty about nationalised industry consumer councils. There have been attempts in your Lordships' House to press the Government to come to a conclusion in respect of their policy about such councils. Those attempts have always failed because the Government are instinctively, or so it seems to me, antagonistic towards such bodies. The Government call them quangos and other rude names.

The only other point I would add to the arguments of the noble Lord, Lord Tordoff, is that the changes proposed for the bus industry will actually increase the need for the views of consumers and potential consumers to be felt. It is proposed that there shall be an element of competition in the bus industry as a whole, but for 95 per cent. to 99 per cent. of actual bus users, perhaps after an initial period of cut throat competition, there will only be one operator supplying the need that the consumer has. Under those circumstances, there will be as much of a monopoly as if it had been a National Bus Company, London Transport or municipal public transport undertaking.

In those circumstances, the fact that the service was formerly private will not make any difference to the ordinary consumer, who will have the same needs for adequate information in the form of timetables and so on, and for adequate opportunities to complain about failure to perform, as he or she has when dealing with the water, electricity or gas industry. The noble Lord, Lord Tordoff, put a modest and fair point rather than the strong point that he might have made about the increased need for consumer protection in the industry as envisaged.

8.15 p.m.

I should like to follow the very interesting few words of the noble Lord, Lord McIntosh, but I think I had better pick up on the words of my noble friend Lord Mottistone, when he said that one should consult the non-users rather than the users. The users are in the competitive marketplace and they like to get a whole lot of other people interested. If there are all these people ready to use the buses, they should consult the users. The users are the people who know the true situation. They have been around for a long time. The users publicise their views on local radio, in the free press and everywhere else. They are surely the people in the know. The nonusers are simply uninterested.

Not true.

I fully support my noble friend Lord Tordoff. My name would have been put to this amendment and to other amendments, but unfortunately last week I lost my voice and I did not see any point in putting my name to amendments to which I could not speak.

When I worked for British Rail, one of the worst duties we had was to to attend meetings with the consultative committees. However, they were useful in that they allowed us to talk to the actual people who caught the 6.58 p.m. from Tooting Bec to Sevenoaks. They know what they want. I feel that the noble Lord, Lord Mottistone, was splitting hairs. He said that there should be consultations with the non-users. The nonuser is someone who does not—

If the noble Lord will allow me to intervene, I was talking about potential users. Those are the people we want to get at.

I was just coming to that point. I agree with the noble Lord that is not the captive audience one wants to attract but the people who may not go by bus and who could go by bus. There are some people who will never travel by bus. We would be wasting our time on them. One is thinking of instead of the people one could attract onto the buses. If one has been on a bus once in a lifetime, I presume one could say that one is a bus user. I am certain that almost everyone in your Lordships' Chamber has been on a bus at one time or another and could therefore say that they are bus users.

In the case of British Rail, we did not like meeting the consultative committees because quite honestly, they tended to ask awkward questions—questions which maybe we would rather they did not ask. They would ask why we did such a thing and did not do another, and then we would have to think up very good reasons or we would have to do something about it. That was a good thing. The market force is great.

As my noble friend Lord Tordoff said, whether or not one likes this Bill, the bus industry must be a success. It will only be a success if more and more people use the buses. They will only use the buses if they provide the kind of service, at the kind of intervals and serving the places, which the users want.

These amendments suppose a bus industry very different from the one that will emerge after deregulation. If we were proposing that bus services should be protected monopolies, planned and co-ordinated by local authorities, then the elaborate consultative machinery proposed might well provide a useful means of finding out what services passengers want and how well they operate in responding to passengers' wishes. Even then, the machinery would be a very imperfect one. We are proposing something which we consider to be infinitely better; that is, that operators should be allowed to compete to provide the services people want. The incentive of competition will make the bus industry more sensitive to the demands of customers.

Both the noble Lord, Lord Tordoff, and the noble Lord, Lord McIntosh, mentioned the existing statutory transport consumer bodies—the CTCC, the area transport users' consultative committees and the London regional passenger committees. These were established by Parliament to represent the interests of users of British Rail and London Regional Transport services. They fulfil an important function, as do other nationalised industries' consultative committees, in representing the interests of customers where the industry is providing many of its services in a monopoly or near monopoly situation. I hope that the noble Lord, Lord McIntosh, hears my words because I do not in any way wish to deprecate these bodies.

It is right that there should be formal procedures for representing the views of the passengers of BR and LRT, but where a deregulated bus industry operates in a highly competitive market, where innovative and unconventional services likely to meet passengers' needs are encouraged, there is absolutely no need for the network of committees envisaged in this amendment and the elaborate bureaucracy which would be involved.

Turning now to the situation where market forces do not prevail and where subsidies are necessary, the Government fully recognise that in reaching decisions about subsidising uneconomic services the local authorities will need to be aware of the wishes of passengers and the potential passengers, to which my noble friend referred, on particular routes. Again, no network of statutory committees seems to the Government to be necessary. Indeed, it seems unjustifiable to seek to impose a statutory committee of the kind proposed between passengers and ratepayers and the councillors whose job it is to represent their interests.

Following discussion on just this issue in the Committee stage in another place my right honourable friend the Secretary of State agreed to consult the local authority associations whose members would be affected about whether they would welcome such a duty. It was clear from the response that they would not. They place considerable importance on consultation but do not see what is to be gained from a specific duty to consult persons representing, or claiming to represent, passengers.

The noble Lord said that there had been consultation with local authorities as to whether they would welcome such a duty. Immediately before that he referred to the alternative strategy of having local authorities taking the strain, so to speak, of representing the passengers. Does the noble Lord mean that the local authority associations said that they do not wish to represent the passengers or that they do not wish to see statutory consultative committees? That was not clear from what the noble Lord said.

I apologise. I said that we consulted them about whether they wished to see such consultative committees established. The authorities felt that they could represent the interests of their own electors, to put it more simply, and I must say that I agree. We would encourage authorities and councillors to consult widely on their policies and nothing in the Bill prevents them from doing that. Consultation, not just of specified groups, is part and parcel of normal democratic procedures. Therefore, I think that not only is the amendment of the noble Lord, Lord Tordoff, unnecessary but that consultation through the locally elected councillors is the better way.

I am grateful to all noble Lords who have joined in this short debate. May I say to the noble Lord, Lord Mottistone, that it seems to me that to have some kind of structure to the consultation process is more likely to involve the potential users than simple market forces. It is much more difficult in an ad hoc situation to know what potential users really want. It is easier to know what the actual users want and more difficult to know, just by studying the returns, what potential users want. By having a properly structured consultation process it is much easier to test the potential market.

To come to what the Minister said, it is quite clear that the Government are resistant to any kind of structured consultative process. I think they are making a grave mistake. I believe we are moving into a totally different situation. I suspect that, in this case, because the local authorities actually have a stake in running buses they probably do not welcome an open-ended consumer consultative system in the way in which my noble friend Lord Attlee said that British Rail did not exactly welcome it. It was uncomfortable for them. I do not expect the National Bus Company necessarily to welcome a consumer council of this kind. However, I expect that the passengers would because they would be better informed through their ability to call on the scientific, legal, or whatever support these kind of consultative committees can provide which the passengers do not have as individuals Even if one accepts that argument in relation to Amendment No. 242—which I do not for one moment accept—nevertheless the earlier amendments talk about consulting suitable bodies, whatever they are. There is a duty, for example, to consult the Women's Institute in rural areas. That does not seem to be a particularly wild suggestion to make. The WI represents people who know what bus users want, and a number of the other bodies which I have already mentioned who support these amendments involve people who know more about the overall position than do individual passengers, particularly individual potential passengers.

It was with those ideas in mind that I spoke to these amendments together because there are a number of dimensions to this series of amendments. It is sad that the Government are not prepared to give any ground or even to suggest that they might think about it again. However, time is getting on, I certainly will not drop this subject and I hope that while we are discussing all these matters, on the beaches or wherever, we can make some kind of progress before we come back on Report in October. Meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendment No. 178B not moved.]

moved Amendment No. 178C:

[ Printed earlier.]

The noble Lord said: I spoke to this amendment with Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 178C):

Page 53, line 30, at end insert—

("(6A) It shall be the duty both of the Authority and of the Executive for any passenger transport area, in exercising or performing any of their functions under the preceding provisions of this section, to have regard to the transport needs of members of the public who are elderly or disabled.").

moved Amendment No. 178D:

[ Printed earlier.]

The noble Lord said: I spoke to this amendment with Amendment No. 174W. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 178D):

Page 54, line 31, at end insert—

( " Consultation and publicity with respect to policies as to services.

.—(1) When considering from time to time the formulation of policies for the purposes of section 9A(3) of this Act, the Authority for a passenger transport area shall consult—

(a) with every Passenger Transport Authority, county council or regional council whose area may be affected by those policies; and

(b) either with persons operating public passenger transport services within their area or with organisations appearing to the council to be representative of such persons.

(2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, the Authority concerned shall publish a statement of all policies so formulated by them on that or any previous occasion which for the time being apply in relation to the performance by the Executive for their area of their duty to secure services under section 9A(1).

(3) When the Authority publish such a statement, they shall send a copy of the statement—

(a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and

(b) to each of the persons or (as the case may be) organisations whom they consulted under subsection (1)(b) above;

in relation to the formulation of their policies on the occasion in question.

(4) The Authority shall also—

(a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and

(b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected." ").

Clause 57, as amended, agreed to.

Schedule 3 [ Amendments consequential on section 57]:

moved Amendment No. 179:

Page 129, line 7, at end insert—

("( ) in paragraph (i) (power to carry passengers by road), after the word "from" there shall be inserted the words "or in the vicinity of;").

The noble Lord said: With this amendment I shall speak also to Amendment No. 184:

Amendment No. 184: Clause 58, page 55, line 21, after ("from") insert ("or in the vicinity of").

The object of this amendment is to make clear that it is legal for the operating companies formed by the passenger transport executives to operate services which are wholly outside the passenger transport areas. At present the executives run services entirely outside the present area for two reasons. First, the areas concerned were in these passenger transport areas between 1969 and 1974 but fell outside them as a result of local government reorganisation. However, the executives continue to hold the licences to operate those services, and they do so now. Secondly, the services were in the operating areas of undertakings acquired by executives because most of their operation was inside the passenger transport area concerned.

The most important example which comes to mind concerns the Greater Manchester PTE which operates a number of services of this nature: in the Glossop area of the High Peak of Derbyshire; in the Wilmslow area of Cheshire; in the Warrington area of Cheshire, and in Merseyside.

8.30 p.m.

However, Greater Manchester is not the only executive affected. If the Bill is not amended it will not be possible for the companies who take over from the executives' operations to run these services. The amendment therefore changes Clause 58(1)( a) by adding the words "or in the vicinity of" to the present wording. This will not therefore give these companies the right to operate anywhere in the country, although there is no reason in principle why they should not, but merely seeks to ensure the continued operation of existing services after deregulation.

In discussions with the PTE group, the Department of Transport have argued that the situation is covered by the Bill as presently drafted. I am sure that my noble friend will explain that. If, however, it is the intention not to restrict the area of operation of PTE companies, the words "within to and from the Executive's area" in the clause are superfluous and should therefore be deleted. Indeed, it can be argued with some such justification that this would place the passenger transport executive companies on an equal footing with all other bus operators who will be able to operate without geographical restriction and would therefore foster fair competition. However, the PTE group has not pressed this point with the department and merely seeks to clarify the position beyond any doubt by inserting the words, "or in the vicinity of" in the clause, which will permit operation immediately outside a passenger transport area. What the amendment will do is to correct an omission from the Local Government Act 1972 which should have recognised the position by amending the Transport Act 1968 which has been used as the basis of the Bill, and a consequential amendment to the 1968 Act is therefore proposed. I beg to move.

I am grateful to my noble friend for raising these amendments, which in fact arise from a misunderstanding of Clause 58(1). If he has discussed the matter with the department, which he says he has, he will of course know the answer, but for the benefit of the rest of the Committee may I just reiterate that this is an error and indeed the department has had to cross through a sentence from the Notes on Clauses circulated to your Lordships which made the same mistake.

Clause 58(1) is not a limit on the powers which the initial company may be given in its objects clause. It describes the minimum powers which the initial company will require. In complying with this clause the PTE must form a company with at least the powers to carry on the purposes specified.

While the company remains in the public sector its controlling authority is required to ensure that it does not extend the scale of any road passenger transport activities beyond those which are currently being undertaken by the controlling authority or the PTE itself. Clause 69(3)(a) requires this, but it does not prevent the transfer to the company of any operations currently entirely outside the area, or the continuing and lawful provision of those services by the company.

I hope that my noble friend will accept my assurance that no amendments to this Bill are necessary to allow the continuation of any existing bus services. He mentioned in particular the one at Glossop and this is four square within the Bill. It will not be affected. On that basis I hope that my noble friend will withdraw his amendment.

I am delighted to withdraw this amendment. In doing so I should like to say that if I had had that answer before, I would have taken this amendment off the Marshalled List. However, I am grateful to my noble friend for what he has said. I repeat, to be absolutely clear on this, that any services which now exist which are outside the area will continue to be allowed to do so. That has been agreed to and in those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. 180 to 183 not moved.]

moved Amendment No. 183A:

Page 132, line 37, leave out ("(b)").

The noble Lord said: With this amendment I should like at the same time to speak to Amendment No. 183B, which is consequential upon Amendment No. 183A.

Amendment No. 183B: Page 132, line 38, leave out from ("services") to end of line 41 and insert—

("(a) for paragraph (b) there shall be substituted the following:

"(b) any operator of a public passenger transport service within the meaning of the Transport Act 1985;"

(b) in paragraph (f) after the words "in paragraph (a)" insert:

"or (c)"; and after the words "(whether wholly owned or not)" insert "of a body falling within paragraph (b) above or".").

May I start by apologising for putting these amendments down rather late, which was due to circumstances beyond my control. These amendments concern paragraph 22 of Schedule 3 which is about the Post Office Act of 1969. As the Committee know, two of the principal aims of this Bill are to make provision for the transfer of the NBC to the private sector and to provide for the reorganisation of passenger transport in the public sector, the latter including enabling provisions for the entry into the private sector of PTEs and local authority bus undertakings.

So far as the Post Office is concerned these provisions pose a serious threat to its counter business, given that when the provisions have been brought into effect it will cease to have statutory power, under Section 7 of the Post Office Act 1969 as amended by the British Telecommunications Act 1981, to perform services for the bodies concerned by way of the sale of tickets, travel passes, etc., and in turn will lose a significant amount of valuable business not only in respect of its Crown office but also its network of sub-post offices, of which at the moment at least 20 per cent. are involved in this type of work. This potential loss of business will therefore strike a serious blow to Post Office efforts to maintain the size of the present network through the retention of existing business and the development of new, long-term business.

My amendments seek to overcome this by making provision in Section 7(1A) of the Post Office Act 1969—that section having been added to the 1969 Act by the 1981 British Telecommunications Act—to empower the Post Office, subject to the consent of the Secretary of State, to continue to perform services at its counters for the particular bodies I have mentioned once they have entered the private sector. I beg to move.

I am entirely in agreement with my noble friend that it would be a pity if the Post Office were no longer to be able to continue to offer the services which it gives at the present time with regard to selling bus tickets and passes and so on, and particularly so in the case of sub-post offices, which I think we would all wish to see have the opportunity of doing as much business as they can. I therefore find my noble friend's arguments very persuasive. I should just like to enter one reservation, which is that when we look at this amendment in detail we might find it more complex than it appears to be. My noble friend has said that his amendment was only put down at very short notice and I am afraid that I have not had the chance to discuss it with my department nor with Parliamentary Counsel. However, I am entirely in sympathy with his arguments and I shall give him an assurance that we shall look at this very seriously and I shall be in touch with my noble friend. I hope that on that undertaking he will be willing to withdraw the amendment for the time being.

I thank my noble friend for that reply. I apologise again for putting this amendment down so late. I see his point that the Parliamentary draftsmen have not had time to look at it. I was about to say that I am not a lawyer—I am, but I have forgotten all the law that I knew. I have looked at the amendment and I suspect there may be one or two things wrong with it; but I am sure we shall be able to sort them out. On that assurance from my noble friend, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendment No. 183B not moved.]

Schedule 3 agreed to.

Clause 58 [ Transfer of bus undertakings of Executives to companies owned by Authorities]:

[ Amendments Nos. 184 and 185 not moved.]

moved Amendment No. 185A:

Page 55, line 33, leave out from ("theirs") to end of line 35 and insert ("which it appears to the Executive to be appropriate to transfer to that company").

The noble Earl said: With the leave of the Committee, I shall speak also to Amendments Nos. 188A, 188B, 197A, 197B, 197C, 198A, 203A, 206A and 264B.

Amendment No. 188A: Page 56, line 22, leave out ("held by them").

Amendment No. 188B: Page 56, line 23, at end insert—

("(8A) Where—
(a) the property, rights and liabilities transferred under subsection (7) above include the whole of the undertaking of any wholly-owned subsidiary of the Executive; and
(b) it appears to the Executive that no further action is required on the part of that subsidiary to perfect any transfer under that subsection;
the Executive shall secure that that subsidiary is wound up.").

Amendment No. 197A: Clause 60, page 57, line 45, at end insert—

("(1A) Where the initial company has any wholly-owned subsidiaries, the proposals may, instead of or (as the case may be) in addition to providing for the transfer to any one or more of those companies of the shares in or other securities of any such subsidiary comprised in the initial company's undertaking, provide for—
(a) the division among those companies; or
(b) the transfer to any one of them;
of the whole or any part of the undertaking, or of any property, rights or liabilities of, that subsidiary.").

Amendment No. 197B: Page 58, line 10, leave out ("is to be divided among the transferee companies") and insert (", and the whole or any part of the undertaking of any wholly-owned subsidiary of the initial company to which the proposals relate, is to be divided among the transferee companies or (as the case may be) transferred in accordance with the proposals to any one of those companies;").

Amendment No. 197C: Page 58, line 12, leave out from ("company") to end of line 14 and insert (", and of any wholly-owned subsidiary of the initial company the whole of whose undertaking is to be transferred in accordance with the proposals to any one or more of the transferee companies, on completion of the transfer of that company's or (as the case may be) of that subsidiary's undertaking ")

Amendment No. 198A: Page 58, line 20, after ("company") insert ("and of any wholly-owned subsidiary of the initial company").

Amendment No. 203A: Page 59, line 2, leave out ("comprised in the part of the initial company's undertaking") and insert (", and of any wholly-owned subsidiary of the initial company, which are").

Amendment No. 206A: Page 59, line 21, at end insert—

("(12) Subsection (11) above shall apply in relation to any subsidiary of the initial company the whole of whose undertaking is transferred under the scheme to one or more of the transferee companies as it applies in relation to the initial company.")

Amendment No. 264B: Clause 113, page 111, line 15, leave out ("a") and insert ("the whole or any").

These amendments have been brought forward because the PTEs have at present powers to create subsidiary companies under Section 10(19) of the 1969 Act. The amendments are technical ones giving the necessary flexibility for the transfer schemes under this Bill. I beg to move.

On Question, amendment agreed to.

moved Amendment No. 186:

Page 55, line 35, at end insert—

("(3A) A scheme under subsection (3) above shall identify any liabilities retained by the Executive or any wholly-owned subsidiary of theirs on the transfer of their property, rights or liabilities to the company under the scheme, being liabilities in respect of the following matters:—
(a) compensation payable under section 78 or otherwise in respect of persons who suffer loss of employment or loss or diminution of emoluments by reason or in consequence of the transfer,
(b) the provision of funds to secure the payment of benefits and pensions of employees;
(c) loss arising in respect of assets held and not transferred under the scheme.").

The noble Lord said: I shall speak also to Amendment No. 187.

Amendment No. 187: Page 56, line 17, at end insert—

("and the Secretary of State shall make grants to the Executive of such amounts as appear to him to be requisite for indemnifying the Executive in respect of the retained liabilities identified in the scheme.").

The need for these amendments arises because Clause 58 of the Bill provides for the transfer of the PTE bus operations to a newly created initial company which will have to act commercially. At the present time the PTEs combine both commercial and noncommercial bus operations. In future the initial company will be interested only in commercial operations and those contracts it may win under the tendering process. Even if authorities could afford to put every non-commercial service out to tender the company is unlikely to win them all. They cannot make up for this, as other operators like NBC can, by tendering for operations outside their areas, as permitted by Clause 58(1)( a).

The initial company will therefore be smaller than existing PTE operations and this gives rise to the problems my amendments seek to deal with. The company will have surplus buses, premises and staff, the disposal of which will cost substantial sums of money. These are one-off costs incurred in establishing the initial company. Amendment No. 186 provides that in the scheme for transfer of the executive's property, rights and liabilities to the initial company, these costs will be identified.

There are three possible ways of paying for these costs. First, they could become obligations on the initial company. In this case the company will be far less competitive than it should be and it will not be able to compete fairly. In the end, the passengers will pay through higher fares or less service.

Secondly, they could become obligations on the executive. In this case they will have to be funded by the authority. That is a perfectly reasonable solution perhaps, but there is a serious problem. Under the Local Government Act the expenditure of the authority during the first three years—a critical period—will be limited by the Secretary of State. Any payments of these initial costs must mean that there is less money for supporting non-commercial services, financing concessionary fares or supporting local train services, etc.

Additionally, the Department of Transport has indicated that for this period from next April the PTAs' expenditure levels will be between 5 per cent. and 15 per cent. less than this years. Thus this second option is not an option at all unless bus service levels are unacceptably reduced.

The third option is for the Secretary of State to make grants to the executives to cover these costs, and this is provided for in Amendment No. 187. This will ensure that the Government's objectives in reorganising conurbation transport will be achieved without detrimental effect on the passengers.

If my noble friend disagrees with this amendment, the Government are saying very clearly that they want the passengers and ratepayers to pay for the changes proposed in the Bill. I beg to move.

8.45 p.m.

With respect to my noble friend, I have to say that I think that his amendments paint a rather pessimistic picture. I urge your Lordships instead to consider that this Bill will rejuvenate the market for bus services and provide a better chance than the existing policies do that the industry will flourish. After all, I do not think that the PTEs could feel particularly happy with their position at the moment. All of them would doubtless say that they provide valuable services, and no doubt many of us would agree with that. But I am sure that many PTEs will admit that recent trends in the industry represent an unhealthy state of affairs and that greater efficiency and enterprise would provide them with better value for money.

The new companies will have every chance to share in the benefits of the change which this Bill will bring about. Management will for the first time be established in a commercial structure, able to provide all the services which it believes in its commercial judgment to be attractive. I think that it would be wrong for us to think in terms of sizeable residual liabilities falling on the PTE. Let us recall instead the benefits the company structure will bring to the PTE and the ratepayers. It is in that spirit that I ask my noble friend to reconsider Amendment No. 186.

In regard to Amendment No. 187, my noble friend is, I think, worried about liabilities which may remain with the PTE and should perhaps properly fall upon the Secretary of State. As I have said, I would ask him to consider that in the context of the Bill as a whole and the benefits that it will bring. The Government have made clear, I know, that they believe some PTE bus undertakings to have subsidy bills which are much too high. But the amendments paint the picture of an embattled Left with losses here, liabilities there, and only the Secretary of State to look to for comfort. The ratepayers will in fact derive great benefits from the Bill. They will see their bus services provided by a company with a renewed stimulus to provide what the public wants in the most efficient way.

In the light of those considerations, I invite my noble friend to withdraw his amendment.

This was a quiet amendment. My noble friend has posed all sorts of arguments which almost make me want to start a long discussion, going on for about 20 minutes. My noble friend Lord De La Warr seems to want to ask me a question, and he is perfectly able to do so before I sit down; or if he thinks that my arguments are inadequate, he can come in. If my noble friend's amendment on Clause 1 introduced a trial period for one year, or even extended it to two or three years, I should say that there was quite a lot to say for that. But this Bill is largely untried.

My noble friend's seated interjections put me straight back down to the very pleasant city of Hereford. It has a population of 48,000, with the rural area outside. This amendment deals entirely with PTEs, and their areas usually cover millions of people. Some are larger than others. That is quite a different thing. At the moment those systems carry lots of passengers. They may have a problem which could have been dealt with in the 1963 legislation, but we shall not discuss that; perhaps they take too much subsidy. But, by and large, they operate a very good service for the public. It is a very much better service than I am afraid there will be in the future. There are these areas of dense population, with the splendid routes about which we have all heard, and there are the evils of cross-subsidy. I must not go on, although I am tempted to do so.

I shall make this point. The areas that will be affected are the so-called residential areas where there are a lot of Tory voters. Those systems will either be subsidised, will not run at all or will run only on a limited service. I really must stop, but I am extremely disappointed with what my noble friend the Minister said. We have gone right back to the root of the philosophy. I have risen like a fish, but I shall not go further, unless noble Lords—no, I am withdrawing the amendment, so no one else can come in. I am very disappointed at the reply. I shall certainly come back with a much more robust amendment, probably on Report. In these circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 186A:

Page 55, line 42, at end insert—

("and any such scheme shall include provision to secure the payment of benefits and pensions in accordance with the accrued rights of existing employees of the Executive or any wholly-owned subsidiary of theirs under the Local Government Superannuation Act 1972 or any customary practice in respect of the grant of gratuities.").

The noble Lord said: I beg to move Amendment No. 186A and at the same time speak to Amendment Nos. 211AB and 240F.

Amendment No. 211AB: Clause 64, page 64, line 27, at end insert—

("and any such scheme shall include provision to secure the payment of benefits and pensions in accordance with the accrued rights of existing employees of the council or councils concerned under the Local Government Superannuation Act 1972 or any customary practice in respect of the grant of gratuities.").

Amendment No. 240F: After Clause 77 insert the following new clause:

( "Transfer pensions

. Provision shall be made in any scheme for the transfer of property, rights or liabilities under section 58 or 64 of this Act to secure the payment of benefits and pensions of persons employed in any undertaking or part of an undertaking which the subject of such a transfer in respect of their employment in the undertaking or part thereof both before and after the transfer.")

As the Committee is aware, Clause 58 transfers the operation of passenger transport executive bus fleets from the PTE to a Companies Act company, which is eventually to be divided into smaller companies under Clause 60. The shares will be held by passenger transport authorities with power to dispose of them later. Similarly, Clause 62 prevents non-metropolitan councils in England and Wales and regional councils in Scotland from operating bus servies—though some of them have been doing so for over 100 years. Clause 63 requires them to form a company to run bus undertakings.

Those employed by passenger transport executives and by municipal undertakings who will be transferred to the new companies are presently members of the local government superannuation scheme. It would seem that two main problems arise. First, the funding of Pensions (Increase) Act payments for former employees will impose a major burden on the new companies or on the funds of the passenger transport authorities who will have to fund as well the non-commercial services. All bus workers employed by a passenger transport executive or a municipal passenger transport undertaking from manual worker to management have been required to invest a proportion of their earnings in the local government superannuation scheme from 1972 and a high proportion of this number have been required to invest prior to 1972 as a result of a decision of their employing authority.

The amount of the employee contributions has been between 5 per cent. and 6 per cent. of their regular earnings with a small number paying up to 15 per cent., the statutory maximum, of their remuneration into the scheme. The employing authority has also to finance certain additional charges levied by the administering authority (normally the county council). These amount in general terms to, firstly, an amount levied by a quinquennial actuarial review to ensure the fund is financially stable; secondly, the general amount of the annual pensions increase; and, thirdly, a direct charge in respect of early retirement caused by ill-health, redundancy, or terminations of employment in the interests of the efficiency of the employing organisation.

This additional amount funded by the employer is infinitely variable between the various administering bodies. The cost appears to vary between 4 per cent. and 10 per cent. of the total gross paybill. If such costs are transferred to the new company by the authority as a liability included in the transfer order in accord with Clauses 58 and 65 of the Bill, then such a liability will materially affect the ability of the company to compete within the new deregulated situation. Conversely, the local authority or passenger transport executive, having lost its passenger transport revenue, if it retained that liability would only be able to discharge it by the use of some of its rate-funded income.

The second problem which arises is that should the companies be privatised, under Clause 71 their employees will no longer be eligible for membership of the local government superannuation scheme and their pension rights may be affected.

Amendment No. 186A lays an obligation on the Government to make provision to secure for former employees of passenger transport executives payment of pension in accordance with their accrued rights under a local government superannuation scheme at the time of transfer. It makes sure that they are no worse off. Amendment No. 211AB does the same for former employees of municipal undertakings. Amendment No. 240F obliges the Government in each case to make provision for pensions in respect of service, both before and after transfer, whether eventually privatised or not. I beg to move.

I am glad to have this opportunity of explaining the position of pensions for staff transferred to public transport companies. I know that pensions are a difficult issue, of concern to staff, and I hope that what I have to say will be of reassurance to those employees who may be affected by the establishment of public transport companies.

I turn first to the amendments to Clauses 58 and 64. These concern safeguards for accrued pension entitlements—that is to say, pension entitlements which have been built up because of service before transfer to the bus undertaking. As the amendment implies, these entitlements have been built up in the local government superannuation scheme.

Whatever pension arrangements are made by public transport companies for the future, the staff concerned will be free if they wish to leave their past entitlement in the local government scheme where they have accrued it, even if they do not stay in that scheme for the future. Provided they have the minimum qualifying service, the entitlement will be preserved in the local government scheme until they eventually reach retirement age; it will then be paid to them as a pension. And the preserved benefit will be increased in line with prices, both before and after the person reaches the relevant retirement age.

I hope it will be clear from this that accrued entitlements can have exactly the same security in the future as they do now. They can be kept in the local government superannuation scheme where they are now, with all the security that that implies. I would therefore suggest that the amendments to Clauses 58 and 64, whilst I understand and sympathise with them, are simply not necessary.

May I turn now to the new clause to appear after Clause 77. This speaks of security for pensions in respect of future services, after the transfer to the public transport company, as well as before. For future service we envisage the public transport company, with its parent local authority or PTE, being free to make its own decisions. After all, it is a key part of our policy that management decisions such as this should be left to the management of the bus undertaking, although of course they will want to negotiate with the staff representatives.

But the Government want to do all they can to leave options open to the parent authorities and companies in consultation with their staff, and one such option would be the continued membership of the local government superannuation scheme, where they are now. To facilitate that option, the Government have undertaken to amend the regulations for the local government scheme: that amendment will allow the parent district council or PTE, if it chooses with the company, to deem that the transferred staff remain their employees for pensions purposes. The effect could be that the staff would stay in the local government scheme, with exactly the same security as they have now, since—for this purpose only—their nominal employer would still be the parent authority. I hope that the noble Lord feels that making this option available does demonstrate the Government's wish to be helpful. In the light of these considerations, I invite him not to press these amendments.

I should like just to ask the noble Lord one question arising out of that reply. What is to happen should any of these companies be privatised? May they then still remain within the local government superannuation scheme?

My understanding of the position is that they may. However, perhaps I may check that and, if I am wrong, I shall write to the noble Lord.

I think the statement which the noble Lord has given to the Committee this evening is very reassuring. I should like to consider carefully exactly what he said. However, it seems that some of the fears which have been expressed are groundless and that steps are being taken to see that people will get their accrued entitlement within the local government superannuation scheme preserved within that scheme and that employers in the new companies will be able to continue membership in the local government superannuation scheme, which will probably be the most desirable outcome.

Subject to what the noble Lord has to say eventually on the other point, it would seem to be a satisfactory situation. However, as I say, I should like to consider it further and, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. 187 and 188 not moved.]

moved Amendments Nos. 188A and 188B:

[ Printed earlier: col. 935.]

The noble Earl said: I beg to move Amendments Nos. 188A and 188B together.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 188A and 188B):

Page 56, line 22, leave out ("held by them").

Page 56, line 23, at end insert—

("(8A) Where—
(a) the property, rights and liabilities transferred under subsection (7) above include the whole of the undertaking of any wholly-owned subsidiary of the Executive; and
(b) it appears to the Executive that no further action is required on the part of that subsidiary to perfect any transfer under that subsection;
the Executive shall secure that that subsidiary is wound up.").

[ Amendments Nos. 189 and 190 not moved.]

Clause 58, as amended, agreed to.

[ Amendments Nos. 191, 192, 193 and 194 not moved.]

Clause 59 agreed to.

Clause 60 [ Division of undertakings of companies formed under section 58]:

[ Amendments Nos. 195 to 197 not moved.]

9 p.m.

moved Amendments Nos. 197A, 197B and 197C:

[ Printed earlier: col. 935.]

The noble Earl said: I beg to move these amendments en bloc. I have spoken to them already.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 197A, 197B and 197C):

Page 57, line 45, at end insert—

("(1A) Where the initial company has any wholly-owned subsidiaries, the proposals may, instead of or (as the case may be) in addition to providing for the transfer to any one or more of those companies of the shares in or other securities of any such subsidiary comprised in the initial company's undertaking, provide for—
(a) the division among those companies; or
(b) the transfer to any one of them;
of the whole or any part of the undertaking, or of any property, rights or liabilities of, that subsidiary.").

Page 58, line 10, leave out ("is to be divided among the transferee companies") and insert (", and the whole or any part of the undertaking of any wholly-owned subsidiary of the intial company to which the proposals relate, is to be divided among the transferee companies or (as the case may be) transferred in accordance with the proposals to any one of those companies;").

Page 58, line 12, leave out from ("company") to end of line 14 and insert (", and of any wholly-owned subsidiary of the initial company the whole of whose undertaking is to be transferred in accordance with the proposals to any one or more of the transferee companies, on completion of the transfer of that company's or (as the case may be) of that subsidiary's undertaking.").

[ Amendment No. 198 not moved.]

moved Amendment No. 198A:

[ Printed earlier: col. 935.]

On Question amendment agreed to.

Following is the text of the amendment (No. 198A):

Page 58, line 20, after ("company") insert ("and of any wholly-owned subsidiary of the initial company").

[ Amendments Nos. 199 to 203 not moved.]

moved Amendment No. 203A:

[ Printed earlier: col. 935.]

On Question, amendment agreed to.

Following is the text of the amendment (No. 203A):

Page 59, line 2, leave out ("comprised in the part of the initial company's undertaking") and insert (", and of any wholly-owned subsidiary of the initial company, which are").

[ Amendments Nos. 204 to 206 not moved.]

moved Amendment No. 206A:

[ Printed earlier: col. 935.]

On Question, amendment agreed to.

Following is the text of the amendment (No. 206A):

Page 59, line 21, at end insert—

("(12) Subsection (11) above shall apply in relation to any subsidiary of the initial company the whole of whose undertaking is transferred under the scheme to one or more of the transferee companies as it applies in relation to the initial company.").

Clause 60, as amended, agreed to.

moved Amendment No. 207:

After Clause 60, insert the following new clause:

(" Protection of employees benefits.

. Any scheme prepared by the Executive under section 58(3) of this Act or any proposals prepared by the Passenger Transport Authority under section 60(1) of this Act may, with the approval of the Secretary of State, include provision—
(a) for the maintenance of any concession, benefit or privilege enjoyed by persons who are or have been employed by the Executive or Company which is the subject of transfer, or
(b) for the making of any payment or the provision of any other concession, benefit or privilege in compensation for the loss of that concession, benefit or privilege.")

The noble Lord said: The reason for this is to afford similar protection to employees of passenger transport executives as that given to employees of the National Bus Company and National Bus Company subsidiary companies under Clause 53(6). A specific right is given here for these employees to have their concessions, benefits or privileges protected by the company. It is not obligatory but the disposal scheme may make provision for this with the consent of the Secretary of State. A similar power needs to be given in respect of passenger transport executive employees as they are in a similar position, working for a statutory corporation that is a creature of statute. It is believed that the Department of Transport feels that PTE employees were adequately protected under the local government legislation. But the executive is not a local authority and only has the powers and duties given to it under the Transport Act 1968. I beg to move.

I wonder whether I detect a welcome shift of policy by my noble friend. Here we have a constuctive amendment. I accept the principle. Unfortunately, it is technically defective in a number of ways. If I give the undertaking that we shall come back to it on Report, I hope that my noble friend will withdraw it.

Splendid! I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 61 [ Functions of local councils with respect to passenger transport in areas other than passenger transport areas]:

moved Amendment No. 207A:

Page 59, line 23, leave out subsections (1) and (2) and insert—

("(1) It shall be the duty of a non-metropolitan county council in England and Wales, or in Scotland, a regional or islands council, in relation to any part of their area which is not a passenger transport area, to take any measures that appear to them to be appropriate for the purpose of or in connection with promoting—
(a) the availability of public passenger transport services other than subsidised services and the operation of such services, in conjunction with each other and with any available subsidised services, so as to meet any public transport requirements the council consider it appropriate to meet;
(b) the securing of the provision of such public passenger transport services as the council consider appropriate to meet any public transport requirements in their area which would not otherwise be available; and
(c) the convenience of the public in using all available passenger transport services (whether subsidised or not).

(2) In pursuance of subsection (1) a council shall formulate and publish from time to time general policies as to the measures to be undertaken in exercising their duties under this section and the descriptions of service to be secured in pursuance of subsection (1) (b).").

The noble Lord said: Together with this, I would like to take Amendments Nos. 208B, 208F, 209B, 210A and 211ZB.

Amendment No. 208B: Page 59, line 42, leave out subsection (3).

Amendment No. 208F: Page 60, line 4, leave out from ("above") to end of line.

Amendment No. 209B: Page 60, line 25, leave out subsection (7).

Amendment No. 210A: Page 60, line 39, leave out subsection (8).

Amendment No. 211ZB: Page 61, line 1, leave out ("(7)") and insert ("1").

The purpose of these amendments is not to make any dramatic change to the Bill, but merely to re-order Clause 61 so that it is in a more workable frame. I must say here that I dislike the phrase "shire county councils" because, in history, all counties were known as shires apart from Norfolk and Suffolk, but, nevertheless, shire counties is now the present term. The present duty on shire county councils under the 1978 Transport Act is to promote a co-ordinated and efficient system of public passenger transport to meet the needs of the county. Clause 61 of the Bill is a replacement of that. What it does is to give a duty to county councils which is confined to services that would not otherwise be available; that means subsidised services. The notes on clauses say that the purpose of the clause is to replace existing duties and powers with ones consistent with the principle of the Transport Bill that local authorities should supplement services provided by the market and, if they wish, promote the use of public transport rather than seeking to control it.

This amendment is not intended to give county councils control over the market. Far from it. But it is intended to acknowledge that the market exists. Recently, a local government observer commented that what this does is virtually to relegate everything other than giving financial support to a local bus service by means of subsidy into a hotch-potch under subsection (7) which is clearly detached and secondary and, as the notes on clauses make clear, totally discretionary.

This produces a total imbalance. On the Marshalled List today we have from the Government a new clause to follow Clause 61. I think that your Lordships have had little time to study it. But it does appear to add a clear responsibility on county councils to evolve policies and to consult on them with operators and district councils and then to make public what they do. All this is confined to subsidised services.

If, as I have quoted, it is the Government's intention to see commercial services as the backbone to the future of public transport, that is surely where a county council's duties should begin. County councils should have a clear idea of the total role they consider appropriate for public transport in the county in order to assess the strength of the commercial services. Only then should they look at where they need to place additional resources. This re-ordering of Clause 61 aims to achieve that emphasis. It also has several other benefits. Not only would it enable county councils to engage in a more realistic debate on policies with both operators and other authorities, but it would also be of benefit in particular to operators who would clearly see that the county council can talk positively about measures which are needed to assist all types of operation, including those which are commercial. There is a whole host of things, from the publication of comprehensive timetables, facilities on the highways such as priorities for buses and, as the third part of the amendment makes clear, facilities for passengers. It might even be part of a county council's policy that these should be provided by the operators contributing towards them. That would be a matter for local decision.

Nothing onerous is being placed on county councils by this amendment. There are, as the Committee will see from the wording, ample qualifications for local discretion as they make judgments as to what may be appropriate in their particular circumstances.

This amendment endeavours to avoid a distinct message of discouragement, which I do not believe Ministers intended, with regard to many of the useful things which shire county councils have been doing to help promote public passenger transport. The reordering of this clause also has other vital benefits. Elsewhere in the Bill there is a distinct requirement for county councils to take into account school transport services, and I notice that this is picked up at the very end of the amendment which was published today by the Government on the new arrangements that they are suggesting for Schedule 5.

In the Standing Committee in another place the Parliamentary Under-Secretary of State for Scotland, Michael Ancram, said that:

"nothing in the Bill at present prevents them—that is county councils—from formulating an overall policy for public transport".

However, he rejected any suggestion that policies should precede action on the grounds that county councils will not be able to tell operators what to do. This amendment does not attempt to do that. However, it does attempt to create a tidy context in which operators and the public alike can have confidence in the actions of their county council. In this way I hope that county councils will continue to do many of the good things, and indeed will do more if at all possible, and in particular will aid the disabled. I beg to move.

I should like to express general support for the amendment moved by the noble Lord, Lord Teviot, and in so doing say that I believe he is exactly right in pointing out the other responsibilities of county councils in addition to the operation of commercial bus services, which must be linked with them if a sensible transport policy is to be evolved and publicised.

If the noble Lord will give way, the Bill says that county councils will only be concerned with the subsidised services, not even with commercial services.

That is of course true, but, as I understood it—and perhaps I have misunderstood the noble Lord—the point of this amendment and certainly the point of Amendment No. 211ZCA, which is the new clause, is that the county councils are required to have and to publish some form of transport policy. I understood the noble Lord, Lord Teviot, to say that this ought to cover all the transport services provided in and for their area. I do not wish to add any more, except to say that we seem to be in the middle of a Bill which is being rewritten as the Committee proceeds. It is extraordinarily difficult for us to relate the arguments which we planned some time before to a stream of Government amendments which come through at the very last minute and which require much more attention than it is possible for those of us who have to earn our living elsewhere to give them in the way of making effective judgments as to what they mean.

My noble friend Lord Teviot presented this amendment to your Lordships as being a modest alteration to the Bill, but it is really quite a fundamental one. The duty which the Government propose for councils in the Bill is narrowly drawn to supplement services in order to meet public transport requirements which are not met commercially and which the council considers it appropriate to meet.

The powers proposed by the Bill go wider than that, and in particular Clause 61(7) confers wide powers to promote the use of public passenger transport generally. This power, which is subject to an important proviso that it should not be used in such a way as to inhibit competition between operators, will enable councils to take a wider general interest in public transport if they choose.

However, in effect, my noble friend's amendments propose that this valuable power should become a duty, and I also notice that the important restriction on its use to inhibit competition would fall. Under the terms of these amendments councils would be required to promote the availability of all services and the convenience of the public in using all services. I do not think that that would be helpful. The task of local authorities in this Bill is to supplement the market. We may disagree on that, but the Government's argument is that if authorities concentrate on the areas of real need, they will perform their task the more effectively. That is, as I say, one of the principles of the Bill, and these amendments would undermine that principle. It is for that reason that I am afraid I must resist this amendment.

Obviously there is a fundamental difference here, which perhaps we shall never get over. It is not the same sort of answer as my noble friend Lord Trefgarne's own amendment, and my noble friend's answer to this amendment does not incite me to reply in quite the same terms. I shall withdraw the amendment shortly, but I am not happy about this.

The county councils have looked after these services for all these years, and if they are to control just the subsidised services all these other things will be outwith their responsibilities, and I do not think that just to let the market forces deal with them is satisfactory. However, at this time of night I am not going to press this amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.15 p.m.

moved Amendment No. 208:

Page 59, line 27, leave out ("within") and insert ("serving").

The noble Lord said: This amendment is a probing one, and it relates strictly to island councils both in England and in Scotland. So far as England is concerned, it has particular reference to the Isle of Wight. Clause 61(1) says:

"it shall be the duty of the county council—

(a) to secure the provision of such public passenger transport services as [are] within the county".

That is seen by the Isle of Wight County Council as possibly overriding their present statutory position with regard to the ferry services which run from the islands to the mainland.

They would be keen not to lose that position. It has frequently been of importance that they should be able to have a statutory position to guide and give advice to the ferry services which are subject to a wide variety of local interests which often conflict one with the other. I think that this has been a balanced position for the whole of this century, and it would be a great pity if other considerations overthrew it inadvertently.

Therefore I propose this small amendment to widen the effect of subsection (1) of Clause 61. It is a probing amendment, and it may not be the right way of doing it. I am sure that my noble friend will have a better way of doing it. I should particulary like reassurance that this overriding of the present statutory position is not a possibility as a result of this Bill. I beg to move.

I should like to say a word in support of my noble friend's amendment. I think that he has reason for it. I can understand the problems in connection with the Isle of Wight. The amendment would also be of considerable benefit to other county councils dealing with ordinary commercial bus services running across a land boundary. I mention that point in passing.

I believe a misunderstanding has given rise to this amendment. Clause 61 requires councils to secure services they consider appropriate to meet any public transport requirements within their areas. What we are proposing is that councils should be required to secure services as they think appropriate to meet requirements which arise within their area.

The services which meet those requirements will not necessarily be linked to those running wholly within the county borders. To take an example, there may be a village on the border of Hampshire which requires a service to take its inhabitants to their nearest shopping centre over the border in Dorset. The requirement for a service arises within Hampshire, and it is for Hampshire rather than Dorset to consider if it would be right to meet the requirement. The service which will meet that requirement will indeed cross the boundary. The wording of Clauses 61(1) and (2) in no way excludes such a service, and Clause 61 provides the necessary powers for councils to secure the service. Clause 61(5) gives non-metropolitan county, and regional and islands, councils power to secure services "for their area".

Of course the situation of the Isle of Wight, in which the noble Lord, Lord Mottistone, has a special interest—and I must declare my own interest in the Isle of Wight, of which I am a resident—is unusual because it is an island. But exactly the same principle applies. This duty is concerned with services which meet the requirements arising within the county. Clearly in the case of the Isle of Wight those requirements may be for services which cross the Solent. The terms of the duty in Clause 61(1) can apply to ferry services as much as to cross-boundary bus services. I hope I have given my noble friends Lord Mottistone and Lord Monk Bretton the reassurances that they require.

I am indeed grateful to my noble friend and thank him for his reassurances, which seem to me to be absolutely splendid. I shall consult the Isle of Wight County Council, and if they see some snag I may come back; but at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. 208Z, 208AA, 208A and 208B not moved.]

moved Amendment No. 208C:

Page 59, line 43, at end insert ("(except insofar as provided in subsection (7) below).").

The noble Lord said: It may be convenient to speak also to Amendment No. 210A.

[ Printed earlier: col. 943.]

The first amendment is in recognition of the fact that although under the Bill there will be two groups of services, those provided by the free market and those secured by local authorities, those services must necessarily overlap. Subsection (3) restricts the policy-making duties of local authorities to those services which would not otherwise be available and the securing of such services. However, subsection (7) significantly provides powers to take measures to promote:

"the availability of public passenger transport services other than subsidised services and the operation of such services, in conjunction with each other and with any available subsidised services",

and

"the convenience of the public in using all available public … transport services (whether subsidised or not)".

By amendment to subsection (3) the duties under subsections (1) and (2) and the power under subsection (7) are drawn more sensibly together. In particular, authorities would be able to take a view on the requirements of the area as a whole on formulating their policies and so, where appropriate, develop measures to promote co-ordination of services, joint publicity and marketing for services in a particular area, and so on.

Examples of where such powers might be used could involve the extension of bus services to railway stations and the co-ordination of bus and train timetables, or in rural areas the provision of subsidised feeder bus services to commercial trunk routes, perhaps with a through ticketing facility to promote interchange and through travel.

The second amendment deals with the deletion of subsection (8). This is necessary because that subsection effectively nullifies much of the potential benefit of subsection (7). If we consider an example, it might be this: if a county council decides to ask a bus operator to co-ordinate his services with a railway service to provide a link from a village to a large town or city, negotiations will take place between county officers, the bus company and British Rail. Let us suppose that the bus service is operating without subsidy and that all parties agree that the necessary changes can be introduced without cost to the council. The council therefore appears to have succeeded in properly using its powers to promote the convenience of the public and secure the operation of services in conjunction with each other.

However, another operator might complain that he already operates, or is considering operating, a direct route between the village and the large town or city without using the rail link service. In this case the county council appears, in terms of its duty under subsection (8), to have inhibited competition as it has promoted the operation of services in conjunction that threaten the success of the second operator's service or proposed service. Many authorities will therefore decide that their powers under subsection (7) are very restricted and the intended effect will not be realised. I hope the Minister will consider this carefully and give an explanation if he is not willing to agree. I beg to move.

The restriction on the scope of the duties imposed by Clause 61(3) does not in any case apply to the powers contained in subsection (7) and, for that reason, the first of the noble Lord's amendments really is not necessary. If Lord Carmichael's concern is that councils should formulate policies about the use of the power in subsection (3), then I can assure him that nothing in the Bill prevents them from doing so. Since subsection (7) is a discretionary power, it would not be appropriate to require authorities to formulate policies about its use. The sum total of that rather convoluted reply of mine is that this amendment, so far as the first of the noble Lord's amendments is concerned, really is not necessary because the duties imposed by subsection (3) do not apply to subsection (7).

The noble Lord went on and put the case that Clause 61(8) operates unfairly upon subsection (7). I think that all I can say at this stage is that I would like to look carefully at the example which the noble Lord gave. As the noble Lord will know from the Notes on Clauses, the purpose of subsections (7) and (8) of Clause 61 is to give local authorities broad powers to promote public transport provided that they do not favour one operator at the expense of another. I could think of many examples (and I am sure that other noble Lords could do so) of what would happen to jeopardise the main objectives of this Bill if we did not have subsections (7) and (8) put together.

The noble Lord gave an example of the way that he felt it would work unfairly. If the noble Lord will allow me to do so, I should like to look at the specific example that he gave, but as it stands at the moment I think that subsection (8) is necessary in conjunction with the power in subsection (7).

I thank the Minister for that helpful answer. It appears to me from the example that there is a certain unfairness because of a lack of evenhandedness. Perhaps the Minister will look at it and come back. May I ask that, when he is looking at it, he will appreciate that this amendment and the others relating to the powers and duties of elected local authorities have been specifically related to non-metropolitan authorities pending the final passage of the Local Government Bill, and that it will be necessary for us to review at Report the corresponding provisions for the metropolitan authorities. I would let him know that this was specifically aimed at the non-metropolitan authorities at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Before calling Amendment No. 208CA, I would remind the Committee that, if it is agreed to, I cannot call Nos. 208D, 208E or 208F.

moved Amendment No. 208CA:

[ Printed earlier: col. 902.]

The noble Lord said: I spoke to this with Amendment No. 174W. I beg to move.

On Question, amendment agreed to.

I cannot call Amendments Nos. 208D, 208E or 208F.

Following is the text of the amendment (No. 208CA):

Page 60, line 1, leave out subsection (4).

moved Amendment No. 208G:

Page 60, line 22, after ("provision") insert ("for their area").

The noble Lord said: This is a technical amendment. The power of PTEs and councils other than district councils to subsidise services is limited to services provided "for their area". This technical amendment places a similar limitation on district councils' powers. I can assure noble Lords who have the district councils' interests at heart, that this amendment does not limit their powers in an unfair way. No responsible council would subsidise services which were not "for their area". The amendment simply ensures consistency for all councils. I beg to move.

On Question, amendment agreed to.

[ Amendments Nos. 209, 209A, and 209B not moved.]

9.30 p.m.

moved Amendment No. 210:

Page 60, line 25, after ("council") insert ("or a non-metropolitan district council").

The noble Lord said: On behalf of the noble Baroness, Lady Vickers, I beg to move Amendment No. 210 and at the same time to speak to Amendment No. 211.

Amendment No. 211: Page 60, line 40, after ("be)") insert ("of a district council or").

I am glad to be able to tell the Committee that not only do I have the noble Baroness' amendments but I also have the reasons behind them, and as I was successful in getting one amendment accepted without having to explain the reasons, I now have very high hopes of getting the rest.

The Bill at Clause 61(6) quite properly gives concurrent powers to the district to subsidise services in the same way that the counties can. For instance, in Devon (which is where the noble Baroness has very strong interests, as I have myself) this is a power which is used at the moment because the districts do the subsidising in cities like Exeter, Plymouth and Torbay and the shires cover the rest of the county. That is successfully provided for in Clause 61(6), but if the district is to get good value for its money when placing its subsidy, it will be necessary for it to have the complementary concurrent powers which are provided for the counties in Clause 61(7), governed by Clause 61(8). The powers of Clause 61(7) are complementary to the concurrent subsidising power, and therefore it is logical for the districts, if they have the subsidising power, to have the complementary supporting power. It just seeks to ensure an even application of the Bill in shire counties where shire districts of the character of Plymouth, Exeter and Torbay, will be active in service subsidies. This is a probing amendment, and I beg to move.

I recognise, and indeed the Bill recognises, that district councils in England and Wales, notably the fifty or so with their own bus undertakings, have a special role in public transport matters. The Bill gives district councils in England and Wales the power to subsidise services, and I trust that my noble friend will note that attempts in another place to amend the Bill to bring the exercise of that power under the control of county councils has in fact been resisted by the Government. We think it right that district councils which have experience of public transport in their areas should be able to subsidise services and should not have to seek the county's permission before doing so; but I have to say that the present amendments which my noble friend Lord Sandford is dealing with go a good deal further. Indeed, they go against the established allocation of functions in public transport which was brought into existence under the Local Government Act 1972—an Act which I seem to remember passed into law at a time when my noble friend was working as Parliamentary Under-Secretary in the Department of the Environment in the Government of that day.

Since 1974 the county councils have had the primary responsibility for public transport in their areas. Accordingly, the Bill places a duty on county councils to secure services to meet public transport requirements within their area and, in addition to the subsidy power it gives, which is contained in Clause 61(5), it gives them the wide-ranging power in subsection (7) to promote the availability of services and the convenience of the public. Many district councils would doubtless welcome the power, but I think that perhaps fewer of them would welcome the duty.

We are continuing a long-established division of responsibilities in this Bill and giving the counties the powers they will need to carry out their duties. The power and the duty go together and, if my noble friend will forgive me for saying so, I do not believe it would be right to extend this wide-ranging power to district councils. My noble friend is probing and I must say, for the reason I have given, I hope that he will not press the amendment further.

I shall not take up time on it but, if I may say so, I think that my noble friend on the Front Bench has completely missed the point. The duties of the county councils are set out at Clause 61(1). The power—that is to say, something which they can exercise if they want—is properly given, and this is an innovation which is welcomed, at Clause 61(6), to the district councils in areas such as Exeter, Torbay and Plymouth and whether they run buses themselves is neither here nor there. It is any authority of that kind of substance and category which should have the power and which has been given the power in the Bill.

All these amendments are asking for is that the supplementary power contained in Clause 61(7) should be added, because just having the power to subsidise without having the additional power which the counties need to supplement it in various ways is not sensible. I shall not spend any more time on this now, but I would ask my noble friend to have a look at it between now and Report stage. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 210ZA:

[ Printed earlier: col. 912.]

The noble Lord said: This amendment is consequential on Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 210ZA):

Page 60, line 36, after ("public") insert ("(including persons who are elderly or disabled)")

[ Amendments Nos. 210A and 211 not moved.]

moved Amendment No. 211YA:

Page 60, line 43, at end insert—

"(8A) It shall be the duty of any council, in exercising or performing any of their functions under the preceding provisions of this section, to have regard to the transport needs of members of the public who are elderly or disabled.")

The noble Lord said: I have already spoken to this amendment on Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

moved Amendment No. 211ZA:

Page 60, line 43, at end insert—

("(8C) It shall be the duty of the authority in exercising its duties and powers under this section to have regard to the public transport requirements of the elderly and disabled in respect of—
(a) the services to be provided;
(b) the types of vehicles to be used; and
(c) the facilities to be provided at stops and terminals.

(8D) It shall be the duty of each operator of registered local services in the area to co-operate with the authority in performing its duty under subsection (8C) above.")

The noble Viscount said: In moving this amendment which stands in the names of myself, the noble Baroness, Lady Elliot, the noble Lord, Lord Henderson of Brompton, and the noble Baroness, Lady Stedman, may I first apologise on behalf of the noble Baroness, Lady Elliot, who has just had to leave the Chamber in order to catch a train. This amendment spells out in a little more detail the purposes which we welcomed so much in the earlier amendment from the Government. It spells out the needs of the elderly and disabled in a little more detail, because these are very important. Perhaps at the end of the third line of the amendment, the word "including" would be better than "in respect of".

The second half of the amendment would put a duty on each bus operator to co-operate with the local authority in performing its duties towards the elderly and disabled under this clause. This would be just a gentle prod, to make sure that the needs of the elderly and disabled are not overlooked by the bus operator. It would start a dialogue between the operator and the local authority, without which the duties of the local authority, which the Government have already conceded, could be to some extent frustrated by the bus operator. Nothing at all specific is mentioned in this amendment, because what, if anything, is necessary will vary greatly from place to place and in different parts of the country.

The concept of putting a duty to co-operate on someone is not unknown to the Government. I believe that it found its way into the Local Government Act which has recently passed through your Lordships' House. So I hope that the Government will consider carefully the need to put some kind of obligation on the bus operator, just so as to give him a gentle prod and to start a dialogue, and to make sure that the needs of the elderly and disabled are not overlooked by him. I beg to move.

Perhaps I may briefly support this amendment. I do not think that it is necessary to talk to the first part of the amendment, subsection (8C), because that has already been amply filled by the admirable amendments moved by the Minister, for which we are very grateful indeed. However, there is a point in subsection (8D) to which I hope the Minister will address himself. This is the concept of a duty on the operators to co-operate. This is very much less than we have been asking for. I wonder whether the model in the Local Government Act might be followed. I know that nothing is precisely the same, but a Government amendment imposed on the local authorities a duty to co-operate in the abolition period. I wonder whether something could be adapted from that Bill; otherwise there will not be any kind of imperative on the operators to co-operate with the local authorities.

Incidentally, Amendment No. 240B, which I suppose will be moved later on, also concerns co-operation.

Amendment No. 240B: After Clause 76, insert the following new clause:

(" Duty of public passenger transport operators to co-operate with local authorities.

.—(1) It shall be the duty of public passenger transport operators to supply to the authority responsible for passenger transport services in an area in accordance with the provisions of section 57 or section 61 of this Act (as may be appropriate) such information as the authority may reasonably require for the purpose of carrying out its duties.

(2) Information with respect to any particular service or business which is given to an authority in accordance with subsection (1) above shall not be disclosed except:—

(a) with the consent of the person for the time being carrying it on; or

(b) for the purpose of the discharge by any person of his functions under any enactment which also applies to the person or body which supplied the information; or

(c) with a view to the institution of, or otherwise for the purposes of, any legal proceedings pursuant to or arising out of any enactment (including proceedings before the Transport Tribunal),

and any person who discloses any information in contravention of this subsection shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(3) For the purposes of this section "authority" means—

(a) in a metropolitan county in England or the Strathclyde Passenger Transport area in Scotland, the Passenger Transport Authority and the Passenger Transport Executive for the area;

(b) in a non-metropolitan county in England or Wales, the County Council;

I wonder whether the noble Lord the Minister will kindly consider Amendment No. 240B in conjunction with the second part of this amendment, which naturally enough we do not intend to press at this stage.

I should like to bring in one matter by a side wind. It is all a package on the elderly and disabled. I know that the Minister has very kindly said that a code of practice will be issued in due course. Here again I wonder whether at the next stage of the Bill the noble Lord, Lord Belstead, will consider whether or not it is possible to make the code of practice statutory, as indeed it was made in the Food and Environment Protection Bill with which we have recently been dealing. I think that was in Clause 16. I do not think that I have had a very pleasant look from the Minister following that request, but nevertheless I shall be delighted if he will consider it.

Perhaps I may ask the Minister two questions about the operation of the amendments which he has just moved to Clause 61 and Clause 57. They are two quite simple questions. If the noble Lord finds it is too late at night to answer them now, perhaps he will be able to do so at another stage or in writing. I am slightly puzzled how the new duty imposed on the local authorities under subsection (8A), which has been inserted into the Bill under Amendment No. 211YA, can be reconciled with the existing duty of local authorities under subsection (8),

"so to conduct themselves as not to inhibit competition".

What will happen if there is a conflict between that duty,

"so to conduct themselves as not to inhibit competition",

and the new duty in relation to the elderly and the disabled? Which would prevail in the event of conflict? I see that Clause 101 applies the Restrictive Trade Practices Act to road passenger transport operators. That is fine, but I assume that work of the Office of Fair Trading is not and cannot be applied to local authorities.

My second question is of the same order. The new subsection (8A) applies to previous subsections. I am not sure what would happen in the case of subsection (7). There, the new duty is imposed as it is under subsection (8A) and it applies to the preceding subsection also. Subsection (7), which is one of the preceding subsections, is permissive. It says that the county councils "shall have power" and not a duty. Subsequently, under subsection (8), the county council is given "the duty".

What happens where one has a permissive power and a duty is added? Presumably if one does not choose to exercise the permissive power then the duty does not apply. It is a puzzle to me and I am positing one possible explanation which may or may not be right. I shall be grateful if at some time, sooner or later, the Minister will kindly consider that point and give me a reply.

9.45 p.m.

The Government fully sympathise with the feeling which has been put forward by the noble Viscount, Lord Ingleby, in this amendment; that the powers of authorities to co-ordinate the provision of all services, commercial and subsidised—which, as I explained earlier this evening, is now established by the Government amendments—should be backed up by a duty for all operators to co-operate with the authorities in the use of those powers.

I believe we must ask ourselves what is the best way of achieving that objective. We have a choice. Either we make a statutory requirement, as this amendment proposes, or we can ask local authorities to secure co-operation on a voluntary basis through active promotional work and close contact with individual operators and their staff.

There are two reasons why I believe the second approach is to be preferred. The first is the very real fear, which the Government have expressed on several occasions previously, that the statutory requirement may in some cases serve to diminish the pool of resources on which public transport ought to be able to draw under deregulation. The fact is that the nature of the requirements which are being proposed in this amendment would be broad, and indeed so broad and general, as to create very real anxieties for the prospective operator—particularly the very small operator who potentially has a very important role to play in the development of services, especially in rural areas.

The search for the best in all circumstances —particularly when thinking about the needs of elderly and disabled people—could in this case indeed prove to be the enemy of the potentially good operator who feels that he simply cannot get on in the market because too much is being demanded of him so far as facilities are concerned.

Secondly, and I think more importantly, I suggest to the Committee that co-operation is likely to be more effective when it is granted on the basis of free will and mutual agreement. Operators will be very well aware of the large proportion of their potential passengers who are likely to experience difficulty in travelling by public transport. They will have every incentive to co-operate in measures designed to help such people. It has been said on more than one occasion in our debates that a considerable percentage of the travelling public are elderly or disabled.

I may add that it is not the Government's intention that authorities should be left to pursue those functions entirely alone and without any guidance. On the contrary, I have already indicated that the Government accept the need for a statutory advisory body which will have wide coverage in all fields of public transport. That was the concept discussed at the meeting which the noble Viscount, Lord Ingleby, arranged with my right honourable friend the Secretary of State, and it was the subject of the amendment which my noble friend Lady Lane-Fox succeeded in putting to the Committee at its sitting earlier this week.

We then have the undertaking of my right honourable friend that he will seek changes in the construction and use regulations, and in the driver's regulations.

There is then the question of the code of practice to try to see that operators with older buses who will not be caught by the construction and use regulations will have good guidance on what they can do—particularly in an easier way in some cases—in order to make their vehicles suitable for elderly or disabled people. The reason that I frowned when the noble Lord, Lord Henderson, made his suggestion that the code of practice should become statutory (as the one in the Food and Environment Protection Bill has become) was that I suddenly felt that there was very little which escapes the eagle eye of the noble Lord. It was for that reason only, and it is certainly a point I shall be glad to look at before the next stage of the Bill.

These add up to quite a lot of movement on the part of my right honourable friend the Secretary of State. He has tried to respond to points put to him ever since the Bill started in another place in order to endeavour to include provisions which will facilitate travel for elderly and disabled people. On top of that there are the amendments which the Government moved into the Bill earlier this evening which your Lordships have been most generous in accepting.

The noble Lord, Lord Henderson, asked two specific questions about those amendments. He first asked: how is it possible to have a duty with regard to the elderly and disabled without jeopardising the freedom for competition which is written into subsection (8)? My answer to that is that we have gone out of our way to write it into the Bill so far as the elderly and disabled are concerned. It will, of course, apply only to subsidised services and it will mean that, where a local authority is receiving tenders for a subsidised service, operators will be able to tender but in certain cases—for instance, where a service is running close to a housing estate on which there are many elderly people—all operators will have to meet certain stipulations when tendering. This will operate in the same way as if any noble Lord were to put out to tender the construction of a building and wanted the walls to be a certain colour. The invitation to tender would go to a whole raft of different builders but that stipulation would be included in all the tender documents.

The noble Lord, Lord Henderson, also asked about the relationship between subsections (7) and (8). This is ground which the noble Lord, Lord Carmichael and I trod a short while ago. I do not think that there is any difficulty in subsections (7) and (8) standing together in the Bill. The purpose of subsection (7), taken with subsection (8), is to give local authorities broad powers to promote public transport, provided they do not favour one operator at the expense of another. If I may look at what the noble Lord, Lord Henderson, said and write to him if I feel that I ought to add to that rather brief answer, perhaps he will be content for this evening.

I am saying to your Lordships' Committee that for the Government's part we believe that all the factors we have tried to promise to write into the Bill, or have promised that we will set in hand, should help authorities in carrying out their functions. We are worried about the present amendment, which calls for co-operation between operators and their authorities, for the reasons I have already given. I believe it is possible that the amendment which the noble Viscount, Lord Ingleby, has moved could be the pursuit of the best, yet finding out that, in the end, it is the enemy of us all; that it keeps operators out of public transport when what we want is to encourage operators into it.

I give the noble Viscount an undertaking because I would not wish him to feel that I am trying to brush past an important amendment. If the noble Viscount together with other noble Lords, wish to discuss this matter between the Committee and the Report stage, of course I shall be very ready to conduct further discussions. But so that I do not mislead him I must explain that this evening we have put into the Bill Government amendments which make it clear that the Government believe that they can go so far as giving authorities the right to stipulate certain provisions when they are letting their subsidised services, but they do not give authorities the right to go further than that when they are dealing with the commercial services.

That is as far as we feel that we can go at the present time. If the noble Viscount wishes to discuss the matter with me to see whether he can persuade me to go any further, I should be very ready to do so, but I warn him that I feel that we have gone just about as far as we can down this particular road.

Before my noble friend says his final piece, perhaps I may say that it was clear to me that the Government felt really nervous about this subsection (8D). They seemed really to feel that it would inhibit small operators from coming in. I took the view that this was really taking their new doctrine to an extreme which was almost ridiculous. We know that the provision of the kind of vehicle into which at least the ambulatory disabled can enter exists to some extent, but it will be a long time before vehicles with underfloor engines and therefore high floors and three steps up will disappear. In due course we shall probably influence the manufacturers to act on this and so the time will come when the lot of the majority of the disabled is very much better. But when they say that the clause goes too far because it might interfere with this precious policy of deregulation, it seems to me that the Government are almost making fools of themselves in their obsessive regard for sticking so tightly to their Bill that they refuse even a clause such as this.

However, I am very glad that my noble friend has said that he will discuss it and I urge my noble friend Lord Ingleby to do his very best to persuade the Government out of this tight little concept to which they are wedded, because we really must try to make some gentle progress in this matter.

I should very much like to thank those noble Lords who have supported this amendment; namely, the noble Lord, Lord Henderson and the noble Earl, Lord De La Warr. I should also like to thank the Minister for the sympathetic way in which he has responded to this amendment. I should like to consider most carefully what he has said and almost certainly I shall take up his offer to discuss this matter further.

Perhaps I may ask just one question. The noble Lord mentioned the code of practice which obviously will be a very important factor. Can the noble Lord the Minister say whether this will be in operation by the time the Act comes into force? Having said that, I should like to withdraw this amendment, to consider carefully what has been said and possibly to come back to it at a later stage.

May I just say to the noble Viscount, Lord Ingleby that I do not think the code of practice can possibly be in operation before the beginning of the new year, which of course is when the transitional period begins—when the plans of the local authorities require to be made by my right honourable friend. As to whether the code of practice could be in effect by the beginning of October, which is the moment of deregulation, I should be more hopeful about that. But I should perhaps like to have a word about that with the noble Viscount a little later on.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendment No. 21IZB not moved.]

10 p.m.

moved Amendment No. 211ZBA:

[ Printed earlier: col. 912.]

The noble Lord said: I spoke to this with Amendment No. 174A. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211ZBA):

Page 61, line 15, after ("Act") insert (", other than services provided wholly or mainly to meet the needs of members of the public who are elderly or disabled.").

moved Amendment No. 211ZC:

Page 61, line 20, leave out from ("agreements") to end of line 23 and insert ("under which any person undertakes to provide a public passenger transport service of any description on terms which include provision for the making of payments to that person by that Executive or council").

The noble Lord said: This is purely a drafting amendment. Clause 94 allows the provision of travel concessions to be financed through service subsidy agreements, where there is no other travel concession scheme for the eligible group in question. That clause makes it possible to include provisions for reduced or concessionary fares to be paid for within a service subsidy agreement. The amendment we are considering here changes the definition of service subsidies so that agreements providing for such payments are governed by the provisions on tendering in Clauses 83 to 86.

This amendment is necessary to avoid any confusion arising, as otherwise Clauses 83 to 86 might apply only to that part of the agreement which secured the running of the service but not that to secure reduced or waived fares for concessionary fares, though these parts need not be separately identified. I beg to move.

On Question, amendment agreed to.

Clause 61, as amended, agreed to.

moved Amendment No. 211ZCA:

[ Printed earlier: col. 902.]

The noble Lord said: This is consequential on Amendment No. 174W. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211ZCA):

After Clause 61, insert the following new clause:

(" Consultation and publicity with respect to policies as to services.

.—(1) When considering from time to time the formulation of policies for the purposes of section 61(1)( b) or (2)( b) of this Act, any council to whom either of those provisions applies shall consult—

(a) with every Passenger Transport Authority, county council or regional or islands council whose area may be affected by those policies; and

(b) either with persons operating public passenger transport services within their area or with organisations appearing to the council to be representative of such persons;

and where the council's area is in England and Wales the council shall also consult the councils of districts comprised in their area.

(2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, any such council shall publish a statement of all policies so formulated by them on that or any previous occasion which they propose for the time being to follow in the performance of their duty to secure services under section 61(1)( a) or (as the case may be) under section 61(2)( a).

(3) When any such council publish such a statement, they shall send a copy of the statement—

(a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and

(b) to each of the persons or (as the case may be) organisations whom they consulted under subsection (1)(b) above;

in relation to the formulation of their policies on the occasion in question.

(4) The council shall also—

(a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and

(b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected.")

moved Amendment No. 211ZD:

After Clause 61, insert the following new clause:

(" Designated areas.

.—(1) Where a county council, regional council or islands council (as the case may be) in exercising its duties and powers under section 61 of this Act is satisfied that the availability of public transport services will thereby be enhanced or the expenditure on the provision of such services reduced, the council may resolve to designate the whole or any part of its area as being subject to a comprehensive service scheme (being hereinafter known as "a designated area".").

(2) Within a designated area a county council, regional or islands council shall draw up a scheme to secure the overall provision of public passenger transport services by competitive tender, and enter into such agreements under section 83 of this Act as are necessary for their comprehensive provision.

(3) A scheme made under subsection (2) above shall come into effect on such date (being not less than nine months and not more than 12 months after the date of the resolution) as shall be specified in the resolution, being either the day after the end of the transitional period or a day not earlier than 12 months after the end of the transitional period as defined in paragraph 1(1) of Schedule 5 to this Act.

(4) Where a resolution has been made in accordance with subsection (1) above—

(a) the authority shall within 7 days of the relevant resolution notify the traffic commissioner,

(b) the authority shall invite tenders under section 83 of this Act for such routes or combinations of routes within the designated area as the authority considers appropriate for the purposes of the scheme;

(d) the making of a scheme by a resolution under this section shall not be taken for the purposes of this Act to be conduct on the part of the council that will inhibit competition.

(5) In drawing up a scheme the council shall take into account—

(a) measures to encourage innovation;

(b) fares, through ticketing and marketing of services; and

(6) Where a scheme is in force in accordance with subsection (2) above—

(a) an application for registration of a service under section 6 of this Act shall be accepted by the traffic commissioner only if within 21 days of his notifying the authority of the making of the application the authority gives its written consent thereto;

(b) where a person wishes to register a service within the designated area and the authority do not give their consent to such application in accordance with paragraph (a) above the traffic commissioner shall require the authority to make representations within two months showing why they consider that the operation of the service proposed to be registered would have an adverse effect on the availability or the cost to the authority of some or all of the services provided within the designated area wholly or partly out of the expenditure of the authority and if he is not satisfied that the grounds of objection are valid he shall direct the authority to give their consent to the registration and shall thereupon register the service.

(7) The Secretary of State may make an order containing such supplementary, incidental and consequential provisions as he thinks necessary or expedient for the purposes of the application of this section and in particular (but without prejudice to the generality of that) may include provision—

(a) modifying Schedule 5 to this Act in relation to schemes brought into effect under this section; and

(b) for the lapsing of the registration of a service made under section 6 of this Act before the scheme has effect.

(8) Regulations may be made under this section as to—

(a) such additional procedures as may be necessary in determining any area to be designated; and

(b) any procedures to be followed with regard to the implementation of a scheme.").

The noble Lord said: This amendment which stands in the names of my noble friend Lady Stedman and myself could call for a Second Reading speech, which I am sure would not be welcomed by the Chief Whip, who is looking at me in a slightly quizzical way at the moment, and I do not intend to make a Second Reading speech. But questions have been asked from the Government Back-Benches about what other options there are for people opposing the Bill and what other ideas they have. This amendment offers an alternative which can be used as an option, particularly in shire counties, for situations where the Government proposals may not fit the situation.

I do not need to rehearse the problems that we have in many ways with the Government's Bill. Many of us do not accept that market forces are necessarily the total answer to everything, and the Government's reliance on them may be taking an unnecessary risk in some areas. The Government have set their face against cross-subsidy and assume improved efficiency if cross-subsidy is got rid of. That could be wrong or it could be over-ambitous in certain areas. Nobody has been able to determine how market forces will work in meeting customers' needs. We dealt with that earlier in terms of consumer protection. It is possible that some of the cost savings offered in the Government's scenario could be offset by a fragmented approach and little bits of services which would cost a lot to provide could be left over to tender.

I emphasise that this amendment is an option. It was an option which was referred to by the Committee in another place looking at the Bill. It was an option which was put forward by one of the honourable friends of the noble Lord the Minister in another place, although I think in a slightly modified form. Perhaps I may direct the Committee's attention to the first two subsections of the amendment. If I may paraphrase it, what it tries to say is that where a county council or other similar council is satisfied that the availability of public transport will be enhanced or expenditure reduced, it may as a result designate the whole or part of its area as being subject to a comprehensive service scheme known as a designated area. Within that designated area a county council or a similar council shall draw up a scheme for the overall provision of passenger transport by competitive tender.

It is a way of ensuring competition, of which we on these Benches are not afraid, but competition through a tendering process rather than competition on the road. As we have heard so often in the earlier part of this debate, one of the problems of competition on the road is the kind of race to the bus stop that has been seen in some of the experiments that have already taken place.

The Government have put up a certain amount of attack on this comprehensive competitive tendering, as it has come to be known. It has also been attacked by those people who believe that the status quo has to be maintained under any circumstances. However, it is clear that the status quo cannot continue and there is no doubt that the threat of competition has stimulated a certain amount of cost cutting and innovation. However, the Government's paper on comprehensive competitive tendering is, I believe, disingenuous and many of the criticisms that have been ascribed to this system apply to a significant extent to the Government's own proposals for limited competitive tendering for loss-making services.

For instance, the Government say that franchises offer protection to the incumbent since it is in the local authorities' interests to maintain continuity of contract. They say that franchises are an abuse of monopoly power; that performance specifications in the contract cannot accurately reflect the customer's wishes; that invitations to tender are likely to be biased towards the incumbent; that the criterion for finally awarding the contract will be artificial and that franchises will tend to use imprecision in the contract as room for manoeuvre and/or to press for renegotiation, and so on. I hope that the Government are communicating these doubts to the DHSS because, in so far as these arguments apply at all they apply to the franchising of hospital cleaning.

However, in the case of buses the pros and cons of comprehensive competitive tendering must be balanced quantitatively against those of the present system and those of the Government's proposals. If one does that, CCT comes out as a clear winner. It ensures the benefits of competition but it minimises the dangers inherent in the Government's proposals. Furthermore, many of the problems attributed to CCT can be overcome if the contracts are not homogeneous. Thus a mosaic of short and long contracts covering large and small networks of services could be effective.

I could go on at some considerable length but I dare say that the amount of attention that I am likely to receive from the Committee at this stage of the night is not likely to be great. However, I felt that it was right to introduce this matter at this stage because I think it is a serious alternative in certain areas. I stress that it is a matter that is of interest in only certain areas and particularly in shire counties.

The Association of County Councils has now come round to the view that this is worth supporting. I was interested to receive a letter from Lancashire County Council the other day, who have taken a very fundamentalist approach to this whole problem until recently but who now feel that comprehensive competitive tendering may be the answer to their problems, where they have had an integrated network, which I have seen and I greatly admire—although I do not greatly admire some of the things that Lancashire County Council have done in the past in trying to oppose the buses Bill and in spending public money in the run up to the county councils. Nevertheless, they have now come round to the view that this is something that is worthy of consideration in preserving the integrated services which they have had across the county.

Kent County Council, as the Minister will doubtless know, has been very strongly in favour of this for some considerable time, as has Cambridgeshire. Many of my friends in Cheshire have also been pressing me to support this concept. It is a concept. It needs refining. It is however a concept that we should consider perhaps in more detail. It is an idea that is beginning to be seen as having more merit than the Government gave it credit for in the early stages. I believe that between now and Report stage it is something that we should all think about. My hope is not that this will destroy the Government's Bill. This is certainly not a wrecking amendment. It is however an option that I believe the Government should consider particularly in shire counties, but only giving the option to those shire counties that wish to adopt it. I beg to move.

As the noble Lord, Lord Tordoff, says, it is unfortunate that an amendment of this significance has to be debated at this time of night on the fourth day of the Committee. Perhaps it is the fault of those of us who have been putting down amendments to the Bill as it has proceeded. I hope that noble Lords will allow me to finish the sentence. It has a rather different end to that which some noble Lords on the Government Front Bench might expect. We have done the Government the credit of assuming that they took their principles seriously and that they had thought out seriously the implications of the combined deregulation and privatisation that is the theme of the Bill. We have taken those intentions at face value. In many amendments to many clauses and many subsections, we have sought to provide safeguards for the travelling public or to find out how seriously the Government had actually thought about the problems that they were getting into by this series of untested adventures into privatisation and deregulation.

I have to say that experience so far is not encouraging. Experience is that the Government have not thought about the implications of doing all these things together. They are not prepared to undertake adequate experimentation or trials. They are not prepared to do anything other than to assert that the benefits of integrated transport services are to be achieved. Indeed, this is not even as much as an assertion. It is what Bernard Shaw called mere asseveration. There is not even an attempt to put any evidence behind it other than the pathetic and usually irrelevant experiments in Hereford, Norfolk and Devon. It is for that reason—having been extremely sceptical about comprehensive competitive tendering at the outset—that I believe the noble Lord, Lord Tordoff, may be right. It may be that, not now, but at Report stage, a concerted attack may have to be mounted by those who are worried about the whole progress of the Bill and lack of adequate answers to serious questions about the Government's proposals.

The amendment, as proposed, is extremely cautious. It talks about designated areas. It leaves it to the local authorities concerned to decide whether they want to designate all or part of their areas. It is basically confined to the shire counties. It provides even for the option of comprehensive competitive tendering at the outset or of delaying it for a year, if I understand the amendment correctly. So there is not even the risk of authorities rushing into a scheme without adequate consideration. But, as the noble Lord, Lord Tordoff, has said, this is a way which might have to be the right way for some parts of the country to achieve the objectives of competition and yet maintain the benefits of integration, the benefits not of outside planning but of the use of an integrated network of transport services, not just the buses, the commercial services or the subsidised services, but all of the ways in which people seek to move about our country.

I believe that the noble Lord is right not to take the matter any further at this stage, and clearly a great deal of further thought will be required if we on these Benches are to put our names to any comparable amendment at the Report stage. However, the noble Lord is right to raise the matter now and it is right that the Government should take it seriously.

10.15 p.m.

For all the reasons which the noble Lord, Lord McIntosh, has put forward so well, I too am extremely grateful to the noble Lord, Lord Tordoff, for putting this on the record. It is right that it should be there and we may well return to it.

I also have some sympathy with this amendment. I do not know whether it is the right approach and I do not know what my noble friend the Minister will say about it in reply; but I do not think that it will be too favourable. However, it is further evidence that the Bill creates a problem for rural areas, and particularly for semi-rural areas —those rural areas that are near pretty large conurbations. Because there has been a higher degree of cross-subsidy, there are doubts whether economies in operation can fill the gap, partly because in some of those areas very substantial economies have already been made.

Therefore, the results of the Bill as it affects these rural areas are—and I am sure that I am not alone in thinking this—evidently likely to be patchy. So I trust that my noble friend the Minister will forgive my pose as a doubting Thomas because I am concerned about these rural areas. I believe that by being a doubting Thomas I am reflecting the view of the rural public about this, and I am quite sure that the more I can urge my noble friend the Minister to do by way of tackling this problem or by dispelling the doubts, the better.

We have tried various amendments on what I call the pragmatic theme. The amendments involving the pragmatic theme are those which retain a certain amount of cross-subsidy somewhere: on-route cross-subsidy or off-route cross-subsidy. This one involves some off-route cross-subsidy. We have done that because it is an approach that is cheaper from the point of view of the public purse. So far none of these proposals has found favour, but we are anxious about what my noble friend the Minister and the Government intend to do about this problem. There are the gravest doubts about the proposal to solve it: whether an extra sum of £50 million over four years is likely to be enough. Therefore, I hope that my noble friend the Minister will be able to say something on these matters when he replies to this amendment.

I understand why the noble Lord, Lord Tordoff, has moved this amendment, and I do not object at all that we should have a debate on the concept of comprehensive competitive tendering. In some respects it would be an advantage over the present arrangements under which local authorities often make bilateral arrangements with one public sector operator, often resulting in a pattern of services which makes neither commercial sense nor reflects the social needs of the area, and that sometimes happens.

However, in many respects I think that franchising would be a step back from the present system. It would put into the hands of local authorities responsibility for decisions about which services the customers should have and which they should not. It really would virtually remove the possibility of operators starting services on their own initiative in the areas which would be designated under the amendment.

My noble friend Lord Monk Bretton has been saying—and I understand his concern; he has talked to me about it so far as the rural areas are concerned—how are the Government going to overcome what my noble friend called the problem of deregulation? First, experience in just about every sector of our economy tells us that when decisions are taken by many different people in response to market pressures the customer usually does far better than when decisions are concentrated in the hands of a few people who do not have direct experience of providing the services themselves.

The sheer complexity of this concept of franchising would be enormous. Most, if not all, the franchises in a given area would have to be let simultaneously so that operators in bidding would know how the various services would relate one to another. The more comprehensive and complex it became, the more difficult it would be for planners to tailor the network to what the customer wanted.

Enlightened authorities will no doubt seek to encourage new operators into the field and encourage innovation and efficiency in the provision of services, but I do not think anyone could reasonably claim that they could do these things as effectively as the market will when operators have the freedom and incentive to seek out customers and do their utmost to serve them.

One of the main aims of this concept of franchising would be to preserve non-commercial cross-subsidy. If your Lordships will forgive my saying so (and for the record I do), it is a system which has been part and parcel of the steady downward slide of the use of public transport, of buses, in this country on local services, together with the steady increase—indeed, dramatic increase—in public subsidy, not to mention the dramatic increase in fares. I think it is fair to say that cross-subsidy is something which appears to damage the best parts of the market, and in an arbitrary way to affect passengers on different services.

I have to ask now what it is about direct competition which led my noble friend to ask me the question he did, and your Lordships to cast about for an alternative. It has been argued that competition will mean wasteful duplication of resources on the profitable services. But if there is room for more than one operator, why deny the customer that extra choice and extra service? It has been argued that competition will bring instability and unreliability in the way that services are provided. I think those with experience of existing bus services might be forgiven for asking whether that is not more likely to happen when operators have a monopoly than when they are under some competitve pressure.

In any event, the Bill contains tough sanctions to deal with operators who may run unreliable services or behave foolishly on the road. There are also measures, as we know, to sort out problems arising from severe traffic congestion. It has been suggested that competition on the road is unlikely to be fair competition, and that in a free market big operators will soon drive the little ones out of busness. While that may be a problem when competition is limited to a few trial areas, it will not be so when the major operators have a monopoly than when they are under some competitive pressure.

Many people, and your Lordships again this evening, have gone through these arguments and have turned to this concept in this amendment as being an ideal compromise. In reality, I suggest it would be a very unwieldy, centralised system which would perpetuate cross-subsidy and would discourage new thinking. I believe it would deprive the travelling public of the benefits of a free market—benefits which we already enjoy in most other sectors of the economy—and it would do all this in order to avoid competition on the road.

Yet, as I have explained, the Bill contains all the necessary safeguards to deal with any problems which might arise when operators are free to compete with one another. Those who support this amendment believe that the interests of the community will best be served by planning the provision of services and the charge to be made for them in conditions of monopoly. All that is part and parcel of this amendment. But the essence of the Bill is the belief that the community will gain most from competition in the market between operators striving to meet the needs of the passengers, subject to the proper safeguards on safety and arrangements to meet social needs. It is not surprising that, having deployed these arguments, I say on behalf of the Government that I do not like the amendment.

Nobody is offering this as the ideal compromise. It is an option. It is an option that might be suitable in certain places. The thought that somehow the county councils of Kent, Cambridge and Cheshire are some wild militant Marxist group which is seeking to subvert the needs of the travelling public by some Marxist concept is beyond comprehension.

The problem that we are worrying about is not in the areas where competition will reduce prices and give better service. It may be that the Government's proposals will do that. It is the devil-take-the-hindmost part of this equation which is worrying. Those areas which are not in the profitable areas are the greatest worry. The idea that somehow we are on a diabolical slide into even more and more expensive subsidisation of services does not stand up in relation to this amendment. There is an element of noncommercial cross-subsidy left, but it is much more transparent under this amendment than it is at the moment. It is that transparency of cross-subsidy which I believe is the control.

It is interesting that as the debate extends on this subject of the CCT more and more people are beginning to see merit in it, not as a panacea or a total alternative to the Government's proposals, but as an option which could be useful particularly in shire counties. I hope that that learning curve will continue and that it might even take in the Government at some stage over the summer period. I have my doubts, but we can all live in hope.

It is getting late, and I do not intend to press this tonight. We shall be back at Report stage, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 [ Exclusion of powers of certain councils to run bus undertakings]:

moved Amendment No. 211ZE:

Page 62, line 30, leave out ("to") and insert ("(according to the context) to—

(i)").

The noble Earl said: With the leave of the Committee I shall speak to Amendments Nos. 211ZF, 211AZA, 211AZB, 211AZC, 211CB, 211CC, 211CD, 2110E, 211CF, 211CG, 211CH, 211CJ, 211CK, 211CL, 211CM and 242A:

Amendment No. 211ZF: Page 62, line 35, at end insert ("; or

(ii) all property of the council used or appropriated for use and all rights and liabilities of the council subsisting for the purposes of any such activities.").

Amendment No. 211AZA: Clause 63, page 63, line 15, leave out subsection (3) and insert—

("(3) Subject to subsections (3A) and (3B) below, a council's bus undertaking shall be regarded for the purposes of this Part of this Act as forming part of a joint undertaking if the services for the carriage of passengers by road provided in the course of the activities of the council's bus undertaking are wholly or mainly provided under any agreement for—
(a) the provision or operation of those services by a body acting on the joint behalf of that council and one or more other councils; or
(b) the operation of those services by any company operating those services in conjunction with services for the carriage of passengers by road provided by that company.

(3A) Subsection (3)(a) above only applies where the agreement provides for the distribution among the parties on its termination of—
(a) all assets, or the proceeds of all assets, used or appropriated for use for the purpose of providing services for the carriage of passengers by road under the agreement; or
(b) all such assets or proceeds excluding only land or the proceeds of disposal of land.

(3B) Subsection (3)(b) above only applies where—
(a) the agreement includes provision for securing that the parties on termination of the agreement hold shares of equal value in assets required to be brought into account on termination of the agreement; and
(b) those assets include all assets so used or appropriated for use.").

Amendment No. 211AZB: Page 63, line 35, leave out ("or arrangements").

Amendment No. 211AZC: Clause 64, page 64, line 7, leave out ("or arrangements as are") and insert ("as is").

Amendment No. 211CB: Clause 65, page 65, line 16, leave out from beginning to end of line 17 and insert ("In any case within section 63(3)(a) of this Act both or all the councils participating in the joint undertaking may").

Amendment No. 211CC: Page 65, line 29, leave out ("or arrangements").

Amendment No, 211CD: Page 66, line 11, leave out from ("case") to second ("the") in line 13 an insert ("within section 63(3)(b) of this Act").

Amendment No. 211CE: Page 66, line 14, leave out ("that party") and insert ("the company carrying on the joint undertaking").

Amendment No. 211CF: Page 66, line 16, at end insert ("by the council concerned").

Amendment No. 211CG: Page 66, line 24, after first ("of') insert—

("(i) all property, rights and liabilities of the body carrying on that undertaking; and

(ii) ").

Amendment No. 211CH: Page 66, line 43, leave out from ("and") to ("share") in line 1 on page 67 and insert (", in any case within section 63(3)(b) of this Act, for the transfer to the company carrying on the joint undertaking of any property, rights and liabilities of the council concerned which are comprised in that company's").

Amendment No. 211CJ: Page 67, line 5, leave out ("any joint body established for the purposes of') and insert ("the body carrying on").

Amendment No. 211CK: Page 67, line 20, at beginning insert ("in any case within section 63(3)(a) of this Act,").

Amendment No. 211CL: Page 67, line 20, leave out ("any joint body established for the purposes of') and insert ("the body carrying on").

Amendment No. 211CM: Page 67, leave out lines 22 to 27.

Amendment No. 242A: Clause 81, page 82, line 7, leave out ("(3) and ").

I am glad to say that this group of amendments is rather less formidable than it may seem. It has a very simple purpose: to clarify the meaning of "joint undertaking" in Part IV of the Bill, which I am sure can only be welcome. I beg to move.

On Question, amendment agreed to.

moved Amendment No. 211ZF:

[ Printed earlier: col. 966.]

On Question, amendment agreed to.

Following is the text of the amendment (No. 211ZF):

Page 62, line 35, at end insert ("; or

(ii) all property of the council used or appropriated for use and all rights and liabilities of the council subsisting for the purposes of any such activities.")

10.30 p.m.

On Question, Whether Clause 62, as amended, shall stand part of the Bill?

We now come for the first time to that part of the Bill which contains the special features for the 50 bus companies run by the municipalities. I had understood earlier from the Chief Whip that he did not want to go particularly late tonight, but if it is the decision to continue I am happy to do so; although I am anxious that all of these six or seven groups of amendments should be tackled fairly thoroughly, and I hope that the Committee will understand if I take a certain amount of time about these topics as we are now reaching them for the first time.

I am moving, as a probing amendment of course since I have no intention of pressing it, the deletion of this clause and speaking at the same time to Amendment No. 211A.

Amendment No. 211A:Clause 63, page 62, line 36, leave out from beginning to ("form") in line 39, and insert—

("Without prejudice to the power of a non-metropolitan district council in England and Wales to provide a service for the carriage of passengers by road which requires a PSV operator's licence, any council who, at the time this section comes into force, are providing any such service (referred to below in this Part of this Act as a council operating a bus undertaking) may at any time apply for and the Secretary of State may make an order empowering the council or (as the case may be) each of the councils to whom the order applies, before the end of the period applicable to that council under the order, to".)

This is because I want to draw my noble friend on the Front Bench to say a bit more about the Government's intentions over the structure of municipal bus companies.

If I can take the Committee back to the White Paper, it stated at 5.10:

"The Government have therefore decided that there should be changes to the structure of public sector operation at the earliest opportunity to ensure fair competition between public sector operators and with the private sector".

Then, a little further on, it says:

"The Government will consult those affected by these proposals about the detailed implications".

Well, no sooner had the consultations begun than, as I explained at Second Reading, they were broken off. Of the three or four options that they had for making the changes which they decided were necessary, the Government have chosen easily the worst. They have proposed that any bus undertaking by a district council should be incorporated into a company owned by the district council.

The purpose of suggesting that Clause 2 should be omitted and Clause 63 should be amended with Amendment No. 211A is to give the district councils the option of retaining the powers that they use at the moment to run bus undertakings and the option to apply to the Secretary of State for an order to form a separate company if that seems the best way of dealing with the situation which is being created by deregulation. I am now asking my noble friend on the Front Bench to comment on the need to take municipal undertakings out of direct control of district councils at all and to form them into these separate companies.

The Transport Committee of the House of Commons in their Second Report of 4th March 1985, in paragraph 281 said:

"The formation of the companies does little to promote fair competition and the financial separation of the undertakings from their councils could be achieved without removing the undertakings from direct local control".

I am not seeking on behalf of the Association of District Councils any favourable treatment for municipal operators. They are already subject to the spur of competition and we remain unconvinced by the arguments for the obligatory setting up of municipal operators as companies. But if in the circumstances of a particular area, the council should see advantage in such a course, then enabling powers should be available and that is what is sought in Amendment No. 211A.

But the decisions as to whether to go that way or another way should be taken locally in the light of the differing local circumstances. It should not, I submit, be imposed as a mandatory requirement. The Association of District Councils supports the Monopolies and Mergers Commission Report on the need for municipal managers to have the freedom to use their own professional expertise to ensure that their undertakings are managed efficiently and without excessive political interference.

Yet it has to be recognised that municipal bus services are operated to meet the needs of local communities and, more than any other type of operator, they are directly accountable under the democratic process. Local democracy is a matter of principle which cannot be subordinated to bureaucratic central government directives, as this clause would do at the moment. The style of control and the management of municipal bus services, I submit to the Committee, should remain subject to the elective local processes and control, even though a new financial framework may be necessary.

As I have said, the House of Commons Transport Committee urged that there should be an option in this matter and that it should not be mandatory; but the Government spokesman in the other place at Committee stage said:

"We need the companies because of deregulation. There is no other way to identify the cost benefits given to municipal undertakings as a part of a local authority."

That is just not the case. My noble friend referred just now to the days when I was in the Department of the Environment. At that time the Department of Transport was in with us, and they would not have made the mistake of overlooking the existence of the direct labour organisation regime.

That is a regime specially established in order that organisations operating directly under district councils should be able to compete fairly with other organsiations in the private sector. It operates particularly in respect of direct labour building organisations, of work done on highways, of work done on sewers, water mains and so on. In all those cases, by the operation of the direct labour organisation regime the agencies working under the district councils are able to compete on a fair basis with agencies, building firms, plumbers and so on, in the private sector.

That is an organisation which has been established for four years and we have long working experience of it. There is absolutely no reason why the running of bus operations should not be controlled in the same way. This is a regime which requires a building agency working under the district council to keep separate accounts, to pay for the legal and financial advice and any other advice and assistance it gets from its parent body, and in that way to ensure that it competes on a fair basis. That whole regime of controlling direct labour organisations is in the process of being extended by the DoE into other fields such as catering, and it would be perfectly simple to extend it into transport and bus operations as well.

If that sensible alternative had been adopted for the setting up of a separate company, it would promote competition quite effectively, ensure financial separation and avoid the complex and formidable problems of company formation, such as the transfer of assets and liabilities, employee transfer, pension rights (which we discussed extensively earlier today) and expenditure and borrowing controls. All those constitute formidable problems, when one asks district councils such as those of which I am speaking to set up separate companies. That is the reason I am moving the deletion of Clause 62 and at the same time speaking to Amendment No. 211A. I should be grateful for my noble friend's comments on those points as a start.

The purpose of the clause which my noble friend is proposing should not stand part of the Bill is to ensure that district councils and, in Scotland, regional councils will not in future have powers to provide bus services directly. The clause preserves the powers of councils who are now running such undertakings until a date specified by my right honourable friend, giving them a period in which to transfer their undertaking to companies; but once that transfer has been completed the powers to provide services directly—in other words, by operating public service vehicles themselves—would be removed under this clause on a date specified by order. We propose that date should be 28th September 1986, when, as your Lordships will know, we propose that deregulation should come into force.

My noble friend has asked me one main question, which is: why form separate companies? What is the need to do so in the local authority sphere? It is a concept in Part IV which goes to the very heart of the proposals in the Bill because we believe that it is vital that bus undertakings should be placed at arm's length from their local authorities. This will enable the undertakings in future to operate entirely commercially, serving in competition with other operators the routes which they consider commercially viable and tendering, again in competition with other operators, for the service subsidies made available by their controlling authority.

I submit to my noble friend that that would not be possible without this clause. As your Lordships will know, we believe that competition is a critical step in reversing the relentless decline, which we all want to stop, in bus services. How, I would ask the Committee, could the system of tendering for subsidy, which is proposed later in this Bill, work effectively if councils retain their bus undertakings in their present form? It is a question which, if my noble friend will forgive my saying so, he did not address in his speech. If that happened, other operators would feel that they simply could not get a look in if they were trying to compete with a municipal operator who was in that sort of position.

I can see from the Marshalled List that we will be discussing the arguments for permitting companies to run bus services when we come to the next clause; and, indeed, my noble friend has moved onto Amendment No. 211A. But I hope that the answer that I have given to the main question which he has asked and which applies to the Question, That Clause 62, as amended, shall stand part of the Bill, and to his Amendment No. 211A, will suffice for the moment.

I must say that until I heard the Minister speaking I had absolutely no intention of saying anything at all on this clause or on any amendment. But the fact is that, having at one time been the chairman of a municipal passenger transport undertaking in Reading, I know that what the noble Lord has said is simply not true, and it is not true for this reason.

The Reading Corporation transport undertaking is under a duty from the council itself to pay all proper central charges and is, therefore, in no way—and I believe that this is true of bus undertakings up and down the country—subsidised by the ratepayers, except in the case of concessionary fares. In my experience, the municipal bus undertakings are run in that way. They receive no subsidy from the ratepayers and they pay the full central charges which are due from local authority services, like the town clerk's department and so on. It is also true of other services as well.

I certainly had the opportunity, when I was the leader of the borough council, of setting up a direct labour department and, again, it was run on commercial lines and paid the full central charges. That did not prevent the building undertaking from competing on the open market with other builders in the area. It had no concession whatsoever and it was run as a commercial organisation very successfully indeed. So successful was it that the Tory Party in Reading was unable to get rid of the department, as it would no doubt have wished to do on dogmatic political principles. I do not want to insult the Minister in any way; I do not want to be unkind to him; but he really is talking nonsense, absolute nonsense.

Order!

If I have offended the Minister I will of course apologise. But let me say that I know from experience that what he is saying does not really apply. The district council authorities which run bus undertakings are perfectly able with their present organisation and without being hived off into separate bodies to do the job that is required of them in this Bill. As the noble Lord, Lord Sandford, has asked, I hope that the Minister and the Government will look at this problem once again. It is a serious matter. I believe that the Government are wrong. There is time for them to think about it, and if they do so I feel quite sure that they will come to the conclusion that there is no need to impose this severe re-organisation on the district councils.

10.45 p.m.

Just for once the noble Lord has not quite hit the target. I was not suggesting in my speech that there will not continue to be some financial relationship between the new companies and their authorities. This is a matter to which we shall be coming at a subsequent sitting of the Committee and in subsequent clauses when we deal with the financing of the new companies.

I was suggesting that it is essential for the concept of the Bill that the arm's length companies should be set up, because if one does not set up such companies it is simply impossible for the company—whatever one may call it; I am calling it "the company"—to tender for the local authority subsidised services in fair competition with other companies. One simply could not do it. If Parliament decided to continue to tie the bus undertaking of a local authority to the undertaking and not form an arm's length company in the future, with the best will in the world it would be impossible for that undertaking to tender fairly with other competitors for the subsidised services.

There are other reasons for the formation of the companies but, with respect to the noble Lord, it was on that ground that I was saying it was essential, and indeed vital to the concept of the Bill, for the companies to be set up. I was content to confine myself to that ground because the hour is late and I know that this is only the opening shot in a series of amendments that my noble friend Lord Sandford is going to move.

If the noble Lord will forgive me saying so, for the reason that I have just repeated, this is an important amendment as far as the concept of the Bill is concerned. I hope the noble Lord will not think that I am being deliberately obstructive when I say that there is no give in the Government's position on this point.

I see that, and I have not yet said anything about what it is that makes these hybrid arm's length companies so impossible to operate. That will come when I reach Clauses 69 and 72. My noble friend has not really answered the point that I was making about the regime that governs direct labour organisations. I am not aware that building firms, carpenters, plumbers and other people, tendering and competing with district council direct labour organisations in Reading or anywhere else, feel that they are up against impossible competition, because that is what the regime was designed to secure and to safeguard. My noble friend has not said anything to explain why a system which works well in that area has not been at least provided for as an option in this area. However, we have other matters to discuss and I do not wish to stand in the way of Clause 62 any longer.

Clause 62, as amended, agreed to.

Clause 63 [ Formation of companies to run council bus undertakings]:

[ Amendment No. 211A not moved.]

moved Amendments Nos. 211AZA and 211AZB:

[ Printed earlier: col. 966.]

The noble Earl said: I beg to move Amendments Nos. 211AZA and 211AZB together.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 211AZA and 211AZB):

Page 63, line 15, leave out subsection (3) and insert—

("(3) Subject to subsections (3A) and (3B) below, a council's bus undertaking shall be regarded for the purposes of this Part of this Act as forming part of a joint undertaking if the services for the carriage of passengers by road provided in the course of the activities of the council's bus undertaking are wholly or mainly provided under any agreement for—
(a) the provision or operation of those services by a body acting on the joint behalf of that council and one or more other councils; or
(b) the operation of those services by any company operating those services in conjunction with services for the carriage of passengers by road provided by that company.

(3A) Subsection (3)(a) above only applies where the agreement provides for the distribution among the parties on its termination of—
(a) all assets, or the proceeds of all assets, used or appropriated for use for the purpose of providing services for the carriage of passengers by road under the agreement; or
(b) all such assets or proceeds excluding only land or the proceeds of disposal of land.

(3B) Subsection (3)(b) above only applies where—
(a) the agreement includes provision for securing that the parties on termination of the agreement hold shares of equal value in assets required to be brought into account on termination of the agreement; and
(b) those assets include all assets so used or appropriated for use.").

Page 63, line 35, leave out ("or arrangements").

Clause 63, as amended, agreed to.

Clause 64 [ Schemes for transfer of individual council bus undertakings to companies formed under section 63]:

moved Amendment No. 211AZC:

[ Printed earlier: col. 966.]

The noble Earl said: This amendment is consequential. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211AZC):

Page 64, line 7, leave out ("or arrangements as are") and insert ("as is").

moved Amendment No. 211AA:

Page 64, line 19, at end insert—

("(3A) A scheme under subsection (1) above shall identify any liabilities retained by the council or councils concerned on the transfer of their property, rights and liabilities to the company or companies under the scheme, being liabilities in respect of the following matters:—
(a) compensation payable under Section 78 or otherwise in respect of persons who suffer loss of employment or loss or diminution of emoluments by reason or in consequence of the transfer;
(b) the provision of funds to secure the payments of benefits and pensions of employees.").

The noble Lord said: I beg to move Amendment No. 211AA, and I shall speak also to Amendment No. 211CA.

Amendment No. 211CA: Page 64, line 45, at end insert—

("and the Secretary of State shall make grants to the council or councils concerned of such amounts as appear to him to be requisite for indemnifying the council or councils concerned in respect of the retained liabilities identified in the scheme").

We come now to pensions again. We spent some time earlier today debating pensions in the case of the National Bus Company, and when we reached Clause 58 we spent some time discussing pensions as they affected the PTEs. We now deal with pensions as they affect the municipal bus companies. All three cases are different.

The point they have in common, as can be seen clearly by the Committee, is that there is no doubt that one of the areas of greatest anxiety and concern relates to the future of the superannuation liabilities for staff who are transferred—either from the nationalised National Bus Company to the privatised fragments of the National Bus Company, or from the PTEs in the public sector to the private sector, or from the district councils to the new bus operating companies in whatever form they take.

In every case, staff are being transferred from public service, with the assurance of the pensions they carry, to the risks and uncertainties of private employment in private enterprise. There is a substantial difference, and the way in which the matter has to be handled is different in every case.

The Government's proposals so far—at least until today—are not to be found on the face of the Bill. It appears that their first thoughts were that when municipal employees were transferred, they would no longer be members of a local government scheme but would just join whatever arrangements the new companies were able to set up. They will not be able to do anything very elaborate in the time that has been allowed for that process. Therefore, those arrangements will certainly be a good deal inferior to those which the employees are enjoying at the moment.

I am glad to be able to report to the Committee that the discussions going on between officials in the ADC and the DTP seem to indicate that the Government are now prepared to accept that it would be desirable as a matter of policy to enable municipal employees to retain their pension rights, and a proposal to this end will be made.

However, the problem is that this entails severe costs either for the new transport companies or for the present parent local authorities. These arise in three different ways. First, there is the annual pensions increase to update the benefits of the current pensioners—not the current employees, the current pensioners—and that, presumably, will continue to fall on district councils whatever is done for employees who are transferred. I have to point out to the Committee that this amounts to as much as £800,000 for a large municipal bus undertaking.

Secondly, the cost of future pensions increases in respect of transferred employees will fall, in whole or in part, on the new companies on top of the cost of around 10 per cent. of pay constituting the employers' contributions for those employees who are transferred. Thirdly, the liability to meet pensions costs and redundancy compensation during that transitional reorganisation, or if the company should fail, would rest with either the district council or the superannuation administering authority which, as your Lordships know, would be the county council.

If the Government accept the desirability of enabling transferred employees to retain their superannuation rights in the local government scheme and accept the need to minimise the burden on the new companies which possibly are to be privatised and will need to be in a position to find capital for themselves—and this is what flows from this policy—and if the Government accept that district councils' expenditure ought not to continue on these items after the revenues are lost, the Government should meet centrally the increased pensions costs and accept liability for debts which may be outstanding if the companies fail, as well as the once-off transitional costs.

There are precedents for this request, notably in the establishment of the National Freight Corporation—now a consortium. All this is essential if the new companies are to compete fairly with independent operators and, if they are privatised, to get access to their own capital. The Government have argued that the financial benefits of their policies will match these costs and no net increase will arise. That remains to be demonstrated. We certainly cannot let the legislation through on that assumption. At the very least there needs to be recognition in the grant-related expenditure assessments of those costs which will fall on the districts.

I have to say that originally the Department of Transport appeared to want to wash its hands of the consequences of this part of the legislation but it is clear from the earlier debates today that that is not the case. However, the way in which it proposes to deal with the pension rights in the case of the municipal bus undertakings needs to be made clear and this is the moment to do it. The danger is that the Government will claim that they have made provision for employees to remain within the schemes while the actual cost will fall locally; and I do not think that that can be accepted. We have discussed similar problems in the National Bus Company and the PTEs, but of course they are not the same as those which arise in the case of municipals.

I hope that with that explanation of the special situation my noble friend will be able to respond with the same thoroughness as he responded earlier in the day in the case of the National Bus Company and the PTEs. I beg to move.

I have listened very carefully to the arguments deployed by my noble friend in support of these amendments. We have of course debated a similar set of amendments to Clause 58 dealing with the PTEs and the companies that they will be forming, and while of course I appreciate that we are dealing here with rather different bodies—district councils and their undertakings—I suggest that the same principles hold good for both.

May I remind your Lordships very briefly of the main points? I hope that in the earlier debate my noble friend was reassured about the terms and conditions of the employees as they transferred to these companies. The Transfer of Undertakings (Protection of Employment) Regulations 1981 will ensure that the contracts of employees who transfer will continue to apply, with the same terms as though they had originally been made with the new company rather than the PTE or district council. If, after transfer has been effected, the company wanted to make changes in the contracts of employment, it would of course be open to it to renegotiate with the staff, but existing terms and the rights to compensation which they imply would have to be the starting point.

11 p.m.

Clause 78 of the Bill provides for the Secretary of State to make regulations providing for the payment of compensation to employees who have suffered loss or diminution as a result of the transfer, but the Government regard this very much as a reserve power for use in particular circumstances in which staff may suffer loss. We do not envisage regulations under Clause 78 requiring payments of compensation to staff generally.

These amendments suggest that my noble friend believes' that the employees of municipal bus companies will be worse off once they have been transferred to the new public transport companies, and that there will be residual liabilities remaining with the district councils which should fall on the Government. However, we believe very strongly that the Bill will rejuvenate the market for bus services and provide a better chance for the industry to flourish than existing policies do. As with the PTE's new companies, the district council companies will have every chance to share in the benefits of the change that this Bill will bring about. For the first time management will be established in a commercial structure able to provide all the services which it believes in its commercial judgment to be attractive. I suggest that it would be wrong of us to think in terms of a sizeable residual liability falling on them. Instead I ask my noble friend to recall that, as with the PTEs, the company structure will bring many benefits to the councils and their ratepayers.

My noble friend has referred specifically to the extra cost of pensions, a matter which we have of course already debated at some length. However, I would reiterate that the bus undertakings undoubtedly will already be covering their own pensions costs and that may well continue to be the case in the future, and in so far as any extra costs fall on the authorities, I do not think it would be right for them to be passed on to the Government.

Finally, let me say once again that the policy in the Bill as a whole will be to the financial benefit of local ratepayers since they will all have the advantages of efficiency and competition, with the reductions of wasteful subsidy that the Bill will bring. I suggest again to your Lordships that in these circumstances it is not right to require the taxpayer to meet any liabilities which may be left to the councils, and it would be quite inappropriate to expect that central Government should meet those transitional costs which arose from the move towards greater efficiency and cost effectiveness in the provision of services.

I had absolutely no intention of intervening at this time of night, but I must say that we are now back on to the old philosophical tack: that with the lid off the pot this Bill will be the most roaring success. However, when it comes to pensions we are discussing important areas of people's lives. I shall not say very much at all and I shall leave your Lordships to my noble friend Lord Sandford who will reply, but the Opposition might wish to come in and say one or two things. We are just back into that same old tack. This debate is sounding like a very boring old gramophone record, and it is entirely speculative.

I must say that I regard that response from the Minister as very unsatisfactory. I asked my noble friend a number of specific questions which arise in the case of the municipal undertakings and which have not arisen before in regard to either the National Bus Company or the PTEs. If I may say so, he ignored the whole lot. I know that it is late at night, but that is not my fault. We have only just arrived at the matters which concern the district councils, and I really must have them discussed properly. I am prepared to go on for as long as the Chief Whip wants me to go on, but I expect to have better answers than that. I shall not press the amendment any more tonight, but I shall certainly press it a good deal harder at Report stage. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[ Amendments Nos. 211AB, 211B, 211C and 211CA not moved.]

Clause 64, as amended, agreed to.

Clause 65 [ Orders for transfer of joint undertakings to companies formed under section 63]:

moved Amendments Nos. 211CB to 211CM.

[ Printed earlier: col. 966.]

The noble Earl said: With the leave of the Committee, I should like to move Amendments Nos 211CB to 211CM en bloc. I spoke to these with Amendment No. 211ZE. I beg to move.

On Question, amendments agreed to.

Following is the text of the amendments (Nos. 211CB to 211CM):

Clause 65, page 65, line 16, leave out from beginning to end of line 17 and insert ("In any case within section 63(3)(a) of this Act both or all the councils participating in the joint undertaking may")

Page 65, line 29, leave out ("or arrangements")

Page 66, line 11, leave out from ("case") to second ("the") in line 13 and insert ("within section 63(3)(b) of this Act")

Page 66, line 14, leave out ("that party") and insert ("the company carrying on the joint undertaking")

Page 66, line 16, at end insert ("by the council concerned")

Page 66, line 24, after first ("of") insert—

("(i) all property, rights and liabilities of the body carrying on that undertaking; and

(ii)")

Page 66, line 43, leave out from ("and") to ("share") in line 1 on page 67 and insert (", in any case within section 63(3)(b) of this Act, for the transfer to the company carrying on the joint undertaking of any property, rights and liabilities of the council concerned which are comprised in that company's")

Page 67, line 5, leave out ("any joint body established for the purposes of") and insert ("the body carrying on")

Page 67, line 20, at beginning insert ("in any case within section 63(3)(a) of this Act,")

Page 67, line 20, leave out ("any joint body established for the purposes of") and insert ("the body carrying on")

Page 67, leave out lines 22 to 27.

Clause 65, as amended, agreed to.

Clause 66 [ Supplementary provisions with respect to orders under section 65]:

moved Amendment No. 211CN:

[ Printed earlier.]

The noble Earl said: I should like to speak also to Amendments Nos. 211CP, 217A, 217B, 221A, 231A, 234A, 239A, 241ZA, 241B, 241C, 264A and 264C to 264G.

Amendment No. 211CP: Page 68, line 28, at end insert ("; and (e) with respect to the consideration to be provided by any such person for any transfer under the order.").

Amendment No. 217A: Clause 69, page 70, leave out lines 33 to 35 and insert—

("(2) Following the transfer to a public transport company of its initial undertaking,").

Amendment No. 217B: Page 70, line 41, at end insert—

("The reference above in this subsection to the transfer to a public transport company of its initial undertaking is a reference, in relation to any such company, to the transfer or (if more than one) the first transfer of property, rights and liabilities to that company under section 58(7), 60(10), 64(7) or 66(2) of this Act.").

Amendment No. 221A: Clause 71, page 74, line 3, leave out from ("company") to ("any") in line 4 and insert ("so formed by way of consideration for").

Amendment No. 231A: Clause 75, page 76, line 42, leave out from ("in") to ("requires") in line 1 on page 77 and insert ("pursuance of any provision made by any scheme or order under this Part of this Act in connection with any transfer of property, rights and liabilities to the company in question for which that scheme or order provides").

Amendment No. 234A: Page 77, line 26, leave out ("and") and insert ("or").

Amendment No. 239A: Clause 76, page 78, line 25, leave out ("and") and insert ("or").

Amendment No. 241ZA: Clause 78, page 79, line 17, leave out ("or") and insert ("and").

Amendment No. 241B: Clause 79, page 80, line 44, leave out ("subsection (6) below") and insert ("the following provisions of this section").

Amendment No. 241C: Page 81, line 10, at end insert—

("(6A) Any order under this section may make modifications in Schedule 4 for the purposes of its application to a transfer effected by that order.").

Amendment No. 264A: Clause 113, page 111, line 12, leave out ("and") and insert ("or").

Amendment No. 264C: Page 111, line 17, at beginning insert (" (or partly in one way and partly in the other)").

Amendment No. 264D: Page 111, line 19, at end insert ("(including in particular, but without prejudice to the generality of that, provision with respect to the consideration to be provided by the transferee for any transfer under the scheme) ").

Amendment No. 264E: Page 111, line 20, leave out ("subsection (4) below") and insert ("the following provisions of this section").

Amendment No. 264F: Page 111, line 34, at end insert—

("(5) The Secretary of State may by order make modifications in Schedule 4 for the purposes of its application to tranfer under section 50(4), 58(7), 60(10) or 64(7) of this Act.").

Amendment No. 264G: Clause 120, page 117, line 12, at end insert—

(" "securities", in relation to a body corporate, means any shares, stock, debentures, debenture stock, and any other security of a similar nature, of the body corporate;").

This is a group of technical amendments to the provisions in the Bill relating to transfer schemes. They are needed to ensure that the scheme-making provisions will work properly. I beg to move.

On Question, amendment agreed to.

Following is the text of the amendment (No. 211CN):

Clause 66, page 68, line 22, leave out ("and").

moved Amendment No. 211CP:

[ Printed above.]

On Question, amendment agreed to.

Clause 66, as amended, agreed to.

I am of course in the hands of your Lordships' Committee, but I feel that my noble friend Lord Sandford does not want to be hurried on these next two amendments. I think the Committee has gone beyond the time that your Lordships' House normally sits.

I should much rather stop now. Through being pushed, harassed and, I think, not really treated properly, I have missed an amendment altogether. I think it is rather unfair, after sitting here all day, that when the issues with which I am concerned come up, we are not handling them properly.

I am very sorry that my noble friend feels that we are not handling things properly. We have spent quite a lot of time on his amendments as well as on those of other noble Lords. If he does not wish to move his amendment now, perhaps it is time we resumed the House. I therefore beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at ten minutes past eleven o'clock.

Volume 466: debated on Thursday 18 July 1985

House Of Lords

Diplomatic Cars: Parking Spaces

Wave Energy Power Generation

Diplomatic Immunity: Claims For Losses

Breast Cancer: Screening Policy

Business

Summer Recess

Cambridge City Council Bill

Business Of The House

Business Of The House

Housing Bill Hl

Housing Associations Bill Hl

Landlord And Tenant Bill Hl

Housing (Consequential Provisions) Bill Hl

Weights And Measures Bill Hl

Town And Country Planning (Amendment) Bill

Transport Bill

Town And Country Planning (Fees For Applications And Deemed Applications) (Amendment) Regulations 1985

Town And Country Planning (Fees For Applications And Deemed Applications) (Scotland) Amendment Regulations 1985

Transport Bill