Memorandum by the Department of the Environment,
Transport and the Regions
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
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
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
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
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
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
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
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
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
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
CLAUSE 99: FURTHER PROVISION ABOUT LOCAL TRANSPORT
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
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,
CLAUSES 113 TO 123: BUS SERVICES: QUALITY CONTRACT
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
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
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
- 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
- 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
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
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
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
- 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
that a suitable model for road user charging orders could be found
in 'Local Authorities' Traffic Orders (Procedure) (England and
This is still the Government's view and has been re-affirmed in
"Breaking the Logjam - the Government's response to the consultation".
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
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
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
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
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
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
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
CHAPTER III - GENERAL AND SUPPLEMENTARY
CLAUSE 183: DETERMINATION OF DISPUTES, APPEALS AND
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
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
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
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
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
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
- amending the Rail Regulator's jurisdiction under
the Competition Act (clause 230 amending section 67 of the Railways
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
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
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
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
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
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
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.
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
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
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.
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
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).
PART III: ROAD CHARGING AND WORKPLACE PARKING
Regulations on Order Making
Regulations on order making might cover the following
- Procedure for making orders, and the form orders
- 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
- 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
- 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
- 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.
PART III: ROAD CHARGING AND WORKPLACE PARKING
REGULATIONS ON ENFORCEMENT
We would expect enforcement regulations for road
user charges and the workplace parking levy to cover the following
Road user charging
- To allow charging authorities to set penalty
- 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
- 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).
6 DETR, December 1998. Back
7 SI 1996 2489. Back
8 DETR, London, February 2000. Back