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Baroness Thomas of Walliswood: I understood that aspect of what the Minister said in her original answer. However, my contention is that in the section to which we are referring we are selecting aspects of passenger services which are particularly important and to which the mayor should direct TfL to turn its attention. It is for that reason that I am suggesting that we may wish to come back at a later stage to the idea of the provision of interchange. In order to avoid argument, we do not need to mention the word "cycling". However, my view

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is that we may wish to come back to the important issue of interchange facilities. However, for the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 254D not moved.]

Lord Brabazon of Tara moved Amendment No. 255:

Page 72, line 41, at end insert--
("(3) In exercising his powers under section 133(1) above to determine the matters specified in subsection (2)(a) above, the Mayor shall ensure that the general level of fares to be charged for public passenger transport services by Transport for London at any time after this Act comes into force is no more than the general level 12 months previous to that time increased by a percentage equal to the control rate.
(4) In subsection (3) above the control rate shall be at any time the number of percentage points by which the most recently available figure for the retail prices index has increased on the retail prices index for the month 12 months previous to that figure, less the factor X.
(5) In subsection 4 above--
(a) "the retail prices index" is the general index of retail prices (for all items) published by the Office for National Statistics, and if that index is not published for a month which is relevant for the provisions of this section then this section shall be construed as referring to any substitute index or index figures published by that Office; and
(b) "the factor X" shall, prior to 1 April 2002, be equivalent to two percentage points, and on or after 1 April 2002 shall be equivalent to four percentage points.")

The noble Lord said: There is a misprint in the amendment. The first line should refer to section 134(1) rather than "section 133(1)". I think that that is obvious.

This amendment seeks to place an annual ceiling on the general level of fares charged by Transport for London and to ensure that this level falls year on year. Transport for London clearly is a public utility. In future, it could become a privatised utility. Parts of it are run at the moment by the private sector. Other parts of it are going to be subject to public/private partnerships.

It is now established that significant utilities, whether public or private, should be subject to a regulator, one of whose functions is to protect the interests of the consumer by ensuring efficiency through a ceiling on costs. I do not believe that anyone would doubt that the major incentive for the vastly improved provision of utilities which began in the 1980s was the use of this price ceiling, particularly in gas, electricity, telecommunications, airport charges, and even the privatisation of rail, where we have seen the regulator imposing fare increase ceilings.

In this Bill, the mayor stands in relation to Transport for London as their regulator. Why then, when the Government would not dare to remove the consumers' price ceiling on other utilities, should not Transport for London be subject to regulation on a similar basis? This amendment seeks only to cap the general fare level overall. The Bill as drafted refers to a "general level of fares", and we adopt the principle. It is clearly right that premium services, such as those for tourists, should be able to cross-subsidise other services.

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I should point out that the figures of factor X in the last section of this amendment may or may not be the right ones. I have put those in merely as a suggestion. It could be that other figures would be better, but the principle remains the same. I beg to move.

Lord Clement-Jones: In rising to support this amendment in spirit, let me first confess in advance to blatant plagiarism. I and others on these Benches liked some aspects of this amendment so much that we turned it into a specific amendment for the London Underground under Amendment No. 280WA, to which we will be speaking later. This, of course, is much broader than that, dealing right across the board with Transport for London. We on these Benches treat it in the spirit of a probing amendment. I suspect that the noble Lord, Lord Brabazon of Tara, is treating it in very much the same spirit. It is very important that we know what the underlying assumptions are as regards fare levels. There are limits on this which are used by Transport for London.

I shall at a later stage go in some detail regarding our own amendments into Ministerial statements on this subject and the failure to publish the Price Waterhouse work underlying the PPP proposals. I also wish to go into some confusion that seems to be evidenced by Ministers as to precisely what assumptions are being made about fare levels, in terms of whether or not the assumptions are for a 1 per cent above RPI rise or whether it is purely according to the rate of inflation. There seem to have been some rather contradictory statements made on this matter. All this lack of transparency points strongly to a need for robust pricing controls.

These amendments are, of course, based on the RPI minus X formula which is used by the privatised utilities. Whether X should be 2 per cent or 4 per cent at any particular time is, of course, a moot question. I hope, however, that the Government will give careful consideration to this amendment. I believe that it points to a very valuable way forward.

Lord Berkeley: On the face of it, this amendment is a good idea. However, if one looks back 20 years, I wonder whether it would have been a good thing if this amendment had been introduced in the London Transport legislation. It is my perception from 18 years of the last government trying to run the Underground that fares used to go up with monotonous regularity. If that is coupled with an inability to borrow without getting Government approval--and the grants will probably go down because these things happen--one will end up with a worse service, increasing breakdowns and no Circle Line, just as we have today, which is a consequence of 20 years of that policy.

I believe that it would be much better if the mayor and Transport for London were allowed some freedom to do what they like in relation to this matter. I certainly

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do not believe that they will wish to suddenly charge tourists double the fare that they charge us for sitting on the Circle Line.

Baroness Farrington of Ribbleton: This amendment would greatly restrict the mayor's control over the affairs of Transport for London's public transport services. The amendment would set a limit of RPI minus 2 per cent in the year on year increase in any fare on public transport in London until April 2002, and RPI minus 4 per cent thereafter.

The mayor is to define the GLA strategies, including the integrated transport strategy; and the mayor is to set the framework on important matters such as fares. To curtail the mayor's freedom in this area would be out of keeping with the general principle that the mayor should have the powers that he or she needs to make sensible decisions on how the transport strategy can be delivered.

The amendment would also undermine the relationship between the mayor and Transport for London, in that it would limit the mayor's ability to give directions and guidance to Transport for London. But TfL is the mayor's executive body, whose main role is to deliver the mayor's transport strategy. Clause 135 makes it clear that the general levels of fares, the route structure and the frequencies are to be the mayor's responsibility. A mayor might well want to set efficiency targets for reducing costs relative to inflation, but it would be difficult for the mayor to design an innovative transport strategy if major issues such as this are determined on the face of the Bill. I therefore hope that the noble Lord will feel able to withdraw this amendment.

Lord Clement-Jones: The Minister did not deal with some of the underlying assumptions about fare structures, in particular as regards PPP. I understand her remark about not wishing to restrict the mayor's ability to decide fares, but the essence of the amendment is to have an understanding of the kind of fares projected for the future and the economics of the PPP stretching into the future.

With reference to the point raised by the noble Lord, Lord Berkeley, if one is caught between the hammer of price regulations and an inability to borrow, that is unsatisfactory. But from these Benches we argue strongly that Transport for London should be entitled to borrow.

Baroness Farrington of Ribbleton: I apologise to the noble Lord, Lord Clement-Jones, if he believed that I did not answer his point. I understood that the noble Lord would raise those issues when speaking later to a similar amendment. Therefore I did not make a detailed note. However, if at that stage I am able to reply to some of the points he raised, I shall do so.

Lord Clement-Jones: I thank the Minister, and look forward with great anticipation to Amendment No. 280WA.

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