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Local Transport Bill [HL]

Volume 696: debated on Tuesday 20 November 2007

Second Reading debate resumed.

My Lords, we return to the Second Reading of the Local Transport Bill. While much of the Bill applies to England and Wales, there is one clause that applies to Wales only and is of particular interest. That is Clause 109 which transfers specific legislative powers to the National Assembly for Wales and has already been mentioned by the noble Lord, Lord Bassam, and by my noble friend Lord Attlee. This clause is one of three such clauses which will appear in Bills to come before your Lordships this Session. Similar clauses appear in the Education and Skills Bill and the Planning Reform Bill. These framework clauses, as they are called, will enable the National Assembly and its Government to pass Assembly measures which will have the same effect and force as measures passed by this Parliament. Such clauses are not new to us in Parliament but they are constitutionally important in that they augment and enhance the powers devolved to the National Assembly. I am sure your Lordships would wish to be aware of that. The main powers transferred in Clause 109 relate to schemes for charging for the use of trunk roads in Wales. Trunk roads are the roads for which Welsh Ministers are responsible and they include the major east-west arteries such as the M4 in the south and the A55 in north Wales.

We are informed by the very useful memorandum on these framework provisions supplied by the Welsh Assembly Government that there are no plans to amend the provisions relating to trunk road pricing schemes on an England and Wales basis and that this seems an appropriate opportunity to seek legislative competence for the Assembly,

“in respect of the possible development and implementation of pricing schemes for users of trunk roads in Wales”.

I think we are all aware by now that there is no similar pricing proposal for England and its national roads. I recall a massive public protest against it on the No. 10 Downing Street website some time ago and I believe that the number of protests reached a record level of 1.8 million.

One's first reaction to the Welsh proposal is fearful to say the least, fearful that the Assembly Government might impose charges for the use of the major arteries I referred to earlier—the M4 and the A55—which supply the life-blood of Wales, as if the Severn Bridge tolls were not enough of a handicap for travellers to the Principality. As someone who had responsibility as a Minister for roads in Wales in the 1980s, I am aware of the vital role major roads played in attracting new industry and contributing to prosperity. It is a fact of life that road traffic increases when the economy prospers and that there is a direct relationship between the two, a point made by the noble Lord, Lord Bassam. Similarly, road traffic declines during a recession. We tend to forget that we are approaching hard times now by all accounts, and economic growth next year is already forecast to be lower than expected. Clearly, in these circumstances, we must do nothing which threatens our economic well-being in Wales or elsewhere in the UK.

The thrust and justification for road charging schemes to date has been that they help to reduce congestion, but it is not inconceivable that the financial proceeds of road charging can in themselves be a powerful stimulus, especially in times when local authorities are strapped for cash, which currently appears to be the case. Some authorities in Wales, for example, have had allocations from the Assembly Government barely covering inflation. They may well be tempted to charge for the use of their roads if there is the possibility of a reward. I share the misgivings of the noble Lord, Lord Cameron of Dillington, about road charging schemes.

Clause 109 provides that the proceeds of trunk road charging schemes in Wales shall be applied to purposes relating to transport and that, prima facie, is good news. But, of course, any resulting increase in the resources available for transport purposes will probably mean a smaller allocation from the Assembly Government budget, and charging schemes may well develop into a stealthy means of raising extra revenue.

I have one more point to make about Clause 109. The Assembly Government memorandum spells out in detail what the Assembly measure, which will flow from the clause and the grant of legislative competence, may contain. The 13 details listed range from the designation of trunk roads that will be subject to charging, to the financial arrangements for the application of revenues for transport purposes. Indeed, such is the detail in the memorandum that one is tempted to say that, with a little refinement, they could have been incorporated in the Bill. There would then be no call for an Assembly measure, which is bound to involve much work and effort at the Assembly some time in future. But then, of course, the powers would not have been devolved and that, after all, is one of the main points of the exercise and Clause 109.

The Government may well deny the possibilities that I have raised as contentiously speculative, but they exist, are there and implicit in the proposals to allow charging for trunk road use, especially on trunk roads already paid for and maintained at taxpayers’ expense. I hope that what I have said alerts the Welsh electorate to what may be in store for them, as those who logged on to the No. 10 website were obviously aware.

My Lords, it is always a pleasure to follow the noble Lord, Lord Roberts of Conwy. That role has fallen to me in this House on at least one occasion and in the other place it fell to me on more than one occasion. I cannot promise to accompany him, whether by road, rail or car, on a tour of the Principality, but listening to him and to the noble Earl, Lord Attlee, the principal Front-Bench speaker, I am always struck by how adept the Conservative Party is at adopting the role of the motorist’s friend in these debates. Both those speakers made great play of their support for public transport, but at the same time said that there must be no restraints on motor cars and that we cannot have congestion charging.

One of the great weaknesses of the present charging system as far as roads and motorways are concerned is that once one has purchased a car, whether on hire-purchase or directly, and paid for the petrol, the insurance and all the other things, it does not make any sense to leave it on the drive and catch a bus. The sooner the cost of a journey is more accurately reflected in each journey undertaken, the better. If we had a system of congestion charging that made it apparent, so that there was an easy comparison between using the car and using public transport, that would help to get the modal shift that all of us say we are in favour of. However, as long as the principal opposition party sets its face against any congestion charging, that is not likely to happen.

In my younger days in another place when I had some transport responsibilities, I used to try to write—I am going to show how impartial I am going to be in this debate—into Labour Party manifestos the provision that we should abolish the road fund licence and put the cost on a gallon of petrol, which would more accurately reflect the cost of a journey. Needless to say, most of the opposition to that proposal came from the Principality, particularly from the Swansea area, where civil servants who earned their living in the motor tax department could see redundancy looming if my preposterous—in their view—suggestion were adopted.

My Lords, the noble Lord talks some sense, but I hope that he does not forget that the principal operating cost of a motor car is the fuel, which is taxed at about 400 per cent.

My Lords, if it is Conservative Party policy to reduce fuel tax, we will all be interested to hear about it. I am not sure whether the noble Earl, Lord Attlee, is senior enough or responsible enough to make that pledge, but it is very interesting that, at a time when we are talking about global warming and the cost of motoring in general, the Conservative Party should be so irresponsible as to make that suggestion. However, let us not bicker among ourselves; there is plenty of time in Committee for that.

It is surprising that so far there has been no mention of the railway industry. If we are to have a different charging regime for local road pricing, such a regime will have some impact on the railway industry. I have a number of questions to put to my noble friend arising from those potential charges. Does he agree that local transport authorities should take account of relevant rail plans—network route plans and other plans—when devising local transport policies and plans? Does he think that they should consider how their proposals will impact on rail capacity and whether they need financially to support enhancements to the rail network in their area from the extra income that they will gain from these proposals? If local areas wish to introduce local road pricing schemes, should they not be required to consult Network Rail and the train operating companies because of the impact that such charges will have on rail carriers? If extra capacity is to be created on local rail and other public transport networks to take care of the additional traffic that will be generated from these road pricing proposals, should local authorities not be able to borrow money against the revenue stream that will arise from a road pricing scheme? I hope that my noble friend will look at those questions, as there is an opportunity for local authorities to be able to finance better public transport in their area without the burden necessarily falling directly on Her Majesty's Government’s taxation policies.

Turning from the railway industry to the impact of these proposals on the bus industry, I draw your Lordships’ attention to the entry in my name in the Register of Members’ Interests. Nowadays I carry out consultancy work for First Group plc and I spent many years working for the National Express Group—indeed, I was chairman of its major bus operator for some years—and there are a number of matters in the Bill on which I should like to comment and to which I will return at a later stage.

The Bill has come about as a result of quite a few years of lobbying by passenger transport authorities and their executives. The great myth about bus passenger carryings is that it is only since the 1986 Act, which deregulated bus services, that passenger carryings have been falling away dramatically. That is not true but it is the great myth that PTAs and PTEs have tried to instil for many years. Again, there was not a great deal of defence of the 1986 Act in the speech of the noble Earl, Lord Attlee. The Transport Act 2000 and the Bill before your Lordships today arose directly out of criticism of the 1986 Act, much of it based on myths perpetuated by local authorities.

I do not think that the average bus passenger cares who owns the buses or, for that matter, what colour they are. The average bus passenger is concerned to see that the bus arrives at the time stated in the timetable and is not held up unduly by congestion along the journey. It is an oft repeated remark, but it deserves putting on the record again, that we will never tempt motorists out of their cars if the bus that we are trying to tempt them to join is in the same traffic jam as they are in, listening to whichever radio programme they choose in the warmth, comfort and isolation of their motor car.

The Conservative Party cannot have it both ways. It cannot say, on the one hand, that we must have no congestion charging or penalising, as it would put it, of the motorist and, at the same time and in the same breath, that we can have proper bus priority measures. The two are incompatible. To introduce proper congestion-busting bus measures we need to restrain the private car.

Again, there is nothing revolutionary about that. It was the Conservative Government who gave permission and the financial wherewithal for the Midland Metro system to go ahead in the area that I used to represent when I was in another place. They did so on the understanding and the clear direction that car restraint measures were introduced on the adjacent A41 trunk road. That was eminently sensible and everyone supported it. But where are such sensible proposals these days from the Conservative Party? It professes to be the motorists’ friend and says that there should be no car restraint, although proper provision has to be made for public transport. The two are incompatible and it is time that the Conservative Party recognised that.

The other great myth is that London has a successful system and the rest of the country should emulate the London experience if we are to have proper bus services. The Department for Transport, or whatever it is called these days, not too long ago carried out a survey of bus passengers—surely the people who count. The DfT figures showed that 83 per cent of bus users outside London were satisfied or very satisfied with their services, whereas 78 per cent—5 per cent less—were satisfied in the capital. I need hardly remind your Lordships of the capital experience of investment. The latest figures that I have are for 2005-06, and it is costing £638 million to subsidise London buses. That may be a very good investment—I do not criticise it—but it is a bit more than the £128.6 million that the rest of the country gets. If we were to have an honest and straightforward debate about these matters, the fiscal imbalance between the two would have to be recognised. All too often it is ignored when PTEs and PTAs, in particular, demand a repeat of the London experience in their areas.

The proposals in the Bill envisage three different ways of operating buses throughout the country: the voluntary partnerships, the statutory quality partnerships and the quality contracts. I have some trouble with the English language, as your Lordships may have noticed during the debate, but I do not understand what a statutory quality partnership is. A partnership is a partnership—an agreement between two separate bodies. How can it be statutory? The Labour Party used to demand statutory industrial agreements in the 1970s. I used to point out to the likes of Eric Heffer that there was some contradiction there. Needless to say, I did not get much change from him. I cannot see how one can make a partnership statutory.

In any case, voluntary partnerships in various cities around the country have been extraordinarily successful. However, they need both sides to participate. The great myth that the PTAs and PTEs put around is that the only people who seek to co-operate in these matters are the local authorities. They say that the wicked capitalists who run the buses—they put me in that category at one stage; I cannot understand why—are not interested in partnership, yet I have previously during these debates drawn the attention of the noble Lord, Lord Bradshaw, to the fact that, in Birmingham, where there was a freely entered into agreement between the company of which I was chairman at the time and the passenger transport authority to provide bus lanes along the No. 67 bus route, the city council, which was under the so-called progressive partnership of Conservatives and Liberals, took out that bus lane on a temporary basis four years ago and has still not replaced it.

It takes two to tango. A quality partnership must be a proper partnership and recognised and adhered to by both sides. In Birmingham, there are numerous examples of great growth in bus use on certain routes where proper bus priority measures have been laid down. The city of York, where there are something like 12.5 miles of bus lanes, has also seen extraordinary growth. In Sheffield, where there are fewer than two miles of bus lanes, there has been significant growth on certain routes because of a voluntary quality partnership. Growth can be achieved, but it will not be done by the imposition of statutory quality partnerships or, even worse, the protracted legal wrangling to which they will lead if the local authorities are unwise enough to introduce quality contracts.

I am sure that we will return to many of these matters in Committee. I apologise for detaining your Lordships for so long. It is a matter about which I feel strongly. I shall underline that in Committee, no doubt much to my noble friend’s chagrin.

My Lords, I thank the Minister for explaining the Bill to us in such detail. As one of those who did not take advantage of the briefing sessions that he provided, I am afraid that I came to this subject a little cold. The Bill contains a wonderful example of the efforts that we make to square the circle of an unequal devolution settlement between Scotland and the rest of the UK. It manages to go quite a long way towards achieving this and, during its passage, I hope that we shall be able to satisfy ourselves that it has managed, however approximately, to do so.

I note that paragraph 37 of the Explanatory Notes states that the Bill does not contain measures that require a Sewel motion from the Scottish Parliament, but it seems that there are one or two areas where the Bill comes fairly close. Numerous permutations involving Scotland in the Bill appear to be designed to overcome any accusations that this is another area where the West Lothian question might arise. I notice that the commissioners for England and Wales will have power to act on any retained matters in Scotland, and the commissioner for Scotland will be able to act on retained matters in England and Wales.

Most matters relating to local transport in Scotland are devolved, so it is of much interest to see in paragraph 47 of the Explanatory Notes that the Scottish commissioner will have full jurisdiction over devolved and reserved statutory functions. Does that not have a Sewel motion implication? Has any assessment been made of the burden of responsibilities that will be faced by the Scottish commissioner as compared to that of his English counterparts? Does it have any relevance to the apparent lack of powers within the Bill to appoint a deputy traffic commissioner in Scotland?

Noble Lords will have noted that both Clauses 1 and 6 of the Bill grant sweeping, Henry VIII powers to the Secretary of State. The reasons for this being thought necessary will require a little probing at a later stage. Are there any such powers in the legislation that already governs this area, or are these new proposals?

As the noble Lord, Lord Cameron of Dillington, said, the amendments in Clauses 46 and 47 will be seen as very welcome in all rural and remote areas, although they are also bound to benefit anyone who wishes to provide a local service in some urban community. I note that the Countryside Alliance re-emphasised in its brief for this Bill the problems of remoteness in rural areas and the fact that it is estimated that 16 per cent of rural households do not own a car, which puts them at a serious disadvantage in many areas of life. Given the current increases in the price of fuel and the fact that between 600 and 700 petrol stations in rural areas are closing every year, the number of rural households without cars may go up quite dramatically. The possibility of someone who normally runs a taxi service, which is often in the form of a minibus, being able for some part of the day to provide the format of a local bus service should be very beneficial. A similar service in the form of a post bus exists in my own area. I presume that that will be able to operate under the regulations that we are discussing.

Part 5 of the Bill deals with integrated transport arrangements. Will the Minister enlighten the House as to how many of them are currently in existence, as they are of major importance to the convenience of the travelling public? An active arrangement exists in my home area: the Strathclyde Passenger Transport Authority has made an enormous difference, as it covers an area in which it has to co-ordinate rail, bus and ferry services. However, it has recently been presented with a further challenge. A new Scottish local transport service provided by a sea plane has just been opened up. It will fly you from the centre of Glasgow to any loch or marine destination in Scotland that you choose, and usually in not more than three-quarters of an hour. I am fairly sure that no attempt is yet being made to integrate it with the Strathclyde Passenger Transport Authority, but considering that so little regulation of air transport has been devolved, I wonder which government body will license that service. It may well at some point have to be dealt with in a Bill such as this.

My Lords, this transport Bill aims to do a lot of good, primarily for road congestion and bus services. I hope that it will deliver; I am sure that we will have a better idea about that by the time the Bill leaves this House. Indeed, we have discovered a lot about the Bill today.

I shall examine what the Bill hopes to do for transport in Scotland, where, as the noble Duke, the Duke of Montrose, said, transport is largely a devolved matter. Irrespective of the future governance of Scotland, I am generally in favour of one rule of the road in the British Isles.

Much of the Bill hangs on the future performance and independence of the traffic commissioners. It extends the changes for the traffic commissioners to the Scottish traffic area so far as reserved matters are concerned.

I am puzzled by the fact that the new senior traffic commissioner will be able to direct the Scottish traffic commissioner to do work in England or Wales, yet deputy Scottish traffic commissioners may not be so directed. I presume that the deputy traffic commissioners will handle the devolved transport work. There is some confusion about that and its practicality, so I hope that the Minister will clarify it. In doing so, will he tell the House whether the Scottish traffic commissioner is barred from being the senior traffic commissioner?

The opportunity to detain public service vehicles which are being operated without an operator’s licence on the same basis as HGVs driven without such a licence is a welcome and useful provision. The same can be said about the use of taxis and other private-hire vehicles as public service vehicles. This deregulation may well enable small-scale public transport to be extended to isolated Highland clachans, hamlets and other villages where there is a limited but specific demand for travel to work or for a Saturday night out. It may reduce the amount of time that parents in rural areas spend ferrying the children around and make it more possible for poorer families to live in the countryside.

The relaxation of the permits for charitable sector minibuses and the possibility of payment for the drivers, and by passengers, may well enlarge the scope and scale of that market. However, I expect that communal operators will scrutinise any expansion of such activity like hawks; perhaps fairly so.

I have examined subsections (1) and (2) of Clause 59, which are claimed to extend to Scotland. The provisions imply a power for transport authorities and presumably local authorities in Scotland to subsidise passenger transport. Will the Minister please clarify that?

The opportunity for members of DPTAC seems to be generous, particularly if they have to devote considerable time and travel time to their duties. However, I note that this remuneration must not apply to any devolved matters. Quite how that will work within UK-wide meetings I do not yet know.

Another organisation to get into potential difficulties of this nature will be the Rail Passengers Council. The RPC is to get more non-rail powers. That sounds sensible, particularly when transport is to be integrated. I note that this new work will not apply to the Scottish appointees. How will that work out at meetings?

The Secretary of State is giving herself the opportunity to charge Scottish transport authorities for information supplied under the Transport (Scotland) Act 2001. I wonder how often that will happen, or is it to stop them asking for information?

I am content with the new powers for collecting information about foreign-owned lorries. I suspect that there may be some surprise at the roadside when the child support regulations are enforced. There is considerable concern about these lorries and this may bring them under closer scrutiny.

Those 10 measures are the Scottish content of the Bill. Clearly, the Bill is about bus franchising, the reorganisation of the PTEs into integrated transport authorities and road congestion busting. I have a few comments about the rest of the Bill and its potential for success. The Bill aims at rural proofing. That is commendable, but it is unlikely to reach really isolated and sparsely populated areas, making it difficult for teenagers in particular. Possibly the taxibus system will help.

The Bill enables local authorities to install a range of road charging schemes and other congestion reducers. Without any reduction in vehicle excise duty or fuel duty, these will be seen as unfair by many. My preference is for using traffic orders and higher parking charges. Closing specific roads to certain types of traffic may well solve the congestion problem, which slows up the buses, trams and taxis. Good examples can be seen in Princes Street, Edinburgh and in Stirling where the Springkerse park and ride buses enter the city centre through private roads, involving no expensive surveillance and collection systems. If road charging has to be used, it should be used only during the peaks. Such measures are not needed in Alloa where we have free car parks which are not yet full.

I was impressed by the Bill’s impact assessment, published separately, when it looked at the Bill’s outcomes for gender, ethnicity and disability. It made instructive reading.

To be successful, the Bill will have to demonstrate that it can organise the integration of transport without compromising competition policy. That seems to be a bigger problem than it ought to be and may well defy common sense. Network Rail, in its briefing notes—I was not the only one to receive them—states that it wants to be consulted about the effect of proposed bus franchises and road charging schemes. If they are to be of any use, they are bound to have implications for the railway, so it seems sensible to make Network Rail a statutory consultee.

Finally, I hope that the Bill will be an aid to improving local transport and will give an added fillip to public transport. A central message is that improved punctuality and frequency will lead to increased patronage. I look on with interest. Some people will not give up their cars for anything except positive coercion. Perhaps others will be prised out of their cars by demonstrably quicker bus and tram journeys. I, too, look forward to the Grand Committee.

My Lords, first, I remind Members of my various interests. I am leader of Wigan Council and, particularly in this context, chairman of the Association of Greater Manchester Authorities.

I welcome most of the provisions of this Bill. It will greatly assist city regions such as Manchester in improving their transport facilities. Power given to local authorities is something that, as a localist, I always welcome as a sign of trust. In the process of developing a bid for the Transport Innovation Fund, we in Manchester have done a lot of thinking about the importance of transport in modern cities. Not only is it vital to allow the city's economy to flourish, but it enables communities to access the education, health, cultural and social facilities that make a modern city. A lack of investment in the past has created congestion and other situations which can cause a loss of jobs. In Manchester, we are advised that without the TIF bid and congestion charges there could be a cost of some 30,000 jobs in the city.

It also badly damages the environment. When you draw a map of Greater Manchester showing the areas most adversely affected by environmental pollution, you are actually drawing a map of the main rail and road system: it is identical. We hope to get a TIF bid that will bring some £3 billion investment to public transport with road pricing, although we will not introduce road pricing until after public transport has been improved.

I also welcome the holistic approach to transport issues that is involved in the Bill. Bringing road and public transport out of their separate silos into one integrated authority will be an improvement. I hope that we will also integrate into the approach the link to parking, not just parking in city centres. Certainly, in lots of areas there are major problems with free parking in out-of-town retail centres. They can have a huge effect on the local road network causing major congestion and we could use the income from such parking to improve public transport.

I want to concentrate, as other noble Lords have, on three things: the governance arrangements, the bus operations and road pricing. At the moment, cities are reviewing their governance arrangements in the context of the sub-national review and the opportunity given under it for the multiarea agreements to further city development. In Greater Manchester, transport is just one of six different areas that we are trying to bring together to create new ways of governing. I welcome what the Bill can do for us as an integrated authority. In particular, I welcome the opportunity to involve stakeholders and partners from outside the local authority. In putting together our TIF bid, we have had great assistance from the Greater Manchester Chamber of Commerce, which proofed our proposals against the effect on the local economy. That was very helpful.

I also like the fact that we will see flexibility in the system, as mentioned by the Minister in his introductory remarks. What we want in Greater Manchester may not be what people want in other cities, and that is fine. We can have a system that we want, which will bring in partners—transport operators, users and industrialists who can make a contribution. I can assure the noble Lord, Lord Bradshaw, that PTAsare not precepting authorities; they are levying authorities. Whatever they want to do needs the approval of the local authorities. Believe you me, later this week we are having a scrutiny of the Greater Manchester transport budget bid for next year and I assure him that it will come down. The relationship with highways authorities needs to be clarified. I am sure that we can do that in Committee to see how much influence local authorities can have over the Highways Agency—an important agency in contributing to transport issues.

The role that buses play in cities is not fully recognised. My noble friend the Minister quoted them as having two-thirds of public transport journeys; they are very important in cities, where it is probably as high as 80 per cent. The experience of public transport in cities, particularly in bus operation, is very different in different parts of the country. I am sorry that my noble friend Lord Snape has just left his place, because one of the treasures of your Lordships’ House is that there is always somebody to defend an interest, however oppressed it is. In his robust and entertaining speech, my noble friend defended bus operators. Well, there you go; somebody has to do that. Yet when you look at the reports on their financial dealings and the profits that they make, I prefer to defend the interests of bus passengers. They are getting a raw deal—particularly in urban areas outside London which suffered the consequences of deregulation.

Despite what my noble friend said, the figures on what has happened are quite stark. During the past 20 years, since deregulation, bus fares have risen in London by 50 per cent while patronage on the buses has risen by 57 per cent. In other urban areas, operated through deregulation, bus fares have risen by 100 per cent but passengers have fallen by roughly 50 per cent. That is a really different experience from what is going on here, which can be explained by no reason other than the impact of London still having a regulated bus operation. Transport for London and the mayor can therefore decide all sorts of things such as routes, timetables and fares—even the colours of the fleet. It seems to me that we should not have gone away from some of that in the deregulation of 1986.

I think that one reason for this Bill being before us today is that delegates to the 2006 Labour Party conference had an opportunity to see first-hand what was happening in Manchester’s Piccadilly, where there was a queue of bus after bus after bus—all with their engines operating, and therefore polluting the city centre. There were an unbelievable number of rival buses trying to pinch passengers, and that just does not work. It is costly to the bus passengers, as we saw.

I hope that we are trying to get quality partnerships in Greater Manchester, but quality contracts are important. I will not repeat the points made earlier by my noble friend Lord Rosser, but the Bill proposes a complex way in which quality contracts should be implemented. That has to be a serious and relatively straightforward alternative to the quality partnerships regime, if only to get the bus operators around the table in a serious mood to agree to a proper partnership. I hope that we can make some amendments there. In the bus parts of the Bill, I also welcome the ability for transport authorities to own their buses. That could make an enormous difference to those community bus services that require a high degree of subsidisation, and which are so vital to many of our communities.

Finally, on road pricing, I still bear the scars from the proposal to introduce congestion charging in Manchester as part of our TIF bid. Clearly, no one is willing to pay any more tax for using a car, so how did we manage to convince the majority—two-thirds of the public and of the business community—to support the TIF bid? We made sure that they understood that, for a number of reasons, the congestion charge was not a tax. First, there is a choice: motorists do not have to pay a congestion charge in Manchester if they choose to change the mode of travel. Clearly, that encourages people who can do that. Secondly, they can vary the time of travel; we are introducing a peak time congestion charge system, which is doing what it says in charging motorists for the congestion that they create during peak periods. In non-peak periods, there is no cost and it would therefore be wrong to charge them, so if they change the time of travel then they will not pay. The revenue that would be raised from such charges will be reinvested in improving local transport, and people recognised and understood that.

On the question posed earlier by the noble Lord, Lord Cameron, about the benefits to the rural community of a community charge, it is simply that the money will be going to improve public transport, including things like park-and-ride so that people who live in rural areas can travel to the nearest station, park up and use the train or a bus to travel into the city. There are thus opportunities and benefits there, and we will make sure that there is considerable investment in railways as part of the package of improvements to public transport—in both stock, to improve capacity, and in stations, to make sure that they can handle that extra capacity. We will talk to Network Rail and other rail operators to ensure that that happens.

If we are trying to improve lives and opportunities in our cities, transport is now such a vital element that it can no longer be ignored or left on the back burner. I welcome the Bill as a great way forward, and I look forward to working to improve it in Committee.

My Lords, there are many areas in this Bill that we all seem to favour. There are, however, pitfalls that do not recognise the investment and commitment that transport businesses have made to the industry or the huge improvement in services.

I am afraid that greater regulation via a quality contract and a PTA will not improve the system. It is therefore palpably flawed. Undeniably, the best transport infrastructures in Britain are in York, Cambridge and Brighton, which, despite initial controversy, shine like beacons. Why? It is because each has a unitary authority, which determined an integrated traffic management system, recognising the coexistence of buses, rail and bicycle and the equal importance of the car. I note that the private car gets a mention only in the last quarter of this Bill. Unitary authorities are, therefore, a proven success in which, if created with a quality partnership—partnership being the operative word—public and private entities can successfully recognise each strength and weakness for a common aim.

Since time immemorial, it has been demonstrated that the Government or the public sector are no managers of businesses, particularly substantial ones such as the transport industry. Many transport companies have become significant multinational businesses, and I fear that some of this legislation treats them as if they were small-time operators. The quality contract is, I am afraid, therefore flawed. It provides greater regulation and greater cost to the taxpayer, potentially jeopardising investment by operators who fear that, at a whim, contracts may be awarded to alternative operators if it is politically, and not necessarily commercially, expedient. I share the CBI’s concerns that no compensation scheme is provided if that occurs, and I have asked the Minister to look into that.

Of course, we need regulation to ensure that targets are being met and that safety standards are being adhered to and there is no reason why that should not be done by a senior traffic commissioner, as is proposed. Yet he must have the independence to marry the political and commercial influences on his decision-making, so I agree with the noble Lord, Lord Bradshaw, that such a job specification and remit needs to be carefully considered and crafted. A nationwide code of conduct through that regulator is, surely, the fairest blend between commercial and political influences, to ensure that the general public have best practices and value for money. We all support joined-up thinking that develops an overarching plan, embracing all forms of transport with the highway authority at its side. We must ensure that we combine private and public sectors, operating together, as that is the only way forward. It can be done only through a quality partnership, not through quality contracts.

My Lords, I happened to be watching a television show last weekend in which the Secretary of State for Transport was being interviewed. I did not see the complete interview, but what I did see included some matters relating to this Bill. The Secretary of State said that people would be given “a choice” of the transport that they might use, but for many people there will be no choice. There are the tradesmen, travelling salesmen, taxis, delivery services, to mention but a few—and then there are the people who cannot afford to use public transport. If they are forced off the roads and cannot afford to travel by bus or train, businesses will suffer as well as their own cash flow.

How about blue badge holders? I should declare that I am one. Will they be charged or will they be exempted from any form of charging? How will a local authority know that they are exempted if it is the intention for local authorities to have their own list of exempted drivers? During Question Time today I received a letter from the Minister of State, who wrote:

“currently, we have not given specific guidance to local authorities, beyond noting that any proposals on discounts and exemptions, including for disabled people, should be justified against the objective of the scheme and the cost implications understood”.

Does that mean that in some areas blue badge holders will be charged while in others they will not? This seems totally bizarre. How would a local authority know that a particular vehicle was being used by a disabled driver? Equally, how would such a driver know that they are entering a location where charging takes place? Would charging start on a dual carriageway where a driver cannot turn around and avoid it, as happens in Singapore? Would it not be easier for a national register to be set up so that local authorities would know who to charge and who is exempted? In the case of disabled motorists, the register should include the name of the holder of the blue badge, the duration of the exemption, a photograph of the holder and the index number of the vehicle used. In her letter, the Minister of State concluded that there will be an announcement soon within the context of blue badge reform, and I look forward to learning more about this.

I hope that I am not being too simplistic in thinking that the driver of a company car will pass any charge on to the employer if driving is not a part of that person’s employment, or that a company will pay the charge for all their employees. How will local authorities deal with foreign-registered vehicles? I am led to believe that at any one time there are 140,000 such vehicles in this country and some of them will, I am sure, be driving in towns and cities which will introduce charging. How will such a driver know about charging? I was pleased to hear my noble friend mention that anomaly in his opening speech.

With those cars owned by people who cannot afford to continue driving off the roads, congestion will be reduced, leaving roads clearer for the drivers who are not concerned about the cost. Maybe I am being cynical, but this Bill appears to pay lip service to the poor while encouraging the financially sound to continue motoring. After all, fares on public transport, including the trains, have increased so much over the years that people have been forced to drive as they are unable to afford the fares. Should fares remain the same or be increased so that more and more people are forced on to the roads or should they be heavily subsidised to attract people back on to public transport? If roads become increasingly congested, those people who are adversely affected by longer delays will be forced to seek alternative ways of reaching their destinations. Many people have schedules to adhere to and an increasing number of them will find that public transport is more reliable than the unknown delays imposed on drivers of other vehicles due to congestion. My noble friend referred to the problems being investigated that have occurred between the Department for Transport and local authorities in delivering various improvements. I am glad to hear that that is so.

Those who live in rural areas need public transport in exactly the same way as those who live in urban parts of the country, as many noble Lords have said. Because population density is lower and distances are greater, people have to rely on their cars for transport because public transport is available less frequently. In some areas, bus services have been cancelled, leaving the passengers to drive cars. Subsidies, as I have already mentioned, will be required to keep such services running, because no operator will be prepared to run at a loss.

I wish this Bill well and leave my noble friend with one final thought. Has any consideration been given to nationalising public transport?

My Lords, like my noble friend Lord Roberts of Conwy, I shall concentrate almost solely on Clause 109 and the Welsh issue. The noble Lord, Lord Roberts, recently handed over to me the baton of looking after our Welsh friends after a large number of years—I cannot remember exactly how many—involved in Wales and Welsh politics.

I want to draw the House’s attention to Clause 109, although I have to say that it is very questionable whether this clause should be before this House at all, for it seems to me that it creates new powers of taxation for the Welsh Assembly, and, as your Lordships know, in this House we do not debate taxation.

The clause allows the Welsh Assembly to introduce a Wales-wide road-pricing scheme, which is effectively a new tax on Welsh motorists, Welsh farmers, Welsh hauliers, and Welsh tourism. What assessment have Ministers made of the potential effect of this measure on the Welsh economy? There is an enormous gap between local congestion charges and a general power to tax all Welsh motorists. Obviously, if we are to have local congestion charges, it makes sense for trunk roads to be part of that scheme, as the law currently allows, but making general provision for a Wales-wide scheme is of a different order of magnitude.

We are told that the Welsh Ministers have yet to decide what role, if any, road pricing should have in Wales. Would it not have been preferable, or indeed more sensible, if Ministers had thought through what use they may or will make of these powers before we are asked to transfer them? It is not abundantly clear that the Assembly will use these powers to the full. At present the Assembly, unlike the Scottish Parliament, has no powers of taxation. Had the Government wished the Assembly to have tax-raising powers they could have put that to the Welsh public at the referendum, but they did not, and we should remember the result of that referendum. To give the Assembly tax-raising powers would be a major constitutional change and should be subject to another referendum, not slipped through as part of a fairly irrelevant Bill. Instead, the Government seem to be giving the Assembly stealth powers to levy another stealth tax.

The money raised from a Wales-wide road-pricing scheme is not restricted to paying for improvements to roads, or even for public transport in the immediate vicinity. Will the Minister confirm that this provision would enable the money raised to be spent on Welsh Ministers’ official cars? The only restriction on the use of this money is that it must be spent on transport, but if the Welsh Ministers could effectively fund their transport spending from a Wales-wide road-pricing scheme, they could transfer the money from the block grant that they currently spend on transport to other uses. Any ring-fencing in this clause simply dissolves; it becomes a general power of taxation.

I am also concerned about how we are now asked to transfer these powers, especially, as your Lordships should know, since there are three more examples of this sort of power sliding coming before us in other Bills. Only last year we passed new legislation setting up a method—admittedly a rather labyrinthine one—for the Welsh Assembly to gain new legislative powers. It is an open, Assembly-led process in which the elected Members request new powers, and Parliament can then decide whether to transfer those powers to the Assembly. Why are the Government not using this process now?

Instead, the Explanatory Notes tell us that it is the Welsh Ministers, not the Assembly, who have requested these powers. Having laid out an open, transparent process for transferring powers, we are now faced with a deal thrashed out behind closed doors between Welsh Ministers and government Ministers in Whitehall. That is not a good way of legislating—in fact it is a very bad way of legislating. Perhaps the Government can also tell us why they are giving Welsh Ministers the power to create a Wales-wide road-pricing scheme when we are assured that Ministers have no intention of creating a nationwide scheme in England. Is this a stalking horse for a national scheme of road pricing? We suspect that it is.

It seems that we are effectively laying the foundations for a general levy on Welsh drivers. As the noble Lord, Lord Roberts, pointed out, this could have enormous repercussions for the Welsh economy and on the Welsh state and wealth. Yet we are asked to sanction a general transfer of powers when the Welsh Ministers cannot or will not say how they intend to use them. We do not support this part of the Bill.

My Lords, I apologise to the Minister for not being in my seat at the beginning of this debate. I was unavoidably delayed in Manchester but would like to stress that it was not because of the transport system. I also therefore apologise for repeating anything that was raised in the debate when I was not present.

I give a general welcome to the Bill. In cities such as mine, Manchester, the public will welcome any steps that are taken to address the chaos on some of the main roads into the city; they are particularly pleased that the Bill provides transport authorities with greater influence over bus services and enhances to existing passenger transport authority powers. They are also pleased that the Government’s proposals in the Bill broadly strike the right balance between strengthening the remit and the role of passenger transport authorities—to be renamed integrated transport authorities—in planning and delivering the strategic priorities for a city region such as Greater Manchester while allowing each city region to determine how best the right balance between local circumstances and aspirations can be achieved. I pay tribute to the work of Greater Manchester Passenger Transport Authority in trying to achieve this in the current circumstances.

However, in this brief contribution I will concentrate on issues relating to buses which, through sensible amendment, will further strengthen the Bill. As we have heard, the bus is the main form of public transport. Yet, outside London, bus use has been in decline. This Bill rightly attempts to tackle this by making changes to the way in which voluntary and statutory partnerships can be introduced and operated; bringing in a new process of franchising networks; strengthening the role of traffic commissioners in enforcing better punctuality; and making provision for a new passenger watchdog. I would like to touch on some of these points as they relate to buses.

The first point concerns quality partnerships. I welcome the opportunities afforded by the Bill for authorities and bus operators to form more extensive, voluntary and statutory quality partnerships by amending the competition test in an attempt to encourage the development of more collaborative partnerships. While I welcome the retention of the ability of authorities to set and revise frequencies, timings and maximum fares as part of the statutory quality partnership, it is notable that the Department for Transport seems to have diluted the proposals in the Bill in so far as operators can challenge improvements with regard to frequencies, timings and so on, by making admissible objections.

I understand that regulations are to be drafted that will define admissible objections. The criteria that will determine admissible objections are unclear. I would welcome the House having early sight of regulations which will presumably define these in due course. I hope that the Minister can assure us on that point. Further, the criteria should require objective and evidenced submissions by bus operators such that admissible objections can be properly judged in light of the public interest. It is also unclear who will make the decision about whether an objection is admissible. If it is an independent third party such as the Traffic Commissioner, we will require an informed understanding of the wider public transport context in order for such decisions to be appropriately made.

My second point concerns quality contracts. These already affect the franchising of a network of services similar to the way in which the majority of the rest of public transport in the UK is provided, such as bus services in London and the national rail network. However, there are considerable practical obstacles to the introduction of quality contracts, not least of which is that the incumbent operator usually has control over garages, the staff and the buses and if they fail to win the quality contract competition they are under no obligation to hand them on to the winning bidder. Such practical difficulties can be overcome if passenger transport executives or authorities are able to invest in modern depots and services in the process of awarding quality contracts.

Further, the process outlined in the Bill for an authority to secure quality contracts is still very time- consuming with the potential for an elongated appeals process. These decisions should be taken at a local level by local authorities as elected representatives of their local communities instead of being delegated to external, unelected bodies, such as approvals boards or transport tribunals as the Bill currently outlines. I hope that the Minister will further consider this point in terms of decision-making.

The Bill does not fully address the need to protect passengers, taxpayers and bus workers in any transition from the current situation to quality contracts. The Bill does propose that TUPE will apply in so far as the operators of a quality contract wish to take on staff from previous incumbents where their pay and conditions will be maintained. However, that guarantee is not written into the Bill where the bus operator may not want to transfer staff in the numbers that are currently employed or within the terms and conditions that they currently have. That needs to be carefully looked at.

The Bill makes provision to strengthen the enforcement powers of traffic commissioners with regard to improving the general punctuality and reliability of bus services. It also permits them to reject registrations to run new services in quality partnership areas in the light of criteria provided by the local authority. However, the Bill does not address the issue of increasing both the resources and the skills level of traffic commissioners in the light of those additional responsibilities. It is essential that they be trained and have appropriate resources if their role in the process is properly recognised and valued.

I welcome the move in the Bill that enables passenger transport authorities or executives to own bus vehicles, which should permit greater competition on subsidised bus services and their tenders.

In conclusion, I greatly welcome the thrust of the Bill. When we move sensible amendments in Committee, we can strengthen the arrangements further to ensure that cities such as Manchester have the bus service that they deserve and clearly want.

My Lords, during the dying days of the previous parliamentary Session, I spent many hours in your Lordships' House dealing with the then Local Government and Public Involvement in Health Bill. I found it a fairly dispiriting experience, because I disagreed with almost everything that the Government sought to achieve in that Bill, so it is a relief to discuss a Bill on which I am fundamentally in tune with what the Government seek to achieve. I would like clarification on some issues today, and to introduce some thoughts that might not have occurred to the Government.

Until July, for six years I was a member of the Commission for Integrated Transport, and was involved in producing a report last year looking at the whole question of transport provision and governance. Having taken evidence from around the country and talked to many people, we came to the conclusion that the failure thus far had been because there was not an effective sub-regional tier of decision-making for transport issues. Existing regions are too big, and local authorities are on the whole too small. The Bill goes some way to address that, although it misses out on the most fundamental point—how money is raised. This is not a time to go into detail about local government finance, but it seems a crying shame that we are so centralised that the great cities of this country such as Manchester and Liverpool have to go cap in hand to the Government, year after year, to fund the transport projects that they believe are right for their areas.

I wish to concentrate on the impact that the Bill will have on local decision-making, because there is certainly quite a patchwork of systems across the country. Responsibility for particular areas of transport lies in different parts of local government. My main experience is in shire counties such as Suffolk, where I was a councillor for 15 years. There, most transport responsibilities sit with the county council and the system works pretty well, although the fact that off-street car parking and concessionary bus fares lie with the district council causes problems from time to time. The real issues are in metropolitan areas—the sort of areas covered by Transport for London and the PTAs—where the split responsibilities have been much more problematic, with public transport in the remit of one group of people and the highway network in the hands of another. It is certainly evident that, across the country, the areas where the most progress has been made—not just with public transport, but in the likes of walking and cycling—are those served by unitary councils. Places such as Brighton, Reading and York all spring to mind. All the levers of decision-making and policy there lie in one set of hands.

In many of the areas covered by the PTAs, we have reached an impasse. Bus operators are saying that they will not invest any more in quality until the highway network is changed to give bus priority and is upgraded. Councils are refusing to put in bus lanes until the bus operators improve, and the PTAs are stuck in the middle, trying to improve the service for their passengers and finding that they are unable to do so. The noble Lord, Lord Rosser, explained well how difficult it would be to achieve a quality contract under the current arrangements, because the legal hurdles are now so difficult. The noble Lords, Lord Snape and Lord Marland, do not think that quality contracts are a good idea anyway. I do not propose to get into that debate but, until we sort out the question of responsibility for the highway network, it will be difficult to improve bus services even to the point of a quality partnership. Until we get the partnership right, we certainly cannot think about moving on to contracts.

I welcome the provision for the new integrated transport authorities to have powers to deal with the highway network in their areas. That will make a fundamental change. However, I hope that the noble Lord can clarify something from the Bill for me. I am not clear on whether the new ITAs will automatically take over highway powers or whether there has to be a review before they can do so. I would appreciate it if he could clarify the timetable for the reviews. As we heard from my noble friend Lord Bradshaw, we cannot deal with congestion until the question of highway powers is sorted out.

There will always be conflicts between a local perspective and the more strategic perspective of the PTA. Both points of view are perfectly valid; the question is about how you arrive at a system where both sides can be heard but that does not stop progress. I welcome the strengthening of the PTAs by turning them into integrated transport authorities, and particularly by giving them the general power of well-being and the provision to alter their boundaries and create new transport authorities. How will the reviews be carried out? Will they be from the bottom up—at the request of local areas—or directed by the Secretary of State? How will he avoid destabilising the existing arrangements? We have to remember that PTAs have complicated arrangements for contracts, often stretching many years into the future. For example, Merseytravel operates not just buses, but ferries and the Mersey tunnels. It even has its own train set.

I have a few questions about the governance of the new authorities. If the noble Lord does not have time to respond today, I hope that he can write to me. How will the transport plans drawn up by the ITAs fit in with other planning documents such as local development frameworks? Will local plans have to fit in with the strategic vision, or will the strategic vision be some conglomeration of the local plans? How will the new ITA structure fit in with the local strategic partnerships, which are such an important part of local authority governance now? Those bodies will agree targets and funding with the Government, and it is important that we understand how the new ITAs will fit in with that. What will the relationship be between the ITAs and the emerging regional agenda and multi-area agreements? Beyond that, how will ITAs work with national transport providers such as Network Rail and the Highways Agency?

I would also appreciate some comments about the governance of the new bodies. Can the noble Lord assure the House that the constituent parts of ITAs—the local authorities that send representatives to them—will continue to be party-politically balanced and to run their own governance arrangements, and will not be forced to go down the route of local authorities and have a single person with all the executive power? Can he explain how the Government think that the non-elected nominees to those bodies will be chosen? If an ITA wishes to bring in stakeholders from its area, that seems fine and a matter for it, but having nominees imposed by the Secretary of State would be a step too far. Will those people be allowed a vote when they are on the ITA? Given the not insignificant levy that the PTAs and ITAs will be setting—not precepting—on constituent local authorities, it is important that the people who do that are in some way democratically accountable.

To someone who comes from a rural area, it seems to me that the Bill’s provisions will do very little for transport and public transport in rural areas, which is a problem. The big difference is that in rural areas public transport is about accessibility, not congestion or the environment. It is about the quality of life for the significant minority of people who do not have access to a car, and unfortunately the Bill does not address that.

I do not share the concerns that have been expressed by some noble Lords about congestion charging in rural areas. Whatever we feel about congestion charging, it will be enormously controversial and no local authority will undertake it lightly; its political future will depend on that. I cannot imagine a situation in which a rural local authority would introduce congestion charging on rural roads other than perhaps in, for example, national parks where there might be some issues of overuse. Beyond that I cannot see that noble Lords need worry about congestion charging or road-use charging in rural areas. The key to getting this right is ensuring that public transport improvements extend into the rural hinterlands so that residents of rural areas do not feel that they are paying for improvements that go only to improve life for people who live in towns.

I hope that the Minister will be able to answer at least some of the many questions I have asked, but I am happy to receive some answers in writing. I look forward to the Committee stage.

My Lords, I am pleased to be able to speak at the end of such an insightful and well rounded debate. I thank my noble friends Lord Attlee, Lord Roberts of Conwy and Lord Glentoran for their contributions, particularly on the Welsh question, which I hope the Minister might be ableto answer tonight. We are very concerned that about on this side of the House. I thank my noble friend the Duke of Montrose for his contribution on Scotland and my noble friend Lord Marland for his contribution.

The consensus on the objective of the Bill is clear. We all appreciate and understand the need to reform transport and tackle congestion. That much is evident. It is, of course, the detail that is questionable, as we have discussed today, and we shall be debating that in this House over the next few weeks. As leader of one of the largest local authorities in the country, I am acutely aware of how the local transport debate has evolved of late and of the pressing concerns we face. I shall approach our debates on the Bill from that perspective.

Speaking of the general tone of the Bill, I would contend that under the guise of pro-localism the Bill is promoting a selective form of devolution that serves only to pass down to local authorities those powers the Government might feel were politically unattractive for themselves. It is interesting to observe that most of the devolutionary proposals seem to focus on removing the Secretary of State’s involvement, rather than on allowing the full remit of powers to be brought down to the local level. As one or two noble Lords have said today, while local authorities are unable to raise money locally, local decision-making will always be taken to a national level anyway. Bringing powers down to the local level would much more effectively tackle the issue of transport and congestion, bringing with it the benefits we are all aiming for.

With regard to road pricing, little is mentioned on other forms of tax. I shall talk about that later. Since within the Bill lies the acknowledgement that decisions regarding transport are best decided locally, surely there is a case for the administration of existing road taxes also to be devolved. Again, I shall talk about that later. Devolution cannot be used as a tool when it suits; that serves to undermine local government. I am confident that local authorities could do much more, and do it more successfully, if the handing down of powers were full and rational instead of the patchwork mosaic suggested.

My authority, Essex County Council, in one way or another spends around £70 million a year on transport, including subsidies, school transport, transport for the elderly and all sorts of transport in the county. That includes a £7.5 million subsidy for bus routes. With increasing cost pressures, the modern local authority is conscious that funds cannot be spread liberally. I for one would prefer to be given the ability to get the best result I could out of that figure, and I would like legislation to enable me to try. It is unfortunate that the Bill does not go far enough in allowing us to achieve that.

I welcome the discussion of community transport in the Bill. The noble Lords, Lord Bradshaw and Lord Cameron of Dillington, mentioned this element of rural transport in particular. Done properly, reform could be achieved with community transport helping to reinvigorate rural communities where commercial bus services are not viable. After all, increasing public transport usage is what we are striving for. For example, if we combined community transport with school transport, transport for the elderly, bus services and all sorts of other services, we would really get value for money. We will be seeking to refine the Bill’s proposals in this area in Committee to see what can be achieved.

The punctuality monitoring regime put forward by the Bill is sensible. Both operators and local authorities should be held responsible for the quality of services. Punctuality is one of the main determinants of the perception of a local route and has the ability to turn potential passengers back to their cars. Reliability is very important for buses, and that will be even more noticeable if there are going to be more people using them.

What the Bill neglects to consider, however, are the other factors that turn passengers away from using a bus service. Currently, a change to a bus timetable requires a 56-day notice period in England, yet in Scotland a full 70 days need to be given. During the consultation period it was suggested that England’s requirement should be increased to match that of Scotland, with restrictions placed on the number of permissible timetable changes. It may be sensible to place some minimum conditions on the length of time new operators intend to run a new service. Such measures would help to reinforce and revive the public’s opinion of, and confidence in, their local services.

The partnership approach has worked well alongside the deregulation of bus services, and additional measures to strengthen that and increase uptake are to be welcomed. I agree with the view expressed by many today that franchising is not required for a local bus system to be successful. However, the proposals concerning partnerships will need to be refined for benefits to be maximised. As it is, there is no clear factor that would compel bus operators into agreeing to the maximum fares, timings and frequencies that are proposed. The definition of “admissible objections” needs to be tightened.

If a partnership is truly to function, there needs to be recognition and respect of the arrangement across the board. The unfortunate situation at present is that local authorities and operators have sometimes been forced into unnecessary opposition. An example of this can be demonstrated by the lack of clarity surrounding the new concessionary fares framework, which the noble Lord, Lord Bradshaw, mentioned at the beginning of the debate and which we all support. It starts from next April. However, the guidance from the Government is still inadequate on how reimbursement will operate. Such factors undermine the success of co-operation. Perhaps the Minister can let us know about that.

The proposals in the Bill on reforming transport governance are to be welcomed. My counterparts in metropolitan areas will be especially glad of the change, and we have heard several contributions today that mainly support that. For too long the rules around governance have been stiflingly inflexible; they stand in the way of what is often logical. Initiating a review of local arrangements should indeed come from the bottom upwards, with the implementers of change deciding how their arrangements should work without the direction from the centre being overly strong. In addition, the potential implications of allowing non-elected persons to be members of an ITA require further investigation about their specific role. I agree with all the questions on governance just raised by the noble Baroness, Lady Scott of Needham Market. I hope that the Minister will reply to those questions—if not today, then in writing—because who we place in those roles is important. The amended role of traffic commissioners, as proposed by the Bill, needs to be scrutinised in order to ensure that their position is justified and that they are not merely unelected replacements for the Secretary of State.

Evidently, road pricing could be an effective tool in reducing congestion on our roads—many noble Lords have mentioned that today—particularly in areas such as Manchester and other big cities. I again agree with the noble Baroness, Lady Scott of Needham Market, that it is not ever going to happen on rural roads. With a national scheme not forthcoming, it appears that local road pricing has been pushed forward to allow central government all the benefits of observing a trial scheme without any of the political responsibility. Some noble Lords referred to the delivery of nearly 2 million signatures to Downing Street illustrating the sensitivity of such an introduction; I have reservations regarding the motivation of the Secretary of State’s approval role, as it has been removed. In addition, local people need to play a role when deciding if a charging scheme suits their area. In Committee we will explore options on how the public could be consulted—whether in the metropolitan or urban area or the rural areas around it—such as referendums or other consultation options.

The measures in the Bill are ostensibly locally driven. However, should the level of transport grants and the like be phased out, one can imagine a situation where local authorities could be coerced into charging on their roads purely for financial reasons. All Governments, I am afraid, have introduced new ideas, saying, “You can raise money by doing this”, and then removing it from the revenue grant that we get locally. Perhaps the Minister will reassure us on that point. Similarly, the role of the Transport Innovation Fund, as a potential lever for central government to encourage charging schemes, undermines the local decision-making process. That should not be the case.

I would contend that the biggest indicator of whether a road-pricing scheme is likely to be a success appears to be whether it is perceived as a stealth tax by the public, as mentioned by one or two noble Lords today. Little mention is made of the implications of road charging for other forms of road taxation, or of how the total cost of motoring is to shift. I would suggest that if other forms of taxation were in local authorities’ hands, a more balanced and informed decision could be reached on the road-charging debate. For instance, as I have proposed several times, vehicle excise duty could be localised. A brief consultation of Department for Transport statistics demonstrated that around 700,000 cars were licensed in Essex last year. That money would go a long way towards improving our roads and would be a local form of taxation. The public would see that they were getting something for their investment.

In a similar vein, both authorities and the public require transparent information on how road pricing is to function alongside tolls. I am a supporter of tolls on roads—we have proposals in Essex to construct a toll road. No mention is made in the Bill and I would like the Minister to comment on tolls and road pricing. I also remain unconvinced that more than one charge on the same road is fair or acceptable. For the same reason, the allowance in the Bill for London authorities potentially to place more than one charge on a road will require further examination.

As I said at the beginning, we have had an interesting debate. There is general agreement that the Bill—in the right way—could be helpful and improve matters. The points raised merit further investigation if we are to produce effective legislation. I look forward to continuing the debate in Committee, where we can look to improve the areas highlighted in discussion today.

My Lords, I start with general thanks to all the noble Lords who have taken part in what was a lively and interesting debate. The noble Lord, Lord Hanningfield, expressed it well when he said it was a well rounded and interesting discussion. That was certainly true.

We have had some impassioned contributions on subjects ranging far and wide: quality partnerships and quality contracts; I thought I heard a plea for nationalisation at one point; concerns about road pricing in Wales, particularly from the noble Lord, Lord Roberts of Conwy, and the noble Lord, Lord Glentoran; issues about the power of traffic commissioners and, quite rightly, about governance matters in the new ITAs; and some powerful pleas for rural areas, notably led by the noble Lord, Lord Cameron of Dillington, about giving fair consideration to better access to transportation and being mindful of the potential impact of systems of road pricing. We had powerful contributions too from the noble Lord, Lord Smith of Leigh, with his insights into good governance and transportation matters in Manchester and, similarly, from my noble friend Lord Bradley, based on his time representing Manchester constituencies and his involvement in local government.

We also had concerns expressed about matters well outside the scope of the Bill, such as concessionary bus fares. We had pleas from my noble friend Lord Snape—good knockabout stuff—about consultation with Network Rail. However, Network Rail has made those pleas itself, and aggressively so—quite rightly and properly. My noble friend Lord Rosser raised the issues of TUPE, traffic commissioners and so on. I shall pick up on some of those comments and observations during the time I spend on the points raised. The noble Duke, the Duke of Montrose, Scotland’s very own watchdog, made some good points and asked some helpful questions. I cannot hope to cover every question raised; I was encouraged that noble Lords were realistic about that prospect. I will endeavour, as best I can, to respond to some of the main points raised during the afternoon. I do not just recognise the importance of the points, but understand their significance for later stages of the Bill.

In general, not only was the debate constructive, but the Government received some plaudits. The noble Earl, Lord Attlee, described the Bill as having laudable aims—from the Conservative Benches, that is probably praise. The noble Lord, Lord Bradshaw, a great friend of public transport, was generally encouraging about the Government’s approach, as was the noble Baroness, Lady Scott of Needham Market. I think that we are in for a constructive debate as the Bill goes through your Lordships’ House. The degree of support for the Bill’s broad aims and approach came from all sectors, reflecting in large part the contribution already made during the process of public consultation and pre-legislative scrutiny.

A number of noble Lords expressed their support for the Bill’s focus on empowering local authorities—the noble Earl, Lord Attlee, and certainly the noble Lord, Lord Bradshaw, did exactly that—and on the Government’s desire to devolve greater responsibility and discretion to the local level. The noble Lord, Lord Hanningfield, described that as being a degree of localism. If that is the case and he sees it that way, that is all to the good, because that is how the Government see it. That is a key feature of many of the provisions in the Bill, which generally fits with the Government’s wider approach to local government. In our terms, that represents a real contrast with the approach adopted in some previous legislation, particularly with passenger transport authorities. I am pleased that the change is welcome in your Lordships’ House and is being perceived as such.

Noble Lords have raised points which fall outside the scope of the Bill but which are very important. The Government have taken a conscious decision to focus the Bill specifically on the linked aims of improving public transport and tackling congestion at a local level because we see action at a local level as being the most effective. In doing so we recognise that the Bill is only one part of a much wider package of measures to improve transport across the country. The Bill is not, and does not purport to be, the solution to all the nation's transport challenges.

I now turn to the specific questions, as the House deserves some answers. I found the questions very helpful and I want to answer as many of them as possible. In general, Conservative Members—I hope this is not seen as unfair—in expressing support for the Bill, were not happy about quality contracts. Noble Lords are quite entitled to take that view; I happen to take a contrary view. The noble Earl, Lord Attlee, started that debate. On quality contracts, in many places bus services are not being delivered satisfactorily, despite the best efforts of operators and local authorities. Where local authorities have the resources to develop quality contract schemes and where there is public support for them, we believe that option should be made available. Obviously, we hope that the Bill will encourage a more effective use of partnership arrangements, which, it is fair to say, received a great deal of support during the debate.

On quality partnership schemes, the noble Earl, Lord Attlee, and the noble Lord, Lord Bradshaw, made points about the admissible objection from relevant bus operators and asked what kind of assurances we can give that that is not a device to make it difficult to establish quality partnership schemes. The intention is not to make it difficult to establish a quality partnership scheme; the intention is to ensure that local authorities cannot impose requirements on bus operators that are unrealistic or unreasonable in relation to frequencies, timings or maximum fares. However, we agree that we must not give bus operators carte blanche to veto any proposed scheme that comes forward. That would be self-defeating.

The noble Earl, Lord Attlee, made the accusation that we were trying to distance ourselves as a Government from road pricing and that we were trying to put a gap between the Secretary of State and the development of schemes. It is right that decisions on local road pricing schemes should be matters for local authorities and the communities and should not be diktats from central government because any scheme will be aimed at tackling local problems. The noble Baroness, Lady Scott, made the point that there is unlikely to be much congestion in rural areas and that it is an issue for urban areas. That is precisely why we think that working up schemes is best left to local authorities, such as those in Manchester, so that we can have effective traffic and transportation management.

The noble Earl, Lord Attlee, made the point that it is crucial that local arrangements for governance reform avoid unnecessary interference. The Bill makes it clear that the emphasis is on local areas carrying out their own review of transport governance and on identifying what changes they think are needed so that locally matters can be dealt with effectively. The noble Earl also made the point that local authorities should be required to consult; we certainly agree that consultation is very important. We would expect all authorities considering introducing a charging scheme to consult fully on any proposals that they seek to bring forward.

The noble Earl and a number of Conservative Peers, notably the noble Lords, Lord Roberts and Lord Glentoran, made the point that road pricing is a form of stealth tax. That is a very narrow consideration of the issue. Road pricing and congestion charging have been proven to work in London. Clearly, it is for other local authorities to try to make use of that in similar ways so that money can be ploughed back into improving the quality of public transportation.

The noble Lord, Lord Bradshaw, and the noble Baroness, Lady Scott, asked whether we as a Government can confirm who would be responsible for the preparation of a local transport plan and who would have to be consulted in an integrated transport area and elsewhere. The preparation of a local transport plan would continue to be an obligation of the local transport authority, which is defined in Section 108(4) of the Transport Act 2000. In an integrated transport area it will be for the ITA to prepare the local transport plan, obviously in consultation with constituent metropolitan district councils. In unitary authority areas, such as Brighton and Hove, the duty will continue to fall on the unitary authority. Elsewhere it will be, as now, for county councils to prepare the plan in consultation with the constituent shire and district councils.

The noble Lord, Lord Bradshaw, asked about the public interest test, quality contract schemes and what the term “economic, efficient and effective” means. The intention is simply to ensure that schemes offer good value for money. That wording is already contained in the existing test that applies to quality contract schemes. Similar wording appears in existing general duties that apply to various authorities under the Local Government Act 1999. The noble Lord, Lord Bradshaw, asked whether the Government will amend Clause 8—that is the duty on local transport authorities to take into account and have regard to government policies and guidance on environmental protection matters. It is implicit in the Bill as drafted that the proposed environmental duty is a statutory minimum requirement. Nothing in Clause 8 or elsewhere precludes local authorities from going beyond what is strictly required by the statutory duty. A local authority will be required to do so as a matter of administrative law where it is a relevant consideration for their deliberations.

The noble Lord, Lord Bradshaw, and the noble Baroness, Lady Scott, asked who will exercise highway powers in an ITA area. Will it be the ITA or local authorities? Will district councils be able to block proposals such as bus lanes? We would hope that in reviewing transport governance in an area, ITAs and local authorities can reach agreement on how best to ensure effective integration of public transportation and raise issues. It is for them to consider where powers over roads should sit. However, under Clause 75, integrated transport authorities can also be given a power to direct authorities on how the latter exercise their road functions—for example, installing such things as bus lanes, which need longer routes to be effective.

The noble Lord, Lord Bradshaw, also raised a question about community transport provisions. I am delighted that those provisions were broadly welcomed. I think his point was whether it would be possible for local parishes in rural areas to operate regular bus services—for example, feeder services—to connect villagers to nearby commercial routes and, if so, whether it would be possible for separate fares to be paid by individual passengers. That kind of arrangement is already possible under the existing Section 22 permit regime. The Bill will provide added flexibility, allowing drivers of such services to be paid and, of course, allowing for the use of larger vehicles. Again, that has been broadly welcomed. Individual passengers would need to pay separate fares and we do not see any particular obstacle to that in the legislation.

The noble Lord also asked about private hire vehicle operators choosing to run local bus services under the taxi/bus provisions in the Bill. I think the noble Lord wanted to know whether they would have to register the details with the traffic commissioners and whether tests on drivers and their vehicles would be as stringent as those faced by bus operators. Where a private hire vehicle licence holder wanted to operate a local bus service under the taxi-bus proposals, they would have to register the details of the services with the traffic commissioner like any other operator. Of course, they would be subject to the same penalties as other operators.

In common with other noble Lords, the noble Lord, Lord Bradshaw, was concerned about aspects of the traffic commissioner regime and how the commissioners will exercise discretion over bus registration. As a general rule, that would be a very radical step and it would be strongly opposed by operators. However, for quality partnership schemes, the Bill includes a procedure whereby both local authorities and existing local operators can make representations to the traffic commissioners on registration applications. That is contained in Clause 42. The traffic commissioner will then decide whether to accept the registration, reject it or ask for it to be revised.

The noble Lord asked who will sit on approval boards for quality contract schemes. The Bill provides that boards should normally be chaired by the traffic commissioner with the most relevant local knowledge. Its other two members would be selected from a panel appointed by the Secretary of State. It is envisaged that they would have specific relevant expertise relating to transport planning and transport economics.

The noble Lord and the noble Baroness, Lady Scott, made points about the possibility of non-elected members sitting on ITAs. The question was asked about the type of people whom the Government envisage being appointed, who would make those appointments, how many there would be and what arrangements would be in place for voting on financial matters. Clause 72 requires that a majority of members of each ITA will be elected representatives of the county, unitary or district councils making up the ITA area. However, the Bill provides flexibility for each area to propose, if they wish, that membership of the ITA should be broadened to represent other interests or to bring in wider experience to the authority. We heard from a number of noble Lords about the value of broadening that experience; the noble Lord, Lord Smith, said the value of consultation with chambers of commerce was of particular importance. The ITA could also include representatives of transport user bodies, environmental groups, Network Rail or, indeed, the Highways Agency; but it would be for the authorities carrying out a review of governance arrangements to make proposals as to how many people would sit on the ITA, what bodies they would represent and what voting rights they would have.

The noble Lord, Lord Cameron, made a number of points about ensuring that rural communities were properly recognised. The Bill deliberately provides a range of options, particularly on bus services, for local authorities across the country, reflecting the diversity of local circumstances. The work of the bus policy review in preparation for the Bill looked closely at city, small urban and rural services, and our proposals attempt to respond to concerns raised across the country. We believe that those services will deliver real benefits for all sorts of areas, too. For example, measures to support stronger partnership working would be beneficial in rural as well as in urban areas, and proposals to strengthen punctuality regimes would have a universal benefit and, I would strongly argue, be of benefit to rural bus users. Community transport providers and taxi buses—the noble Duke, the Duke of Montrose, referred to post buses and so on—are an important part of the transport system in rural areas, with potential for further development. The Bill offers improvements to encourage those sectors.

The noble Lord, Lord Cameron, made some points about the need for greater flexibility in terms of design. We agree with that and we want to see the boundaries of ITAs working well in rural areas so that they can have a powerful input into the development of rural services.

Before I sit down, I want in particular to deal with the points made by the noble Lord, Lord Rosser, about the quality contract schemes. There was a discussion about the lengthy approval procedure. We believe that the regimes that we have set out could have a big impact on bus services, so it is important that an independent assessor is involved and that operators’ rights are not trampled on without good reason. The approvals process should help to gain acceptance for schemes and reduce the likelihood of those schemes being taken through lengthy court procedures.

We have of course heard the calls for greater clarity on the application of TUPE in relation to quality contract schemes. It is important that the workforce involved in the transition to quality contract regimes has assurances. We do not want uncertainty, so the Bill includes a provision to ensure that the provisions of TUPE regulations will apply when a new employer takes on staff from an existing operator as a result of a quality contract. Broadly speaking, the effect of the provisions is to ensure continuity of employment and of the terms and conditions of employees transferred from one operator to another when a new quality contract is put in place.

I have raced through as many of the questions as I possibly can. I realise that I have not dealt with the Welsh question. All that I can say of value on that at this stage is that the Welsh provisions were put in place very much at the behest of the Welsh Assembly. We aim to work very closely with Assembly Members in putting this legislation together.

I could go on for a great deal longer on all of the questions raised, but I have a feeling that noble Lords opposite might begin to balk at that suggestion. Again, I thank everyone involved in this debate. I will ensure that a full compendium of questions is put together with answers supplied and I shall be more than happy to circulate that letter and correspondence to all noble Lords who have taken part. I am greatly looking forward to Grand Committee because I think we can have interesting discussions. I see the noble Baroness, Lady Noakes, nodding in agreement—or I thought she was—although I doubt that she will be there because her eyes will be on other matters. I welcome the support for the Bill and I am looking forward to constructive debate and dialogue—and I am certainly looking forward to Grand Committee.

On Question, Bill read a second time, and committed to a Grand Committee.