I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following: amendments (a) to (j) to Government new clause 9.

Government new clause 13—Advice by boards or their Commissioners.

Government new clause 14—Consideration of proposed schemes by boards.

Amendments (a) to (c) thereto.

Government new clause 15—Appeals against the making of schemes for areas in England.

Amendments (a) to (d) thereto.

Government new clause 16—Exempt continuation proposals.

Government new clause 17—Continuation of schemes for areas in England: procedure.

Government new clause 18—Continuation of schemes for areas in Wales: procedure.

Government new clause 19—Exemption from s.132 for specific variations directed by Transport Tribunal.

New clause 6—Approval of proposed scheme—

‘In the TA 2000, for section 126 (approval of proposed scheme) substitute—

“125A Consideration of proposed scheme

(1) If, having complied with section 125, the authority or authorities wish to proceed with the proposed scheme, they must apply to the appropriate consulting authority for its consideration.

(2) In this Part “the appropriate consulting authority” means—

(a) where the area to which the scheme relates is in England, an approvals board for England; and

(b) where the area to which the scheme relates is in Wales, the Welsh Ministers.

(3) The application must include—

(a) the authority’s or the authorities’ reasons for wishing to make the scheme; and

(b) such other information as the appropriate consulting authority may reasonably require.

(4) The appropriate consulting authority shall give its opinion on the proposed scheme within 28 days of the latter of—

(a) the application for its opinion; and

(b) the receipt of any further information requested under subsection (3)(b).

(5) The appropriate consulting authority may recommend modifications to the proposed scheme.

(6) Following receipt of the appropriate consulting authority’s opinion, the authority or authorities must take that opinion into account and may then proceed to—

(a) make the proposed scheme;

(b) discontinue the proposed scheme; or

(c) make the proposed scheme with modifications.

(7) If the authority or authorities propose to make the scheme with modifications, they must first consult such of the persons they consulted under section 125(3) as would in their opinion be affected by those modifications.”’.

New clause 7—Approval of proposed scheme (No. 2)—

‘(1) Section 126 of the TA 2000 (approval of proposed scheme) is omitted.

(2) After section 125 of the TA 2000 (notice and consultation requirements) insert—

“126 Consideration of proposed scheme

(1) In this Part “the appropriate consultation authority” means—

(a) where the area to which the scheme relates is in England, a consultation board for England; and

(b) where the area to which the scheme relates is in Wales, the Welsh Ministers.

(2) Where the area to which the scheme relates is in England—

(a) upon receipt of a notice under section 125(1)(a), the senior traffic commissioner shall within 7 days of receipt of the notice appoint a consultation board to give its response on the proposed scheme; and

(b) once appointed under paragraph (a), the consultation board shall begin its consideration.

(3) Where the area to which the scheme relates is in Wales, the Welsh Ministers shall begin their consideration upon receipt of a notice under section 125(1)(a).

(4) The appropriate consultation authority shall consider whether the proposed scheme as a whole satisfies the criteria set out in section 124(1).

(5) In carrying out its consideration, the appropriate consultation authority shall consider—

(a) the consultation document produced by the authority or authorities in accordance with section 125,

(b) any information received by the appropriate consultation from the persons listed at section 125(3),

(c) any other information that the appropriate consultation authority may reasonably request from the authority or authorities proposing the scheme, and

(d) any other information that the appropriate consulting authority obtains from any other source which the consulting authority deems to be relevant.

(6) If the appropriate consultation authority believes that any of the criteria set out in section 124(1) are not satisfied, it shall give reasons for that belief in its response and may suggest ways in which the scheme could be modified so as to ensure that the criteria are satisfied.

(7) In giving its response, the appropriate consultation authority may recommend modifications to the proposed scheme.

(8) Following receipt of the appropriate consultation authority’s response, the authority or authorities proposing the scheme shall forward the response to the persons listed at section 125(3).

(9) The authority or authorities proposing the scheme must take that response into account and may then proceed to—

(a) make the proposed scheme;

(b) discontinue the proposed scheme; or

(c) make the proposed scheme with modifications.

(10) If the authority proposes or the authorities propose to make the scheme with modifications, it or they must first consult such of the persons it or they consulted under section 125(3) as would in its or their opinion be affected by those modifications.”’.

New clause 8—Review of validity of schemes—

‘(1) After section 126B of the TA 2000 insert—

“126C Review of validity of schemes: areas in England

(1) This section applies where the area to which the proposed scheme relates is in England.

(2) If any person who was consulted by the authority or authorities in accordance with section 125(3) or the consultation board desires to question the validity of a quality contracts scheme, or of any provision contained in it, on the ground—

(a) that it is not within the powers of this Act; or

(b) that any of the relevant requirements have not been complied with in relation to that scheme,

that person or the board may, within the period of 42 days beginning with the day on which the notice is required by section 127(8) is published, make an application for the purpose to the Transport Tribunal.

(3) On any such application, the Transport Tribunal—

(a) may suspend the operation of the quality contracts scheme, or of any provision contained in it, either generally or in part, until the final determination of the proceedings, and

(b) if satisfied that the quality contracts scheme or any provision contained in it is not within the powers of this Act, or that the interests of the applicants have been substantially prejudiced by a failure to comply with any requirement imposed by or under this Act, may quash the scheme or any provision contained in it, either generally or in part.

(4) Subject to subsections (2) and (3) and without prejudice to any right of appeal from the Transport Tribunal, a quality contracts scheme shall not, either before or after it has been made, be questioned in any legal proceedings whatever.

(5) Notwithstanding the provisions of paragraph 8 of Schedule 4 to the TA 1985, the jurisdiction of the Transport Tribunal in relation to this section shall be limited to the consideration of the matters set out in subsection (2).’.

Amendment No. 5, in clause 19, page 18, line 15, after ‘relates’, insert

‘which are greater than those that would pertain under existing arrangements,’.

Amendment No. 6, page 18, line 22, leave out paragraph (e) and insert—

‘(e) there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area to which the proposed scheme relates’.

Government amendment No. 163

Amendment No. 30, page 18, line 27, leave out subsection (3) and insert—

‘(3) Leave out subsection (2)(b) and insert—

“(2) (b) have consulted the appropriate consulting authority in accordance with section 125A”’.

Amendment No. 65, page 18, line 27, leave out subsection (3) and insert—

‘(3) In subsection (2) omit paragraph (b) and the word “and” before it.’.

Government amendment No. 121.

Amendment No. 66, page 18, line 39, at end insert—

‘(6) After subsection 13 insert—

“(14) For the purposes of determining whether or not the criteria set out in subsection (1) would be satisfied by any proposed scheme, an authority or authorities may cause to be held such inquiries and in such manner as it or they think fit.”’.

Amendment No. 67, in clause 20, page 18, line 43, leave out from beginning to end of line 2 on page 19 and insert—

‘(2) For subsection (1) substitute—

“(1) Prior to making a quality contracts scheme the authority or authorities must—”’.

Amendment No. 68, page 19, line 2, at end insert—

‘( ) Give notice of the proposal to make the scheme—

(a) if the area to which the proposed scheme relates is in England, to the senior traffic commissioner; or

(b) if the area to which the proposed scheme relates is in Wales, to the Welsh Ministers,’.

Amendment No. 7, page 19, line 3, leave out ‘in such a manner as they think fit’.

Amendment No. 8, page 19, line 6, after ‘subsection (3)’, insert—

‘(c) supply a copy of that document to—

(i) the chief fire officer for each fire area covering the whole or part of that area;

(ii) the head of the local ambulance service for each area covering the whole or part of that area;

(iii) all persons living within 150 metres of any part of the route as specified in the proposed scheme;

(iv) representatives of local groups representing disabled people’.

Government amendments Nos. 164 to 166.

Amendment No. 69, page 19, line 30, at end insert—

‘(f) a statement that all consultees may copy any comments they wish to make to the appropriate consultation authority, setting out details of the appropriate consultation authority.’.

Government amendments Nos. 167 to 169.

Amendment No. 70, page 20, line 1, leave out clause 21.

Government amendments Nos. 170 to 177.

Amendment No. 71, in clause 22, page 20, line 21 , leave out ‘approvals’ and insert ‘consultation’.

Government amendment No. 178

Amendment No. 72, page 20, line 22, leave out ‘an approvals’ and insert ‘a consultation’.

Government amendments Nos. 179 and 180.

Amendment No. 9, page 21, line 7, leave out subsection (8).

Government amendments Nos. 181 to 186.

Amendment No. 73, in clause 23, page 21, line 16, leave out ‘approvals’ and insert ‘consultation’.

Government amendments Nos. 187 to 189.

Amendment No. 74, page 21, line 19, leave out ‘approvals’ and insert ‘consultation’.

Government amendments Nos. 190 and 191.

Amendment No. 75, page 21, leave out line 24.

Amendment No. 31, page 21, line 24, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 76, page 21, line 25, leave out from beginning to ‘to’ in line 26 and insert

‘provision for a confirmation that the consultation board is considering a proposed scheme’.

Amendment No. 77, page 21, line 29, leave out ‘an application for approval has been received’ and insert

‘the consultation board is considering a proposed scheme’.

Amendment No. 32, page 21, line 29, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 78, page 21, line 32, leave out ‘application’ and insert ‘proposed scheme’.

Amendment No. 23, page 21, line 32, at end insert—

‘(e) provision that the role of the Approvals Board will be restricted to verifying that the authority seeking approval has followed the proper procedures for making a Quality Contract Scheme.’.

Amendment No. 79, page 21, line 34, leave out from ‘that’ to end of line 35 and insert

‘any consultation board for England should normally give its response on any proposed scheme.’.

Government amendments Nos. 192 and 193.

Amendment No. 33, page 21, line 35, leave out ‘approval’ and insert ‘consideration’.

Government amendment No. 194.

Amendment No. 80, page 21, line 36, leave out ‘an approvals’ and insert ‘a consultation’.

Government amendment No. 195.

Amendment No. 34, page 21, line 37 , leave out ‘reach its decision’ and insert ‘publish its recommendations’.

Amendment No. 81, page 21, line 37, leave out ‘reach its decision’ and insert ‘give its response’.

Amendment No. 82, page 21, line 37, leave out ‘on any application for approval’.

Amendment No. 35, page 21, line 38, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 83, page 21, line 38, leave out ‘approval’ and insert ‘a response’.

Government amendment No. 196

Amendment No. 84, page 21, line 39, leave out ‘an approvals’ and insert ‘a consultation’.

Amendment No. 36, page 21, line 39, leave out ‘reach its decision’ and insert ‘publish its recommendations’.

Amendment No. 85, page 21, line 39, leave out ‘reach its decision’ and insert ‘give its response’.

Amendment No. 37, page 21, line 40, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 38, page 21, line 42, leave out ‘reached its decision’ and insert ‘published its recommendations’.

Amendment No. 86, page 21, line 42, leave out ‘reached its decision’ and insert ‘given its response’.

Amendment No. 39, page 21, line 44, leave out ‘reach a decision’ and insert ‘publish the recommendations’.

Amendment No. 87, page 21, line 44, leave out ‘reach a decision’ and insert ‘give a response’.

Amendment No. 40, page 22, line 1, leave out ‘reach its decision’ and insert ‘publish its recommendations’.

Amendment No. 88, page 22, line 1, leave out ‘reach its decision’ and insert ‘give its response’.

Government amendment No. 197

Amendment No. 89, page 22, line 7, leave out ‘made the application for approval’ and insert ‘is or are proposing the scheme’.

Amendment No. 41, page 22, line 8, leave out ‘approval’ and insert ‘consideration’.

Government amendments Nos. 198 and 199.

Amendment No. 42, page 22, leave out lines 14 and 15 and insert

‘ “application for consideration” means an application under section 125A for consideration of a quality contracts scheme;’.

Government amendments Nos. 200 to 203.

Amendment No. 91, in clause 24, page 22, line 26, leave out ‘approvals’ and insert ‘consultation’.

Amendment No. 92, page 22, leave out lines 27 to 35.

Amendment No. 93, page 23, line 34, leave out ‘126C(8)’ and insert ‘126C(5)’.

Government amendment No. 204

Amendment No. 44, in clause 25, page 23, line 40, leave out ‘applications for approval’ and insert ‘Quality Contract schemes’.

Amendment No. 45, page 24, leave out line 3 and insert ‘authority proposing to make the scheme’.

Amendment No. 46, page 24, line 5, leave out paragraph (a).

Amendment No. 47, page 24, line 28, leave out ‘, or to the approvals board for England,’.

Amendment No. 48, page 24, line 34, leave out paragraph (b).

Amendment No. 49, page 24, line 40, leave out paragraph (e).

Amendment No. 50, page 25, line 3, leave out subsection (4).

Amendment No. 51, page 25, line 8, leave out ‘or (e)’.

Amendment No. 95, in clause 26, page 25, line 13, at end insert—

‘(1A) For the heading “Making of a scheme” substitute “Requirements of a quality contracts scheme”.

(1B) Subsection (1) is omitted.’.

Government amendment No. 205

Amendment No. 96, page 25, line 14, leave out subsections (2) to (4).

Amendment No. 52, page 25, line 14, leave out subsection (2), and insert—

‘(2) Leave out subsection (1) and insert—

“(1) Once the appropriate national authority considers the scheme the authority or authorities who proposed it may make it, with or without modifications, at any time not later than 6 months after the date on which the recommendations of the approvals board are published.”’.

Amendment No. 53, page 25, line 24, leave out ‘approvals board for England’ and insert ‘authority proposing to make the scheme’.

Government amendment No. 206.

Amendment No. 97, page 26, line 15, leave out ‘periods mentioned in subsection (1), (1A) or’ and insert ‘period mentioned in subsection’.

Government amendments Nos. 207, 208, 122, 123 and 209 to 221..

Amendment No. 54, in clause 30, page 28, line 36, leave out ‘approval’ and insert ‘consulting’.

Amendment No. 55, page 28, line 37, leave out ‘section 126’ and insert ‘section 125A’.

Amendment No. 56, page 28, line 40, leave out ‘approval’ and insert ‘consulting’.

Government amendments Nos. 222 and 223.

Amendment No. 57, in clause 31, page 29, leave out line 4 and insert

‘(1) Section 125A (consideration of proposed scheme)’.

Government amendments Nos. 224 to 235.

Amendment No. 58, in clause 32, page 31, line 28, leave out ‘approval by appropriate approval’ and insert ‘consulting by appropriate consulting’.

Government amendments Nos. 236 and 237.

Amendment No. 59, in clause 33, page 31, line 39, leave out from second ‘the’ to ‘as’ in line 41 and insert

‘authority proposing the continuation of the scheme’.

Government amendments Nos. 238 to 242.

Amendment No. 60, in clause 34, page 32, line 19, leave out paragraph (a) and insert—

‘(a) leave out paragraph (a) and insert—

“(a) requires the consideration of the scheme by the consulting authority which published recommendations on the scheme in accordance with section 125A, and”.’.

Government amendments Nos. 243 to 254.

Amendment No. 61, in clause 35, page 33, line 25, leave out paragraph (c).

Government amendments Nos. 255 and 256.

Amendment No. 62, in clause 36, page 33, line 30, at end insert—

‘(2A) In subsection (1)(b) leave out “approval” and insert “consideration”’.

Government amendments Nos. 257 and 258.

Amendment No. 63, page 33, line 33, at end insert—

‘(3) (b) in paragraph (e) leave out “approval” and insert “consideration”’.

Government amendments Nos. 259 to 263, 124 and 125 to 138.

Amendment No. 98, in clause 61, page 55, line 9, leave out from ‘it’ to end of line 10 and insert—

‘(a) it provides that a PTE shall cease to have the power under section 10(1)(viii) of the TA 1968; or

(b) it would prevent the carrying of passengers by road by the PTE in pursuance of the power inserted into the TA 1968 by subsection (7).’.

Amendment No. 99, page 55, leave out line 15.

Amendment No. 100, page 55, line 17, at end insert—

‘(7) For subsection (1)(i) (power of PTE to carry passengers by road) substitute—

“(i) in the event that a quality contract within the meaning of section 124(4) of the Transport Act 2000 is terminated or local services undertaken to be provided under such a quality contract cease to be provided in whole or in part, to carry passengers by road within, to and from that area for the purpose of maintaining local services provided in the area to which that quality contract related, for a period not exceeding 12 months from the date of the termination of the quality contract or the cessation of the local services or such longer period as may be approved by the relevant traffic commissioner as being in the public interest;”.’.

Government amendments Nos. 264 and 265.

I am delighted to be able to take the Bill through its Report stage and Third Reading. I genuinely believe that it has the potential to help local authorities, bus operators and passengers alike to achieve substantial change in bus services and other provision to reduce congestion and climate change problems.

By and large, I welcome the Government’s proposals, which I think constitute a move in the right direction. I congratulate the Minister and his colleagues on listening to the comments that were made in Committee. However, this vast raft of amendments was tabled very close to the Report stage. Given that the Committee stage ended some months ago, it would have been helpful if the Government had published their intentions rather earlier.

I thank the hon. Gentleman for welcoming me and the amendments; I am sure that if we had not introduced them we would have been accused of not listening and of failing to take due account of the deep discussions in Committee, which I have read about and spoken about with the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Doncaster, Central (Ms Winterton), who took the Bill through Committee.

On the Transport Tribunal, my hon. Friend will be aware that the Tribunals, Courts and Enforcement Act 2007 makes provision for two tiers of tribunal, the lower and the upper. On the face of things that may be fine, but under the Bill the first appeal would be to the integrated transport authority itself. Surely we will not then have two further tiers of appeal, as that would be over-bureaucratic. Will he clear that matter up?

I thank my hon. Friend for that comment. He is absolutely right that under the 2007 Act, sectoral tribunals will be done away with in favour of the new first-tier and upper tribunals. Decisions on interim arrangements and which levels will be used are still being consulted on, but we are keen to ensure that processes are not drawn out by any individuals or groups. The Bill contains provisions on that point, which we are keen to recognise. I add that if a QCS board states its opinion that the five public interest criteria are met and that the authority meets the statutory consultation obligations, the right of appeal to the tribunal will be limited to points of law.

Will my hon. Friend clarify how the public interest criteria that he set out will be determined by elected members rather than an appointed board?

The proposing transport authority will need to do a cost-benefit analysis using the five public interest criteria laid out clearly in clause 19, including the benefits for passengers and whether they are delivered in an economic way. It will have to follow all five of those criteria. That will have to be set against any disadvantages for operators, and the effect of delivering the revised and new contracts schemes must be proportionate. We would expect traffic commissioners to use other schemes within industries as a benchmark against which to judge if needs be, but in the first instance the authority will need to do a cost-benefit analysis using those five criteria.

I note my hon. Friend’s comments a moment ago about the Transport Tribunal. May I push him a little further on that point? Will he commit to discussions with the Ministry of Justice to ensure that when the new tribunal framework to replace the Transport Tribunal is finally in place, it is no more onerous for local authorities than the current arrangements? That is a very important point.

I assure my hon. Friend and the House that we are consulting our colleagues at the Ministry of Justice on how the appeals should be handled. Hon. Members will be aware that the provisions are that if the QCS board gives the scheme a clean bill of health on meeting the requirements, an appeal can be made only on points of law. If a clean bill of health had not been given, there would a wider opportunity for an appeal to be taken, and that would happen through the different tiers. It is possible that appeals on points of law would be taken by the upper tribunal and other appeals would be taken through the first tier, but that is open to a discussion, which we will take forward. I hope that clarifies matters on the tribunals.

A number of existing features of the Bill would remain unchanged. For example, a QCS board would still be chaired by a traffic commissioner, who would sit alongside two people from a panel of independent experts to be appointed by the Secretary of State. The Secretary of State would still have the power to specify in regulations a target time limit for the QCS board to complete its deliberations. In contrast to what is proposed in amendments tabled by my hon. Friends and by the Liberal Democrats, the Government are not proposing any significant changes to the arrangements in Wales. As applies now, schemes in Wales would be considered by the Welsh Ministers, which is fully in line with the preferences expressed by Welsh Assembly Members.

Some other refinements to the Bill’s QCS provisions are proposed. For example, the amendments would give the local authority the option—I should emphasise that it is an option, rather than an obligation—to begin the process of tendering for quality contracts while an appeal to the tribunal is in progress. Previously, the Bill would have prevented that, but it should help to speed up the overall process of implementing quality contracts schemes, helping to address another concern expressed by hon. Members in Committee and on the Floor of the House.

I congratulate my hon. Friend on his new post. I welcome the amendments and new clauses that the Government have tabled. They are very much in the spirit of local responsibility and local accountability, and that is what Labour Members believe in. Does he have any idea of how long the board’s deliberations might take? Will he assure us that, as part of those deliberations, there will be no requirement to go back to any of the operators to seek their views on the board’s comments, and that if there is a discussion between the board and the transport authority, there will be no obligation to involve the operators in it?

I thank my hon. Friend for his comments in welcoming me to my post. How long the process takes will depend, in part, on the nature of the scheme. Obviously, a city-wide scheme will take longer than a localised scheme because of the advance work needed build up to having a scheme to work with, regardless of any provisions in the Bill; the time needs to be taken for that to be done.

The Secretary of State will have the power to specify time limits for boards and we will consult on the time limits in the next few months. As I recall it, my right hon. Friend the Member for Doncaster, Central indicated in Committee that we are considering time limits of six weeks and, as I have said, allowing invitation to tender to happen while the appeal is taking place. Such an approach will focus minds on ensuring that the goal is to deliver quality bus services that are fit for purpose in our cities and towns, and fit for passenger use today.

I hope that my comments have reassured hon. Members that the amendments will address the key concern expressed in Committee that it should be for elected local authorities to take the decision on whether quality contracts schemes should go ahead.

I was trying to tease an answer out of my hon. Friend on a second question. Is it the case that once the transport authority has consulted and set out a scheme, the board will look at it? From then on, the discussion is between the board and the transport authority, without the operators having the right to be consulted again or have further input into the process.

My hon. Friend is right that there would be no requirement to consult the operators again. In fact, the QCS boards will consider the scheme only after the consultation process, when everyone has had the opportunity to participate.

I thank my hon. Friend for his clear delineation of the role of the QCS boards, but can he assure me that any future guidance given to them will reiterate their role as being to determine whether a scheme has met the statutory criteria, not whether it is the only or even the best scheme to deliver best practice on buses?

The role of the QCS boards is clearly laid out. They judge whether due process has been followed and whether a scheme meets the five public interest criteria. It is not their role to make a judgment about a local authority’s overall transport policies. I hope that my hon. Friends and the Liberal Democrats will conclude that the Government amendments address their concerns and will therefore not seek to press them.

Government amendments Nos. 124 to 128 deal with TUPE and pensions issues. There was a good debate in Committee about the ways in which a quality contracts scheme could affect bus workers in the area concerned. I agree wholeheartedly with those who argued in Committee that we need to ensure that appropriate protections are put in place to safeguard bus workers’ interests. That is why the Government tabled amendments in the other place, so that the protections afforded by the TUPE regulations would apply where employees transfer to a new employer on the coming into force of a quality contract. Those amendments were a considerable advance on the Transport Act 2000 as it was originally enacted, which contained no provisions about TUPE. Nevertheless, we listened with great care to the points raised in Committee by several hon. Members, and especially by my hon. Friend the Member for Manchester, Blackley (Graham Stringer). In light of that debate, I am pleased to be speaking to Government amendments Nos. 124 to 128 today. These amendments will further enhance the protections that the Bill already provides.

Government amendment No. 124 describes an additional situation that is to be treated as a “relevant transfer” for the purposes of the TUPE regulations—that is to say, an additional situation where the protections of TUPE will apply. When a local authority has awarded a quality contract to somebody other than the incumbent operator, there is a risk that the incumbent might decide to withdraw from the local bus market before the contract comes into force. That could lead to a short-term gap in bus service provision, which the local authority may well decide to fill by means of a subsidised service agreement with another operator. The amendment provides for such a situation to be treated as a “relevant transfer” for the purposes of the TUPE regulations, so that the incumbent operator’s workers can benefit from the same protection as the Bill already provides in relation to services that transfer straight to the quality contract operator. Government amendments Nos. 125 and 126 are consequential on Government amendment No. 124.

I echo the comments made a moment ago by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts), and welcome my hon. Friend the Minister to his role on the Front Bench. I also warmly welcome the Government’s efforts to ensure that TUPE provisions apply when a quality contract is introduced. Will my hon. Friend confirm that where the amendment refers to the

“coming into force of a quality contract”

it means the point at which the scheme comes into operation?

That is my understanding of the exact operation of the amendment. It affords protection from that very moment.

Government amendment No. 127 is a technical amendment, intended to provide certainty that the pension protections afforded by sections 257 and 258 of the Pensions Act 2004 will apply when there is a TUPE transfer in connection with a quality contracts scheme in exactly the same way as those protections apply to a normal TUPE transfer. Those sections of the Pensions Act set out the minimum level of pension provision that must be made available to a person who is subject to a TUPE transfer and who had pension rights before that transfer.

Amendment No. 128 is also about pension protection. It provides a power to make regulations to specify pension protection requirements over and above that afforded by the Pensions Act. It also places a duty on the Secretary of State to exercise that power to ensure that workers involved in the provision of bus services in the scheme area before the scheme was made do not lose out in pension terms as a result of the scheme.

The Government’s intention is to draw on the existing arrangements that apply where a local authority outsources activities that were previously undertaken by the authority in house. Under those arrangements, workers who transfer from the authority to the contractor are granted rights to acquire pension benefits that are the same as, or count as being broadly comparable to or better than, the pension rights that they had before the transfer. Our amendments will provide a similar level of protection.

The detail of how that protection will work will be set out in regulations, which is consistent with the local authority analogy, where the details are set out in directions. That will enable the Government to consult fully with trade unions, local authorities and bus operators before finalising the detailed provisions. The amendments provide, on the face of the Bill, a clear minimum level of protection that future regulations will have to provide for particular employees.

I am pleased to hear about the developments that the Government have placed in those amendments, but will my hon. Friend clarify that the trade unions can now enter into discussions and negotiations with the employers about pensions on the basis that he has outlined?

We are making that provision in the Bill, and as I said, we will be consulting on our guidance and so on with trade unions and bus operators alike to take the provisions forward. They are clearly laid out on the face of the Bill to give a true minimum position.

I shall now turn to Government new clause 9, together with Government amendments Nos. 121 and 122. In Committee, my hon. Friend the Member for Manchester, Blackley and other hon. Members made an eloquent plea that passenger transport executives that are running a quality contracts scheme should have the power to take over operating the buses if the contractor goes into liquidation or for some other reason is no longer able to provide services under the quality contract before that contract is due to end. They accepted that such a power would not be easy to use and would be used only in an emergency, and they drew attention to similar powers with regard to franchised railway services. My right hon. Friend the Member for Doncaster, Central promised to consider the matter further in the light of the debate. The Government have now done so, and I am pleased to have moved new clause 9.

My hon. Friends have also tabled amendments similar to those that they tabled in Committee. There is not an enormous difference between the two sets of amendments, so I shall describe those tabled by the Government. They consist of a new clause whose effect would be to empower a local transport authority to operate interim services, and two minor consequential amendments. The proposed new power would allow a local transport authority to provide services as an operator of last resort in a quality contracts scheme area. That would be possible only when a quality contracts operator ceased to provide the contracted services before the quality contract was due to expire. The power could be exercised by the local authority only for a time-limited period. In one respect, the power goes further than amendments Nos. 98 to 100, tabled by my hon. Friends, as it would apply to any local transport authority in England or Wales that has made and brought into force a quality contracts scheme, whereas their amendments would apply only to areas with passenger transport executives. It is nevertheless a modest and limited power; it applies in only a very specific set of circumstances, and it certainly would not give local authorities a general power to run bus services.

I entirely understand where my hon. Friend is coming from, and new clause 9 is very welcome. He says that the power will be time-limited. What will happen if the time runs out, but a new operator has not been found?

I thank my hon. Friend for that intervention. The power is time-limited; the proposal is that the time should be limited to nine months, with the option of having a further three months thereafter. It is, in our opinion, highly unlikely that a transport operator would not be found, because if things got to that stage, I suspect that the proposed scheme would not have met other criteria. Our genuine belief is that it is highly unlikely that we would end up in the situation that he describes.

The Liberal Democrats welcome the new clause as a sensible step in the right direction. My only question is about the difference between the nine-month period and the 12-month period to which the Minister referred. The last three months are subject to approval by the traffic commissioner. Is the Minister planning to publish guidelines on the circumstances in which the traffic commissioner would be empowered or encouraged to give that three-month extension? As the times—nine and 12 months—are quite limited, presumably any discussion with the traffic commissioner would have to begin some time before the nine-month limit was up.

Obviously, in the situation that we are describing, the traffic commissioner would watch things closely in the interim period in which a local authority was acting as an operator of last resort. As I have indicated, we are consulting on how provisions in the Bill will operate, and that is another way in which consideration will be given to the matter. Now that my hon. Friends have heard what I have said about the new clause—in particular, now that they know that it would apply not just to PTEs but to local transport authorities elsewhere in England and Wales—I hope that they will be persuaded not to press amendments Nos. 98 to 100.

Finally, I turn to Government amendments Nos. 123 and 129 to 138. Clause 44 will, in certain circumstances, enable local bus services to be registered in an area covered by a quality contracts scheme. The amendments are essentially technical amendments to improve the clause. They look rather complicated—they certainly did to me—but the intention is fairly straightforward; it is to set up a procedure for varying bus registrations when, exceptionally, they apply within the area of a quality contracts scheme. The general rule is that bus operators cannot register services in the area of a quality contracts scheme, but clause 44 provides a procedure for them to do so if the authority that made the scheme is satisfied that the proposed service would not be detrimental to the scheme. A service that has been registered under those new provisions may subsequently be varied or cancelled. Clause 44 makes no provision for that, so the normal process for varying registrations under section 6 of the Transport Act 1985 would apply. Under the Bill as it stands, that means that it would be possible for an operator to register a service that the local transport authority is happy to accept, but then to vary it in a way that the authority would not be happy with.

I welcome the Minister to his new role and commend him for his courage in taking on the Bill at this stage. I agree entirely with the intervention made by the hon. Member for Lewes (Norman Baker).

The Government’s management of the process and of this part of the Bill has been shambolic, illogical and discourteous—shambolic because in the past 10 days they have produced no fewer than 165 new amendments and 12 new clauses, and illogical because a number of those new clauses make a nonsense of what the previous Minister told us in Committee was absolutely necessary. Some of the concerns that she raised to objections to the approvals board and some of the justifications that she gave us for the approvals board have proved to be a nonsense. Finally, the Government’s management of this part of the Bill has been discourteous to the House. We finished consideration of the Bill in Committee on 8 May. The Government chose to wait until 17 October to produce the bulk of their amendments. Last Thursday, the very last business day before Report, they produced another three amendments and another new clause.

Some of the amendments in this large group are substantive, some are technical and some are consequential. A number of amendments have been tabled by my hon. Friends and me to Government new clause 9. I understand the necessity for the new clause, if it is a clause of last resort. The Minister has just assured us that he sees it as such, and that there is no chance of its being a back-door way for local authorities to start running bus companies again.

There is a real possibility that bus operators, particularly small operators, may go out of business in the current climate. We are already seeing operators struggle as a result of the iniquitous distribution of funds for the concessionary fares scheme. The underfunding of the national scheme is threatening the scheme and already driving bus services off the road. My hon. Friend the Member for Scarborough and Whitby (Mr. Goodwill) and I were both contacted last week by Mr. Peter Shipp, the chairman and chief executive of the East Yorkshire Motor Services Group, who described the difficulties facing his firm. He spoke of “disastrous consequences” and a

“situation that is getting worse, not better”

because of the underfunding of the national concessionary scheme.

Furthermore, in an age of rising fuel costs and the uncertainty surrounding the bus service operators grant, more small operators will find it difficult to survive. The clause provides for that and for the scenario where an operator gets into trouble because it is tied into a quality contract and can no longer fulfil its obligations. If an operator goes out of business, it is clear that those who use its services need to be protected. It is therefore right that local authorities should be able to step in as operators of last resort, but only for a limited period. Provided that it is for the limited period that is the premise of the Bill, I understand the necessity for it and will support it. However, I am concerned that people may use it as an excuse to return bus services for a prolonged period to be run by local authorities, thus depriving the sector of the private sector funds and innovation it needs if it is to flourish.

I see the necessity for the new clause, but it must not be a back-door route. Normal services should be resumed as quickly as possible in the event of an operator going out of business, and my new amendments (a), (b), (c) and (d) would place an obligation on the local authority to invite tender for the provision of replacement services no later than a month after the termination of the original service. Amendment (b) is of particular significance because it would firmly place an obligation back on the local authorities to ensure that they did not take their time, that services continued and that the tender was put out. That strikes me as reasonable and generous.

It cannot be beyond the organisation of local authorities—be they local transport authorities or councils—to arrange the tender for a new route within a month. Failure to do so could jeopardise the service and the route, and they would have to accept that urgent action should be initiated. My amendments (g), (h), (i) and (j) would ensure that once arrangements had been made for a replacement service to begin, the authority would cease to be the operator within six months. That is a sensible and generous period; after all, the Minister has just reassured us that he does not expect anyone not to wish to be involved in the tendering process.

Amendments (e) and (f) are inspired by my firm belief that partnership arrangements are considerably preferable to quality contracts. As we have seen in a number of cases, partnerships have brought innovation and good and efficient services, and they are proven to work. When an operator has failed, for whatever reason, to fulfil its obligations under a quality contract, surely it is irresponsible and short-sighted to replace that quality contract with another. That method has been tried and it has failed. If something is broken, why would we replace it using the same broken method? That would be illogical. I suggest that we at least provide the option of it being replaced with something that works. There should be an option to replace a failed quality contract with a voluntary or statutory quality partnership.

All three parties agree that we are discussing a matter of last resort. However, I am struggling to understand how on the one hand we can tell local authorities to look at alternatives to what was in place, while on the other trying to reduce the time that they have to discuss the matter before they have to go out to tender again.

I do not think that the local authorities would have any difficulty in putting in place a statutory quality partnership or a statutory quality contract. Like me, the hon. Gentleman knows that if local authorities wish to operate a route, they will do so and get a tender for it very quickly.

Quality contracts have seemed to be failing. I have looked for hard evidence of where local authorities are looking to implement quality contracts because they think that there will be an improvement over and above quality partnerships. I have seen no evidence of quality contracts having delivered anything more beneficial than a quality partnership has.

I thank the hon. Gentleman for giving way. If the quality contracts under this new law prove successful, as Labour Members truly believe they will, will the hon. Gentleman’s party commit itself to not repealing this legislation if it forms a Government in future?

I thank the hon. Lady for that intervention. She knows the answer, as I made my position clear throughout the whole Committee stage, just as my hon. Friend the Member for Scarborough and Whitby made his clear on Second Reading. We do not believe that quality contracts will be successful. We believe that they will be detrimental, and a future Conservative Government will repeal them.

My point was this: if Labour Members are right and they prove to be successful, will the Conservatives change their minds?

As I said, we do not believe that they will be successful. Throughout the passage of the Bill, I have asked for someone to produce evidence of any reason why a quality contract would provide benefits over and above a voluntary partnership or a statutory quality partnership, but no passenger transport authority from anywhere in the country, or anyone else, has produced that evidence.

If the Conservatives form a Government, what will be their position if a quality contract has been entered into by a local authority? Will they require it to withdraw from that contract?

The hon. Gentleman and I share one ambition—that the next general election should be fairly soon. Even if it were 18 months away, I would advise that quality contracts should not be entered into.

I accept that new clause 9 is necessary, but it would be much improved by the amendments that I have outlined. We will test the will of the House at the appropriate time, particularly on amendment (b), which would give a clear statement and clear guidance on this point.

I turn to Government new clauses 13 and 14 and my amendments thereto. The Minister took some time to talk about scrutiny boards. This is undoubtedly the most controversial element of the Bill, and it makes what we have seen today all the more astounding. We spent many sittings of the Public Bill Committee discussing the proposed approvals boards for quality contracts schemes. The then Minister, the right hon. Member for Doncaster, Central (Ms Winterton), went to great lengths to spell out the benefits of approvals boards, telling us that

“if an appeals process is in place, it is much more difficult to get leave to go to judicial review.”––[Official Report, Local Transport Public Bill Committee, 29 April 2008; c. 160.]

We were told that approvals boards were more flexible, would help to introduce quality contracts, and aided local autonomy. Since then, operators, local authorities and other stakeholders have formed their response to the Bill around the concept of approvals boards, yet at the very last minute the new Minister has introduced a whole new approvals process. I cannot be alone in being surprised and dismayed by this last-minute change of heart. Over the past 12 months, I have had countless meetings with various stakeholders to discuss the merits and demerits of approvals boards.

As always, I am listening carefully to the hon. Gentleman. Does he accept that he is being inaccurate when he says that local authorities have formed their plans on the basis of what was said in Committee? Passenger transport executives and authorities, and other transport authorities, have continued to lobby the Government for something along the lines of these Government amendments, so his comments are completely inaccurate.

The hon. Gentleman might think so, but I do not agree. Several local authorities have formed a response on this basis. Would we have had these amendments if this Report stage and Third Reading had been on 8 July, as they were due to be? I do not think so. We have been given just a week to examine these proposals. What is the point of having long consultations if the goalposts are to be shifted at the 11th hour? The Government’s conduct over the summer beggars belief. We are all prisoners of their whims, but not, I hope, for much longer.

Let us consider some of the detail that the new Minister described. In his letter to the Chairman of the Public Bill Committee, he said that the amendments would replace existing provisions about quality contracts and put in place quality contracts schemes scrutiny boards. We have not even had a chance to see whether the approvals boards will work, but we are replacing them with scrutiny boards. If approvals boards were so necessary in May, why are they now redundant? The Minister seems to be making a fool out of the previous Minister: his amendments wreck her “much needed protection” of May. The amendments undermine the credibility of his Department. If a Department is thinking one thing in May, why would it suddenly be thinking another thing in October? It has listened to one set of legal advice in May, and is now contradicting itself after listening to another set of legal advice in October.

The provision of the boards and the inclusion of due process and the five public interest criteria is about recognising the balance needed between the legitimate requirements of operators currently running those services and—quite rightly—the decision-making process of democratically elected authorities. The due process and the five public criteria tests are intended exactly to ensure that minds are focused and that we avoid long, drawn-out judicial review processes.

Yet again, the Minister has not answered my point about the Human Rights Act. I am sure that we will come to that again later.

There are a number of further questions that the Minister needs to answer if he is to convince anyone that the scrutiny boards are going to work. What is the purpose of such a board if it has no powers? We are told that its role is advisory, which is fine, but if in practice the board throws out a proposed scheme and the authority seeks to go ahead with it anyway, is it not true that an appeal can be made to the Transport Tribunal? Is it not therefore the case that the Transport Tribunal holds the ultimate power? How will the QCS boards carry out their functions? If an authority says to a board, “Our scheme will increase patronage by 5 per cent.”, how will the quality contracts scrutiny board determine whether that is a valid prediction? Will it have to conduct as thorough a consultation as the authority, or does the Minister claim that due process does not involve consultation? In what circumstances does he believe that the outcome of an application for a quality contracts scheme will be different under the new arrangements from that under the previous arrangements, or, indeed, from that under the arrangements that the hon. Member for Manchester, Blackley (Graham Stringer) proposes in his amendments? Is it not true that the same unelected people who would have sat on the approvals board will now sit on the tribunal? Is it not therefore unlikely that they will reach a different decision?

I repeat that concerns have been expressed for a long time that the provisions that we are considering might contravene the Human Rights Act and will be challenged in the courts. I fear that the new arrangements that the Minister is attempting to introduce today will make a possibility a probability. The new clauses are so important and so potentially detrimental to bus services that I will, with your permission, Mr. Deputy Speaker, test the will of the House at the appropriate time, especially with regard to new clause 13.

We went into great detail in Committee about the composition of the boards, and my concerns remain. I urged the Government to ensure that the people on the boards were appropriately qualified and experienced and, of course, independent. I also urged them to ensure that the Secretary of State could not interfere too much in the boards’ processes and procedures. I tabled a host of other amendments, which were designed to fine-tune the role and procedures of the boards. I do not intend to revisit all those issues, because we do not have time, but the amendments would have improved the Bill.

Let me explain the rationale behind the amendments that I have tabled to the new clauses. Amendment (a) to new clause 14 would ensure that when a local authority began to consult on its quality contracts scheme, it sent a copy of the consultation document to the QCS board. It would also ensure that, at the end of the consultation procedure, the board was sent copies of all further documents that the authority issued as part of the consultation—for example, replies to any responses that it received. Those changes are essential if the board is to take a complete and fair view of the consultation that has been carried out. After all, that is one of the board’s main roles. I hope that the Minister accepts that the amendment is fair and uncontroversial. It would not place a significant burden on local authorities and would greatly help the QCS board to reach a fair decision about the consultation. I cannot foresee any reason for the Minister refusing to accept the amendment.

Amendments (b) and (c) would slightly extend the QCS board’s mandate. If a board decided that the local authority that proposed a quality contract had not fulfilled its public interest criteria, it should be able to recommend that the authority consider scrapping the scheme. If the board decided that the local authority that proposed a quality contract had not fulfilled the Bill’s the requirement to consult, it should be able to recommend remedial action to ensure compliance. These amendments would preserve the advisory function of the board while allowing local authorities to benefit from the expertise of those who serve on the scrutiny board.

I deal now with the amendments to new clause 15. There are two overriding reasons for my opposition to quality contracts schemes. First, the innovation of private sector investment working in partnership with local authorities throughout the country has meant that bus services improved in quality and quantity. I am worried that quality contracts will reverse that process, and that the travelling public will suffer. Let us remind ourselves that private investment in the bus services slowed the decline in patronage.

The hon. Gentleman seems to be lauding the success of deregulation and privatisation, but patronage in passenger transport authority areas has halved since bus deregulation. Although there has been a slight increase of 9.5 per cent. over the past 10 years, most of that is down to increases in patronage in London. The situation outside London is no better—in fact, it is a lot worse—than it was in 1985.

Yes, but there are two points about that. One is that patronage in county council areas has increased. More importantly, 86 per cent. of the decline in bus patronage since 1950, which is when bus patronage started, happened while buses were still regulated, not in the period of deregulation.

Will the hon. Gentleman give way?

I am sure that the hon. Gentleman will make exactly the same point, but I am happy to give way.

The hon. Gentleman is very gracious, but I am not going to make quite the same point. Given his party’s obvious antipathy to any form of regulation, no matter how diluted through quality contracts, will he extend that principle to London? Does he plan to tinker with a system that has delivered such great improvements in bus transport for passengers in the capital?

My party is not opposed to all regulation. As the Minister does not know, but as his predecessor does, I supported the statutory quality partnership scheme throughout Committee and on Second Reading. As the hon. Member for Pudsey (Mr. Truswell) knows, the issue in London is a devolved matter and not something over which we have competence. However, my constituents in Wimbledon would say that the huge increases in the precept that the previous Mayor exacted from them were the reason why there might be more buses on the road, not regulation. There is no clear evidence that regulation has brought better bus services anywhere.

What has happened in Cambridge is often cited as an example of the success of partnerships. Nevertheless, the increase in bus patronage in Cambridge had rather more to do with the geography of an historic town, which allowed the county council more scope in restricting car traffic, and with the city council, unusually for a district council, offering a subsidy for buses. People in Cambridge would not reject the option of a quality contract, as the hon. Gentleman seems to be doing, which would have the additional benefit of allowing them to control fares. If a bus company has a local monopoly, the way it makes money is by restricting services and increasing fares.

I am sure that the hon. Gentleman is looking forward to explaining to his constituents why a quality contract is necessary when all the benefits could be derived under a statutory quality partnership.

The point is that local authorities would benefit from having the option of moving to a quality contract if the current improvements continued, especially if fares continued to be high and if the volume of services was restricted. Having the option is fantastically beneficial, even if local authorities do not use it.

But the hon. Gentleman has just given the lie to that argument. Everything that local authorities wished to achieve under a quality contract could be achieved under either a voluntary partnership or a statutory quality partnership. That is the key point.

The other reason I am concerned about quality contracts is that there is a chance that operators will challenge them in the courts. Quality contracts have damaging implications, the first of which is financial. In this day and age, the last thing that local authorities want is heavy legal costs. Quality contracts also have the potential to damage the relationship between the local authority and the bus operator. It is essential that that relationship should be good if good services are to be provided.

Proposed new section 127A(2) of the Transport Act 2000 says that anyone who was or should have been consulted by a local authority wishing to make a quality contract scheme has the right of appeal to the Transport Tribunal. Under normal circumstances, that could be done on either a point of law or a question of fact. However, new clause 15 says that if the QCS board has decided that a local authority has followed due process, the appellant loses that right.

As I have said before, that is likely to be tested in the courts under the Human Rights Act. My amendments therefore restore the much needed protection that the previous Transport Minister talked about when she did not want judicial reviews. My amendments (a) and (b) to the new clause would end that discrepancy and restore the right of appeal on a question of fact. That would be a major step forward in reducing the possibility of a judicial review.

I shall speak to amendments Nos. 98 to 100, which stand in my name, Government new clause 9, new clauses 7 and 8, Government new clauses 13 to 19 and Government amendments Nos. 124 and 128, but before doing so I want to thank my right hon. Friend the Member for Doncaster, Central (Ms Winterton) for all the times, not just in Committee, that she debated the issues with right hon. and hon. Members on both sides of the House, as well as for the time that she took out to have discussions with us, the trade unions, bus operators and local authorities to try to get the Bill right. What she did was above and beyond the call of duty.

With all due respect to the Under-Secretary, my hon. Friend the Member for Gillingham (Paul Clark), I think that, thanks to the amendments, he and my right hon. Friend are presenting us with a much improved Bill. I am delighted with some of the amendments, and I will have one or two things to say about them, but there is no doubt that the Bill is going in the right direction and is much improved.

The position taken by the hon. Member for Wimbledon (Stephen Hammond) is extraordinary. He expects a Minister taking a Bill through Parliament, having listened to arguments from all sides, never to change her mind. If we believed that, as he seems to, we could all save our time and not turn up for Public Bill Committees. His is an absurd position to take in a parliamentary democracy.

As I said in my speech, the right hon. Lady listened in the Public Bill Committee, but gave no indication that she was going to change her mind. She told us that the process she was putting in place was essential and dismissed any objections, including those of the hon. Gentleman. That is why I said what I did.

We could look at the Official Report to find out, but my recollection is that my right hon. Friend, while arguing the case in defence of the Bill as it then stood, also made it quite clear that she would continue to discuss the matter with hon. Members and interested parties from both sides.

When answering my hon. Friend the Member for Sheffield, Hillsborough (Ms Smith), the hon. Member for Wimbledon exposed his position. He wants to fight with the facts. He is at odds with the evidence. My hon. Friend asked him whether he would change the Conservatives’ position and support a quality contract, once it was up and working, and once the evidence showed that it provided a better public transport system, better use of public money and that the travelling public liked it more. His answer was, “That can’t happen.” No. He is arguing with the evidence. That is because, unusually for him, he has taken up a completely ideological position. I do not know whether that has been forced on him from the centre of the Conservative party.

We have had the argument many times on Supply days, in Adjournment debates, in Bill Committees and on Second Reading. The evidence is overwhelming. I will not repeat it all, but we can compare London with the rest of the country, and also make comparisons with every other part of Europe. Every continental city has a regulated system. There may be more public subsidy or less, but the public transport systems in all those cities are better than the deregulated system that we have in this country.

Is there not another fatal flaw in the argument of the hon. Member for Wimbledon (Stephen Hammond)? He talks of the benefits of competition, but we know—especially those of us whose constituencies are in passenger transport authority areas—that such competition simply does not exist. We have de facto monopolies: evidence of that is seen every time a tender is made for a subsidised service. Usually there is only one tender, in some cases there may even be none, and, despite increasing levels of public subsidy for private operators, we are seeing no commensurate increase in services.

Precisely. My hon. Friend has exposed the aim of the Conservative party, which is to defend the vested interests of private bus companies rather than those of the travelling public outside London. Since deregulation, bus fares in passenger transport executive areas have doubled in real terms and patronage has halved. The profits—the bottom lines—of the bus companies are two or three times as great as before. Companies are making the same profits outside London as they are in London, where there is a better public service. Not for the first time in the Conservative party’s history, it is on the side of vested interests and against those of public transport and the travelling public.

The hon. Member for Wimbledon is not just trying to fight the evidence from an ideological position. As may become clear when we discuss later amendments, he is also fighting against local democracy and local decision making. He recalled the arguments advanced by my right hon. Friend the Member for Doncaster, Central in Committee about the need to protect the process of moving from judicial review to quality contracts. The arguments were advanced for perfectly good reasons. The bus companies that are making two or three times as much profit since deregulation are going to fight like ferrets in a sack to prevent the introduction of quality contracts. It is not a question of partnership in most of the passenger transport executives.

There is, however, a major principle in opposition to the pragmatic facts that my right hon. Friend had to consider. Labour Members believe that matters that can be determined locally should be determined locally, by locally elected people. The hon. Member for Wimbledon would clearly prefer such matters to be determined by appointed people such as traffic commissioners, if that is possible.

I believe that my new clauses 7 and 8, and the Government’s new clauses 13 and 19, solve the practical difficulty posed by the need to respect the wishes of locally elected people by proposing the establishment of a super-consultative body, the quality contracts scheme board, which must be consulted by means of a special process. It will be able to judge whether the public-interest criteria have been met, and, if there is agreement, the position for which we argued in Committee will be achieved. Bus operators will be able to appeal only on matters of process and procedure, which is as it should be.

I have one worry, and I would like my hon. Friend the Minister to comment on it. There is some ambiguity to the way in which the QCS board can view public interest, and one can go into all sorts of detail about whether a proposal is viable or is meeting the better public transport criteria—these are difficult issues. I have been either associated with or a part of local government for most of my adult life and I am a great supporter of local democracy, but I acknowledge that—very occasionally—local government introduce crazy schemes. I hope that there will be some guidance on this measure, even if only in response to my hon. Friend saying that it is intended to weed out any extraordinarily badly conceived or wacky scheme that local authorities might propose by making it possible to say to them, “This simply isn’t going to work, chums, and you should go back to the drawing board”, and that the intention is not to go into intricate details such as, for example, the percentage differences in the cost-benefit analyses of one route as opposed to another. This is an order of magnitude issue, and I would like some reassurance from my hon. Friend on it. I do not intend to press my amendments to a Division, however, and I shall support the Government new clauses.

On the TUPE amendments, I never had any doubt that the Government wanted to get TUPE right. This is a difficult issue, as there might be a gap between one operator moving out and another operator coming in. I understand that a defining time for when a quality contract comes into operation appears in the Bill, but does not appear in the amendments. I would like my hon. Friend the Minister to say whether there is any significance in that, whether it is a difference without meaning, and whether it might be better if we were to use the same clear definition throughout the Bill.

On the operator of last resort and amendments Nos. 98 to 100 and Government new clause 9, as we argued in Committee, an operator of last resort is necessary; otherwise, large areas of the country and considerable proportions of the population could be left without any public transport. I do not share my Government’s worry that such operators might try to re-municipalise bus services—I would welcome it if they did. However, leaving aside that possible back door to municipalisation, there is the possibility of a gap lasting longer than nine months plus three months on appeal. This is a particularly testing issue and bus operators might make a challenge on human rights or procedural grounds, leaving an area without services for longer than that period. My hon. Friend the Minister rightly proposes to allow quality contracts to start during this process. Where an integrated transport authority or a transport authority is searching for new operators because the operator has pulled out of an area, I do not think the market will be attracted to the area for what might be only a very short period. If there is a dispute in the courts, I can foresee times the process taking longer than 12 months. Will my hon. Friend reconsider that? The first nine months, to be used under normal circumstances, may well cover virtually all situations, but if a fight was going on, a three-month extension with all the safeguards that he has included may well not be long enough. Again, however, I shall not press my amendments on that point.

Finally, a matter that is not currently dealt with in the Bill, but may well be later in secondary legislation, is the deregistration period. The short period of deregistration is one issue that has destabilised public transport in many areas, and I would welcome a clear statement from my hon. Friend of whether the deregistration period will be increased, and to what. I hope that it will be doubled compared with the previous period.

In many ways the engine of the Bill is improving bus services and allowing local determination of transport priorities, such as the control of bus fares and networks. My hon. Friend the Minister and his predecessor have done a good job of proposing improvements to the Bill.

I welcome the Minister to his new role. I am not sure whether he or his predecessor is responsible for the amendments that the Government have tabled, but either way they are sensible and take the Bill forward productively, and I thank Ministers for listening. The hon. Member for Wimbledon (Stephen Hammond) is a very affable chap, but the idea that Ministers should not listen during debates, and that if they do they should disregard what is being said no matter its validity, seems a rather curious proposition. If the Government had accepted amendments tabled by the Conservatives in Committee, heaven forbid, I wonder whether the same argument would have been forthcoming. I suspect not.

My criticism is the point on which I intervened—the time at which the Government amendments were tabled. It was very close to Report, a gap of some months from the termination of the Committee stage. There may well have been detailed discussions going on that were so complicated that no earlier date was possible, or it might be the Machiavellian reason that the Government wanted to give bus operators little notice of the amendments. Be that as it may, we have had to absorb a number of amendments in very little time. However, that is a small point if the amendments are broadly right, which I think they are. No doubt if I read the small print afterwards I might find something slightly wrong with them, but that seems to be the case at the moment.

I wish first to pick up on the issue of quality contracts, which are at the heart of the Bill in many regards. In my view they are certainly the most important proposal in it. I think that the hon. Member for Wimbledon might agree about that even though he objects to them somewhat, because he recognises the importance of the proposal. Many of us are concerned that although the original arrangements in the Transport Act 2000 went in the right direction, they did not work in encouraging local authorities to bring forward quality contracts. I made that point in Committee, as did Labour Members. Above all, we did not want a repetition of the Government bringing forward powers that no local authorities actually wanted to take up.

I felt, and I think other members of the Committee agreed, that the hurdles that were in place—the quality contracts boards, the Transport Tribunal and the possibility of judicial review—were one hurdle too many for local authorities that wanted to go down this road. Therefore, the move towards the arrangements that the Minister has set out today was right. He neglected to mention that the proposal introduced today to make the quality contracts board a consultee was one that I made in Committee—I am sure that was an oversight on his part, so I put it on the record for his benefit—and it is an eminently workable solution.

I support the amendments on the approvals process for quality contracts, the operator of last resort and the TUPE regulations. Like my hon. Friend the Member for Manchester, Blackley (Graham Stringer) and other hon. Friends—and indeed the hon. Member for Lewes (Norman Baker)—I am delighted that we are considering the amended Bill today. It is much improved and, like my hon. Friend, I am very grateful for the work done by the previous Minister, my right hon. Friend the Member for Doncaster, Central (Ms Winterton). She did a great job in getting the Bill into shape after Committee and ensuring that the points raised were fed into the Bill before consideration on Report. I also commend the new Minister on the speed and competence with which he has grasped those points. The result is before us today and is very welcome.

A demand for change led to the tabling of this Bill and it should not be ignored. That demand is underpinned by the evidence. The overall subsidy levels for the bus industry in this country have now risen to 40 per cent. of bus industry income at £2.5 billion. At the same time, the use of buses in passenger transport executive areas has declined by 8.6 per cent. in the past 10 years. More subsidies are going into the bus system, but the level of patronage, in PTE areas in particular, has declined by 8.6 per cent. At the same time, patronage in London has increased by 54 per cent. It is quite clear that the issues to do with patronage and subsidy versus regulation are not quite as clear cut as the hon. Member for Wimbledon (Stephen Hammond) would have us believe. There is a relationship between regulation and whether or not a bus service can succeed.

If that is true—if the hon. Lady believes that and thinks that she has the evidence for it—why is it that in regulated Belfast patronage continues to fall?

The matters before us today do not relate to Northern Ireland, but I turn the question back on the hon. Gentleman. If he is so sure about regulation, why will not the Conservative party revisit the matters devolved to the City of London if—and that is an uncertain if—it returns to government?

The Bill is about “Putting Passengers First”, which was the title given to the original proposals. That title should not be forgotten. The Bill is about giving more local control to bus users up and down the country—not just in London, but in all our areas. It is particularly aimed at those living in metropolitan areas—often including quite considerable rural areas, too—where the need for re-regulation is at its greatest.

Local control is a form of devolution that I would have thought that the Tory party would be keen to pursue. I thought that the Conservative party was now the party that believed in local control and in giving local people more say in how their services were delivered. The responses given by the hon. Gentleman to my interventions exposed what I think to be the true Conservative position. That position is unreconstructed and unmodernised and is based totally on dogma rather than an appreciation of what is pragmatic and what will deliver for local people. [Interruption.] The hon. Gentleman may laugh, but passengers in Sheffield, South Yorkshire, Manchester, Greater Tyneside and all such areas would not be laughing if a future Tory Government repealed this legislation.

We do not need any lessons in dogma from the hon. Lady. After all, this is her dogma that she is putting forward. If she wants to try that argument, she is being equally dogmatic.

I struggle to make any sense of that intervention, so I shall move on.

It is worth mentioning, to be fair to the hon. Member for Wimbledon (Stephen Hammond), that not everyone in the Conservative party seems to share that view. Conservative councillors to whom I have spoken seem to be rather keen on the Bill and to use the provisions. Would it be helpful, perhaps, if the future Conservative Government—if there is such a thing—or this Government found out the views of Conservative councils so that the House could be fully informed?

I would recommend that to a future Conservative Government. They might start with Birmingham, where I understand that there is quite strong support for the Bill from Conservative councillors. Indeed, the Conservatives have some councillors in South Yorkshire, I understand, in Rotherham. I understand that they would join the consensus in South Yorkshire, among all political parties, that the Bill is absolutely necessary to the future of public bus services in the area. As I say, the Bill is all about giving more local control to bus users in areas outside London, so that bus services can be improved. The amendments put forward will make it a great deal easier for us to deliver the improvements that we want—the quality contracts.

As a member of the Public Bill Committee and of the Select Committee on Transport, I welcome the opportunity to speak in the debate on the amendments relating to quality contracts.

I begin by welcoming the Under-Secretary of State for Transport, the hon. Member for Gillingham (Paul Clark) to his post and as a Report-stage substitute for the right hon. Member for Doncaster, Central (Ms Winterton), who is now the Minister of State, Department for Work and Pensions. I am tempted to describe him as the David “Supersub” Fairclough of the Government’s transport team. He has come on late in the second half and changed the game in respect of quality contracts and the approvals board.

The Government’s new clauses take on board the concerns raised by both Liberal Democrat Members and some Labour Back Benchers in Committee and introduce proposals to limit the power of the new quality contracts scheme board by effectively making it a super-consultee, rather than a decision-maker. I am happy for the Minister to attempt to take some of the credit, just as the Government did when they took on Lib Dem plans for free travel for the elderly prior to the 2005 election. We are more than happy for the Government to implement Lib Dem proposals.

The need to amend the legislation on quality contracts is clear. The Transport Act 2000 has not resulted in a raft of quality contracts, and in large swathes of the country outside London bus patronage continues to fall. Had the amendments not been tabled, there is a great danger that quality contracts would continue to be the pot of gold at the end of the rainbow, or that bus companies would be able to cause unending delays in implementing a scheme through a drawn-out appeals process.

The need for viable, workable quality contracts is nowhere more pressing than in Greater Manchester. In my constituency, Manchester, Withington, we have seen some of the worst results of bus deregulation. It is true that certain routes have seen additional buses, particularly the Wilmslow road corridor, but that has been at the expense of other less profitable routes. Overwhelmingly, bus deregulation has not increased competition.

Where other bus companies have tried to compete—for example, on the 85 and 86 bus routes from Chorlton to Manchester—bus wars have ensued. Stagecoach flooded the routes with extra buses taken off other routes and introduced cheap fares. Buses were prevented from entering the bus station or stopping at certain stops. However, as soon as the competition was run off the road, the additional buses disappeared. Now the cheap fares have been phased out too, despite a local outcry from residents.

Bus companies have used deregulation as a way of making services more profitable by cutting out parts of routes that are less profitable or that affect reliability. Again, in my constituency, that has resulted in fewer services running to the most deprived area in the whole of the constituency because more profit can be made by ending most of the services at the bus station. Similarly, the bus companies have attempted to hold the passenger transport authority to ransom on some routes by demanding subsidies to run services for part of the day, particularly in the evenings. When passenger transport authorities have been unable to add that subsidy, the services have disappeared.

Those service failings can be addressed through quality contracts and they will need to be if the proposed transport innovation fund bid is to go through in Greater Manchester. The Greater Manchester passenger transport executive has been quick to assure me that the bus companies are keen on partnership working to deliver an improved bus network for the area; I am not surprised, given that £3 billion is at stake. However, I am less convinced that the companies will agree to partnerships whose profits would be low.

In Manchester we will rely on the new bus services to provide an easily accessible alternative to the car and persuade some motorists to change their behaviour, and we cannot trust the bus companies to provide such services voluntarily. That is why it is vital that the Bill should provide local authorities with the opportunity to introduce quality contracts without the fear of a long, protracted appeals process.

Like other Labour Members, I commend the Government on amendments Nos. 124 to 128. I also join the celebration of the life and works of my right hon. Friend the Member for Doncaster, Central (Ms Winterton) and welcome the arrival of my hon. Friend the Member for Gillingham (Paul Clark) to the Front Bench.

We are promoting an excellent piece of legislation today, and I particularly commend the amendments that I mentioned. I am the co-ordinator of the National Union of Rail, Maritime and Transport Workers parliamentary group, and I accordingly draw attention to my entry in the Register of Members’ Interests. About 6,000 of the union’s 80,000 members work on the buses. When the Bill was initially brought forward in the Lords, it contained no protection for the workers in respect of the potential for them to be transferred when a contract was awarded. As a result of the really constructive dialogue between Ministers, civil servants, the RMT and other transport unions and the TUC, we have a set of amendments that affords workers extensive protection. TUPE protection has now been introduced, and it has been extended to the transitional period; that will assist in protecting the work forces of operators that fail to win a quality contract.

Some of those protections will be laid out in detailed regulations. I shall refer to three particular issues that I would like the regulations to address and in respect of which I would like them to offer specific protections. A number of the unions have been pressing for a dismissal to be automatically construed as unfair under the regulations if it was given by an operator that did not win a quality contract or that decided to withdraw services instead of bidding for a quality contract. TUPE applies to many such workers, but we would welcome that specific protection against unfair dismissal. That would strengthen the unions’ hand in deterring the almost truculent treatment by employers that lose a contract.

I agree with my hon. Friend the Member for Manchester, Blackley (Graham Stringer) about the need for an extension of the deregistration period. That would allow local authorities to protect services and jobs and plan accordingly. The amendments constructively and helpfully ensure that there will be protection when employees transfer to a quality contract so that the new pensions are broadly comparable to the previous ones. That is a major breakthrough and will give reassurance to many in the industry. It is suggested that the protection will be based on a formula similar to that used in the local government pension procedure. I welcome that. It has been pointed out in some of the discussions that some of the workers may be eligible to join the local government pension scheme. It would be useful if that was addressed specifically in the regulations; a number of transport workers would welcome the opportunity to join the scheme and gain benefits and security from it.

Overall, I welcome the amendments on behalf of the unions. I am the son of a Liverpool docker who became a bus driver for 30 years; if my father were alive today, he would be heartbroken at what has happened to our bus services across the country as a result of privatisation and deregulation. However, he would broadly welcome this legislation, which gives our bus services the potential for a new future and a firm footing for the delivery of services on which so many of our communities rely.

Let me start by suggesting to the Minister that the characteristically generous reference by my hon. Friend the Member for Manchester, Withington (Mr. Leech) was probably due mostly to the fact that he is, like me, a Manchester City fan. We both have fond memories of beating Gillingham in the play-offs final some years ago.

May I add my voice to those who have thanked and congratulated my right hon. Friend the Member for Doncaster, Central (Ms Winterton), and my hon. Friend the Minister? It was outrageous for the hon. Member for Wimbledon (Stephen Hammond) to accuse the Government of not listening and then complain that the amendments came so late. Of course the Government listened. My right hon. Friend listened and discussed these important issues not only with Labour Back Benchers but with Members from all Opposition parties. In the short time that the Under-Secretary has been in the Front-Bench team, he has worked hard and been rigorous in consulting and listening to Back Benchers from all parties. My thanks are sincere to both Ministers.

I declare that I am a lifelong trade union member, and proud of it. I spent 20 years working for the Transport and General Workers Union as a regional officer in north-west England. Since becoming an MP, I have probably initiated upwards of nine or 10 debates in Westminster Hall and this Chamber on transport issues. That was not because I was a trade unionist in a union for the transport and public transport industry, but because it was one of the biggest demands of my constituents. The ability to get around the community, particularly for the elderly, the disabled and young mothers, is important to the debate about adequate public transport. Indeed, the economic interests of an area depend greatly on people being able to get to work on time.

In the Standing Committee considering the Transport Act 2000, some of us spoke to the then Minister—in the Committee and privately—and tried to highlight the fact that there was an imbalance since the Conservatives had deregulated public transport outside London. That imbalance was not in favour of local people, and we argued strongly that it should be put right by giving local elected passenger transport authorities more powers. It is well recorded that, like my hon. Friend the Member for Manchester, Blackley (Graham Stringer), I would like to see public transport run by locally elected people in the interests of local people. But that is not the case; we still have a system in which private operators deliver the services. That is fine, but if we have to accept that, there should be a good balancing effect, with local, democratically elected members making sure that the process is carried out in a fair way that looks to the interests of the operators earning reasonable profits and keeping people in work, and most importantly, to ensuring that the service is adequate and affordable for our constituents.

I turn to the question of deregulation being a matter of local democracy, and how the Bill will redress the imbalance. When the hon. Member for Wimbledon (Stephen Hammond) spoke earlier, he referred to a provision in the Bill that says “as it sees fit”. That related to local decision making, and the attitude of the hon. Gentleman was an attack on local democracy. The phrase “as it sees fit” implies local knowledge, and if we chose to remove those words from provisions to do with locally elected or public bodies, we would indeed be reducing local democracy.

I am glad to have the chance to correct the hon. Gentleman. When I used those words, I was talking about a specific element of the Bill: the obligation to consult and to publish in the way that is seen as fit. He will remember, as he was a member of the Committee, that we discussed that wording several times and in several places. In this case, I was referring to the requirement to publish. I am sure that he listened carefully to what I said later, and I made the point that there could be no misinterpretation about the word “publish”. Therefore, the phrase “as it sees fit” would not add anything to the wording of the Bill.

If the hon. Gentleman wishes to try to retrace his steps and his words, that is for him to do. It does not mean that I need to accept it. Implicit through all his curmudgeonly and negative approach to the Bill has been what I described earlier. I do not accept his explanation.

Will the hon. Gentleman give way?

No, I will not give way; I would like to make some progress.

We talked about the importance of local democracy delivering for local people, and one of the issues raised by hon. Friends and Opposition Members is TUPE. In our efforts to ensure that the interests of our constituents—meaning the public—are looked after, we sometimes forget that the workers in the companies involved are also constituents and that we should be looking to their interests. I spoke at length in Committee on TUPE. The matter is complex, but it is fundamentally a question of recognising the limitations of any system that throws people into unemployment. It should be a duty of politicians to look to making that as short a period as possible and, where possible, ensuring that workers are kept on, and kept on under terms and conditions that are at least equal to those they enjoyed under their previous employer. Having gone on at length about that matter in Committee, I am satisfied that the Government have moved forward and provided a protection that is probably as good as possible, with the exception of what was mentioned by my hon. Friend the Member for Hayes and Harlington (John McDonnell); the question of dismissal needs to be looked at more closely. I support my hon. Friend on that point.

I met privately with the Under-Secretary on the question of last resort, among other issues, and I said that there is an unknown in this case. We all want to see the matter settled before nine months—and certainly before 12 months—but there is an unknown. We do not yet have an adequate explanation of what happens when we move into the period after 12 months. I ask the Under-Secretary to consider the matter before the next stage. I say again, however, that a good step forward has been taken on behalf of working people.

When I heard the Member for Wimbledon—he is not yet honourable, I do not think, not for a long time yet. [Hon. Members: “He’s not right honourable.”] When I heard the hon. Gentleman assert—I shall try to remember correctly—that it is hard to quantify well-being, I totally and utterly disagreed. The whole Bill is about the quantification of well-being. What does that mean in English? It means looking after the interests of the public and ensuring that workers and operators get a fair deal.

Hansard will recall what I said previously, but on this point, can the hon. Gentleman tell us what tests he suggests the Government should have so that they can quantitatively measure personal well-being?

The man is a mind reader. By the way, I do not care if anybody calls it dogma, but I think that the matter is straightforward. The well-being of my constituents in Eccles and the city of Salford—and of the hon. Gentleman’s constituents—is served by ensuring that buses are provided on routes where they are needed, that they are modern and safe, run regularly and turn up on time, and that travel on them is affordable. That looks after the well-being of our constituents, and if it is dogma, I admit to being dogmatic. I would like my constituents to be able to rely on the Bill’s delivering those objectives by giving more power to locally elected politicians and passenger transport authorities. Only the Labour Government can deliver that—a Conservative Government could never do so.

An interesting range of contributions has been made to our discussions about one of the major elements of the Bill. It was interesting that the hon. Member for Wimbledon (Stephen Hammond) started with an attack on my ministerial colleague, my right hon. Friend the Member for Doncaster, Central (Ms Winterton), who undertook a great range of work in listening carefully to the comments of not only Labour but Opposition Members.

I did not attack the right hon. Member for Doncaster, Central. I merely said that much of what the Government have tabled renders illogical her comments in Committee.

I thank the hon. Gentleman for his intervention, but let me quote my right hon. Friend:

“I have, of course, listened very carefully to a lot of the points that have been made today and I would not in any sense wish to indicate that I would not take them away and consider them; that is the point of the Committee stage.”––[Official Report, Local Transport Public Bill Committee, 29 April 2008; c. 220.]

The vast majority of hon. Members—certainly Labour Members and Liberal Democrat Members—believe that to be the point of a Committee stage and of having Ministers who listen to the arguments.

The hon. Member for Wimbledon also told us how hard pressed the bus companies are. There are undoubtedly problems, as there are for operators of any services in the current economic climate, but let us not run away with the idea that all is doom and gloom. The latest survey of company annual accounts and interim results for all the major bus companies, including First, Stagecoach, Arriva and Go-Ahead, clearly shows higher operating margins and profit levels this year than the same time last year. Those are facts and we should take them into account.

The hon. Member for Wimbledon made several points about quantifying the benefits to passengers. Let us not get the idea that local authorities are not adept at quantifying costs and benefits of all kinds for all schemes, including transport schemes. There is nothing novel about that, and local authorities are familiar with the Department’s guidance on transport scheme appraisal. Clause 19 clearly sets out the criteria that must be fulfilled, and they are relevant to several points that were made in other interventions and contributions to the debate. They are that the proposed scheme

“will result in an increase in the use of bus services…will bring benefits to persons using local services in the area… will contribute to the implementation of the local transport policies of the authority or authorities…will contribute to the implementation of those policies in a way which is economic, efficient and effective”.

The final criterion is the proportionality requirement:

“any adverse effects of the proposed scheme on operators will be proportionate to the improvement in the well-being of persons living or working in the area”.

Earlier, the hon. Member for Wimbledon (Stephen Hammond) asked about effectiveness, efficiency and so on. He asked whether such matters could be quantified properly, and for a philosophical and contextual definition. Does my hon. Friend agree that locally elected people are best suited to determining on behalf of local people whether a scheme is effective or efficient?

My hon. Friend is absolutely right. Those who have worked and been elected locally are the best people to deal with such matters and to make those judgments on behalf of the people whom they represent.

The hon. Member for Wimbledon also asked about TUPE and the extra costs. The costs would be reflected in the price that the operators bid. The local authorities clearly need to factor any such costs into their assessment of a proposed scheme—they must take them into account when working through the criteria. However, it is important to remember that applying TUPE will also deliver benefits. Having an existing, well-trained work force transferring to the quality contract operator will lead to savings and benefits. It is therefore sensible all round to protect the employees of companies that are not successful, but we should also remember that having such a qualified work force will be beneficial.

I am grateful to my hon. Friend for his patience. We are considering issues that are important to our constituents and to us as politicians. The TUPE regulations were originally intended to ensure that unscrupulous employers could not make workers redundant on a Friday and offer them a new contract, with lower terms and conditions, on a Monday. The Bill’s provisions on that matter are good and will hopefully remain when it becomes an Act.

My hon. Friend is right that those provisions are some of the many good aspects of the Bill. He is also right about the purpose of TUPE.

Let me respond specifically to some of the amendments. Proposed amendment (a) to new clause 14 deals with the detailed workings of the QCS boards. It appears that it would do two things. First, it would place a further obligation on local transport authorities, to be fulfilled when they decide that they are ready to submit their proposals to the QCS board for consideration, to send to the board copies of documents that the authority sent out as part of the consultation or in response to it. Section 125 of the Transport Act 2000 already provides that the authority must publish notice of its proposed scheme at the outset of the consultation, and Government amendment No. 165 would provide that the notice must be copied to the senior traffic commissioner. That notice must describe the proposed scheme and state where a copy of it and the consultation document may be inspected. The purpose of having the notice copied to the senior traffic commissioner is that, when he designates the commissioner who is to chair the relevant QCS board, he can also ensure that that commissioner has access to the local authority’s consultation materials.

Amendment (a) also refers to documents that the local authority sends out during or after the end of the consultation period in reply to written responses from consultees. We consider that the local authority will have a clear interest in ensuring that the QCS board is aware of any such documents, as they are likely to be important in spelling out the local authority’s case for proceeding with its proposed scheme. I am therefore not persuaded that we need to make explicit provision for that, but I would be happy to reflect on the matter further as I develop more detailed proposals for regulations and guidance that will support the quality contracts scheme provisions in the Bill.

The second effect of amendment (a) to new clause 14 would be to insert another new requirement for local authorities. The amendment would mean that if, having consulted on its scheme and reflected on the consultation responses, the local authority wished to proceed with its proposed scheme, it must send a copy of the consultation document to the QCS board. Again, that is quite unnecessary, because the Government amendments already make provision for the consultation materials to be disseminated to the QCS board via the senior traffic commissioner. The Government amendments also include provisions requiring the authority to supply the board with information about all the responses that it has received and to ensure that the board has before it a copy of the final proposals for the scheme before it begins its deliberations. Our amendments therefore already provide for the board to have all the information that it needs.

My hon. Friend is very generous in giving way. Will he elaborate a little on exactly how widely integrated transport authorities will be expected to consult, in order to lay to rest any concerns that people might have about the quality of consultation on the schemes that is provided for in regulations?

I thank my hon. Friend for her intervention. There is a clear duty to consult all interested parties on the proposals and schemes being considered. It would be most bizarre if an authority did not use the option to consult, for example, bus operators, bus users and businesses in its local area and to follow that through. Again, however, we believe in allowing local bodies to decide how best to pursue those options in the consultation procedure.

The Opposition’s amendment (b) to new clause 14 relates to the actions that a QCS board may take if it considers that a proposed scheme does not meet the statutory public interest criteria. New clause 14 already makes it clear that in such circumstances the board may make recommendations on the actions that the authority or authorities might take in response to that opinion. New clause 14 is not prescriptive about the recommendations that a QCS board might make.

The Government would normally expect a QCS board to take a constructive approach. Where a board identifies defects in a scheme, the constructive approach would be to offer suggestions to the local authority as to how it might remedy them. It is unlikely that, having invested a great deal of time and effort in developing and consulting on proposals, an authority would submit to a QCS board a proposed scheme that was so defective that it was beyond salvation. If that very unlikely situation were to arise, I suppose it might be appropriate for the QCS board to say so, but there is no need to amend the Bill to empower the QCS board to do so. The provisions in proposed new clause 126AC(2) are already sufficiently broad to cater for that most unlikely outcome.

I agree with the Minister’s analysis, but does he think it would be helpful for local authorities to avoid any pitfalls by discussing the scheme informally with the QCS board before its submission, or does he think that the two processes should be separated so that there is no prior consultation with the QCS board, informally or otherwise?

I thank the hon. Gentleman for his intervention. I have said clearly that those who propose the scheme should use every option to ensure that they consult. As I said in response to an earlier intervention about the time process, local transport authorities will take time to develop a scheme. Depending on a scheme’s complexity—for instance, it could be a city-wide scheme or a more localised scheme—it will obviously take time for it to be ready and presentable. I therefore assume that authorities would use every option to ensure that they have consulted as widely as possible.

The Minister just used the phrase “a full-case review”, but will he be absolutely clear about that? My understanding was that the Transport Tribunal’s role in investigating any appeal where there was a division between the QCS board and a local authority would be limited to matters of disagreement between the two bodies. Is the Minister saying that it would be possible for the Transport Tribunal to reopen the whole case even when the QCS agrees with the local authority?

No, that would not be possible where the QCS agreed with the local authority. If the scheme had failed on the five public criteria test, it is likely that issues would arise that cut across a number of those criteria, which would therefore be open to a review through the appeals process. There would be knock-on effects where there was a problem with those public criteria.

If the point of disagreement between the QCS and the local authority concerned only one criterion, for example, would the Transport Tribunal be limited to considering that one criterion, or would it conduct what the Minister referred to as a full-case review?

No. My thought was that a cutting across over a number of those criteria would be likely, but if the disagreement was confined to just one, that would be the issue for an appeal. The hon. Gentleman is right in that sense.

Amendments (c) and (d) to new clause 15 would amend the powers of the Transport Tribunal to deal with an appeal. New clause 15 includes a power under which, in certain circumstances, the tribunal could quash the local authority’s decision to make a scheme. But, as with QCS boards, the Government envisage that the tribunal would seek to take a constructive approach by proposing solutions to remedy any defects in a scheme, where such solutions could be identified. That is why new section 127B(5) limits the tribunal’s power to quash a scheme, so that it may be exercised only in situations where the scheme cannot be varied to put things right.

Having spoken at some length on the amendments to new clauses 14 and 15, I now turn back to amendments (a) to (j) to new clause 9, which relate to the proposed “operator of last resort” powers. I should start by reminding the House that the purpose of new clause 9 is to provide a very limited power for local authorities to take action, in a specific emergency situation, to protect the interests of bus passengers—the people at the heart of the Bill. The power would apply only where a quality contract operator was unable to operate the services that it had contracted with the authority to provide. In such a situation, it is possible that the only way to ensure continuity of services to passengers would be for the local authority to step in.

This is absolutely not a generalised power for local authorities to get into the business of running bus services. It is a very tightly limited power, and it includes clear limits on the time period for which an authority may exercise it. The time limits proposed in new clause 9 are intended to ensure sufficient time for the local authority to find a longer-term solution to the unexpected gap in service provision, while ensuring that the local authority cannot exercise those powers over an indefinite period.

A number of hon. Members, including the hon. Member for Lewes (Norman Baker), have asked what would happen after 12 months. As an operator of last resort, we cannot provide services after a 12-month period. I have already said that if a local authority cannot find a contractor to run the services within that 12-month period, it probably never will. At that point, there has to be an alternative way forward. There has to be an incentive for all concerned to deliver services in the way that we want, using the various options that are open to them. It would therefore be wrong to extend the 12-month period. If we extended it for another three months, why should we not extend it for another six or beyond? We believe that the provisions for nine months, plus three months, will be able to meet the requirements in all circumstances. If they do not, it is unlikely that an authority will ever find an operator to tender for that service.

Obviously, any time limit will be arbitrary. A line has to be drawn somewhere when dealing with my hon. Friend’s basis for having an operator of last resort. Does he not accept, however, that if two major operators—which might or might not be involved in a future quality contract—were involved in a legal dispute, either with each other or with the integrated transport authority, the time taken might extend beyond 12 months? In those circumstances, there might be no incentives for any other bus operator to come into that area.

There would, of course, be an incentive for the local transport authority, as it would have been charged with providing those services for the bus passengers to whom it was responsible. I have genuinely tried to find out whether there is any belief that this process would be likely to succeed if it went beyond the 12-month period. My conclusion, following the discussions that I have had over the past three weeks, is that it is highly unlikely, and that we should need to find an alternative solution.

May I suggest a way forward? We all understand that the Minister does not want to give local authorities carte blanche indefinitely. A solution might be to give the traffic commissioner further authority to extend the process beyond the three months. The commissioner, an independent person, might be able to pick up on unforeseen circumstances and say, “Yes, given that there are circumstances that we cannot foresee today, there might be a case for extending this for another month.” That could be the safeguard that the Minister is looking for.

The hon. Gentleman will be aware that we have already given the traffic commissioner the power relating to the three-month extension, but his suggestion would almost take us into the game of finding a further extension. It is a question of where we draw the line. All the advice that we have received is that the process should be well on the way, if not complete, after nine months. That is why we have allowed three further months to allow for the possibility of it going beyond that time.

I think that my hon. Friend has got the drift of this. The rationale that he has put forward has been clearly understood on both sides of the House. However, I am worried about the unknown and unexpected things that could happen at the end of the 12-month period. I have asked him to revisit his thinking on this matter before Report, and I again ask him to do that.

I understand what my hon. Friend is trying to achieve. However, if I am to revisit the matter before the end of Report, I shall have to move extremely quickly to do it before 9 o’clock. I ask hon. Members to accept that we have recognised the issue of the operator of last resort, because we think that that was a powerful argument. That is another instance of our listening to the arguments that were made in Committee and by those who are seeking to deliver these services. We have taken the point on board. I ask all hon. Members to accept that we believe that nine months, plus an option of three months, is the way to ensure that we continue to provide services to the travelling public in the event of an unexpected gap. It should be remembered that this provision applies only in those circumstances.

It might be that I do not understand new clause 9. Will the Minister talk me through the scenario that was adverted to by my hon. Friend the Member for Manchester, Blackley (Graham Stringer), in which an authority issues an invitation to tender within the appropriate time frame but no one tenders? According to new clause 9, this will be covered in subsections (4), (5) and possibly (6) of proposed new section 132D, but I confess that I do not understand what the time frame is to be. If a tender is issued but nobody bids, how long will the emergency, or interim, service keep going?

This provision is for a time-limited period of nine months, plus three months as a further option, to get the contracts in place. Under the scheme, there is a period of time for the contract that was running, so it would be for the remainder of that period that this would run. That is why I believe that if there were a problem with the tendering, there would also be a wider issue that needed to be dealt with.

Amendments (e) and (f) appear to be getting at a slightly different issue. They seek to insert references to quality partnership schemes into new clause 9. The idea seems to be that, if a quality contract operator were unable to continue operating his services, the local authority might seek to fill that gap with a quality partnership scheme. But such an arrangement is wholly unworkable. The whole point of quality contracts schemes is that bus services falling within them are to be provided under quality contracts. I simply cannot see how the authority could superimpose a quality partnership scheme on top of an existing quality contract scheme. Furthermore, a quality partnership scheme involves the provision of facilities by the local authority, and bus operators wishing to use them must deliver an improved standard of service. I simply cannot see what hon. Members are seeking to achieve through these amendments other than attempting to wreck a sensible set of existing powers.

Amendment No. 5 simply states the obvious. It is a requirement, under clause 19 as drafted, that a proposed scheme bring benefits to people using bus services by improving the quality of the service. Clearly, the requirement must be judged against some other scenario, and the only reasonable and realistic one is to do exactly what the amendment says—to compare the expected benefits of a quality contracts scheme with what would be expected if things carried on without a scheme. Indeed, that is what the guidance will advise. That is not quite the same as saying that the effects of the scheme must be compared with the status quo, because in some cases it would be clear that, if no changes were made, services would be cut, passenger numbers would fall and we should be into a downward spiral.

Does the Minister view amendment No. 8 as almost a wrecking one, as under (c)(iii), all the consultees have to be

“living within 150 metres of any part of the route as specified in the proposed scheme”?

If one person were missed out, we would end up with judicial review, which reveals it to be a wrecking amendment, does it not?

I think that my hon. Friend may well have put his finger directly on the intention behind some of these amendments—[Interruption.] I am sure that the hon. Member for Wimbledon has been closely following our deliberations and he will have read the amendments tabled by others.

Will the Minister give way again on that point?

No; let me make some progress. In common, however, with my right hon. Friend the Member for Doncaster, Central, I want to respond to the amendments and to comments made by right hon. and hon. Members in the debate. Indeed, it would be discourteous not to do so.

My hon. Friend the Member for Manchester, Blackley (Graham Stringer) raised a number of points, particularly about how QCS boards will view the public interest. He hoped that the boards would not nit-pick too much—I think that that was my hon. Friend’s terminology. It will certainly not be the job of QCS boards to second-guess every point of detail in a local authority’s proposal. Their role will be to ensure that a proper and plausible analysis had been carried out. My hon. Friend was equally concerned about drafting issues and I can confirm that the reference to the

“coming into force of a quality contract”

does, indeed, mean the date on which services start to be provided under that contract. We think that that meaning is made clear by the rest of the wording in new section (1A)(a) inserted by amendment No. 124.

My hon. Friends the Members for Manchester, Blackley and for Hayes and Harlington (John McDonnell) raised a number of issues, including about the number of days of notice to be given. We can confirm that the notice period will be dealt with in regulations and increased from 56 to 112 days, which we believe is the right time for a period of transition towards a quality contracts scheme.

In addition, questions about the tribunal process have been asked. I had hoped that my earlier comments clarified the position, but my hon. Friend the Member for Sheffield, Hillsborough (Ms Smith) was particularly concerned about it. I reiterate that our intention is to ensure that the process is not overly cumbersome. We cannot prejudge what our Ministry of Justice colleagues will do, but I can give an assurance that, whatever the outcome, the process will have taken less time than a judicial review does.

My hon. Friends the Members for Hayes and Harlington and for Eccles (Ian Stewart) asked about the wording of “broadly comparable” and whether anyone would end up worse off. The “broadly comparable” wording in the amendment is consistent with the wording in the Local Government Act 2003, which makes provision for pension protection policy where activities are contracted out by the local authority. We are not aware of any difficulties that have arisen from the use of that wording. We are happy to work with the unions and other interested parties as we develop the secondary legislation that will support this important Bill.

On whether quality contract workers will be eligible to join the local government pension scheme, it would obviously be for an employer to determine what pension provision to offer its work force—subject, of course, to meeting the requirements set out in the regulations. The Government have confirmed to the trade unions that an operator of services provided under a quality contract would be eligible to join the local government pension scheme in respect of employees engaged in the provision of services under the quality contract.

Will my hon. Friend clarify, on that specific point, that that will also apply to employees of operators who are not local government operators?

This covers all employees who have been working under quality contract schemes.

Let me turn finally to issues of unfair dismissal, particularly whether it is automatically unfair if an employee is dismissed by an operator who fails to win a quality contract. We do not believe that that constitutes unfair dismissal. Because of the changes that we introduced in the mid-1980s, buses operate under a deregulated market, so bus operators, like suppliers in all sectors of the economy, are free to decide what services they wish to provide.

The Employment Rights Act 1996 provides that the dismissal of employees who are redundant is not unfair dismissal. That is an important principle in employment legislation. The best we can do is, first, ensure that, wherever possible, employees in the area of quality contract schemes are protected by TUPE and, secondly, minimise as far as possible the likelihood of that situation arising where TUPE does not apply.

I welcome many of the statements that the Minister has made tonight with regard to TUPE. A joint mechanism between the Government and the trade unions would be invaluable to monitor the implementation of the legislation in the coming period, particularly the detail that will be in the regulations, which he will publish in due course.

I am sure that my hon. Friend will be one of those who scrutinises how well the legislation works. He will be well aware that there are mechanisms to check how it operates, and that can be done in conjunction with all those who have an interest, including the trade unions.

My hon. Friend has not been able to give complete reassurance to those of us who are concerned about that aspect of employment law, but—just in case any employers do not understand—will he reiterate that all other employment protections remain in place for workers who are made redundant?

We have made it clear in the Bill that we have moved a long way on TUPE provisions and extended them to include those on pensions.

Before I conclude, may I make one point clear? I gave an answer on the 112-day consultation period: all that is out to consultation with the very people whom some of my colleagues want to see involved—the trade unions—as well as all concerned.

We have had an interesting debate about major issues. [Hon. Members: “Hear, hear!”] I am delighted that Conservative Members agree, because I am sure that they want for their constituents good bus services that run on time, use all the available facilities and work in conjunction with all concerned to deliver a public benefit. On that basis, I have no doubt that they will want to join us in the Lobby. I commend new clause 9 to the House.

Question put and agreed to.

Clause read a Second time.

Amendment proposed to the proposed new clause: (b), in line 31, leave out “three months” and insert “one month”.—[Stephen Hammond.]

Question put, That the amendment be made:—

The House proceeded to a Division.

Order. I ask the Serjeant at Arms to investigate the delay in the No Lobby.

On a point of order, Madam Deputy Speaker. Your answer to the following question may well be that we have pagers and that the vote was advertised on the screens, but for those of us who were not looking at either, may I inform you that the Division bell failed to ring in Portcullis House and thus some of us missed the vote? Might you make inquiries as to why it was not working, and ensure that it will be working for any future votes this evening?

I thank the hon. Gentleman. He is one of several Members who have informed me that the Division bells were not ringing in Portcullis House. On the basis of that information, I extended the period before the doors were locked by two minutes. I am aware that Members rely on the Division bells, but he is right to point out that they also have other means of knowing when there is a vote. As we are speaking, investigations are under way to make sure, as far as we can, that the Division bells will be working in any subsequent Divisions. May I also remind hon. Members to check their pagers and BlackBerrys and the Annunciator?

Further to that point of order, Madam Deputy Speaker. In light of that wise ruling—as all rulings from the Chair are—may I remind the House through you, Madam Deputy Speaker, that mobile phone signals do not work in Portcullis House and that our pagers are not reliable there? We rely on the Division bells, so they really do need to work.

Perhaps that is a matter that the hon. Gentleman might take up via other channels? In the meantime, may I remind all Members that when they are not in the Chamber they should keep an eye on the other methods by which they are informed that a vote is taking place?

New Clause 10

Provision that may be made in an order under section 73

‘(1) An order under section 73 may make, in relation to the ITA,—

(a) provision about its constitutional arrangements (within the meaning given by section 78(2)),

(b) any provision which may be made by an order under section 79, 80 or 81.

(2) An order made by virtue of subsection (1)(a) which includes provision about the number and appointment of members of the ITA must provide—

(a) for a majority of the members of the ITA to be appointed by the ITA’s constituent councils (see subsection (3)),

(b) for those members to be appointed from among the elected members of the constituent councils, and

(c) for each of the representative councils (see subsection (4)) to appoint at least one of its elected members as a member of the ITA.

(3) For the purposes of this section, the constituent councils of an ITA are—

(a) any county council, and

(b) any district council,

for an area within the integrated transport area of the ITA.

(4) For the purposes of subsection (2)(c), the following councils are representative councils in respect of an area to be designated as the integrated transport area of an ITA—

(a) if that area includes the whole of a county, the county council;

(b) if that area includes a metropolitan district or a non-metropolitan district comprised in an area for which there is no county council, the district council;

(c) if that area includes one or more districts in a county but does not include the whole county, either the county council or the council for each of those districts (as determined by or in accordance with the order in question).

(5) If an order made by virtue of subsection (1)(a) provides for members of an ITA to be appointed otherwise than from among the elected members of its constituent councils (see subsection (2)(a) of section 78), it must provide for those members to be non-voting members (see subsection (2)(b) of that section).

(6) The voting members of an ITA may resolve that provision made in accordance with subsection (5) is not to apply in the case of the ITA.’.—[Paul Clark.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following: amendments (a) and (b) to Government new clause 10.

Government new clause 11—Provision that may be made in an order under section 78: membership of ITA.

Amendments (a) and (b) thereto.

Amendment No. 11, in clause 73, page 64, line 6, in clause 73, at end insert—

‘(2A) An order may be made only if all of the constituent councils of the proposed ITA have approved the scheme by means of—

(a) a resolution, and

(b) a public referendum.’.

Government amendment No. 151.

Amendment No. 29, page 64, line 31, leave out paragraph (b) and insert—

‘(b) for those members to be appointed from among the elected members of the constituent councils in such numbers as to be proportionate to the representation of political parties on those councils’.

Amendment No. 12, page 64, line 32, at end insert

‘, and

(c) for those members to be appointed from among the members of the different political parties represented in the constituent councils, in such numbers as to be proportionate to the representation of political parties on those councils’.

Amendment No. 13, page 64, line 32, at end insert—

‘(8A) Only those members appointed from among the elected members of the constituent councils under subsection (8) will be permitted to vote in the ITA’.

Government amendment No. 152.

Amendment No. 26, in clause 78, page 68, line 29,  at end insert

‘but which arrangements must provide that members of the ITA who are not elected members of the ITA’s constituent councils may not vote unless this is unanimously agreed by the ITA’s elected members.’.

Government amendment No. 153.

Amendment No. 101, page 68, line 37, at end insert—

‘(c) for the ITA to determine what matters members of the ITA who are not elected members of the constituent councils may not vote on (which may include any matters relating to the funding or expenditure of the ITA, whether of a capital or revenue nature).’.

Government amendments Nos. 156 and 157.

Amendment No. 64, in clause 87, page 74, leave out subsection (2) and insert—

‘(2) The Secretary of State may not make an order under this Chapter unless the Secretary of State has laid a draft of the order before each House of Parliament and the remaining provisions of this section have been complied with.

(3) The Secretary of State must have regard to—

(a) any representations,

(b) any resolution of either House of Parliament; and

(c) any recommendations of a committee of either House of Parliament on the draft order,

made on or with regard to the draft order during the 60-day period.

(4) If, after the expiry of the 60-day period, the Secretary of State wishes to make an order in the terms of the draft, he must lay before Parliament a statement—

(a) stating whether any representations were made under subsection (3)(a); and

(b) if any representations were so made, giving details of them.

(5) The Secretary of State may after the laying of such a statement make an order in the terms of the draft if it is first approved by a resolution of each House of Parliament.

(6) However, a committee of either House may, at any time after the laying of a statement under subsection (4) and before the draft order is approved by that House under subsection (5), recommend under this subsection that no further proceedings be taken in relation to the draft order.

(7) Where a recommendation is made by a committee of either House under subsection (6) in relation to a draft order, no proceedings may be taken in relation to the draft order in that House under subsection (5) unless the recommendation is, in the same Session, rejected by resolution of that House.

(8) If, after the expiry of the 60-day period, the Secretary of State wishes to make an order consisting of a version of the draft order with material changes, he must lay before Parliament—

(a) a revised draft order; and

(b) a statement giving details of—

(i) any representations made under subsection (3)(a); and

(ii) the revisions proposed.

(9) The Secretary of State may after laying a revised draft order and statement under subsection (8) make an order in the terms of the revised draft if it is first approved by a resolution of each House of Parliament.

(10) However, a committee of either House may, at any time after the revised draft order is laid under subsection (8) and before it is approved by that House under subsection (9), recommend under this subsection that no further proceedings be taken in relation to the revised draft order.

(11) Where a recommendation is made by a committee of either House under subsection (10) in relation to a revised draft order, no proceedings may be taken in relation to the revised draft order in that House under subsection (9) unless the recommendation is, in the same Session, rejected by resolution of that House.

(12) Where a person making representations under subsection (3)(a) has requested the Secretary of State not to disclose them, the Secretary of State must not disclose them under subsections (4)(b) or (8)(b)(i) if or to the extent that to do so would (disregarding any connection with proceedings in Parliament) constitute a breach of confidence actionable by any person.

(13) If information in representations made by a person in response to consultation under subsection (3)(a) relates to another person, the Secretary of State need not disclose the information under subsection (4)(b) or (8)(b)(i) if or to the extent that—

(a) it appears to the Secretary of State that the disclosure of that information could adversely affect the interests of that other person; and

(b) the Secretary of State has been unable to obtain the consent of that other person to the disclosure.

(14) Subsections (12) and (13) do not affect any disclosure that is requested by, and made to, a committee of either House of Parliament charged with reporting on the draft order.

(15) For the purposes of subsections (5) and (9) an order is made in the terms of a draft order if it contains no material changes to the provisions of the draft order.

(16) In this section the “60-day period” means the period of 60 days beginning with the day on which the draft order was laid before Parliament under subsection (2).’.

I shall also discuss new clause 11 and amendments Nos. 151, 152, 153, 156 and 157, in the name of the Government. All these amendments deal with the membership of integrated transport authorities.

The strengthened powers for local authorities to improve bus services in their areas—which we discussed under the previous group of amendments—will be most effective if they are supported by the right arrangements for taking decisions at a local level. There is a clear consensus that in our larger urban areas outside London the current leadership and delivery arrangements for transport do not work as well as they might and that they need to be updated to reflect changing patterns of transport. The current governance arrangements in our major cities date from 1968. The Transport Act 1968 allowed for the establishment of passenger transport authorities with overall responsibility for public transport services across each of those cities. By the time of the establishment of the metropolitan county councils in 1974, there were six of these PTAs, covering the west midlands, south and west Yorkshire, Greater Manchester, Tyne and Wear and Merseyside. One was also set up north of the border in Strathclyde. Although the PTAs survived the abolition of the metropolitan county councils in the mid-1980s, the power to create further PTAs was removed from the statute book, even in circumstances where local authorities themselves were keen to see new ones set up. So, the broad arrangements for local transport decision making have, almost unbelievably, effectively been frozen since then.

Over the last quarter of a century, there have, inevitably, been many changes in the transport needs and patterns of different areas—for example, in the distance that commuters are prepared to travel to their workplaces—yet the existing legislation offers very little flexibility to update local arrangements for the planning and delivery of transport, or for one PTA area to do things differently from another, where local needs differ; hence our provision in this part of the Bill.

I come now to the Government’s amendments. At present, membership of each of the six English PTAs consists entirely of local councillors representing each of the local authorities that make up the passenger transport area. The Bill offers greater flexibility, both to areas that are considering setting up a new integrated transport area and authority and to those where the existing PTA has become an ITA, as to whether they would prefer to broaden the membership of their ITA to allow a wider range of bodies or persons to be represented on it. At the same time, a majority of members of each ITA would still have to be elected members of the local authorities that make up the integrated transport area.

Will my hon. Friend explain how the changed membership of the ITAs could, together with their new functions, allow better integration of local bus services with rail services?

I shall come on to those points shortly, but let me say that the ITAs will be able to draw together responsibilities for integrated transport. The title of integrated transport authority itself highlights that this is not just a simple change from passenger transport authorities to ITAs, but that it is very much about bringing together all the transport requirements—a point that covers exactly the issue that my hon. Friend raised.

The hon. Gentleman has just explained how responsibilities will be broadened under the ITAs. Will he explain how ITAs might include my mode of transport hither and to across the Solent—ferries?

First, let me say that it is up to local authorities to make a decision to review their transport arrangements and to come forward with a proposal to establish an ITA. Therefore, it would be within the scope of the authorities in the hon. Gentleman’s area of the Isle of Wight to have discussions and look at whether some form of ITA could be created within those authorities. It is not for the Secretary of State, or central Government in general, to dictate what the local authorities should do; it is up to them to come forward with proposals as to how they might take advantage of the Bill.

A range of issues relating to ITA membership was explored in detail in Committee. In particular, concerns were raised as to whether it was appropriate for those members of an ITA who were not elected representatives of a local authority to be able to vote on matters in the integrated transport authority. As we explained at the time, we are keen not to be too prescriptive in the Bill about the details of the structure of each ITA and how it will operate. As I indicated to the hon. Gentleman, we think that it is far better for us to leave different areas the flexibility to do things differently if they so wish, including deciding whether non-elected members of ITAs should be able to vote.

Just a few moments ago, when we were discussing the previous group of amendments, the Minister agreed about the importance of local democratic accountability. He made the point forcefully that the local authority would have the final say on quality contracts, and that it would not be left to advisers. Will he explain to the House why this is a different principle? Why does he feel that the matter that we are discussing now should be at the discretion of local authorities, and why is the principle of democratic accountability not just as important on this matter as on the one that we were talking about just a few moments ago?

The ITAs will consider all the transport options that exist. We are still giving the final say to local authorities, and in fact it is provided that they will be in the majority on any ITA board. Representatives of the local authorities will make up the larger number, and there will be a minimum of one representative from each authority in the ITA area. Equally, it would be right for them to bring in others, potentially including representatives of users—that option would be open to the ITA and local members—to be involved in their deliberations and discussions. Whether they had voting rights would be decided by the elected members of the ITA. I hope that that covers the hon. Gentleman’s point.

May I draw my hon. Friend’s attention to new clause 10(5)? I am clearly reading it differently from him. It states that

“it must provide for those members to be non-voting members”—

“must” not “may”. As I interpret it, he appears to be saying that they may be non-voting members. The wording in the bit that I am reading, which may not be the bit that applies to what he is saying, states that they must.

I thank my hon. Friend. It is certainly the case that if an ITA decides that it wishes to include other representatives, for example of bus users, operators or a number of other groups depending on local requirements, it will have the ability to do so. It will then be able to decide on which matters those non-elected, non-local authority members will vote. That is exactly the provision.

Perhaps if I turn my attention particularly to new clauses 10 and 11, I may elucidate on what I have just said. Members of all parties recognised that voting arrangements are best decided locally, which was why we were happy to respond with new clause 10, which applies to secondary legislation setting up new ITAs, and new clause 11, which applies to secondary legislation covering ITAs that already exist. They provide that it will be for each ITA to decide for itself whether those of its members who are not elected members of the local authorities but who are appointed by them should be able to vote, and if so, on which issues. That is instead of the issue being determined in the governance order to be made by the Secretary of State.

I have been puzzling over new clause 10(5) and (6) since I first read them. Subsection (6) clearly provides for local determination on the voting rights of non-elected members on a committee, but will that be reversible on a meeting-by-meeting basis?

It will be for the local ITA to decide how that provision will operate. It might decide on voting rights on issues that appear on the agenda for a given meeting, or it might well decide on broad categories of provisions. It could agree that non-elected members cannot vote on finance issues, or another such category. There will clearly be supporting guidance to help ITAs through that process, but it will be for them to deem how they run their own affairs.

I am grateful to my hon. Friend for being generous in giving way on a difficult point. My concern is this: if a party in control of an ITA can bring people on to it and give them voting rights on everything from capital and revenue expenditure to the network route, will it be able to say that those people have voting rights for four years, potentially undermining any elections in its constituent authorities? That is not clear from the new clauses.

My hon. Friend raises an interesting point. If I recall correctly, the authorities themselves will be able to review provisions under the new clauses periodically. I shall return to that issue shortly, but I recall that they will certainly be able to review them as and when required. Of course, there is a requirement for the ITAs to follow the rules and regulations on political balance, to reflect the constituent local authorities that make up the ITA.

Surely it would be far more straightforward to get that expertise on board with an ITA but give non-elected members no voting rights.

That course of action would be open to individual ITAs. As I have said, it will be up to an ITA to decide locally whether those members have voting rights. That will be entirely its decision to make, and the concern that my hon. Friend the Member for Manchester, Blackley (Graham Stringer) has indicated could be taken into account.

The new clauses also make it clear that each council that falls within an ITA area should be able to appoint at least one of its elected councillors as a member of the ITA, or that if there is a two-tier local government structure, the area must be represented at either county or district level.

May I return to the previous issue? I realise that it is a tricky point, and I understand that the Minister listened to what was said about concerns over voting rights for non-elected members of an ITA. The problem is that although the members of an ITA will be able to decide whether non-elected members can vote on particular issues, if a party with a majority sees an election coming that it might lose, it could seek to build in its majority by giving rights to non-elected people. That is the real concern.

If the Minister were able to give some assurance that in making secondary legislation he will guarantee that the decision is to be revisited after every local election, that would probably do quite a lot to remove hon. Members’ concerns.

I thank my hon. Friend. I wish to be absolutely certain that it is clear that non-elected members of an ITA will always be in the minority, because we have arranged it in that way.

Secondly, a minimum of one representative from each of the local authorities that are party to the integrated transport authority will be involved, and the political balance regulations laid out clearly in other legislation will have to be followed. Obviously, if there were a change after an election such as my hon. Friend mentioned, for example, the make-up of the ITA could be revisited.

Hon. Members are labouring this point because some of us have experience of hung groups relating to political alliances, and such situations make matters all the more complicated.

I understand what my hon. Friend is saying. Nothing in life is easy, and all I can say to him is that he should ensure that, through people coming out to vote correctly, his area does not end up with a hung ITA. It would be equally wrong for us to try to prescribe at central Government level how local authorities should handle the delivery of transport in their area. It is right that local authorities should make decisions on such matters and set up the governance arrangements that they want to have. The ITA can always decide to take away voting rights by overturning a resolution that it passed earlier giving voting rights in the first place, and that is why we are allowing local people to make that local decision.

A goodly number of hon. Members appear to share a concern that the Government are creating an unnecessary problem. Nobody is making the case that other people should not be involved in these organisations, and nobody is saying that their expertise as transport users and so on might not be useful. We are simply saying that they should have advisory status only. Given the arguments about democratic accountability that the Minister was advancing just a few moments ago, I simply do not understand why he has set a hare running on this issue. With the best will in the world, it is clear from some of the answers given that he does not have a clear response to the various points being made by his Labour colleagues.

I assure the hon. Gentleman that there is a clear response: it is a matter for local people—local, democratically elected councillors—on the ITA to decide whether non-elected people are incorporated into that body, whether they have any powers to vote and, if so, on what issues. We are providing for the local members on that ITA to have that power.

Let me try to help the Minister, because there is an easy solution to this matter. It is my amendment No. 13, which states:

“Only those members appointed from among the elected members of the constituent councils…will be permitted to vote in the ITA”.

If he were to accept it, we would cut the Gordian knot on this issue.

Equally, Labour Members believe that local authorities and local elected representatives should have the power to decide, and we want to provide for that.

Could the Minister tell the House how many local authorities or passenger transport authorities have made representations to the Government asking them to put other, non-elected members on their new ITA? Which local authorities have made such representations?

I understand what the hon. Gentleman is asking, but I do not want to end up in a situation such as the one that arose from the Transport Act 1968. For the past 25 years, following the abolition of the metropolitan county councils, we have not been able to amend things to allow the flexibility that would reflect the changes in transport demands in our cities and in our towns and meet the requirements of our constituents and the local businesses that operate in those towns and cities. Therefore, prescribing what the decision-making processes of locally elected representatives should and should not be would be the wrong step to take.

The Minister is clear in his determination to ensure that local authorities can decide which non-elected members serve on those bodies and whether those people can vote. Can he explain where else in local government such a structure is in existence?

If I recall correctly, such provisions exist within other local government legislation in respect of health improvement forums and so on. We should not necessarily seek to implement decision-making processes in transport in the same way, because this is a complex area. We must respond to local needs, and that is exactly what we are endeavouring to ensure. There are precedents for other joint bodies having non-elected members, such as national park authorities and police authorities—I knew that I would think of them.

I am sorry to labour this point. I applaud the Minister for what he is saying about giving maximum flexibility to local elected members—that is music to my ears—but introducing non-elected members is a slightly different proposition. For instance, we would not, in law, allow local authorities to recruit people who were not elected and then allow them to vote and make decisions. The same principle should apply in this instance, so he should re-examine this matter.

I take on board my hon. Friend’s comments. It is in the hands of local people to make these decisions. If they decide not to involve outside bodies, such as representatives from service users groups, so be it—that is a matter for them to decide. If they decide to have transport users on their board and they went them to be able to vote, that is also up to the ITA. As I have said, the elected members of the ITA will always be in the majority.

Would not the amendment tabled by my hon. Friend the Member for Wimbledon (Stephen Hammond) cover this point? It would not prevent advisers from being appointed; it would prevent the ITAs from being loaded committees, because it would be elected members who were in a position to vote. Surely accepting the amendment would be a simple way of making progress.

I find it difficult to accept that we should not include representatives of other organisations if the locally elected representatives deem it desirable to do so. They should have an opportunity to make that decision, and that is why I would not go down the route that the hon. Gentleman suggests.

I wish to tease this matter out by simplifying it for the Minister. In the west midlands, there are seven metropolitan authorities. Let us suppose that there are seven members of the passenger transport authorities, although that is not quite the case. The west midlands is a swing area, which is, unfortunately, controlled predominantly by the Conservatives at the moment. Let us also suppose that a few years ago, Labour, predominating among those seven councils, had appointed six—a minority on the PTA—of these non-elected members for a four-year term. Elections take place in the west midlands authorities three out of every four years, so in practical terms there is an election every year. During the four-year term of the six appointed members, the predominant control could change so that there were two Labour and five Conservative authorities. As Labour had packed the PTA with six non-elected members on a four-year term, however—our party would not do that, but we are talking about a hypothetical situation—despite the fact that the preponderance within the metropolitan authority would have changed, there would be a majority on the ITA of Labour representatives; there would be six “placemen” and two from the two remaining local authorities. Hon. Members from metropolitan districts are concerned that such a situation could occur, and on that basis, I urge the Minister to re-examine the mathematics of how this arrangement could play out in metropolitan authorities. I am not suggesting that any party would play fast and loose, but we need democratic safeguards.

I accept that there are concerns, but they may differ according to the area. There may be one set of concerns in my hon. Friend’s area, and another in the constituency of the hon. Member for Isle of Wight (Mr. Turner) about any ITA that may be set up there. Those concerns have to be taken into account when people are deciding how their ITA should operate. The danger of prescribing exactly what should happen in every ITA is that it could take us back to 1968, and the inability to change for 25 years.

I shall try to help the Minister. Could the issue be interpreted in relation to Government amendment No. 156, which refers to the need for political balance?

As I said earlier, locally elected members will always be in the majority on the authority, and that has to represent the political balance under the existing legislation covering those public bodies.

Although I would prefer elected members only to take part in votes, I understand the Government’s desire for flexibility. Would it help if we had a commitment to establishing boundaries for the reasons to give voting rights to non-voting members of ITAs? In other words, we could clearly state the grounds on which an ITA could grant such rights. The nervousness of Labour Members relates to the possibility of political parties playing fast and loose with this provision. In south Yorkshire, we have three main parties—Labour, Liberal Democrat and independents. Increasingly, they are coming into balance on PTAs, so the opportunities to abuse the system are great.

In practice, I am sure that suggestions and guidance will be provided on how ITAs might be set up, but I must reiterate that it will be for the local members to make the final decision—

As someone who wants democracy to work, I too would like to be helpful. Given that the Minister is insistent that non-elected members should be able to have voting rights, can he accommodate the concerns of many Members by providing that the voting rights of non-elected members should be renewed after every council election?

As I have said before, that will be an option for the ITA, as the rules and regulations set out. If an ITA changed, in terms of the representation of newly elected members from the local authority after a given May election, it would be for it to decide the rights of the non-elected members. The Local Government and Housing Act 1989 sets out the political balance requirements, and section 15 sets out the principles, including the need to review all appointments after political changes. That is the point that I have just made.

As has been pointed out, if the ITA has the power to decide that non-elected members can have voting rights for several years, they may be entitled to be involved in the initial decisions at the annual general meeting. The question is whether the elected politicians should run the AGM and decide, after each AGM or council election, whether the non-elected members should have voting powers.

That is for the ITA to decide. I repeat that locally elected members will always be in the majority. It could be that the ITA decided at its AGM that non-elected members were not to vote, or could not vote on constitutional issues. A range of options will be open to the ITA, and that is what we are trying to allow. We want proper representation with proper structures to deliver good public bus services, as we discussed regarding the first group of amendments. We want to modernise the delivery of those services.

In addition to the changes to clauses 73 and 78, the amendments would also take the opportunity to tidy up the structure of the clauses by placing the provisions covering membership of ITAs in two new free-standing clauses. Government amendments Nos. 151 and 153 therefore delete the existing references to ITA membership in clauses 73 and 78, as these will now be covered by Government new clauses 10 and 11.

Government amendment No. 156 is intended to ensure that the political balance of those district and county councils that make up the area of a newly established ITA is reflected in the appointments made by those councils to an ITA. That also responds to concerns raised in Committee that a governance order under part 5 of the Bill could be used to circumvent the new political balance requirements. In fact, PTAs are already subject to section 15 of the Local Government Act 1989, which requires that the political balance of the local authority representatives who sit on a PTA reflects the political balance of the constituent councils that make up the passenger transport area. There may have been some confusion on this point in Committee, but I can reassure hon. Members that section 15 of the 1989 Act will also apply to integrated transport authorities—not just to those six ITAs that will replace the existing PTAs, but also to any new ITAs that might be set up in future.

I recognise that there were some concerns that the powers in clause 86 for the Secretary of State to make incidental, consequential, transitional and supplementary provision by order could, at least in theory, be used to disapply the requirement for ITAs to be subject to political balance. I am very happy to make it clear that the Government believe the membership of ITAs should be subject to the rules on political balance, in the same way as are other authorities to which the 1989 Act applies. Government amendment No. 156 underlines that by making it clear that the powers in clause 86 cannot be used to remove the requirements for ITAs to be subject to the rules on political balance.

Government amendment No. 152 makes a small drafting correction in clause 76. Government amendment No. 157 provides that orders under clauses 73 to 91 of the Bill would not be subject to the hybrid instruments procedure when laid before Parliament. That would apply to orders made by the Secretary of State in response to proposals for changes to existing arrangements put forward by local authorities of the sort that we have already been discussing, such as an order setting up a new ITA or making changes to the boundaries of an existing ITA.

The amendment would, of course, apply only to proceedings in another place, as the hybrid instruments procedure does not apply to this House. Such dehybridising clauses are not unusual in local government legislation. Similar provisions have been included recently in the Local Government and Public Involvement in Health Act 2007 and the Housing and Regeneration Act 2008. Indeed, the Local Government Act 1992 also provided that orders setting up unitary authorities, such as those in Hartlepool or the City of Leicester, would not be subject to hybrid procedures.

The Bill quite properly already provides that governance orders under it should receive detailed scrutiny, both inside and outside Parliament. Clause 87 therefore provides that they will be subject to affirmative resolution in both Houses. Equally, clauses 73(10) and 85(4) provide that the Secretary of State must consult relevant local authorities and other parties with an interest before such orders are made. Given that fact and the precedents that I have mentioned, the Government do not feel that potentially subjecting such orders to hybrid procedures is necessary to ensure the proper scrutiny of the proposals. That is especially true as such a process could have the effect of delaying changes to existing governance arrangements, which have enjoyed widespread local support.

I am grateful to my hon. Friends and other hon. Members who raised important issues in Committee. We have reflected on those points before introducing these amendments. The amendments address the issues behind amendments Nos. 12, 13, 26 and 29, tabled by Opposition Members, and behind amendment No. 101, tabled by my hon. Friends. I hope that as a result that they will not feel that they need to push these amendments to a vote.

I am glad to see the new clauses, although I would like slightly more clarification of certain parts of them. In Committee I said:

“In areas where there is no ITA, local people elect their councillors, who go on to implement local policy such as that on transport…Therefore, in ITA areas that process, or something similar to it, is preserved. My amendments”—

those that I tabled in Committee in April and May—

“would achieve that by ensuring that the members of the ITA who make and implement the transport policy were drawn from a pool of locally elected councillors. I question the need for direct elections, although I understand that that process would have even greater…linkage. We have a process whereby elected officials can sit in a democratically accountable way on an ITA, but unless the ITA reflects the political proportionality, democratic representation and democratic consent are removed.”––[Official Report, Local Transport Public Bill Committee, 8 May 2008; c. 317-18.]

I am pleased to see the new clauses, because they begin to cover the issues that were raised in Committee and have been raised again tonight.

My argument in Committee, unlike my arguments on the previous group of amendments, gained some support from all parties. I argued that if ITAs were to be a success, they must be accountable and democratic: that the ITAs must be made up of elected members of the councils that constitute the ITA area; that those elected members must be appointed to the ITA in such a way that their numbers reflected the political make-up of the councils; and that, if there were to be unelected members, they should not have the right to vote. The Government’s proposals go some way towards that. The new clauses are a starting point, offering total flexibility of membership and voting, that could lead to my desired finishing point of fully accountable ITAs.

The new clauses specify that each ITA must include at least one elected representative from each authority represented in the ITA. Furthermore, the Government’s amendments specify that those members not appointed will be able to vote only on those matters that the ITA permits them to vote on. As hon. Members have said, that raises a number of issues, and so I have tabled two amendments to new clause 10 and a further two to new clause 11. Unless I get some further reassurance, I shall test the will of the House on amendment (b) to new clause 10. Those amendments complement my original amendment No. 12, which was tabled before the summer recess. The first effect of the amendments will be not only that a majority of ITA members will be local councillors, but that all of them will be. The second effect will be that the representation of the various political parties on an ITA will mirror that on the councils that comprise the ITA.

My hon. Friend the Minister found himself in difficulties on this issue. I sympathise, because he walked into the job only very recently. I genuinely hope to be helpful by going through the issues as I see them. I hope that we can come to a resolution, if not now, then possibly in the other place.

When the metropolitan county councils were abolished, it became the constituent authorities’ responsibility to send members to the passenger transport authorities and other joint boards. After a lot of argument, it became clear that rules had to be applied to retain the correct political balance. At best, my hon. Friend was not clear about the fact that that political balance relates to the number of members sent to the PTA by the constituent districts. If, for example, there was a Labour majority of one in Wolverhampton, the district could not send three or four Labour delegates to the PTA; it had to be proportionate. That requires a little thought. Although the constituent authorities will do their best to send a proportionate balance of members to the PTA—or, in future, the integrated transport authority—it is likely that the final balance will not reflect the balance across the county.

If, as seems intended in new clauses 10 and 11, we reduce the number of council representatives on the integrated transport authorities to one per authority—that is the minimum—it becomes impossible to reflect the political balance in the county, unless the county is a statistical freak. There are difficulties to do with where we start. In Committee, we discussed holding direct elections or referendums to set up the bodies, but that is not what the amendments that we are discussing are about.

In new clause 10(5) and (6), there is both a prohibition on having non-elected members on an ITA, and a power giving ITAs the ability to waive that prohibition. It is not clear what the purpose is of providing for such members. I do not mind the 47 professors of transport that universities feel they need being on integrated transport authorities. I do not mind bus operators or passengers being on them, either. Discussion with those people would add to elected members’ knowledge. However, what is the purpose of allowing non-elected members to vote? I have not heard the Minister give any good reason for that.

I should like to query one statement of fact that the Minister made. He said that voting arrangements were determined locally. That is simply at odds with the facts. Local authorities cannot co-opt people with voting rights on to them. In fact, the right is jealously guarded. The Local Government Act 1972 got rid of aldermen, who had been there for ever—I mean, some of them, personally, had been there for ever. From that point on, all directly elected local authorities have been just that—they have had only elected members. That was the political balance. Where there are joint boards, an attempt is made to recreate that political balance on them. The one exception is police authorities. Historically, magistrates have long been seen as almost equal, if not equal, to elected members of such authorities, but all the other authorities have jealously guarded the situation.

I would therefore be fascinated to hear the objective, beyond that of providing expertise, behind allowing non-elected members. The Minister said repeatedly that elected members will be in a majority, but that is not really the point. Those of us who stand for election do so because we believe certain things. Often, parties believe different things; that is why their representatives stand for election. What matters is the political balance. If the Labour party or Conservative party has one representative on a body, that is the balance that matters, and not whether there are more elected than non-elected members.

I ask my hon. Friend to think about that, because as things stand—given the fact that the relationship between subsections (5) and (6) is ill-defined, and given that there is no clear stated objective—the process can change the political balance of the authority, and we do not know how long for; it may be for four years, or for one year. That can be done while elected members remain in a majority.

As the hon. Member for Wimbledon (Stephen Hammond) said, I attempted to define and address some of those issues in amendment No. 101. Having listened to the debate, however, I think that it does not go far enough. I certainly will not press it to a Division, but I look to the Minister at least to make a statement in the House saying that he will look into the issues with a view to ensuring that the political balance is maintained within authorities. What is proposed in the Bill is at best ill-defined. The provisions were introduced in response to comments made in Committee, and I accept the Government’s good will, but they could work to undermine essentially good proposals.

I cast the problem as being to do not just with members, but with the purpose of setting up integrated transport authorities; the Minister referred to that. In one sense, the purpose is to say, “Transport has probably not been considered as important as it should have been in the local democratic context, and we will give it a shove. We will have integrated transport authorities, and after consultation and once statutory instruments have been agreed to in this place and the other place, we will give them the ability to take highways powers away from local authorities.” If that is the purpose—to give a push to transport—one has to keep the scheme in the most powerfully democratic context that one can.

I have been on passenger transport authorities, and I have been on the Transport Committee, although I was not on it when I was a member of the Government. I believe in giving transport as much help as it can get, but there are competing interests that must also be part of the democratic process. If one is setting up a bus priority measure, shopkeepers, local residents and pedestrians will often have very different views about it. If the proposals in the Bill were agreed to, and those with special interests from the transport world altered the political balance, there would be less and less possibility of people who disagree with transport proposals gaining their point through the democratic process.

Is there not another problem with the proposal—that it may fall victim to what I might call the Thatcher test? When faced with selecting people, the right hon. Lady often used to ask, “Are they one of us?” It is one thing appointing “one of us” to any sort of authority, but it is quite another to give that person a vote.

I entirely agree with my hon. Friend.

Transport proposals are often at the core of the most intense debate in local areas. In Greater Manchester a tremendous row is going on about the transport innovation fund proposals. A referendum on the matter has been proposed, but many of us believe that the question has been fiddled. Transport is not an easy subject, and to take it further from the democratic process may well be a mistake.

My final amendment does not focus on the detailed working and structure of integrated transport authorities and how they could be made fair, democratic and effective; it deals with how they are created. We had that discussion in Committee. The Government’s position is that ITAs should be created by statutory instrument, under the affirmative procedure because they fundamentally change the structure of local government. Highways powers will be changed, and borrowing powers may well be transferred to different authorities. People will be able to vote more easily to effect some policies as an elector if the proposals go ahead.

I shall comment briefly on the proposed make-up of integrated transport authorities and the voting rights within them. It is clear that the Minister has considered the concerns expressed in Committee by my hon. Friend the Member for Lewes (Norman Baker) and by other hon. Members about the political accountability of ITAs, but unfortunately the Government amendments do not go nearly far enough to allay those concerns.

The guarantee in the Government’s new clauses that each ITA would include at least one elected councillor from each local authority is not enough to guarantee political balance and the local accountability of the ITA. In his opening remarks the Minister was quick to argue that the Government were seeking not to dictate to local authorities on the make-up of the new ITAs and whether non-elected members had voting rights, but he was unable to give one example of a local authority or PTA that was asking for the power to include non-elected people in the ITA with voting rights.

The current arrangements for PTAs are hardly perfect, but at least they make some attempt to reflect the relative size of each local authority and its political make-up. In Greater Manchester, for instance, the Labour party recently lost control of the passenger transport authority, but that would almost certainly not have happened if the PTA were made up of one member from each local authority area. The temptation will be great for so-called independent members of ITAs to be selected by political allegiance, rather than because of their transport knowledge.

Surely, therefore, the most appropriate way forward is to ensure that any independently appointed members of the ITA have no voting rights. The Government can attempt to put as many restrictions in place as they want, but if they continue to insist on voting rights for non-elected members, they will seriously damage the accountability of each ITA.

Amendment No. 26 in my name and that of my hon. Friend the Member for Lewes seeks to restrict voting rights on the ITA to elected councillors appointed by individual local authorities, while allowing for independent members who have expertise in transport matters. It is right and proper that an ITA should benefit from the expertise and experience that some appointed members may be able to contribute. It is not right or proper, however, that those people should exercise votes. The only people who should have voting rights are elected members of an ITA’s constituent council. Those members are the only ones truly accountable to the local people on whose behalf decisions relating to transport matters are made.

I am following what the hon. Gentleman is saying, but it appears to contradict his amendment No. 26, to which he has just referred. The amendment says that

“arrangements must provide that members of the ITA who are not elected members of the ITA’s constituent councils may not vote unless this is unanimously agreed by the ITA’s elected members.”

In the Chamber tonight, the hon. Gentleman appears to be enunciating a principle, which I quite understand; his amendment, however, seems to straddle that principle somewhat. Which is his position?

Ideally, we would take the position that there should be no voting rights for unelected members; I suspect that an ITA would never agree to give voting rights to a non-elected member anyway. However, to try to get the Government’s support on this matter, we are pushing an amendment that simply gives the opportunity for local authorities to restrict those voting rights.

Although the Government’s new clause 10 heads in roughly the right direction, it does not guarantee accountability. It is not acceptable to put the question of whether an ITA is accountable directly into the ITA’s hands; that runs the real risk that an ITA will appoint a large number of co-opted members—little more than party stooges—who would then have the power to thwart the wishes of the electorate and the local community. The Government have a duty to safeguard local democracy, not to threaten it as they are currently doing with this element of the Bill. I shall be slightly bolder than the hon. Member for Wimbledon (Stephen Hammond) and push amendment No. 26 to a Division.

I should like to make four big points. First, we have to be careful about the use of the term “political balance”. Although it is possible to ensure that each constituent authority within an ITA area is required to propose representatives who reflect the political balance of their council, it is not possible to construct a system under which all the authorities together are taken as a whole and the political balance of the ITA reflects their total political composition. There cannot be a mechanism for doing that, because there would be nobody to oversee it. There is no way in which we can do it, and we must be careful about that. Currently, under the passenger transport authorities, each local authority selects its members to the transport authority on the basis of the political balance in that authority—and that, I suggest to the Minister, is also how things will have to be done with ITAs.

Secondly, it would help if the Minister said that there would be an attempt to balance representation on grounds of population within local authority areas as well. Currently, there are big differences in population among authorities that constitute passenger transport authorities, and the membership of the PTAs reflects that. I hope that that will be carried through. Obviously, Sheffield is the largest authority in south Yorkshire and if we had an extended ITA for that part of the country, I would like that fact to be reflected. We could end up with a mix of met and non-met districts forming a new ITA in which the differences in population size between the authorities would be even bigger.

Thirdly, I turn to the issue of votes for unelected members. In the end, the arguments are pretty persuasive. There is no good reason in principle why unelected members should have the same votes as those on the same authority who are elected. Nevertheless, in moving as far as they have, the Government may well have been helpful. In the vast majority of circumstances, no group of elected councillors on an ITA will award the vote to people who are not elected; they would not share their democratic entitlements in that way. The only time when that might happen is when people want to play political games—when, for example, the majority on an ITA think that they are going to lose power and seek to appoint like-minded people to positions as non-elected members and then give them the vote.

I think, however, that the Minister has already said that the decision on whether non-elected members should have a vote on the ITA should come up after each local authority election at the very least, so that it could be repeated. Indeed, there was some suggestion that the voting members on the ITA might be able to vote on the rights of non-elected members at any time. That might deal with the problem.

I agree with what the hon. Gentleman has said so far. Is not the problem that the Government are standing too far back? They should be saying that setting a framework within which everyone had to operate would in no way affect local accountability. That framework should be designed to prevent abuse and ensure democratic accountability.

In new clause 10, the Government are trying to set a better framework. Some on the Labour Benches are just trying to encourage the Minister to make the framework a little more specific to secure democratic accountability and prevent the misuse of powers.

Finally, I turn to the potential extension of the new PTA areas and the new ITAs. I think that that is a real possibility in south Yorkshire, north Derbyshire, north Nottinghamshire and perhaps even north Lincolnshire. The issue is exciting, because the current PTA boundary ends at the bottom of my garden. There is nothing intrinsically wrong about that, but the problem is that the travel-to-work area does not end there. The travel-to-work area of Sheffield, as a city region, extends into north Derbyshire, north Nottinghamshire and north Lincolnshire. Good relationships are now developing between the various local authorities, which want to come together on issues of transport, and perhaps skills, to consider how they can work together better.

I do not think that everything is sweetness and light between the districts and county in Derbyshire, and elsewhere, about how that will be done; there are some tensions that will have to be talked through. However, the possibility of doing that is a positive and helpful step in the Bill. I ask the Minister to think about the one issue that might be restrictive. I am thinking of representatives of an ITA that incorporated only part of a county but the whole of certain districts within that county, which could happen in, for example, Derbyshire, Nottinghamshire and Lincolnshire. In such a case, there would have to be a decision on whether the county or each individual district was represented on the ITA. Might not making that decision, and saying that only one or the other could have representation, create a further problem for an agreed way forward between the county and districts on those other issues? Will the Minister think about how such a restriction might prove more unhelpful than it need be?

We have certainly had an interesting discussion about the provisions of integrated transport authorities—those that exist and those that we want local authorities to consider as a way forward.

The last comment made by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) was about the representation of districts and counties. He is right that there is a minimum position of there being a representative either from each of the districts or from the county council, by agreement. We are saying that that would be the minimum representation. I shall come back to the other matters that he raised and reflect on other things that he mentioned. I shall try to deal with some of the amendments and then with the issues that have been raised individually.

Amendment No. 11 relates to clause 73, under which the Secretary of State can make an order establishing a new integrated transport authority and integrated transport area where the local authorities in the area have reviewed their existing governance arrangements and have published a scheme that proposes that an ITA be set up. However, let me make it absolutely clear: an ITA to be established can usually cover only those geographical areas included in the proposals for a new ITA put forward by two or more local authorities—county councils, metropolitan districts, councils or unitary councils. The only exception to that rule would be in the circumstances that two or more authorities have not only been directed by the Secretary of State to undertake a review of all or part of their area but have been directed by the Secretary of State to prepare and publish a scheme for the establishment of a new ITA in that area or part of that area. I would expect that to be a rare occurrence, if it ever proved necessary at all. However, there might, for instance, be a major difference of opinion between neighbouring authorities that made it impossible for them to decide what area a new ITA should cover, thus holding up a review that could lead to improvements to transport locally.

In those circumstances, a direction by the Secretary of State determining the likely area of an ITA could remove the main blockage to a review going forward. If the local authorities failed to comply with such a direction, the Secretary of State would be able, subject to the procedures and safeguards set out in the Bill, to make an order setting up the new ITA. The Bill already provides several constraints on the Secretary of State’s power to establish a new ITA—for instance, the procedural safeguard of consulting representatives of appropriate authorities and others. What is more, any governance order setting up a new ITA would need to be approved by this House and by another place.

These safeguards will enable individual local authorities properly to represent the interests of those who live and work in their areas. I am not convinced that requiring a local referendum or the passing of resolutions before an ITA may be established would provide any worthwhile extra protection. It is worth repeating that people using transport in the area may not always live within the boundaries of the proposed ITA itself, especially where it is an urban area that has a large number of commuters. I hope that my explanation has convinced hon. Members that the safeguard that they are attempting to introduce into the Bill is unnecessary and that they are able to withdraw their amendments.

I turn to the Conservative amendments to new clauses 10 and 11. I have already explained the purposes of the new clauses, one of which is to provide that non-elected members of an ITA should have voting rights only where the existing voting members of that authority agree. This deals with the concern expressed in Committee that having non-elected members could lead to a shift in the political balance of the ITA. That is why, as some right hon. and hon. Members have recognised, we moved to reflect the debate that took place in Committee.

Having listened carefully to the Minister, I am not sure that he has addressed the point raised by my amendment No. 13, which clearly refers to

“Only those members appointed from among the elected members of the constituent councils”.

That is slightly different from the Liberals’ amendment, which would provide the flexibility that the House does not appear to want. I hope that I will be able to press my amendment at the appropriate time, because the Minister has not given me the reassurance that I sought.

Amendment No. 13 would mean that non-elected members had no voting rights at all under any circumstances. I have already been through that discussion. The hon. Member for Manchester, Withington (Mr. Leech) referred to the fact that individual authorities have not yet asked for non-elected members because they have not yet undertaken a review of their governance arrangements in those areas. We are not forcing non-elected voting members on anybody—we are providing the possibility that that can be decided at a local level. We have said that non-elected members cannot vote unless the ITA wants them to do so.

Will the Minister give way?

Yes, on that point.

My hon. Friend has been courteous throughout this long debate, but could he explain the purpose of transferring to the ITA the power to give non-elected members the power to vote, which is very unusual?

My hon. Friend has mentioned other examples of where this happens—for example, police authorities. If the provision is not widespread, that does not mean that it should not apply and that we should not be far-thinking in getting the arrangements for governance of the transport system in our towns and cities that we think are right and will deliver. One reason for giving non-elected members the power to vote could be to give a voice to passengers from outside the ITA area, such as those who commute to the travel-to-work area. That was mentioned by my hon. Friend the Member for Sheffield, Attercliffe, who welcomed the ability to change the boundaries of existing areas because of changing travel-to-work areas. All these measures reflect the changes that have happened over the past 25 years or so while provisions on the Government’s arrangements for transport within our major cities have been frozen without the ability to introduce any new ones.

My hon. Friend mentioned the sort of constituency that might be represented by co-opted members who are given the vote, but to whom would they be accountable? Does the situation that he describes override the fears of abuse that have been expressed around the Chamber?

ITAs are responsible to local authorities and, ultimately, to the people whom they serve—the travelling public. I reiterate that this is about making a provision for an ITA to take if it so wishes. If it wants to incorporate and involve non-elected members—for example, representatives from user groups, operators, or other interested bodies that it thinks would add to its deliberations—that is one of its powers. The second power is the ability to say, “You can vote or you can choose not to vote.” It is a matter to be decided locally.

Many of us would find it much more reassuring if my hon. Friend were able to give the House a commitment on the point about “review at election”, if I could use that shorthand for Members who have taken part in the debate. Would the voting status of non-elected members who were given a vote by the ITA have to be reviewed by the elected members at the first meeting subsequent to any council elections?

That might be a good provision to be incorporated within the constitution of an ITA, but I want to talk further about the question of a review after an election. An amendment was tabled by the hon. Member for Wimbledon to new clause 10 that would require that members were appointed precisely in proportion to their representation. This is an example of where the provision would work exactly as my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) says.

As other hon. Members have said, it is unlikely that we would always have a situation where a precise political balance on an appointing council matches the number of appointments that it can make to an ITA. That is why the Local Government and Housing Act 1989 sets out at length the way in which political balance works. Section 15 sets out principles by which appointments can be balanced. When political balance changes, the duty on the appointing authority is to review the representation as soon as is practical thereafter. A review would therefore be going on, even if there was not a change of political balance, because the legislation requires it. Section 15(6) of the 1989 Act deals with non-elected appointees by requiring the number of such appointees to be taken into account.

Would the Under-Secretary accept that, compared to the current arrangements for PTAs, the Government’s proposals make it far more likely that the composition of an ITA will not reflect the political balance?

No, I do not accept that because of the safeguards in the Bill that I hope we will pass today, and in the 1989 Act. I do not believe that the proposals would do as the hon. Gentleman describes. My hon. Friend the Member for Sheffield, Attercliffe talked about reflecting population differences in the numbers that could come from each participating authority. That is a possibility, and the relevant ITA could decide to reflect the population on that basis. The effect of further amendments to new clauses 10 and 11 would be to preclude any representation on ITAs other than by elected councillors. The Government believe that non-elected members of the ITA could have an important role to play if the local ITA so decided.

Amendment No. 64, tabled by my hon. Friend the Member for Manchester, Blackley (Graham Stringer), would introduce additional procedures for any orders making changes to existing transport governance arrangements in any part of the country that the Secretary of State might make using his powers in clauses 73 to 91. A key objective of the Bill is to allow local government arrangements to be tailored to meet local needs. In contrast to the current statutory arrangements, which are extremely inflexible, the Bill allows for separate orders to be made to introduce changes in different parts of the country. An order covering the west midlands could include different provisions from one covering Merseyside. That is why provisions cannot be included on the face of the Bill, and need to be left to secondary legislation.

I entirely accept that the Bill provides for significant reforms to be covered in secondary legislation. That is why the affirmative procedure will apply, so that all such orders would need to be approved by both Houses of Parliament. That is entirely consistent with the findings of the Delegated Powers and Regulatory Reform Committee in the House of Lords. The Committee considered the issue carefully. It noted the procedures and safeguards that are included in the Bill, and concluded:

“we do not consider these delegations inappropriate”.

Therefore, I ask my hon. Friend to consider his amendment unnecessary. I think that I have covered all the points raised in the debate, and with that I urge hon. Members to support new clause 10 and to reject the amendments tabled.

Question put and agreed to.

Clause read a Second time.

Amendment proposed to the proposed new clause: (b), in line 12, at end insert—

“(d) for those members to be appointed from among the elected members of the different political parties represented in the constituent councils, in such numbers as to be proportionate to the representation of political parties on those councils”.—[Stephen Hammond.]

Question put, That the amendment be made:—