HL Deb 05 June 2000 vol 613 cc924-1038

3.11 p.m.

The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston)

My Lords, I beg to move that this Bill be now read a second time. This is the first comprehensive transport Bill that the House has had the opportunity to consider since my noble friend Lady Castle was Transport Secretary in the late 1960s. I am conscious of the great store of experience available in the House since I believe that more than 20 noble Lords have had ministerial responsibility for transport issues. I am sure they would readily agree that many of the problems and some of the solutions in prospect are not in essence ideological and can command widespread support.

We all know that this country faces serious transport problems. For years our public transport system has suffered from under-investment. Road traffic levels have risen faster than predicted, leading to increasing congestion. Road maintenance in particular has deteriorated while many potentially useful road schemes have yet to be built. Altogether, that is bad for the environment and business and a continuing source of exasperation for too many motorists and passengers.

Our transport system, for whatever reasons—lack of foresight or lack of resources—has been allowed to decline too long. We have to sort that out—and soon. The Government have a clear view of where we should be going and of the integrated transport system required. We also have a strategy on how to get there. We are putting in place by virtue of this Bill the legislative powers to make it all happen.

Following the vision set out in our integrated transport White Paper, the building blocks for a new transport system are properly funded means of delivering improvements, such as the Strategic Rail Authority, bus quality partnerships and local transport plans; innovative forms of finance, including public private partnerships and hypothecation of taxes and revenues specifically to improve transport—something no British Government have done before—combined with continued increases in public investment; and a renewed commitment to safety across all transport modes. All of that lies behind the radical Bill we have brought before the House today.

The Bill contains proposals for air traffic services, local transport services, road user charging and workplace parking levies, and railways.

Part I covers air traffic services and provides powers to proceed with a public private partnership for national air traffic services, NATS. Certain documents relating to that partnership have been placed in the Library. They are the draft licence under which the new company would operate; draft articles of association; a draft partnership agreement; and draft heads of terms of the NATS/Ministry of Defence contract.

NATS at present provides a reassuringly professional service in increasingly crowded skies. We believe that NATS would now benefit from access to private investment funding and project management expertise so that it can sustain safety and upgrade its systems to the standards demanded by ever-increasing levels of air traffic. It will cost approximately £1.3 billion over the next 10 years to develop new systems which we believe will be world class.

Part I will enable large-scale investment in NATS without adding to pressure on public sector borrowing or being subject to its vagaries. Through the public private partnership—PPP—we intend to secure a long-term strategic partner that will commit to investing in and to delivering on time and on budget, air traffic control systems that will offer the technology and capacity required to cope with this inexorably expanding industry.

Under the PPP, NATS will be owned by the Government, with a 49 per cent shareholding, a strategic private sector partner, with a 46 per cent shareholding, and an employee trust with 5 per cent. It will be designated a private sector operation, as are the existing air traffic operations at many UK airports, including East Midlands, Bristol and Liverpool.

We do not believe that a 100 per cent sell-off of NATS—its privatisation, as proposed by the Official Opposition—would provide an appropriate option, given the complexity and sensitivity of the business. Under our proposals, the main strategic decisions of the NATS board would require the unanimous vote of all directors—including those appointed by the Government under the PPP arrangements. Moreover, by retaining a substantial shareholding, we can ensure that the Exchequer and hence the taxpayer share in the future success of the company, which could be considerable, given the potential for international consolidation being driven by technological advances and the commercial imperatives of an ever-expanding global aviation industry.

In any such global consolidation of air traffic services, our PPP will ensure also that Britain's national security interests are safeguarded. The Bill has been carefully prepared in close liaison with the Ministry of Defence, so that there can be no doubt of the Government's power to step in at any stage should they deem it necessary to do so in the interests of national security. Our proposals ensure that NATS will continue to provide, in conjunction with others, a safe, efficient and secure service for all civil and military users.

It has been said that our proposals compromise safety. I shall deal with that concern in some detail, given its overriding importance. First, I repeat the Government's commitment to safety. Your Lordships may be assured that safety will continue to be paramount. We do not accept that the PPP would jeopardise safety in any way. Neither do British airline operators who told a Select Committee in the other place that our proposals would enhance aviation safety. Would any of us suggest that the 13 major UK airline operators are indifferent to the future safety of their passengers and the reputation of their companies? Please be clear: the function of safety regulation will remain in the public sector in a reformed Civil Aviation Authority. Our proposal that safety regulation should rest with a public body and be separate from the company that is responsible for operations is now widely accepted. The CAA, shorn of NATS, can more single-mindedly continue to set and monitor standards. We have made it abundantly clear that standards will not be reduced in any way. It is true now—and it will continue to be the case—that no one can provide air traffic control services in the UK unless the CAA safety regulation group is satisfied that they can do so safely.

The CAA will continue to conduct regular inspections and audits. The competence and medical fitness of all operators will be tested annually. Procedures and equipment used by air traffic controllers will have to be approved by the CAA. It will also control maximum working hours and no company will be able to make air traffic controllers work undue hours since shifts will continue to be controlled by regulation.

None of the existing safeguards will be weakened. Staffing levels and the type of equipment used will be controlled by the CAA. Again, nothing changes in respect of the complement of controllers and the efficiency of their equipment.

Safety will be entrenched in the strategic partnership agreement which will be a legally binding contract between the Government and our partner. A main board director of NATS will have specific responsibility for safety. A safety monitoring committee will be established within NATS, most likely to be chaired by a government-appointed director.

The safety management system of NATS which presently includes elements that exceed statutory minimum safety requirements will remain in place. The CAA's monitoring procedures will be extended to ensure that an audit of safety management is conducted annually. Finally, training and development standards will be further enhanced.

Lord Clinton-Davis

My Lords, before the Minister develops his argument in another direction, perhaps he will deal with this. His officials have met the representatives of the three trade unions concerned. They remain dissatisfied with the provision of safety. They are not compelled by the Government's argument. If the three trade unions concerned are not satisfied, will the Minister take the opportunity to meet them again before discussion of the Bill is completed in this House?

Lord Macdonald of Tradeston

My Lords, I am grateful to my noble friend Lord Clinton-Davis. Given his past experience in areas of transport, I am very respectful of his intervention.

For the past six months, we have worked with interested parties to identify their specific concerns. If there is more yet to be done in that area, then I am certainly very ready to continue the dialogue, as my noble friend requests. I trust your Lordships will agree that we have taken appropriate action to address concerns with regard to safety procedures. First, we have separated the public safety regulator from the service operator, as everyone wants us to do. Secondly, we have a rigorous selection process which will ensure that the strategic partner shares our commitment to safety. Thirdly, there will be a main board director of NATS who has specific responsibility for safety.

For those reasons, I cannot agree with critics who assert that strategic partners from the private sector would, through undue emphasis on profit, put passengers at risk. Your Lordships can be assured that this will not be a "sale without safeguards". This PPP is a specific solution for a special company. It is calculated to provide future benefits to air traffic users, both airlines and passengers, military and leisure fliers, as well as the country as a whole.

Part II of the Bill includes our proposals to improve local transport services, particularly buses. Local authorities have a unique role to play in delivering integrated transport since we believe that they are best placed to provide local solutions for local problems which they best understand.

The Bill will require local authorities to publish local transport plans setting out their policies for the promotion of safe, integrated, efficient and economic transport facilities in their area. We have made clear that these policies should give a high priority to road safety schemes in order to deliver our new road safety targets. Local authorities are already producing local transport plans on a non-statutory basis. This Bill, by putting them on a statutory footing, will reinforce their importance.

Local transport plans, or LTPs, will ensure that local authorities take a comprehensive look at their transport powers and breadth of objectives for urban and rural transport, capital and current expenditure and public and private transport. These LTPs are also the basis on which public funding is now allocated.

The local transport settlement for 2000–01 was some £755 million. This is 20 per cent up on the previous year and will rise by a further third to £1 billion next year, demonstrating our determination to deliver integrated transport across England for pedestrians and cyclists as well as for passengers and motorists.

In the settlement for the financial year 2001–02, following the next spending review, SR2000, to be announced next month by my right honourable friend the Chancellor of the Exchequer, we will indicate the likely funds available for the full five years of the local transport plans. Local authorities can then invest with greater certainty to deliver the integrated transport system that they have long argued for and communities have long deserved.

We see better bus services as a key to local transport solutions. The Bill therefore requires authorities to develop a bus strategy as part of their local transport plan. Our proposals also give local authorities new powers to put in place good quality bus services tailored to local circumstances. The Bill introduces a package of enabling powers relating to partnerships between bus operators and local authorities. These draw on practical experience of more than 150 quality partnerships already working on a voluntary basis around the country. After decades of decline, these partnerships have been instrumental in increasing bus patronage in many areas.

Putting quality partnerships on a statutory basis will allow all parties to invest with confidence. Local quality standards can then be imposed and enforced for the benefit of the passenger; for example, to provide more accessible and comfortable buses. For the benefit of the wider community, partnerships can help meet traffic reduction and air quality objectives. Existing voluntary schemes which are working well can be subsumed into the new contractual arrangements.

Integrated ticketing and better passenger information are particularly useful in making bus travel a more attractive alternative to the private car. The Bill introduces powers for local authorities to require bus operators to participate in joint ticketing schemes, and it places a duty on authorities to secure the provision of bus passenger information in their area.

We are also taking powers in the Bill for local authorities to enter into "quality contracts" for bus services if required. Under quality contract schemes, local authorities would determine networks and service levels and let exclusive contracts for them.

We do not see quality contracts as the norm but believe we are right to provide for this option. The extent to which we need to resort to it will depend greatly on the bus industry's continued willingness to work in partnership. However, the imposition of quality contracts will be subject to a strict "public interest" test and to prior consent of the Secretary of State or the National Assembly for Wales.

We are also honouring the promise to introduce a national minimum standard for local authority concessionary fares schemes. This will guarantee all pensioners a cheap bus fare scheme which is at least as generous as half-fare. Further, in future they will no longer have to pay £5 or indeed anything at all for the concessionary bus pass. This will benefit around 3 million pensioners.

A number of local authorities—in London for example—already offer more generous or even free bus travel for pensioners. The measures in the Bill will not affect those schemes. What the Bill will offer is a guaranteed half-fare as a minimum across England and Wales.

We recognise that many local authorities also allow concessionary travel for blind people and/or half fares for disabled people. I am pleased to announce that we intend to bring forward amendments to the Bill to extend the minimum half-fare scheme to disabled people in all localities.

Part II also strengthens the powers of traffic commissioners to fine bus operators for running unreliable services. The Bill provides the Secretary of State or the National Assembly for Wales with the power to make grants to local authorities for general transport purposes and also contains a power to amend the current fuel duty rebate scheme. Both those powers are simply to provide proper flexibility for the future.

Part III of the Bill contains our proposals for road-user charging and the workplace parking levy. As your Lordships will be aware, we have already made those powers available to London's mayor and boroughs as part of our Greater London Authority Act 1999. The Transport Bill will grant similar powers to local authorities outside London.

New charging powers can help local authorities to tackle the problems of congestion and pollution. Less congestion means faster and more reliable journeys for motorists, more punctuality for bus passengers and reduced costs to businesses.

In addition, the Bill provides that net revenues raised from such local charging schemes will be retained locally and ring-fenced for spending on improvements to local transport for at least 10 years. Our proposals therefore ensure that new charges will be invested to tackle the problem of traffic congestion and help fund improved alternatives to car travel where needed.

I should like to make it clear that the Government are not imposing charging on local authorities. Some will not charge; some will. This Bill simply gives local authorities powers to tackle traffic problems by introducing charging where it is judged appropriate.

However, local authorities which want to charge will have to submit their plans for raising and using revenues to improve local transport to my right honourable friend the Secretary of State, or to the National Assembly for Wales, for approval. Your Lordships may be assured that we do not currently envisage that any scheme will be approved by the Secretary of State unless and until some public transport improvements are made before charging starts; all proceeds are apportioned to fund further improvements to local transport; and adequate consultation has taken place with local people and businesses. For electronic charging schemes, the appropriate technology must be in place to make the scheme effective. Finally, the scheme must be judged fair and proportionate and calculated to make a contribution to integrated transport at the local level.

We have not set deadlines for the introduction of charging schemes. Those involving new technology will take time to test. I can report, however, that 25 local authorities in 12 areas have expressed interest in using the road-user charging and the workplace parking levy powers contained in the Bill.

Local authorities will also be able to ask my right honourable friend the Secretary of State, or the National Assembly for Wales, to introduce charging on specific trunk roads, but only if that is necessary and complementary to their local scheme. The Bill will also allow large trunk road bridges and tunnels—that is, of at least 600 metres in length—to be subject to charges. Those might be introduced to promote our objectives of tackling congestion and pollution, or to provide additional funding to build costly infrastructure. However, your Lordships should be aware that we have no plans to charge for existing tunnels and bridges that are currently free from tolls.

I now turn to Part IV of the Bill—our proposals to improve the railways. The Bill establishes the Strategic Rail Authority—the SRA—and sets out its powers to improve services for the travelling public. The primary purposes of the SRA will be to promote the use of the rail network; to secure its development; and to contribute to the evolution of an integrated transport system. In other words, it will give the industry a long-term strategy for integrated growth.

The authority will have a general power to enter into agreements for the purpose of securing the provision, improvement or development by others of the railway. This includes a wide power to give financial assistance. For example, the SRA's powers would enable it to fund the integration of tramways with the main rail network, but not to assume prime responsibility for funding such light rail networks, which will remain a responsibility of the DETR.

The SRA will take over consumer protection functions from the rail regulator. The SRA and rail regulator will have enhanced powers to deal with poorly performing companies. The rail regulator will also have a new power to require facility owners, such as Railtrack, to enhance facilities or to provide new facilities, subject to the owner being adequately rewarded. I am pleased to announce to your Lordships that we shall be bringing forward an amendment at Committee stage to ensure that where rail services have been interrupted—for example, because of engineering work—the substitute services by road must be suitable for disabled passengers.

The rail users' consultative committees the passengers' watchdogs—will have new duties to keep under review matters affecting the interest of rail users and a power to make representations about these matters. Re-named as rail passengers' committees, they will also have a statutory basis for encouragement of better bus-rail links and interchanges. The passenger representative now appointed to the Strategic Rail Authority will mean that the passenger's voice is ever present in its counsels.

The SRA will be able to retain penalty income from enforcement action, including that taken by the rail regulator. Naturally, we expect companies to improve their performance so that enforcement is not necessary. But where it is, penalties will go towards investment in the railway.

The measures in this Bill bring greater public accountability to the railway industry. The Bill will allow the SRA to plan for an expanding and safer network. It will require those who own the network or run trains on it to meet their obligations. The SRA will have the capability to take over franchises "as a last resort"; for example, if a franchise were terminated or if there were no acceptable private bids.

The railway industry has had more than its share of criticism. No doubt some of it was deserved; some of it inescapable given the fragmentation of the industry in the recent past. But there are now positive signs of increasing cohesion, indeed, a revival, of Britain's railways with growth in patronage, new investment in rolling stock and infrastructure, and a large number of safety initiatives.

The Government take rail safety very seriously. That is why we have set up several inquiries to review safety systems and regulation. As an interim measure, Railtrack's current functions in respect of the safety cases of train operating companies are being transferred to the Health and Safety Executive. Additionally, Railtrack is being required to separate its safety functions from its commercial interests in a new independent company called Railway Safety.

Further measures must await the results of Lord Cullen's inquiry into the Ladbroke Grove crash and the joint inquiry on train protection systems to be undertaken by Lord Cullen along with Professor Uff, who conducted the Southall inquiry. It would not be appropriate to take steps now that would pre-empt that advice. However, by increasing investment with the help of this Bill, we invest too in greater safety.

The National Rail Summit, on 25th May, pointed the way for more investment to improve performance and increase capacity. The Bill will help deliver a modern railway capable of meeting the growing needs of passenger and freight customers by providing safe, punctual, reliable services.

The Bill also contains powers for the Vehicle Inspectorate to impound heavy goods vehicles found to be operating illegally. I pay tribute to the noble Earl, Lord Attlee, for bringing forward these measures in the last Session.

Illegal lorry operators are a small minority in a very responsible industry, but by flouting the law on goods vehicle operator licensing they avoid the checks on professionalism, safety and pollution which are vital to the licensing system. We are determined to act against operators who choose to bypass the licensing system and we believe that the measures in the Bill will enable us to take action against these cowboy outfits.

The Bill will allow school crossing patrols to cover all pedestrians rather than just school-age children by extending the existing powers so that patrols can assist anyone crossing the road. It is also our intention to bring forward amendments at Committee stage to remove the restrictions on times when school crossing patrols may operate. This will complete the package of measures, promised by Government in the 1998 integrated transport White Paper to widen the operational scope for school crossing patrols.

This is a large and complex Bill, and it will come as no surprise to your Lordships to hear that we intend to table a series of government amendments. I reassure your Lordships that they will be limited in number and, when marshalled together, will cover a dozen or so issues. These amendments will be largely technical or drafting amendments which do not raise new policy issues. Other amendments are being tabled to respond to issues raised during the passage of the Bill through the other place or in response to representations made to us from interested parties.

Our amendments to Part I of the Bill are largely of a technical nature, aimed at facilitating the details of the sale of NATS and to ensure effective regulation of the air traffic services provider. As I have indicated, we shall be tabling amendments to Part II of the Bill relating to concessionary fares.

The amendments we propose to introduce on road user charging and the workplace parking levy will be limited to technical amendments. The amendments to the railway clauses will again be mainly technical in nature but, as stated, we shall also be tabling an amendment to ensure that where rail services have been interrupted, a substitute service by road must be suitable for disabled passengers.

Amendments to Clause 245 concerning school crossing patrols will complete the package of measures on this matter promised by the Government in the integrated transport White Paper.

All the amendments will be tabled in Committee. I can assure your Lordships that the amendments will be tabled in good time before the start of Committee to ensure that the House has sufficient opportunity to consider them.

We believe that the Bill will help to reverse years of decline and will ensure that all concerned work together to give Britain a transport system fit for the 21st century. This country needs and deserves a safe, modern, integrated and efficient transport system that offers people real choice. Already there is evidence of real improvement. Private investment by the rail industry has doubled since 1996–97, upgrading stations and rolling stock. One thousand three hundred extra train services are running each day to meet growing demand which is now at its highest for half a century. There are 150 bus quality partnerships in towns and cities, increasing bus usage and halting decades of decline. Bus industry investment has doubled and is now running at £380 million annually, providing around 8,000 new buses a year, greater travel choice for the disabled and almost 2,000 new or enhanced services in rural areas.

Trunk road maintenance is now properly researched and its condition is stabilising. Local road maintenance is being tackled through substantial increases in local transport plan budgets. On top of that, and much more, an extra £280 million for transport spending this year was announced in the Budget, funding the start of new rapid transit links in Manchester and London, as well as many other welcome initiatives.

Much has been done in the past three years to upgrade and integrate our transport network, but clearly there remains a great deal more to do. Later this summer we shall publish our 10-year plan which will set out the transport outcomes the Government want to see over the next 10 years, together with the investment strategy—for both public and private sectors—needed to create more choice and more opportunity for more people to travel in safety and comfort at affordable prices and to get to their destination in good time.

The Bill is about delivering the powers that are needed to transform our transport system into one that begins to rival the best in Europe. It provides a constructive, responsible statutory basis for the long-term future of transport in this country. I commend it to the House.

Moved, That the Bill now be read a second time.—(Lord Macdonald of Tradeston.)

3.43 p.m.

Lord Brabazon of Tara

My Lords, I thank the Minister for the long and detailed explanation of what is, after all, a long and detailed Bill. We have many speakers to listen to this afternoon. I look forward, in particular, to the three maiden speeches we shall hear later.

It is with a somewhat heavy heart that I rise to speak on yet another Bill when the Government already have a huge backlog of legislation before this House. However, we are really speaking about four Bills rolled into one. It has been said that the Government's transport policy has been modelled on the buses: you wait for three years with no transport legislation and then it all comes along at once.

The Bill is also growing at a disturbing rate, suggesting that the Government published the Bill first and thought about what should be in it later. We remain concerned that after 18 years in opposition and three years in power in which to construct their transport policies, the Government still do not really know what they think about transport.

The Bill began life in another place at an already hefty 258 pages, 231 clauses and 26 schedules. A couple of thousand amendments in Committee later it was reported back to the other House, where yet another ream of amendments was suggested. It has now reached us as a strapping Bill of 330 pages, 253 clauses and 30 schedules. I have no doubt that by the time we have finished with the Bill it will be so large and unwieldy that we will thank the Chancellor of the Exchequer for permitting 44 tonne trucks so that we can send it back to another place.

Seriously, I had hoped for an assurance from the Minister this afternoon that we would not have a repetition of the Greater London Authority Bill. This time last year, that Bill was virtually redrafted in this House with nearly 1000 government amendments. I have to say how disappointed I was to hear the section of the Minister's speech in which he seemed to promise us something which is more or less along the same lines. That is not to say that we do not welcome some of the amendments he foreshadowed this afternoon.

We have a huge advantage over our friends in another place. The Government have appointed the two most senior transport Ministers from among our ranks. Our colleagues in another place had to contend with the Bill being argued, albeit admirably, by a Minister whose brief did not even include transport. We will take full advantage of our position to question fully the noble Lords, Lord Macdonald and Lord Whitty, on the more baffling, incredulous and downright dangerous aspects of the Bill.

We have many objections to this legislation. Instead of far-sighted measures that will improve investment capability, expand passenger choice and grant people more freedom to travel, the Bill is all about allowing more taxation, more regulation and more control by central Government.

This country needs action and policies rather than consultations, focus groups and endless leakages to the media. As the Minister mentioned, I understand that the Government will shortly publish their 10-year plan for transport. But the question must again be asked why the Government have taken three years to come up with such a plan. Action is needed to get the country moving. Some elements of the Bill offer that sort of action. However, there are others, particularly the botched privatisation of National Air Traffic Services and the new stealth taxes, that we shall oppose.

The sale of NATS on the cheap provoked the most controversy when it was debated in another place. Ninety MPs signed an Early Day Motion condemning the partial privatisation. Forty-five Government Back-Benchers disobeyed their Whips and opposed the clause at Report stage. The Labour-dominated Select Committee dismissed the Government's plans as being, the worst of all possible options for the future structure of the company". Clearly, there are many on all sides of Parliament who see problems with the Government's choice of partial privatisation. Like their PPP for the tube, it is botched and is neither the most efficient nor the most sensible thing to do.

The Select Committee also admitted that the status quo was not beneficial for air traffic safety. We welcome the separation of the provider, NATS, from the regulator, the CAA. We do not believe that full privatisation would cause any threat to safety, particularly in an industry where safety is the main function. But, unlike the Government, we have been listening to people's concerns and will seek to raise these matters and the vital issue of national security as the Bill makes progress through this House.

As the Minister pointed out, our airlines and airports are already in private hands and part of profit able enterprises, and civil aviation just happens to he the safest form of transport. A sensible privatisation scheme would present no safety threat at all.

As is known, we on this side of the House proposed a full flotation of NATS to create a great new British company with effective golden share arrangements that would protect the business from unwelcome foreign take-over and provide the widest possible share ownership among the British public. The Government's proposed public/private partnership, however, is something of a mess. The Secretary of State has many friends, but not I fear on this issue. Although, as I said, we reject the notion that safety is incompatible with private ownership, we have several concerns in relation to the proposed scheme.

This public/private partnership provides poor value for the taxpayer. National Air Traffic Services is probably worth between £1 billion and £1.5 billion, and the PPP offers release of loans of about £300 million and net proceeds of £15 million from the sale of operational control of the business. A straight flotation would raise considerably more for the taxpayer, especially if sold in stages rather than in one go. Furthermore, sale proceeds are likely to be significantly enhanced after 2002 when the new Swanwick centre becomes operational.

The Government's PPP will not extend share ownership. It is a complex, part-trade sale forced on NATS to try to disguise the reality that it is just privatisation by another name. A straight flotation would create thousands of new shareholders. But this way the strongest bidders appear to be either foreign companies, some perhaps partly or wholly state owned, or others which are already key suppliers to National Air Traffic Services. The only UK bidder appears to be the Airline Group, but there is no guarantee that its bid will be successful. The PPP will create not a new British company, but probably a foreign-owned subsidiary, and that does not appear to us to be in the national interest.

Sale of control to a trade bidder carries extra risks. A straight flotation provides for continuation of the same business, but under the same management; a trade investor offers the downside risk of adverse interference in the management of the company and, in particular, in procurement issues. NATS could finish up tied to a less satisfactory supplier of equipment and there are also risks of transferring control to a state-owned entity in another country. Moreover, the shareholding structure of the PPP creates its own uncertainties about who will be in control of the business. The Government intend to hold more shares than the so-called "strategic partner" and the draft articles of association for the partnership company and the draft strategic partnership agreement are both complex documents. In this privatisation, confusion about who is responsible for safety could give rise to safety concerns. NATS management is excellent and has no need of outside expertise from a trade investor.

Why do the Government continue to talk about the retention of 49 per cent when Clause 48 specifically spells out that the Government's shareholding could be reduced to 25 per cent? What will happen if there is a rights issue then? What is Clause 48 worth when it has a Henry VIII provision stuck in it so that, at the stroke of a pen, the Government can, at a later date, tear up the golden share and the share restriction provisions in the clause? It is incumbent on the Minister to tell us exactly what the golden share is for, given that the European Commission made it clear that it regards it to be illegal under European Community law. The Government's PPP is a bad privatisation that we cannot support.

The Conservative Party invented privatisation, but we have never been the party of privatisation for its own sake. Privatisation should be a means of improving efficiency and effectiveness, but the Government's privatisation carries risks and disadvantages compared to our scheme. The Deputy Prime Minister brought this so-called PPP to Parliament only because the Treasury is forcing him into the privatisation against his will. It is flawed by the Government's attempt to pretend that they are not privatising something when they are. Having promised before the election that, Our air is not for sale", Labour is now promising a back-door privatisation.

Lord Clinton-Davis

My Lords, before the shadow Minister completes his remarks in relation to privatisation, will he indicate whether any of the trade unions concerned support his idea?

Lord Brabazon of Tara

My Lords, I doubt that they do, given their lack of support for the Government's partial privatisation. I have been in discussion with one of the trade unions in relation to this Bill, and the noble Lord will be aware of the line that we on this side of the House took in another place. No doubt we shall be taking the same line, when we come to it, in this place.

To continue, we will argue for the privatisation of NATS, which we believe is the solution the aviation industry would truly prefer, once national security issues have been resolved.

Turning to Part II of the Bill concerning the bus services, we believe that those schemes are also botched. We support non-statutory bus quality partnerships, although we do not see why there should not be an arrangement for including requirements on frequency or timing of services. But quality contracts are just designed to reregulate the industry and reestablish the local monopolies that failed in the past, and that is opposed by the bus industry.

We are also concerned that hidden away at the end of Clause 142 of this huge Bill is a subsection that gives Ministers power to remove the fuel duty rebate currently given to bus operators. The industry predicts that fares would have to rise by 15 per cent to compensate. I look forward to hearing the Minister explain how that will encourage more people to use public transport. By contrast, we made it policy to extend the rebate to community transport schemes. That is a common sense move that will help local transport.

Part III of the Bill—"Road user charging and workplace parking levy"—returns to a familiar government theme; that of more stealth taxes. The Government already take £36 billion a year from the road user. Now local authorities will be given the power to charge people to enter town centres and business will be taxed for each employee car parking space. Studies suggested that the congestion tax would have to be nearly £10 a day to have any deterrent effect on reducing congestion. The workplace parking tax is just a new tax on business and proposed charges include £250 per space per year in Birmingham and as much as £5,000 in London. The workplace parking tax is vehemently opposed by industry, which points out that if the tax is paid by the employer, it is just another tax on business and will not stop anyone using their cars; if it is paid by the employees, it will fuel demands for inflationary pay rises as they will no doubt wish to recoup the money immediately.

Many questions are still unanswered in relation to how the schemes will be operated, who will be exempted and where the money will go. But my noble friend Lord Dixon-Smith will be concentrating particularly on this part of the Bill. We will be specifically interested to learn why the Government, having forced through the legislation that allows congestion charging in London, now seem opposed to it in the capital. If they made a U-turn in London, why have they not changed their mind for the rest of the country?

The final part of the Bill is to do with the railways. The Government introduced draft legislation for creating a Strategic Rail Authority in the last Session. We do not need a Bill to give Ministers more power over rail; we just need a Secretary of State who knows how to do his job. It is one thing to call rail industry figures together once a year and shout at them for the sake of a good headline; it is another to have intelligent discussions that help to deliver investment incentives for the industry and real benefits for passengers and freight.

We do not oppose a SRA in principle, which can act as persuader and facilitator for increased investment in the industry. However, the railways provisions in the Transport Bill have been described as "renationalising the railways by the back door". No wonder rail company share prices have slumped. Not only is the rail regulator being politicised, but the powers given to Ministers and the SRA threaten to bring more bureaucracy into decision making. The danger is that every major rail investment decision will become subject to Treasury control—just what privatisation was intended to remove. The Minister mentioned how successful privatisation has been in bringing much increased new investment into the railways. Once more, the rail industry will be spending more time in negotiation with Treasury Ministers than in creatively improving the railway.

The whole Bill is full of measures for increased taxation, regulation and control. It shows that the Government do not have a clue about the concerns of the travelling public. Britain needs a modern, forward-looking, safe and efficient transport network, and this Bill fails to contribute much to that objective.

There are several questions that the Minister should be answering. Has there really been a U-turn in government thinking on transport, as recently reported? Are the Government going to revive the Conservatives' plans to give more communities the bypasses they need? Are they going to deal with the bottle-necks and road improvements that have got worse over three years of stagnation? Are they going to restore the cuts in the trunk road and motorway network? Are they going to start reducing fuel duties to make our transport industries competitive once again? Are they going to see sense and not impose any more taxes on the road user? Are they going to stop legislating for restrictions and controls on our railways and buses so that they are free to invest and develop their services for their passengers? Will they go for a common-sense and straightforward flotation of NATS to create a free-standing British company that will act in the national interest?

This Bill is a resounding "no" to all those questions. The whole thrust and tone of the Bill is wrong. It is based upon the belief that Whitehall and the town hall knows best and that ordinary people will welcome ever-higher taxes and incursions upon their freedom to travel. The Bill takes us only a short way down the road to a first-class transport network. While the Prime Minister can travel down the M4 bus lane in his limo, the rest of us will have to wait for some time yet in the jams. We look forward to debating this Bill and hope that the Ministers in this House will see some sense and work with us to return this Bill, substantially altered for the better, to another place.

4 p.m.

Baroness Thomas of Walliswood

My Lords, in introducing this Bill, the Minister reminded us of how long it has been since a comprehensive transport Bill went through our Parliament. My noble friend Lord Rodgers of Quarry Bank, who was sitting next to me, remarked that he had only dealt with "little" transport Bills. That reminded me of how often one finds oneself sitting next to, behind, or in front of someone who has been a Minister of Transport.

My first purpose today is to welcome those parts of the Bill—broadly, Parts II, III and IV—which give partial legislative expression to the concept of integrated transport and to ideas of sustainability that were expressed in the transport White Paper. Fears were widely expressed among the NGC)s and by those active in the transport industry that the Government are less committed than before to practical implementation of integrated transport. I hope that that is not true.

In the past, investment in transport infrastructure, particularly in roads, has been a stop-go affair varying with the strength of the national finances. I hope that the Government are not slipping back, as the purse strings are slightly loosened, into governments' old habits of promoting an unbalanced boom in road-building once again, just as the population at large is beginning to resign itself—even to accept—a need to use existing road space better and to invest in public transport. In Committee we shall be putting forward amendments to various parts of the Bill. Such amendments will have at their core a desire to improve the Bill in respect of better integration.

Another general concern in the Bill is that of road safety. We welcome the inclusion in Clauses 241, 242 and 243 of the provisions to tighten enforcement of licensing of HGV operators. If the noble Earl, Lord Attlee, decides to bring forward the provisions of his Bill, which do not appear in this Bill, I believe we shall be minded to support him. I also note and welcome the Minister's assurance of the importance of safety as an element in local transport plans.

I noted with pleasure the inclusion of Clause 245 during the passage of the Bill in the House of Commons. The Minister has already referred to this clause, which relates to school crossing patrols. I welcome his indication that further amendments to complete that process will be brought forward in Committee. This reflects one of the Government's commitments in the road safety strategy which was issued in March of this year. But the Government made other commitments in that strategy that we believe could, and should, be added to this Bill. After all—I refer again to the Minister's opening remarks—this may be the only opportunity for many years to give legislative effect to those recommendations of the safety strategy that the Government wish to introduce "as soon as the legislative timetable permits".

We shall be bringing forward amendments to that effect, as I indicated during the debate on the road safety strategy in your Lordships' House on 13th March of this year. In responding to my comments and to those from Conservative speakers, the noble Lord, Lord Whitty, seemed willing to accept that approach. Therefore, I hope that our objectives can be achieved by agreement. I shall also be writing to the Minister to see what progress has been made with the next tier of important actions deriving from the safety strategy that are currently under consultation.

In tackling this Bill, which, as the noble Lord, Lord Brabazon of Tara, observed, has considerably increased in both length and weight during its passage through the other place, we shall also have to give clue attention to the many government amendments, especially those passed without discussion during the Report and Third Reading stages in the House of Commons, as well as those that are about to reach us. Unlike the noble Lord, Lord Brabazon of Tara, I believe that at least some of those mentioned by the Minister seem welcome.

I turn to Part I of the Bill. The Government will not be surprised to know that we oppose their plans for the part-privatisation of NATS. Of course, we are not alone in opposing them; indeed, the noble Lord, Lord Brabazon, has just indicated that the Conservatives oppose them. However, I suspect that our agreement will end there. The airline industry and airline pilots have expressed concern in this respect, and the RAF is reported to be apprehensive at the possibility that air traffic controllers employed by a non-British company could be sharing tasks and expertise with them.

The Minister made much of the large government holding of shares in NATS under the PPP. However, as the noble Lord, Lord Brabazon, pointed out, that share could be reduced to as little as 25 per cent. Air traffic controllers themselves oppose the part-privatisation and, when polled, the British public has shown itself to be overwhelmingly against the idea. The House of Commons Select Committee was scathing in its condemnation and large sections of the Labour Party and of the parliamentary Labour Party still adhere to the policy that the party held before the last general election. Their feelings showed in the results of the votes on 9th May in another place.

It is all for nothing. We, and many other objectors, accept that a division between the regulatory and service delivery functions is desirable. We also accept that the Government, whether or not we agree with them, are committed to seeking to fund investment in NATS outside the public sector borrowing requirement. But there are alternative options for achieving those objectives without losing the public sector safety-first ethos, which has given NATS its unrivalled position as a world leader in air traffic control and created a sense of confidence among users and the general public. We shall be tabling amendments to express our views in that respect.

Turning to the railways, I start by noting that there is considerable concern in the industry about the potential for legalistic dispute between what are in effect two regulators—the Office of the Rail Regulator and the Strategic Rail Authority. An interesting comparison can be made with the gas and electricity industries, which, under the Utilities Bill, will have a single regulator, as compared to one industry having two regulators as proposed in this Bill. Following changes in the regulatory framework as proposed in the Bill, I hope that the Government can convince us that the ORR and the SRA will not be encouraged to waste time or become diverted from their main purposes by technical inhibitions to collaboration or by positive disagreements about mutual boundaries.

A linked problem is derived from the structure of the rail industry as it emerged from the process of privatisation. The premise behind the structure was that there would be more than one train operating company competing on a single route. In fact, this is not the pattern that has generally emerged. The result is a rather artificial separation of track owner from train operator, which does not necessarily lead to the best outcome for users. It will be interesting to know whether the suggestion that Scotland provides a perfect test bed for experimenting with a different and more productive sort of relationship could find favour with the Government.

Of course, such matters are well beyond the remit of the Bill—or, rather, we shall be unable to amend it in order to encompass all the issues that I have raised. Nevertheless, the Government's attitude to these problems, and to their solutions, will form the context for the development of rail transport under the legal framework provided by this Bill over the next 10 to 15 years. I should welcome a response from the Government on these matters. Looking at the clock, and taking into account the number of speakers on the list, I estimate that the Government have six or seven hours in which to bring forward such a reply. However, if that is not possible, I should be glad to receive a letter in response.

As regards Part IV, we shall seek to clarify and expand the purposes of the SRA. We shall also move, or support, amendments to secure the expansion of rail freight. We shall test the commitment of the Government to review the position of the railway police. I welcome the Minister's comments on changes in Railtrack's responsibilities for safety. I shall read that part of his speech with great care.

Finally, I thank in advance my noble friends who will test and, if we can persuade the Government, improve the Bill. The noble Lords, Lord Smith of Clifton, Lord Bradshaw, Lord Addington and Lord Methuen, the noble Baroness, Lady Scott of Needham Market, the noble Earl, Lord Mar and Kellie, and the noble Viscount, Lord Falkland, will address different aspects of the Bill. My noble friend Lady Scott of Needham Market will make her maiden speech today. I am sure that it will immediately become apparent why she is so welcome on our Benches. This is an important Bill. We on these Benches will approach it with a due sense of its importance and with a determination to improve it through the process of scrutiny in which this House excels. I look forward to that process.

4.10 p.m.

Baroness Cohen of Pimlico

My Lords, I am grateful to your Lordships' House for the opportunity to make my maiden speech in this important debate. I must first, however, thank all noble Lords for their kind reception. Members of this House, noble Lords and noble Baronesses, attendants and staff have received me with the greatest kindness and courtesy. I must have sorely tried their patience. Lacking any sense of locality as I do, my brief sojourn here has been marked on my side by a series of daft questions and, what is worse, repetitive daft questions, addressed to anyone unwise enough to hesitate in the corridors for one moment.

I have been successively unable to find the Attendants' Office, the Peers Lobby, the Library, and even on one particularly bad day, the Chamber itself! But everyone I appealed to has stopped whatever they were doing and helped with very real kindness. I have also received a good deal of encouragement and help in speaking today.

I particularly wanted to speak on the public/private partnership proposed by the Bill for National Air Traffic Services. In 1970–30 years ago—I was a young principal in the Board of Trade with responsibility for the newly constituted British Airports Authority, and all the implications that that carried for what we then called Air Traffic Control. It was a simpler world. There were many fewer flights to control and the investment needed to keep the United Kingdom at the forefront of safe air traffic control was not then so great as to be unaffordable from the public purse.

After 1973 when I moved from civil aviation, I and my colleagues spent the rest of the 1970s and early 80s under Labour and Conservative governments in increasingly urgent debate on the best ways to harness private sector managerial and financial expertise for the benefit of public sector activities. I was in the thick of this, being concerned successively with shipbuilding, aircraft manufacture and steel, culminating in 1981 with the setting up of the series of joint ventures between the British Steel Corporation and the private sector, which probably preserved much of the United Kingdom's steel industry.

Even after I left the public service in 1982 to join a merchant bank, I was still concerned with the same issues. The Treasury rules on what constitutes public expenditure drove the debate for more than 10 years and all suitable concerns—and some that were not really suitable at all—were exported into the private sector lock, stock and chief executive. At the same time, however, some innovative thinking was being applied to public sector activities, such as the construction of roads and other major projects, which were increasingly expensive and inefficient, but which could not be moved wholesale out of the public sector. As a banker I was involved at an early stage in advising the Department of Transport on getting contractors to design, build, finance and operate selected roads. It was not, alas, until many years later that this thinking, refined and much improved by others, spawned the successful range of public projects built under the private finance initiative.

I believe that we now need further financial innovation. Privatisation and the private finance initiative have transformed much of the public sector, but they do not constitute a full hand of cards. There are public sector concerns, such as National Air Traffic Services, where the public interest is so dominant as to make them unsuitable for wholesale privatisation. Nor is the private finance initiative the right way to finance the two new control centres with their high technological content that National Air Traffic Services will require. I believe that what is needed is the new form of financing proposed in the Bill where a major private sector partner is brought in, but the public sector retains a very large shareholding.

I should also like to address the question of safety. Whenever bringing in private sector cash and expertise is proposed, great anxiety is always expressed about decreasing standards of safety. I suggest to your Lordships' House that this concern is misplaced. Safety at work is not a matter of ownership, nor even primarily of regulation. It is a function of management, of the persistent, patient maintenance of a safe system of work. A safe system requires three things, of which the most important is commitment from management from top to bottom, with an acceptance that safety is everyone's business, not just that of the safety officer. Transparency is the next most important—everyone has to be trained, to know the rules, to measure performance and how to put things right when they have gone wrong and improve performance. A system of monitoring and auditing to keep everyone up to the mark is also essential—that is the third most important matter.

I believe that the Bill provides for those three conditions to be achieved. The management of National Air Traffic Services has always been committed to the maintenance of safety standards; and the Bill provides for the appointment of government directors, one of whom will be specifically charged with leading the work on safety, including training. Transparency will be greatly facilitated by the separation of National Air Traffic Services from its regulator, the Civil Aviation Authority. It is always difficult for a regulator also to be an owner. The Bill provides for rigorous monitoring and auditing which my right honourable and noble friend the Minister for Transport has undertaken will include auditing of safety procedures.

In much of the public debate the fear seems to be that a private sector owner will be tempted to cut corners, sacrificing safety in the pursuit of profit. I suggest that that is nonsense. No manager in his right mind would court the possibility of a serious accident. The human consequences are dreadful for the managers of any business, be it public or privately owned. The administrative consequences, including ruined careers and years spent in courts are terrible for any organisation. I suggest that private sector concerns have, if possible, even more to lose from a serious accident than the public sector because of the damage done to their profitability that results from the loss of reputation involved. A crash is any airline's worst nightmare, not only because of the terrible human price but also because of the direct consequences for its market share.

I remember when the sale of British Airways was first proposed how many people prophesied that safety procedures would be abandoned in the search for profit. Of course that did not happen because safety is an airline's prime business asset, as it is for National Air Traffic Services. Safety is what they do, and their fine record and reputation are the principal assets that any private sector partner would want to preserve.

In conclusion, I thank noble Lords for their patience. I hope that we shall support the Bill, that we shall welcome the future participation of the private sector, and that we shall accept that the private sector has no less an interest than the public sector in the maintenance of high standards of safety in National Air Traffic Services.

4.18 p.m.

Lord Freeman

My Lords, I congratulate the noble Baroness, Lady Cohen of Pimlico, on her maiden speech. It was a refreshing, clear and interesting speech delivered by a welcome, youthful new contributor to our debates. The noble Baroness has a long and distinguished career in banking, the Civil Service and the public service, and as a novelist and academic. We look forward to hearing many contributions from her. We shall always pay great attention to what she has to say.

I declare an interest as the director of a French public company, Thomson CSF, which has an interest in supplying services to National Air Traffic Services in this country.

I wish to direct my brief comments to Part IV of the Bill. I am pleased that in his opening speech the Minister said that it was the intention of the Government to improve the railways. As the Minister of State for Public Transport between 1990 and 1994, working very closely with my noble friend the shadow Minister on the Front Bench in the Department of Transport, I have never believed that any legislation introduced by any administration was incapable of improvement. I welcome Part IV of the Bill; I welcome in principle the creation of the Strategic Rail Authority; and I support what Sir Alastair Morton has already said as its shadow chairman. The SRA has a key role to play in encouraging extra investment in the railways. That is the only way in which we will reduce congestion and improve and expand the railways.

Since privatisation was completed in 1997, both passenger and freight patronage has increased by about one-quarter. I fully admit that I and most of my fellow Ministers in the previous administration did not forecast such a welcome increase. I am glad that it has occurred. It has come about for a number of reasons, but it has brought a number of problems, principally those of overcrowding and congestion. It has happened because of continued economic growth in the economy and the reaction to growing road congestion; it has occurred because of the reduction in real passenger railway fares where there is a monopoly supply of service, which has encouraged patronage; and it has also come about because of the innovation of management in the private sector in introducing new services and new fare structures, and in capturing new markets.

Those who study the railway industry and have its best interests at heart forecast a 50 per cent increase in passenger rail traffic over the next decade, and perhaps a 100 per cent increase in the amount of freight carried. These are very welcome but daunting figures. They will bring great environmental benefits but, without new investment of substantial sums, such predictions will not be accomplished. They certainly will not be accomplished comfortably for the passenger and speedily for the freight shipper.

The Strategic Rail Authority has a key role to play. Railtrack estimates the investment requirements in the infrastructure of the railways over the next 10 years at something like £50 billion. This, of course, must include—in my judgment at least—£4 billion to £5 billion specifically to assist the freight industry alone to take heavier and longer trains. I look forward to the contribution in the debate of the noble Lord, Lord Berkeley. I support very much what the Rail Freight Group—and he in particular—have already achieved in encouraging our interest in the growth of rail freight.

How is this £50 billion to be financed? We know that Railtrack forecasts that it can probably finance £25 billion under the current track access charging regime; and the estimates are that the train operating companies could provide about £10 billion. Both sources, incidentally, are in the private sector and therefore unrestricted by the Treasury's rules of annuality and control of public expenditure. The doubling of railway investment, which the Minister rightly referred to in his opening speech, has come about because of the freedom that those bodies have to borrow and to invest their cashflow without restriction from the Treasury.

Unfortunately, there is a gap of £15 billion. Where is this money to come from? Probably, only from two sources. If he has time, it would be helpful if the noble Lord, Lord Whitty, could comment on this issue when he responds to the debate. Otherwise I look forward to following the progress of the Bill in Committee and in detail.

The first source is Railtrack. The track access charging regime—which is controlled by the regulator and limits what Railtrack can charge the train operating companies—is under review. I welcome that. It is timely and necessary. A key problem that the regulator needs to address is that Railtrack is not compensated for growth in the volume of rail traffic. That may have been an error in the original architecture of the track access charging regime. No one forecast such a substantial increase. But, under the new regime, Railtrack should be able to recover more from the train operating companies, and therefore the passenger, the more use is made of the infrastructure. I hope that the new track access charging regime—a draft is due very shortly—will provide greater flexibility and allow Railtrack to recover more moneys from the train operating companies. The second source, of course, is the train operating companies and the state as subsidiser.

It is sensible to assume that fare revenues will rise as the industry expands to provide sufficient cash to pay Railtrack. It would be helpful if the Minister who is to respond to the debate could indicate that the Treasury is prepared to look more favourably than it has in the past on the recycling of the premium payments being made in later years under current franchises by train operating companies to the Treasury. In his opening speech, the Minister spoke about hypothecation recycling. The same principle could apply in decades to come. The many billions of pounds that the franchisees of passenger rail services will provide to the state could be recycled.

I am sure that all sides of the House welcome the imminent arrival of the Government's 10-year strategic transport plan. After the spending review figures are settled in July, it will provide an indication of how much money is due for the railways. We look forward to the regulator's review of the track access charging regime. But the SRA has a key role to play in bringing all this together, in co-ordinating it and in setting, if you like, a vision of where the railway industry should be in a decade's time. I hope that the important responsibility placed on the SRA by the Bill will not disappoint the House.

4.27 p.m.

Baroness Scott of Needham Market

My Lords, it is with some trepidation that I rise to make my maiden speech to this House so soon after my introduction. It is a great honour for me to have been chosen to become a Member of this House, and for my family and for my home town of Needham Market.

The fact that I have so enjoyed my first few weeks here is due in no small part to the many gestures of friendship that I have received from all sides of the House, and to the unfailing courtesy and efficiency of the people who work here. I fully empathise with the noble Baroness, Lady Cohen, as she struggles to come to terms with the geography of this place. On my first day I found a room in which I knew I could work comfortably. Unfortunately, I have never been able to find it again. I am beginning to wonder whether, like something from Gulliver's Travels, it is a room that moves around the Palace of Westminster.

I have served on a local authority since 1991; first of all on Mid Suffolk District Council and then on Suffolk County Council. That county council has a proud tradition of innovative transport policies, which have been recognised nationally. For the past three years I have been vice chairman of the Local Government Association Transport Committee. It seems particularly appropriate that I should make my maiden speech on the Second Reading of this important Bill.

I intend to address my remarks to what is described as the centrepiece of the Bill—the local transport plan. I fear that this aspect of the Bill will suffer rather and receive less attention than NATS, buses, trains and charging schemes. Nevertheless, a new framework for transport planning is the key to developing a modern transport system which is fit for the new century.

There is a growing consensus that this country has been poorly served by its transport planning system in the post-war period. A lack of national strategic vision, fragmentation of policy making, underinvestment and political opportunism have all played their part in creating the transport system that we have today. All too often it is inefficient, expensive, overcrowded and environmentally damaging.

Under the provisions of the Bill, local authorities will have a statutory duty to prepare local transport plans in which they will set out how they intend to develop safe, sustainable and integrated transport facilities in their areas, along with proposals for spending both government capital grant and their own revenue resources.

In the past, local authority transport policy was outlined in a less than exciting annual bidding document, known as the "TPP". Submitted each year to central government, it ostensibly provided the foundation for capital grant decisions, but the system led to progressive overbidding and the development of wish lists. Worse still, they were often created in a vacuum—hermetically sealed from other policy areas such as environment, economy and accessibility.

A mini breakthrough occurred in the early 1990s as the so-called "package approach" to transport planning was developed. Package bids encompassed, for the first time, a wider range of policies and bids which placed more emphasis on safety, sustainability and integration. An urban package approach recognised the limits of local authority boundaries in strategic transport planning and therefore encouraged co-ordination across authorities in sub regions.

Building on the success of urban packages, the local transport plan approach, as outlined in the Bill, has much to commend it. A five-year plan with an emphasis on consultation, the inclusion of strategies to promote walking, cycling and public transport, along with green travel plans, is a major step forward. But perhaps the most important aspect is the recognition that transport policies exist in order to promote other objectives.

It is hardly rocket science, but I feel that sometimes transport professionals can lose sight of why we actually need transport—the mechanics and economics of mass movement have become objectives in their own right and the needs of individuals are often forgotten.

A survey of local authorities after the first round of provisional LTPs indicated that the process had involved their taking a genuinely corporate approach, involving professionals from fields such as social services and education—and not before time. Today's transport planners need skills in areas such as public participation, community development and economic regeneration to augment the more traditional disciplines.

It is worth emphasising that this is only part of the systemic reform which is necessary if we are to achieve an improved transport system. There is still little sense of an overall national transport strategy, given that press releases are no substitute for policy. I am sure that the Minister is looking forward to using the forthcoming 10-year plan as an opportunity to give shape and clarity to the Government's transport priorities.

Transport is one of the many policy areas which benefits from a regional perspective and the current development of regional transport strategies will be helpful. Rail infrastructure investment should be considered alongside major road schemes on a regional basis for both impact and prioritisation purposes. The complex relationships between urban centres and their rural hinterlands might become better understood in a regional context. Coherent regional strategies for parking and charging schemes will help to prevent unhelpful rivalries between neighbouring urban centres. However, it is far from clear how local transport plans will fit into such regional frameworks and into the emerging 10-year plan.

Local authorities will continue to produce development plans at county, district and unitary levels and perhaps we can look forward to a system in which the LTPs are integrated into all of these so that the artificial divide between transport policies and land use is finally eliminated.

The Local Government Bill promotes the development of community plans. How will those relate to LTPs and what do we do to reconcile the competing demands of those who live in a community, the people who come into the area to work or to shop and those who simply want to pass through at maximum speed, unhindered by road humps and bus lanes?

As far as concerns finance, the LTP system links government capital and local authority revenue spending on transport and provides a five-year planning framework, both of which should be welcomed. Nevertheless, urgent consideration should be given to reforms to allow local authorities to borrow in order to provide alternatives before they put in road-user charging or workplace parking levies. To do otherwise would be municipal highway robbery and would meet with massive opposition.

Revenues generated by such schemes must be truly additional so that those faced with the charging schemes can see very clearly how their money is being used and what benefits they are receiving as a result. I fear that in the highly complex and occasionally murky world of local government finance, it will be hard to tell.

In conclusion, local transport plans are based on a proven concept and should be welcomed. But they are only part of the picture and need to be clearly one part of an overall strategic approach to transport planning. I look forward to the debates on the Bill in this House over the coming weeks.

4.34 p.m.

Lord Marsh

My Lords, it is a particular pleasure to welcome the noble Baroness, Lady Scott of Needham Market, to the House of Lords "transport club" and to congratulate her on a speech which demonstrated very clearly her considerable interest in and experience of the world of local government in general and transport in particular. I can quote that she also has, a particular interest in European issues". Indeed, the list of UK and European organisations in which she plays a major role, while in the process of bringing up two children—it is hoped with more success than I had some years ago—is impressive.

Many in this House share the noble Baroness's interest in European issues, but I doubt whether I could guarantee her the same degree of enthusiastic unanimity which greeted her speech today. Indeed, perhaps I may issue a warning that it is highly unlikely, if her next speech addresses European affairs, that it will be greeted with similar unanimity—whichever side she is on. We are pleased to welcome her to the House, whether she makes controversial speeches—it happens; whether she is rude to the Whips—that is highly desirable; or whether she becomes involved in European issues. She will be a much-valued colleague and we wish her well.

As the Minister pointed out in his opening remarks, one has only to look at the list of speakers in today's debate to see that, once people become involved in the multi-faceted problems of moving people and freight in an affluent country such as ours, they tend to become hooked on the subject. I confess that I am in that group. I spent seven increasingly fascinating years, first, as Minister of Transport in a Labour Cabinet and, immediately after that, as chairman of the British Railways Board under a Conservative government who—to add to the fun—were replaced by a Labour government halfway through my contract. From that experience I can say only that if all Ministers knew, at the beginning of their period of office, that they would have to live with the consequences of what they had done, there might be better legislation and certainly far less of it.

I propose to speak about the transport implications in the Bill, but before doing so perhaps I may register a small whinge. In many ways it is a pity that the proposal for NATS has been incorporated in the Bill because it is a major issue in its own right and does not—strangely enough—fit in naturally with surface transportation matters, which form the main part of this legislation.

The Minister mentioned the Transport Act 1968 and his remarks brought my memories of it flooding back. Like the Minister I, too, find it interesting to note the similarities between this measure and that Act. They are roughly the same enormous size. I hope I can say that that Bill contained fewer government amendments—perhaps, when the Minister winds up the debate, he could indicate how many have been produced so far; that information will help some of us to plan our summer holidays. Nevertheless, it is significant that the key issues addressed in the Transport Act 1968 and the objectives then set out to tackle them are almost identical to those set out here.

First, 32 years ago no one argued against the fact that it had become necessary to exert some control over the growth of private car ownership and the ever-increasing mileage driven. The impact that was having on society was clear. Secondly, in addition to trying to control the growth of car use, we sought to transfer more travellers from private vehicles to public transport. Thirdly, after deep research we decided that it was necessary to transfer more freight from road to rail. Our fourth objective was to face the problems that were directly attributable to inadequate railway investment over many years. That was the nature of the 1968 Act. Plus ca change …!

In support of those objectives we examined a raft of options for road pricing. At that stage, all kinds of electronic devices were becoming available which made increasingly possible, whether in terms of tolls, a tax on business parking or whatever. We decided that buses were a key part of public transport; therefore, we set up the National Bus Company. Then, turning our attention to the problems of freight on the roads, we set up the National Freight Corporation. Finally, we reorganised the management structure of the British rail network. We faced a complex matrix of problems and sought solutions; and we threw the full weight of the government machine behind that task. To make our intentions clear, we described our approach as "an integrated transport policy".

Only two transport initiatives from that time survive today having proved their worth and made a massive and obvious contribution to road safety. Neither was in the Act. I refer to the compulsory use of seatbelts and the drink-driving legislation which have had a major impact, while the original provisions in the Bill have had no lasting effect. In case there is any misunderstanding—because neither of us has been invited to set up the other's fan club—the credit for those two measures is directed entirely at the noble Baroness, Lady Castle, who promoted them personally.

I outline this past experience not because I take a negative view of the Bill—indeed, quite the opposite; the Bill provides the opportunities to rescue the situation from some of the damage that has occurred, particularly in the railway system over recent years. The problems addressed by the Bill are faced by all affluent industrial nations, and they have not found the answers either; they have similar problems of traffic congestion and pollution. But they share a key feature with the UK: traffic congestion, whether in Tokyo, São Paulo, London or Paris, never brings a city to a standstill. That is significant, and there is a simple reason for it. Congestion is the only thing that controls the private motorist and has a considerable effect on his behaviour. Motoring is not price sensitive. For years this country has imposed some of the highest taxes on the motorist, through fuel policy and other measures, in Europe and through most of the world—and they have had no impact at all. All the motorway programmes of the 1950s and 1960s demonstrated that, as fast as road surface was provided, it filled up to an acceptable level of congestion. I do not see a simple solution to that problem. The answer may be to come to terms with seeking to ameliorate the problems of motoring in towns with considerable investment and research in traffic management schemes which have much greater effect.

I turn to what I regard as by far the most important part of the Bill. I refer to the clauses relating to a strategic rail authority. For a variety of reasons, I was strongly in favour of the injection of private capital into the nationalised railway—not for any doctrinal reasons, but primarily because I thought that it would provide some sort of discipline for the investment programme and the fiscal management of the railway and ministerial interventions.

At that stage, the noble Lord, Lord Peyton, and I moved a number of amendments to the Bill because we were extremely worried by the proposition that was being put. Nothing that has happened since leads me to suppose that the changes that were made have produced anything other than a managerial monstrosity. One has only to sit down and draw up a simple structural reporting chart to see the situation. There are 25 separate operating passenger companies, each with different shareholders, each with a different business plan, each with different franchises. On top of that, there are the separate freight organisations, and so on. It is an impossible organisation to co-ordinate in any serious way in the long term. I believe that the Strategic Rail Authority can provide the basis of a much more rational structure, which could last a long time.

I should like to make three further points. First, the present situation is untenable and unmanageable. I hope that the considerable powers that will be available to the Strategic Rail Authority can be used in some way to reduce the numbers of companies involved by means of merger or whatever way possible to begin to move towards a more rational, sensible structure. No board could successfully manage the present structure.

Secondly, it is crucial that the post of chairman of the authority should be a full-time position. The sheer scale of the operation will keep the CEO fully occupied. The chairman needs to maintain close relationships not only with the Minister and his officials but also with the Opposition, industry and consumer organisations, to name but a few. Above all, he must understand and become a part of the culture of the railway industry. This is not a part-time job. Some of the safety problems that have arisen have done so precisely because the culture of the organisation and the inter-relationships within it have been neglected.

Finally, there must be long-term investment plans, guaranteed over seven to 10 years. Nothing better could happen for the taxpayer and the travelling public than to have some security as regards the adequate funding of railway investment. However, during the five years when I was chairman of British Rail, there were seven major changes in the investment programme. I see no reason to suppose that that will be different in the future. Possibly in five years, certainly in 10 years, Lord Prescott will have become chairman of Jaguar Europe, having lost the leadership to Sir Ken Livingstone, and the Treasury will have intervened at least half a dozen times. It is a feature of our system which requires some new initiative, possibly between the parties, with some guarantees.

I do not know how that can be achieved, but drawing up the investment programme is the easy part. Unless the integrity of the investment programme can be protected, at least within some parameters, we shall have missed another opportunity. That would be a tragedy. I cannot believe that we cannot deal with that problem, and I wish the Bill well.

4.49 p.m.

Baroness Gibson of Market Rasen

My Lords, in this my first speech to your Lordships' House I wish to place on record my thanks for the kindness and courtesy shown to me by all sides of the House since my arrival on 15th May feeling very much the new girl in school.

Like others before me, I have had difficulties. The noble Lord, Lord Greaves, explained in his maiden speech why he had not been able to use one of the tools of his father's trade—a police whistle—to help him find his way around the House. But he had used a pocket compass. The tools of my father's trade would also be of little use to guide me. He was a butcher. On reflection I do not think that arming myself with a meat axe would endear me to your Lordships. And., as I do not possess a pocket compass, I am deeply grateful to Members, officers and staff who have advised and guided me with humour and patience when I have been found wandering many steps from where I was supposedly heading.

Prior to entering your Lordships' House I was a senior trade union official in the Manufacturing, Science and Finance union, the union in which my noble friends Lady Turner of Camden and Lord Hoyle have played such important roles over the years. I regarded it as an honour to work for the members of MSF, who were from all walks of life, with many different beliefs, needs and aspirations.

I am equally proud to speak here today on working issues, conscious of the history of this House and its role in the affairs of our nation.

I wish to concentrate my remarks on health and safety in the railway industry, because in any discussions on transport, health and safety must play a vital role. Here I declare an interest. I am a serving Health and Safety Commissioner, having been appointed to that role in 1996. Together with nine other commissioners, I oversee the work of the Health and Safety Executive, the expert, independent safety body in this country. Its role is to identify hazards, assess risks and apply appropriate control to protect both workers and the public—and, of course, its remit includes transport.

Although the Bill is primarily about delivering a more efficient transport system, that does not mean that we should not be concerned about safety. We owe that both to the passengers who use the transport system and to those who work in the industry. Efficient, safe transport is a must; a safe railway is essential.

The Bill covers issues of key importance in the railway health and safety field: the need for increased investment to improve safety, comfort, reliability and speed; the need for new rolling stock in many areas; and the need for an efficient enforcement system which will allow poor performance by rail operators to be effectively tackled. Additionally, consideration must be given to providing enough health and safety inspectors to enforce health and safety law on the railways and elsewhere; and there is certainly a need for a rail consumer body which will put the passenger's voice at the heart of decision-making.

Of course, we have to put our health and safety record in its proper context. The UK's record on health and safety is a strong one compared with that of other developed countries. Our systems are greatly respected, and indeed replicated elsewhere. This is in no small part due to the work of the Health and Safety Executive and its dedicated staff, who earn a great degree of credibility and respect from employees, employers and organisations at home and abroad.

However, there is no room for complacency. Serious accidents continue to occur, and they are what register in people's minds. We all remember accidents such as the Southall train crash, the sinking of the riverboat "Marchioness" and the recent Ladbroke Grove disaster, the deaths and the injuries received and the aftermath for families and organisations alike.

The railways are places of work for many thousands; and in the railways, as in other workplaces, I am anxious to see better health and safety standards.

I understand that shortly the Deputy Prime Minister and the Health and Safety Commission chair, Bill Callaghan, will launch a new 10-year strategy for better health and safety. No longer can we allow hundreds of people to die each year as a result of work. No longer can we allow £18 billion to go down the drain every year because of health and safety lapses.

I am sure that those involved in our transport system are well aware of the need for constant improvements and constant vigilance. Obtaining a balance between business drive and care for employees is a challenge to all employers, large or small. A company's culture—how things are done within the company—is of crucial importance to the healthy progress of any organisation. If, for example, senior management does not believe that health and safety matter, it is unlikely that employees will take the care or pay the attention needed to create a risk-free environment.

Over recent years the development of the role of health and safety representatives, men and women who are alert in their workplaces to risks which may be encountered, has worked well. They discuss with their employers how such risks can be overcome before a risk becomes an accident or, worse, a fatality.

Currently a number of well-known companies are working with unions to co-ordinate safety improvements, and this is of paramount importance in the transport industry. Indeed, recent trade union research has shown that in companies where employers and safety representatives work together to tackle safety issues accidents can be substantially cut. Such partnerships show the way forward.

Finally, I am well aware of a number of respected health and safety experts in your Lordships' House, my noble friend Lady Whitaker being one, and it is a pleasure for me to be working alongside them. I am not a health and safety expert, but I am a firm believer in the importance of health and safety. When the chair of the Health and Safety Commission asked me recently what qualities I believed I brought to the work of the commission, I replied that I tried to bring common sense and an open mind to issues before us. I hope to bring these qualities to this House also.

4.58 p.m.

Lord Montagu of Beaulieu

My Lords, the whole House will wish to congratulate the noble Baroness, Lady Gibson, on her cogent and well delivered maiden speech. The Bill before us provided her with an excellent opportunity, because her expertise is well known. I hope that we shall hear much more from her, not only on this Bill, but on others in years to come.

Noble Lords

Hear, hear!

Lord Montagu of Beaulieu

My Lords, whatever happens, this Bill will have a great long-term effect on the motorist and motoring. As we have a long list of speakers, I shall confine my remarks to congestion taxes and workplace levies.

We have all sat in traffic jams, and it is a very boring process, but when we think about it do we not see that sometimes the problem is slightly exaggerated? I say that because in the 24-hour day even the worst roads are congested for only about two hours; most of the time there is no problem. Therefore, the motorists ask themselves, "Is this congestion really necessary?" They ask what research has been done to discover the causes.

The motorist has always been blamed, is blamed and will always be blamed. But if I were to show the House some photographs of the traffic in London in 1900 your Lordships would see that traffic congestion was far worse. In fact, 350 people were being killed by horse-drawn traffic every year in London alone. But, unfortunately, in line with the policy followed by successive governments of blaming the motorist for everything, when governments talk about congestion they seem to forget about such matters as roadworks, badly timed traffic signals, trucks unloading at traffic lights, coach traffic, inadequate and incomplete roads and so on. That is not to forget such other matters as IRA bombs and the widening of pavements, with a consequent reduction in the size of roads.

The motorist is used to being blamed for everything. The trouble with finding solutions to the problems I have outlined is that they cost money. It is much easier not to spend money and to make the motorist pay. I very much agree with the noble Lord, Lord Marsh, that solutions exist, but the lack of good traffic management is very conspicuous in our cities. For example, it is well known that if there was more manual control of traffic intersections in rush hours, as happens in cities on the Continent, there would be far less congestion and traffic flow would improve. However, manpower costs money. Instead of taking measures to relieve traffic congestion, what is the workforce doing? It goes round the residential squares of London harrying the inhabitants—and, of course, makes money for the local authority.

What is welcome in this Bill is the very important consultation outlined by the Minister. However, one is not concerned solely with consultation. Perhaps I am wrong, but there is a great lack of research opportunities in the programme. More independent and open research must be conducted into the causes of congestion. The case must be made out before more taxes and levies are imposed as a last resort.

As to the proposed workplace levy, I remember a time when a developer could not build an office block in the City of London unless it included a car park for the staff. Now a fine is to be imposed for the provision of a car park, which is quite illogical. As a result, there will he increased staff and bureaucracy in local authorities. I ask the Minister to look at experience in America where similar schemes have been tried. They have resulted in what is called "the decayed tooth" syndrome where everything has gone outside the city and the centre is dead. We must be very careful to ensure that that does not happen here.

Motorway and trunk road charging causes me great worry. To divert traffic onto inadequate and less safe roads will create more congestion. More importantly, the Government must face the fact that because the motorways are the safest roads in Britain their proposal will cause more accidents. What research has been done? How many more accidents will be caused by diverting cars off motorways and on to inadequate roads?

Successive governments have aggravated the situation by lack of investment in motorways and so on. However, the present Government must take some blame because when they came to power they cancelled a considerable number of important bypasses, the completion of the M40 and so on. Not all of the problems can be laid at the door of past governments.

I hope that there will be more independent research and better presented cases. I hope that a co-operative effort will remove the "them and us" situation as between motorists and the authorities. Unless we approach the problem together, we shall never reach a solution.

5.3 p.m.

Lord Clinton-Davis

My Lords, I apologise to the noble Lord who has just spoken. He did not refer to air traffic safety and my remarks are concerned exclusively with that matter. I hope that I make sufficient declaration of my interests if I say that I am President of the British Airline Pilots Association and am a former aviation Minister and member of the European Commission with responsibility for transport and the environment.

I am largely in favour of the radical transformation of our transport system which is envisaged by the Deputy Prime Minister not only in this Bill but in the year or two—perhaps longer—that he remains in that office. However, I demur very strongly from the proposal set out in the Bill to set up a public/private partnership to run National Air Traffic Services. I am against it, as were the Conservatives when in office. They consulted upon it and discovered that the vast majority of consultees were against a change in the status quo, which they had endorsed in the Civil Aviation Act 1982. The Conservatives did not have the political courage then to swim against the tide of informed opinion. Today, we have heard the mealymouthed attack on the proposal by the Shadow Transport Secretary, or whatever his title is, but the Conservatives have given no indication about that with which they had 18 years to deal but refused to repair the neglect.

The fact of the matter is that the then Shadow Secretary of State for Transport made it clear that an incoming Labour government would stand by a nationalised industry. What happened? The newly elected Labour Government, with a vast majority, contrary to their declarations while in opposition, supported the restructuring of air traffic control services to include a strongly commercial component. The Government's proposal supports the retention of 49 per cent of the company. Five per cent of the shares are to go to NATS employees and the remainder are to go to the private sector. Why have they added to the present complexity which the proposal demands? They have not begun to advance a proper argument for that case. We are told by the Conservatives that we should support their idea. Why? They had 18 years to do something about it but chose not to do so.

The Government have made it clear that they will never sell their shares, although an amendment to the Transport Bill makes a mockery of that by allowing, if necessary, for the company to be floated on the Stock Exchange. A resultant increase in overall share capital could dilute the Government's holding to as little as 25 per cent. Why have the Government done that without any explanation—if one has been given; perhaps I missed it—from the Minister today?

I know IATA very well. It has been claimed by IATA, which represents airlines and not the consumer, that, the industry needs a much more flexible and robust approach to investment that only the private sector can provide". That is a fine assertion but it is not backed by any evidence. Why not? Over the years NATS has established a reputation as being effective, efficient, safe and second to none. Why should this now be put in jeopardy? Why did my colleagues in the Labour Party only a short time ago dismiss completely the idea of the proposed restructuring? The present structure of NATS has served the country, industry and passengers well. To compromise that for the sake of savings in cost, given that they could be achieved as predicted, is insupportable, the more so when there are viable alternatives to attract inward investment which have been tried and tested elsewhere in other contexts.

The case for retaining NATS in public ownership has been argued persuasively by my own union, BALPA. It has serious reservations about the means proposed for providing NATS with the investment funds required, particularly in relation to safety and service quality. Should not the pilots know? Are not they the best people to form a judgment about the matter? In this connection, I do not care that I am president of BALPA. I am concerned about the safety of the people who fly in aircraft; and the pilots have come unequivocally to the conclusion that the system which has served them and the public well should be retained.

The three unions which serve the public in this respect should know. They have the right to know. BALPA feels that it has made its representations very clear and, along with others, has, in response to the Government's invitation, suggested some creative forms of financing—highlighting non-recourse debt as used in overseas infrastructure projects such as Denver airport. It also pointed out opportunities for generating capital internally, such funds to be channelled back into the industry for reinvestment and not siphoned out to shareholders. It also believes that the Canadian trust approach could work well here.

It is worthy of consideration that all the unions share that point of view. The Institution of Professionals, Managers and Specialists submits that there is no political case, and no business case—all NATS costs are covered by charges to airlines. There is no industrial case. Above all, there is no air safety case for the Government's proposed alteration. There is also a defence case for not privatising a service in which there are vital defence implications. Currently, civil and military controllers work side by side, flexibly, without the necessity for contractual and bureaucratic arrangements.

Together with the Public and Commercial Services Union, they represent 95 per cent of the NATS staff. All stress that under the strategic partnership agreement, the management and control of the organisation will be the sole responsibility of the private directors, not the government directors whose shareholding could be considerably diluted following a flotation.

What is the Airline Group? It is a consortium of nine United Kingdom airlines. It may consider putting itself forward as a strategic partner which would be committed to run NATS on a non-profit-making basis but no decision has yet been taken as to whether it will become a bidder. Therefore, until it makes a decision we are not entitled to consider the group.

The in-depth report of the House of Commons committee into this aspect of transport reflected the serious doubts expressed by those working in the aviation industry, not only in relation to safety but also the possibility of increased costs to airlines, and thus customers, in the drive to push up profits. It suggested possible ways in which the Government could achieve their objective for NATS without recourse to private profit motive. I am glad to say that the chairman is with us today listening to every word spoken, in particular my speech which supports her. It cited the positive advantages of independent public corporations and the trust model, as adopted by NavCanada which, in its view, met concerns about rising charges, lower safety standards, national security and so on. Why have the Government dismissed those concerns?

There is bound to be an increased risk to safety, however small and albeit with stringent regulation, where private profit is a prime consideration. We have only to note the recent tragic outcomes of the decline in safety affecting our railways to vouchsafe what I say. A fully nationalised service would have as its primary duty the elimination of all foreseeable risk. It would continue to provide vital non-profit-making services without which safety could be threatened. In any event, a commercial company would tend to favour its major customers at the expense of the rest in the provision of these services.

This Bill has nothing to do with enhancing air safety. But, as I said at the outset, apart from these proposals, the Bill is to be welcomed, and I am proud to have once been a member of the Government who have introduced them, along with many other measures which will enhance the quality of life for many more of our citizens.

The standards of our air traffic control are respected world wide. Complexity is not to be confused with cogency. I beg the Government Minister to understand that. There is still time for the Government to rethink their ideas about NATS. It is in all our interests that the Government should do so.

5.17 p.m.

Lord Smith of Clifton

My Lords, like the noble Lord, Lord Clinton-Davis, I shall confine my remarks to air traffic control although without his relentless logic.

As my noble friend Lady Thomas of Walliswood made abundantly clear, we on the Liberal Democrat Benches are totally opposed to the Government's intention to part-privatise the national air traffic control service. I heartily agree with the noble Lord, Lord Marsh, that it would have been better to have considered this matter in a separate Bill.

The country is faced with a quite bizarre situation. As the noble Lord, Lord Clinton-Davis, remarked, in the last Parliament the Labour opposition were adamantly against privatisation while the Conservative government were fully in favour of it. The positions are now reversed, at least in so far as the Conservatives oppose the Government's PPP. One of the alleged virtues of the so-called two party system is that it gives voters a choice between competing policies. The chance would be a fine thing! In fact what has happened is that there seems to be a consistent government line on NATS privatisation, whatever party happens to be in power. Thus the will of the people, the majority of whom oppose such a privatisation, is contemptuously thwarted. I cannot resist making the point that voting reform is vital to offset such abrupt barefaced U-turns in policy.

Lord Dixon-Smith

My Lords, I apologise for interrupting but I feel I must. We should be quite clear that the reason my party oppose what the Government propose in this Bill is because we do not consider it to be full and proper privatisation. My party's policy has not changed. We still favour that as the correct and best solution.

Lord Smith of Clifton

My Lords, I thank the noble Lord. I pointed out that while his party is still fully in favour of privatisation it is against this particular form of part-privatisation.

The only consistent party line is that of the Liberal Democrats, who have always opposed the privatisation of air traffic control whenever the issue has been raised. Why the Government have changed their tune so flagrantly and gone out of their way gratuitously to antagonise majority public opinion is inexplicable. After all, after three years in office they are having enough trouble convincing the electorate that they are delivering on their manifesto pledges for education, health and road and rail transport, without courting massive disfavour by totally reneging on their policy for air traffic control for which they have absolutely no popular mandate. Perhaps there is some deeply dark Freudian sado-masochistic explanation for this self-inflicted injury, but, if so, it escapes me. The privatisation of NATS will be seen to be as politically inept as the Chancellor's curmudgeonly decision to raise the state pension by a measly 75p this year. The public are utterly opposed to it.

Liberal Democrats oppose this privatisation measure for five fundamental reasons. First, as I said, the Government have no mandate—indeed, quite the reverse. Constitutional convention should not be flouted quite so cavalierly. Secondly, the proposals are finance driven, as the noble Lord, Lord Macdonald of Tradeston, frankly admitted, when they should be safety driven. That is the most serious objection to the proposals.

A commercially oriented public/private company, with shareholders seeking a maximum return on their investment, means but one course of action; cutting costs. As there is little possibility of market expansion, the only way of improving profit margins would be to reduce manning levels and to shorten the safety distances between airborne planes. That would be folly, particularly at the present time. Air traffic control over Britain is growing in volume at a rate of 6 per cent per annum. British airspace is already one of the most densely crowded in the world. And when Swanwick kicks in, 18 months hence, there will be a need for a further 100 air traffic controllers. Furthermore, I agree with the noble Lord, Lord Brabazon of Tara, that the Government's PPP project is hopelessly complex, although I reject his alternative of full privatisation.

Thirdly, the argument that NATS needs an injection of private-sector management discipline is far from obvious. NATS currently makes a surplus of some £55 million a year, which goes directly to the Exchequer. More importantly, it has a safely record second to none and it is expertly managed. What "added value", to use the current cant, will private sector techniques bring, apart from the absurd potentially dangerous cost cuttings to which I referred?

Your Lordships will doubtless recall that a captain of industry, a chairman of ICI no less, was called in by government to sort out a transport problem. Dr Beeching's savage surgery was applied to the railways with disastrous results. At enormous cost, attempts are now being made to reverse its worst excesses. Like Captain Boycott a century earlier, his surname became a reviled verb. Beeching was not a happy precedent and we should beware the blandishments of any would-be emulators.

Fourthly, NATS would become the only privatised air traffic control agency in the world. Not even President Reagan endeavoured to privatise American air traffic control, which remains in federal hands. This would make it much more difficult: to harmonise with the state-owned systems of the member states of the European Union. Collaboration, not competition, is what is needed in the move towards a European "single sky", which most experts agree is the desired goal.

Fifthly, the smooth interface between civilian and military air traffic control may well be compromised by privatisation, no matter what government directives are issued. This would be very serious at times of increased military activity, thereby endangering national security.

It is for those reasons that we on these Benches are implacably opposed to privatisation. We go along with the need for more capital to keep NAT'S fully modernised to meet the growing demands it is facing, but we are not convinced that a PFI or a PPP scheme is either necessary or desirable. Quite frankly, the Treasury could afford to provide the necessary money to be repaid over time. That would be a much cheaper option and could be facilitated by the recent changes to resource accounting and capital charging that enable costs to be apportioned and recouped over the lifetime of the project. That is the conclusion of a recent study by the National Institute for Economic and Social Research.

However, for reasons best known to themselves, the Government are very unlikely to provide Exchequer moneys for the future funding of NATS and it is only realistic, therefore, to consider other feasible options apart from privatisation. During the passage of the Bill in another place, my honourable friends supported the proposal put forward by the honourable Member for Edinburgh East and Musselburgh, Dr Gavin Strang—who at least has the great virtue of sticking to the principles which his own Government have so cynically abandoned—for a public, not-for-profit trust with bond issuing powers.

The model for that is NavCanada, which was created in 1995 with a board representative of airlines, staff and government. After an extensive analysis, the Canadian innovation was the option favoured by the Commons Environment, Transport and Regional Affairs Select Committee when it reported last February. Accordingly, Liberal Democrats will be tabling amendments to the Bill to enable an independent public trust to assume responsibility for NATS in place of the Government's policy of privatising a vital asset whose sole concern should be safety in the air rather than the price of a commercial share.

5.26 p.m.

The Lord Bishop of Hereford

My Lords, the Second Reading debate on the Transport Bill might not be seen to call for the use of apocalyptic language or imagery, but the fact is that the human race is threatened by two enormous and terrifying problems. The first is the relentless growth in population in the developing world and the second is the very serious damage which we in the developed world in particular are inflicting on our fragile environment.

It is not the business of the Transport Bill to inhibit the processes of procreation, but it is its business, among other things, to tackle some of our most pressing environmental problems. I warmly welcome the steps which the Bill takes in that direction, although I fear that they are more faltering steps than some of us would have wished to see.

I welcome the move towards something which at least begins to resemble an integrated transport policy. I welcome the emphasis on local transport plans. I welcome the creation of a definitive strategic rail authority. I welcome the provision for congestion charging and the workplace parking levy. All those developments offer significant environmental benefits, at least potentially. I hope very much that the Government will not be deflected from their originally declared objective of significantly reducing car use, promoting better public transport and moving large volumes of freight from road to rail.

I therefore want to speak entirely about the provisions of the Bill which have environmental implications, so my few words may be seen in that context perhaps as a trailer for what the noble Lord, Lord Beaumont, will be saying later in the debate. The Bill would have provided the ideal vehicle for such a development, but local transport plans can and should be as much concerned with making it safer and more attractive to walk or cycle as with the management of motorised traffic and the introduction of better public transport.

I was pleased to see the support of the Minister in another place, Mr Keith Hill, for the "walking bus" method of getting children safely to school as part of the "Don't Choke Britain" campaign. The enthusiastic introduction of that method right across the country could make a significant difference to car use and road congestion.

In all our attention to environmental concerns, we have to pay proper attention to the competitiveness of UK industry. Increased charges of any kind must be watched very carefully from that point of view. But it is in a sense fortunate that congestion, for example, has an enormous financial price tag as well as an environmental one. Congestion currently costs us a huge amount, variously estimated at between £19 billion and £23 billion each year. Compared with that, the necessary expenditure which we foresee on the enhancement of rail freight infrastructure of £5 billion over 10 years begins to look more like peanuts.

The Strategic Rail Authority has a very important role to play in achieving the development of rail freight infrastructure and the transfer of more traffic from road to rail. The past five years have seen a very encouraging growth in rail freight traffic under the completely transformed management of English, Welsh and Scottish Railways, Freightliner and, now, GB Railfreight. From an all-time low of 5.7 per cent of market share in 1995, the figure this year has risen to something like 8 per cent of the market share for rail traffic. However, when one reflects that rail's market share was 42 per cent in 1950, it becomes clear that we still have a long way to go to recapture that lost ground.

I believe that congratulations are very much in order on the achievements of the rail freight companies and on the efforts of the Rail Freight Group, so ably led by the noble Lord, Lord Berkeley. However, the real constraints now are on capacity. Significant infrastructure improvements are extremely costly. The return on capital investment of this kind is a long-term business and Railtrack has made it clear that it is not prepared to make that kind of investment.

That is one of the worst dilemmas to result from the bizarre processes of privatisation. Clearly it calls for the development of new and imaginative ways of funding major infrastructure improvements, such as the proposed special purpose vehicles which have been mentioned by Sir Alastair Morton. I hope that the Minister will be able to confirm that such measures will have enthusiastic government support.

I was grateful for what the noble Lord, Lord Freeman, said about the financing of the enormous gap in the infrastructure costs for rail freight because the environmental advantages of rail freight are very great. CO2 emissions for an electric freight train are 23 grammes per tonne/mile; for a diesel train they are 70 grammes per tonne/mile; and for a heavy goods vehicle on roads, as much as 450 grammes per tonne/ mile. The differences are colossal and it is extremely important that we achieve the transfer from road to rail.

However, even in an ideal world with 50 per cent of freight carried by rail, a great deal will still have to go by road. I believe that it is very encouraging that the CBI and the Freight Transport Association have joined with the rail freight companies in a combined campaign to improve rail freight so that it can properly serve the national interest and complement road freight services. Those services suffer appallingly from congestion costs, and I believe that targeted congestion charging makes economic as well as environmental sense. If we could reduce significantly the number of private cars on the road, the necessary road freight would travel more quickly, more efficiently and more economically.

The workplace parking levy, with all the proceeds hypothecated for public transport improvements (I hope not simply for 10 years but indefinitely) would reduce considerably car use and hence atmospheric pollution. As a member of the All-Party Motorcycling Group, I must declare an interest and plead for an exception to be made for motorcycles, which are so much more environmentally friendly than cars as well, of course, as much more fun. There are already examples of large companies which have introduced excellent green transport policies for their employees, such as Boots in Nottingham and Pfizer, the pharmaceutical firm, in Kent. Those examples could and should be followed.

However, I believe that there is a serious flaw in the provisions for the parking levy. The Bill specifically excludes retail and leisure locations and I believe that that is a mistake. It is significant that the Local Government Association, among other bodies, wants to see the parking levy introduced also at out-of-town supermarkets and retail and leisure facilities, where free parking at present seriously disadvantages town centres and their shops and businesses. The huge proliferation of out-of-town shopping centres has been an important contributory factor in the growth of car use, not to mention the aesthetic impact of their hideous buildings and sprawling car parks.

A flat-rate compulsory car park charge of, say, £3 for every visit to such a place may be a useful deterrent. However, as other noble Lords have said, I recognise that car use is not as price-sensitive as one would like to believe. But I believe that it may achieve something and it may also do something to help our declining market towns. If the supermarkets complain, too bad. They have already inflicted far too much damage on our landscape, our environment, our town centres and our farming industry.

In general, I welcome the Bill. It promises some important environmental benefits. In introducing the Bill, the noble Lord, Lord Macdonald, said that the Government plan further amendments. Perhaps he will think of others in response to some of the points that I make. If the Government really wanted it to, the Bill could deliver even more environmental benefits.

I fear that I must end on a slightly sour note with regard to another important omission. The Bill has much to say about air traffic control and many noble Lords have spoken wisely and knowledgeably about that. However, it has nothing to say about the volume or levels of air traffic and their catastrophic environmental impact. Friends of the Earth has calculated—I recognise that this is perhaps an impressionistic rather than a precisely verifiable statistic—that one return flight from London to Miami generates more C02 pollution than does the average private car in this country in a whole year.

I believe that there is a dawning awareness of the danger of the pollution caused by road traffic. That is one of the reasons for congestion charging and the parking levy. So far there appears to be little or no awareness of the appallingly damaging effect of air traffic. What do the Government think about CO2 pollution? Do they care or not? Do they realise that soon we shall have to meet much more demanding targets for CO2 reduction than those set at Kyoto? If they do care, why have they allowed the extraordinary expansion of so-called low-cost airlines with more and more flights to what Mr Chamberlain, were he living at this hour, would no doubt have called "little-known airports in faraway countries"?

Of course, this is an international problem and it needs an international solution. However, I believe that we could at least give a lead.

5.37 p.m.

Lord Morris of Manchester

My Lords, together with other noble Lords all across the House, I pay tribute to the three maiden speakers and look forward to hearing all of them again on many future occasions.

I have two reasons for speaking in this debate. First, I want to acknowledge the Government's major new investment in the Greater Manchester Metrolink. As a Member of Parliament for Manchester for 33 years, I was much involved in securing the funding to get this project, which today is so hugely important to the conurbation, off the ground.

The Government have now allocated no less than £250 million to the expansion of our Metrolink and it will benefit not only my former constituency, Wythenshawe, which includes Manchester Airport, but also Oldham and Rochdale, Ashton and Trafford Park. It will be a major influence on the regeneration of Greater Manchester and reflects high credit on the passenger transport authority and executive. Thousands of new jobs will be created and, once finished, Metrolink will carry around 50 million passengers, some 10 million of them—as the right reverend Prelate the Bishop of Hereford will be glad to hear—attracted from the private car.

The biggest single investment in a public transport scheme outside London made by any government in 30 years, it gives the lie to those who complain that Ministers have not fully committed themselves to investment in the transport infrastructure. For this I extend warm appreciation to my noble friend the Minister, whose personal links with Greater Manchester are close and of long standing. In my view, my noble friend was already well entitled to call himself an honorary Mancunian: now no one anywhere can question that entitlement.

My second reason for speaking today is to congratulate the Government on this Bill. For 18 years in another place I was forced to witness the progressive disintegration of public transport wrought by bus deregulation and rail privatisation. Passenger numbers fell by over 30 per cent in metropolitan areas and fares increased in similar proportion. Socially, environmentally and economically the effects were disastrous. The Bill heralds change for the better with its emphasis on integrated transport, land-use policies that favour public transport as a viable choice for the car owner and the injection of some order into the chaos that followed rail privatisation.

But there is no Bill that cannot be improved—I speak as a former Minister who took many wide-ranging new measures to the statute book—and I have some suggestions for my noble friend to consider.

At the heart of the Bill is the obligation that Local Transport Plans will place on local transport authorities to produce a strategy for a bus quality partnership between the public and private sectors. In advance of the Bill's enactment, many authorities, including Greater Manchester— which the Deputy Prime Minister has designated a "centre of excellence"—have already been hard at work forging such partnerships. In general, the local authorities will invest in bus priority and improved bus facilities and ensure that information and ticketing schemes are developed. Those efforts will be developed in partnership with bus operators, who are investing heavily in new, cleaner and accessible vehicles. As drafted, however, the Bill forbids any prescription of timing or frequencies.

To many of us that seems odd. If local transport authorities have gone to the trouble of providing improved facilities, it is not unreasonable for bus operators to be asked to guarantee a minimum level of service. In another place the Government expressed fear that such powers might be used by over-zealous authorities to place a burden of service upon operators beyond what is commercially tolerable, resulting in wholly prescriptive bus franchising. Yet such powers are available in the Bill if quality partnerships fail. I understand that Ministers have suggested that similar arrangements might be entered into voluntarily; but the trouble here is that they would not enjoy the partial protection offered by the Bill's competition test applicable to statutory quality partnerships.

Operators have the genuine anxiety that if they enter into such arrangements they will be exposed to the full rigours of the Competition Act 1998, with no protection from the Bill's competition provisions. To meet the legitimate concerns of all parties, my suggestion—to which I hope my noble friend will accede—is that voluntary arrangements, once made, should have the same protection as that afforded to statutory partnerships. That would allow authorities and operators to negotiate minimum frequencies which, while not statutorily prescriptive, would be judged by the same competition criteria as those set out in the Bill. My contacts with people of differing interests suggest that this compromise could meet the concerns of all parties. I know that my noble friend will want to respond to me about it as helpfully as he can.

I turn now to integrated through-ticketing, the ultimate test for any scheme of integrated public transport. As the Bill stands, there is an obligation on local transport authorities and bus operators to formulate a scheme of through-ticketing for buses. There is also an obligation on the Strategic Rail Authority to collaborate with such schemes. I see two weaknesses in this approach. First, there is no obligation whatever on bus operators to collaborate with the SRA; and, secondly, there are public transport modes other than bus and rail. I spoke earlier of my delight at the expansion of the Greater Manchester Metrolink. Elsewhere in the country there are other light rail systems, ferries, metro systems and so on. None of these other forms of public transport is addressed by the Bill and I feel this should be reconsidered. The Secretary of State might, for example, take power to require local transport authorities and operators of all modes to collaborate on multi-modal through-ticketing. Without that power, a splendid opportunity to guarantee fully-integrated public transport might be lost.

As your Lordships know, the problems and needs of frail elderly and severely disabled people have been my special parliamentary interest over many years, including my five-and-a-half years as the first Minister for Disabled People. Thus I welcome the introduction of minimum fares for elderly people and the new help for disabled travellers that my noble friend the Minister announced in opening the debate.

I have often had the pleasure of welcoming innovative new facilities in Greater Manchester for blind and other disabled people. They have ranged from free or flat fare concessions, grants toward accessible buses, door-to-door transport across the whole county and taxi vouchers for people whose disabilities are such as to require the use of taxis. I am glad to say that concessionary facilities in all metropolitan counties exceed the statutory minimum. While some use flat fares and in others fares are free, they are all uniformly generous. But a statutory scheme is made essential by some local authority schemes that vary, in terms of practical help, from the pathetic to the non-existent.

I must, however, enter the plea that where a concessionary scheme for the elderly is demonstrably more generous in the round than the minimum, some discretion should be afforded to the Secretary of State to exempt it from the minimum. I say that not merely on account of administrative difficulties or expense, both of which will occur, but because of the confusion and anxiety that two schemes, or a hybrid of two schemes, will cause both to drivers and the elderly people whom the minimum is designed to help. And here, in parenthesis, I make one more plea of special importance to many frail elderly and other disabled people: namely, that steps will be taken to ensure that rail substitution services are by wheelchair-accessible vehicles; and that licensed taxis, all of which will be required under the Disability Discrimination Act 1995 to become wheelchair accessible, are guaranteed access to railway forecourts.

Finally, I want briefly to comment on the proposed Strategic Rail Authority, whose purpose of introducing some order into chaos I wholly applaud. I trust that we can now look forward to stability and investment in the rail network on a scale not hitherto seen. There is concern, however, that a London-based SRA will not be able, by the very nature of its strategic and national responsibilities, to take into account local and regional priorities. I am pleased that the Government have, to a considerable extent, protected the powers of passenger transport authorities and executives in metropolitan areas to fix service levels and standards, a power they have exercised since 1968 with enormous benefits to local people and with higher levels of investment than can be found elsewhere in this country.

The Bill sets out matters that the SRA should have regard to in discharging its functions. But there is one curious omission: the Local Transport Plans of local transport authorities. This Bill stands or falls on its ability to deliver fully integrated public transport and the Government's chosen mechanism is the Local Transport Plan. Whether in metropolitan or shire areas, rail services will be an essential constituent of these plans; yet the body charged with responsibility for rail services is not given, on the face of the Bill, a duty to take Local Transport Plans into account.

I gather it is felt that to list every matter to which the SRA should have regard would be impossible and that this should be left to guidance from the Secretary of State. I accept that that may be the case for a wide range of matters, but Local Transport Plans are so central to the Government's whole strategy that their omission from the SRA's stated duties seems frankly illogical. I urge my noble friend to reconsider this constructive criticism of the Bill and I know he appreciates that it comes from people who both welcome the Bill and wish him all possible speed in achieving its enactment.

5.49 p.m.

Lord Faulkner of Worcester

My Lords, I suppose it was inevitable that this debate would be wide ranging, as the Bill contains complicated provisions relating to so many aspects of our transport industries. I shall resist the temptation to go down all the routes that the Bill opens up and which other speakers have covered and concentrate mainly on the aspect I know best and talk about Part IV, which formally establishes the Strategic Rail Authority.

Before I do so, I must comment on the Government's proposals for the National Air Traffic Services. Some years ago, I was employed as an adviser by the Civil Aviation Authority. The CAA was then—and remains today—an effective and efficient regulator. It is vital that nothing is done which diminishes that role or in any way compromises the CAA's absolute commitment to air safety.

In my view, the Bill passes that test. It also addresses the issue of investment funding in air traffic control. With air traffic levels throughout Europe growing by 6 to 7 per cent a year, long-term investment in NATS is not only desirable but essential. I am aware that there are differing views here and outside about the model the Government have chosen to resolve this.

I am puzzled by the tactics which the two Opposition parties apparently plan to adopt in your Lordships' House when we reach later stages of this Bill. The Conservatives are in favour of total privatisation of NATS. The Liberal Democrats are totally against. This point of view was helpfully clarified and confirmed by the noble Lords, Lord Dixon-Smith and Lord Smith of Clifton, just a few minutes ago. Yet I read in the press that they are apparently planning to vote together in the hope that they will embarrass the Government. If they do decide to go down that route, do they not think that this would be regarded as cynical and as a blatant piece of opportunism?

Baroness Thomas of Walliswood

My Lords, I am sorry to interrupt the noble Lord in full flow, but I assure him and the House that, as far as I am aware—and I am leading on this Bill—there have been no discussions of any description between the noble Lord sitting on the Conservative Benches and myself.

Lord Faulkner of Worcester

My Lords, I am naturally delighted to be corrected by the noble Baroness. I was going on what press reports were indicating; if they are inaccurate and the two parties do not intend to come together in the way that I have described, I shall be very happy to be proved wrong on this.

Safety is absolutely paramount but I take the view that the combination of the CAA safety locks, the power under Clause 35 of the Bill given to the Secretary of State to issue a direction to NATS licence holders in the national interest and the "fit and proper person" selection criteria for the strategic partner, provide the necessary safeguards.

I turn now to Part IV of the Bill and specific ally its proposals to remove the "shadow" from the SSRA and to establish the Strategic Rail Authority as the body to replace the British Railways Board; to take over the functions of the franchising director; and to make a number of changes to the regulatory arrangements for the railways.

It is important that we understand how much the railway has changed in the past five years. Some of these changes have been for the better and a number, I readily admit, have followed from privatisation. Most of the improvements stem directly from the new approach which this Government have adopted towards the railways. The sea change is that the industry is now planning for growth and not for contraction.

Not very long ago, I recall a very senior official from the Department of Transport being seconded to the British Railways Board and telling his colleagues in the first week that he was there "to preside over the orderly run-down of the railway". Faced with attitudes like that, it was little surprise that the industry was starved of investment and received less subsidy support than any comparable railway system in Europe. These are facets of railways at that time which the noble Lords, Lord Freeman and Lord Marsh, will recall from their own experience only too well.

The railway is now growing fast. Train miles have grown by 16.1 per cent in the past five years and passenger miles by 30 per cent. Further growth of between 30 and 60 per cent is forecast for the next 10 years. Freight tonne miles are also up one-third against a background of decline over the previous 50 years. Much new investment is coming on-stream: 2,350 new coaches have been ordered since privatisation and more are in the pipeline; 300 new locos are on order for the freight companies; and 2,500 new wagons are coming off the production line at York and going into service. All these developments are heartening to those of us who are committed to the expansion of rail travel and long for it to be given the chance to contribute more in the national transport scene.

In our transport debates, I hope that we continue to remind ourselves that a twin track railway has the same capacity as a six lane motorway and accounts for one-quarter of the land take. The right reverend Prelate the Bishop of Hereford, in what I consider to be a very sensible speech, spoke eloquently about the environmental benefits of rail freight as well.

The growth in demand for rail travel brings with it new challenges and problems for the industry. Compare just two of the figures I have mentioned: train miles up 15 per cent and passenger miles up 30 per cent over the past five years. Even though there are 1,500 more trains running now than there were in 1995, services are more congested and more people are inconvenienced if the trains run late or are cancelled. In the old BR days—I hesitate to say "the bad old days"—when the emphasis was on contraction and there was little investment in capacity, the solution dictated by the Treasury was simply to push up the fares and price people off the trains. Happily, that is no longer seen as an acceptable option and the task for the new railway is to plan for growth and at the same time invest in new infrastructure to provide new capacity and replace equipment which is outworn and life expired.

That provides a huge challenge for the SRA, the train operators, the regulator and Railtrack. In creating the SRA, the Bill provides the necessary focus and sense of direction. It also allows the present inadequate short-term franchises to be replaced with longer ones. They must bring with them new investment and increased and more reliable train services. Six franchises are already in the replacement process. The study for a Wales/borders franchise is proceeding well, with a report due next month. Schemes have already been authorised for a new cross-London service, a park-and-ride scheme in Edinburgh, a new fast service from Sheffield to Hull and schemes to provide more capacity in Bristol, Leeds and Newcastle.

The SRA has been in business in shadow form only since July last year, but the new organisation is already providing the necessary new leadership for the rail industry and encouraging the development of a better railway. Its main task is to offer a real alternative to road for more passenger journeys and freight movements.

Like the SRA, most of the train operators are aware of what is expected of them under the new regime. I agree very much with Mr Giles Fearnley, the chairman of the Association of Train Operating Companies, when he says in introducing the new summer timetable: the rail network urgently needs large amounts of investment from the industry and Government to provide passengers with the modern and efficient rail system that they want and deserve". I wish that all train operators could strive to be as good as the best because that is not the case at present.

It is important that the Bill clarifies and strengthens the role of the rail regulator. He has an essential part to play in these new arrangements. The Bill gives him new duties to facilitate the execution of the SRA's strategies; to contribute to the development of an integrated system of transport of passengers and goods; and to contribute to the achievement of sustainable development. To do his job effectively, he must have proper powers of enforcement, particularly as that affects Railtrack's network licence and how the company delivers on reliability, in minimising delays, and on investment. He must also be independent of Government and not be deflected by political pressure.

I was disappointed to read that, during the Report stage of this Bill in another place, there were attacks on Mr Tom Winsor by Conservative members for the action which he very properly took after the Ladbroke Grove accident. Happily, I am pleased to say they were not repeated by the noble Lord, Lord Brabazon, this afternoon. Contrary to what Mr Bernard Jenkin alleged in the other place, Mr Winsor did not threaten to revoke Railtrack's network licence—he does not have the power to do that. Section 4(5) of the 1993 Railways Act requires the regulator to consult the Health and Safety Executive when there is prima facie evidence of a breach of railway group standards and of the Railways (Safety Case) Regulations. I hope that Ministers will continue to give their full support to Mr Winsor who is doing the best he can to deliver stable, predictable, transparent, fair and proportionate regulation. That is in the interests of the whole industry including its customers.

That brings me finally to Railtrack and to the crucial role that it has to play in delivering the new railway. It has clearly found it hard to come to terms with the new approach which the Government are bringing to transport, and this is not surprising. The previous regulator and the Conservative government gave Railtrack an easy ride. It took some time for the company's shortcomings to be identified and it has taken longer than it should to put them right.

I am still concerned about some aspects of its operations, particularly its property division. In that regard, the objective of making money from selling station sites to non-rail related interests such as supermarkets seems to take precedence over the need to plan for the future use of assets by the passenger or freight railway or by other prospective developers who aim to add new dimensions to railway travel. I suspect that we may hear more about that during later stages of the Bill as I hear whispers of amendments being drafted elsewhere.

Overall, the prospects for rail have never been better at any time during the past 25 years. I take the view that this Bill is essential to ensure that the industry can make the most of those new opportunities and I welcome it with enthusiasm.

6 p.m.

Lord Swinfen

My Lords, I do not intend to detain your Lordships for long this evening. In general, I welcome the Bill. In particular, I welcome the placing of local transport plans on a statutory footing. However, I hope that, in preparing local plans, note will be taken of national transport systems so that the two will be properly integrated. It would be useless if local bus services, according to the local plans, are due to arrive at railway stations catering for long-distance trains a few minutes after those trains are due to leave.

The Bill gives us the opportunity to ensure that local public transport can be enhanced for the benefit of elderly and disabled people, as already mentioned by the noble Lord, Lord Morris of Manchester.

I welcome the fact that the needs of pedestrians are to be taken into consideration when preparing local transport plans. In time, that will produce a safer environment for elderly and disabled people, as well as children. Pedestrian routes must be wheelchair-friendly.

Although I started by welcoming the Bill, it needs some improvement and I intend to table amendments for your Lordships' consideration at later stages. In recent years, on other Bills, the House has accepted amendments designed specifically to cater for the transport needs of people with disabilities.

Before the Minister spoke introducing the Bill, I was going to say that it was disappointing that the Government, their advisers and the Bill's draftsmen did not bear that in mind in preparation of this legislation. It would have saved the time and hard work of your Lordships and, indeed, of Members of another place. However, the Minister has indicated that some account has been taken of that but, in my view, more will need to be done.

Local transport plans should be drawn up in consultation with disabled people and with organisations of and for people with disabilities. Those plans should be available in alternative formats, if required, at no additional charge.

I welcome the national concessionary fare scheme and the Minister's announcement this afternoon that it will be extended to help disabled people Will that include disabled people in work? I am concerned that the scheme is limited by the expression "relevant time"; in other words, as I understand it, between 9 a.m. in the morning and 11 p.m. in the evening. In my view, that scheme should apply to all journeys in the local area as that would promote social inclusion and independence and would also help disabled people to work unsocial hours if they wish to do so.

Finally, I make a brief mention of two other points. First, there should be concessions for people with disabilities on the road-charging schemes and in workplace levies. They are the people who most need to use private transport.

Secondly, I welcome the fact that where railway services are temporarily interrupted or discontinued, the strategic authority must ensure that the alternative carriage for passengers is fully accessible to people with disabilities. I look forward to seeing the amendments which the Minister said he would bring forward in Committee to give effect to that. I had already planned to table amendments to deal with that point. I shall bring forward amendments to deal with other matters connected with disability at later stages of the Bill.

6.4 p.m.

Baroness Goudie

My Lords, in the integrated transport White Paper, this Government put the principles of sustainability and integration at the heart of their transport policies. The Transport Bill before this House aims to put those principles into practice at local and national level by building an integrated transport system which meets our economic and social needs but does not threaten the health of our environment. That is why one of the Government's key aims is the reduction of road traffic and pollution from road vehicles.

As this Bill has progressed through Parliament, we have heard much about the Government's proposals on road congestion charges and workplace parking levies as tools for tackling road congestion. We have heard also at length about the proposed private-public partnership for National Air Traffic Services Ltd.

One area which has hitherto received little attention is the movement of goods by rail and sea. As an adviser to Clydeport plc, I declare an interest in that area and I also declare some experience in those matters which I hope to add to this debate.

Clause 182 sets out the purposes of the Strategic Rail Authority, which include the promotion of the railway network for the carriage of goods as well as passengers and to contribute to the development of an integrated system of transport for goods as well as passengers.

The encouragement of the transfer of freight from road to rail is therefore central to the purposes of the Strategic Rail Authority. Perhaps I may say to the Minister that the omission of short sea freight from the Bill is a missed opportunity which I hope he will address in Committee.

The movement of goods by rail and sea within the UK has generally been held to be uneconomic, insufficiently flexible and useful only for the very longest journeys and for high volume, low value goods. That is no longer the case. Rail freight and freight by short sea shipping can now offer industry an increasingly competitive and flexible alternative to moving goods by lorries which are destined to sit in queues on the M25. Rail freight allows industry to move goods at speed at night to road-rail hubs from where lorries can distribute the goods to their final destination.

Recognising the strategic demand for change, organisations currently involved in rail freight distributions are committing multi-million pound investments into new locomotives and rolling stock to satisfy the increased market demand.

Advances in technology are also making ships faster. Their increase in speed and the impact of congestion on road haulage has made short sea shipping more competitive and reliable. It is no longer the mode simply for coal and timber, although those goods are still important to rail and sea freight.

The fast-moving goods consumer industries are now taking advantage of short sea shipping. Distillers of whisky are dependent on the deep-sea terminals for exportation of their product and take advantage of those new routes; for example, United Distillers uses feeder services to access deep sea ports. Manufacturers of paper use short sea distribution of timber from Argyllshire to Ayrshire and Cumbria. And it is better for the environment as it relieves road congestion and reduces the pollution that comes from road vehicles.

I am not anti-lorry nor anti-road. I have a car and I buy goods from shops which rely on lorries to bring them their stock. But I am pro-integration. I believe that there is a place for road haulage, for rail freight and for short sea shipping. But I do not believe that the potential of rail and sea freight is being fully realised or fully integrated into our transport system. I would like the Government to give much more encouragement to both users and operators of those two important modes of transport and to ensure that there is genuine integration into the transport system.

6.8 p.m.

Lord Dixon-Smith

My Lords, the device of using local government as the mechanism to introduce the new taxes in Part III, following the precedent of the Greater London Authority Bill last year, gives this House a rare opportunity to discuss finance and supply matters.

I welcome what the Minister said in his opening remarks about those new taxes and the way in which he hopes they will work. But he did not go far enough. Taxes are no less taxes for being collected, kept, used and accounted for locally.

In order to sensibly discuss Part III of the Bill, it is first necessary to discuss Part II. The reason for that concerns the content of the local transport plans and, more importantly, the meaning of the words in the Explanatory Notes concerning Part II of the Bill. Paragraph 84 concerns the duty of local authorities to create local transport plans. It states that local transport plans "must" provide a framework for the promotion of improvement to buses under Part II and, most importantly, the introduction of charges under Part III. That wording is not consistent with that of the Minister's introduction, and the words on the face of the Bill are different. The Bill states: a … local charging scheme may only be made if it appears desirable for the purpose of achieving the policies in the local transport plan. Perhaps in his reply the Minister could resolve that inconsistency in presentation.

In addition, in his opening remarks the Minister appeared to state that such charges will not be introduced until after bus and other transport systems have been sufficiently improved. That may be welcome, but if the charges are not to come into effect until after the necessary improvements have been made it could be argued that they are no longer necessary and that the huge revenues that the road users already pay in that situation will have been properly and well used to bring about any necessary improvements. That may be a perverse interpretation but it seems very real.

It is not surprising that on this side of the House we have had representations from the CBI, the Engineering Employers' Federation, the Food and Drink Federation and many others regarding these charges. This country is a trading nation. Its competitive position in international terms is essential to everyone's wellbeing. The new charges have the potential to raise transport and other costs at a time when manufacturing and other industries, particularly in the field of export, are already under extreme pressure.

Part of the purpose of the Bill is supposed to be to encourage freight transport to transfer away from roads. That is welcome. However, we need to recognise that the railways, which are the alternative, currently take only around 6 per cent of freight moved. Doubling that capacity will take care of only a very short time of growth in the economy. Imagine an economic growth of 3 per cent per annum—would not the Chancellor of the Exchequer be pleased with that? In two years' time the increased capacity of the railways to move freight would be absorbed. We have always needed, and always will need, a well-diversified transport system.

In addition, because of their impact on business costs, the new taxes—that is what they are; not charges and levies—could have a damaging effect. This is not simply a question of road freight costs—all retailing activity depends upon road freight—but labour costs also could be put under great pressure.

If ever there was a view that the roads are jammed because people drive around for pleasure, current costs of driving should be enough to exorcise it from anyone's thinking. Car drivers are on the roads from necessity. However, it must be said that convenience and time are both factors in such necessity.

I well remember how things worked when I was young and the country was emerging from the war. All movement was dominated by the rail and bus systems. Everything was much slower. It took far longer to do anything or to get anywhere. I do not think we could afford to go back to that. In the Bill, however, the Government appear to be introducing specific additional taxes on movement by road.

We know that the road user charges are to be paid by the registered owner of a vehicle, for that is what the Bill states. I suppose that the driver will be deemed to have been authorised by the registered owner. Increased driver costs, therefore, will almost inevitably impact upon wage cost pressures. It will not be more than a few months before wage demands are inflated as workers affected by such costs take steps to defend their relative prosperity.

In the case of the workplace parking levy, matters are not so clear. The levy falls on the provider of the space in the first instance, but the Bill is not clear about whether that should be passed on to the user of the space. If it is not, it is a straight additional tax on business and commerce. If it is, I have already said what will happen to wage cost pressures. Whichever is the correct answer—perhaps the Minister will provide clarification in his reply—the impact will be the same: business costs will increase and competitiveness will be put at risk.

Many figures have been bandied about to interpret what that might mean. For the sake of simplicity, I take two figures which have been discussed in the context of London: £5 per day for the road user charge, and £5 per day for a workplace parking levy. Those two figures have the capacity to increase the tax burden on an affected road-using employee of any business by £2,500 per year. When one thinks of the annual Budget debate in another place where the minutest tax increase can be extremely controversial, I am bound to say that I find it fascinating that these new taxes have caused so little fuss.

There are many other points of detail which we shall want Ito discuss with greater care than is appropriate at this stage of the Bill. However, perhaps some are worth noting. The Government suggested that they should exempt hospitals from the workplace parking levies because hospital staff work at night. In this modern, high-pressure age, so do many other businesses. Should they be exempt? What about businesses which operate park-and-ride systems or other co-operative transport systems, which are in the community's interest? Should they be exempt? What of the problems of businesses which operate continuous processes and are therefore required to have double the number of parking spaces so that two shifts can park at the same time? If a business is operating a commercial process, a shift coming on cannot wait until the shift which is already working has left its place of work and, more importantly, left its place in the car park. How do we cater for that problem?

Those are all points which will unquestionably have to be debated at future stages of the Bill. However, there are two other matters which must be mentioned tonight. First, the Bill as drafted contains what can only call the sop of hypothecation; that is, 10 years for transport improvement purposes for the new taxes, after they are introduced. That is supposed to make the taxes acceptable. I wonder. Almost exactly one year ago in this House we spent many hours discussing the Greater London Authority Bill. I remain firmly of the view that 10 years is too short a timescale for this hypothecation—I wholly support the remarks of the right reverend Prelate the Bishop of Hereford in that regard—particularly now that the taxes are to be spread across the whole country. So that debate must be reopened.

But there is a second matter, which I choose to describe as the "big" word that must be the companion word to "hypothecation"; that is, "additionality". That is all too familiar a word to local government. They have bitter experience of seeing funds, originally intended to be additional, absorbed and disappear into the Treasury maw.

The question is whether the unacceptable can be rendered more palatable. What is certain is that yet another tax imposed on road users will not be acceptable in any way if the funds it produces are not seen to be additional to those provided for maintenance and improvement of the transport system. Will the Minister, in his reply, strengthen the assurance given by his noble friend in his opening remarks that, if this matter is ever mentioned in the discussions on finance that must take place annually between central and local government, it will he taken as an entirely separate item, purely to ascertain that the money is being well and appropriately used? Most importantly, will he assure us that it will never affect the existing levels of transport support? Without such an assurance, we are looking at a poll tax on wheels.

6.22 p.m.

Lord Hoyle

My Lords, this has been a well-informed debate and a credit to the House. I support integrated transport and congratulate my noble friend on what he said in relation to the help being given to pensioners in regard to travel and bus passes.

However, perhaps I may turn to the one point which particularly bothers me and about which I want to speak tonight; that is, NATS. I know that both my noble friends on the Front Bench will give way to no one in relation to safety, and the same applies to my right honourable friend the Secretary of State in another place. That is why, despite all the explanations given, I am still extremely puzzled as to why we are throwing away NATS, which is a world leader in relation to public safety. Indeed, the Minister has said on occasion that the world looks to us in this particular field.

It appears that the explanation being given involves the question of investment in NATS over the next 10 years. The investment in NA TS over the past 10 years was £1.2 billion and, as I understand it, the investment over the next 10 years will be just £1 billion. That can be broken down into only £100 million per year. We can also take into account that NATS will generate profits, part of which will go towards that investment figure. For the life of me I cannot see why the rest cannot be borrowed from the Treasury as loans and be repaid, as it has been in the past, with an interest rate of around 8 per cent. Why, therefore, are we destroying a world-class organisation?

My second point is that, if we cannot keep NATS, I would prefer a free-standing company like the privatised Post Office which can raise finance independently, if necessary, though the Treasury may not agree. I would also support a model such as that being advocated in Canada, which is a non-profit-making trust. The advantage of those systems is that they put safety foremost. That is my problem with the solution put forward in the Bill.

Air traffic control is quite different from airlines and airports, whether British Airways or the CAA. NATS is concerned only about air traffic control, and therefore primarily with the safety of its operations. What happens if it becomes a public-private company? There must be a return for the shareholders. Where will it come from? That is the dilemma I face. Will it come from cutting the operators or from increasing charges to the users? It must be one or the other. That is a particular problem.

Having said that, there is no doubt about the cynicism of the arrangement when the two opposition parties come together. When one prefers the trust model—for which I have a preference—and the other complete privatisation, one can only conclude that the object of the exercise is to defeat the Government. It will be viewed therefore as a purely political manoeuvre.

When we examine the proposals before us in this Chamber, like my noble friend Lord Clinton-Davis I hope that the Government will think again. If we retain the present model, are there ways in which it can be improved? For instance, why cannot there be an employee representative on the board? It may be said that the interests of the shareholders have to be put first. But surely those interests will be primarily linked to safety. And the employees must have just as great an interest as the shareholders in seeing an efficient and safe company. Their being represented on the board would ensure that safety was kept right at the forefront.

My noble friend may say: what about the strategic partnership? That is all very well, but it must be remembered that it is only a consultative body, due to meet biannually. It is said that it can demand other meetings. But that cannot make it an effective watchdog.

My other anxiety relates to the government shareholding. At the moment it is to be 49 per cent, with 46 per cent owned by the new partner or partners and 5 per cent by the employees. But we also learn that it can be floated on the Stock Exchange and the Government's share can then be reduced to 25 per cent. What control will we then have? Surely we do not intend to rely on a golden share, or special share. That has never been effective. Indeed, it never prevented the sell-off of other companies that possessed such a "special" share.

Further, can my noble friend the Minister say whether this has been cleared with Europe? In other words, has the issue of whether we can even have a golden or special share been discussed with the Commission? Surely we must clear the matter with the EU. I know it is said that it may be cleared because security comes into the matter, but could not this also lead to problems with the MoD? We have already heard that there are some misgivings on the part of the RAF; indeed, there are certainly murmurings in that respect. It seems to me that we must retain some public control if security matters come into the equation.

I know that the document spells out the fact that training will be paramount and that there will be no dilution in the training offered. However, we must ensure not only that the standard is maintained but also that it is improved. We shall need better training because, whatever the right reverend Prelate would like to see, the amount of air traffic will grow. It is estimated that it will grow by at least 3 per cent a year. That means more congested skyways. I hope that my noble friends will consult with the unions in this respect. I also hope, like my noble friend Lord Clinton-Davis, that they will have further talks with the pilots who have expressed grave concerns about the safety issues that could arise.

There is one further issue that I should like my noble friends to consider both now and in Committee. I refer to the level of pensions now paid. Could we not have the same safeguard that was offered to London Transport workers by such provision being written into the legislation?

Unless there is a change of mind, I know that at the end of the day the present pattern that we have of a public/private partnership will be maintained. However, I ask that we look again at strengthening the public control in relation to it and that we also ensure not only that safety is paramount but also that such provision is written into the Bill.

6.31 p.m.

Lord Bradshaw

My Lords, speaking at the bus summit on 9th November last year, the Deputy Prime Minister said that, the bus holds the key to improving public transport locally". He said that, in many people's minds it is not even today's product, let alone tomorrow's", and that, we need to break through that way of thinking, if we are to see a progressive, forward looking industry seizing the challenges which lie ahead". On these Benches we endorse those sentiments but believe that, as this Bill is the only piece of legislation affecting buses which the Government have or are likely to table in this Parliament, the great transformation will not take place. This is a great pity and a great waste, as buses are the cheapest, most readily available means of changing people's travel habits.

Above all, to be efficient, bus services need a clear highway along which to drive. We look for two changes in legislation to achieve this aim. First, we need the extension nationwide of enforcement by camera technology of the law relating to the abuse of bus lanes, yellow box junctions and banned right-hand turns. It is no use giving offenders the option of a £20 fixed penalty ticket, which was last reviewed in 1992. Government must prevail upon the police so that officers are available to review camera records and institute prosecutions. Local authorities should keep the revenue raised to fund better enforcement. We seek an immediate extension from London of the use of enforcement cameras and look to the Government to bring forward the necessary amendments at Committee stage. This requires a simple amendment to the Road Traffic Act 1991, Schedule 3 of which gives the Secretary of State wide powers only in respect of stationary vehicles. These powers need to be extended to include moving vehicles.

Secondly, we must protect marked bus stops from illegally parked vehicles. Several noble Lords have spoken about the needs of disabled people. It is absolutely no use the bus industry buying accessible buses if they cannot pull into the kerb. The daughter document to the transport White Paper, From Workhorse to Thoroughbred, held out the prospect of action in this area. Have the Government come to any conclusions in their consideration of designating bus stops as urban clearways and of an effective means of enforcement? At the bus summit the Deputy Prime Minister said that, when road space priority is designated it must be respected". We look for delivery against that commitment.

The Bill makes many references to the traffic commissioners. They will have the responsibility for an extension of the scope of traffic regulation orders and for enforcing quality partnerships. In his reply, I should be grateful if the Minister could explain how the commissioners are to deal with an operator who is excluded from a quality partnership and to whom an excluded operator might appeal. Would this be to the traffic commissioners? The traffic commissioners need adequate resources, not only to carry out any new tasks that come to them as a result of this Bill but also in order to discharge their existing duties. Operators pay for this enforcement through their operator licences. We should like to see the powers of the traffic commissioners extended.

I asked someone in the Library of the House to conduct a small exercise for me comparing the resources available to those regulating safety and the railway generally—the rail regulator and the railway inspectorate—with the resources available to those involved in regulating road traffic. I found that although the tasks to be carried out by the traffic commissioners have increased, their resources have not. Conversely, the number of staff employed by Her Majesty's Railway Inspectorate, referred to by the noble Baroness, Lady Gibson of Market Rasen, in her maiden speech, has greatly increased since the old railway inspectorate was replaced by the staff of the Health and Safety Commission. Therefore, we are looking for some evening-up of this use of resources.

We shall move amendments to extend the powers of the traffic commissioners in three areas. First, we believe that they should have the power, not to reject a registration of a bus operator, but to vary this when, in the opinion of the commissioners, this is intended to disrupt the business of another operator—the old tactic of registering a departure two or three minutes ahead of that of a rival. When a similar amendment was moved in Committee in another place, the Minister said that the traffic commissioners' existing powers, coupled with the safeguards provided in competition law and the possibility for the Office of Fair Trading to intervene—now enhanced in terms of speediness—were sufficient.

We are not satisfied that the OFT will move speedily; it has never done so before. We also believe that some simple guidelines can be drawn up to assist the traffic commissioners in exercising judgment which, if published, would act as a guide not only to them but also to bus companies in making registrations. It would be much less bureaucratic and expensive than involving the OFT. Of course, any decision by the traffic commissioner could go to appeal. I shall return to the traffic commissioners in the few remarks that I wish to make about lorries.

When he concludes the debate, can the Minister give the House any news as to when the Government intend to table amendments to the relevant regulations to abolish the five-minute rule and to extend the existing period of notice of de-registration of bus services from 42 to 56 days? These changes were promised in Committee in another place. Both of those changes would be welcomed by those who have to provide timetable information and by local authorities that have to let tenders to replace services which are withdrawn.

Like many other noble Lords, I have read the draft consultation document circulated by the Office of Fair Trading on 8th May on a block exemption order relating to public transport ticketing schemes. This proposes a block exemption for a limited selection of tickets sold under statutory quality partnerships. In our view, the approach of the OFT is too narrow in being limited to ticketing schemes, and I understand that it does not apply retrospectively to voluntary quality partnerships or to other arrangements in respect of tickets, including road/rail tickets. Similarly it does not apply to joint co-ordinated timetables, joint publicity or shared routes. Unless the scope of the block exemption is widened considerably, there is the real prospect of various existing arrangements which benefit passengers being struck down because they offend the purity of the theory of competition law.

Again I quote the Deputy Prime Minister: We have also got to see transport marketed more effectively as a single product regardless of operator. That means ticketing that meets the needs of users rather than operators". Can the Minister assure the House that the genuine concerns of the industry and of users are appreciated and that urgent discussions are taking place with the DTI and the OFT to preserve the degree of integration which has already been achieved and to extend that?

There is a strong wish on these Benches to see the market for the provision of bus services being contestable. That involves taking strong action to prevent predation and the abuse of dominant positions. This is necessary so that the tendering process will work. But contestability does not require the outlawing of sensible co-operation, marketing and ticketing which benefit the consumer.

We warmly welcome the provision of half fare passes to pensioners and particularly the extension to the blind and the disabled announced this afternoon. However, we believe that the Government should go a little further. We do not believe that this will cost much when the generation factor—that is, the extra people who use bus services because fares are lower—is taken into account. We very much hope to hear from the Government that all persons over 60, men as well as women, will benefit. For example, I received a letter offering me a winter fuel rebate although I am not yet a pensioner. It appears that the Government can change the rules about age limits to suit a particular case. Our greatest wish is to see the concession for buses extended to those in full-time education up to the age of 18. Often young people buy old cars and increasingly are driving them to school. Travel costs bear heavily upon them. We believe that government could and should negotiate a good deal with bus companies in introducing this change.

Quality partnerships as envisaged in the Bill will not cover frequencies and fares. These are important features of any service. We have noted statements that these issues might be addressed in a non-binding codicil to quality partnerships. The issue was raised by the noble Lord, Lord Morris of Manchester. I suggest to Ministers that our misgivings might be assuaged if it were possible to include a kind of passenger service requirement as is found in railway franchises—a kind of baseline level of service—and that fare rises should be limited to a special bus industry cost index; that is, there would be no real fare rises except rises in costs specific to the industry.

I conclude with a couple of references to road haulage. As a member of the Commission for Integrated Transport I was disappointed by the announcement that 44 tonne lorries were to be introduced without the accompanying package of measures. I am pleased that work is going on within the shadow Strategic Rail Authority to put together schemes to facilitate the use of rail by customers who might be attracted to using that mode. I hope that the necessary funding will be made available. I was also pleased to see as part of the Bill the proposals on impounding vehicles introduced in this House in the previous Session of Parliament by the noble Earl, Lord Attlee.

However, further changes are needed. These include—as the noble Earl, Lord Attlee, proposed—the fact that a lorry driver stopped for exceeding hours should be obliged, on the spot, to take a full period of rest before proceeding. It is wrong that in any field of transport a driver or a pilot should be permitted to remain in control when he has been found to be exceeding permitted hours. For the Government even to consider bringing charges of corporate manslaughter against directors of transport companies while this lacuna in the law continues, with ministerial indifference, is unacceptable. I have the word "connivance" in my notes, but I shall refer rather to ministerial indifference. As the Minister said in relation to NATS, safety in transport is a paramount interest.

We shall seek to move two amendments to protect those living on estates and weight restricted rural roads from "rat-running" by large lorries. We shall seek to make it much easier to prosecute drivers of lorries using prohibited routes. The present system does not work. We shall seek to extend the authority of traffic commissioners in granting a licence for the establishment or expansion of vehicle operating centres to have regard to the suitability of the highway network in the area and to provide that the commissioners should approve centres of bus operations. When an operator is called before a traffic commissioner on a disciplinary matter it is often the case that undertakings are given concerning future behaviour. We are not satisfied that these are enforceable and hope that the Government will be persuaded to bring forward an amendment to remove the doubt which exists.

The road haulage industry will benefit substantially from the introduction of 44 tonne lorries. I and many colleagues on the Commission for Integrated Transport believe that it is time that those whose lives are put at risk or those whose lives are blighted by heavy lorry activity deserve the protection which would be afforded by these minor amendments to the Bill. We believe that we are asking only for what the Deputy Prime Minister promised when he said: Any drivers and operators who persist in using unsafe vehicles or breaching drivers' hours legislation can expect to be dealt with severely by the Traffic Commissioner or by the Courts". Many such people never appear before any court, let alone face meaningful penalties. This must change. I look forward to supporting most of what is in the Bill. However, I shall do so more gladly if we see some of the amendments I have mentioned.

6.46 p.m.

Lord Hogg of Cumbernauld

My Lords, I am pleased to be able to contribute to this important debate. Transport has been an interest of mine for a long time and throughout my parliamentary life. At one stage I was chairman of the all-party Road Passenger Transport Group. Therefore I am delighted that transport is such a high priority of the Government.

An efficient transport system is vital not only for the economy but it is essential also for the environment. That is why I am pleased that the Government have introduced the Bill that is before the House. It is the right Bill at the right time.

The Bill is a comprehensive measure. That fact alone has attracted criticism, but not criticism that I feel able to echo. If we are to create a fully integrated transport system across the UK, that objective is bound to be reflected in the enabling legislation; hence a large Bill.

I wish to concentrate on a single area of the Bill, that which deals with buses. Here I must declare an interest. I have just been appointed chairman of the Bus Appeals Body. That is the independent body set up by the bus industry in conjunction with bus passengers to arbitrate on passenger complaints. It is a good example of the increasing customer focus of today's bus industry. I pay tribute to the noble Lord, Lord Bradshaw, who preceded me in that office and served the body with great distinction.

A key element of the Government's transport strategy is to give people more choice. No one needs to be persuaded of the benefits of more people choosing to leave their cars at home and use public transport. But people cannot be forced to do that. People must make that choice because public transport is a better option. It has to be reliable. They must choose it because it will not get caught in congestion; because highway authorities have given it priority road space; because it is clean; because it is accessible; and because you do not have to park your car at the other end—in short, because it is in every way convenient. In towns and cities across the UK the bus is uniquely positioned to provide the service I have just described. The message I hear from bus operators is: "Give me the operating conditions and I will invest and deliver a high quality service".

The 1985 Transport Act brought about significant changes in bus operations in the UK. Not surprisingly, the results were mixed. The aim of this legislation should be to build upon the positive results of that legislation. There are many positive results, not least in record levels of investment in new vehicles. This Bill seeks to remove only the negative results of the 1985 Act. The Government have got that right.

The Bill will put in place measures which ensure that bus operators and local authorities work together on a formal basis using their respective expertise to the best effect. In the first instance, local authorities are required to produce bus strategies as part of their local transport plans—a sensible measure in my view. But I have two pleas to make.

First, the Government's guidance must be strong. The Bill as it stands allows for the imposition of a quality contract where a local authority feels that it is the only practical way to meet its bus strategy. Many interested parties—not least passenger groups through the National Federation of Bus Users—along with the industry itself, feel that bus services would suffer as a result of these contracts. Some local authorities have made it plain that they are keen to go straight to contracts, which is a clear departure from government policy. It is vital therefore that firm, clear guidance is given to guard against quality contracts introduced by the back-door.

My second plea relates to consultation. The Bill compels local authorities to consult when developing their strategies. This is a welcome move. Bus operators in particular have built up great expertise over the years in providing services—a positive aspect of deregulation. They have also shown innovation in the services provided.

While the Bill compels consultation, it does not compel local authorities to heed that consultation. No doubt my noble friend the Minister will say that this is implicit in the clauses, but I should value his reassurance from the Front Bench when he responds to the debate.

This brings me to quality partnerships. The Government have stated that the quality partnership approach will be the corner-stone of their proposals for bus service provision. This is something else that I welcome. Voluntary quality partnerships operating throughout the country have shown impressive increases in passenger numbers. Placing these partnerships on a statutory footing is the next logical step. This will allow local authorities to invest in highway schemes secure in the knowledge that bus operators will provide quality services to run on them. Similarly, bus operators will be able to invest in new, high-quality vehicles that they can run reliably in a congestion-free environment.

These partnerships must not be too prescriptive. They must be flexible enough to meet differing needs in different areas. A rural quality partnership will be different from one in an urban area.

They must be partnerships in the true sense of the word. Quality partnerships are a marriage of different areas of expertise, including road planning, service provision and enforcement. Care must be taken to ensure that local authorities do not become too prescriptive in the conditions that they set. It is unlikely that bus operators would be willing to continue their present high levels of investment if control of their assets lay elsewhere. Conversely, it would be quite wrong for bus operators to lake the lead on infrastructure planning. Consultation and partnership must be the bywords for a successful quality partnership.

I have followed the remarks of Ministers in another place during the passage of this Bill, and I fully agree that voluntary agreements on service provisions such as frequencies should run alongside statutory provisions. This will guarantee partnerships in the true sense.

I know that anxieties have been expressed about the effect of the Competition Act on partnership arrangements. It has been said that this Act legislates against integration and co-operation. Ministers will need to ensure that this does not prove to be the case. I welcome therefore the new schedule added to the Bill by the Government. This sets a firm competition test for the statutory aspects of quality partnerships. I note what the Government said on the need to consult the OFT on the non-statutory aspects of quality partnership arrangements. I hope that my noble friend can join me in urging the OFT to do everything that it can to facilitate agreements, both voluntary and statutory, which are made in the public interest.

I must tell my noble friend that I have some difficulties with quality contracts. I have studied the proposals carefully and share the views expressed by the Confederation of Passenger Transport and the National Federation of Bus Users. Quality contracts will not provide passengers with the best services. I have looked at the report of NERA (the National Economic Research Associates) into the franchising of bus services—and franchising seems to me to be the effect of quality contracts. NERA believes that franchising would result in more public expense, less investment and less flexibility. I have some sympathy with that point of view.

The imposition of a quality contract would be most unfair on the bus operators, large and small alike. They would lose business as a result. As I say, the large operator would see his ability to invest diminish, and there are serious implications for the workforce. The problems would be worse for the many small, family-run businesses. For this group, losing out on a franchise would mean relocation—an impractical solution. Going out of business seems much more likely. There would be no compensation, and the Government may like to address that issue when we come to the Committee stage of the Bill.

I understand why proposals for quality contracts have been included in the Bill; they are intended as a safety net. However, they should never be a last resort. I hope that I shall receive some assurances about this when the Minister responds to the debate.

I do not wish to end on a negative note. I am a strong supporter of this Bill. A high quality, fully integrated public transport system, backed up by strong investment, is vital for the United Kingdom in the 21st century. I believe that this Bill will go a very long way towards achieving that for our people.

6.56 p.m.

Baroness Greengross

My Lords, I should like to concentrate on two issues, the first of which relates to congestion charging. I shall focus on London because it is the area that I know best. It is probably my simplistic attitude, but I admit to being somewhat puzzled. We seem to have a straightforward logistical problem but we do not seem to be able to find a straightforward answer.

We know that we have run out of road space in London and, therefore, in order to give people the mobility that they need, we have to make better use of the road space that we have. Already 85 per cent of commuters come into central London on public transport, but we still want to get people out of their cars and into the centre by public transport. We have to get people to make the change onto public transport, and we have to decide what they should travel in or on to get into central London if they make that change. Obviously other major cities have similar problems but they are perhaps most acute in London.

We know that the Underground system is running above its capacity during certain parts of the day. It is very difficult to get more people onto a service which is already over full. It would be a marvellous solution if we could run longer trains—but we cannot make longer platforms in our deep tube system to allow people to board longer trains. That is rather sad.

We could do many other things which I feel your Lordships would not appreciate. For instance, we could take out all the seats on the Underground and get many more people onto the trains, but that is not something we would consider. We know that the new signalling systems will allow trains to run safely at closer intervals to each other, but that will not do a great deal to increase capacity. We could do other things which I think would be undesirable. For example, we could encourage trains to stop at every two or three stations instead of at every station, but I do not think that passengers would want that.

So we are left with one resource in the centre of the city—that is, buses. I think most people see them as being unattractive and unreliable in many ways. We need to address those issues if we are to make proper use of our buses.

We need, first, to aim to speed them up. Secondly, they should arrive at frequent, proper intervals, not all together. Only congestion charging will achieve those aims. However, we face a problem because many people have put forward persuasive reasons for delaying the imposition of congestion charging until an adequate public transport system is in place.

However, it is difficult to understand how a proper, efficient bus service can be introduced unless a form of congestion charging is introduced first in order to facilitate better public provision. We shall not be able to make the patient better until we adopt the only realistic alternative option; namely, congestion charging.

The enforcement of bus lanes will help, but such lanes cover a fraction of most bus routes and are operational for only short periods of the day. We need only to step out of this building to see that traffic jams build up throughout the day, as well as through much of the evening. If bus lanes are extended and their hours of operation lengthened, enforcement would soon become impossible. It is not easy even to enforce the bus lanes already in place. For those reasons, the problems will remain unless charging is imposed quickly.

Perhaps I may turn briefly to the issue of concessionary bus fares for pensioners, who will increasingly use the improved bus services. However, first I should like to echo the pleasure expressed by the noble Lord, Lord Morris, for the new provision announced earlier by the Minister which will benefit disabled people of all ages. However, I am concerned about the discrimination that currently applies to men aged 60 to 64. The situation is unfortunate and may result in further legal action against the Government because, for the first time, a requirement is to be placed on local authorities to offer transport concessions. Given that, at one of the two levels of the European courts, this anomaly could lead to further action following the failed earlier case. Perhaps the Minister could indicate whether the Government are now considering proposals to equalise the concessionary age, preferably at 60 years, although it is most important that equal treatment should apply to everyone.

Another point to bear in mind as regards the concessionary scheme is that it is not national; rather, it is a nationally set minimum standard. Many pensioners think that they will be able to get half-price travel wherever they go. However, that of course is not the case at the moment. The concessions will apply only to transport within people's own local authorities. They will be very disappointed if they find that they cannot travel out of their local area to visit a doctor or to go shopping unless all local authorities reach agreements with each other. Rather than waiting for reciprocal deals to be made between local authorities, perhaps the Minister would consider providing for pensioners automatically to receive the minimum standard wherever they go. That would be simpler and would avoid disappointment.

7.4 p m.

Lord Hughes of Woodside

My Lords, I welcome the Bill, especially because it aims to bring about a more integrated transport policy. For many years that has been the principal aim of those interested in transport. It locks like some progress is about to be made in that regard. The key to establishing an integrated transport system lies not so much in regulation and introducing different schemes but in ensuring that sufficient money is invested in the system. The key lies in adequate investment.

A little over a decade ago I was the Front-Bench spokesperson for the Labour Party looking at integrated transport policies. One of the principal points of discussion was how to get around the Treasury rules. As a former chairman of British Rail, the noble Lord, Lord Marsh, will recall the mechanism called the external financial limit which allowed the government of the day to determine each year how much a publicly owned industry could spend. The question of how money was raised was not at issue; the limit covered only how much could be spent. At the time British Rail was experimenting with private finance initiatives on a small scale for privately owned sidings allowing provision for privately owned rolling stock. That did not give British Rail more money to spend on its day-to-day objectives; in Fact, it meant that it could spend less. The system was ludicrous. The problem with the Treasury rules is that over the years they have interfered far too much with the implementation of government transport policies.

I believe that there will be a general welcome for the mandatory travel concession system set out in the Bill. Again, the establishment of a countrywide minimum standard is something that we have long sought to achieve. However, I accept that there may be problemsas regards cross-authority agreements. Nevertheless, I welcome in particular the announcement made today by my noble friend Lord Macdonald of Tradeston concerning the extension of the concessionary fare scheme to the blind and the disabled. That is very welcome.

It has been clear from the contributions made in our debate that the Bill is not without controversy. No doubt those issues will be discussed in great detail both in Committee and on Report. I am sure that the clauses in Part III dealing with road user charges and workplace parking levies will not receive universal approval. Indeed, the noble Lord, Lord Dixon-Smith, has made his position clear. However, I suspect that in this, as in many other areas, a certain degree of "Nimbyism"—not in my back yard—may have been evinced. The theory is all well and good, but in practice individuals will object to paying congestion charges or contributing to workplace parking fees. Indeed, I receive frequent press notices from private companies declaring that congestion is costing the taxpayer dear and is expensive for the consumer. However, once a solution is suggested, that is another matter. Congestion is rather like sin—everyone is against it. And, of course, as far as congestion is concerned, it is always someone else's car that is causing the problem, not the car being driven by oneself. A little humility is called for in this area.

Without doubt, the most controversial proposals in the Bill are those covering the public-private partnership for National Air Traffic Services. M y noble friend Lord Clinton-Davis made a powerful case, as did my noble friend Lord Hoyle. I suspect that others will also put forward their views. I have great respect for my good and noble friend Lord Clinton-Davis. We served together in the House of Commons for a period. He was a distinguished Transport Commissioner in the European Commission. I respect his views very much. From time to time we even used to play golf together. By the time my noble friend is once again fully fit, I may even have been able to save up enough money to buy a golf ball as a side stake when we play one another. I look forward to that.

As regards NATS, the issue is not so much one of ownership but rather of how sufficient finance can be injected into the system. The issue is also primarily one of safety. How can we ensure that safety remains paramount? Basically, there are two sides to this equation. Let us take, first, the position of the Government and the Civil Aviation Authority. I am sure that everyone will have received a letter from the chairman of the CAA stating that he believes that safety will be guaranteed under the provisions of the Bill and that the separation of powers between the CAA and the newly formed NATS will be sufficient to guarantee continuing high safety standards. However, the trade unions have argued that the safeguards are insufficient. Oddly enough, they say that NATS currently operates to a higher standard than allowed for by the CAA. There is something curious about that. If that is the case it may well be that stronger provisions in terms of safety are needed on the face of the Bill. But there is a dilemma as to how far we regulate each time standards change. We need the highest standard of safety.

I used to take the absolutist view that "private sector" equalled bad safety and "public sector" equalled good safety. I recall the argument at the time when British Caledonian Airways was to be set up. Routes were stripped away from the British Overseas Airways Corporation to set up the new private company in the interests of competition. Incidentally, that took place under a Labour government. One of my noble friends on this side of the House was a Minister at the time. British Caledonian no longer exists—but not because it had a bad safety record. The company no longer exists because it was effectively going bankrupt; there was no safety issue was involved.

I have scars on my back from defending to the hilt Dounreay as a place of the greatest safety. Sadly, I have been proved wrong. I recall vigorously defending the people at Sellafield and saying how safe it was. Now we find that there was systematic falsification of documents. That is a public sector company, and always has been. However, I do not now take the opposite view that public ownership means bad safety and that the private sector automatically means good safety. I have not yet crossed that line or made that 180 degree turn. I still believe that we need absolutely stringent standards.

I am interested in one of the dilemmas that may be resolved at a later stage. There remains confusion as to the views, in terms of voting, of the Liberal Democrats on the one hand, who have said that they are in favour of a trust and are opposed to any privatization—incidentally, a trust would mean moving out of public ownership—and the Tories, who have stated their belief in full privatisation. We have heard from the Liberal spokesman, the noble Baroness, Lady Thomas, that there has been no collusion between the two parties—and Members opposite are vigorously shaking their heads. But as my noble friend Lord Hoyle said, it is not collusion—

Lord Hoyle

It is a marriage made in hell!

Lord Hughes of Woodside

My Lords, I was not about to be so provocative as to describe it as a marriage made in hell—but that is what it would have been. I am interested to know what the amendment will be. Is it to be, as would not be allowed in another place, a wrecking amendment to remove the clause? Will it propose a change of ownership? If so, how would that apply?

I do not want to dwell too long on the matter. I shall merely say that this House is a revising Chamber. It is not a Chamber in which Opposition parties should seek, in collusion, to embarrass the Government and elevate that approach to an issue of high principle, which it is definitely not. I give way to the noble Baroness.

Baroness Thomas of Walliswood

My Lords, I feel that we are going down some very strange paths in this debate. I do not know what is the origin of all this speculation. I have already told the House that we shall table amendments that conform to our view of a better alternative to the Government's proposals. That is all that we plan to do. From then onwards, we shall follow the normal processes of Committee, Report and Third Reading.

Lord Hughes of Woodside

My Lords, I accept that. Indeed, I stated clearly that there were two different points of view. The view just stated reveals a remarkable innocence; namely, that no responsibility can be taken for what happens as a result of one's own actions. It is a point that should be examined.

My final point relates to the question of pensions, which has already been touched on by my noble friend Lord Hoyle. Concern has been expressed by those in NATS about their pension rights. The Government have stated their clear belief that the Bill contains enough protection and there is nothing to worry about. I can understand the concern that people have in regard to their pension rights. One point that the Government must answer is why it is necessary to write on to the face of the Bill protection for workers in London Underground and why it is not necessary in this case. That issue must be examined at a later stage of the Bill.

That said, I give the Bill my full support. In terms of ownership the Government's choices are ones that I should not necessarily by instinct have followed. But we have moved on. I do not believe that my noble friends Lord Macdonald of Tradestone and Lord Whitty, my right honourable friend John Prescott and the Minister for Aviation, Chris Mullin, would embark on a course that would lead to unsafe skies over and around this country. Therefore, I am prepared to trust their judgment. If there is a need to write greater safeguards into the Bill, we must examine that. However, the Bill takes matters forward a great deal and I wish it good speed.

7.16 p.m.

Baroness Wilcox

My Lords, I should like briefly to turn the attention of the House to parts of this large Bill which have received less attention than they might merit. The noble Lords, Lord Hoyle, Lord Bradshaw and Lord Hogg, have raised my spirits in the past hour with regard to buses. While the future status of NATS and workplace parking levies are important, it is the quality of bus and rail services that is often of greater concern to the man, or more often the woman, in the street on a day-to-day basis.

If we are to tackle congestion and pollution, so eloquently described by the right reverend Prelate the Bishop of Hereford, I suggest that the nub of the issue is the need to provide the high-quality, reliable public transport services that can convince drivers like myself that there is sometimes an economic, efficient and effective alternative. The structural reforms contained in Parts II and IV of the Bill should make a difference. We shall see. But I am particularly anxious that the needs, views and preferences of the passenger—or consumer—of local transport services are put at the heart of policy-making.

The Bill devotes a couple of clauses to this matter. I note that rail passengers are to have a new watchdog—the rail passengers' council and regional rail passenger committees were launched last month, replacing the old CRUCC and RUCCs. But it is worth recalling the comments of the Transport Sub-Committee in another place on initial provisions included in the Railways Act, the forerunner to Part IV of the Transport Bill. The committee argued that, significant changes must be made if the Rail Users' Consultative Committees are to become influential and effective representatives of the interests of rail passengers". That ought to include a name change, adequate funding and more freedom to run their own affairs.

True to form, the Government have since adopted the suggestion of a name change and a re-branding exercise. But aside from that, there are only some rather modest extensions to the powers and duties of the new RPC. It is not clear to me that that constitutes the kind of significant changes referred to by the committee.

A successful system of consumer representation requires not just the setting up of a new body and the usual group of dedicated but overstretched staff, important though that all is. The RPC also needs to be granted appropriate powers and duties and sufficient resources to exercise those powers effectively and carry out those duties.

A blueprint recently produced by the National Consumer Council provides us with a very useful guide. Based on its considerable experience, and following consultation with existing consumer bodies, it identifies key characteristics which identify a good consumer body. Top of the list is independence—independence in their governance and their management, and from the industry, the regulator, and central and local government, particularly in their choice of work and in the views that they express. So it is with some concern that I note that it is proposed that the Strategic Rail Authority should sponsor the rail passengers' council. The Strategic Rail Authority will act as a funding channel for the RPC, will have administrative responsibilities for the RPC, and will even appoint some of the RPC's members. Yet the authority is taking on regulatory powers and could even potentially become a service provider in its own right. There are circumstances under which, given its remit to represent the passenger interest, the RPC might wish to take a different stance from that of the authority. It might even wish to be critical of the authority's overall performance. Strategic Rail Authority sponsorship has the potential to compromise the RPC's ability to do this. The Minister may wish to reassure me in that regard, but I may seek at a later stage to introduce amendments to test the extent of the Government's commitment to establishing a more effective and independent consumer voice for rail passengers.

I would like to be more certain that the rail passengers' council will have the resources it needs to conduct its own quality research and to lobby effectively. The Bill's silence on information is not particularly encouraging either. Without the power to access and publish industry information, the RPC's ability to champion the passenger interest could be seriously undermined. The Utilities Bill and the Postal Services Bill, currently being considered by the House, both establish new consumer bodies. They contain clauses which establish direct rights of access to regulatory and company information, and the right to publish advice and information supplied to public authorities. While far from perfect, the gas and electricity consumer council and the consumer council for postal services will have much clearer and stronger statutory rights than the rail passengers' council will have.

The GECC and the CCPS are also required to have particular regard to the needs of disadvantaged consumers, such as elderly or disabled people. It is a good principle, which should be extended to this Bill. The interests of such groups, as we have heard today, are of particular importance with regard to bus services, acting as they do as a lifeline for many. Those on low incomes and elderly people depend on buses to get them to work, to visit relatives or go to the local shops. We must make sure that we have regard to their interests.

In terms of consumer representation, circur istances are somewhat different from those of the railways, given the very local nature of bus services. But, while a statutory national body may not be appropriate, buses need a higher profile, and I am unclear how the Government intend to carry out their stated intention of strengthening the voice of bus users.

Research for the Cabinet Office people's panel—that fast-disappearing body of volunteers—has found higher dissatisfaction with bus services than with train services. There are significant concerns regarding reliability, frequency and personal safety. Indeed, a recent Welsh Consumer Council survey found that only 43 per cent of passengers feel safe on a local bus at night.

As we have heard tonight, buses do matter to consumers. I am concerned, therefore, that bus services do not receive the attention that they justify, given that they make up two-thirds of all public transport journeys. I sometimes wonder whether their low profile reflects the fact that there are not too many politicians, national or local, or indeed journalists, to be found on the local No. 39 or No. 73 bus.

I look forward to hearing the Minister's response to my concerns, and, if I remain worried, to bringing forward amendments during the further stages of the Bill.

7.25 p.m.

Lord Lea of Crondall

My Lords, first, I congratulate the three noble Baronesses who made an outstanding series of maiden speeches: Lady Cohen of Pimlico; Lady Scott of Needham Market; and Lady Gibson of Market Rasen, with whom I worked closely on this and other matters for many years in the TUC. They will all be making a notable contribution over the coming years. I simply add that we look forward to the day when noble Baronesses outnumber us noble Lords in the House.

I shall be giving strong support to the Bill, with one exception—aspects of the air traffic control proposals, on which I shall in due course raise some issues, partially in the context of European air traffic congestion. My noble friend, Lord Whitty, may wish to respond to some of those points, even though he may not wish to buy me a drink afterwards.

In broad terms, the Bill's logic as regards road, rail and local transport plans, road user charging and the workplace parking levy is first class. It represents the culmination of a radical rethink of transport policy in recent years. That rethink began, it is fair to say, in the period of the previous administration, but we have seen under the present Government a bold implementation of new ideas which would have been unlikely without a Labour administration. The main Opposition party's approach to congestion charges is, in the light of the background, regrettable.

One has only to go round those parts of northern Europe with the population density of England—I say "England" advisedly, because population density is the key to much of the debate—to observe that a high degree of social and environmental planning is essential. Market forces in the conventionally understood sense do not "rule, OK", so we have to construct markets that actually work with the difficult realities of what economists call market externalities. I agree with the noble Lord, Lord Marsh, that the Bill addresses these matters more effectively than we did in 1968.

The Government are to be congratulated on getting the transformation of transport policy overwhelmingly right, notably in the innovation of congestion and parking charges and hypothecation. Here the noble Lord, Lord Dixon-Smith, may have got his comments out of balance. The money will be recycled, and it is not an on-cost to industry in quite the way in which he portrayed it; if we look at the arithmetic we see that it is not an on-cost to industry if it is to be recycled through hypothecation. That is the whole idea behind hypothecation. Maybe that will come out in more detailed debate.

We now have a large investment plan for the next three to four years, with the comprehensive spending review to 2004–05 and the 10-year planning horizon to 2010. That is extremely welcome. On the question of the public finance initiative and the public-private partnership, if I am reading the auguries correctly, the fashion for PFI has somewhat receded, notably for county roads. In the case of major road projects, we have seen all the difficulties of shadow pricing and so on, and I do not think that the fashion now is quite to go the whole hog to PFI as a subset of PPP in order to deal with it.

We have also passed a high water mark in the fashion for saying that just because Treasury rules are restrictive—true—we have to privatise everything that moves—not true. We should change the Treasury rules and, for example, agree to adopt the European benchmark which is less restrictive.

It is common ground that the decision about a public/private partnership for air traffic services was taken at a time when the need to raise revenue was the Treasury's paramount consideration. It is now said that management expertise was the starting point. That was not how the document read a year ago. Let us remind ourselves of why NATS is not a sensible candidate for what might be termed whole hog privatisation, which the Opposition now apparently advocate. NATS is not at present subject to any formal regulatory regime but sets its charges and recovers its costs in accordance with Eurocontrol charging principles. The Secretary of State proposed in the 1998 consultation paper that, since NATS was a monopoly provider of en route air traffic services, those and any other monopoly part of its business should be subject to statutory economic regulation when it came into the private sector.

It is clear that, as revenues are to be controlled, the privatisation will operate in a rather unusual context, in that the only profit-related side of the equation subject to management control will be costs, which are overwhelmingly staff costs. That is where control will lie on a day-to-day basis, even though outside the core business, which must be traffic control, there are no doubt very imaginative schemes to look at world markets and so on.

I notice that the Airline Group, which includes British Airways, British Midland, Virgin and so on, is considering making a bid to be the PPP strategic partner. That appears to be very odd. It is a bit like the regulated rail operating companies making a bid to run Railtrack's signalling operations. It is all very well for the airlines and IATA to welcome involvement in air traffic control, but do they really want to have responsibility effectively at both ends of the safety equation? Have they looked at the due diligence side of it? Will we not introduce one of the ambiguities that we have experienced in the case of Railtrack? Even at this late stage I believe that there is scope for Ministers to allow themselves greater latitude. On that basis some constructive amendments—I emphasise "constructive"—will need to be considered.

As to safety and conflicts of interest, it is all very well to say that each of the locks will be in place, but what will be the pressures if, say, the Airline Group is the preferred bidder? Of course airlines have an enormous vested interest in safety. It is not a question of the airlines as an interested party making the ultimate decision as to landing intervals at Heathrow Airport or who is to land first. That is a caricature and it will not happen. However, in this situation perception is extremely important and one must be seen to be Caesar's wife. Many people have qualms about an airline consortium controlling air traffic control. There are alternatives which are not necessarily any better. For example, one can think of Lockheed Martin, or almost any other company, putting up a proposal for consideration. It is a bit like expecting the French Government to suggest that French airspace should be controlled by British Aerospace or Lockheed. I doubt whether they would even let it be controlled by Thomsons.

Sir Roy McNulty, Chairman of NATS, has written to everyone to draw attention to the fact that Europe is still divided into a multitude of national air services. He remarks that, The airlines are crying out for reform and more aviation experts are speculating that some form of consolidation [in Europe] will happen, another factor being pressure from the European Commission for a single European sky". That is another piece of Brussels-speak which no doubt we shall learn to love.

Does all of this lead to a single European private monopoly? Surely not. Perhaps the Minister can elucidate exactly what the scenario will be. Given that it is notoriously difficult to break down the national governmental defensiveness of the French, the Spanish and so on, are Ministers satisfied that other countries are ready to privatise the European sky? How can we negotiate on a privatised basis if the rest of Europe sees a single European sky as an intergovernmental exercise? Will they have the power simply to override the Bill at that stage, or is it so flexible that we can make it up as we go along? How can BT, or whoever, commit its capital on that basis?

To summarise, is there agreement on the following points: first, that skies are a natural monopoly as far as concerns air traffic control; secondly, that revenues are determined in detail by Eurocontrol; and, thirdly, that that control means that the company will not be able to maximise shareholder value as regards the core business? After all, the CBI and others have always claimed that detailed regulation of prices is incompatible with the competitive market. That was always said at the time of prices and incomes policy, and I have the scars to prove it. Price controls do not operate in that way in the privatised utilities. Within a legislative framework they have scope to change their pricing structure. In the case of airspace, it is an external body, Eurocontrol, that sets the actual price with a degree of rigidity.

I believe that in due course Eurocontrol should run the lot. As that is where we are heading, why do we not recognise it? I am not sure whether due diligence will throw up difficulties for potential bidders given the inevitable constraints. Surely, the biggest question is how European airspace is to be controlled when it reaches full capacity. The delays, which increase exponentially, can to an extent be dealt with by greater integration, which I advocate. However, to an extent delays are a consequence of peak period congestion. How can we possibly visualise a single European airspace without it being derived essentially from an intergovernmental agreement? Watch this airspace!

I predict that, whatever emerges from this Bill, we may have to unscramble it in two or three years. At Committee stage the question will arise how the legislation can be amended when very few of these matters are dealt with in the Bill, which is itself hard to follow. Unless we consider those matters now, including the balance of shareholding, I am not sure when they can be debated and be subject to parliamentary scrutiny.

I very much associate myself with similar questions raised by my noble friends Lord Hoyle, Lord Hughes, Lord Clinton-Davis and others. In particular, I support the proposition of my noble friend Lord Hoyle that there should be some employee representation on the board of any new operating company concerned with air traffic control, as opposed to the stakeholder council which is one stage removed. Air traffic controllers enjoy a very high reputation in Britain. One of the casualties of the present debate is that, at a time of growing pressure upon air traffic controllers, their perception is that a cold wind is beginning to blow, as my noble friends have already attested. It is essential to retain the goodwill and confidence of pilots and controllers, who form a key relationship, in the system.

I am sure that we can find solutions to the problems. For their part the unions have entered into a serious dialogue. I hope everyone accepts that they are motivated by the public interest as well as the legitimate concerns of their members who are engaged in an exacting profession. I join my noble friends in saying that this has been a very constructive debate, and I trust that the Minister will be able to take on board some of the points that have been raised in it.

7.39 p.m.

Lord Beaumont of Whitley

My Lords, this is where I came in! Three months after entering your Lordships' House I was a Front Bench spokesman for the Liberal Party on the last inch-thick transport Bill. Before that Bill came to this House I knew nothing about transport; and a month after it passed front your Lordships' House I knew nothing about transport However, for a couple of months in between I knew almost everything there was to be known about transport. I do not know whether the same will be true of this Bill. It is true that I know a little more about transport than I did then. It is also true that I hope to forget a great deal about transport after the Bill is passed. In the meantime, I shall do my best to learn from noble Lords.

The Bill, introduced so ably by the noble Lord. Lord Macdonald of Tradeston, has four parts. Much attention has been paid to the first part on air traffic control. That is the part which least affects ordinary people in their ordinary lives. It is the part to which I shall pay least attention. I do not propose on behalf of my party to table any amendments to it. I noted that the noble Lord, Lord Brabazon of Tara, devoted 50 per cent of his speech to the first part of the Bill. Given his ancestral inheritance, that is not surprising. However, I believe that it was somewhat more than that part of the Bill deserves.

Local transport is the issue which affects many of us most of the time. I shall seek to persuade your Lordships to set as many traffic reduction targets as possible. I am not sure that the Government are as committed to the reduction of traffic as they often say they are. In his opening speech, the noble Lord, Lord Macdonald, said that many road systems have yet to be built. I hope he did not mean that he hoped they would be built.

We believe that it is right to introduce targets for traffic reduction. There are obvious practical objections to a national target. However, there is a need to set targets: by the Mayor of London; by all unitary authorities; and within all local transport plans. There should be a special mention of targets in rural areas to be agreed with the Countryside Agency.

On buses and quality contracts, local authorities need more powers to set quality standards, avoid wasteful competition on routes, set frequencies of services and require inter-ticketing, bus/rail integrated ticketing and much better information. We shall support any noble Lord who tables amendments on that point.

Local authorities should retain responsibility where possible. We plan to amend Clause 134 in order to encourage local transport authorities to remove the age discrimination inherent in current pension legislation. That may be by the way but one should not miss the opportunity when it arises.

Part III relates to road user charging and workplace parking levy. It provides legislation to allow councils to introduce road user charging and the workplace parking levy. I believe that that is right. We shall do our best to support that part of the Bill.

As regards railways, the Strategic Rail Authority should be given as much power as possible. I have received briefing which suggests that British Rail is resisting that point. I believe that British Rail's position should be resisted. The Strategic Rail Authority provides a way of achieving a sensible setup.

I revert for a moment to the issue of air traffic control. The noble Lord, Lord Macdonald, explained why we should not go along the route suggested by the Conservatives. I go along with that. However, he never explained why that part of the Bill exists. The noble Baroness, Lady Cohen of Pimlico, made an absolutely first-class maiden speech. If I had realised that I was listening to the maiden speech of Janet Neel, I should have known that it would contain the ingenuity, wit and style that it did. The noble Baroness explained somewhat more fully than the Minister the reason for Part I of the Bill. The noble Lord, Lord Hoyle, put his finger on why Part I should not be encouraged. I do not think that Part I should be encouraged.

On the whole, the Bill is very good. Responsibility should be spread more locally, with the needs of individual members of the public being looked after. At present they want to use public transport as much as possible but are often frustrated in doing so. I wish the Bill well.

7.46 p.m.

Baroness Turner of Camden

My Lords, I welcome the opportunity to participate in the debate on this important Bill—a debate which has included notable maiden speeches from three noble Baronesses. Whether or not we have some specific expertise, it is a subject which is of great concern to everyone. I am glad that the Government are making an attempt to deal with some of the problems involved which sometimes seem so intractable. I am sure that all of us want to see an integrated transport system and we hope that the Bill will prove a major step along that road.

Sections of the Bill are highly controversial, none more so than the first part dealing with National Air Traffic Services Limited (NATS). I have read most of the material available and the Minister will not be surprised to learn that, with my trade union background, I have grave concerns about the proposals in the Bill. In opposition, my party was opposed to the privatisation of NATS. A former transport Minister famously told a party conference that "our air is not for sale"—and that has been thrown back at us from the Opposition Benches in the debate today.

Now we have the so-called public private partnership, with 45 per cent to be sold off to a trade partner and a further 5 per cent to staff, with the Government retaining the rest, including a "golden share". That is likely to be a partial sale, with the likelihood that, as with other privatisations, the rest will eventually be sold.

Of course safety is the key issue. That has already been dealt with adequately by other noble Lords, notably by my noble friends Lord Hoyle, Lord Clinton-Davis and Lord Lea of Crondall. Privatisation is not now exactly popular with the public, particularly in the light of the problems and justified criticisms of the privatised railway service. What concerns me most is that the staff who operate NATS and the pilots who obviously have a professional concern are unhappy about the proposals in the Bill. The pilots have serious reservations. They have said that the proposals will have many of the deficiencies of outright privatisation in, as they put it, distorting investment, penalising long-term projects and placing insufficient weight on factors such as user time savings and safety, exerting undesirable pressure upon operational safety and service quality, focusing instead on profitability and shareholder value, and rendering it more difficult for the Government to plan and implement their airspace policy effectively.

Furthermore, the unions representing 95 per cent of NATS staff have been outspoken in their opposition. They believe that there is no political case and no economic case either. NATS, they say, does not cost the taxpayers anything. All its costs are covered by charges to airlines. Nor is there a business or industrial case. NATS' standards of service are respected worldwide, a point repeatedly made in the debate. Charges to airlines have fallen in the past six years.

Alternatives have been suggested; for instance, NATS could be run on a non-profit-making basis as an independent, publicly owned corporation, or it could be turned into a trust. Selling half of NATS would bring in around £350 million—not much compared with the recent mobile telephone bonanza of £22 billion. The small concession of turning outright sale into a partial one has not set public fears at rest.

The safety issue may well be overstated. I welcome the assurances given by the Minister today that that has a high priority as far as the Government are concerned. However, it is a very large issue in the minds of the public, and the opposition of the very people who run the present system, which is widely respected, does little to allay those fears. I urge the Government to think seriously about what is proposed and in particular to enter into further consultations with the people closely concerned with the running of the present service.

Parts II and III of the Bill refer to duties imposed on local authorities and give local traffic authorities the right outside London to introduce user charges and workplace parking levies to help tackle congestion in towns and cities. Presumably London is to be dealt with by the new Mayor, who has already indicated that he favours congestion charges. I understand that the Government are not in favour until public transport has been substantially improved.

I must say that, unlike some noble Lords who have spoken, I am in entire agreement with that. I live in London but outside the main centre. Everyone knows that traffic in London is now appallingly congested. But it is far too easy to blame the motorists. Actually, congestion in London and other major towns is due not so much to the private motorist—few use their cars nowadays to drive through London during the week unless they have to—but to the proliferation of commercial vehicles, some of them enormous. Why they cannot be compelled to deliver at night instead of during the day I cannot imagine. That is the situation in many Scandinavian countries.

Let us hope that local authorities use the powers which the Bill gives them to prevent the appalling disruption of traffic such as has taken place in London during the past weeks. Camden High Street, for example, is alleged to have been dug up 85 times during the past year. Large stretches of London have been rendered impassable. That simply will not do. It must be possible to organise road maintenance, repairs or cable laying with less inconvenience to the public.

I welcome those parts of the Bill which give local authorities powers to take steps to assist the disabled. I recently became partially disabled and it was a salutary experience. I have a mobility problem at the moment; I cannot walk very well and stairs are a nightmare. But our Underground stations have been constructed by people who believe that it is absolutely necessary to have some stairways—mostly with steel-tipped stairs—before the unfortunate passengers reach the escalator, if such exists. For quite a while the authorities responsible at my local Underground station apparently believed that they were doing their duty by the public if they kept the "up" escalators going, but the passengers had to walk down. It is a very deep station. Going downstairs for someone who cannot walk properly is more of a hazard than going up, as a fall can result in very nasty injuries.

Therefore, I want to make a plea for the partially disabled—and there are many of us about. Many local authorities believe that they have fulfilled their obligations if they have made arrangements simply for severely disabled people. If you are partially disabled and can hobble about a bit, well, you can get on with it. And if you happen to fall down and injure yourself, that really is too bad. I hope that local authorities will address that serious problem which affects not only the likes of me in this House but many elderly people. Looking around the streets one can see a large number of people who have such a difficulty.

Congestion charges, without substantial improvements in public transport, will simply make the situation a great deal worse. In London people will park their cars near Underground stations, adding to the congestion in the streets around and of course to the numbers travelling in the appallingly overcrowded trains during the rush hour—although rush hour now seems to extend almost throughout the day.

Those who are well off will continue to use their cars and pay the charge. People who are less well off will feel themselves victimised. New charges for motorists, on top of the current tax burden, will be deeply resented. Somehow or other, the Government and local authorities must come to terms with living with the car—at least for a long time to come, I fear. I am not at all certain that some of the propositions in the Bill will deal adequately with that situation. However, in general, I support the thrust of the Bill. I welcome the desire to introduce integration into our transport system and, generally speaking, apart from the reservations I have made, I wish the Bill well.

7.56 p.m.

Baroness Hanham

My Lords, as has already been said, this Bill does not affect London. But that, as your Lordships know, is because powers contained in the Bill have already been given to the Mayor and to the Greater London Authority, which becomes the first strategic local transport authority. It also becomes the body responsible for London's concessionary fares scheme, which has been funded by the London boroughs for many years and which is now being extended to the rest of the country.

However, no mention is made in the Bill of where the extra resources to pay for that will come from. Will the Department for the Environment, Transport and the Regions fund the scheme? It will cost most local authorities many millions of pounds. We are not talking about small sums but about considerable sums of money. Is it intended that such funding should be part of the SSA settlement or, perish the thought, that it should come from congestion charging? It is an important question which needs a response.

The measures in the Bill which are germane to London were discussed in detail during the progress of the Greater London Authority Bill, but some bear repeating, but repeating briefly after the noble Baroness, Lady Turner, who raised them in her speech. They have a wide effect elsewhere. Perhaps fortunately in tune with the Minister's comments today, the new Mayor for London made it clear that he has decided to take no action on congestion charging for at least the next two years or until he is satisfied that proper alternative transport systems are in place and that there is a satisfactory method of identifying vehicles when charging for congestion.

That is self-sacrificing on his behalf as the money from congestion charging is the only way in which he will raise resources, apart from a small precept upon Londoners. But it is also wise as there is already ambivalence in the Government and from the Prime Minister—it was well expressed during the London local elections—over the whole question of the electoral popularity of the scheme and workplace charging in particular. We need to ensure that the population and the people who are to pay the charging are happy about it. In London, as elsewhere, a great deal of breath is expended on lamenting the problems of congestion and air pollution. The only result is these proposals to fleece motorists again for using their cars.

The corollary is, of course, whether motorists should be terrorised or financially penalised for using their cars unless and until each one is satisfied that there are proper alternative forms of readily accessible transport. In London this means a Tube that is reliable, clean, safe and frequent, and a bus service which is comfortable, frequent, reliable and which goes where passengers want to go. If co-ordination of services is inadequate, it will be neither just nor practical to imagine that people will abandon their cars and leave them elsewhere.

A problem also arises as to where the congestion charging starts. If one takes as an example the London boroughs, wherever that boundary is, there is a boundary outside it. The authority outside the boundary will be badly affected by people leaving their cars and jumping over the fence into the congestion charge area.

The noble Baroness, Lady Turner, raised the question of the co-ordination of roadworks. We have recently discussed that matter many times in the House. In my view, it causes more congestion than many thousands of motorist journeys on roads which are not held up by vast building programmes.

Co-ordination with the Strategic Rail Authority must also be carried out. The authority will work with Railtrack and influence the work that needs to be done on track and signalling to enable more cross-London commuter trains to enter the network. Where new services are being developed and infrastructure is required, it is imperative that there should be a clear understanding that those should not be delayed because there is a disagreement between authorities over who pays for maintenance and who pays for new structures. Theoretically, Railtrack is responsible for the first and the Strategic Rail Authority will be responsible, by investment, for the second. I am particularly concerned about that because in this respect the western London line badly needs new capacity to improve commuter services.

The setting up of the Strategic Rail Authority is most significant. In London its relationship with the Greater London Authority will be crucial for the strategic planning of the Underground, as well as much needed new lines, such as CrossRail and the Chelsea-Hackney line. As I have already said, investment, co-operation and co-ordination will be absolutely vital.

I return to the subject of congestion charging and the introduction of workplace taxes. As many noble Lords have said, they will have a far-reaching impact on the free movement of residents in and around the place they live and on the viability of business. Sterilising areas of the capital city could have a far more serious effect on its future viability than any congestion, perceived or real. I believe that that will apply also to any other metropolitan area in the rest of the country that introduces congestion charging.

With regard to the introduction of the strategic transport plans and bus strategic plans, I note and hear today that particular attention is being paid to the elderly and those with mobility problems. Much work has already been done on this in my part of London by another government initiative, Better Government for Older People. Recently, bus drivers on routes through the borough were faced with clipboard-bearing pensioners who took up their seats and settled themselves behind the drivers to gauge their driving styles. Bad marks for hard braking, fast cornering, lack of courtesy and speeding off at bus stops were all noted and reported to the drivers at feedback sessions in the garage. Who needs transport Bills? Let us ask the passengers.

8.4 p.m.

Lord Smith of Leigh

My Lords, this has been a long but high quality debate. Many excellent contributions have been made, notably by our three maiden speakers and by many other noble Lords with experience and expertise. I should perhaps make two declarations of interest. First, I am leader of a local council which soon will be responsible for implementing the local transport plans. Secondly, I am a director of Manchester Airport, which is still (perhaps I may remind the noble Lord, Lord Brabazon of Tara) in public ownership.

On the whole, the Transport Bill is to be welcomed. However, to be effective the Bill will need to change both attitudes and behaviour. First, there is a need to change perceptions of public transport—a difficult task to achieve. The car is seen as a status symbol rather than as a means of transport. The impact of our experience of journeys is that we forget the ones that go well but always remember vividly the ones that do not. As a frequent user of the West Coast main line, I say that with some feeling. In addition, the perception of transport time is somewhat different. I understand that people perceive waiting time as three times as long as moving time. I believe that many of us do a lot of waiting on public transport.

It is a difficult but not impossible task. Manchester Airport has begun to tackle some of those issues in a green commuter plan that it introduced in 1998. I am relieved that the right reverend Prelate the Bishop of Hereford is not here to hear me say that in 10 years' time it is expected that Manchester Airport will grow to deal with some 30 million passengers and that employee numbers will rise to some 30,000. Of course, an airport is a 24-hour operation. We must give consideration and find imaginative solutions to the problems, otherwise transport will not move around the airport. However, after two years we have already seen a 15 per cent reduction in the number of staff who travel alone to the airport by car.

Changes can happen. How do they happen? I believe that first we need to understand the lesson of shared responsibility. Everyone is part of the problem and everyone is part of the solution. I believe that we need to ensure that people understand the range of travel options and that those options must be explained fully. We need to provide quality facilities and services. At the airport we have a new bus service—Skyline— which offers frequent services operating both early and late in the day. We provide cycle parks, and soon a new cycle centre will offer maintenance and shower facilities. We offer discounts for employees on all forms of public transport.

I believe that the message that we must get across to people is that small changes in behaviour make a difference. In addition, as my noble friend Lord Whitty is well aware, having been invited a month ago to Manchester Airport to cut the first sod, the airport is planning a new £60 million ground transport interchange which will integrate buses, trains, the Metrolink and coaches. The airport is proud of its initiatives on transport but, as both Ministers are aware, it is concerned about its ability to continue them under the restrictions that will be imposed by vires issues. I believe that the airport authorities are in correspondence with both my noble friends Lord Whitty and Lord Macdonald with regard to this matter.

As a local politician, I certainly welcome the increased responsibility that we have to bring forward local transport plans. To my mind, that fulfils the powers provided by Part I of the Local Government Bill to promote the economic, social and environmental well-being of communities. The Transport Bill achieves all three at the same time.

There has been reference in the two speeches preceding mine to congestion charges. I shall therefore pass over what I was going to say about that. I regard it as a problem that has been passed to local authorities to deal with. It would be described m the rugby-playing circles of Wigan as "a hospital pass"; that is, something that is quite difficult to get away with. However, we shall do our best.

My noble friend Lord Morris of Manchester outlined some of the issues relating to Greater Manchester, and I feel bound to support his comments, particularly in one respect. Ministers will be aware that my local councillor is the chairman of the Greater Manchester Passenger Transport Authority. He is well known not only to present Ministers but also, I believe, to a number of past Ministers who have felt the need to talk to the chairman of the Greater Manchester PTA.

As my noble friend Lord Morris explained, we are proud that we are a centre of excellence. Greater Manchester has pioneered many initiatives on improving bus services in partnership with the more enlightened bus operators throughout Greater Manchester. That involves improving quality bus corridors with current investments of over £6 million. One such corridor operates at the end of my road. I believe that noble Lords will realise that it has now been renamed the "Road to Wigan's Pier".

A more ambitious plan has been put forward to introduce a guided bus link from Leigh—probably the largest town in England without a rail link—into the centre of Manchester. All those schemes involve considerable public investment—some £53 million in the case of Greater Manchester—and create not a little local opposition when people learn about changes that will affect the way they live their lives. It is disappointing that the proposals for quality partnerships contain no provision for frequency and timing. I hope that that aspect can be reviewed. One understands the problems of competition, which my noble friend Lord Hogg explained in detail, but we do not want something that is already part of voluntary arrangements to be lost by the Bill.

The Bill does much to redress the balance in favour of public transport. The Bill creates possibilities for local authorities to improve the quality of life for local communities and I am glad to support it.

8.10 p.m.

The Earl of Mar and Kellie

My Lords, I begin by reminding the House that I live in the one Scottish local authority area—Clackmannanshire—with no railway services, at least at present. My contribution hopes to reflect on the Scottish aspects of the Bill. Scotland's devolved position as regards transport is complicated. Transport in its many forms is partially devolved and partially reserved. We will become increasingly familiar with that situation.

The Bill concerns Scotland only in respect of air traffic, which is almost a wholly reserved matter—and sensibly so; the goods vehicles operators licence amendments; and railway improvements. The latter will be partially devolved, with Scottish Ministers having a duty to give direction, guidance and advice.

The Bill is silent in Scottish terms about roads, cycleways, footpaths, waterways and, significantly, ferries.

There is clearly reorganisation in the measures for the future governance of air traffic but I wonder whether there will be improvement. One outcome for which I am looking but doubt that I will find is a reduction in the price of air travel within Scotland—especially within the islands and remoter parts of the mainland and with respect to the Central Lowlands and the rest of the United Kingdom. I do not see the same duty to develop air services as is placed on the Strategic Rail Authority with regard to railways.

The goods vehicle regulations are probably only technical amendments but I see them as levelling up the playing field by dealing with recalcitrant small operators. If only the Bill gave the same levelling effect to fuel prices and ferry fares in remote areas.

The railway changes introduce a clear duty for the SRA to promote the rail network and passenger and freight services, and to contribute to an integrated transport system. I hope that the SRA can deliver on that by finding co-operation with other transport operators. While the SRA will normally deliver passenger services by franchise, it has the power to procure rail services by other means. Although that will be used, I presume, as a last resort, I admire the flexibility granted by that measure.

I hope that we shall soon see positive confirmation of the re-establishment of goods services between Stirling and Kincardine-on-Forth, and of passenger services between Alloa, Stirling and Glasgow; the return of the Waverley route servicing the Borders, Edinburgh and Carlisle. That route has distinctly strategic potential and probably should never have been closed. Congestion on the West Coast main line should be reduced by that re-opening. I hope to see soon the extension of passenger services from Glasgow to Larkhall and Stonehouse, which should reduce commuting on the M74 into Glasgow.

The reopening of railways will be a major mark of progress in Scotland and the rest of the United Kingdom and a tribute to acceptance of the need for forward-looking investment. I congratulate ScotRail on its new long-distance routes. The summer timetable introduces through passenger trains from Glasgow and Edinburgh to Wick and Thurso and to the Kyle of Lochalsh. That certainly contributes to the perception that the remoter areas are being recognised in a small way. Glasgow Queen Street will despatch trains to Oban for the southern Hebrides, Mallaig for Skye and the Small Isles; Kyle for Skye and the Outer Hebrides; Thurso for the Orkney islands; and Aberdeen for the Shetland Islands—although Bergen continues to be their nearest mainline railway station.

Only the Ullapool ferry to Stornoway and the Isle of Lewis and Tarbet for Islay and Jura are not served by rail. I doubt that they ever will be. All that is good but journey times remain substantial, as do ticket prices.

Transport is an essential element of any policy for remote areas. I see Scotland as 10 per cent urban, 45 per cent rural and 35 per cent remote in land area terms. The state should enable people to live and work—and have an economy—in remote areas and to share many of the benefits enjoyed by the urban majority. Remoteness and peripherality cannot be abolished but the state can help to mitigate the costs. People who live and work in remote areas have to do the travelling.

I end with this question: will the proposed disabled travel concession scheme extend to Scotland?

8.7 p.m.

Lord Berkeley

My Lords, the noble Earl gave a most interesting and well-researched summary of the problems facing Scotland, to which I shall refer later. I declare an interest as chairman of the Rail Freight Group and an adviser to Adtranz.

I congratulate my noble friend the Minister on his introduction to the Bill, which comes from a White Paper on transport integration that itself resulted from a major, extended consultation exercise. If it has taken three years to get this far, one can argue that the proposals have been signed up to by a large number of people involved in the consultation. Some of the ideas have already been implemented in the Greater London Authority Act 1999.

It has been commented that congestion charges should not be introduced until alternative transport schemes have been introduced. Let us not forget that 40 per cent of the population do not have access to cars anyway, so the sooner we can make buses run more reliably, flexibly and comfortably—and the sooner we can introduce better cycling and walking routes—the sooner more people will use them.

I am keen to see walking and cycling made safe, comfortable, convenient and integrated. Some people comment that cycling should not be encouraged because more cyclists will mean more accidents in which they get killed. It is the role of integrated transport to give the unprotected users of our highways as much thought and consideration as those who are safely cocooned in their metal boxes.

Turning to railways, I welcome the creation of the strategic rail authority and its objectives. I shall be suggesting a few minor changes in Committee, but the principle is excellent and it must be the only way of putting forward what I see as the rough legislation of the previous government.

The SRA must be strategic. It may seem obvious to say so but it is very, very important. It must be visionary and it must be proactive. It must know more about the railway business than those with whom it deals and it must know what its customers—passenger and freight—want. I suggest that, most of all, it must provide the policy leadership within which the industry must operate. It must work seamlessly with the rail regulator. It is encouraging that the rail regulator is now beginning to take action to ensure that the railways give value for money, performance and growth as well as encouraging competition. It is rather sad that it has taken five years to get this far, but at least it is happening.

At the moment I see the SRA as having to fulfil the important function of the refranchising process as well as encouraging freight. I hope that this is being undertaken within a strategy for developing all the passenger services, as well as freight, and that in the future the process will be a little more clear and transparent. The SRA has to give a lead to the industry and promote best practice and value for money as it will be spending large sums of taxpayers' money.

I shall be proposing an amendment to bring station services within the regulatory framework. I would like briefly to explain this. Railtrack owns all the stations. However, except for some of the larger ones, most are leased to the train operating companies. The Association of Train Operating Companies is concerned that Railtrack does not have to lease stations again when the franchises are re-let and has indicated it would like to take some or all of the stations back as it could make more money on them. The train operators feel that they are closer to the customer and that they can better judge customers' needs at a station. Of course, they are going to be there for up to 20 years and so there is a great deal of logic behind that.

Another problem with passenger trains at the moment is the delays in introducing new rolling stock, and many ministerial words have been said on the subject. There are still thousands of new coaches parked up while commuters endure cattle-truck conditions. It is not good news for the industry.

My noble friend Lord Macdonald stated that there were interim proposals to alter the structure of the safety organisation on railways. I suggest that he takes the Government's example of a regulatory body separate from the operator, as is proposed for air safety. At the moment, thousands of trains are built to the same standards as operate at the moment in many other European countries, and there are no problems outside the UK with track circuits and interference with signalling. Railtrack seems to be so concerned about possible electrical interference from these trains that it cannot accept the trains with continental specifications, even though the new trains create only one-tenth of the interference of the existing trains, which of course had what are called grandfather rights. The same can be said about the size of trains going through tunnels and over bridges. Trains have been built to the existing size specifications and these have also been rejected.

The problem is that Railtrack is playing safe because, after five years of owning the company, it still does not know what it owns. It does not know the height or width of bridges, the loading gauges, the details of signalling or safe interference levels. This is exemplified by the shadow Strategic Rail Authority, which recently sent out inquiries for 1,500 new trains to replace the Mark 1 slam-door stock. In its inquiry document, the SSRA said that it could guarantee the technical accuracy of only 75 per cent of the infrastructure; it could not say which 75 per cent it was guaranteeing. It is difficult to build trains to that specification.

I am sure the House will agree that this is not the way to get trains on the line on time, at the cheapest possible price. Indeed, there are those who suggest that the whole process is designed to reduce Railtrack's risk to a minimum rather than create a safe railway within the guidelines set by government through the Health and Safety Executive and the Railway Inspectorate.

I believe operators and manufacturers need clear specifications for the infrastructure—the heights of bridges, signalling and power supply—if, with Railtrack, they are to provide the best and safest value for money. Transparency and complete separation of safety regulation from Railtrack must be the long-term aim. I hope that a start will be made soon in setting up proposals for an overall transport safety body, judging road, rail, air and sea by the same criteria. My noble friend will be pleased to hear that I shall not be putting down such an amendment to the Bill as it is much too early, but it needs to be considered.

Turning briefly to freight, I was heartened that the CBI, the Freight Transport Association and the rail freight industry have come together to demonstrate the need for the industry to have efficient choices between road and rail for freight. The industry is committed to improving services and, with proper investment, it can double its traffic within 10 years, alongside the growth of passenger traffic, which will probably be around 50 per cent. That will have a significant effect on the number of lorries and, more importantly, will provide choice for the industry.

The noble Lord, Lord Dixon-Smith, said that rail freight growth was insignificant and that it would be more than overcome by the growth in road freight over a few years. If I remember correctly, this goes back probably 20 years to the time when the noble Lord, Lord Parkinson, was Minister of Transport. He said that, even if rail freight were doubled overnight, it would take up only two years' growth in road freight. The fallacy there was that he was including milk floats in his definition of road freight, and one does not want to take milk floats as part of what could be diverted to rail—unless it is new deliveries for United Dairies.

I support the amendments of the noble Earl, Lord Attlee, to complete the work that was not finished last year of bringing in enforcement measures for the lorry regulations in his Bill. I would certainly welcome similar penalties for overweight lorries coming into the ports. There is a well known story that the first lorry over the new weighbridge in Southampton last year weighed in at 60 tonnes and broke it. I know that that is apocryphal, but the situation still needs to be looked at. There is great support from the road freight industry for such moves. I shall support such an amendment if it is tabled.

Another matter to be considered is extending the rail freight grants and maintaining them until the new ones are in place. We need more flexibility so that operators can develop turn-up-and-go services without having contracts in place. There is an argument for extending the same grant for short sea freight.

The noble Earl, Lord Mar and Kellie, started discussing reserve and non-reserve matters in relation to Scotland. It was interesting because I have recently been involved in trying to re-open a service between Menstrie, Alloa and Stirling for some important rail freight business. The British Rail Property Board, now called Rail Property Limited, owns the first part of the track and Railtrack the rest. Unfortunately, the property board will only sell it to Railtrack at the same price as it wanted for a supermarket development which the Government thankfully stopped. If any money is to go to Railtrack to help it to do that, it has to go to the SRA. But I believe that the money has to be voted from the Scottish Executive rather than from the department here. We need to do some work to see whether a simpler scheme can be devised.

Another matter which I would like the House to consider is the idea of a rail freight committee to match the rail passenger committee. Many people will say that the industry can look after itself, but it is not always consulted on closures. There was a serious closure proposal in Holyhead. It was proposed that the last possible terminal for rail freight in the town was to be sold off as a compulsory purchase deal to the local authority. But at the same time the Welsh Assembly has a policy of encouraging rail freight. It was for a new road into the port. But it would have been nice to have been consulted about that rather than having to rely on passenger colleagues telling us about those matters.

The major problem for rail freight and passengers is land. I have talked about passenger and freight growth. If they are to increase by 50 or 100 per cent in 10 years, there must be land for car parks at stations and for rail freight terminals. The British Rail Property Board has been selling off land for years. Many colleagues here have helped to slow down the process. But there is still a risk that land which could be used for car parks and terminals will be sold off for commercial developments. If there are no car parks, there will be no passengers. If there are no freight terminals, there will be no freight.

My honourable friend the Minister with responsibility for railways, Keith Hill, said in another place that the Government believe that strategic sites could be retained for up to 20 years by the Strategic Rail Authority. I am not sure that that message has finally got through to the SRA and the rail property board. We must explore that in Committee. It is extremely important that terminals, car parks and occasional land re-opening—such as the Menstrie branch which I mentioned earlier—should not be sold off for supermarkets but should be retained for future use by rail passengers or freight.

In conclusion, I welcome this Bill. It is long overdue. I am sure that it will do what is required of it. If it does, its length is immaterial. I shall certainly play my part in seeking to bring it to a positive conclusion.

8.31 p.m.

Baroness Byford

My Lords, after some 30 authoritative speeches, I shall restrict my comments to two particular aspects of the Bill; namely, that in relation to air and that in relation to local authorities and charging. I want my comments to reflect the impact which the provisions of the Bill will have on those living and working in rural areas.

Environmental considerations are high on the list, especially as regards air quality and noise pollution. The steady increase in both commercial air traffic and private flying is not compensated for by the drop in military traffic. I am concerned that this Bill, from a Government who invoke a mantra of "joined-up" in a variety of circumstances, has done nothing to advance the progress of meeting their obligations arising from Montreal and Kyoto. For example, there are no constraints on the NATS replacements to ensure that they function to standards which reduce the amount of time that aeroplanes spend above our airports, doing circuits or stacked in columns miles high. As far as I can see, there is nothing in the Bill which ensures that airlines using our air space must adhere to minimum seat occupancy rates or freight densities. I do not know whether the Government have considered that and perhaps the Minister will clarify that issue when he winds up. That is particularly surprising when one contemplates the wealth of detail contained in Schedules 4 and 5 as they rule on everything from compulsory lands to new towns and planning to water and drainage.

I am sure that I shall be told that our friend "competition" will take care of all that. If one could only be certain that competition is ever the bringer of unalloyed benefit. There is always someone who suffers. I fear that the unregulated increase in air traffic, which other noble Lords have indicated will continue, will cause massive damage to our environment. It may be that in 20 or 30 years' time, our grandchildren will be cursing us for not making better use of this Bill.

Local transport authorities will have many duties and already the detail of potential conflicts is reaching my in-tray. However, I note that Clause 100(3) lays down a statutory duty for the LTAs to have regard to education transport requirements—mainly school buses. So far, I am not aware that the Government will require the local transport plans or either of the quality initiatives to cover specialist, abnormal or innovative transport ideas. We have spoken of many of those in recent debates. Those are particularly important for rural dwellers, low earners everywhere and for those who are still in full-time education. They need to attend classes, go to interviews and take further training at times and in places which do not necessarily match up to publicised public transport schedules.

The provision of information would also be helpful to them. That would be strengthened were a statutory duty to be placed upon the providers of bus services, for example, to publish information about interconnecting services with rail links. I gave one example; namely, that the 7.8 a.m. from Middle Puddle arrives at 7.58 a.m. at Lutterworth Station Road and connects with the 8.7 a.m. to Leicester and London and the 8.11 a.m. to Nottingham. That is a small example but it would help enormously.

Many noble Lords have spoken this evening about their concerns in relation to the charging system and workplace charges. Road-user charging schemes may be applied to many a busy and overcrowded route. I am concerned lest they encourage cars, lorries and other vehicles to divert down country lanes and through villages and market towns. That must not happen.

I hope that in Committee we shall be able to devise a method of ensuring that all charging schemes are monitored and allowed to continue only when they have reduced the volume of traffic in absolute terms and without having adverse effects elsewhere. Not only should they be monitored but they should be assessed also to see, for example, the impact on local businesses in neighbouring local authorities, one of which has charges and one of which does not. Such businesses may move from one authority to another in order to avoid the charges.

The Bill requires the local transport authorities to consult a variety of interests in the production of their local transport plans. Many of the county councils involved will doubtless "copy" the parish councils in their areas. But I have searched in vain for anything in the Bill which can be interpreted as new statutory powers for parish councils to deal with transport matters in their own territory. Again, perhaps the Minister will comment on that in his response. Rural communities may find themselves disadvantaged and with no adequate means to counter it.

I turn to the theme about which other noble Lords have spoken earlier; that is, the economic impact of the workplace parking levy on business. I do so in the knowledge of the figures produced by several numerate firms within the engineering community.

Let us assume, for argument's sake, that the level set is £250. That is a cautious assumption. It may be much higher in many regions and perhaps as high as £3,000 per space in London. For a large company with 2,000 to 2,500 car parking spaces throughout the UK, the cost would be in the region of £500,000 to £625,000 per annum. The burden of those charges on that business will be massive.

Let us take, for example, a certain large engineering company with a number of sites throughout the UK. It has said that the additional cost of the levy will put pressure on the business's profitability and may lead to employment cut-backs. That particular company has already taken steps to reduce its staff's dependency on cars for getting into work by introducing special bus services and car-share schemes. It seems that regardless of its efforts, because the company has 23,700 spaces, the result of the workplace parking levy will be a bill for that company of nearly £6 million.

Another large national company believes that the levy will lead to job cuts and has already taken steps to encourage its employees to consider other forms of transport with the introduction of free minibuses, cycle racks, showers and car-sharing schemes. The company also operates shift working and flexible starting times. Overall, the firm has some 6,500 car parking spaces throughout the UK which would cost it some £1.6 million.

Other noble Lords, and, indeed, my noble friend Lord Dixon-Smith, said quite clearly that the move is a tax on business. Indeed it is. Given the examples which I have outlined of the effect on big business, what will be the effect on small and medium-sized businesses? Many are based rurally and have no alternative. At present, bus services, if they exist, are infrequent, so cars have to be used. That is not a choice but a fact of life. Not only is that a necessity; it is convenient and enables small businesses to do more business.

If a local authority introduces the new user charges and a neighbouring one does not, I fear that we will see businesses, especially the smaller ones, move to the area in which the authority does not charge. That could put greater pressure on rural communities at a time when many are struggling to survive.

We welcome the concept of better integrated local transport systems. I, too, follow the noble Lord, Lord Berkeley, and include walking and cycling, which are important. However, in Committee we on these Benches will look carefully at the detail and the practical implications of the Bill for the consumer, the user and particularly those in rural areas who are solely dependent upon their car for getting to work and doing business.

8.40 p.m.

Lord Elder

My Lords, I believe that the Bill represents a major advance in the development of an integrated transport policy in this country. It is over 30 years since such a decisive step has been taken to revitalise our public transport services and initiate a comprehensive modernisation of transport services across the board, coupled as it is with a great deal of new investment.

During the course of the debate we have heard of a number of possible amendments. I should certainly like to add my support to one; namely, the extension of a freight facilities grant for coastal and short sea shipping. That has been a declared policy objective of the Government. I very much hope that this opportunity to put that into effect will not be missed and that support for an amendment might be forthcoming from all parts of the House.

There has been broad-based support for the establishment of the Strategic Rail Authority. Recently, one or two contributions have been made commenting on aspects of how these matters affect Scotland. During the course of detailed discussion of the Bill, I hope that it will be possible for the Government to give reassurance that what is contained in the Bill does not change the agreement reached during the passage of the Scotland Act and set out in what has become known as the "McLeish Settlement" and regarded rightly as an important matter in Scotland. It relates to the role of Scottish Ministers in giving direction and guidance to the SRA in relation to Scottish services and the circumstances in which it might be proper for the SRA to disregard that guidance in the light of other guidance received.

To ensure clarity in this area and avoid any possible recourse to law when disagreements arise, it might well be that having this settlement built into the Bill rather than based in a ministerial statement would be preferable. After all, Ministers change. More permanence might be more reassuring.

The part of the Bill which has attracted the most comment is Part I, which relates to the proposals concerning the restructuring of NAT'S. First, I wholeheartedly welcome the Governrnent's commitment to the two-centre strategy and the building of the new facility at Prestwick. This has been keenly sought and will greatly benefit the economy of Ayr and Ayrshire. The overriding factor in all the discussions and for all those involved in the debate has been safety. At the heart of the issue are fears that a private sector company cannot provide the necessary guarantee of safety. I find that argument rather curious.

I have heard rehearsed before, not least by the Deputy Prime Minister in relation to Sellafield, in terms of the argument of safety in the public and private sectors, that it might be possible to dispute whether or not recent discoveries of problems there were due to a move towards privatisation or whether such problems came to light when the pre-privatisation audit was undertaken. What is beyond dispute is that Dounreay, which has never been considered for privatisation, has a record which, although improving, has been far from exemplary and is still far from perfect. Being in the public sector is no guarantor of safety.

If, indeed, the link between the pilots and ground staff is key, it seems extraordinary that this should work well when the pilots are in either the private or public sectors, but only if NATS staff are wholly in the public sector. The provision of ground services, perfectly satisfactorily, by the private sector in a number of UK airports is deemed to be irrelevant by most critics.

I have no doubt that the ethos that has built up in NATS is of great importance; perhaps even more important than the rules that apply. I dispute that all that must change on the introduction of a PPP. The unions have expressed their concerns. I hope that they will continue to press for any sensible improvements in the proposed regime. Ministers have again made clear that they would be prepared to listen to such suggestions, but I do not believe that the basic scheme should be substantially altered.

I understand also that doubts might emerge when a company is seen to cut staff to boost its profits or its Stock Exchange position. But I really doubt that the Stock Exchange would take kindly to a company, part of which had as its prime purpose safety, compromising that safety for short-term financial reasons. That seems an unusually unsophisticated view to take of the stock market. Would institutional investors really be happy to see a company in which they held shares taking steps to undermine its ability to deliver on its core business? Of course not.

Profits can come from a variety of sources, not least from growing the company. The proposed PPP enables NATS to obtain the funding necessary to ensure that the system in the future is as up to date and sophisticated as the increase in traffic which we all expect will demand. No one should underestimate the scale of that task or the potential benefits of remaining ahead of the field in this very competitive market.

I am wholly in favour of the public sector doing and being encouraged to do what it does well. But however strongly that view is held, we have to face up to the fact that there are some things which the private sector does better. It is a recognition of that reality which is behind the Government's proposals.

The Government have sought to combine the very real expertise in operational matters that NATS has with private sector managerial standards which NATS equally clearly lacks. There is nothing intrinsically wicked about that; quite the contrary. It is plain common sense.

For those opposing the Government, a search has been on to find a proposal, not because it is best and nor, indeed, because the individuals support it, but because it might maximise opposition to the PPP scheme. I fear that maximising opposition will mean there will be some very odd bedfellows indeed. Those in favour of the complete privatisation of NATS will find common cause with those who oppose the introduction of the private sector at all. That is not a sensible way in which to proceed.

Perhaps even more importantly, I doubt whether it will be in the long-term interests of this House if we are seen as the place where a battle can be taken when it has been lost in another place. There is a world of difference between the second Chamber amending and improving and providing the time for consultation and reflection, and the second unelected Chamber overturning a clear government proposal backed by the other place by a clear margin. I very much hope that will not happen and that the proposals charting the way forward for NATS will be supported here as they were there. I wholeheartedly welcome and support the Bill.

8.48 p.m.

Baroness Hamwee

My Lords, the debate has been marked by a length and range matching those of the Bill, and particularly by three maiden speeches, different in content but similar in the authority of the speakers. I am delighted that we have another three effective women in the House with a great deal to offer. The congratulations of this House sometimes smack of protesting too much because we are flowery in our language. I hope that the three maiden speakers will accept the sincerity of the congratulations which have come from all quarters.

The Minister described the Bill as the first comprehensive Transport Bill for over 30 years. It has been said to me that the only thing integrating the Bill is a set of staples. That is a little harsh. As stated by my noble friend Lady Scott of Needham Market, transport is a facilitator not an objective in its own right. It is important for achieving economic development, including access to jobs; in land use planning, housing and health. We have talked often in this Chamber of the problems of children with asthma.

I welcomed the context in which the right reverend Prelate the Bishop of Hereford put the Bill. He suggested that it cannot address the growth of population, but I join him in pausing for a moment over the Minister's description of air traffic as, "inexorably expanding". The Government seem to be in danger of taking the slightly defeatist, weary view of air traffic that they do of road traffic. I hope that the noble Lord, Lord Whitty, will take the opportunity to explain the Government's attitude to traffic volume and growth and their effect on the environment. As we know, the Government pledged to reduce the rate of growth, rather than an absolute reduction in levels. That reminds me a little of the claim of the Conservative government that they were being successful when they were reducing the rate of growth of inflation rather than reducing inflation itself.

Sustainability is mentioned in the Bill, but not as an overarching objective. I believe the Government said that they will keep under review the contribution of the railways to sustainable development objectives. That made me wonder which comes first, the cart or the horse—no transport pun intended. Nor is there an overarching objective of equality of access. Those who have, for instance, mobility problems, have a specific interest in integration.

A thread which ran through the debate is that of safety, particularly commented on by the noble Baroness, Lady Gibson. On that note, I am sorry that the opportunity has not been taken in this Bill to address the question of speed limits on roads.

Safety is of course particularly important in the context of NATS. The Minister told the House that this not a sale without safeguards; that there will be a legally-binding contract. Speaking as a solicitor, I would prefer to see statutory provision rather than a reliance on contract. We are told that the government director on the board of the company will have a special responsibility for safety. I shall be interested to know whether the Minister can tell the House, particularly in the context of plans for an offence of corporate manslaughter, whether or not there will be Crown immunity.

One only needs to travel on a plane which loses its take-off slot to realise how fine is the timing; how delicate is the task of air traffic control, although I am sure other noble Lords have noted that the blame is always placed on Belgian air traffic control. One only needs to read reports of what is termed rather euphemistically as an "air miss", (in my language almost a collision) or of airlines which cut very fine the amount of fuel they carry, relying on not being stacked over airports, to realise the problems involved.

I agree with the noble Lord, Lord Clinton-Davis, that the Government have not begun to justify the proposed share structure and the possible dilution of the Government's interest in the plans contained in the Bill. Is it not true that, yet again, the PSBR rules are obstructing investment, as the noble Lord, Lord Lea of Crondall, hinted (perhaps more than hinted) and that accountancy is obstructing the best decision making? Of course I appreciate the need for investment, but I worry about some of the arguments. The noble Lord, Lord Elder, repeated the argument of NATS that profitability can be increased by growing the business and exporting know-how. I do not deny that that may be a possibility, but I suspect that the opportunities for doing so must be limited. I note also in the Bill that the general duty on the Secretary of State puts airlines and airports before customers.

Members of the Benches opposite have had some fun about the co-operation (or otherwise) between the Opposition parties in relation to these proposals. It was said that we are just playing politics; that we will have talked about whether and how we will oppose the Government. Thanks for the idea; perhaps now we o will. As my noble friend Lady Thomas of Williswood said twice during this debate—it did not stop the accusation continuing—there has not been discussion. Perhaps there should be, because politics is about real aims and outcomes and not about playing. But I am puzzled that, given the less than wholehearted support of the Government Back -Benchers for NATS, one might have thought that they would not play politics but would look for a way of persuading the Government to think again. I do not know whether their approach is their search for an excuse for not having to vote where their mouths are.

I turn to local transport plans and parts of the Bill that we welcome far more. I welcome the acknowledgement of the role of local authorities, although I confess that I should like to see them set more in the context of regional policy as well as other areas. My noble friend Lord Bradshaw talked about the enforcement of bus lanes. That leads one on to arguments about resourcing the police or possibly transferring the responsibility for enforcement. But I accept that the Bill cannot cover everything.

With regard to buses, as my noble friend Lord Bradshaw illustrated, integration and competition do not lie easily together. The noble Lord, Lord Morris of Manchester, said that through ticketing on a multi-modal basis is the ultimate test of integration. I suggest that so too is integration of information; for example, being able to find out before one gets on a train what is happening with the bus service at the other end of the line. I trust that local authorities will share their customary enthusiasm for innovation in the use of new technology in providing information. They have certainly shown an innovative approach in the use of "old" technology—that may not be the right description when one talks about "walking buses" to which the right reverend Prelate referred. But I too am aware of schemes which have been very successful.

I look forward to the discussion in relation to the scope of quality partnerships, and agree with those, including the Local Government Association, who argue that they should extend to fares and frequencies. Also, during the course of the Bill, I shall seek assurances that standards include the standards of driving buses and the training and retention of drivers. I am sure noble Lords will be aware, either through experience or through the media, of the real danger in which some passengers are placed through sloppy driving.

By definition, quality partnerships should include everything that the partners wish to include, subject perhaps to legislative minima. I am puzzled as to why the Bill limits the criteria. The noble Baroness, Lady Byford, rightly spoke of the specific needs of rural communities, to which partnerships should have regard. And we will also be discussing the issue of equality in the area of concessionary fares. The noble Baroness, Lady Greengross, mentioned those and the Liberal Democrats support equality in that area. I would prefer to see the Bill deal with that rather than a legal challenge to the unequal provision currently on offer.

I turn now to congestion and workplace charging. The noble Lord, Lord Dixon-Smith, and other Members of the Conservative Benches described them as taxes. The noble Lord, Lord Montagu of Beaulieu, spoke of congestion charging being a "last resort". I believe that we need now to look for the solution of last resort, given the problem of congestion. We also need to be clear whether congestion charging is about dealing with congestion or about raising money. I believe it is the former. I agree with Members on the Conservative Benches about the importance of hypothecation and additionality. Those are matters which will assist public confidence in congestion-charging schemes.

Throughout the Bill the Secretary of State needs the consent of the Treasury—the noble Lord, Lord Hughes of Woodside, referred to this—and one wonders whether joined-up government might now allow a Secretary of State not to have the statutory constraint of having it spelt out that he needs to go to the Treasury. I feel that we would accept that as a way of governing generally rather than having to have it spelt out on the face of the Bill. We on these Benches will also be tabling amendments, as we did in connection with the London scheme, to allow local authorities to borrow against the income stream from these schemes.

We want to see local authorities have maximum autonomy and discretion in dealing with such schemes, including charging at out-of-town retail and leisure sites. We also think it is important—I am sure local authorities will be able to work out suitable mechanisms for this—to be able to link workplace charging with green travel plans, as has been mentioned. I must confess that I have some doubts about the likely effectiveness of workplace charging, which I believe will have no effect on through traffic, but that may be because of my experiences in London. I shall willingly accept the judgment of local authorities in that respect.

I utterly agree with other noble Lords who have mentioned the need for charging to follow public transport improvements. That is why, in our view, it is necessary to allow local authorities to borrow in order to invest in public transport. In a briefing that many of your Lordships will have received, the AA says that such schemes, must have an honest framework". We must take seriously the concerns that are expressed about the mechanisms and the detail involved. The CBI has also expressed some concerns. It is because it supports congestion charging in principle that one must take such concerns most seriously.

I turn finally to railways. The Strategic Rail Authority, if not the strategic transport authority, is required because of the tangle of provision⁁or failure of provision—which was so roundly condemned by the noble Lord, Lord Marsh, and others. I confess that I am not satisfied with the separation of, on the one hand, its purposes and, on the other, the duties regarding the exercise of its functions. That seems to me to make both sustainability and integration with other modes of transport secondary issues.

I also note that the franchise director has been set an objective of increasing the number of passengers travelling by rail. That seems to me to miss the point to some extent. Would it not be better to increase the percentage, as absolute numbers are dependent on other factors such as the success of the economy? I should like to see a formal relationship between the work of the SRA and local transport plans. Issues such as safety at stations require a close relationship. I should also like the SRA to have regard to regional transport strategies and, indeed, to contribute to their development.

The noble Lord, Lord Morris of Manchester, referred to the Metrolink service in that city. To a large extent, that service uses existing track that is no longer used by heavy rail traffic. The noble Lord, Lord Faulkner of Worcester, referred to non-operational land. I share the concern that land which might be used, for example, for modal interchange should not be lost and that the role of the British Rail Property Board and Railtrack should not be allowed to be that of a commercial property developer. As the noble Lord, Lord Berkeley, said, the real problem is land.

In conclusion, it was not only the beady eye of the indomitable chair of the Transport Committee of another place that led to such opposition being expressed during the course of today's debate to a major part of the Bill. We on these Benches support much of the Bill—the parts which, as the noble Lord, Lord Beaumont of Whitley, said, affect most people. But we shall want to tweak those. However, we do not support the proposals for NATS.

9.4 p.m.

Earl Attlee

My Lords, it gives me great pleasure to wind up this interesting and good-humoured debate on the Bill, although I suspect that there will be many long nights ahead of us before the Bill is passed. We have had a wide-ranging debate, and I now have little idea of how long my speech will take—

Noble Lords


Earl Attlee

Noble Lords need not worry too much about that. However, before saying anything of substance, I should remind the House that I have an interest to declare as I am president of the Heavy Transport Association. I also have some other minor interests, which I shall draw to your Lordships' attention when appropriate.

When the noble Lord, Lord Macdonald of Tradeston, introduced the Bill, he referred to the 1968 Act of his noble friend Lady Castle. But I do not believe that this Bill is as significant. The noble Lord, Lord Marsh, also referred to the 1968 Act. He mentioned seat-belts and the drink and drive laws that we still enjoy. Although the law has been amended since that time, the Act also introduced our present regime of goods vehicle and HGV licensing.

In his opening speech, the noble Lord, Lord Macdonald, said that there were no plans to introduce charges for existing untolled tunnels and bridges. What assurance can the Minister give me about the future of tolling on the Dartford river crossing when the franchise period ends? The Minister will have several minutes to consider his answer; and I shall remind him if he looks in danger of forgetting it.

I should like to take issue with the noble Baroness, Lady Thomas. I must remind her that my noble friend Lord Brabazon of Tara welcomed some of the amendments announced this afternoon by the noble Lord, Lord Macdonald; he just disagreed with the volume of amendments and the other amendments that will no doubt be tabled in due course.

My noble friend Lord Freeman made some interesting comments regarding the track access charging regime and the need to identify sources of finance for Railtrack. I hope that he will table some interesting amendments for us to debate.

The noble Baroness, Lady Goudie, declared an interest as a director of Clyde port. My understanding is that the port could be highly successful if the continental railways caught up with the UK and became rather more commercially aware. Containers could then be sent by rail from Clyde port directly to southern Europe. Railtrack may also need to make some improvements to the loading gauge. I know that that is a major concern of the noble Lord, Lord Berkeley.

The noble Lord, Lord Hoyle, skilfully teased noble Lords on this side of the House about the differing views of the two opposition parties regarding NATS. The noble Lord would like the Government to think again about NATS. Perhaps it is worth remembering that without some form of alliance on this side of the House the Government will not be obliged rethink the matter at all.

I say to the noble Lords, Lord Clinton-Davis and Lord Smith of Clifton, and others, that our policy is exactly as outlined by my noble friend Lord Brabazon. We are in favour of a full-scale privatisation by means of a public offer for sale. This was contained in our previous election manifesto. My noble friend Lord Brabazon made clear our objections to the Government's plans, which are neither one thing nor the other. At later stages of the Bill we shall move amendments to include our proposals in the Bill. If, however, those amendments do not find favour in the House, we shall support amendments that propose something better than the Government's proposals; for example, the Canadian trust model that has been mentioned and was recommended by the Transport Select Committee of another place. This is exactly what we did at Report stage in another place, so there is no inconsistency in our approach. We want the best future for NATS.

I enjoyed listening to the thoughtful speech of the noble Baroness, Lady Turner of Camden. She referred to the problems of the partially disabled on the Underground. However, if escalator failures make it impossible for the partially disabled to use the Underground, they also make it deeply unattractive even for reasonably fit people carrying luggage. It will be interesting to see whether the Mayor and the GLA can secure any improvements in that regard.

I listened with care to the speech of the noble Lord, Lord Berkeley, with much of which I agreed. I shall have to reserve my position on the station services argument that he articulated but I believe that his amendment will lead to a useful debate. His comments about new rolling stock always cause me alarm. One has to ask who is paying for the loss of use of this new rolling stock? What is the Secretary of State doing about that?

I am grateful for noble Lords' support for my tachograph provisions in the Road Traffic (Enforcement Powers) Bill that the Minister unfortunately accidentally left out of the Brill we are discussing! Noble Lords should be aware that I intend to table numerous other amendments aimed at raising the standards, safety and profitability of the road haulage industry. My aim is to reduce or eliminate unfair and illegal competition while avoiding excessive regulation.

My noble friend Lord Brabazon summed up most of our objections to the Bill. I should like to add my comments on some of the more undesirable clauses and their likely effect. The Bill is partial privatisation by stealth, centralisation by stealth, re-regulation by stealth and taxation by stealth. It is renationalisation of the railways by the back door. The Bill does nothing to address the crisis in standstill Britain that the Government are creating.

Many noble Lords will be particularly concerned about the plan to levy yet more taxes on motorists. We have read recently that petrol has reached nearly £4 a gallon. However, I wonder how many noble Lords remember that just three years ago the price of petrol was about £2.65. Many unsophisticated motorists believe that the marginal cost of using their car comprises only the fuel. As noble Lords will be aware, 80 per cent of this cost goes directly to the Chancellor. The Chancellor now takes £8 billion more per year than he did in 1997. The average British motorist spends £270 more per year for petrol and diesel fuel than he did three years ago. I am sure that the Minister is considering carefully the electoral consequences of this policy.

On top of that, the Government now want to levy more taxes on motorists who drive into town centres or who park at work. However, I am not clear how motorists will be deterred from using their cars if the already high taxes—which comprise 80 per cent on the cost of fuel alone—do not do so. I believe that these new taxes will result in a short-term reduction in traffic, but those people who are deterred from travelling will be replaced by more affluent motorists taking advantage of less congestion on the roads.

The noble Lord, Lord Marsh, pointed out that traffic congestion has never brought a city grinding to a halt, occasional gridlock excepted. I think that he was suggesting that congestion itself limits traffic growth. I have some sympathy with that view. Noble Lords should not misunderstand me. I fully recognise the need vastly to improve the utility and the effectiveness of buses but I do not believe that the new taxes will achieve that. Ministers have to realise that one cannot begin to have a debate about congestion taxes when fuel taxes are so high and so little is being spent on roads and public transport—far less than the previous government spent.

For instance, noble Lords will be alarmed to discover that in this year's local transport settlement the Government allocated just £18 million to towns that had expressed an interest in introducing congestion charging to enable them to provide improved public transport in advance. There is not much incentive to put the horse before the cart.

The Minister stated that hypothecation was a new development for the UK. However, many noble Lords are concerned about additionality. In being so concerned, they have no doubt studied the history of vehicle excise duty. When that was introduced it was supposed to be hypothecated; indeed, it was called "the road fund licence". Now it is just another tax and a valuable source of income for the Chancellor.

But who will be exempt from these new charges? Cases can be made for many essential road users. What about emergency vehicles; motor-cycles; disabled cars; school vehicles; cars driven by doctors on call; cars driven by volunteer workers on their way to work; cars driven by teachers; taxis; and rescue and recovery vehicles? And what about Ministers and parliamentarians? Will they have an exemption?

The Government's plans for the railways are simply based on a desire to control the railway centrally. The Secretary of State wants to be able to interfere with the train-set rather than let the industry get on within a suitable regulatory environment. It is worth remembering that since the 1993 Act, both passenger and freight activity has increased significantly, and the noble Lord, Lord Macdonald, waxed lyrical about the increase in investment post-1993.

Since privatisation, managers in the railway industry have ceased complaining so much about a level playing field with regard to road haulage. They are now much more concerned with the availability of train paths from Railtrack and rolling stock from industry.

No one is saying that the 1993 Act was perfect. There is indeed a role for the SRA to help the industry develop, but not for the rebirth of the old British Railways Board in a new form. We are opposed to the Secretary of State having new powers to direct investment; we are opposed to him being able to interfere in access agreements; and we are opposed to unlimited fines. Noble Lords must remember that Railtrack is a commercial organisation and that recent activity by the Government and the regulator has damaged its share price and hence its ability to raise the necessary finance on the market. We are opposed to the other measures in the Bill that will allow more political interference and less enterprise. On the railway, as in all other transport areas, passengers' needs must come first, but this Bill seeks to delay improvements while the Government play ideological politics.

The noble Baroness, Lady Thomas of Walliswood, stated her concerns about the proposed new structure of the rail industry. We have sympathy with some of what she said, but not everything.

Much has been said about the safety of the railway industry. Can the Minister say whether any safety performance indicators have shown a sustained negative trend since privatisation?

With one notable exception, the Bill does little about road safety. I am extremely grateful for the kind comments made by Ministers about my efforts with my impounding Bill. I am very pleased that the Minister has included it in the Bill.

In the United Kingdom we have a relatively good safety record, but there is room for considerable improvement. The Minister's road safety strategy document usefully identifies a number of requirements for primary legislation. We shall be helping the Minister by tabling suitable amendments. He should he aware that there is considerable cross-party support for many of them. The noble Baroness, Lady Thomas of Walliswood, has already indicated support for my tachograph amendment.

In addition, I and many noble Lords from all sides of the House will be tabling numerous and, I fear, technical amendments. For instance, how many convictions must an operator of goods vehicles collect before he automatically loses his "good repute"? There is considerable uncertainty in the road haulage industry as a result of badly drafted legislation. This issue must be cleared up. I suggest that this Bill is an ideal opportunity to do so.

Section 33 of the Immigration and Asylum Act covers the issue of illegal immigrants entering Britain by lorries. It seems to me grossly unfair and I shall be tabling amendments to the Act by means of this Bill. As I understand it, the Secretary of State sets the £2,000 fine, determines guilt and then hears any appeal. I am not going soft on illegal immigrants, but I do not think that this is the right approach. First, it conflicts with ECHR; secondly, it sets the rate for bringing an illegal immigrant into the country at about £2,500—£500 for the driver and £2,000 for the fine if he gets caught; and, finally. I do not think it solves the problem.

I turn now to a couple of general points about the Bill. This is a huge Bill that will occupy the House for many hours, many of them late or very late at night. It would have been better to have had three or four Bills. Indeed, the rail proposals were already submitted in last year's Railways Bill, but such is the Deputy Prime Minister's lack of influence that his Bill did not reach the Commons until far too late in the legislative timetable and so failed due to lack of time. We are glad to see that those proposals have been included in the Bill because we will now have a chance to show how misguided they are.

My noble friend Lord Brabazon of Tara mentioned the vast number of amendments that were tabled in another place. I have no doubt that noble Lords will prepare a similarly impressive array of alternative wordings. Furthermore, the Minister has already identified a number of errors and omissions. I am tempted to organise an opposition sweepstake for the number of government amendments. My guess is that there will be around 500. Indeed, would the Minister like to join us in our sweepstake? I do not think that there will he any conflict of interest as probably he, too, does not know how many government amendments will be required. The noble Lord, Lord Macdonald, appears to have succeeded in his tough negotiations with the Government's business managers to find space for some of his own amendments.

Transport is a vital issue that affects us all and it should not he forgotten that it constitutes a major part of our economy. At the moment, people and businesses are getting a raw deal from the Government. The Prime Minister realised that when he demoted the Deputy Prime Minister and promoted the Minister, the noble Lord, Lord Macdonald of Tradeston. The Government would like us to believe that this has brought great benefits, but in reality all that has changed is the rhetoric. The Government pretend that they are now the motorist's friend, but the facts show that taxes are rising and investment is falling. In the meantime there is standstill on the roads, standstill on the railways, standstill or stand-up on the Tube and standstill in the air. The only area where there is no standstill is in the ever-growing number of leaked stories about the Government's so-called 10-year plan, which in reality is only a measure of their lack of progress.

We look forward to seeing the final format of the Bill once our work in this House has been completed. We shall look carefully at the existing small print and address any omissions. On the evidence of the Bill, however, it is clear that the Government are still stuck in the slow lane.

9.21 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

My Lords, this has been a very interesting debate—at least so far. I have the task of responding as best I can to the many contributions and wide variety of points that have been made about the Bill. We have heard a broad range of speeches, including contributions from at least two former Ministers of Transport and three maiden speeches. From the remarks that others have made, I do not think that I would be wrong to say that I am not merely observing protocol when I observe that they were among the best speeches made in the course of our debate.

I was grateful to hear from my noble friend Lady Cohen of Pimlico. Those who have been Members for some time would not assume that asking daft and repetitive questions is entirely confined to the first few weeks of membership of this House. I was interested to learn of my noble friend's early career in which, many years ago, she developed public/private partnerships, possibly even before those set up by my right honourable friend the Deputy Prime Minister. That will stand her in good stead, as will her experience and knowledge of safety management. I hope to see her as a regular contributor to transport debates in this House.

The noble Baroness, Lady Scott of Needham Market, is known to me when wearing her road safety hat in her position on Suffolk County Council. She has been a leading light on road safety matters, as well as on other transport issues. I agree totally with her observation that the local transport plan is the main motor driving a great deal of our transport policy., but that it needs to link in with regional and national transport plans, as well as with wider issues such as land use planning and environmental policy. Indeed, her speech could well serve as an advertisement for my right honourable friend the Deputy Prime Minister's department. I shall commend her words to him.

I was also grateful to hear the maiden speech of my noble friend Lady Gibson of Market Rasen, who is a long-term acquaintance through the trade union movement and the Labour Party. Her role as a commissioner on the Health and Safety Commission has been extremely important. Furthermore, her knowledge of rail safety and transport safety in general is very helpful to our debate. It is no doubt partly due to her influence that we have seen an increase in resources for rail safety and other areas related to transport, a point that was referred to earlier in the debate. I am very pleased to welcome her presence in this House and I look forward to her involvement in transport debates.

A number of themes were introduced during the debate. A major theme referred to by my noble friend Lady Cohen is that of innovative ways in which to mobilise resources for transport. It runs through the whole debate. There are knee-jerk reactions against it from all sides of the House, but we are looking for new ways in which to bring income resources and capital, and indeed management expertise, into the transport field. At the same time, we are deeply concerned about safety on the roads and railways and in transport generally. It is important that the effective regulation of safety is separate from operations.

It is important, too, that transport solutions are addressed in a local context. Local transport plans are the dynamo of this whole approach. The broader environmental dimension is also important, as the right reverend Prelate drew to our attention, and it runs through much of what we propose in the integrated transport White Paper. It is the result of the powers in the Bill; and the means of delivery of the provisions in the Bill is through local transport plans. The establishment of the Strategic Rail Authority provides for far more effective regulation in that field.

The noble Lord, Lord Brabazon, attacked the putative introduction of a public private partnership in air traffic control as a "botched privatisation". We are, however, dealing with the legacy of a botched privatisation of the rail industry. I was grateful, therefore, for the support of the noble Lord, Lord Marsh, who said that we need a strategic authority: whatever the ownership of the railways, we need a rail strategy and we need to ensure that we can enforce it. Therefore, the introduction of a Strategic Rail Authority is an important facet of the Bill.

The noble Lord, Lord Brabazon, referred to the Bill's length—despite the fact that almost every other contributor was attempting to add to its length! It is indeed a large and complex Bill. The noble Lord also complained that it has taken us three years to produce it. That is not entirely true. As the noble Earl, Lord Attlee, admitted, a large part of the Bill was before the House of Commons last year. The noble Lord complained also that it has taken us three years to produce a 10-year transport plan. That follows on 18 years when there was neither a comprehensive legislative framework for transport, nor sufficient resources, and when there was no transport strategy. We have been left with a deeply fragmented, internally inconsistent approach to transport ever since. Therefore, I do not think that the Opposition Front Bench can criticise us too much for taking the past two or three years to get this right.

I should refer also to potential collusion between the two Front Benches. I should like to exempt those on the Liberal Democrat Front Bench. My noble friend Lord Hughes referred to their innocence in these matters and I am prepared to go along with that. Nevertheless, we have some track form in this matter: we have the vote in another place. The Conservative Front Bench voted for a Liberal Democrat amendment put forward in good faith which was totally contrary to its own position. In a sense it does not matter in the House of Commons; they can play games there. Here, it does matter, and I hope that we shall not see that degree of cynicism from the Conservative Front Bench in this place. I shall try to refrain from making further party-political points.

The noble Lord, Lord Brabazon, asked about amendments to the Bill. There will be some amendments. My noble friend Lord Macdonald of Tradeston spelt out clearly the scope of the amendments that we intend to bring forward—subject to any arguments that convince us in Committee—and that they are limited. At most, they will apply to 12 main areas. I assure the noble Earl, Lord Attlee, that they will be significantly fewer than 500. I am not prepared to place a precise bet on these matters, but I suspect, given what the noble Earl said, that they will probably be considerably fewer than he himself proposes to pursue. So if we sit late hours during the passage of the Bill it will be a matter to lay at the noble Earl's door rather than the Government's.

I now turn to individual subjects, beginning with the public/private partnership for National Air Traffic Services Limited, NATS, which probably attracted most contributions.

My noble friend Lord Clinton-Davis, in his intervention in the speech of my noble friend Lord Macdonald of Tradeston and subsequently, made clear the concerns on safety and other grounds. I take those concerns seriously. I take seriously in particular the need to address the safety issues. But we also have to face the fact that everybody is agreed that safety should be separated out from operation. The Bill provides for that very clearly. The present situation does not. Everybody is agreed that we need substantial investment in air traffic control over the next few years. Everybody agrees that we need better management and a higher degree of expertise in project management. The Swanwick project is hardly a great example in that respect. And everybody agrees that we need to be in a powerful leading-edge position in order to engage in the Eurocontrol developments that are likely to follow.

All of those matters require a change in the manner in which we manage air traffic control. The Liberal Democrats want to put it in a trust. The trade unions by and large want to keep it in state ownership. The Conservatives want it totally privatised. We have a fourth way. We want to take the positive elements of all approaches and put them together in a partnership approach. The imaginative nature of our proposals has escaped some noble Lords, because they are stuck, thinking of things in a very narrow and ideologically determined way.

Our solution will mobilise private capital, not primarily through the sale, but through the ability to tap into the capital markets over time, for huge investments are needed. It will separate out safety and make it clear that there is a major safety responsibility on management at the same time. It will provide a stable framework, which air traffic control has not had, because of variable funding, over the years. It will put us at the cutting edge of technology and give us a lead in Europe.

We can argue among ourselves about the exact structure and ownership of the financial organisation of the future NATS. But let us not use safety as an argument about financial structures. As my noble friend Lord Elder spelt out very clearly, there is no intrinsic difference between the private and the public sector on how safely they can deliver an operation. We have poor examples in the private sector and we have poor examples in the public sector. Safety in our regime will be paramount. That is the essence of air traffic control. My right honourable friend the Deputy Prime Minister is absolutely committed to that. A structure of safety will therefore be effected. There will no doubt be arguments in Committee about the precise financial structure, but let us not confuse the two issues.

We are not doing the PPP solely for financial purposes. We are also doing it in order to mobilise expertise. But even on the money side we are not just talking about the sale; we are talking about mobilising long-term capital support for the project. The noble Lord, Lord Smith of Clifton, said that this was not value for money. Clearly, if it were not value for money we would not be proposing this course of action. But it is a way of mobilising money which is not likely to be available from public or limited trust company sources. The safety regime is set down and enforced by air navigation orders made under the Civil Aviation Act. That gives the CAA as regulator wide-ranging powers and it can tighten the regime further.

All respondents to the PPP consultation have been asked how the existing safety regime may be improved, and in that context a number of detailed suggestion have been made. In response to my noble friends Lord Clinton-Davis and Lord Hoyle and other noble Lords, we are considering all of these issues together with the NA TS trade unions, other aviation professionals and the safety regulators to see what further measures are desirable in order to entrench the very high safety record of NATS and, if possible, enhance it. I give noble Lords the assurance that those discussions will continue and elements of them can be put in place to enhance safety. I hope, therefore, that the trade unions recognise that the discussions are by no means at an end; they continue. We shall ensure that any ideas on safety that emerge are taken fully into account.

I say to my trade union colleagues that the staff are absolutely key. The future of NATS depends on the quality and commitment of its staff. The noble Lord, Lord Smith, referred to the possibility of staff cutbacks. That is not in the plan and is not the intention; indeed, it can hardly be the reality whoever manages the air traffic control system. As my noble friend Lord Hoyle suggested, there is also a requirement for improved staff training.

The noble Baroness, Lady Hamwee, asked whether safety would rely on a contract to enforce it. No, it will not. Safety will rely on all the existing safety regulations which will remain intact. The noble Baroness asked whether NATS would have Crown immunity. The PPP will itself be designated as a private sector company and will not have Crown immunity in any sense, whatever other discussions on Crown immunity in the wider context of health and safety may produce.

Baroness Hamwee

My Lords, I was interested in the position of any government nominee or representative on the board.

Lord Whitty

My Lords, that raises the wider question of the responsibilities of directors and others in terms of immunity. No Crown immunity applies here. The responsibility of the directors will be no different from that of directors of other companies, but in the context of health and safety further discussions are to be pursued—an announcement as to that will be made in a couple of days—in a consultation paper issued by the Home Office. The government director will be in no different position from others in that respect.

My noble friend Lord Hoyle, the noble Baroness, Lady Thomas of Walliswood, and other noble Lords asked about relations with the Ministry of Defence, in particular the RAF. The MoD fully supports the PPP. The department has been part of the steering group from the outset and has been very much involved. It is fully content that the PPP will deliver what it needs from the air traffic control system. NATS will be under a licence obligation to continue to collaborate with the MoD. There is nothing in those rumours. We are working very closely with the RAF and others on the military side.

My noble friends Lord Clinton-Davis and Lord Hoyle and the Select Committee in the other place have referred to alternatives. It is suggested that the Post Office model should be used rather than the one we have chosen. The Post Office and NATS are very different businesses and each requires a different solution. The Post Office is much bigger and has a higher turnover than NATS but its investment relative to its business is small. The Post Office is increasingly doing business in a competitive situation as compared with UK air space, which is a monopoly that is not exposed to competition. I do not believe that the Post Office model is appropriate. Further, we do not believe that the model of the Canadian trust company advanced largely by the Liberal Democrats can be immediately read across to the UK situation. That model deals with considerably more air space but much lighter traffic. Therefore, that is a much smaller and less complex organisation which does not have assets or income, or at least capital backing; it has mainly debt. We are looking, therefore, for a more stable financial situation for what we propose under our PPP.

My noble friend Lord Lea of Crondall raised a number of issues relating to the European aspect and was almost as nostalgic as the noble Lord, Lord Marsh, in relation to the 1968 Bill. My noble friend and I probably have our initials on the TUC document on integrated transport, circa 1972. At the time it was the last word on this subject. I did not return to the subject for about another 28 years. On the European dimension, we believe that the PPP will place us in a better position to play a key role in the future of air traffic control in Europe. We also believe that there is a trend towards more efficient commercialised air traffic control providers in Europe. We are aware of investigations by the Dutch who are looking at a similar structure to our own. We believe that, if anything, the remainder of Europe will follow us down the road to a more commercialised or joint public/private approach which will have access to greater capital than a purely state-provided air traffic control in Europe would do. That is part of the European Commission's approach to ideas for a single sky for Europe where it will clearly want efficient national service providers and a more integrated and harmonised approach to air traffic control across the European air space. It is an important area.

Perhaps I may correct the position implied by my noble friend Lord Lea on charges. Eurocontrol does not set charges. However, it has a set of principles on which they can be set. Those were changed last year to provide incentives for commercialised providers which would include organisations like the NATS PPP.

The noble Lords, Lord Brabazon of Tara, Lord Clinton-Davis, and Lord Hoyle also referred to the nature of the government share in this context. The noble Lord, Lord Brabazon, raised the issue of the golden share, or the special share. He queried, as did other noble Lords, whether this was being challenged at European level. The special share offers a way to safeguard the essential public interest directly through equity in the company. It does so in a way which does not unduly interfere with day-to-day operational control but it supports the Government's position. Although it is true that the European Commission has objected to special shares in certain cases, those cases do not seem to us analogous with this position. Therefore we are reasonably confident legally that we can go down this road.

In relation to the size of the shareholding, we are starting from the position of a 49 per cent government share in the PPP in addition to the golden share. The legislation provides for the possible dilution of the proportion. However, that would not be possible without a clear government decision. The company itself could not do it. It cannot fall below 25 per cent without a legislative change put to Parliament. In no way is this reducing the value of the government share. It would be simply a reflection of additional capital coming into the company were that to take place. However, there are safeguards over the circumstances in which any reduction can take place.

I was grateful for the words of my noble friend Lord Elder in relation to the two centre strategy and the support that has within Scotland. I can assure him that the PPP company will continue to be committed to that strategy.

In relation to NATS staff pensions, the Government recognise that the staff still have important concerns. They have decided that NATS staff who were in the employment of the company at the time the PPP was established should be entitled to remain in the Civil Aviation Authority's pension scheme. The company would participate in the scheme as a non-associated employer. Existing pensioners' positions would remain unchanged, therefore, in accordance with the undertaking given. They continue to belong to the CAAPS and receive the benefits that the scheme offers.

Clearly, we shall return to many of the air traffic control issues and I have taken 20 minutes explaining the position. However, the core of the Bill rests elsewhere. The Committee will look in detail at air traffic control, but it also needs to look in detail at some of the other areas.

As regards local transport plans, which are the central part of the Bill, I can underline the points made by the noble Baroness, Lady Scott, and my noble friend Lord Morris about their importance. My noble friend referred in particular to Manchester; to the role of quality partnerships and the support given to the Metro in Manchester. I can assure him a similar step in improvement in local transport plans will be welcome and will no doubt be referred to in the 10-year plan of my noble friend Lord Macdonald. I can also assure my noble friend Lord Berkeley that walking and cycling are still key components of local transport plans and safety in general is a major part of the guidance to local transport authorities in drawing up those plans.

The noble Lord, Lord Beaumont of Whitley, referred to road traffic reduction targets in this context. We issued a detailed document in reaction to the national road traffic reduction legislation in January. It indicated that the national volume of traffic was probably not a useful indicator, as he accepted. We will be looking at objectives, targets and benchmarks related to congestion and pollution and will expect authorities to develop their own particular types of target to reduce the volume and congestion element of traffic within their areas.

The main area of concern about local traffic plans related to buses. They are an important part of our integrated transport policy, as my noble friend Lord Hogg underlined. The aim is to accentuate the positive parts of the earlier legislation, but also to eliminate its negative effects. I can assure him and other noble Lords that the difficult and delicate relationship between the local authorities and operators will be preserved through the system, but we need to move from the status quo, which is restrictive on what can be done between local authorities and the operators, to a system where quality partnerships are the norm and in some cases quality contracts will need to be entered into.

I also note the point made by the noble Lord, Lord Bradshaw, about buses in general and about bus lane enforcement in particular. We will consider that, together with his points in relation to the powers of the traffic commissioner. We are keen to learn lessons from the London pilot schemes in relation to bus lane enforcements and regard that as a particularly important part of ensuring that public transport gets through and an important part of improving traffic flows in general.

The noble Lord, Lord Brabazon, and others referred to the suggested need for bus quality partnerships to include timetables and frequencies. There is an important distinction between quality partnerships and quality contracts. Quality contracts give local authorities detailed controls over timetables and frequencies. It would not seem right to blur the distinction between two separate legal concepts and, in partnership terms, much give and take can be undertaken between operators and local authorities. However, in terms of legal enforcement of timetables and frequencies, that would only be in the context of quality contracts.

I can assure my noble friend Lord Hogg that quality contracts will not be the norm. That would be a major departure from the current arrangements because they would give operators exclusive rights for up to five years to run services to a local authority's specification and performance criteria. In general, that can be done through partnership, but in order to encourage those partnerships it is important that the power to move into quality contracts exists.

However, we shall ensure that moving into quality contracts is subject to a strict test. The Bill as amended in another place provides that the local authority must be satisfied that quality contracts are the only practical way to deliver the local authority's bus strategy. I hope that that gives my noble friend Lord Hogg the reassurance that he required.

The noble Lord, Lord Bradshaw, and others raised the issue of competition and competition powers. We have made a number of changes to the Bill in another place to ensure that the new powers of local authorities are subject to a tailor-made competition test. Clause 141 and Schedule 10 will ensure that the powers cannot be used to favour particular operators but can be used to benefit passengers, even though otherwise the OFT may judge them to have adverse effects on competition. I believe that that is a major move which recognises the reality of the type of arrangements which must be made in the relationship between the local authorities and the operators.

It was also made clear in another place that the OFT is at this moment consulting on a draft block exemption for ticketing schemes. That is very important and we hope that some way may be found, either under Clause 124 of the Bill or quite independently, to decide whether such arrangements are exempt from the Chapter I prohibition in the Competition Act. I believe that that matter is still under discussion, and I hope that your Lordships will regard this as a commitment on that front.

The noble Lord, Lord Bradshaw, suggested that there should be a much wider exemption for bus operators from the provisions of the Competition Act. I believe that we shall probably debate that issue at some length in Committee. We want to maximise the benefits of an integrated approach but, on the other hand, competition also provides a way of getting benefits to the consumer. Therefore, we need to find a balance. We believe that broadly the position is right but we shall consider further arguments in that respect.

The noble Baroness, Lady Hamwee, rightly referred to the fact that sharing of information is probably the most important aspect of co-operation between operators and between operators and local authorities. Our initiative on Transport Direct helps to deliver many of the benefits of an integrated information system which will be developed not only for bus timetables but also for train and other public transport provisions. Therefore, through-ticketing arrangements are reflected also in the through-information system.

In relation to buses, the noble Lord, Lord Brabazon, also suggested that there was a hidden power in Clause 142 to abolish fuel duty rebate. So far as that is concerned, I believe that to some extent he has the wrong end of the stick. Fuel duty rebate is being examined because it may not be the best way to subsidise the bus industry. Possibly we need to look at a more flexible approach to the way in which we subsidise and provide grants to the bus industry. At the moment, it tends to benefit particularly the least fuel-efficient buses. Therefore, we are examining that matter. However, it is not a way of abolishing fuel duty rebate altogether, as he seemed to suggest in his earlier remarks.

With regard to concessionary fares, I am grateful for the welcome that has been given both to the basic provision and to the extension for the disabled, which my noble friend Lord Macdonald introduced. With regard to the further concerns in relation to the question of whether or not there should be a national system, I can see the attraction of such a system. On the other hand, it would represent a major departure from the present position in which schemes are local authority-based and it would be quite bureaucratically complex. We recognise that a national bus pass is an attractive idea and we have suggested to the bus industry that it might look at industry-based schemes which in effect would deliver a voluntary industry-based scheme. I shall be glad to discuss that further, both in Committee here and with the industry.

The suggestion was also made that we should look again at age discrimination between men and women. We debated that matter at some length during the GLA Bill. Veterans will recall that I insisted that the concession relates to retirement age. Although eventually there will be some harmonisation of retirement age, at the moment we see no reason to depart from the provision that bus passes come with retirement age.

The noble Baroness, Lady Hanham, asked how the concessionary fares scheme would be paid for. In the announcements made earlier in the year, it was made clear that the scheme would be met from public expenditure. Therefore, the minimum concessions would be met centrally by provisions through the rate support grant. I believe that that is the information the noble Baroness sought.

Road-user charging is perhaps the other main controversial part of the Bill. I was challenged by the noble Baroness, Lady Hamwee, to say whether that is a revenue-raising or transport management measure. It is both. We require revenue as hypothecation backing to transport schemes but it is also a means of demand management. The noble Lords, Lord Montagu and Lord Marsh, said that congestion rations itself and the motorist has had a rough time. The real cost of motoring from 1975 to 1999 did not increase, whereas the real marginal cost of public bus transport rose 80 per cent. We must do something to change the marginal costs and reduce the attractiveness of using cars, particularly in congested urban areas.

The Bill provides for local authorities to introduce road-user charging schemes and workplace parking charges. It requires that all proceeds will be directed into real improvements to local transport, so they are not taxes in the normal way that the noble Lord, Lord Dixon-Smith, refers to them. Nor are they stealth taxes. We are pretty up front about that. The Bill also requires that local people are fully consulted, particularly the business community, and that some public transport improvements be made before charging starts. Schemes will be well researched—to take up the point made by the noble Lord, Lord Montagu—to ensure that they have a real impact on solving congestion and do not just raise revenue.

Because of all the pre-requisites, we expect that charging schemes will take four or five years to implement, although there may be small-scale schemes before that. In London, the introduction of such a scheme comes under Greater London Authority legislation and relates to the mayor's own strategy. Again, full consultation will be required by the mayor. He has clearly indicated that he will consult widely and take business interests into account. In his case, the scheme will need to be seen in conjunction with improvements in public transport in London. Although London may be slightly ahead of the game, it is not treated differently from other areas except that it is the mayor's decision.

Workplace parking is our other measure for altering the marginal costs of motoring relative to public transport and providing additional resources. Local authorities will be given the power to introduce workplace parking areas. There will be national exemptions for emergency vehicles and disabled persons and exemptions or concessions for parking at NHS hospitals—the details are still being worked out. Exemptions can be introduced at local level and could include concessions where employers introduce green travel plans on the lines to which the noble Lord, Smith of Leigh, referred in respect of Manchester airport. We are not necessarily promising that to Manchester airport—it will depend on local decisions. That is another means of ensuring that local employers develop green transport plans.

The noble Lord, Lord Dixon-Smith, and others referred to such schemes as taxes on employers. The main expense to employers is precisely the huge costs that congestion in urban areas and inter-urban networks impose on business. The schemes will partly offset congestion costs, reduce delay, cut the cost of goods being on the road, and reduce the expense of managers and sales people being on the road. The proposed costs are nothing compared with the huge costs imposed on business by failing to tackle congestion in the past 20 years.

We do not expect any generalised charging on trunk roads for many years. We will use the interim to promote debate on how trunk road user charging could be introduced and to develop a better understanding of problems such as diversion—which the noble Baroness, Lady Byford, raised in relation to small towns and rural villages. We need to examine the technology of possible charging and other means of traffic management on the motorway network. Therefore, we are not providing general powers within the Bill until we have had that debate and are clear what we want to do. The powers in relation to trunk road networks relate only to the situation where local transport schemes cover an area which is a highways authority road and the powers to charge on bridges and tunnels.

The noble Earl, Lord Attlee, asked specifically about the Dartford crossing in this context. It will come as no great surprise to noble Lords—I seem to remember an exchange with the noble Lord, Lord Dixon-Smith, a few months ago on this very issue—that we will be continuing to consult on the continuation of road user charging on the Dartford crossings. I do not wish to pre-empt the outcome of that consultation in this debate.

There has been reference to hypothecation. The hypothecation guarantee is not indefinite because, in the medium to long-term, reserving all charging revenue for local transport may not enable value for money criteria to be met. Nevertheless, the 10-year minimum hypothecation is in the Bill. Longer periods of hypothecation can be agreed at the outset on a scheme-by-scheme basis if it is justified; for example, by the need to finance a longer-term PFI deal. There will also be a general review of hypothecation arrangements before the first 10-year period has elapsed so that future arrangements can be decided.

I say to my noble friend Lord Hughes that we have already circumvented the Treasury rules in this context with the very full and vocal support of the Chancellor of the Exchequer and the Treasury itself. This is a new way of mobilising more funds into public transport and into road improvements in a way which also has the beneficial effect of improving the traffic management in the area concerned. That seems a sensible relaxation of Treasury rules and one which could be applied in transport generally. We are certainly keen to see local authorities taking up the options under these provisions.

Somewhat surprisingly, there were only two brief references to the issue of streetworks in this debate. My noble friend Lady Turner of Camden referred to them. The noble Lord, Lord Peyton, was in his place at the beginning of this debate and will doubtless be promoting his own Bill in this respect shortly. There is clearly deep concern in this House. Your Lordships will be aware of the action that we have currently put in hand to use the powers under the New Roads and Street Works Act 1991 to provide for charging for streetwork overruns. We will be introducing regulations under that provision later this year. We have not ruled out further action but we will no doubt have a serious debate on this matter later during the passage of this Bill.

I move on now to rail. Clearly, the creation of the Strategic Rail Authority provides a new sense of direction for the rail industry to face up to the challenges of this century. It is important that the SRA works very closely with Railtrack and with the operating companies and indeed, as the noble Baroness, Lady Wilcox, indicated, with consumers. It is important that the rail passenger council has an independent view on these matters and is built in to the decision-making.

The SRA provides a new start for the rail industry. It has already started, in its non-statutory form, to develop strategic priorities. The ability to provide longer franchises through franchise replacement will enable train operators to offer far more long-term investment and long-term commitments.

To answer the noble Lord, Lord Freeman, the Government's contribution will be known when the current spending review is completed. We shall publish that in the context of our 10-year investment plan. Clearly, public and private resources will be needed. I was grateful to the noble Lords, Lord Freeman and Lord Marsh, for bringing their experience to register at least some degree of support for the Strategic Rail Authority's role. I do not necessarily follow the precise arithmetic of the noble Lord, Lord Freeman, in relation to the gap to which he alluded, but provision will be made through the activities of the Strategic Rail Authority directly under the new franchising arrangements. Other public money may well be provided through the 10-year plan. I fear that the noble Lord will have to wait until at least July or possibly slightly later in the year for the details. But we recognise a resourcing problem.

As the noble Lord, Lord Marsh, said, it is extremely important that we secure new investment; that we secure a long-term framework for that investment; and that we secure a new partnership between government and industry in the railway industry.

It is important that all the regulating authorities work together. It is important that it is seen as a cooperative exercise and not, as noble Lords have implied, as a threat of back-door nationalisation. The SRA will have stronger powers. I was distressed to hear the noble Earl, Lord Attlee, put on record that some of those stronger and more effective powers will be opposed by the Opposition. That is not a constructive and sensible approach even from the perspective of the Opposition. Certainly, we shall defend rigorously our commitment to more effective regulation within that area.

Safety on the railways is a very important part of our consideration. Lord Cullen has started his inquiry and we expect his report by the middle of next year. All of his recommendations will be considered and dealt with urgently and seriously. To answer my noble friend Lady Gibson and others, where immediate improvements to rail safety can be made without preempting the report of Lord Cullen, we are making them. We are taking measures to change Railtrack's safety responsibilities so that responsibility for accepting railway companies' safety cases will transfer from Railtrack to the HSE, and the Safety and Standards Directorate will, as my noble friend Lord Macdonald said, be removed from Railtrack's direct control into a subsidiary company with a separate chair and board. Those changes will be implemented immediately.

I welcome the reference by my noble friend Lord Berkeley to the increased co-operation between the CBI, the Freight Transport Association and the rail freight industry to try to create a cross-modal approach to freight. The SRA will have a key role in developing rail freight. There are naturally concerns about what has been the past attitude of Rail track and what we need to do now. I understand the concerns also about property sales referred to my noble friend and others. But we are in a new area with a statutory strategic rail authority which will have the power to improve the facilities for rail freight. The shadow SRA has already begun to develop the strategy which will be incorporated into the 10-year plan as and when it has statutory powers.

My noble friends Lady Goudie, Lord Berkeley and Lord Elder all referred to freight grants for short sea shipping. At this stage in my speech, I have to he a bit careful how I say that! Certainly it was in the integrated transport White Paper and we are looking at means of introducing grants to short sea shipping in that context or another. Therefore, I hope to give the assurance sought on that.

Finally, I turn to the points made by the noble Earl, Lord Attlee, in relation to HGV impounding, about which I underline the appreciation of my noble friend Lord Macdonald for the noble Earl's earlier efforts in that respect. There is no reason to delay further the introduction of impounding schemes. I know that the industry has been looking for that for some time. We need VI examiners to be able to check quickly at the roadside that a vehicle is operating illegally. The new computer system which we are introducing will enable them to do that and allow operators to contact the traffic area offices by all means of communication.

We shall introduce the impounding provisions when the IT systems are in place. I note the concerns of the noble Earl and his intention to table further amendments in that respect, particularly relating to drivers' hours. No doubt we shall have interesting discussions in Committee on that matter. He also promised or threatened further provisions on road safety. As the noble Earl knows, he and I see eye to eye on a number of such issues. I believe that the majority of our road strategy can be delivered without further new powers and mainly through the local transport plans. Nevertheless, I shall consider positively any constructive ideas he has in that respect.

This has probably been the longest winding up that even I have done. I apologise to noble Lords who should not have had such an interesting debate to which I have had to reply! I suspect that this is a portent of the long nights which await us and will keep us awake for some months yet. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.