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Lord Pearson of Rannoch: My Lords, I thank my noble friend for that reply, which I fear will not bring much comfort to the British bus industry. Could I remind my noble friend that our bus industry is privatised and deregulated, unlike its European competitors, and it therefore needs to be able to respond to international and national market requirements without being fettered by red tape from Europe? In this context, is my noble friend aware that the British and Irish members of the Vehicle Working Group in Brussels are isolated from the other Community countries, so the proposed annex to the draft directives, which seeks to alleviate the position, does not in fact meet our requirements at all? Finally, could I ask my noble friend if he is aware not only that the annex would prevent our buses from circulating in Europe, but also that it would prevent them from being sold in the Far East, where at the moment they are doing extremely well in the interests of this country?

Viscount Goschen: My Lords, I quite agree with my noble friends that there are clear benefits from being able to operate double-decker buses and midi-buses in this country. They are popular, and we feel that they should be able to continue. We aim to ensure that the eventual standards that do come forward will take that fully into account. Progress is being made on this issue, but indeed there is a long way to go in order to convince the Commission and other European countries of the value of our position.

Lord Stoddart of Swindon: My Lords, can the noble Viscount tell the House what on earth the sort of buses we run in London and elsewhere in this country has to

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do with the interfering busybodies in Brussels? Is this not a case of Europe interfering in the nooks and crannies of our national life, which the Foreign Secretary said would not happen, particularly after the passing of the Maastricht Bill and the Maastricht Treaty? Will the Minister give the assurance that, if possible, any suggestion of doing away with our double-decker buses will be vetoed, or that at least the European Commission will be told that it will not be implemented?

Viscount Goschen: My Lords, I do not agree with the noble Lord at all. We aim to establish a single market for vehicles. That will be to the benefit of manufacturers. It will be to the benefit of the United Kingdom bus and coach industry. I simply do not accept that this is a matter of subsidiarity.

Noble Lords: Oh!

Lord Stoddart of Swindon: What is then?

Viscount Goschen: However, we will put forward the case very strongly to ensure that our double-decker buses and midi-buses will be able to continue to be manufactured and sold.

The Earl of Lauderdale: My Lords, why can this not be treated as a matter of subsidiarity?

Viscount Goschen: My Lords, the directive, when adopted, will be one of a number under Article 100a of the treaty designed to harmonise construction standards for motor vehicles. That will complete the single market for vehicles to the benefit of manufacturers. That is the reason why it is not an issue of subsidiarity.

Lord Monson: My Lords, does the noble Viscount agree that Continental manufacturers wanting to sell into the British market are far more handicapped by having to convert from left-hand to right-hand drive than they are by having to adapt to the characteristics of the traditional British double-decker bus, and that therefore that particular argument is a totally spurious one?

Viscount Goschen: No, my Lords, absolutely not. But I agree that there is clearly a left-hand drive/right-hand drive problem. That is obvious. We wish to see proposals which are not design restrictive, which cope with the safety requirements but are not over-prescriptive in terms of comfort and design of the interior of the vehicles, for instance.

Lord Bruce of Donington: My Lords, is the noble Viscount aware that the only reason why this duff draft directive has come about is because the French and the Germans do not have the expertise to produce a double-decker bus? Will he accept that they have no capacity to deal with it at all and are well aware that they cannot compete with us in either South America or Asia? Does he agree that that is the reason why the whole issue has arisen?

Viscount Goschen: My Lords, I agree with the noble Lord to the extent that the United Kingdom is the leader in the double-decker bus field.

Lord Cockfield: My Lords, does the Minister agree that a degree of harmonisation is absolutely essential,

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otherwise the Germans or the Italians, for example, would be able to block the export of buses from this country? Does he further agree that the lack of harmonisation in the case of motor vehicles was one of the grounds on which the French, Italians and others tried to obstruct the export of Nissan motor cars manufactured in this country?

Viscount Goschen: My Lords, my noble friend's question has given a clear explanation of the benefits of harmonisation in the industry.

Lord Carmichael of Kelvingrove: My Lords, I should like to emphasise that I am not by any means anti-Europe. But will he accept that such regulations and directives test the patience of the British public? So far as I remember, the one that most nearly approached this case was the directive on Arbroath smokies. Can the Minister tell the House whether we have a bus industry which is capable of meeting all the requirements of the British bus fleet? Will these directives be an excuse to allow big imports from Europe of buses from Italy, Germany and perhaps France?

Viscount Goschen: My Lords, I cannot answer the noble Lord on the matter of Arbroath smokies. But we do indeed have a very good bus industry in this country. It is well capable of producing buses to the highest specification. The important point is that we and the industry see the clear benefits of harmonisation. We are trying to achieve that without at the same time being over-prescriptive.

Lord Tebbit: My Lords, will my noble friend not simply give the assurance which would satisfy everyone in the House that under no circumstances will Her Majesty's Government allow the Germans, Italians, French, Greeks or others to cook up a set of regulations which will prevent us from manufacturing, using and exporting double-decker buses? Will he accept that, if he were to say that, he would have the support of the whole House?

Viscount Goschen: My Lords, I believe that I said very clearly that our aim in these negotiations is to produce proposals which our bus industry will be able to fit in with and that any moves which will require major design changes to our buses without taking into account safety considerations will be resisted.

Lord Peston: My Lords, will the noble Viscount accept that I find his answer very strange? Is he aware that, quite independently of whether one is for or against the Community, if ever there were a case in which a directive was not needed and competition was needed, this is it? All that is required is open competition, is it not? Why does he not agree, since I understand that that is part of the Government's policy anyway?

Viscount Goschen: My Lords, open competition is a major plank of the Government's policy. Yet we still see the very clear benefits that will come from harmonisation of this industry within the European Community.

Lord Teviot: My Lords, I can speak for the industry and the industry is supportive of the Government in

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what they are doing. Are not all these questions hares in relation to the issue of double-decker buses? Contrary to what my noble friend Lord Pearson said, the industry regards this hare about double-decker buses as being a Euro-myth?

Viscount Goschen: My Lords, I agree with my noble friend that we are keeping in very close contact with the bus industry on this point and will continue to do so.

British Rail: Privatisation Expenditure

2.55 p.m.

Lord Taylor of Gryfe asked Her Majesty's Government:

    What is the total expenditure incurred in consultancy, legal and accountancy fees in the privatisation of British Rail, including Railtrack, and the anticipated expenditure on franchising.

Viscount Goschen: My Lords, total expenditure on external consultancy fees for railways privatisation, including legal and accountancy fees, incurred by the Department of Transport, the Office of Passenger Rail Franchising and the Rail Regulator between 1991-92 and 1993-94 was £19 million. Consultancy costs incurred by BR and Railtrack are a matter for them, but I understand that they were in the order of £30 million up to March 1994. Total planned expenditure by the Office of Passenger Rail Franchising for 1994-95 is £7 million.

Lord Taylor of Gryfe: My Lords, will the Minister accept that I was very interested in the figures quoted? I understand from the annual accounts of British Rail that it has taken 50 per cent. of those costs and the 50 per cent. in its accounts represents £40 million. That suggests that the total amount of fees that I mentioned in my Question are in the region of £80 million. Even if we accept the Minister's figures, does he consider it a reasonable contribution to an efficient railway system when, at the same time that those substantial fees are being incurred, the investment budget of British Rail last year was reduced by 21 per cent.? The public service obligation, which is the subsidy for the day to day running of the railways, apart from investment, was also substantially reduced. Can he justify the expenditure on consultants' fees while there is a reduction in investment in new rolling stock, etcetera, which will make the railway efficient?

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