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Baroness Thomas of Walliswood: I thank the Minister for that full and, I think, largely satisfactory reply. I shall read what the Minister has said but, for the present, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon-Smith moved Amendment No. 221:

The noble Lord said: Amendments Nos. 221 and 222 are grouped together. They seek to change the psychology of this part of the Bill. Clause 170 is concerned with the contents of charging schemes. Clause 170(1)(e) states that a charging scheme must,

    "state whether or not the charging scheme is to remain in force indefinitely and, if it is not to remain in force indefinitely, the period for which it is to remain in force".

I leave aside the earlier argument proposed; namely, that the purpose of the charges is to provide a permanent disincentive for people to drive. Clearly, this part of the Bill at any rate, is not consistent with that.

Amendment No. 220 seeks to amend Clause 170(1)(e) to read,

    "state whether or not the charging scheme is to remain in force for ten years or indefinitely".

The hypothecation period presently provided in the Bill is 10 years. I do not see why a local transport authority should have to bear the responsibility for introducing a tax which may subsequently become a national tax. In my view, that does not accord with the principles of open and honest taxation.

The psychology of the Bill at this point would be improved if the tax--and it is a tax--was to run initially for the period of its hypothecation to the benefit of the local community. If subsequent events necessitated a change--or if a government legislated to bring it about, which would be the open way of doing it--it could perhaps become a permanent charge. The principle of permanence is already eroded by the wording of the Bill--I am delighted about that--but we should say that these are local taxes for local use at the very least. It is important to get the psychology right.

I am a great admirer of everyone involved in local government but, at the moment, local transport authorities may not think sufficiently carefully about this matter. They may not think sufficiently carefully about it in any event, but they would be more likely to think about it if the emphasis of this small part of the Bill were to be altered. I beg to move.

Lord McIntosh of Haringey: Perhaps I should first say a word about hypothecation, which is a little more complicated than the noble Lord implied. Each scheme starting in the 10 years following the commencement of these powers will be guaranteed at

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least 10 years of hypothecation. So, if a scheme started nine years from now, hypothecation would continue until 19 years from now. We would then have a general review after 10 years. The Secretary of State may, if he wishes, agree a longer period of hypothecation for an individual scheme at the outset. Every scheme will have established at the outset the exact period of hypothecation that it is guaranteed, and an authority could, of course, decide to link the length of the scheme to that.

As far as I can see, there is no risk whatever of what the noble Lord suggested--that is, that a scheme might run out of hypothecation and could not be brought to an end if the authority so wished. The Bill allows that orders of indefinite length may be revoked at any time if the charging authority so wishes.

Having got that out of the way, perhaps I may turn to the amendments themselves. The amendments seek to require that scheme orders must be either indefinite or of 10 years' duration. Schemes can be indefinite or of 10 years duration now; the amendments would stop them being for any finite period other than 10 years. That could be too restrictive. An authority may decide to introduce an order initially for a year, with the continuation of the scheme being subject to review and the remaking of the order; or it might decide that an order of five years would be right to tie it into the timetable of a local transport plan.

Having removed the fear of a scheme which may run out of hypothecation, I hope that the noble Lord, Lord Dixon-Smith, will feel that the flexibility provided in the Bill is better than the position proposed in his amendments.

Lord Dixon-Smith: We are constantly dealing with what lies behind the Bill rather than what lies in the Bill. None the less, I am extremely grateful to the Minister for his response, which gives me considerable cause for hope. I shall study his words with care. It may be that there are particular aspects of what he said that I shall wish to explore further at a later stage but, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 222 not moved.]

Lord Dixon-Smith moved Amendment No. 223:

    Page 102, line 29, at end insert (", and

(f) state whether the charging scheme will cease in the event that the monies provided annually by government to local government for highways and transport purposes (as exemplified in the annual Revenue Support Grant negotiations) are reduced year on year for more than one year").

The noble Lord said: Amendment No. 223--which I am sure is hopelessly inadequately worded--seeks to give us the opportunity to explore a different aspect of what is now happening in relation to funding as a result of the introduction of these additional taxes--that is, the question of additionality.

Many people think that hypothecation is the essential building block to making this work. But if we were to have a hypothecated source of revenue which

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allowed the Government to withdraw other available funding--so that one was almost in a position of a drug addict having his addiction forced on him by the possibility of the withdrawal of treatment--we would not be in a very happy situation.

I thought quite hard about how I could table an amendment to bring about that which I wish to ensure--that is, that normal funding will carry on as one would normally expect it to do. I am quite prepared to admit that my wording is not adequate to achieve that purpose--as no doubt the Minister will agree, whatever else he says when he responds to the amendment. In any event, it is far too risky; inevitably as between one transport authority and another, over years their needs will go up and down, as will funding, and my amendment does not permit funding to go down. I admit therefore that we could have a little difficulty.

However, I want to get the principle of additionality to local government generally at the very least debated; indeed, if I could, I should like to get it acknowledged on the face of the Bill. The Minister may say that I am a very untrusting kind of bloke and that I have a suspicious nature. I accept the charge. Those of us who have spent our lives in local government, very regrettably, end up with that as a part of our character. It gives me no pleasure whatever to say that, but it is a fact of life. The important point is that we need somehow to assure those who will be responsible for introducing these charges that they will mean an additional gain to their communities. Without that, we will be in some difficulty.

We have spoken about the question of the guidance. I mention en passant that the psychology of the guidance could also mean that the Government could use its base funding as a tool--heaven help us--to persuade authorities to introduce charges. It has happened before from central government to local government by the simple device of central government saying "You are not introducing these charges; you are not doing what we want; therefore we shall reduce your funds". It has happened to local government from central government as bluntly as that. That is not a proper way to carry on.

It was with all these thoughts in mind that I tabled the amendment. If the Minister can give me concrete assurances on the principle I am trying to get across, it may be that I shall be happier. It is an extremely difficult area, as I am the first to acknowledge. I look forward to the noble Lord's reply. I beg to move.

Baroness Thomas of Walliswood: I should like to add a few words to what the noble Lord, Lord Dixon-Smith, has said. Undoubtedly there is a danger--we have seen it in local government, as the noble Lord said, and in art funding following the creation of the lottery fund--that when there is specific support for a particular item of expenditure governments, no matter what they say, sometimes fall down in maintaining their original programmes of support for that item of expenditure. There is a rather disagreeable reality behind the noble Lord's amendment. We should like whatever reassurance the Minister can give us that the

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Government will not go down that road. It would be dangerous for local government to depend on congestion charging for funding everything it wants to do in the field of transport.

6 p.m.

Lord Macdonald of Tradeston: I agree with the noble Baroness, Lady Thomas, that we all have a shared and understandable apprehension about this matter. In the circumstances, the noble Lord, Lord Dixon-Smith, need not confess to more suspicion in these matters. I entirely agree that the revenues from new charges must be additional to existing funding and that this must be clear for all to see. We also have to recognise that that will be crucial to the success and public acceptability of any charging scheme. For the record, I repeat the Government's promise that the net proceeds from charging schemes will be additional moneys for improving local transport.

It was with the issue of additionality in mind that Schedule 12 was drafted to require charging and licensing authorities to establish a separate account for the income and expenditure from charging schemes. That account must be published annually. That will guarantee transparency by making it clear to local people and businesses how much money is being raised through charging and how that money is being spent. That will, we hope, help to demonstrate that the revenues raised through the new charges are indeed additional to a local authority's revenue support grant and other grants paid by central government to local government.

Returning to the noble Lord's amendment, I would emphasise that we have been careful to put as few obstacles as possible in the way of an authority that wishes to discontinue a scheme. If it wishes to halt a scheme, on whatever grounds seem appropriate and relevant, then that is a matter for the charging authority to decide. A statement on the lines required by the amendment would not make any difference to that.

We are committed to the principle of additionality but the amendment does not help in any way to fulfil our commitment. I therefore hope that the noble Lord will agree to withdraw his amendment.

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