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Page 78, line 2, leave out (“(3)(a)") and insert (“(3)").
Page 78, line 22, leave out (“(3)(a)") and insert (“(3)").

On Question, amendments agreed to.

Earl Attlee moved Amendment No. 374:


Page 78, line 26, at end insert--
(“( ) Notwithstanding any other provision of this Act, Transport for London may not acquire any interest in a company whose shares are quoted on a recognised stock exchange (within the meaning of section 841 of the Income and Corporation Taxes Act 1988) or traded on any public market (any such company being in this subsection a “quoted company").
( ) Where Transport for London acquires an interest in a company which subsequently becomes a quoted company then it shall be permitted such period of time as is reasonable in all the circumstances (being a period not exceeding 2 years beginning on the day when such company first becomes a quoted company) to dispose of such holding for the best price as may be obtainable, and during such period such company shall not be regarded for the purposes of this Part as a company in which Transport for London holds an interest.").

The noble Earl said: My Lords, in moving Amendment No. 374, I wish to speak to Amendment No. 382. In Committee, the Government dropped an original provision requiring the consent of the Secretary of State to any acquisitions. We welcome that sensible approach. The noble Baroness, Lady Farrington, indicated in Committee that there was no intention of allowing re-nationalisation or nationalisation of any company by the back door or otherwise. The amendments seek to help the Government by putting the issue beyond doubt.

19 Oct 1999 : Column 1003

The prohibition on holding listed shares will avoid the risk of TfL being tempted to speculate on the stock market. However, it is reasonable as it allows TfL to sell assets for shares. That could possibly occur under a PPP arrangement. TfL may also hold shares in subsidiaries that are privatised.

The reason for the two-year period of grace is that AIM flotations, whatever they are, typically have a two-year lock-in period for significant shareholders. I beg to move.

Lord Whitty: My Lords, as they stand, the amendments would curtail the commercial and operational flexibility of TfL. As the noble Earl hinted, the Bill is not designed to facilitate the taking back into public ownership of, for example, privately operated bus companies. My noble friend made that clear in Committee. The transport powers we are giving the mayor are targeted at delivering better transport facilities and services. TfL's power may only be exercisable in this context for the purpose of discharging its functions. That means that TfL may need to acquire certain services. The powers are not designed to enable the mayor to embark on speculative ventures. It means that TfL cannot play the stock market willy-nilly nor can it significantly extend the means of production, distribution or exchange.

I say that because the noble Lord, Lord Brabazon, indicated at an earlier stage that he feared that this would be the means whereby TfL would be able to re-nationalise Railtrack. That is a little far-fetched, given the amount of money that would be required. On the other hand, it is possible that TfL and the mayor might want to acquire an interest in a smaller transport undertaking or in the circumstances where he or she felt that it would be helpful in providing better facilities and services to London. We see no reason why the mayor and TfL should not have the ability to do that. They could only do so in the context of discharging the functions set out in the Bill and in no wider context. I hope that the noble Earl will not pursue the matter because it would restrict the flexibility of TfL.

Earl Attlee: My Lords, I am grateful for the noble Lord's response and will read carefully what he said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty moved Amendment No. 375:


After Clause 141, insert the following new clause--

RESTRICTION ON E“ERCISE OF CERTAIN POWERS E“CEPT THROUGH A LIMITED COMPANY

(“ .--(1) The Secretary of State may by order made with the consent of the Treasury provide that Transport for London shall not carry on such activities as are specified in the order except through a company which is limited by shares and registered under the Companies Act 1985 and which is--
(a) a subsidiary of Transport for London; or
(b) a company which Transport for London formed, or joined with others in forming, by virtue of section 141(1) above and which does not fall within paragraph (a) above.

19 Oct 1999 : Column 1004


(2) The specification of an activity in an order under subsection (1) above shall not--
(a) prevent Transport for London from entering into or carrying out under section 141(2) or (3) above an agreement with a person for the carrying on of that activity by that person; or
(b) affect the validity of such an agreement.
(3) If it appears to the Secretary of State that Transport for London is carrying out, or proposes to carry out, otherwise than in compliance with an order under subsection (1) above any activities specified in such an order--
(a) the Secretary of State may give a direction to Transport for London requiring it to comply with the order within such period as may be specified for the purpose in the order; and
(b) Transport for London shall be under a duty to comply with such a direction.
(4) If Transport for London does not comply with a direction under subsection (3) above in the case of an activity to which the direction relates, Transport for London shall be treated in respect of the carrying out of that activity as not being a local authority for the purposes of--
(a) section 519 of the Income and Corporation Taxes Act 1988 (exemption of local authorities from income tax and corporation tax); and
(b) section 271 of the Taxation of Chargeable Gains Act 1992 (exemption of local authorities from capital gains tax).").

On Question, amendment agreed to.

Schedule 9 [Miscellaneous powers of Transport for London]:

Lord Graham of Edmonton moved Amendment No. 375A:


Page 235, line 28, leave out from first (“London") to end of line 29.

The noble Lord said: My Lords, the amendment stands in my name and that of the noble Lord, Lord Murray of Epping Forest. The anxiety that this series of amendments represents is from those who, like the noble Lord, Lord Murray, and myself, live outside the area of Greater London government. We are therefore deprived of a vote in the election of the mayor. Nevertheless, for some time we hope to continue to enjoy (if that is the right word) the services of the Underground. We live in Loughton which is the site of the first station on the Central line that is outside the GLA area. The people of Loughton enjoy the benefits of the service but are not actively involved in the election of the mayor. Although I have lived in Loughton for less than 10 years, there is always a feeling that that which we pay for may be affected by decisions taken on a metropolitan basis.

The purpose of these amendments is not to seek a reassurance but to put down a marker. I know that the Minister cannot speak for the future mayor of London--perhaps even a Labour mayor. He may tell me that the face of the Bill is not the proper place for this amendment. However, what the Minister says on the record in open debate in this House will go a long way. The important words of Amendment No. 375C are:


    “shall operate services provided under sub-paragraphs (2)(a) and (b) at the general level, frequency, and cost to the user as did London Regional Transport during 1998, or at improved levels and frequency".

19 Oct 1999 : Column 1005

We do not ask for an advantage; we want to guard against being either accidentally or deliberately disadvantaged by the transport policy that is in the gift of the mayor. The Minister will tell us that the face of the Bill is not the place in which to go into nitty-gritty of that kind, and my noble friend and I accept that. However, there have been some bad experiences in the past where those outside this particular remit, but nevertheless affected by it, find themselves at a disadvantage. We are anxious to secure protection from either ignorance or punitive action in the field of transport on the part of anyone with power to do that.

The Minister was kind enough to write to my noble friend Lord Murray of Epping Forest on 27th July. He said that the flexibility of the mayor of London should not be inhibited in these matters. I have no “quabble" with that. “Quibble" is better than “quabble"; a “quabble" is a bit more than a quarrel but not quite as effective as a quibble. I have no quarrel with the general philosophy and division of powers.

We are also heartened by what was written into the Bill by way of amendment in July. Therefore, some of the protections that we seek are already there. As to one of the amendments, which was quite helpful, the Minister writes:


    “The significant change is that it will be the mayor who takes the decisions, rather than the Secretary of State. However, in recognition of the position of those outside London, the amendment provides that persons aggrieved by a mayoral decision about discontinuance of services wholly or partly outside London will have a right of appeal to the Secretary of State".

I say to the Minister and the House--because the House approved it--that that is a good safeguard. I do not envisage for a moment that we shall reach that stage, but it is heartening to the people of Loughton, Theydon Bois, Debden and Epping--the stations affected--that if they were aggrieved by the decision of the mayor they would have a fall back. I also welcome the amendment whereby plans for fares and services should be the subject of consultation. One cannot go wrong by seeking advice and guidance from those who are affected in that way.

My noble friend Lord Murray of Epping Forest and I are well satisfied both with the amendments and the Minister's understanding and interpretation of them, but we take this opportunity to ask the Minister to reinforce our understanding that the people whom we seek to represent in this instance will be no worse off. While they do not seek an advantage, they do not want to be disadvantaged in future. I believe that Barnet is also included in those areas that may be affected. I beg to move.


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