§ 7.42 p.m.
§ The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Avon) rose to move, That the order laid before the House on 12th December 1984 be approved. [6th Report from the Joint Committee.]
§ The noble Earl said: My Lords, it may be helpful to the House if I briefly explain the background to this order. The powers required to set up the Tyne and Wear Metropolitan Railway—the Metro—were provided in the Tyneside Metropolitan Railway Act 1973. The Tyne and Wear Passenger Transport Act 1979 made various additional provisions which included those necessary to rate the Metro by statutory formula. It is not possible for land occupied by the operational premises of the Tyne and Wear Passenger Transport Executive to be rated in the normal way. And in any case, since the Metro crosses four of the five rating districts in Tyne and Wear, some method of attributing a value to the elements in each district was needed. Section 7 of the 1979 Act therefore provides that the rateable value of the operational land and premises—the Metro system itself—in each rating area is to be determined by a statutory instrument made by the Secretary of State, after consultation with the interested parties.
§ The statutory formula aims to achieve a rateable value for the undertaking as a whole which is as fair as possible. This means it attempts to produce a rate burden as close as possible to what might have been expected if the system had been capable of being rated normally. In order to achieve such a result we have involved closely the passenger transport executive, the county and the five rating districts. I am happy to say that all these parties are content with the order before us today.
§ The Tyne and Wear Metro opened in August 1980 and was extended gradually until it became fully operational in March 1984. Separately rateable offices and other buildings have been assessed in the normal way, but we felt it right to wait until the network became fully operational before introducing the statutory formula method of fixing its rate burden for the future. It has been agreed between all the interested parties that passenger mileages travelled should form the basic method for assessing the total cumulo value of the Metro. We now have a sufficiently firm estimate of the mileages travelled on the completed system to bring this order forward.
§ Perhaps I may briefly take your Lordships through the detail of the order. It sets out, first, a method of ascertaining an annual cumulo value for the whole of the Metro's operational network; and, secondly, a method of dividing this total between the four rating districts in which the Metro operates, to give a rateable value in each area. Each district will then levy its own rate poundage on this notional rateable value. All these aspects have been the subject of detailed consultations between my department and the Valuation Office of the Inland Revenue, the passenger transport executive and the county and rating authorities.631
§ The initial total rateable value, known as the cumulo value, has been based on a comparison with a notional rateable value for the London Underground network, in relation to the passenger mileages travelled on each system. The basic comparison takes account of the rate poundages payable in each London borough in calculating LRT's notional rateable value. It is also adjusted for differences in 1973–74 rateable values, reflecting rent levels in London and in Tyne and Wear at the date of the "tone" of the list, since the cumulo value must be set at the "tone" of the valuation list drawn up at the last revaluation; that is, at 1973 prices. The calculation is based on an estimated total passenger mileage for the Metro in its first year of full operation—1984–85—of 174 million passenger miles to be travelled. Using the appropriate figures for travel on LRT, the initial cumulo value proposed is £193,000.
§ Like other values fixed by statutory formula, the cumulo value of the Metro will be varied each year to take account of reductions or increases in the value of the system as measured by passenger mileage travelled. The order proposes that 50 per cent. of any change in passenger miles travelled from the initial figure of 174 million miles will be reflected in the cumulo value in the next year but one. The apparently complicated formula—it sounds complicated to me as well—in paragraph 2(2)(c) multiplies the initial cumulo value of £193,000 by a factor giving changes in the mileages travelled; your Lordships will rapidly see that 174/348 reduces easily to ½
§ No rates have yet been paid on the Metro's operational network, although the first section opened in August 1980. The county, the PTE and the districts have agreed that the initial payment of rates from 1st February to 31st March 1985 should reflect a payment in respect of rates to those authorities in whose areas it has been operating. The initial cumulo value of £2,514,000 also reflects the fact that rates will be levied only for the last two months of the year; that is, one-sixth of the rating year.
§ The district councils have agreed that the cumulo value should be divided between the four areas in which the Metro operates according to the passenger mileages travelled in each of these four districts. The apportionment of the initial sum is set out in paragraph 3(a).
§ Finally, paragraph 4 of the order ensures that the matters determined by the order can be effected without the procedures for proposals and appeals appropriate to changes in valuation by normal method. It also enables the valuation officer to ensure that the annual adjustments required by paragraph 2(2)(b) and (c) may take effect immediately on 1st April each year. This is a of particular importance in 1985, when the substantial initial cumulo, effective for only two months, should be reduced to £193,000 and apportioned to the districts accordingly.
§ Before presenting the order to the House we have consulted very thoroughly those parties directly interested—the PTE, the county and the five districts in Tyne and Wear—and also their local authority associations. This draft order represents the outcome of those discussions and I commend it to the House. 632 With that brief explanation I hope that I can persuade the House to accept this order. My Lords, I beg to move.
§ Moved, That the order laid before the House on 12th December 1984 be approved.—(The Earl of Avon.)
§ 7.49 p.m.
§ Lord Graham of Edmonton
My Lords, the noble Earl, Lord Avon, will find no opposition to this order from this side of the House, even if there was a convention that orders were opposed if they were not either understood or supported. The convention aside, I was going to press the Minister on the first part of the order where it says:after consultation with those associations of local authorities or of persons carrying on undertakings appearing to him to be concerned".More than once—and I think wisely—the Minister in effect stressed that, outwith what I would call the larger, more dramatic dimensions of the future of the authority, there has been both consultation and agreement on the complicated formula which is contained in the order. For that I am certainly very grateful.
More than once the Minister stressed that the basis of the order in the future would rest upon mileages travelled. In other words, the future reapportionments will depend to some extent upon the uses and methods of the local people on Tyneside. I was born on Tyneside and I have travelled on the Metro fairly recently, and I share some of the pride which everyone who is associated with Tyneside must feel at that event. Nevertheless, what we have with the order is the opportunity to press the Minister on the further consequences.
When one turns to page 2 one sees in the first line item (c):for any rate period beginning on or after 1st April 1986".On or after 1st April 1986 a great deal is likely to happen which can be affected by the wording in this order. The Minister knows that he and his colleagues are pressing on with two pieces of legislation. The first is the Local Government Bill which is in Committee in another place, and the other is the Transport Bill which we have yet to have presented to us, but which I understand is likely to be presented in another place within a matter of two or three weeks.
I know that this is not directly the responsibility of the Minister but he is a member of the Government. In the Standing Committee on the Local Government Bill (the seventh sitting on 17th January at col. 455), his governmental colleague, the Minister of State, Department of Transport, Mrs. Chalker, said:When I am looking for export business for transport industries I always point to the Tyne and Wear Metro—it is a firstclass piece of engineering. I also point to its cost because there is no way in which one should not be honest about the way an organisation is running. But the basic engineering is very good indeed. It is a fine example of British engineering.The Minister must be aware of the extreme anxiety which exists not merely among the politicians on Tyneside but among the millions of passengers and users of the Metro at what is likely to happen if the Minister and his colleagues have their way.
633 Both Bills will have a severe bearing on the matter. For instance, if the abolition Bill becomes an Act the Secretary of State, a colleague of the Minister answering tonight, will take to himself the power—and after that power has been taken away from the existing metropolitan authority—the right, the duty and the obligation to set the rate for the first three years. The Minister will be aware that this is not an idle power. It is put in there in order that the Secretary of State can control the amounts of money which will be spent by the new authority.
The Secretary of State is well aware, as the House must be aware, of the importance of the Metro to the people of Tyne and Wear. Tyne and Wear has only 49 per cent. of a car-owning population. It is the lowest car-owning population in any county in the country. There are more people who rely upon the use of public transport and the Metro on Tyne and Wear than in any other comparable part of the country. Seven million journeys are made every week.
They are not made merely by the Metro but by buses, trains, and ferries. The transport system on Tyne and Wear is the best form of integrated transport that this country has had. With an investment of more than £280 million over the past 10 years it is the greatest single—and most successful—transport investment not merely of the decade but for many years before.
We have something which is successful and which is expanding; something which is constantly looking for better ways to serve its community. I am told by the people who have been in touch with me and have been alerted by this order—not opposing the order, but asking me to support it—to make sure that the Ministers and others are well aware of their anxieties.
Their basic anxiety stems not merely from the inability of placemen and placewomen of a future Minister to understand the problems of the area as well as they do; but it also runs along the lines of what the Minister and his colleagues intend to do with the Transport Bill. We know that the Transport Bill is going to deregulate local bus services, enabling commercial operators to register and operate services where and when they wish for commercial reasons without regard to the needs of the community.
That means that the integrated transport system, of which I know the Minister is proud as well as everyone else, will be put at risk. The question must be asked: why? Operators will operate buses in parallel, when the Metro was organised in such a way as to make sure that the maximum and most efficient use was made of every service.
Operators will decide that they will start at six in the morning and end at six at night. The unprofitable parts of the day will not be serviced. The peak hours will be a heyday, and after that ordinary people will have to fend for themselves. All of that is based on a system which was tried out in Hereford and which has been laughed at not only by the people of Hereford but by other people who are looking at the possible consequences. There will be a diminution of the service in an area which desperately needs stability.
Tyneside is one of those areas which has a greater unemployment rate than many. The mobility of workers and those seeking work has been augmented 634 inestimably by the success of the Tyne and Wear Metro. Over the next period—that is 1985—when these two great measures come before this House and the other place they will be argued over (I use the term they will be fought over); but the Minister at the beginning of the year, not as a result of this order but in other ways, has an opportunity to say to his Governmental colleagues, "Is it not possible to think again?"
I argue the case for the Tyne and Wear Metro, and clearly that cannot be separated from other major national considerations, but I say to the Minister that he has an opportunity to take back to his colleagues the concern which has been expressed to me not only by politicians but also by other users. At the moment there is one authority, the Tyne and Wear authority, making the laws, rules and regulations concerning things, but people are fearful that in the future there will be separate small authorities which will be responsible for trying to maintain the same level of service, the same level of safety, the same level of fares, etc. People are very worried about this.
So far as we are concerned on this side of the House we shall not oppose the order, but we are fearful of the future. The pride of Tyneside and Wearside has risen out of their ability to persuade the noble Earl's Government and former Labour Governments to provide the money and the service. Therefore, it would be a tragedy if after 1986 the service was to disintegrate, passenger mileage was to go down, and the rates which are affected by this order had to be adjusted, all, so far as we are concerned, to no avail.
§ The Earl of Avon
My Lords, I am grateful to the noble Lord, Lord Graham, for welcoming this order. I, too, have seen the Metro, have been very impressed by it and, indeed, have been shown how it works. I assure him, and add to the pledges of my honourable friend the Minister of Transport, Mrs. Chalker, by saying that we are looking forward to a successful and expanding Metro system. In no way do we expect that the abolition next year will have anything but a beneficial effect on the railway.
I understand that, under deregulation, the executive will have a role in promoting the co-operative arrangements between operators, including the co-ordination of time-tabling and through ticketing. I am sure that my right honourable friend the Secretary of State for Transport, in setting precept limits for the new joint board, will take full account of the various needs for expenditure in the different areas. It will be for the joint board, as the new transport authority, to decide on the allocation. I am sure there will not be a diminution, but I hope that the Tyne and Wear Metro will continue to prosper.
The noble Lord asked me what will happen after 1st April 1985 and in future years. In this case the cumulo value will be apportioned according to the proportion of the total passenger miles travelled on the Metro in each district in the appropriate period. The apportionment for 1985–86 will be based on the PTE's estimate of miles travelled in each district in 1984–85. In future years it will be the figure certified by the PTE as having been travelled in the last year but one.
635 I hope that that clarifies the point that the noble Lord asked. I commend this order.
§ On Question, Motion agreed to.
§ Lord Skelmersdale
My Lords, I beg to move that the House do now adjourn during pleasure until 8.40 p.m.
§ Moved accordingly, and, on Question, Motion agreed to.
§ [The Sitting was suspended from 8.3 until 8.40 p.m.]