House of Commons - Explanatory Note
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Clause 129: Mandatory Travel Concessions in Greater London

108. Clause 129 makes separate provision, to similar effect, for Greater London, by modifying the provisions in the Greater London Authority Act 1999 which define when the reserve free travel scheme will be triggered. If a half-fare concession is not made available to pensioners on journeys on the London bus network (as defined in section 181(3) of that Act) beginning at specified times, the reserve scheme will come into effect. Again the Secretary of State has power to extend eligibility for the concession to other eligible categories of London resident and to improve the concession to better than half the fare (clause 129(7)).

109. Nothing in the Bill requires any change to be made to the present voluntary free scheme agreed between the Boroughs and London Transport or to any future free scheme agreed by virtue of the 1999 Act.

Clauses 130 to 135: Financial provisions

110. Clause 130 amends the criteria by reference to which local authorities must decide which tender to accept in the case of tenders for additional subsidised public transport services under section 9A of the 1968 Act and section 63 of the 1985 Act (which are mentioned further at paragraph 117 below). It introduces a new 'best value' test by requiring local authorities to have regard to economy, efficiency and effectiveness and also to have regard to the relevant bus strategy, and environmental issues, namely the reduction or limitation of noise or air pollution.

111. This clause also removes the present constraint, imposed by section 92(1) of the 1985 Act, that in exercising powers to subsidise those services local authorities must not act so as "to inhibit competition". It is replaced with a new duty to have regard to the interests of the public and of operators. This is intended to make it easier for authorities to subsidise additional service frequency in appropriate circumstances by removing them from the requirement to consider whether competition might be inhibited, however slightly.

112. Clause 131 makes new statutory provision for grants to bus operators, including power to make regulations as to the classes of bus services for which grant may be paid, and the method of calculation. When introduced, this power will replace the current Fuel Duty Rebate ("FDR") scheme under section 92 of the Finance Act 1965 with a more flexible power enabling grant to be paid by the Secretary of State or the NAW to bus operators on a different basis from the present scheme. Provision could, for example, be made for differential rates of grant to encourage the use of more environmentally friendly fuels or vehicles.

113. Clause 132 makes alternative provision to section 111 of the 1985 Act (traffic commissioners' powers in respect of unreliable or unregistered services) as from the time when FDR is replaced by clause 131. That section presently allows the traffic commissioners to demand repayment of 20% of eligible FDR in the event of an operator being found to have contravened section 6 of the 1985 Act. Under this clause, the traffic commissioners will be able to impose a financial penalty. The maximum penalty is £550 (or such other sum as may be prescribed by order - subsection 8 - multiplied by the number of vehicles the operator is licensed to use under his public service vehicle licence, representing approximately the same level of penalty as the current penalty. There will continue to be a right for operators to appeal to the Transport Tribunal, as now.

114. Clauses 133 and 134 empower the Secretary of State or NAW to make grants to local transport authorities other than PTAs (clause 133) and to PTAs (clause 134) for general local transport purposes. Grants may be paid subject to conditions or not. One effect of these clauses is to put on a permanent statutory basis support for rural local transport in England and Wales which is currently covered by special grant reports approved annually by Parliament under section 88B of the Local Government Finance Act 1988. (See also paragraph 178 below.)

115. Clause 135 amends the present power of the traffic commissioner under section 111 of the 1985 Act to impose a penalty on a bus operator, if he fails "to a significant extent" to operate his services as registered under section 6 of the 1985 Act. Currently the commissioner must impose a penalty of 20% of the FDR rebate paid in the previous three months. The amendment will enable a commissioner henceforth to impose a penalty between 1% and 20% and he will no longer need to satisfy himself that the operator has failed "to a significant extent", thus allowing a more flexible, and perhaps more frequent, use of the power. (This amendment only has effect, however, until such time as section 111 is replaced by the provisions of clause 132.

Clause 136 to 138 and Schedule 10: Supplementary

116. Clauses 136 to 138 make provision for regulations and orders under Part II of the Bill and introduce the minor and consequential amendments in Schedule 10, and provide for definitions.

117. Paragraphs 2 and 8 of Schedule 10 in particular amend section 9A of the 1968 Act and section 63 of the 1985 Act by removing the obligation imposed on local authorities and PTAs to formulate policies as to what subsidised public transport services are required in their area. This is now replaced by the duties under clauses 92 and 94 to produce local transport plans and bus strategies. The duty in those enactments to secure the provision of services which would not otherwise be provided commercially is retained.

118. The Schedule also amends the Road Traffic Regulation Act 1984 to empower local traffic authorities to make traffic regulation orders affecting trunk roads if necessary to give effect to QP schemes, if the Secretary of State or NAW consents.


119. The Road User Charging and Workplace Parking Levy provisions are in three Chapters. These are:

Chapter I - Road User Charging

Chapter II - Workplace Parking Levy

Chapter III - General and Supplementary.


Clauses 139 to 143: Charging schemes

120. Clause 139 enables road user charging schemes to be introduced by:

  • local traffic authorities outside London, acting either singly, or jointly with another local authority, or authorities with a London traffic authority or authorities (ie Transport for London, or London borough councils or the Common Council of the City of London) and;

  • by the Secretary of State or the NAW.

121. Clauses 140 and 141 provide that charging schemes made by local authorities may only apply to roads for which the charging authority or authorities are the traffic authority, and that charging schemes should be introduced only in support of a local transport plan (see paragraphs 78 to 81). Clause 142, which relates to joint local authority - London charging schemes, also provides that charging can occur only on the roads for which the participating authorities are the relevant traffic authorities, and that the scheme must support both the local transport plan(s) of the non-metropolitan authority or authorities, and the London Mayor's statutory transport strategy.

122. Clause 143 sets out the two cases where charging can be introduced on trunk roads by the Secretary of State or the NAW. The first of these is charging on bridges and tunnels of at least 600m in length. This is to allow for future cases where charging may be an option for making expensive new structures affordable, and for continued tolling on crossings when the current tolling powers are due for renewal. The Government has no plans to introduce tolling on existing bridges and tunnels which are not already tolled. The second case is where a local authority requests the Secretary of State or the NAW to charge on a stretch of trunk road, in order to complement a local authority road user charging scheme.

Clauses 144 to 146: Making of charging schemes

123. Clause 144 specifies that a traffic authority or authorities acting jointly - local, Transport for London or the Secretary of State - wanting to introduce a charging scheme must do it by making an order. If an authority wants to change or revoke a scheme, this must also be done by order. Where the Secretary of State or NAW has started a charging scheme on a trunk road at the request of a local authority, it cannot be changed or revoked unless the local authority has been consulted.

124. Clauses 145 and 146 define the role of the two national authorities in relation to local authority orders setting up, changing or revoking charging schemes. Clause 145 requires that all non-London local authority orders must be approved by the Secretary of State or NAW, as appropriate. Where there is a joint scheme between an English and Welsh local authority, there must be approval from both national authorities (see clause 174(1) for definitions of "appropriate national authority"). Where there is a scheme run jointly by an English local authority and a London authority, approval will be needed from the Secretary of State and the Greater London Authority. In all cases, the approving authority can make modifications to the order.

125. Under clause 145(2) the Secretary of State or the NAW will also be able, by regulations, to waive the requirement for his/its consent. This will allow, for example, local authorities to make minor changes to their schemes or suspend charges through more streamlined, simplified procedures, provided certain conditions are met. In the longer term, it may be possible to broaden the scope of the waiver given by regulations.

126. Clause 146 provides for the Secretary of State or the NAW to consult or hold an inquiry on their own schemes, or require additional consultation or an inquiry to be held before granting approval for a local authority scheme.

Clauses 147 to 148: Contents of charging schemes

127. Clause 147 sets out the basic elements which must be included in the order establishing the charging scheme - the roads to be charged, and how the charges are defined, the classes of motor vehicles which will be charged, the levels of charge, and the duration of the scheme. These elements are for the charging authority to determine. Clause 147(3) ensures that charging powers cannot be used purely as a charge on parked vehicles.

128. Clause 147(5) describes some of the factors by reference to which different charges might be imposed, but this is not an exhaustive list. Clause 147(7) allows the charging scheme to require documents or equipment to be carried in or fitted to a vehicle when it is on a charged road. This gives charging authorities power to ensure that everyone who enters a scheme must have a permit or electronic payment unit in their vehicle, or have to pay a penalty charge. Clause 148 provides the power for regulations to set exemptions from charges, reduced rates or limits on charges which will apply to all charging schemes. The Secretary of State will be able to set exemptions, reduced rates or charging limits applying to all local authority schemes in England and Wales (not London only schemes). This could be used for an exemption, for example, for emergency vehicles or disabled persons. Subject to this power, the NAW will be able to set exemptions, reduced rates or limits applying to Welsh local charging schemes. Subject to the regulations, any charging scheme will also be able to set additional exemptions, reductions or limits as the authority wishes, subject to approval.

Clauses 149 to 150: Enforcement of charging schemes

129. Clauses 149 and 150 allow the Secretary of State to make regulations to provide for the fair and effective enforcement of road user charging schemes. This includes arrangements for adjudication. The Bill provides that non-payment of a road user charge will be a civil matter rather than a criminal offence, and outstanding charges will be recoverable as a civil debt. Charges will not apply to vehicles that are not on the road. It is expected that the registered keeper of a vehicle will generally be liable to pay any road user charge and any penalty charge notices, but that there will be a defence where the vehicle has been stolen. Deliberate tampering with any in-vehicle or roadside equipment of a vehicle with intent to avoid payment or being identified as having failed to pay are more serious cases and will therefore be subject to criminal rather than civil law. Clause 150 provides powers for the Secretary of State to make regulations to allow enforcement actions such as the examination of vehicles and equipment, and the mobilisation or removal and storage of vehicles.

Clauses 151 to 153: Supplementary

130. Clause 151 allows charging authorities to install and maintain any equipment or buildings in connection with effective operation of a charging scheme. The Secretary of State will have the power to set the basic specifications for and type approve any equipment, as well as setting out the basic classifications of motor vehicles (eg by weight, or engine size), so that all schemes will be technically interoperable (see clause 174(3)).

131. Clause 152 allows the Secretary of State or the NAW to direct a charging authority to put up traffic signs on their land in relation to a charging scheme; and to direct any authority to put up traffic signs connected with a trunk road charging scheme.


Clauses 154 to 158

132. Clause 154 defines the concept of licensing schemes, and enables licensing schemes to be introduced by a local traffic authority outside London, either singly or jointly with another local traffic authority or authorities or with a London traffic authority or authorities. A licensing scheme is the mechanism for collecting the workplace parking levy. It will be for local authorities to decide whether or not to bring forward a scheme.

133. Persons will be able to apply to local authorities for a licence to park up to a stated maximum number of vehicles ("licensed units"), and pay the appropriate sum based on the charge per unit. Local authorities will be obliged to issue the licence for the number of units requested - they will not be able to use this mechanism as a means of directly controlling the number of parking places provided.

134. Clauses 155 to 157 allow licensing schemes to cover any part of the area of the authority or authorities making the scheme, and require that a scheme must be in support of the relevant local transport plan or plans (see paragraphs 78 to 81), or in the case of a joint scheme involving a London authority the transport strategy prepared and published by the Mayor.

135. Clause 158 provides the detailed definition of workplace parking. The definition is designed to include most forms of parking by those attending premises where they will carry out their work. The parking can be at or in the vicinity of the workplace - this is intended to catch, for example, parking at a car park adjacent to the workplace, but to exclude parking at a park and ride site or station car park, where the worker makes a further journey to reach the workplace. It also is designed to include parking provided by arrangement with a third party - for example where an employer has a contract with a car park company to provide a certain number of spaces for its workforce.

136. Included in the definition is parking by the employer himself, employees, suppliers, business customers or visitors, and pupils or students at an educational establishment. Suppliers can mean, for example, a photocopier engineer called out to make repairs, or an external consultant providing advice on site. The definition also includes members of organisations such as a recreational club or Chamber of Commerce, but only when they are attending a place where the organisation carries on business. Clause 158 also includes a power for the Secretary of State or NAW to change this definition by regulations. This power is designed to allow the prompt closure of any loopholes which the definition may contain. It does not provide for the extension of the scope of the levy beyond workplace parking to customer leisure or retail parking.

Clauses 159 to 161: Making of licensing schemes

137. Clauses 159 to 161 closely follow clauses 144 to 146 in Chapter I on road user charging, setting out the order-making process for introducing a licensing scheme.

Clauses 162 to 164: Contents of licensing schemes and licences

138. Clause 162 sets out the basic elements which a licensing scheme must contain, and allows for variations in the charges according to different days or times of day, different parts of the licensing area, different classes of motor vehicles or different numbers of licensed units. For example, an authority will be able to choose to apply the levy to parking during normal office hours on weekdays, to charge different rates for two-wheeled vehicles, or to set a sliding scale so that the charge per vehicle increases or decreases above certain thresholds.

139. Clause 163 follows clause 148 in Chapter I in granting powers to set exemptions, reduced rates or limits on charges by regulations.

140. Clause 164 sets out the essential elements that must be included in a licence under a licensing scheme. Licences may not be granted for a period of less than a year.

Clauses 165 and 166: Enforcement of licensing schemes

141. Clause 165 largely follows clause 149(1) to (3) in Chapter I, in providing for regulations to set out the enforcement requirements for licensing schemes. Subsection (3) enables the Secretary of State to make regulations making the occupier of premises (or, in specified circumstances, other persons) liable to pay the parking levy. Subsection (4) enables the regulations to specify who is to be considered the occupier or occupier of premises for these purposes. Clause 166 allows for a right of entry to premises by an authorised official to check that workplace parking is appropriately covered by a licence. It also creates an offence of intentionally obstructing an authorised official in the exercise of these powers.


142. The following clauses are common to both road user charging (Chapter I) and the workplace parking levy (Chapter II).

143. Clause 168 allows charging/licensing authorities to spend money on operating a charging or licensing scheme, and to enter into contracts with third parties for the operation of a scheme. Clause 169 allows for guidance to be issued. Clause 170 allows various bodies carrying out statutory functions to share information in relation to charging schemes or licensing schemes. This will allow, for example, information needed for enforcement purposes to be given by the Driver and Vehicle Licensing Agency ("DVLA") to the charging authority. Clause 171 gives a regulation-making power to the Secretary of State to provide for appeals and adjudication in respect of schemes. Clause 172 ensures that this Part applies to the Crown and its agents.

144. Clause 173 establishes that regulations are exercisable by statutory instrument; most will be subject to the negative resolution procedure. The power to amend the definition of workplace parking in clause 158(5), and the powers to change hypothecation provisions in Schedule 11 will be subject to affirmative resolution procedure in the House of Commons.

Schedule 11

145. The Schedule contains the financial provisions for road user charging and workplace parking levy schemes.

146. Paragraph 2 defines net proceeds. Once the gross proceeds have been received under a scheme, the charging authority will subtract the expenses of establishing or operating the scheme to give the net proceeds. Paragraph 2(2) allows the Secretary of State or the NAW by regulations to treat certain wider expenses as deductable from gross proceeds in the case of a trunk road charging scheme. These relate to the costs of constructing, improving or maintaining the charged road. This will particularly apply to private finance contracts where a private operator may be contracted to build or maintain a road as well as operating the charging scheme on it.

147. Paragraph 2(5) allows a complementary trunk road charging scheme and the local authority scheme which it complements to include the expenses of either scheme within its own expenses provided there is no double-counting. This will allow flexibility for local authorities and the Highways Agency to agree to apportion costs between the complementary schemes as is most appropriate.

148. Paragraphs 3 and 4 deal with the apportionment of the net proceeds of a joint scheme or of a complementary trunk road charging scheme and the local authority scheme it is supporting.

149. Paragraphs 5 and 6 cover the accounts and funds charging or licensing authorities are required to keep and the treatment of deficits and surpluses between financial years.

150. Paragraph 7 sets out how net proceeds can be spent for schemes starting in the 10 years after commencement of the charging powers in the Bill. It requires that net proceeds will be "hypothecated" and can only be spent in support of the authority's local transport plan for the first ten years of a scheme's life. It also makes provision for joint schemes, including ones involving a London charging authority where their share of proceeds must be spent in line with the Mayor's transport strategy.

151. Paragraph 7 also allows periods of hypothecation that are longer than 10 years to be agreed by the Secretary of State or the NAW at the outset for individual schemes. It also allows regulations to make provision, where a scheme is revoked and restarted, or modified, to judge whether the same or a different scheme can be regarded as being in force for deciding when the period of hypothecation starts or ends.

152. Paragraph 8 provides that after the period of hypothecation local authorities must spend net proceeds in accordance with regulations made by the Secretary of State. It would also allow the Secretary of State to provide that schemes starting later than 10 years after the commencement of the charging powers could be included in paragraph 7's hypothecation requirements. Paragraph 8 requires that local authorities must spend net proceeds only on things that offer value for money, and allows the NAW and the Secretary of State to issue guidance.

153. Paragraphs 9 and 10 require local authorities outside London to prepare a 10 year general plan for spending proceeds, and more detailed plans linked to the timetable for preparing local transport plans. These have to be agreed by the Secretary of State or the NAW. Paragraph 11 allows the Secretary of State, in consultation with the Greater London Authority, to make regulations about the application of revenues from joint schemes involving a London charging authority.

154. Paragraph 12 covers the application of revenues from trunk road charging schemes. Schemes that are complementary to local authority charging schemes have parallel arrangements; the Secretary of State or the NAW will keep the revenue for 10 years from the start of a scheme where that scheme is started within 10 years of the legislation coming into force. The revenue must be spent on transport purposes. Paragraph 12(2) allows that 10 year period to be extended by regulations. The proceeds of trunk road bridge and tunnel charging schemes will be available for use of the Secretary of State or NAW for 10 years from the start of the scheme, whenever that is.

Schedule 12

155. Schedule 12 contains amendments to Schedules 23 and 24 to the Greater London Authority Act 1999. In particular it extends a number of the provisions referring to the operation of charging and licensing schemes contained in this Bill to London.


156. The Railways provisions are in three Chapters. These are:

Chapter I - The Strategic Rail Authority

Chapter II - Other provisions about Railways

Chapter III - Supplementary.


Clauses 176 to 179 and Schedule 13: The Strategic Rail Authority

157. Clauses 176 to 179 and Schedule 13 provide for the establishment of the Strategic Rail Authority ("the Authority"). The Authority will be a body corporate and will have between eight and fifteen members. Members will be appointed by the Secretary of State who may, by order made by statutory instrument, substitute different figures for the minimum and maximum membership of the Authority. In making appointments the Secretary of State is to have regard to the desirability of appointing persons who have experience of, and shown capacity in, some matter relevant to the functions of the Authority. The Authority will not be a Crown body but will be a Non-Departmental Public Body. The Authority's staff will not be civil servants. The chairman of the Authority is to be appointed by the Secretary of State and the other members (including any deputy chairman) are to be appointed by the Secretary of State after consultation with the chairman. The Authority appoints its own chief executive, with the Secretary of State's approval, who is to be appointed a member of the Authority.

158. Schedule 13 covers provision for the appointment, tenure, and remuneration of members and staff of the Authority and for procedural matters. Paragraph 1(4) makes standard provision for the Secretary of State to remove any member from office on the grounds of incapacity or misbehaviour. The Schedule sets out provisions as to members' interests and conduct to prevent conflicts of interest arising.

159. Schedule 13 also provides for the financing of the Authority. The Authority will be funded by the Secretary of State, and will also be entitled to borrow money, both from the Secretary of State and temporarily from other sources (eg by overdraft or bridging facility) with the consent of the Secretary of State and the approval of the Treasury. Restrictions on borrowing and a borrowing limit are set out. Provision is made as to the terms of any loans from the Secretary of State. The requirements for accounts and audit are set out. The Secretary of State is allowed to guarantee sums borrowed by the Authority, and the procedures which must be followed to facilitate this are laid down. The Schedule allows the Secretary of State to require the payment to him of sums which are received by the Authority, in particular where these are surplus.

160. The Authority is permitted to set up committees and sub-committees and is allowed to delegate functions to its members, staff, committees and sub-committees and wholly owned subsidiary companies.

Clauses 180 to 185: Purposes, Strategies and Exercise of Functions

161. Clauses 180 to 182 set out the framework within which the Authority must work to bring strategic leadership to the railway industry, with a hierarchy of purposes, strategies and duties. They set out purposes for which the Authority is established and how it should seek to achieve those purposes.

162. First, clause 180 sets out the primary, high level, purposes of the Authority: what might be called its "objectives" or "mission". These purposes are:

  • to promote the use of the railway network for passengers and freight;

  • to secure the development of the railway network; and

  • to contribute to the development of an integrated system of transport of passengers and freight.

163. The Authority has to explain how it will give effect to these purposes through strategies which it must formulate and keep under review (clause 181). These will still be at a high level. One strategy must relate to services in various parts of Great Britain for facilitating the use of the Channel Tunnel.

164. The Authority must consult the Rail Regulator and other persons as it thinks fit, before formulating a strategy and as part of keeping its strategies under review. The Authority is to publish its strategies. The Secretary of State has the power to give directions and guidance to the Authority as to, for example, the matters to be covered by the strategies.

165. Any directions and guidance issued to the Authority are to be published (see clause 184).

166. The Authority will need to exercise its functions (that is all the powers and duties which it has in clauses 186 to 197, both those inherited from the Franchising Director, the British Railways Board, the Rail Regulator and the Secretary of State, and those freshly conferred by the Bill) with a view to furthering its purposes in accordance with any strategies which it has formulated (clause 182). It will also need to exercise its functions in a manner best calculated to achieve the considerations set out in clause 182(2)(a) to (f) and to have regard to the considerations in clause 182(3).

167. The considerations in clauses 182(2) and (3) are broadly aligned with the Regulator's duties under section 4 of the Railways Act 1993 ("the 1993 Act") (as amended by the Bill). If they pull in different directions the Authority will need to do what it considers to be most appropriate, balancing all the relevant considerations.

168. The term "users" in clause 182(2)(a) includes passengers, freight customers, train service operators and, where appropriate, railway facility providers. "Railway services" is defined in section 82 of the 1993 Act and covers passenger, freight, light maintenance, station and network services.

169. The Authority must ensure that any payments made by it are such as it reasonably considers will further its purposes economically and efficiently. This duty includes all payments made by the Authority, whether by way of grant, under a franchise agreement, or under any other agreements made to secure the provision, improvement etc. of services. This provision is based on the similar duty laid on the Franchising Director in section 5 of the 1993 Act (which will be repealed) and is often referred to as the "value for money" duty.

170. The Secretary of State may give directions and guidance to the Authority as to what it should do to achieve its purposes in a way best calculated to balance the various clause 182 considerations. The Secretary of State may also direct the Authority not to exercise a function in a particular manner or not to exercise it without first consulting him or obtaining his consent. For example, the Secretary of State may direct the Authority not to pay freight grants except in accordance with a framework which complies with European Union law on state aids. However, the Authority's duty to obtain value for money in any payments which it makes cannot be overridden by the directions and guidance.

171. The Scottish Ministers may also give directions and guidance to the Authority for services which start and end in Scotland. The Authority must implement these provided that they do not conflict with the Secretary of State's directions and guidance. The Scottish Ministers may also give directions and guidance on Scottish sleeper services, which the Authority must implement provided that they do not conflict with the Secretary of State's directions and guidance, and provided that they do not impact on other services or the non-Scottish budget.

172. Clause 185 protects transactions of the Authority from being invalidated on the grounds merely that it has failed to comply with a requirement to take proper account of all the considerations in clauses 182 and 183.

173. Clauses 186 to 197 describe the main functions and powers of the Authority, including ones transferred from the Franchising Director, the Rail Regulator, the Secretary of State and the British Railways Board.

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Prepared: 1 December 1999