Select Committee on Delegated Powers and Deregulation Twentieth Report



ANNEX 1

TRANSPORT BILL

Memorandum by the Department of the Environment, Transport and the Regions

Introduction

1. The Transport Bill was introduced into the House of Commons on 1 December 1999, and received its First Reading in the House of Lords on 12 May 2000.

2. This Memorandum identifies the provisions in the Bill which give powers to make delegated legislation. It explains the purpose of the relevant power, the reason why the matter is to be left to delegated legislation, and the nature of, and reason for, the procedure selected.

Main contents of the Bill

3. The main purpose of the Bill is to honour commitments to legislate in the 1998 Transport White Paper (Cm 3950) and to provide for a Public Private Partnership for National Air Traffic Services.

Part I - Air Traffic Services (clause 1 to 97, Schedules 1 to 9)

4. Part I of the Bill contains 97 clauses in six Chapters, with 9 related Schedules. The purpose of this Part of the Bill is to establish a framework for a Public Private Partnership (PPP) for National Air Traffic Services Ltd (NATS). Currently en route air traffic services, and air traffic services at some airports, are provided by NATS, a company which is wholly owned by the Civil Aviation Authority (CAA). The Bill will enable NATS to be transferred to a company owned partly by the public sector, partly by the private sector and partly by NATS employees. This new company will continue to provide the services currently provided by NATS through two subsidiaries, one providing monopoly, en route, air traffic services, the other providing airport air traffic services and other non-monopoly services. En route services will be provided under a licence issued by the Secretary of State, and will be subject to statutory economic regulation by the CAA. All air traffic services will remain subject to statutory safety regulation by the CAA, who will also have responsibility for air navigation policy.

Part II - Local Transport (clause 98 to 150, Schedules 10 and 11)

5. Part II contains 53 clauses with two related Schedules, and sets out the Government's proposals for local transport plans and buses. These include placing a statutory obligation on local authorities to produce a local transport plan and bus strategy. Provision is made for Quality Partnerships between bus operators and local authorities to be put on a statutory basis, and gives powers to local authorities to enter into Quality Contracts with bus operators to participate in local joint ticketing schemes, and places a duty on local authorities to secure the provision of bus passenger information in their area. The Bill introduces a national minimum standard for local authority concessionary fare schemes, guaranteeing all pensioners a scheme at least as generous as half-fare on buses. There are also various financial provisions, including a more flexible power to pay grants to bus operators.

Part III - Road User Charging and Workplace Parking Levy (clauses 151 to 188, Schedules 12 and 13)

6. Part III of the Bill contains 38 clauses in three Chapters, with 2 related Schedules. It enables local traffic authorities outside London to introduce road user charges and workplace parking levies in their areas to help tackle traffic congestion as part of a local transport plan. It requires the revenues raised from charging and licensing schemes to be spent on measures to improve local transport. It allows for joint schemes between authorities, including ones involving London authorities.

7. The local authority charging provisions contained in the Bill mirror those included in the Greater London Authority Act 1999, which empowers London's Mayor and boroughs to introduce road user charging and workplace parking levy schemes in Greater London. Schedule 13 amends the charging provisions in the Greater London Authority Act to ensure uniformity, where appropriate, between the legislative provisions for London and elsewhere.

8. The Bill also enables the Secretary of State, and the National Assembly for Wales, to introduce road user charges on trunk roads in connection with a local authority charging scheme, at the request of the local authority. The Secretary of State and the National Assembly are also given the power to introduce road user charges on trunk road bridges and tunnels of at least 600 metres in length.

Part IV - Railways (clauses 189 to 240, Schedules 14 to 28)

9. Part IV contains 52 clauses in three Chapters, with 14 related Schedules. The Bill will establish the Strategic Rail Authority (SRA) and contains measures to make railway regulation more effective and accountable. The post of Franchising Director will be abolished and his functions will be vested in the SRA. The SRA will have duties to encourage greater rail use to plan the network strategically, and make sure trains link with other services.

10. The Rail Regulator's consumer protection functions will be transferred to the SRA. The Regulator will become an independent economic Regulator responsible primarily for regulating access and other charges (but not rail fares, which will be regulated through franchise agreements as at present). The BR Board will be abolished and its remaining functions, assets and liabilities will be transferred to the SRA.

11. The Bill revises many of the duties in the Railways Act 1993 to remove any obligations on the Secretary of State or the Regulator to pursue privatisation-related objectives, and restores a power for the Secretary of State to issue guidance to the Regulator. The enforcement powers of the SRA and the Regulator will be tightened.

Part V - Miscellaneous & Supplementary (clauses 241 to 253, Schedules 29 and 30

12. This Part contains 13 clauses with two related Schedules.

13. Clauses 241, 242, 243 and Schedule 29 give the Vehicle Inspectorate (VI) powers to impound illegally operated heavy goods vehicles (HGVs) at roadside checks. To facilitate the exercise of the impounding powers, the provisions would allow for the abolition of the so-called "margin concession" by which a vehicle can be operated by up to a month before being specified on an operator's licence. The Bill would also increase the maximum level of fine for the offence of using a vehicle to carry goods on a public road without an operator's licence.

14. Clause 244 concerns the law on the licensing of small buses (otherwise known as public service vehicles or PSVs) and private hire vehicles (PHVs - often known as mini-cabs). This clause ensures that if a small vehicle is used for private hire work it must be licensed as a PHV. (The one exception to this is if the vehicle is being used for private hire as part of a business all but a small part of which involves the operation of large PSVs.)

15. Clause 245 amends the Road Traffic Act 1984 to allow school crossing patrols to help any pedestrian across the road, extending the existing powers so that patrols can assist children of any age, and any adult, to cross the road.

16. The remainder of Part V (clauses 246 to 253 and Schedule 30 contain the usual supplementary provisions including powers to commence the provisions in the Act (clause 248), power to make transitional provisions and savings (clause 249) and power to make amendments (clause 250) by statutory instrument.

PART I: AIR TRAFFIC

Type of Parliamentary Scrutiny

1. Clause 95 provides that the powers of the Secretary of State to make an order or regulations under this Part are exercisable by statutory instrument.

2. Most of the regulation and order making powers are subject to the negative resolution procedure of both Houses of Parliament. This is considered the appropriate level of Parliamentary scrutiny where there is a clear indication on the face of the Bill of the scope of the order or regulations, particularly where the provisions will be similar to existing aviation or utility privatisation legislation. In addition the Government considers that the negative resolution procedure is appropriate where the powers will not have an impact on other legislation and where they are sought for either technical or administrative purposes.

3. In two cases the Government believes that a higher level of scrutiny is appropriate. The first of these is where the Secretary of State proposes by order to amend or repeal clause 48 (which defines, inter alia, the minimum Crown shareholding in the PPP, and guarantees the special share). The second instance is in clause 48(2), which gives the Secretary of State the power to designate a transferee company by order. In both these cases, the Government is of the view that no such orders should be made unless a draft has been laid before and approved by a resolution of each House of Parliament.

4. In one case, the Government is proposing to exercise order making powers without Parliamentary scrutiny on national security grounds. Clause 87 enables the Secretary of State by order to provide for taking possession of and using for the purposes of the armed forces of the Crown, any aerodrome, or any aircraft or other things found in or on the aerodrome in the event of actual or imminent hostilities or of severe international tension or of great national emergency. This provision broadly replaces section 62 of the Civil Aviation Act 1982, and is not subject to Parliamentary scrutiny so that the Government may act at extremely short notice to safeguard national security in times of hostilities or other emergencies. The power for Her Majesty to make an Order in Council in clause 97 will also not be subject to Parliamentary scrutiny.

CHAPTER I: AIR TRAFFIC SERVICES

CLAUSES 3 TO 9: RESTRICTIONS

5. Clauses 3 to 9 of the Bill concern the restrictions that will be placed on the provision of air traffic services to aircraft in the UK. Clause 3 creates the offence of providing air traffic services in respect of a managed area unless authorised to do so by an exemption or by the holding of an operating licence. Clause 4 provides that the Secretary of State may by order grant an exemption authorising the provision of air traffic services in respect of a managed area. Clauses 5 to 9 deal with licences, their grant, provisions and the duties of licence holders.

6. The Government's intention is that, initially at least, a licence will be required only for the provision of monopoly air traffic services, broadly speaking those services currently provided by NATS which are commonly referred to as "en route" services. The Secretary of State will grant a general exemption under clause 4 to all other providers in respect of services which are not "en route" services, subject to any requisite permission required under other legislation. The granting of exemptions is consistent with existing utility legislation (for example section 7 of the Railways Act 1993).

CLAUSE 6: LICENCES: GRANT

7. Clause 6 of the Bill sets out the procedure for the granting and refusal of operating licences, for the provision of air traffic services to aircraft in a managed area. The licence authority will be either the Secretary of State, or the CAA with the Secretary of State's consent or general authority. The granting of a general authority will be conditional on the CAA's compliance with certain specified requirements, such as the provisions to be contained within any future licence, or the requirement to consult the Secretary of State or obtain his consent before granting the same.

8. All applications for licences will be required to be made in a manner prescribed in regulations by the Secretary of State, contain or be accompanied by prescribed information, be published in a prescribed manner and, if the Secretary of State is the licence authority, be accompanied by the prescribed application fee.

9. It is proposed that the Secretary of State will grant the first licence, and thereafter the CAA will take over the role of the licence authority.

CLAUSES 23 TO 30: ADMINISTRATION ORDERS

10. Clauses 23 to 30 and Schedules 1 to 3 set out the powers available and the procedures to be followed to ensure that services are maintained where otherwise they may be at risk due to a licence holder's inability or unsuitability to deliver them. Examples of this would be where the licence holder was in serious breach of a licence condition or a duty under clause 8, or where the licence holder became insolvent. In these circumstances the Secretary of State would need to have regard to his international obligation (under article 28 of the Chicago Convention) to provide air traffic services in UK airspace.

11. For the purposes of giving effect to clauses 24 to 27 and Schedules 1 and 2, clause 27(5) applies, with modification, the power in section 411 of the Insolvency Act 1986 to make rules.

12. Schedule 2 provides for schemes to be made, following the making of an ATAO, to transfer as much of the undertaking to a new company as is necessary to ensure the continuity of licensed activities. Schemes may be made by the existing licence company and the new licence company, and are subject to approval by the Secretary of State. Paragraph 3(3) permits the Secretary of State to modify a scheme by agreement with the existing and new licence company, and paragraph 3(6) provides that any time after a scheme has come into force the Secretary of State may by order provide that the scheme is to be taken for all purposes to have come into force with the modifications specified in the order.

13. Schedule 3 provides for the application of ATAOs in Northern Ireland by modifying the application of specified clauses of, and Schedules to, the Bill. Paragraph 5(4)(b) modifies clause 27(5) the effect of which is to apply, with modification, the power to make rules in Article 359 of the Insolvency (Northern Ireland) Order 1989.

CHAPTER II: TRANSFER SCHEMES

CLAUSE 48: CROWN SHAREHOLDING

14. Clause 48(2) provides a power for the Secretary of State to designate by order a company which is a transferee under a transfer scheme. The company to be so designated will be the PPP vehicle - ie the company which will be the subject of a partial sale to the private sector. The Secretary of State must then ensure that the Crown continues to hold any special share provided for in the company's articles of association, and also between 25 and 49% of the company's share capital.

15. In recognition of the importance that Parliament will attach to this issue, clause 95(6) provides for the affirmative resolution procedure to apply to an order made under this clause.

16. Clause 48(10) provides a power for the Secretary of State to amend or repeal the section by order. The clause contains provisions relating to the maximum and minimum levels of Crown shareholding in the PPP vehicle, and also includes the obligation for the Crown to hold a special share.

17. These provisions are similar to those in section 18 of the Commonwealth Development Corporation Act 1999, which deals with matters relating to Crown shareholding in the Commonwealth Development Corporation. Section 18(5) similarly provides a power for the Secretary of State to amend or repeal the section by order. Clause 48(10) would operate in the same way.

18. Given the significance of the clause 48 provisions the Government believes that the affirmative resolution procedure is appropriate to any order seeking to amend or repeal these provisions.

CLAUSE 53: SHADOW DIRECTORS

19. Clause 53 seeks to ensure that Ministers of the Crown, Northern Ireland Ministers, their nominees and Northern Ireland Departments are not regarded as the shadow directors of a transferee company, or an associated company, for the purposes of certain provisions of the Companies Act 1985 or Companies (Northern Ireland) Order 1986 listed in clause 53(4). Shadow directors are persons who have not been appointed to the office of director of a company but who are considered to be de facto directors operating, as it were, behind the scenes.

20. Clause 53(10) provides the Secretary of State with a power to designate by order a company which is to be regarded, for the purposes of clause 53, as associated with a transferee. An associated company will be a company in which the PPP vehicle will own at least 50.1% of the shares or will have control over the composition of the Board of Directors. Ministers of the Crown, Northern Ireland Departments, their nominees and Northern Ireland Departments will not be treated as shadow directors of a company so designated.

CLAUSE 54: EXTINGUISHMENT OF LIABILITIES

21. Clause 54(1) contains a power for the Secretary of State to direct, with the Treasury's consent, the CAA to release NATS from any debts it owes to the CAA. In turn, under clause 54(5) the Secretary of State may, by order, extinguish the CAA's liability in respect of these debts where they are thought to correspond to those in the direction.

22. At present, NATS' sole source of borrowing is from the CAA. The CAA has the power to borrow sums from the Secretary of State (who, in turn, borrows from the National Loans Fund), and it lends to NATS such of those sums as NATS needs to perform air navigation services on behalf of the CAA.

23. The purpose of extinguishing NATS's liabilities is to ensure that the CAA is not left with unserviceable debts following the transfer of shares to the Secretary of State.

24. There are in fact two stages to the process of extinguishing these liabilities. The first stage is the making of a direction by the Secretary of State, requiring the CAA to release NATS from its debts. The effect of this will be to transfer the debt to the CAA. The second stage involves the making of an order extinguishing the debt from the CAA to the National Loans Fund, which is the original source of the loan.

25. It is not the intention that NATS' existing indebtedness should be written off for all time. It is likely that indebtedness in the same amount will be substituted under clause 55 which will ultimately be paid off by the private sector.

CHAPTER IV: CHARGES FOR AIR TRAFFIC SERVICES

CLAUSES 69 TO 77: CHARGES FOR AIR TRAFFIC SERVICES

26. Clause 73 gives the Secretary of State power to amend the meaning of chargeable air traffic services by order. It is possible that in the long term the licence holder will contract for the provision of airport air traffic services at all airports and for the provision of en route services to the operators of North Sea helicopters. The power to amend the meaning of chargeable air traffic services will allow flexibility in a continually evolving industry. Certain services could be removed from the ambit of the statutory duty to pay charges; it leaves open the possibility of extending the duty to pay charges and allows for future changes to the basis for recovering charges for services to North Sea helicopters and at airports.

27. Clause 73(4) gives the Secretary of State power to designate aerodromes so as to provide that air traffic services provided on behalf of the owner or manager of an aerodrome under a contract or other arrangement are not excepted from the meaning of chargeable air traffic services. Exercise of this power would allow charges for such services provided on behalf of the owner or manager of a designated aerodrome to be the subject of specifications made under clause 69.

CLAUSE 74: RECORDS

28. Clause 74 gives the Secretary of State power to make regulations in order to facilitate the assessment and collection of charges. This allows the Secretary of State to make regulations requiring the operators or owners of aircraft or the managers of aerodromes to keep and produce records of aircraft movements in order to assist the assessment and collection of charges under clause 69. Such records may be required to be kept regardless of the place of registration of the aircraft, its location and from where the service is provided.

CLAUSE 76: DETENTION AND SALE

29. Clause 76 gives the Secretary of State power to make regulations that authorise the detention and sale of aircraft. This allows the Secretary of State to make regulations authorising the detention, or detention and sale, of aircraft where the operator is in default in paying a charge specified under clause 69 (Charging) or of a requirement imposed by regulations made under clause 74 (Records). Details of the provisions that may be contained in the regulations are listed at clause 76(2), and include any provision that can be made under section 88 of the Civil Aviation Act 1982 in regard to the detention and sale of aircraft.

CHAPTER VI: MISCELLANEOUS AND GENERAL

CLAUSE 87: ORDERS FOR POSSESSION OF AERODROMES

30. Clause 87 enables the Secretary of State by order to provide for taking possession of and using for the purposes of the armed forces of the Crown any aerodrome, or any aircraft or other things found in or on the aerodrome in the event of actual or imminent hostilities or of severe international tension or of great national emergency.

31. An order made under this power also includes provision to secure compliance with the order, including the power to detain aircraft. Compensation from the Secretary of State is due in the event of direct injury or loss arising from the compliance with an order under this clause. In default of an agreement between the claimant and the Secretary of State provision is made for the amount to be settled by arbitration.

32. This clause allows for flexibility in the choice of action that may be taken in times of hostilities. The power in clause 86 requires directions to be given to persons as a precondition for securing various controls. This clause allows, in particular, for possession to be taken of any aircraft on an aerodrome that is the subject of an order. Further, instead of obliging a recipient of a direction to secure that assets such as aerodromes and aircraft are taken into the possession of the Crown this clause enables the Crown to take possession without relying on a recipient of a direction complying with its terms. The provisions in clause 87 broadly replace sections 63 of the Civil Aviation Act 1982.

CLAUSE 90: GENERAL INTERPRETATION OF AIR TRAFFIC SERVICES

33. Clause 90 defines air traffic services for the purposes of Part I of the Bill. The definition is, by necessity, very wide and embraces air traffic control, advisory services, airspace management and other services. In order to maintain operational flexibility, there is no differentiation between the different types of airspace. Future developments in air traffic services may require changes to be made to its definition for the purposes of Part I of the Bill. Clause 90 provides that the Secretary of State may by order amend the meaning of air traffic services for the purposes of Part I of the Bill.

Schedule 9 - Air traffic: information

34. Schedule 9 prohibits the disclosure of information gained under Part I of the Bill, save with the consent of the person to whom it relates or where otherwise permitted. Disclosure is permitted to a person or body carrying out his or their functions under the enactments or functions specified in paragraph 3. These include appropriate individuals and bodies such as Ministers and regulators etc. Paragraph 4 provides that the Secretary of State may by order amend paragraph 3. This power is necessary to keep the list of enactments and instruments up to date.

CLAUSE 97: EXTENSION OF PART I PROVISIONS OUTSIDE THE UNITED KINGDOM

35. Clause 97 provides that Her Majesty may by Order in Council direct that specified provisions may extend to any relevant overseas territory. Relevant overseas territories are any of the Channel Islands, the Isle of Man or any colony.

36. The purpose of this provision is to allow the extension of provisions of Part I of the Bill to such territories as and when required. An example of this might be to enable a relevant overseas territory to establish a similar basis for the provision of air traffic services over its territory. This measure follows section 108 of the Civil Aviation Act 1982.

PART II: LOCAL TRANSPORT

Type of Parliamentary Scrutiny

1. Regulations made under Part II of the Bill would be subject to the negative resolution procedure, by virtue of clause 148. The Government considers this to be an appropriate level of Parliamentary scrutiny since the powers chiefly concern matters of detailed procedure and, in other respects, the Secretary of State has only limited scope for modifying the legislative provision.

CLAUSE 99: FURTHER PROVISION ABOUT LOCAL TRANSPORT PLANS

2. Clause 99(6)(b) is related to the transitional provisions of clause 99(5). It empowers the National Assembly for Wales to prescribe, by order, a date by which plans which are treated as local transport plans for the purpose of subsection (5) must be replaced. The period specified for England is 31 March 2006 because the published policies and plans are expected to come into operation on 1 April 2001 and are intended to last 5 years. In Wales it has been decided to link local transport plans to the preparation of Unitary Development Plans (UDP) by the local planning authorities to reinforce the inter-relationship between land use planning and transport needs. Accordingly, in exercising this power, the National Assembly for Wales will have regard to the preparation of UDPs by local authorities and the date for the expiry of the initial plans is not yet fixed.

CLAUSES 104 TO 112: BUS SERVICES: QUALITY PARTNERSHIP SCHEMES

3. The Bill provides in clauses 104 to 112 for Quality Partnership schemes, under which local transport authorities provide certain facilities (for example, bus lanes and quality bus shelters, perhaps with real-time information) in return for which bus operators agree to provide bus services to a particular standard when using those facilities. The Bill includes substantive provision for the making of schemes, including prior notification and consultation (clause 105), commencement and duration (clause 106), and procedures for postponement, variation and revocation (clauses 107 to 110).

4. Clause 111 empowers the appropriate national authority (ie, the Secretary of State or the National Assembly for Wales) to make further provision, by regulations, as regards the making, variation or revocation of quality partnership schemes. The scope of regulations is aimed at detailed matters such as procedure, special exemptions, the serving of undertakings on the Traffic Commissioners and other forms of notification, including any special arrangements for handling objections and inquiries.

5. It is difficult to anticipate the precise provisions which such regulations would contain. Their nature and form would be determined in part by prior consultation with the relevant parties, including bus industry and local government representatives. But it seems sensible to take enabling powers to ensure that appropriate detailed arrangements can be made in connection with these schemes, if necessary.

CLAUSES 113 TO 123: BUS SERVICES: QUALITY CONTRACT SCHEMES

6. Clauses 113 to 123 of the Bill make provision in respect of Quality Contract schemes. Under such schemes, local transport authorities are empowered, subject to approval by the appropriate national authority to replace the existing regime for bus operations by arrangements whereby bus operators tender for the exclusive right to operate bus services within a defined area, to a specification determined by the authority. The Bill includes substantive provision for the making of Quality Contract schemes, including prior notification and consultation (clause 114), commencement and duration (clause 116), and procedures for postponement, tendering, variation and revocation (clauses 117 to 121).

7. Clause 122 empowers the appropriate national authority to make general provision, by regulations, as regards procedural and other matters in connection with the making, approval, variation or revocation of Quality Contract schemes. In addition, specific powers are taken:

  • in clause 116, by order, to amend the 21 month period specified in the Bill which must elapse between making a Quality Contract scheme and bringing it into force. This recognises that operators who had been running services in an area covered by a Quality Contract scheme, and who were unsuccessful in bidding for a Quality Contract, would need time to adjust their business. Clause 116(8) empowers the appropriate national authority to vary this period, allowing scope to make the period longer or shorter in due course if experience suggests that is appropriate;
  • in clause 117, by regulations, to make further provision with respect to postponements of Quality Contract schemes, including in particular the maximum period of postponements, and requirements as to the subsequent re-issuing of tenders. A power to make regulations would allow scope to limit the period of postponement, or to require the authority to undertake a further tendering process in circumstances involving lengthy delay, in order to limit uncertainty amongst bus operators who might be involved in the schemes;
  • in clause 118, by order, to amend the 3 month period specified in subsection (4) within which tenders are to be invited once a scheme has been made. This is to allow some flexibility if, in the light of experience, an alternative period appears to be appropriate;
  • in clauses 119 and 120, by regulations, to make further provision as regards tendering. Tendering will normally be required for Quality Contracts. Clause 119(8) provides for regulations to impose requirements on authorities to publish certain information relating to quality contract tendering, including reasons for accepting particular tenders, and exceptions to the general tendering requirements. Clause 120 disapplies the tendering requirements in exceptional circumstances, for example to avoid a hiatus in provision where a particular service has come to a premature end, or to meet unexpected public transport requirements. The power to make regulations provides added flexibility, in particular to deal with exceptional cases;
  • in clause 121, by regulations, to make further provision with respect to varying or revoking a Quality Contract scheme. Subsections (5) and (6) empower the appropriate national authority, by regulations, to make further provision as to the procedure to be followed, including revocation in advance of bringing the scheme into force. These powers are for contingency purposes in case experience suggests the need for special arrangements in exceptional circumstances, for example in the event of an unexpected collapse of the tendering process; and
  • in clause 123, by regulations, to make further transitional provisions in connection with Quality Contracts. The Bill already provides for consultation, notification and appropriate notice periods before a quality contract can be introduced. Subsection (2) specifies the content which is anticipated. However, there may be unforeseen consequences in the transition to and from the very different regulatory regime which a Quality Contracts scheme represents, and it is thought necessary to make provision whereby major and sudden disruption to bus services may be eliminated. Regulations when made may reflect experience of the detailed provision made by Quality Contract schemes.

8. As with regulations in connection with Quality Partnership schemes, it is not easy to anticipate in detail what regulations might be needed to ensure the smooth introduction and subsequent modification of Quality Contract schemes. Their nature and form will be determined in part by consultation with the relevant parties.

CLAUSES 124 TO 127: BUS SERVICES: TICKETING SCHEMES

9. Clauses 124 to 127 introduce new powers for local transport authorities to make ticketing schemes in the interests of making it easier for passengers to use bus services, particularly where journeys require the use of more than one operator's vehicles. The Bill already provides for prior notification and consultation (clause 125) and introduction of schemes (clause 126).

10. Clause 126 includes a power for the appropriate national authority, by regulations, to make further provision as regards the manner in which and the persons or classes of persons to whom a local transport authority is to give notice of a ticketing scheme made under clause 124; and as regards the procedure for variation or modification of ticketing schemes. The powers are again intended to allow for procedural flexibility if experience suggests the need for more specific requirements to be imposed on local authorities in these respects.

CLAUSES 133 TO 139: MANDATORY TRAVEL CONCESSIONS

11. Clauses 133 to 138 give elderly people the entitlement to a half-fare concession on local buses within the area of the relevant local authority and at certain times. Eligibility may be made conditional on the holding of a bus pass which shall be free of charge. Clause 139 makes separate provision to apply the scheme in the different circumstances that apply in Greater London.

12. Clause 133(3) provides that a person entitled to the mandatory concession may elect to receive a different concession, under a local discretionary scheme made under section 93 of the Transport Act 1985. (This provision is a response to representations that some local authorities offered schemes based on tokens, which were particularly popular with elderly people because in many cases the tokens could be used in payment of taxi fares.) Subsections (4) and (5) empower the Secretary of State and the National Assembly for Wales to make provision, by regulations, about the detailed arrangements which must apply in such cases and, in particular, prescribe a maximum period for which an agreement would apply. It is not thought that the prescribed maximum period would exceed two years.

13. Clause 134(1) (definition of "eligible service") enables the appropriate national authority to prescribe, by order, different services from those specified in clause 134(1)(a) on which a person is eligible to benefit from the mandatory concession. This is to enable consistency to be maintained between services eligible for grant and services on which concessionary travel is available if and when clause 142 (see below) comes into force. (Clause 134(1) relates eligibility to services which the present fuel duty rebate is paid.)

14. Clause 135 gives the appropriate national authority order making powers in respect of travel concessions outside Greater London to:

  • extend the eligible categories to those who may already benefit from discretionary schemes under section 93(7) of the Transport Act 1985 (principally people who are young, blind or disabled);
  • extend the qualifying journeys to those made on public passenger transport services other than the bus services specified in clause 133(1);
  • extend the area to which the concession applies to include places in the vicinity of the local authority concerned;
  • vary the relevant times of day specified; or
  • improve the concession to better than half-fares.

15. Clause 139(10) applies to Greater London, and empowers the Secretary of State to extend eligibility for the concessions to other eligible categories of London resident and to improve the concession to better than half-fare.

16. Clause 137 empowers the appropriate national authority to make detailed provision, by regulations, for the reimbursement by local authorities of the bus operators who participate in the mandatory concession arrangements. Clause 138 empowers the appropriate national authority to make associated procedural regulations. Regulations have already been made under the Transport Act 1985 to provide for reimbursement arrangements for existing, discretionary, local authority concessionary fare schemes; it is intended that the same arrangements should apply to the mandatory concession arrangements.

CLAUSE 142: GRANTS TO BUS SERVICE OPERATORS

17. Clause 142 makes new statutory provision for grants to bus operators towards the cost of operating eligible bus services. The provision, if and when introduced, would replace the current Fuel Duty Rebate scheme under section 92 of the Finance Act 1965 with a more flexible power enabling grant to be paid to bus operators by the appropriate national authority on a different basis from the present scheme. For example, differential rates of grant could be introduced to encourage the use of more environmentally friendly vehicles. No decision to replace Fuel Duty Rebate has yet been taken.

18. Clause 142(2) provides for the making of regulations by the appropriate national authority as to the method of calculation of the grants. It was felt appropriate to make provision for details of the grant system to be set out in secondary legislation, so as to give flexibility to make changes to reflect changing circumstances and policy objectives. Subject to such regulations, the appropriate national authority will have power under clause 142(3) and (4) to determine the amount of, and conditions to be attached to, the grant payments generally or in particular cases. The method of calculation of the grant to be adopted will depend on the nature of the prescribed services under subsection (5).

19. Clause 142(5) provides for the making of regulations by the appropriate national authority to prescribe the definition of "eligible bus services" for the purposes of the grant making power. Providing for the definition of eligibility by regulation again ensures flexibility to reflect changing circumstances and requirements over time. Again, no decisions have yet been taken with respect to any change in the definition of eligibility.

CLAUSE 143: PENALTIES

20. Clause 143 makes alternative arrangements to section 111 of the Transport Act 1985 (under which a Traffic Commissioner may levy a penalty of repayment of 20% of eligible Fuel Duty Rebate in respect of unreliable or unregistered local bus services) as from the time of clause 142 coming into force. Under clause 143(3)(a) the penalty available to the Traffic Commissioner is set at a maximum of £550 multiplied by the number of vehicles the operator is licensed to use. (This figure was chosen as broadly equivalent in financial effect to 20% of Fuel Duty Rebate.) However, clause 143(3)(b) provides that the £550 maximum may be changed by order. This order-making power will enable the maximum levels of penalty to be adjusted from time to time, for example in the light of inflation.

PART III: ROAD USER CHARGING AND WORKPLACE PARKING LEVY

Type of Parliamentary Scrutiny

1. Clause 185(2) provides that regulations are exercisable by statutory instrument, as is the power to make an order making, varying or revoking a trunk road charging scheme.

2. Within clause 185 the Government has sought to achieve some proportionality between the extent of the powers and the degree of scrutiny required. The proposed arrangements for Parliamentary scrutiny of statutory instruments proposed in this Bill are identical to those approved by the Delegated Powers and Deregulation Committee for the road user charging and workplace parking levy in the Greater London Authority Act 1999.

3. Most of the regulation-making powers are subject to the negative resolution procedure of either House of Parliament. This is considered the appropriate level of Parliamentary scrutiny where there is a clear indication on the face of the Bill of the scope of the regulations, particularly where the regulations will be very similar to existing legislation. In addition, the Government considers that the negative resolution procedure is appropriate where the regulations will not have an impact on other legislation and where the regulations are sought for either technical or administrative purposes.

4. However, there are a small number of circumstances where the Government believes that a greater level of scrutiny is appropriate. There are three such circumstances within Part III of the Bill:

  • Amending the definition of "workplace parking" in clause 170(5);
  • Arrangements for the use of net proceeds once the initial 10 year period has ended for local authority road user charging and workplace parking schemes (Schedule 12, paragraph 9(1)); and
  • Arrangements for the use of net proceeds once the initial hypothecation period has expired for road user charging schemes on trunk roads (Schedule 12, paragraph 13(2) and 13(5)).

5. For these three cases, the Government is of the view that the regulations should be subject to the affirmative resolution of the House of Commons. This will give Parliament the opportunity to consider changes to the definition of workplace parking specified on the face of the Bill, if the definition of workplace parking is amended. In addition, it is considered that the important matter of the arrangements for the retention and use of the revenues raised from new charges once the guaranteed period of hypothecation has expired should also be subject to affirmative resolution. These regulations are also subject to the consent of the Treasury.

6. In all cases, regulations will be prepared with the benefit of input from practitioners in the field (for example through the Government's Charging Development Partnership for local authorities interested in using the charging powers contained in the Bill). They will be subject to consultation in draft before being laid before Parliament.

Arrangements in Wales

7. The Bill provides for the introduction of road user charging and workplace levy schemes across the whole of England (except for London) and Wales. Clause 185 excludes regulations made by the National Assembly for Wales from the Parliamentary procedures discussed above. Instead the National Assembly for Wales' procedures for subordinate legislation, set out in sections 64 to 68 of the Government of Wales Act 1998 and its Standing Orders, will apply. Except in cases of urgency, these procedures require both a cost benefit appraisal and affirmative resolution by the National Assembly for Wales of the proposed orders after plenary debate. Draft regulations prepared under the powers provided by Schedule 12, paragraphs 9(1), 13(2) or 13(5) for the retention and use of charging revenues will need the consent of the Treasury.

8. Powers in relation to commencement of Part III of the Bill and associated transitional provisions and amendments to existing legislation are delegated to the National Assembly for Wales by clauses 248 to 250 in Part V of the Bill.

CHAPTER I - ROAD USER CHARGING

CLAUSE 156: CHARGING SCHEMES TO BE MADE BY ORDER

9. Clause 156(3) provides the appropriate national authority (ie the Secretary of State or the National Assembly for Wales) with the power to make regulations setting the format for orders defining a charging scheme. An order will set out the statutory framework for a charging scheme, and define its scope, character, level of charges, etc. The order will be published in draft and be subject to public consultation. An order making a local authority scheme will have to be submitted to the appropriate national authority for approval unless regulations under clause 157(2) provide otherwise.

10. Regulations made under this clause will define the form of orders, and give guidance on issues such as the need for consultation, consideration of objections, and procedures for varying or revoking schemes. The Government suggested in "Breaking the Logjam - The Government's consultation paper on fighting traffic congestion and pollution through road user and workplace parking charges"[6] that a suitable model for road user charging orders could be found in 'Local Authorities' Traffic Orders (Procedure) (England and Wales) 1996'[7]. This is still the Government's view and has been re-affirmed in "Breaking the Logjam - the Government's response to the consultation"[8]. A brief synopsis of the types of issues that the regulations will deal with is attached at Annex A.

11. There will need to be considerable preparation and consultation on the detail before the regulations covering the making of an order are laid before Parliament. In the case of local authority charging schemes, large-scale charging schemes are unlikely to be introduced before 2004 at the earliest.

12. The Government will continue to work with local authorities that are interested in introducing a charging scheme as part of its Charging Development Partnership. It is possible that the first few local authorities will want to bring forward schemes before the procedure regulations are in place. There could be advantages to all parties in gaining practical experience in this way before the regulations are made. The Government will provide non-statutory guidance to any authorities wanting to take this course.

13. Regulations relating to trunk road bridges and tunnels of at least 600m in length might be made in 2001 if Ministers decide that they wish to continue charging at the Dartford crossings after 2002.

CLAUSE 157: CONFIRMATION OF CHARGING SCHEMES

14. Under clause 157(2) the Secretary of State, or the National Assembly for Wales, will be able to waive the requirement for a charging authority to require the approval of the appropriate national authority, for all or some aspects of a charging scheme. This could simplify the arrangements for bringing forward charging schemes where schemes meet certain criteria decided by the appropriate national authority.

15. Until any regulations are made, all aspects of all schemes will be subject to the approval of the appropriate national authority. The regulations would set out the conditions under which this approval would not be required, possibly by reference to the criteria to be met, or limits not to be exceeded.

16. The Government will want to learn the lessons from early schemes before any regulations are made. This approach is accepted by local government practitioners as a practical and sensible way forward.

17. It is not envisaged that any regulations would be laid before Parliament until the experience of the first charging schemes has been assessed. On this basis, regulations are not expected to be made before 2005 at the earliest.

Clause 160: Charging schemes exemptions etc

18. Clause 160(1) provides the power for the appropriate national authority to make regulations setting national exemptions from charges, reduced rates or limits on charges for all road user charging schemes. This does not restrict the power of a local authority to set further exemptions or concessions, and this is provided for under clause 160(2).

19. The Government has announced its commitment to a national exemption from road user charges for emergency vehicles and some form of exemption for disabled persons. These regulations will specify the detail.

20. There are a number of practical issues that need to be resolved in formulating the detail of the exemptions that will apply. This will require more detailed consultation with relevant organisations. In particular, the Government announced on 18 November 1999 that there would be a UK-wide review of the orange badge parking scheme for disabled people. Part of this review will consider the issue of exemptions from road user charges for the disabled, and the results of the review (expected in late 2000) will feed in to consideration of practical arrangements for such an exemption.

21. Regulations setting out the detail of national exemptions are therefore unlikely to be made before 2001. If schemes come forward before the regulations can be made, the Secretary of State will use his approval powers to impose appropriate interim requirements for exemptions on the individual schemes.

CLAUSE 161: PENALTY CHARGES

22. Clause 161(1) provides that the appropriate national authority may make regulations in relation to the imposition and payment of penalty charges in respect of the non-payment of a road user charge. Clause 161(4) provides for the Lord Chancellor to make regulations about the notification, adjudication and enforcement of penalty charges.

CLAUSE 162: EXAMINATION, ENTRY SEARCH AND SEIZURE OF VEHICLES

23. Clause 162 (1) gives the appropriate national authority the power to make regulations dealing with the examination of a motor vehicle for the purpose of checking whether the necessary document or equipment is displayed and whether any conditions relating to the use of such equipment have been met.

24. Clause 162 (2) provides a regulation-making power dealing with the entry into a vehicle by an enforcement agent, where there are reasonable grounds for suspecting that equipment or documents have been interfered with in order to avoid paying a charge.

25. Clause 162(3) provides that regulations may set out the circumstances in which immobilising devices may be fitted to vehicles, and when vehicles may be removed, stored and disposed of, as well as arrangements for the release of vehicles from immobilisation devices or storage.

26. The arrangements for enforcing road user charging schemes will generally mirror the arrangements already in place under the Road Traffic Act 1991, which provided for the decriminalisation of the enforcement of on-street parking restrictions. This means that non-payment of a road user charge will be a civil matter rather than a criminal offence. A brief synopsis of the types of issues that the regulations will cover is attached at Annex B.

27. It is the Government's view that the regulations provided for in this clause will need to be in place before any scheme becomes operational. The Government will want to work up some of the detail with the Charging Development Partnership later this summer. On this basis the Government envisages that the regulations will be put before Parliament in early 2001.

Clause 164: Equipment etc

28. Clause 164 provides the appropriate national authority with the power to issue regulations setting the standard for equipment that can be installed for use for or in connection with any charging scheme. This regulation making power is limited to non-vehicle equipment. In-vehicle equipment will be catered for by the 'Construction and Use Regulations' made under the Road Traffic Act 1988. The regulations will ensure that all electronic equipment used in charging schemes is inter-operable so that drivers can move between different charging schemes using the same equipment.

29. These regulations will generally be technical in nature and will set the minimum performance and functional requirements and constraints for systems and equipment.

30. DETR is undertaking a technical trial of equipment for use in charging schemes, called DIRECTS (Demonstration of Interoperable Road-user End-to-end Charging and Telematics Systems). One of the outputs from the project will be a national standard for in-vehicle and roadside equipment. The relevant regulations will be made once the DIRECTS contract is completed and will need to be in force in time for the first free flow electronic charging scheme. Schemes using barriers or paper permits will not need details of electronic equipment standards. The earliest likely date for an electronic scheme is 2004/5 and DIRECTS is due to present its final report in late 2002.

CHAPTER II - WORKPLACE PARKING LEVY

CLAUSE 170: WORKPLACE PARKING CHARGES

31. Clause 170(5) enables the appropriate national authority to make regulations to amend the definition of workplace parking specified in the clause. Regulations made by the Secretary of State would be subject to the affirmative resolution of the House of Commons.

32. It is intended that the Bill will provide for all workplace parking to be able to be included within the scope of a workplace parking levy scheme. Clause 170 has been drafted to provide for this. Consequently significant changes to the definition of workplace parking specified in the Bill are not envisaged. But it is possible that loopholes may be identified once schemes have been introduced. These could undermine the effectiveness of the workplace parking levy. This regulation-making power will enable the appropriate national authority to close any loopholes that may emerge without recourse to primary legislation. This will ensure that the effectiveness of the workplace parking levy is not undermined.

33. This regulation-making power is a reserve power. Any loopholes will not become apparent until a workplace parking levy scheme has been introduced. This is unlikely to be before 2003 at the earliest.

CLAUSES 171 AND 172: MAKING OF LICENSING SCHEMES

34. The arrangements in clause 171(3) to make regulations setting out how workplace parking levy orders are to be made and arrangements in clause 172(2) covering the waiving of the approval process are identical to the regulation-making powers in clauses 156 and 157 for road user charging.

CLAUSE 175: LICENSING SCHEMES: EXEMPTIONS ETC

35. The same provisions in clause 175(1) for prescribing national exemptions from the workplace parking levy apply as in clause 160(1) for road user charging. In addition to exemptions from the levy for emergency vehicles and disabled persons, there will be some form of exemption or concession from the levy for parking at NHS hospitals. Again the detail will be specified in the regulations once the exact exemption or concession has been established following consultation with relevant parties.

CLAUSE 177: PENALTY CHARGES

36. The arrangements in clause 177(1) and (4) are identical to the regulation-making provisions in clause 161(1) and 161(4) for road user charging. A brief synopsis of the types of issues that the regulations will cover is attached at Annex B.

CHAPTER III - GENERAL AND SUPPLEMENTARY

CLAUSE 183: DETERMINATION OF DISPUTES, APPEALS AND EVIDENCE

37. Clause 183(1) provides a power for the Lord Chancellor to make regulations to provide for appeals against decisions relating to workplace parking licences and determination of disputes relating to both charging and licensing schemes. It also provides for appeals against such determinations, or failure to make such determinations; and the appointment of people to hear appeals.

38. Clause 183(2) provides for the Lord Chancellor to make regulations about the admissibility of evidence in criminal proceedings in relation to offences under Part III of the Bill.

39. The arrangements for determining disputes and matters relating to evidence for road user charges will generally mirror those in place under the Road Traffic Act 1991, which provided for the decriminalisation of the enforcement of on-street parking restrictions. This will provide for an appeal to an independent adjudicator. In the case of the workplace parking levy, we propose that disputes should be resolved in the civil courts. A brief synopsis of the types of issues that the regulations will cover is attached at Annex B.

40. It is the Government's view that the regulations provided for in this clause will need to be in place before any scheme becomes operational. Some of the detail will be worked up with the Charging Development Partnership later this summer. On this basis the Government envisages that the regulations will be put before Parliament in early 2001.

CLAUSE 186: INTERPRETATION OF PART III

41. Clause 186(3) provides the appropriate national authority with the power to make regulations defining the classification of vehicles for road user charging and workplace parking schemes. This is an important power that will help ensure electronic charging schemes are inter-operable by ensuring that a common and compatible way of classifying vehicles operates in all charging schemes.

42. The regulations will be technical and will provide a classification group for every chargeable vehicle. It is possible that these will be based on combinations of vehicle parameters such as number of axles, weight, width, length, height and emission levels from which individual schemes can structure tariffs - but further work needs to be done to determine the details of the regulations.

43. It will be important for these regulations to be in place at the same time as those under clause 164 setting equipment standards for electronic roadside equipment.

Schedule 12 - Road User Charging and Workplace Parking Levy: Financial Provisions

44. Schedule 12 sets out the financial provisions for road user charging and workplace parking levy schemes.

PARAGRAPH 2: NET PROCEEDS

45. Paragraph 2(2) of Schedule 12 provides a regulation making power for the appropriate national authority to define the revenues and expenses which can be taken into account when calculating net proceeds for a charging scheme. Paragraph 2(3) provides that costs and payments in relation to construction, improvement and maintenance of charged roads can be included in the scheme's expenses. These costs are likely to relate to PPP and private finance initiative (PFI) methods of procurement, which are particularly relevant to charging schemes on new structures. The regulation making power is needed to allow flexibility in the procurement arrangements for trunk roads in charging schemes so that value for money can be maximised across the full range of possible schemes.

46. These regulations will be technical in nature and will define which costs and receipts can be included in the calculations of net proceeds for a trunk road charging scheme. The regulations will need to be consistent with the various procurement routes that are available (PFI, PPP or conventional), agreed with the Treasury, and will need to be drafted in the light of real examples on the ground. These regulations will be important both for schemes where there is new construction of infrastructure, or where maintenance of a charged road is part of a larger contract.

47. For local authority schemes, regulations by the appropriate national authority will set out how net proceeds are to be calculated. This will ensure that the approach ties in with local authority accounting practices and will help safeguard the Government's commitment that all charging scheme revenues will be ring fenced for local transport improvements.

48. Regulations will need to be prepared in advance of the first charging schemes, and the Government envisages undertaking detailed consultations with local authorities though the Charging Development Partnership, the Audit Commission and CIPFA before introducing regulations on local authority schemes. It is envisaged that regulations will be made in 2001.

PARAGRAPHS 5 AND 6: ACCOUNTS AND FUNDS

49. Paragraphs 5 and 6 give the appropriate national authority the power to make regulations specifying how accounts relating to charging schemes should be prepared, kept and published. Further work will need to be done to develop the details of the new concept of ring-fenced charging accounts, in compliance with Government and local authority accounting rules and procurement practices, in order to make scheme accounts as transparent as possible and demonstrate the additionality of charging revenues. The regulations are likely to contain concise financial requirements on accounting practice. These regulations will need to be in place in time for any charging scheme to be introduced. It is envisaged that these regulations will be made in 2001.

PARAGRAPHS 8(7) AND 13(4): NEW AND AMENDED SCHEMES

50. Paragraph 8(7) provides the appropriate national authority with the power to make regulations setting out circumstances in which a local authority road user charging or workplace parking levy scheme is to be regarded as a new scheme or an amended scheme. This is for the purpose of deciding when the guaranteed period of hypothecation of charging revenues ends (as defined in 8(2)). Paragraph 13(4) provides for the national authority to make regulations setting out circumstances in which a trunk road charging scheme is to be regarded as a new scheme or an amended scheme.

51. The regulations will deal with the character and size of the changes made to the scheme, and the consequences of different types of variation. Schemes which are deemed "new" schemes will be granted at least 10 years hypothecation from the implementation of the "new" scheme. Schemes that are in place and are subject to minor changes or are revoked and replaced with an identical scheme will only be guaranteed hypothecation for the period agreed when the original scheme was implemented.

52. The regulations are needed to avoid the potential for an authority to put a scheme in place and then revoke it and replace it with a similar scheme within the initial hypothecation period as a means of securing additional years of hypothecation. This would be contrary to the intention of the provisions in the Bill.

53. These regulations are not expected to be needed for several years as they concern only schemes that have started and where a change to the scheme has been made.

PARAGRAPH 9: REVENUES AFTER THE GUARANTEED PERIOD OF HYPOTHECATION

54. Paragraph 9 relates only to local authority charging and licensing schemes. It provides the appropriate national authority with the power to make regulations setting out what will happen to charging and licensing schemes' net revenues after the period of guaranteed hypothecation has expired. This will enable the policy of hypothecation to be reviewed in 10 years time without recourse to primary legislation to specify the arrangements for the use of charging revenues in the medium to longer term.

55. The regulations will set out arrangements for the retention and use of the revenues from local authority road user charging and workplace parking levy schemes once the guaranteed period of hypothecation has expired. Before making regulations, the appropriate national authority must assess the amounts of revenue likely to be raised and the potential for spending this revenue on value for money transport improvements.

56. The Bill provides that the appropriate national authority will require the consent of the Treasury when making regulations. In England the regulations will require the affirmative resolution of the House of Commons. In Wales, as is the case for all secondary legislation, the National Assembly will need to approve the regulations after plenary debate.

57. The initial period of hypothecation for early relevant schemes is at least ten years. An early relevant scheme is a scheme that comes into force within ten years of the commencement of Schedule 12. The regulations will therefore not be needed for several years.

PARAGRAPH 12: JOINT SCHEMES

58. Paragraph 12(1) of Schedule 12 provides for the Secretary of State to make regulations setting out arrangements for the use of charging revenues in joint charging or licensing schemes that include a London traffic authority.

59. Paragraph 12(2) provides that these regulations shall provide that the revenues from schemes brought forward within 10 years of the commencement of Schedules 23 and 24 of the Greater London Authority Act 1999 shall be spent in accordance with these Schedules, subject to any modifications that the Secretary of State might make.

60. These regulations would only be needed if a joint local-London charging scheme were being proposed. The Secretary of State would also be required to consult the Mayor.

PARAGRAPH 13: TRUNK ROAD SCHEMES

61. Paragraph 13(2) empowers the appropriate national authority to make regulations to extend the time scale in which revenues from trunk road schemes made at the request of a local authority can be used for transport purposes, to schemes which start later than 10 years after the Schedule commences. This is parallel to the provision for local authority schemes, and is likely to be used only where the powers under paragraph 9(3) have been used for local authority schemes.

62. The regulations would extend the time scale within which revenues from trunk road schemes complementary to local authority schemes could be used on transport, to schemes which start later than 10 years after Schedule 12 commences. These regulations are unlikely to be made within the next five years. In England these regulations would be subject to affirmative resolution of the House of Commons.

63. Paragraph 13(5) allows the appropriate national authority, subject to the consent of the Treasury (provided by clause 185(3)(b)), to make regulations which determine a different application of the revenue from trunk road charging schemes after the 10 year initial period after the Schedule is brought into force. This would allow an end to the hypothecation of revenues for transport purposes. The regulations would be made if the Government decided that trunk road revenues should be applied to other, or wider, purposes than transport projects, once the 10 year hypothecation period following commencement of the schedule had finished. In England these regulations would be subject to an affirmative resolution of the House of Commons.

64. The regulations would set out the purposes for which trunk road revenue was to be applied at the end of the hypothecation period. These regulations would only apply at the end of the relevant 10 year period after Schedule 12 is in force, and will not therefore be needed in the next few years.

65. Paragraph 13(6) allows the national authority to make regulations which continue the hypothecation period for trunk road schemes for longer than 10 years after the start of the trunk road scheme. This would be done where the Government decided that it was appropriate to continue to spend trunk road charging revenue on transport purposes for longer than was originally specified.

66. The regulations would set out the period by which hypothecation for transport purposes had been extended. These regulations would not be needed for 10 years.

Schedule 13 - Amendments to Schedules 23 and 24 to Greater London Authority Act

67. Schedule 13 contains a number of amendments to the Greater London Authority Act 1999, including regulation-making powers. But there are none that are unique to Schedule 13 and they all appear earlier in the Bill.

PART IV: RAILWAYS

Type of Parliamentary scrutiny

1. In Part IV of the Bill the Government has sought to achieve proportionality between the extent of the powers and the degree of scrutiny required. In three cases the Government believes that regulation or order making powers should be subject to an affirmative resolution procedure. These powers relate to:

  • increasing the Strategic Rail Authority's (SRA) borrowing limit (paragraph 8(6)(b) of Schedule 14);
  • eliminating or reducing the liability of the SRA to taxation on its income and capital gains and consequential modifications to general taxation rules (paragraph 14 of Schedule 14); and
  • amending the Rail Regulator's jurisdiction under the Competition Act (clause 230 amending section 67 of the Railways Act 1993).

2. For the first two cases above, the Government is of the view that orders or regulations should be subject to affirmative resolution of the House of Commons because they relate to finance and taxation. In the third case above the Government is of the view that any order should be subject to affirmative resolution of both Houses of Parliament.

3. The Government proposes that clause 228 will enable orders making provision for winding down and abolishing the British Railways Board to be made without a Parliamentary procedure. The Government considers this to be appropriate since the powers are exercisable for the sole purpose of winding down or abolishing the British Railways Board and are precedented in section 23 of the Coal Industry Act 1994.

4. All other regulation or order making powers in Part IV are subject to a negative resolution procedure. This is considered the appropriate level of Parliamentary scrutiny where there is a clear indication on the face of the Bill of the scope of the regulations, particularly where the regulations will be very similar to existing legislation. In addition, the Government considers that the negative resolution procedure is appropriate where the regulations will not have an impact on other legislation and where the regulations are sought for either technical or administrative purposes.

CHAPTER I - THE AUTHORITY

CLAUSE 190: MEMBERSHIP AND CHAIRING

5. Clause 190 provides for the Strategic Rail Authority (SRA) to have between eight and fifteen members. Subsection (2) enables the Secretary of State to substitute by order different figures for the minimum or maximum membership of the SRA. The purpose of subsection (2) is to provide additional flexibility in setting the size of the SRA. The principle underlying clause 190 is that the SRA will have access to the expertise it needs without being too large to make decisions. Between 8 and 15 members should be ideal for the SRA. However, the additional flexibility afforded by subsection (2) may be needed, for example, if some additional expertise needs to be drawn in, or in the unlikely event that there are not enough of the right candidates to establish a team of eight.

Schedule 14 - Strategic Rail Authority

PARAGRAPH 8: BORROWING

6. The SRA will be funded by the Secretary of State and will also be entitled to borrow money subject to restrictions. A borrowing limit of £3 billion is specified in paragraph 8, which is an appropriate ceiling. This is the current borrowing limit for the British Railways Board (BRB) and is also currently the limit on compensation payable to passenger operators by the Franchising Director under section 136(8) of the Railways Act 1993 in respect of the provision or operation of passenger services. Part of the limit will cover the outstanding liabilities of the BRB and the level also reflects the fact that the SRA may need to act as operator of the last resort. However, the SRA will have a new role in developing and delivering a long-term strategy for the railway, which may require additional borrowing to secure the necessary investment.

7. Paragraph 8(6)(b) enables the Secretary of State to make an order which increases the SRA's borrowing limit. The purpose of this provision is to ensure that there is sufficient flexibility in the financing structure to ensure that the SRA will be able to pursue its strategic objectives for the long-term development of the railway. Orders made under this paragraph would be subject to the affirmative resolution procedure in the House of Commons. The order making power is similar to that in section 11(6)(b) of the Regional Development Agencies Act 1998. Treasury approval is required before making an order.

PARAGRAPH 14: TAXATION

8. Paragraph 14 enables the Secretary of State to make regulations for the purposes of eliminating or reducing the liability of the SRA to taxation on its income and capital gains, or any prescribed category of them, together with consequential modifications to general taxation rules. It is intended that the relieving power would be used in relation to the potential tax liability of the SRA with regard to its exercising of functions of a quasi-governmental character (such as regulation, franchising and other methods of financial assistance) rather than to its undertaking activities of a more commercial character (such as the operation of railway services under clauses 200 and 201).

9. The purpose of the provision is to allow flexibility to deal with changes in the method of operation of the SRA as its role develops. While negotiations with the rail industry are at an early stage it is not possible to be certain of the precise nature and scope of the activities which the SRA will be undertaking in the discharge of its functions and therefore the extent to which specific provision will be necessary to ensure that appropriate items are, consistent with the general approach indicated above, outside the charge to tax. .

10. Regulations made under this paragraph would require an affirmative resolution of the House of Commons. This practice is well precedented with regard to regulations relating to taxation (for example, section 828(3) of the Income and Corporation Taxes Act 1988).

Schedule 15 - Financial assistance: transfers to SRA

PARAGRAPH 12: MODIFICATION OF TRANSFER SCHEMES

11. Paragraph 1 of Schedule 15 enables the Secretary of State to make schemes for the transfer to the SRA of such of the property, rights and liabilities of the Secretary of State (including rights and liabilities relating to staff) as he considers appropriate as a consequence of sections 137 - 139 of the Railways Act 1993 being superseded by clause 199. Paragraph 12 of Schedule 15 enables the Secretary of State to make an order to modify such a transfer scheme after it has come into effect. Modifications could not be made in respect of the transfer of any rights or liabilities relating to a contract of employment. This power is precedented in paragraph 2(4) of Schedule 7 to the Railways Act 1993. The Secretary of State is required to consult the Authority before making or modifying a transfer scheme.

Schedule 17 - Transfers to SRA from Rail Regulator

PARAGRAPH 3: CONSUMER PROTECTION CONDITIONS

12. The Bill transfers responsibilities for consumer protection from the Rail Regulator to the SRA. To the extent that the protection of consumers is secured through conditions of a licence (referred to as "consumer protection conditions") the SRA will be responsible for its content. Paragraph 3 adds a new section 7A to the Railways Act 1993 specifying the matters that are to be considered as consumer protection conditions in a licence. Section 7A(2) enables the Secretary of State to State to make regulations prescribing further descriptions of conditions of licences or licence exemptions as conditions which relate to consumer protection, or excluding any of the conditions described in section 7A(1). Only conditions for protecting the interests of the public may be prescribed, and certain descriptions are specifically precluded.

13. It is not possible to know the content of all future licences. Flexibility is therefore needed so that if future licences cover different matters than at present, it will always be possible to determine (by regulations) what functions are consumer protection functions.

PARAGRAPH 42: TRANSFER SCHEMES FOR PROPERTY, RIGHTS AND LIABILITIES FROM THE REGULATOR TO THE SRA

14. Paragraph 31 enables the Secretary of State to make one or more schemes for transfer to the SRA of such of the property, rights and liabilities of the Regulator as he considers appropriate (including rights and liabilities relating to staff), in consequence of the transfer of functions under the Schedule. Paragraph 42 enables the Secretary of State to made orders to modify a transfer scheme after it has come into force, except in relation to provisions relating to the transfer of rights and liabilities of employees, for example where minor amendments to transfers are necessary because certain property, rights and liabilities have been misallocated.

Schedule 19 - Transfer to SRA of BR's property etc

PARAGRAPH 14: TRANSFER SCHEMES

15. Paragraph 1 enables the Secretary of State to make one or more schemes for the transfer to the SRA of any property, rights or liabilities of the Board, other than in relation to the transfer of the British Transport Police. Paragraph 14 enables the Secretary of State to make an order to modify a transfer scheme, except in relation to transfer of rights and liabilities of employees. This power would be necessary in cases where minor amendments to transfers are necessary because certain property, rights and liabilities may have been misallocated.

Schedule 25 - Transfer of BR's property etc to Secretary of State

PARAGRAPH 13: TRANSFER SCHEMES

16. Paragraph 1 enables the Secretary of State to make one or more transfer schemes for the transfer to him of any property, rights or liabilities of the British Railways Board (including in relation to contracts of employment), other than in relation to the British Transport Police. Paragraph 13 enables the Secretary of State to make an order to modify a transfer scheme after it has come into effect, except in relation to transfer of rights and liabilities of employees. This power would be necessary where minor amendments to transfers are needed because certain property, rights and liabilities have been misallocated.

CHAPTER II - OTHER PROVISIONS ABOUT RAILWAYS

CLAUSE 211: REGULATOR'S POWER TO REQUIRE PROVISION ETC OF RAILWAY FACILITIES

17. Clause 211 inserts new sections 16A to 16I into the Railways Act 1993. This is to enable the Rail Regulator to give directions requiring persons to provide, develop or improve etc certain railway facilities. New section 16B will enable the Secretary of State to make orders excluding specified facilities or specified persons from the exercise of the Regulator's powers. The Secretary of State could exercise this power, for example, to exclude railway facilities provided by the operators of heritage railways, which are used mainly as a leisure facility rather than as public transport.

CLAUSE 216: EXTENSION OF FUNCTIONS

18. Clause 216(4) and (5) insert new subsections 76(7B) and (7C), and 77(9B) and (9C), of the Railways Act 1993. This is to enable the Secretary of State to make orders excluding services from the duties imposed on, respectively, the Rail Passengers' Committees or the Rail Passengers' Council (collectively referred to as the RPCs), or providing that these respective duties apply only to the extent specified by the order or with such modifications as are specified. Orders may be required to ensure that services which are not part of the franchised network can be excluded, wholly or partially, from the remit of the RPCs, where use of the RPCs' powers or full powers would not be appropriate. An example of such services could be those provided by heritage railways, which are used mainly as a leisure facility rather than as public transport. The Secretary of State is required to consult the Rail Passengers' Council before making any order under this clause.

CLAUSE 228: WINDING DOWN AND ABOLITION OF BRB

19. Clause 228(3) enables the Secretary of State to make an order (made by statutory instrument) reducing membership of the BRB to a chairman and one or more other persons appointed by the Secretary of State. The Secretary of State may also by notice in writing remove from office any other member of the Board or vary the terms of his appointment. Clause 228(4) requires the Secretary of State to make an order providing for the dissolution of the British Railways Board when, after consulting the Board, he considers that it is no longer necessary for the Board to continue to exist. This order may contain such provision as the Secretary of State considers appropriate (including provision modifying the effect of any enactment) for the Board or the Authority to prepare accounts for the final financial year of the Board, and to make and lay before Parliament an annual report on the Board's functions.

20. Flexibility is needed because the abolition of the BRB (by order under subsection (4)) may not immediately follow establishment of the SRA. The transfer of some rights and liabilities of the BRB, notably those under the Channel Tunnel Usage Contract will need the consent of other parties (Eurotunnel in the case of the Usage Contract). The BRB is working to secure transfer as soon as possible after the SRA is established. Flexibility is also needed to deal with the final accounts and annual report of the Board on abolition. In the unlikely event that there will be a lengthy period in which the Board will need to exist alongside the SRA, power is needed (by order under subsection (3)) to reduce membership of BRB to the minimum necessary to conduct its affairs.

21. The Government is of the view that a Parliamentary procedure would not be appropriate since the powers are exercisable for the sole purpose of winding down or abolishing the British Railways Board. These powers are precedented in Section 23 of the Coal Industry Act 1994.

CLAUSE 230: COMPETITION FUNCTIONS OF THE REGULATOR

22. Clause 230 relates to the concurrent exercise by the Rail Regulator and Director General of Fair Trading of functions under Part I of the Competition Act 1998. Subsections (2) and (3) amend section 67 of the Railways Act 1993 by clarifying that the concurrent powers are in respect of "services relating to railways". New subsection (3ZA) defines "services relating to railways". New subsection (3ZB) enables the Secretary of State to make an order amending (3ZA) to amend the list of services relating to railways if it becomes apparent that there is a competition issue.

23. Section 67(3) of the Railways Act is amended to make it clear that the Rail Regulator's Competition Act jurisdiction will not be confined to railway services in the narrow Railways Act sense of that phrase. It will also cover certain other specified services relating to railways over which he has no general jurisdiction under the Railways Act 1993.

24. Orders made under this clause would be subject to the affirmative resolution of both Houses of Parliament.

CLAUSE 234:STANDARDS

25. Clause 234(1) enables the Secretary of State to make regulations making provision for the setting of standards, and compliance with them, in relation to railway assets, vehicles or services. The principal reason that this power is being sought is facilitate the transposition into domestic law of the EU Directive on the Interoperability of the Trans-European high speed rail system and the proposed EU Directive relating to the conventional rail system, if, as expected this is adopted by the Council and European Parliament later this year.

26. The existing and proposed Directives provide inter alia for the establishment of a committee of industry representatives (the European Association on Railway Interoperability) to draw up common standards ("technical specifications for interoperability (TSIs)" in the Directives); and for the setting up of notified bodies to monitor compliance with such standards. A key requirement of the Directives is that the TSIs should have effect as soon as they are adopted. Implementation of the Directives through regulations made under section 2(2) of the European Communities Act 1972 would not allow any reference to be made to the TSIs until they had been adopted, but the powers being sought under sub-clause 234(2) would allow regulations to refer the TSIs prior to their adoption and for the TSIs to have effect in UK law as soon as they were adopted. The UK is already the subject of infraction proceedings because of its failure to implement the high speed Directive, which was issued in 1996 and the powers being sought are considered essential to enable the UK to meet its Treaty obligations

PART V: MISCELLANEOUS AND SUPPLEMENTARY

LICENSING OF OPERATORS OF GOODS VEHICLES

1. Clauses 241 to 243 and Schedule 29 insert a Schedule 1A in the Goods Vehicles (Licensing of Operators) Act 1995 to provide a framework for the operation of an impounding scheme. It would allow the Secretary of State for the Environment, Transport and the Regions to make regulations relating to the detention, immobilisation, removal and disposal of illegally operated vehicles and also for applications and appeals by any owner who believed that his vehicle was wrongly detained.

2. Paragraph 1(1) of Schedule 29 sets out three definitions and paragraph 1(2) enables the term "owner" to be defined in regulations. This would specify who can make an application under paragraph 9 of that Schedule.

3. Paragraph 2 enables regulations to set out a detailed scheme for the detention of vehicles and their contents found to be operating without an operator's licence. Regulations may not authorise a person other than a constable in uniform to stop a vehicle on any road.

4. Paragraph 3 enables regulations to make provision with respect to property detained by virtue of paragraph 2.

5. Paragraphs 4 and 5 provide for regulations to be made setting out the arrangements for the immobilisation and removal of vehicles which are detained. It is envisaged that most vehicles would be detained at organised roadside checks, in circumstances where persons authorised by the Vehicle Inspectorate would be available to remove the vehicle so that it could be stored elsewhere. Immobilisation would, therefore, usually only be necessary in certain cases; for example, if a Vehicle Inspectorate examiner found an illegally operated vehicle unexpectedly and had to summon an authorised person to remove it.

6. Paragraph 6 enables regulations to make provision so that the Vehicle Inspectorate can arrange for suitable persons to remove and store vehicles which are detained. Regulations may also provide for a vehicle which is to be detained to be driven first to its destination or another suitable place to deliver the contents.

7. Paragraph 7 enables regulations to make provision for informing persons who may be entitled to the property that it has been detained eg publication and giving of notices.

8. Paragraph 8 enables regulations to make provision for a goods vehicle detained by virtue of paragraph 2 to be returned to the owner.

9. Paragraphs 9 to 11 enable regulations to set out the details of an application and appeal process for an owner, as defined in regulations, who believed that his vehicle was wrongly detained. An application would be made to the Traffic Commissioner and there would be a right of appeal from his decision to the Transport Tribunal. There is a right of appeal from determinations of the Transport Tribunal to the Court of Appeal (paragraph 14 of Schedule 4 to the Transport Act 1985).

10. Paragraph 12 enables regulations to provide that, if no application is made to the Traffic Commissioner in accordance with regulations made by virtue of paragraph 9, any goods vehicle detained by virtue of paragraph 2 may be sold or destroyed in such manner as may be specified in regulations.

11. Paragraph 13 enables regulations to allow the Vehicle Inspectorate or persons authorised by them to retain the contents of the vehicle until they are claimed by their owner within a period to be specified or sold or destroyed as specified in regulations. Contents in poor or deteriorating condition will be disposed of without delay.

12. Paragraph 14 enables regulations to ensure that a vehicle or its contents stored under this legislation should be kept safely.

13. Paragraph 15 enables regulations to allow the net proceeds from the sale of a vehicle which had been detained, once the costs of removal and storage are met, to be paid to its owner. A time limit would be specified for claims under the regulations.

14. Paragraphs 16 to 18 enable regulations to include provisions about the resolution of disputes and provisions creating certain offences.

15. Regulations made under the inserted Schedule 1A are subject to the negative resolution procedure (section 57(1) of the Goods Vehicles (Licensing of Operators) Act 1995). The Secretary of State must consult representative organisations before regulations are made (section 57(1) of that Act).

16. The provisions also substitute a new section 5(6) of the Goods Vehicles (Licensing of Operators) Act 1995 to abolish the "margin concession". The current section 5(6) enables newly acquired vehicles within the maximum number authorised under an operator's licence to be used for up to a month without notification to a Traffic Commissioner and without a disc being displayed. This means that a vehicle may be operating legally even though an operators's licence disc is not displayed on the windscreen. The substitution of the new section 5(6) will enable Vehicle Inspectorate examiners at the roadside to check whether a vehicle is being operated without a valid operator's licence. The existing power to prescribe a fee is reproduced unchanged in the substituted subsection.

SUPPLEMENTARY

CLAUSE 248: COMMENCEMENT

17. Clause 248 provides usual powers for the commencement of the Bill's provisions by the Secretary of State (248(1)) or the National Assembly for Wales (248(2)). The order to commence the provisions relating to mandatory travel concessions in Greater London (clause 139) is to come into force on 1 April in any year and to be made at least 3 months in advance of the commencement date. This allows for appropriate flexibility in respect of existing schemes but ensures proper time for preparations to be made.

CLAUSE 249: TRANSITIONALS AND SAVINGS

18. In addition to the delegated powers listed elsewhere in this Memorandum, clause 249 provides enabling powers for the Secretary of State or National Assembly for Wales to make such transitional provisions or savings as they consider appropriate in connection with the commencement of any provision of any Act resulting from the Bill.

CLAUSE 250: POWER TO MAKE AMENDMENTS

19. Similarly, clause 250 gives the Secretary of State or National Assembly for Wales enabling powers to make such further consequential amendments by order as they consider appropriate. This power is needed in order to permit any amendments to other legislation that are later discovered to be necessary. The powers are similar to those in the Railways Act 1993, which have (for example) been used to amend the Environmental Protection Act 1990 to ensure that the successors to British Rail have responsibility for dealing with litter at railway stations. The use of such powers to permit such amendments (largely those not foreseen during the passage of the Bill but later found to be necessary) is well precedented but normally such instruments have been subject to negative resolution procedures. Clause 250 provides that those orders made by the Secretary of State would be subject to affirmative resolution procedure.

20. A similar power is provided for the National Assembly for Wales in relation to Parts II and III of the Bill and instruments made under those Parts. This power is given as a consequence of the commencement powers conferred by clause 248(2).



ANNEX A

PART III: ROAD CHARGING AND WORKPLACE PARKING LEVY

Regulations on Order Making

Regulations on order making might cover the following issues:

  • Procedure for making orders, and the form orders should take
  • Information that may be required within order (including, for example):
    • Roads to be charged
    • Time limit of charging scheme/indefinite
    • Charges to be imposed, times and days and in any other circumstances
    • Method for modifying charge rates
    • Any requirements for equipment or documents to be kept in vehicles
    • Classes of vehicle being charged
    • Details of exemptions from charges
    • Details of any reduced rates and limits on charges payable
    • Manner in which charges are to be made, collected, recorded and paid.
  • Circumstances under which a scheme can be varied, and procedure for doing so
  • Circumstances under which a scheme may be revoked, and procedure for doing so

Provisions about the publication of proposals for orders:

  • Provisions relating to those who are to be consulted, and methodology of consultation, including time periods, publicity and availability of information
  • Procedure for objecting, and treatment of objections
  • Procedures for making of the final order, including notification procedures
  • Commencement dates of order

NB: This is an indicative list only; more work is needed to define what might be included in the Regulations, and relevant parties will be consulted.



ANNEX B

PART III: ROAD CHARGING AND WORKPLACE PARKING LEVY

REGULATIONS ON ENFORCEMENT

We would expect enforcement regulations for road user charges and the workplace parking levy to cover the following issues:

Road user charging

Penalty charges:

  • To allow charging authorities to set penalty charges
  • Arrangements for issuing penalty charge notices
  • Arrangements for recovering penalty charges as civil debts (these arrangements will broadly follow those in the Road Traffic Act 1991)
  • To allow motor vehicles to be examined
  • To provide for the wheelclamping, removal, storage and disposal of vehicles that have not paid a road user charge (arrangements will follow those in the Road Traffic Act 1991)
  • An appeals and adjudication process (as with decriminalised parking enforcement, the first stage of an appeal will be to the charging authority, with independent adjudicators providing the second stage of an appeal)
  • To provide what is admissible as evidence for the non-payment of a road user charge (eg cameras and sworn statements).

Workplace parking levy

Penalty charges:

  • as above
  • An appeals and adjudication process (the first stage of an appeal would be to the licensing authority. A dispute would be resolved in the civil court if it was not resolved at the first stage appeal to the licensing authority).
  • To provide what is admissible as evidence for the non-compliance with the workplace parking levy (eg photographic evidence and sworn statements).

May 2000


6  DETR, December 1998.  Back
7  SI 1996 2489. Back
8  DETR, London, February 2000. Back

 
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