I beg to move amendment No. 7, in clause 7, page 4, line 24, leave out ‘and effectiveness’ and insert ‘, effectiveness and sustainability’.

With this it will be convenient to discuss amendment No. 8, in clause 7, page 4, line 27, at end insert—

‘(d)existing transport strategies outside Wales, the effect on other transport services and the impact on the efficient operation of the transport network across the UK.’.

The amendment has been tabled on behalf of the Royal Society for the Protection of Birds, which has grave concerns about the lack of reference in the Bill to sustainability, apart from a brief mention of it in clause 1. The Assembly has a statutory duty to promote sustainable development in transport, as in any area. Given that Wales has reached only 2.6 per cent. of the 10 per cent. 2010 renewable energy production target—a very slow increase from 2.4 per cent. in 2002— it is all the more important to create sustainability in other fields. The amendment asserts the importance of having regard to environmental sustainability in securing the provision of public passenger transport services in Wales. The relevance of that is that, as well as promoting economy, efficiency and effectiveness in the provision of public passenger transport, it clearly aids the necessary cause of sustainable development.

In tabling amendment No. 8, our intention is to ensure that the Assembly’s powers with regard to the provision of passenger services cannot be extended without due regard being paid to existing services. We must be certain that the Assembly’s power to secure the provision of extra services does not have a negative impact on the ability of the network to run efficiently. Transport services in Wales are part of a national network. If the aim of the Bill is partly to create genuinely integrated transport, existing transport strategies across the UK must be taken into account, as must the effect on other services, both within and without Wales, and the impact on efficient operation of the whole UK transport network. I suspect that the Minister will say that it is inconceivable that that would not be considered. However, it is important that, even if Welsh Assembly Members do no more than to read his comments, they take on board that important point.

Amendment No. 7 would include sustainability as one of the factors the Assembly would have to take into account in exercising its power to secure public passenger transport services under clause 7. The amendment is not required. Sustainability is already explicitly included in the general transport duty of clause 1 as a principle to be applied by the Assembly when delivering transport policies. This is one of the amendments made to the draft Bill following the pre-legislative scrutiny.

The duty on the Assembly, under section 121(1) of the Government of Wales Act 1988, to make a scheme setting out how it proposes to promote sustainable development in the exercise of its functions applies to clause 7, as it applies in relation to all the Assembly’s other functions. In addition, the Assembly would undertake a strategic environmental assessment as part of the process of drawing up the Wales transport strategy.

Amendment No. 8 would insert into the Bill a requirement on the Assembly to consider the cross-border issues and the wider transport network across the UK in the exercise of its power to secure public passenger transport services. That seems in direct conflict with amendment No. 1 to clause 1, tabled by the hon. Member, but we will let that pass. The transport network in Wales is part of the wider UK network and such issues cannot be ignored when considering the need for additional passenger services in Wales. However, clause 1 already requires the Assembly to consider cross-border issues in the exercise of its statutory general transport duty in the development and implementation of its transport policies. The amendment is therefore unnecessary. We debated the issue on amendment No.1. As it adds nothing to the provisions already contained in the Bill, I ask the hon. Gentleman to withdraw the amendment.

I am grateful for that reply. When the progress Wales is making is so very slow sustainability is vital. The emphasis on creating sustainability in the first part of the Bill was not clear enough and I suspect that that is why the RSPB had these grave concerns. However, it is there and, provided that the Assembly members concerned are as diligent as one would hope and notice it, I am sure that they will take it on board and deliver the sustainability that we all want to see.

I do not agree with the Minister that my amendment to clause 1 in anyway contradicts amendment No. 8. Again, it is vital that any integrated transport strategy takes the existing structure into consideration. The point of the amendments is already in the Bill and, thanks to the comments of the Minister, particularly on sustainability, if it is not clear it will be on the record. That helps. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 9, in clause 7, page 4, line 30, leave out subsection (4).

We propose that the Assembly should be able to secure the provision for public passenger transport services even if the service could be provided without a subsidy. If the Assembly wishes to fund transport   services that would otherwise still exist, why should it not be able to? That would not mean that those services in most need of funding would be ignored. There is no reason why that should be the case. It would simply open up the possibilities for those whose services are already funded but in need of extra help. This could help to boost existing transport providers who might otherwise find themselves in difficulty in the very near future.

However, we need further details about how transport providers will be able to put in their bids for funding here and how the Assembly intends to judge what is required to meet the needs of the public in Wales. How will it decide between bidders? Will this be purely on the basis of the number of people a transport service is likely to help or on the severity of the need in an area? What limits will there be on the funding? Will the Assembly be willing to provide subsidies for transport services for which there is a desperate need but no commercial viability, so they would be run at a loss? Would it not be better to encourage existing transport services surviving alone commercially to expand into providing services where transport requirements are not being met?

Securing the provision of public passenger transport services should not be restricted purely to those services that would not exist without aid. That serves only to secure unsustainable transport provision that will do little good for the people of Wales.

One problem in my constituency is the lack of cross-valley public transport, especially buses. We are told that it is not commercially viable to operate buses that go down one valley and get people to jobs in a neighbouring valley. How would the amendment help that situation?

My understanding of the Bill as drafted is that the Assembly can fund only completely unviable services. At present, if the bus companies run up and down the valleys it may be better to give them more funding to get them to deliver the sort of transport that local people need rather than insisting on a completely new start-up service that would not be viable in the way that the hon. Gentleman suggested. The issue is in the definition of where the Assembly is allowed to provide the subsidy rather than in whether it should do so, which is not in dispute.

I am still not quite clear about it. In the situation that I described, is it the proposal that the subsidy would be given to a route that does not currently need subsidy in order that the commercial operator will then decide that it might use some of the additional profit that it has generated to do the cross-valley route, which needs the subsidy? I am not sure.

Let me try and help again. The clause states that the

“Assembly may not enter into an agreement under subsection (3) unless the service in question would not be provided without a subsidy.”

The clarity that the amendment seeks is whether, and to what degree, transport cannot exist without a subsidy. We want to know exactly what the Assembly will do in relation to the businesses—for example, whether it will need to add money to an existing business. It may be argued that that would not be in the spirit of the Bill.

To add further clarity, the proposal would give the Assembly more power and more flexibility to decide to offer a subsidy to a service that may already exist and may already be making a profit but for reasons that the Welsh Assembly may determine it may want to offer it a subsidy, perhaps so that it can be expanded or enlarged. That is a decision not for us but for the Assembly. The amendment is about giving the Assembly more powers to do the job properly. Given the comments that they made earlier, I should have thought that Labour members of the Committee and those on my left, politically and physically, would wholeheartedly support it.

That brings me back to the first part of what I said earlier: the proposal gives much more flexibility to the Assembly to do what it thinks best for the greatest number of passengers and more freedom than it would have under the clause as drafted.

The previous intervention was helpful because it gave a little more clarification. However, I still cannot get my head around the proposal. Are we talking about a subsidy being given if it is to extend the existing service? Surely, a good commercial operator would be providing that service anyway, whereas what I am trying to get at is whether the money would be best directed at those groups for which the commercial operators say they cannot provide, but for which there is a social need. I am not sure what advantage the amendment would bring to the current situation.

I was tempted to say that we should hear what the Minister has to say and then try to answer that question, but the hon. Gentleman’s final sentence made things easier. The Bill is quite prescriptive, but the amendment would give the Assembly a great deal more freedom to spend its money on whatever it believed to be most beneficial. That answers the point made by the hon. Gentleman in his intervention. He should not be tempted to consider whether or not a company is making a profit. Our focus is on how the Assembly delivers the sort of transport I believe we all agree it should deliver and where it can use its subsidy.

I am somewhat puzzled, as is my hon. Friend the Member for Ogmore. Indeed, I believe that most Committee members are puzzled.

Amendment No. 9 would remove the restriction imposed by clause 7(4). It would allow the Assembly to enter into agreements that provide subsidies for public passenger transport services, even when the service in question could be provided without the subsidy. The amendment would therefore give extra money to services that already run at a profit or break even, rather than simply support them.

I am sure that Committee members, like me, find it hard to imagine a situation in which the Assembly would want to provide financial support for a service that an operator would provide commercially. That is fundamental. Here is a proposal from the Conservatives that we should spend taxpayers’ money on services that are commercially viable. I am staggered that—[Interruption.] That would be the effect of the amendment.

Opposition Members can argue all they like, but we are debating what the amendment says and what its effect would be. It would allow the Assembly to spend public money on services that do not need public money to support them.

I do not understand the confusion. In the past two hours or so, Labour Members have refused amendments on the basis that they are too prescriptive, but this amendment would not order the Assembly to subsidise any public transport system; it would simply allow the Assembly to take that decision.

If one has the faith in Assembly Members that some hon. Members have expressed, it is quite obvious that they will not subsidise something that they would not need to subsidise. The Bill is about giving the Assembly the flexibility to do so in certain circumstances that might be hypothetical and that might never arise. I cannot give the Minister examples of those hypothetical circumstances, because they are for the Assembly to decide. If he has faith in the Assembly and the ability of its Members to take rational decisions, surely he should allow the amendment to proceed to give the Assembly the maximum amount of flexibility. After all, that is all that the Government have been arguing for for the past two hours.

There we have it. The hon. Gentleman is arguing that the amendment would never be used if it were accepted. My hon. Friend the Member for Cardiff, West said from a sedentary position that it is otiose. Finance will always be finite, whichever Government are in power, and it would be ludicrous for any organisation to consider using public money to provide a service that can be provided commercially. I am staggered that the Opposition are advancing that proposal.

This is what I have been struggling with. I cannot envisage any situation in my constituency in which, knowing the deficiencies that already exist, I would support giving taxpayers’ money to a commercial operator—or, rather, to a commercially viable route, not a commercial operator: good luck to them. Perhaps the Minister will respond to that point and to the intervention by the hon. Member for Monmouth about extending routes. I am all in favour of extending routes and providing public money for that, where the route is not currently commercially viable—but not where a profit is already being made.

Absolutely. The irony is that if that ludicrous position ever arose, it would undermine the availability of cash to support other routes that do need subsidy.

We must be clear. The Bill provides that

“the Assembly may not enter into an agreement under subsection (3) unless the service in question would not be provided without a subsidy.”

Let us try—

Order. Perhaps the hon. Gentleman will return to that point later as it is a rather long one.

Let us return to what clause 7 is about. It is intended to allow the Assembly, as my hon. Friend the Member for Ogmore suggested, directly to assist routes that an individual local authority, or even a joint transport authority, might not consider a priority, but which the Assembly might consider a priority as part of the Wales transport strategy. I am thinking of heads of the valleys routes, for example. Clause 7 may enable the Assembly to act in such circumstances.

An example might be a long-distance bus route linking a series of communities, for which a case could be made on economic development grounds: although it would not be commercially sustainable, it would give people seeking work access to that work. I think that the Committee recognises that the amendment would enable the Assembly to subsidise anything, commercially viable or not. That would never happen, so why accept the amendment? I do not understand the arguments that are being made.

Is the Minister saying that if the Bill were passed without clause 7, there would be a real chance of the Assembly entering into inappropriate financial decisions?

No, I am not saying that at all. The important point is that the Assembly has the power directly to commission services, on the clear understanding that those services could not be provided on a commercial basis. That is the reason for the clause. It adds clarity, and I urge the hon. Gentleman to withdraw an amendment that I think may have an ideological basis but certainly no sensible financial basis.

Let me help the Minister. Perhaps I and my hon. Friends have accidentally fallen into using the Labour party’s favourite word, “profit”. Heaven forbid that that should be our intention; it was not. It is a trigger word. I remind the Committee that I had the difficulty of studying economics and religious studies at university. Spelling “profit” was always difficult.

Will the hon. Gentleman give way?

No, I want to make progress.

I can see that a bus service might be running at a profit, when something beyond the operator’s control might change. The operator of a commercial—and commercially successful—service might suddenly see   that in six months it would no longer be possible to provide the service. We want that company to be able to tell the Assembly that it would not be able to operate the route in six months’ time, because it would no longer be profitable, but that if the Assembly wanted to keep it going it would have to subsidise it. As I understand the Bill, that bus service must fail and the Welsh Assembly can then recommission it. We want a much smoother transfer.

One other point was raised by my hon. Friend the Member for Monmouth. It is up to the Assembly if it wants to give its money to wrong or inappropriate people. However, that is not the purpose of the amendment. We seek to ensure continuation, so that if the Assembly decides to change the way the buses cross the valleys it should find it easier to decide which routes to subsidise. At the moment, it could be argued that we should not give money to a bus company if it is making a profit because it could spend that money on delivering another route. We know that it will not do that, which is why we want to clarify matters.

Clause 7(4) clearly states:

“the Assembly may not enter into an agreement under subsection (3) unless the service in question would not be provided without a subsidy.”

Is the hon. Gentleman suggesting with his hypothetical question that we should identify six months down the line whether a route may no longer be profitable? Subsection (4) allows us to enter discussions with the Assembly about it. If the amendment were accepted and if the Conservatives were in control of the National Assembly, could he envisage the Conservative Administration giving taxpayers’ money to commercially viable routes—not to give money to profitable operators, but to put more money into profitable routes?

The first point made by the hon. Gentleman was important; the second was not.

In order for the Assembly to follow the letter of the law, it must be clear that the service in question could not or would not be provided without a subsidy. However, it is not clear, as shown in my hypothetical example. That is the reason for the amendment. The hon. Gentleman then asked whether a Conservative-run Administration would subsidise profitable routes. The Minister said, rightly, that there would be no reason for public money to go to a successful route or business. We are not looking for the Assembly to subsidise successful businesses—heaven forbid that it should want to—but it will not do so. It has to be accountable to its electorate. That fear is not genuine. The purpose of the amendment is to ensure that the Assembly has the freedom to make changes. It is not about giving money to private companies.

I am confused, but at a more fundamental level. If I understand the hon. Gentleman correctly, he is trying to widen the opportunity for the Assembly to spend money, potentially on profitable operations. If I am right, why did he say on Second Reading:

“It looks as though significant amounts of Welsh taxpayers’ money, which some might argue could be better spent elsewhere, will be spent on the additional costs of this Bill’s proposals.”?—[Official Report, 16 June 2005; Vol. 435, c. 424.]

Is he trying to widen the opportunity for the Assembly to provide subsidies, or is he trying to reduce it?

I am surprised that the hon. Gentleman should sally forth point scoring when we are trying to make a sensible amendment to the Bill. The amendment would give the Assembly the ability to deliver in a more flexible way. That would be a positive and sensible contribution. The Assembly may choose to spend the money inappropriately, but that is a function of devolution.

If the hon. Member for Montgomeryshire (Lembit öpik) wishes to sally forth on a point-scoring basis, can he tell us when he next makes an intervention why he and his colleagues have been calling for more power for the Welsh Assembly ever since it was set up but now oppose something that would give the Assembly more power? Does my hon. Friend agree that that is entirely inconsistent, and that the hon. Gentleman should explain it?

I am grateful, as always, to my hon. Friend for that intervention.

Our purpose in Committee is to try to improve the Bill, to take the Government down hypothetical routes and to give examples of those parts of the Bill that may not work. For example, if a large factory or business were to close, the closure would impact on public transport. The Assembly may need to subsidise a route that previously was successful, and I am concerned that such a route would have to prove itself to be unsustainable before public money were forthcoming. The amendment seeks to deal with that situation. If I were a Liberal Democrat, I would be keeping quiet if I had not tabled a single amendment. [Interruption.] If the hon. Gentleman wants to have a go, he is welcome to do so.

The Committee is serving a useful purpose because, from the alleged point scoring, there is a blooming of consensus. I would suggest that we violently agree on one point, which I am pleased about. The Conservatives are agreeing with the Liberal Democrats, as well as with Labour and Plaid Cymru, that it is appropriate for the Bill to enable the Assembly to provide subsidies for transport in Wales. Until that point, I was not clear whether the Conservatives explicitly felt that that was a good element in the Bill, so I thank the hon. Member for Leominster for clarifying that point, as it will help us in our future deliberations.

I am not sure why I give way, as I do not think the hon. Gentleman should be putting words into my mouth. He should be trying to improve the Bill. However, I think the Minister now understands that transfer is the key matter. It is a straightforward amendment, but I do not think we have been going down the constructive route that I hoped we would. I hope that I have clarified matters.

I am grateful for the hon. Gentleman’s comments. Now I understand where he is coming from, although I do not understand where the hon. Member for Monmouth is coming from. He cites as an example a commercially viable route that is not receiving subsidy but which, because of a change such as a large factory closure, would in future be affected. The route would no longer be commercially viable and would need subsidy. Given those circumstances, unless it was a major strategic route, a local authority or joint transport authority might feel that they could not support it. If it were a local service, the company would go to the local authority—that has happened in my own constituency—say that the route was no longer commercially viable, and ask the authority to consider supporting it, at least in part. That happens on a quite regular basis. That is the course that a bus operator, for example, would take.

The clause is about those routes that a local authority or joint transport authority would never consider. One might be, for example, a long-distance bus route, travelling from the constituency of the hon. Member for Caernarfon to Cardiff. It might be arguable that such a route should be supported and subsidised, even if no commercial provider would look at it because it did not believe it could break even or make a profit on it. That is what clause 7 is about. It is not about the circumstances that have been outlined by the hon. Member for Leominster. Given the example that he cited, it would be up to a local authority or a joint transport authority to support a route in those circumstances. The role that would be given to the Assembly by clause 7 would be the one that we discussed in relation to the heads of the valleys, where buses headed across the valleys rather than up and down them. Clause 7 would cover those sorts of routes.

I think the Minister is right in everything that he says. He will also be aware from constituency cases that bus services often stop but start again when the money comes through. They are much more flexible because buses can be sent off to do other routes, whereas obviously that is not the case with rail. There are genuine concerns about the potential for stop-go.

However, for once the Government want to give the Assembly fewer powers, so I suppose I should be chuffed to bits. On that basis, I shall not push the amendment to a vote, although it would have given the Assembly a great deal more flexibility. I do not envisage the Assembly ever wanting to give money to a successful private company unless something remarkably odd was going on. For once, I have dug deep into my devolved reserves and thought of something that might be helpful to the Assembly, but the Government have bitterly rejected it. I am secretly delighted and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Clause 8 ordered to stand part of the Bill.