I beg to move, That the clause be read a Second time.
With this it will be convenient to discuss the following:
New clause 2—Report on the provision of concessionary bus travel to apprentices aged 16 to 18—
‘(1) The Secretary of State must, within 12 months of the day on which this Act is passed, lay a report before each House of Parliament setting out possible steps to support local transport authorities in providing concessionary bus travel to persons aged 16 to 18 who are participating in statutory apprenticeships.
(2) Any report under subsection (1) shall include, but will not be limited to, an evaluation of whether section 93(7) of the Transport Act 1985 should be amended to enable local transport authorities to provide concessionary bus travel to persons aged 16 to 18 who are participating in statutory apprenticeships on the same terms as that which may be provided to persons aged 16 to 18 receiving full-time education.
(3) In this section—
(a) “local transport authorities” has the meaning given in section 108(4) of the Transport Act 2000; and
(b) “statutory apprenticeships” has the meaning given in section A11 of the Apprenticeships, Skills, Children and Learning Act 2009.’
This new clause would require the Secretary of State to publish a report setting out possible steps to support local transport authorities to provide concessionary bus travel to apprentices aged 16 to 18.
New clause 3—Assessment of possible concessionary travel schemes: impact on use of bus services—
‘(1) A local transport authority that does not provide travel concessions under a scheme established under section 93 of the Transport Act 1985 to persons specified in subsection (7)(c) of that section shall be required to prepare an assessment of the impact of establishing such a scheme on the use of bus services by persons specified in that subsection.
(2) Any assessment under subsection (1) shall consider, but will not be limited to, the impact of establishing such a scheme on—
(a) the ability of persons aged 16 to 18 to attend schools and further education institutions by means of bus travel,
(b) the cost of bus travel to persons aged 16 to 18 receiving full-time education, and
(c) traffic congestion and emissions at peak times in the local transport authority’s area.
(3) In this section—
(a) “travel concessions” has the meaning given in section 112 (1)(f) of the Transport Act 1985; and
(b) “local transport authority” has the meaning given in section 108(4) of the Transport Act 2000.’
This new clause would require local transport authorities to assess how creating an authority-wide travel concession scheme for 16 to 18-year-olds in full-time education would affect how these students use bus services.
New clause 1 stands in my name and those of my hon. Friends the Members for Middlesbrough (Andy McDonald), for Birmingham, Northfield (Richard Burden) and for North West Durham (Pat Glass). It would require that the Secretary of State for Transport publish a national strategy for local bus services within 12 months of the day on which the Act is passed, setting out the objectives, targets and funding provisions for buses over the next 10 years. It would also require that the national funding strategy include a consideration of a reduced fare concessionary scheme for young people aged 16 to 19.
New clauses 2 and 3, in the name of the hon. Member for Southport (John Pugh), also relate to bus funding generally, and to young people’s concessionary fares specifically. New clause 2 would require the Secretary of State to lay a report before Parliament setting out possible steps to support local transport authorities in providing concessionary bus travel to apprentices aged 16 to 18, and new clause 3 would require local transport authorities to assess how creating an authority-wide travel concession scheme for 16 to 18-year-olds in full-time education would affect the way in which students use bus services.
It is clear that a long-term national discussion from central Government on the funding of the bus industry is long overdue. Since the bus market in England outside London was disastrously deregulated in the 1980s by a Conservative Government, public support for bus services has been provided in a far from transparent way. The effects of deregulation have been stark.
Does my hon. Friend agree that the drop of more than half in passenger journey numbers in Yorkshire and Humber since 1985 is no coincidence—it is down to deregulation?
I very much agree with my hon. Friend, and I will return to other examples of the failure of deregulation in a moment. It is not just about the number of services. Fares have risen faster than inflation, and patronage overall has fallen by more than a third. Bus market monopolies have become the norm in far too many places.
Back in October, we noted the 30th anniversary of bus deregulation, but it was far from a cause for celebration. It meant 30 years of bus users being ripped off by a handful of big bus operators, which have carved the market into chunks and which go largely unchallenged in their own territories.
Does my hon. Friend agree that for people on low incomes in rural areas, and in some urban areas as well, it is almost impossible to job hunt without a decent bus service?
Once again, I agree with my hon. Friend. In too many parts of the country, it has become very difficult for people to get to and from work. Throughout the 30 years since deregulation, fares have shot up even at times when fuel prices have been falling. For 30 years, while patronage in the still-regulated capital increased, passenger numbers declined in the rest of England.
This month, the Campaign for Better Transport published its latest “Buses in Crisis” report. The organisation made more than 100 freedom of information requests to local councils to get a full picture of recent bus cuts, and it found that funding for buses across England and Wales has been cut by 33% since 2010, and by nearly £30 million in just the last year. Last week I was in Somerset, where support from the county council will fall by another 19% next year. Across the country, more than 500 routes were reduced or completely withdrawn in 2016-17.
Despite the seemingly endless rounds of bus cuts, the Government seem reluctant to look at whether anything can be done in the round to improve the current system of bus funding. The Government’s argument is well rehearsed: the bus industry is a private industry and thus has nothing to do with central Government or central Government’s money. But that is just not the case. Around half of bus industry funding comes from the public purse. In 2014-15, total public support for buses accounted for 41% of overall industry funding. In the past, the figure has been higher; in 2010-11 it was more than 46%.
I do not think that asking the Government to publish their strategy regarding such funding for buses in a single document is really asking that much. We just want a little clarity in a system that has become convoluted and confusing. The strategy would set out the plan and objectives for the public money that goes towards local authority-supported bus services, the reimbursement of bus operators for trips made by concessionary pass-holders and the payment of the bus service operators grant to bus operators. Public money is being spent on buses, but the Government lack a strategy regarding how that money is spent. We believe that that needs to change.
I have previously raised the fact that operators are being reimbursed by public money for trips made by concessionary pass holders, but those operators can cut services and routes; the public have no say. That leads to the bizarre situation in which someone may have a concessionary bus pass, but no bus on which to use it. That is not a good deal for anybody.
We already have national strategies for roads and rail, and we are told that the cycling and walking investment strategy is imminent. Buses are being singled out within the transport family. Our new clause 1 would redress that imbalance and bring buses into line with other modes of transport.
We believe the Government need to do far more to help young people to afford the cost of bus travel. That is why we are asking the Government to include consideration of a young person’s concessionary fare scheme in the national bus strategy. Young people rightly have to stay in school, further education or training until they are 18, and many of them use the bus to get there. It is quite right that the Government should look at how they can reduce the financial burden on young people who are only trying to get to their school, job or apprenticeship.
Young people in Greater Manchester have told me that it is sometimes cheaper for four of them to get a Uber than to travel on buses in Greater Manchester. How on earth can that possibly make sense, and how on earth can that lead to anything other than complete gridlock on our roads?
My right hon. Friend is absolutely right. On Second Reading, we heard a number of cases from across the country about the excessive costs of travelling locally, particularly for families. Such a cost is bad for congestion, it is certainly bad for employment and it is bad for social justice.
The way in which buses are funded in this country is clearly not working. We need a proper governmental strategy to address these funding issues and enable the country to have the national conversation about buses that is long overdue and much needed. I therefore urge the Government to accept our new clause 1. It may help the House if I suggest that we will press it to a Division.
New clause 1 calls for a national strategy that sets out various targets and objectives. I feel sure that the Opposition spokesman, the hon. Member for Cambridge (Daniel Zeichner), sees one of the targets as the need to have accessibility for all who use the buses. I understand that the Government have already considered that issue after it was raised in Committee, and that they have very valid reasons for not going forward with a national strategy. However, by tabling the new clause, the hon. Gentleman has raised several important issues, and I want to mention some of them briefly.
In particular, there is a need for consistency. I welcome the change the Government have made with regards to information for bus passengers, which will help all our constituents. Some of my constituents have contacted me about the importance of having information available on the routes that they are taking. That is important not only for partially sighted or blind passengers, but for one constituent with autism and special needs who contacted me. This will help that individual, as well as a broader group.
As my noble Friend Baroness Campbell pointed out in the other place, other issues of national importance for people who use buses would fall within the national strategy proposed by the hon. Gentleman, such as wheelchair priority and access policies more generally. The Minister’s comments in Committee on wheelchair priority are very heartening. Following the Paulley case, it is important that an advisory committee will be set up. I hope that the Minister will confirm that he has given further thought to the composition of the group’s membership. Does he intend to involve the Equality and Human Rights Commission and the Disabled Persons Transport Advisory Committee? He should consider that carefully. The Minister did not touch on that detail in Committee—perhaps it had not been all worked through at that stage—but perhaps he could take this opportunity to assure the House that, subsequent to our debate in Committee, the discussions as part of that advisory group will be acted on quickly and that all relevant people will be involved.
Does the right hon. Lady agree that these measures in the national strategy would give bus services the status they deserve and recognise the fact that so many more people travel on buses, and make more bus journeys, than they do on trains, which are much more widely recognised in national policy making?
The hon. Lady makes an interesting point about the difference in the way trains and buses are treated. I do not necessarily agree that there is a need for the national strategy to ensure parity, but she makes an important point. There should not be undue differences in how we treat bus operators and train operators, in particular on disability issues. I will take that point one stage further before I finish.
When the Bill was discussed in the other place, my noble Friend Baroness Campbell said that there is a need for an accessibility policy with teeth to ensure that it is effective. As the hon. Lady said, there is a real contrast between how the Government treat buses and trains in respect of disability access and on the conditions for licences for those who operate these important public services. It is a condition of a train operator’s licence that they comply with disabled people’s protections policy and state how they will protect the interests of disabled customers. That is enforceable by the regulator, with fines associated with lack of compliance. Why, therefore, is that not the case for bus operators? Perhaps in the absence of a national strategy, a condition could be put in place to ensure that such provisions exist for bus operators. Buses are an important way for disabled passengers to get to work and to social engagements, and to be a part of the community. Such provisions for bus operators would ensure parity between train operators and bus operators in how they support disabled people.
My right hon. Friend makes an interesting distinction between buses and trains. Surely the point is that there are policy initiatives the Government could take, for example on access for disabled people, but that does not mean that a national strategy will take away from the requirements of a local strategy, which is what the buses are based on.
I am not arguing against having local strategies, but a number of issues to do with the provision of services have a national resonance. The Government have identified this problem in the provisions on information that is available to bus passengers when they are on buses. That is nationally applicable. I am simply asking the Minister whether he will confirm what further thoughts he has given to ensuring that what is good enough for train operators is good enough for bus operators in respect of disability access.
I support the amendment and want to reflect the huge consensus in Committee on this issue. We divided on a number of matters, but it was a relaxed Committee and the Minister gave reasoned answers. The Bill represents a first step towards a change in attitude to buses. It was brought about following negotiations between the then Chancellor of the Exchequer and different metropolitan areas. A deal was reached whereby elected mayors could re-regulate bus services. I hope that this is just the first step.
I ask the Minister to reflect on this issue in a developing situation. The new Prime Minister has brought in an industrial strategy, and there is a strategy for the railways, as has been mentioned, as well as a strategy for aviation. It is rightly difficult to think of areas where large amounts of public money are spent where it is not the responsibility and the right of the Government and elected representatives to define the objectives that that public money should provide.
The hon. Gentleman mentioned a connection between directly elected mayors and bus deregulation. Does he see any logical or sensible connection between the two? Is there any reason why the two should go hand in hand?
It was a pragmatic decision taken by the then Chancellor and the combined authorities in metropolitan areas. There is obviously no rational basis for deciding to have a different bus system in Greater Manchester than in Southampton, for example. What would be the rationale for that? Clearly, there is none.
The point I was making is that, having taken the first step—not necessarily consistently, but in a sensible way in the metropolitan areas—it is right to look for a strategy that would help us to get rid of a relic of ideological Thatcherism from the early 1980s, which was seen in the Transport Act 1985 that deregulated buses. What the absence of strategy says is that we do not care how many millions of pounds have gone into the bus industry since 1986 when the 1985 Act came into force. I do not know, but I would have thought that over 31 years we are talking about a large chunk out of £100 billion being spent without any policy direction at all over that spending.
What we have been left with is a rather sterile debate. On the one side it is said that buses are declining and they would have declined in any case over this period. On the other side, there are those who think that that decline was not necessary. They say that without on-road competition, which has failed, with better competition at the tender stage and with a clearer decision on what bus services were needed and what fares should be charged, we would not have lost so many bus routes and bus passengers as we have. Not having a strategy over the last 31 years is saying that it does not matter that two thirds of bus passengers have disappeared in Greater Manchester and that bus fares have gone up considerably more than the rate of inflation. But these things do matter.
As both the right hon. Member for Basingstoke (Mrs Miller) and my hon. Friend the Member for Cambridge (Daniel Zeichner) have said, the vast majority of the people we represent, particularly the poorer people who do not have access to a car, rely on buses to get to work, to get to a hospital and to see relatives at weekends, but after deregulation, many of those bus routes no longer existed. How could we not have a strategy in view of that? How could we abandon those people?
Following on from what the hon. Gentleman says about a strategy, it is important to ensure that we have better records on bus safety. I ask the Minister to look again at what record keeping we have on this issue. Of course we publish the number of people killed or seriously injured, known as the KSI, but many other injuries are caused by buses. I can speak only about the London experience, but it would be really helpful if, as we put into place our overall plans for transport, we think of some way of recording minor as well as major incidents, so that we can provide everyone with assurances about the safety of buses.
That is a pertinent point. However, a bus strategy would cover all the issues: personal safety, disabled access, fares, and where buses were running. It is clear from the interventions and the speeches that we have heard from Conservative Members, both today and in Committee, that that is where the central view of the House lies, and I think that that will be the direction of travel even if the new clause is not accepted on this occasion.
My hon. Friend is making some important points. Does he recall that, over three Parliaments, the Transport Committee has investigated bus deregulation on five occasions, and does he agree that that reinforces the case that he is making for fundamental reform, starting with this Bill?
I do indeed recall the time and effort spent on the Committee’s reports with my hon. Friend. They show that competition does not take place on the road—that is a myth—and that we have left the public purse vulnerable to parasites like Brian Souter who have taken money out of it while putting up prices and reducing the service.
There will be a rearguard resistance from people who have benefited from the system, but we, as parliamentarians who have a duty to look after raised taxes, should support the consensus in favour of a bus strategy that I believe exists in the House. After all, there are strategies throughout the rest of our transport system.
Like the hon. Member for Blackley and Broughton (Graham Stringer), I was a member of the Bill Committee, and was pleased to contribute to what was, as the hon. Gentleman said, a consensual discussion. It was very well piloted by the Minister, to whom I was grateful for sending a Double Decker chocolate bar through the internal mail. Sadly, owing to the internal mail system, it looked more like a bendy bus by the time it was opened, but I was grateful none the less.
There is much in new clause 1 that is attractive, but I think that, given the improved local data requirements in the Bill, it should be perfectly possible to fix the strategy on a local basis rather than needing some form of Government top-down approach. The essential aim of the Bill is surely to bring about more localism.
The right hon. Member for Basingstoke (Mrs Miller) made the important point that a national strategy, or consistency, would really help disabled people, who may travel to a different part of the country and not know what to expect from the public transport system. Can the hon. Gentleman not see that basic minimum standards for disability access or ticketing, for instance, would be very helpful to those who travel across the country using different public transport systems?
I can certainly see the attraction of that, but I also think there is a danger that if local authorities think that Government will deliver the strategy, they might then not put anything in place themselves.
Another mechanism in the Bill will make it easier for local authorities to get more involved in the actual policy of how the Bill is implemented and how partnership should operate. Rather than talking of a national strategy, I would state that the Bill has some excellent points that should assist strategy at a local level.
Will my hon. Friend give way?
Of course: I will give way one last time and then move on to 16 to 19.
I understand the point my hon. Friend is making and have a huge amount of sympathy with his wanting to make sure that we have a local approach to our bus services. Does he not then agree with me that we need to make sure that our law, through the Equality Act 2010, has more teeth, so that individuals are able to make the law work for them when they encounter problems, such as discrimination against them because they are disabled?
My right hon. Friend is correct. Indeed, I had been going to retort that perhaps our laws need to be tightened up so that there is that combination. I absolutely agree with my right hon. Friend’s point, therefore.
Moving on to subsection (2)—
Order. I remind the hon. Gentleman that we are discussing only new clauses 1, 2 and 3 in this group. The amendments that I think he wants to speak to—amendments 16 and onwards—are in the next group. If he wishes to speak to them, he can do so when the next group comes up.
I thank you for your guidance, Madam Deputy Speaker, but I was referring to subsection (2) of proposed new clause 1, which talks about the reduced fare concessionary scheme for 16 to 19-year-olds. Am I within order?
Thank you. I have no desire to talk on other proposed measures.
On new clause 1, I agree with the hon. Member for Cambridge (Daniel Zeichner), and see the advantages of this scheme. I serve a rural constituency where it is incredibly difficult for young people in particular to travel by bus. I would also extend his point: in my view, this relates to our desire to increase social mobility. If our young people cannot access work, perhaps at weekends, because it is too far for them to travel, and they cannot afford motor insurance premiums—which we all know, and have debated, are incredibly expensive—then there is something to be said for the argument about lack of social mobility. I am therefore attracted to the idea that this should be looked at.
We on the Conservative Benches would point out that we need to make sure that we cost those measures up, however, and that is the matter that would give me concern. If we increase the national debt through policies such as this one, that will have a negative impact on young people, because it is them and future generations that will have to repay it.
Perhaps we could consider the overall cost of concessionary travel, and whether it is time for concessionary travel, perhaps for the over-65s, to be given only to those who cannot afford it. We would therefore be looking more at means testing than giving concessionary travel to those who can well afford it and perhaps would therefore like to share that benefit with 16 to 19-year-olds, who, after all, we are requiring to stay in education and training and so need some assistance.
Does the hon. Gentleman accept that it may not be necessary to throw money at this? The powers in this Bill could be used cleverly to extract value. For instance, if longer term franchises were given to the bus operators on condition that they could then give free travel to 16 to 18-year-olds, they might then become more regular bus users in their 20s, in which case the bus operators would capture the upside of that. Does the hon. Gentleman therefore accept that this could be done cleverly if more areas were given the ability to use these powers?
The right hon. Gentleman is absolutely right. Anything that can be done to get young people on to the buses so that they stay on the buses has much to recommend it. I am also conscious that subsection (2) of new clause 1 refers to “consideration” of a reduced fare scheme, as, indeed, do the points I am talking to. So perhaps a mission for Government should be that money that can be saved, or perhaps reinvested, could go towards this measure, which I believe would help young people and social mobility.
I rise to speak in support of new clauses 2 and 3 in my name and also new clause 1.
Both my new clauses are basically about coherence; neither is about dictating to local authorities, as was mischievously suggested by the Secretary of State on Second Reading. I am not trying to dictate to local authorities what they should do. Both of them are also obviously about concessionary travel for young people, which has been a thorny issue throughout the passage of this Bill.
Support for young people’s transport is variable, as the hon. Member for Bexhill and Battle (Huw Merriman) said, and worsening. Since 2008, 50,000 16 to 18-year-olds have had free transport withdrawn—a 42% drop, I believe. Two thirds of local authorities no longer provide free transport to 16 to 18-year-olds, and the price of bus passes for 16 to 18-year-olds varies incredibly across the country, ranging from £230 to more than £1,000. The number of transport authorities offering concessions right across their area has dropped since 2010 from 29 to 16, and 10 authorities have no arrangements that benefit the older age groups. The roll of shame of authorities that do not offer any concessionary fares for young people comprises Cheshire West and Chester, Halton, Warrington, Lincolnshire, Nottingham, Peterborough, Bracknell Forest, Oxfordshire, Portsmouth and Slough.
The situation is hardly good and the impacts are fairly obvious. The hon. Gentleman mentioned the impact on educational progress. According to the Association of Colleges, a fifth of students consider dropping out during their course, and often the reason is transport costs or, if the cost is not foremost in their mind, transport difficulties. There is an impact on students: a survey by the National Union of Students shows that two thirds of further education students pay more than £30 a week for transport—a lot of money for a young person. There is a clear impact on traffic congestion and pollution—the hon. Gentleman mentioned that, too—as more young people get a car, perhaps sooner than they should, or rely on parental transport, which affects congestion at all the wrong times in most towns. There is also an impact on educational choice—I emphasise the hon. Gentleman’s point that the worst affected are probably residents of rural areas and poorer students generally.
Within the system are clear anomalies that need to be resolved. We raised the age of compulsory education, but local authority transport obligations remain very much as they were.
I agree with everything the hon. Gentleman says about the withdrawal of concessionary support for young people, but does he concede that the withdrawal of the education maintenance allowance under the coalition Government made the problems for young people much worse?
The right hon. Gentleman might be surprised to learn that EMA was mentioned in my notes, but for some reason I omitted to mention it just then. He has drawn attention to it, and I dare say it was a factor.
Another anomaly in the system—this is where new clause 2 comes into its own—is that while we all accord parity of esteem between the academic route and the technical route, and the apprenticeship route is now being sold fervently by almost all Government Members, apprentices do not really get a look in: an apprentice aged 16 to 18 gets a bare £4 minimum wage. We want to make the apprenticeship route more attractive, and there is some evidence that where schemes are introduced, they are highly successful. Anecdotal evidence suggests that the MyTicket scheme in Liverpool city region improved attendance quite appreciably. Developing transport in line with the apprenticeship system is very much a part of the city region agenda, which the hon. Member for Blackley and Broughton (Graham Stringer) touched.
The aim of my new clauses is relatively modest. They would not change the character of the Bill, which I broadly support. Essentially, they oblige local authorities to take a broader view of the environmental and educational impacts of transport policy.
Does the hon. Gentleman share my concern that while the Government make huge cuts to local authority funding, even where authorities want to provide concessionary fares they are in many cases being forced to withdraw them? We heard evidence to that effect from Nexus, which said that, as much as it would like to support young people, the point was being reached in the north-east where it would no longer be able to do so.
Desperate times call for desperate remedies, and the financial situation in most local authorities at this moment is desperate, as is evident from the Audit Commission’s recent study of local authorities’ financial sustainability. Whether the Government accept that point or not, I think they will accept that there is a case for joined-up policy. The Government need to link the apprenticeship opportunity agenda with real-time transport problems and impacts. That is where new clause 2 comes into its own, and if I am supported, I will happily press it to a vote unless the Minister can assure me that all these things are within his frame of reference for the moment.
It will be useful for me to cover all the amendments in one, hopefully fairly detailed, set of replies.
New clause 1 would require the Secretary of State to develop and publish a national bus strategy—which we discussed at some length in Committee, where I am glad the discussions were considered, reasonable and helpful—and to consider a reduced fare concessionary scheme for young people aged 16 to 19 as part of the strategy. New clause 2 would require the Secretary of State to publish a report setting out the possible steps to support local transport authorities to provide concessionary bus travel to apprentices aged 16 to 18.
While the Government fully appreciate the importance of public transport for young people, particularly those living in more isolated areas, we also recognise that the cost of transport can be an issue for some young people, including those who are participating in apprenticeships. One reason for the introduction of the 16-to-19 bursary fund was to help with transport costs. Funding is allocated to schools and colleges and is used to support disadvantaged young people who need the most help with education and training costs, and the 2015 evaluation showed that nearly 400,000 young people were being supported. However, the statutory responsibility for transport to education and training for 16 to 19-year-olds rests with local authorities, enabling them to make decisions that best match local needs and circumstances. Many authorities and operators already offer discounts for passengers in that age group.
Both issues relate to funding. In Committee, I made it clear that the Bill is not about funding; it is about providing authorities with new tools to help them improve local services in a way that best suits their areas. As part of the 2015 spending review, my Department is protecting the bus service operators grant at current funding levels until 2020-21, already providing significant certainty of funding for bus services without the strategy proposed by the hon. Member for Cambridge (Daniel Zeichner). The funding is provided directly to local authorities and to bus operators and is not broken down into categories of service or by route. Attempting to do so would be a burdensome exercise that could risk embroiling central Government in the fine detail of local bus service provision.
At the heart of the question about a national strategy is the fact that the Bill relates to local bus services. It is not about a top-down, national plan. Buses are local by definition and play a key role in local transport planning. That is why we are seeking to support local councils with more powers. A national plan is not the answer. More powers for local authorities are part of the answer, and they are what the Bill provides.
One of our few disagreements in Committee was about what should be determined locally and what should be determined nationally. When the Government are spending billions a year on bus services, does the Minister not think that they should take an interest in there being more bus passengers and more bus miles and in what the fares should be? That could be stated as part of a strategy. In that respect, what is the fundamental difference between buses and trains?
I am happy to agree entirely that buses are a critical part of any local transport mix. I am a great champion of bus travel, which has been made clear in all my work as a Minister and in Committee. However, this is about a local issue, not a national solution. I made a joke in Committee that one of the great truths of business is, “I’m from head office, and I’m here to help.” I often was that person from head office, and I was not always quite so welcome.
This should be about local transport needs, not about a national top-down strategy. Are the Government neutral? Of course we are not, which is why we introduced the Bus Services Bill and protected the bus service operators grant, but ultimately this is about local authorities working in partnership with local bus operators to deliver the right services for their area.
The Minister is being typically generous in giving way. If it is about local decisions, why will he not devolve the bus service operators grant to local authorities or elected mayors?
Some of the grant is already devolved to bus operators, but the key reason not to devolve it further is that it goes direct to bus operators, which very frequently operate routes that cross council boundaries. Council boundaries and bus routes are not the same thing. Transport to work has nothing to do with a local authority’s geography, so it would potentially be a bureaucratic nightmare to change the system.
Having said that, we are considering how to reform the BSOG operation. The grant pays a flat 34.57p a litre in subsidy, which is why it used to be called the fuel duty rebate. We are considering how to incentivise better practice, rather than just rewarding bus operators for using fuel, which is not good practice.
It feels as if the Minister is trying to devolve all responsibility for the state of our bus services. It was announced in the 2015 local government settlement that core central Government funding to local authorities would fall by 24% in real terms, which is partly why local authority support for buses is falling. Does he not take any responsibility for the impact that is having on bus services and on people’s ability to use the buses?
Of course I recognise that the pressures on local government finance are quite acute. In fact, I was in charge of my local council’s financial affairs throughout the financial crash in 2008-09, so I am fully aware of that. At the same time, it does not change the requirement to recognise that buses are a local service and should be determined locally.
Has my hon. Friend the Member for Blackley and Broughton (Graham Stringer) not just exposed a major contradiction at the heart of the Government’s position? The Minister says that he wants local delivery but, when it comes to cross-border issues, he says that Whitehall knows best. Surely the Government’s position on bus services should be for maximum devolution, including of the budget.
I am not saying that Whitehall knows best; I am saying that the grant is best delivered to bus operators that are running cross-border services, and then to take it from there. It is not a question of Whitehall knows best. We are not determining the routes that operators should be operating. We are keen to see more support for buses and more routes available, but the way to achieve long-term sustainable bus growth is to have more passengers on the buses.
My right hon. Friend the Member for Basingstoke (Mrs Miller) mentioned the Paulley case, which went through our legal system for five years and reached the High Court. Specifically, we will be inviting the Equality and Human Rights Commission to attend the meetings of our working group, on which progress has been made. We seek to have a small working group that will look at the practical implications of the Paulley case. Among the members invited so far is the Disabled Persons Transport Advisory Committee, because we want the voice of disabled groups. We also want the voice of the bus operators, so we have invited the Confederation of Passenger Transport and the Association of Local Bus Company Managers. We also want the voice of passengers, so Transport Focus has been invited. I hope we will see the Equality and Human Rights Commission, which has been invited to attend but not as a formal member. I hope to get things under way with our first meeting next month.
I apologise to the Minister, but may I take him back to the cross-border issue? Even in areas that do not have a landscape drawn out for elected mayors, local authorities have for the past three decades worked in partnership with one another where bus routes go across their local authority boundaries. I do not understand his point about devolving the grant to the bus company and not to groups of local authorities in travel-to-work areas.
The devolution of the funding goes straight to local bus companies. We are looking at how we can reform BSOG and I will take the hon. Gentleman’s points as a contributory suggestion. I do not want to change the system unless we are clear that it will keep more routes operational. We would have no guarantee, unless we ring-fenced the funding, that if we granted the devolution of BSOG to a local authority it would be used to support buses. It could go towards other forms of local transport. I want to keep it focused on buses. That is why it is with operators. However, I will take his point on board as we think about how to take this matter forward.
To answer my right hon. Friend the Member for Basingstoke a little more fully, the working group needs to be very action-oriented. The High Court encountered practical challenges in dealing with the issue of disabled access. We need to get the balance right. The space that is used for wheelchairs may also be used for parents with disabled children, the owners of assistance dogs and people who use walking frames. I want to protect everyone’s needs.
Disabled transport plans such as DPPPs are important in providing confidence and consistency for disabled people when using transport. I have much sympathy with the reason underlying my right hon. Friend’s suggestion. We will take forward a recommendation in the guidance supporting the Bill that authorities ensure that information is made available to passengers. That might be in a form that is provided by the authority or by individual operators. Again, we have been working on this issue with DPTAC, which has developed a template. I am keen to publish that with the guidance and encourage bus companies to use it. I therefore expect us to make progress in this area, which I hope will assist my right hon. Friend.
I welcome the Minister’s clarification with regard to the guidance being made available to passengers, but I gently remind him that when it comes to rail passengers, not only is there a regulator breathing down the neck of providers, but there are fines for non-compliance. How can he give this real teeth?
My right hon. Friend makes an interesting point, but I am not sure that there is a straightforward read-across from rail to buses. There are 30 or so rail companies in this country and 1,000-plus bus companies. We need to have something that is proportionate. For the very largest groups, what she suggests might be appropriate. For the smallest companies, which might be operating a single route, what we are suggesting would clearly be more appropriate to provide information to disabled passengers, which is ultimately our joint objective.
New clause 3, which was tabled by the hon. Member for Southport (John Pugh), would require local authorities that do not provide a concessionary scheme for 16 to 18-year-olds in full-time education to produce a report, setting out the impact on that group of young people and on local traffic of not providing such a scheme. As I have said, the legal responsibility for transport to education and training for 16 to 19-year-olds rests with local authorities, which are free to put in place appropriate arrangements. Those arrangements do not have to be free, but we expect local authorities to make reasonable decisions based on the needs of their population, the local transport infrastructure and the available resources.
Local authorities already have a duty under the Education Act 1996 to publish a transport policy statement each year, specifying the travel arrangements they will make to support young people to access further education and training. New clause 3 would simply replicate that duty.
In short, I do not believe that new clauses 1, 2 and 3 would add anything of value to the delivery of a bus service on a local basis or directly benefit passengers. I therefore hope that hon. Members will not press them.
Once again, we have had a constructive exchange; the points made about disabled access are welcome and will be pursued. As in Committee, much of the discussion has hinged on issues of localism. My hon. Friend the Member for Blackley and Broughton (Graham Stringer) and my right hon. Friend the Member for Leigh (Andy Burnham) described well what we and many others see as the failures of the systems over the past 30 years. We discussed at length in Committee the value of a national framework, and I did not hear a huge amount of opposition to that in the contributions from Government Members, with many seeming to suggest that they, too, could see the benefits. The Minister heroically stuck to the script and clearly does not wish to go down that route just at the moment, but as we consider in future the way we fund bus services, be it the concessionary fares schemes or the bus service operators grant, there will clearly be a debate to be had.
Does my hon. Friend agree that it would be helpful to have that national discussion, involving not only passengers, but the industry and the local authorities, about the most sustainable way to fund buses? As local authorities develop different emissions standards as part of their own partnership and franchising schemes—the Campaign for Better Transport has said this—would a national strategy not provide some certainty for the UK’s bus vehicle manufacturers as well? There are many advantages to doing this, are there not?
As always, my hon. Friend is absolutely right. She has raised the important issue of air quality, which is clearly becoming more important in many of our cities across the country. I just suggest to the Government that having a national framework within which to discuss these things might be extremely helpful, for a whole range of reasons. I fear that we are not going resolve or agree on this issue, so we will press new clause 1 to a Division.
Question put, That the clause be read a Second time.
I beg to move, That the clause be read a Second time.
With this it will be convenient to discuss amendment 14, in clause 4, page 14, line 13, at end insert—
“(2A) A franchising scheme may not be made unless the franchising authority can demonstrate that the benefits for passengers could not be provided by a quality partnership scheme, an advanced quality partnership scheme or an enhanced partnership scheme.”
This amendment would ensure that a Local Transport Authority cannot make a franchise scheme if the passenger benefits can be provided by a quality partnership scheme, an advanced quality partnership scheme or an enhanced partnership scheme.
Amendment 16, page 15, leave out line 36 and insert—
“(3) A franchising authority or authorities shall consider an assessment and shall not proceed with the proposed scheme unless it is satisfied that—”
This amendment and amendments 17 to 23 would tighten the criteria against which an authority must consider a franchise proposal.
Amendment 17, page 15, line 37, leave out “whether”.
This amendment is consequential on amendment 16.
Amendment 18, page 15, line 43, leave out “whether”.
This amendment is consequential on amendment 16.
Amendment 19, page 16, line 1, at beginning insert “they know”.
This amendment is consequential on amendment 16.
Amendment 20, page 16, line 3, leave out “whether”.
This amendment is consequential on amendment 16.
Amendment 21, page 16, line 5, leave out “whether”.
This amendment is consequential on amendment 16.
Amendment 22, page 16, line 7, leave out “the extent to which”.
This amendment is consequential on amendment 16.
Amendment 23, page 16, line 7, leave out “are likely to” and insert “will”.
This amendment is related to amendment 16.
Amendment 15, page 16, line 9, at end insert—
“(g) the specific passenger benefits that would result from a franchise scheme, with an explanation of why those benefits could not be delivered by a quality partnership scheme, an advanced quality partnership scheme or an enhanced partnership scheme.”
This amendment would require a franchise assessment to specify the benefits of the proposed scheme for passengers and to explain why these benefits cannot be delivered by a quality partnership scheme, an advanced quality partnership scheme, or an enhanced partnership scheme.
Amendment 24, page 16, line 9, at end insert—
“(g) whether the proposed scheme would be more efficient, effective and economic than any other option, taking into account any compensation payable to bus operators whose businesses would be wholly or partially expropriated by the scheme.”
This amendment would ensure that the value for money test of a franchise scheme must factor in the cost of compensation to bus operators who lose part or all of their business as a result of a franchise.
Government amendments 2 to 4.
Amendment 25, page 17, line 7, at end insert—
“(3A) A person may not act as an auditor under this section if the person or company for whom the person is employed has been an auditor for the franchising authority at any time in the previous five years or has had any other commercial relationship with the franchising authority at any time in the previous five years.”
This amendment would ensure that any auditor appointed by the franchising authority had no commercial interest or association with the franchising authority which might create, or might be perceived to create, a conflict of interest.
Government amendment 5.
Amendment 6, page 19, line 37, at end insert—
“(4A) An award of any new franchise or contract shall not be made on the basis of labour costs estimated by the potential franchisee or contractor assuming labour costs for new employees at less than the labour cost of workers who are covered by TUPE protections in accordance with section 123X transferring to the new franchisee or contractor.”
This amendment would ensure that any new franchise or contract will not be awarded on the basis of estimated labour costs being lower for new employees than the labour cost of workers covered by TUPE protections.
Amendment 26, page 20, line 24, after “(or further postponed)” insert “or cancelled”.
Amendment 27, page 20, line 24, at end insert—
‘(1A) If an authority or authorities decide to cancel a proposed franchising scheme under subsection (1) they may not initiate a revised or alternative franchising scheme until the end of the period of five years beginning with the date on which the decision to postpone the original scheme was taken.”
This amendment would provide greater certainty for bus operators and passengers by specifying that, if a franchising authority fails to make a case for a franchise scheme or decides not to progress its proposals, it should not be permitted to bring forward fresh proposals for five years.
Amendment 7, page 30, line 2, leave out “at the same time,”.
Amendment 8, page 30, line 14, leave out “at the same time”.
Amendment 9, page 32, line 27, at end insert—
“123Y Employees not covered by TUPE protections
Employees of local bus service providers who are not covered by TUPE protections may not be employed on terms and conditions less favourable than those provided by TUPE.”
This amendment would ensure that employees working under local service contracts not covered by TUPE protections may not be employed on terms and conditions less favourable than those provided by TUPE.
Amendment 10, page 32, line 27, at end insert—
“123Z Effect on employees of introduction of local service contract
(1) Where, either before or after the introduction of a local service contract following an assessment under section 123B, any employee of an operator in the area to which the scheme relates is dismissed, that employee is to be treated for the purposes of Part 10 of the Employment Rights Act 1996 as unfairly dismissed if the sole or principal reason for the dismissal is the introduction of the relevant local service contract.
(2) Paragraph (1) applies whether or not the employee in question was part of an organised grouping of employees principally connected with the provision of local services, under section 123X(4).
(3) Where section 123X(4) applies, a new operator may not engage employees or workers on terms and conditions less favourable than those of the employees whose employment transferred from the former operator.”
This amendment would make dismissal of an employee for the sole or principal reason of the introduction of a franchising scheme automatically unfair dismissal.
Amendment 28, in clause 9, page 41, line 17, at end insert—
“(6A) The requirements that may be specified under subsections (4)(b), (4)(e) and (4)(h) in relation to fares and the prices of multi-operator tickets may only be specified if all operators party to the enhanced partnership scheme are in agreement with those requirements.”
This amendment would specify that fares structures could only be specified as part of an enhanced partnership scheme if the operators involved agree.
Amendment 11, page 57, line 3, leave out “at the same time,”.
Amendment 12, page 57, line 14, leave out “at the same time,”.
Amendment 13, page 59, line 42, at end insert—
“138T Effect on employees of introduction of enhanced partnership scheme or plan
(1) Where, either before or after the coming into force of an awarded contract in an area to which the relevant enhanced partnership scheme relates, any employee of an operator in the area to which the contract relates is dismissed, that employee is to be treated for the purposes of Part 10 of the Employment Rights Act 1996 as unfairly dismissed if the sole or principal reason for the dismissal is the introduction of the awarded contract.
(2) Paragraph (1) applies whether or not the employee in question was part of an organised grouping of employees principally connected with the provision of local services, under section 138S(4).
(3) Where section 138S applies, a new operator may not engage employees or workers on terms and conditions less favourable than those of the employees whose employment transferred from the former operator.”
This amendment would make dismissal of an employee for the sole or principal reason of the award of a contract under an enhanced partnership scheme automatically unfair dismissal.
I declare an interest inasmuch as I am chair of the RMT parliamentary group and vice-chair of the Unite parliamentary group, both of which unions have members in the bus industry.
The transport sector is a safety-critical environment. This is not a loose use of language. The sector involves carriages travelling at speed, individuals working long hours on repetitive tasks on repetitive routes, and people maintaining equipment at all hours of night and day. Hard lessons have been learned following a series of fatal road and rail crashes in the 1980s and 1990s. However, continuing financial pressures, declining support from Government through the bus service operators grant, and commercially oriented initiatives towards potentially reducing staff could threaten safe working practices.
Bus drivers are aware of where corners are being cut. In theory, they may be empowered to use their employers’ whistleblowing policies to speak out. In practice, however, workers who do so are frequently subject to all sorts of pressure and have been known to be dismissed for whistleblowing. This invariably leads to serious safety failings being increasingly ignored and not adequately investigated, or the results of an investigation not being acted on by bus companies.
To counter the dysfunction, a confidential reporting service known as CIRAS was introduced. This system, initially only for rail, has been successful in enabling workers properly to ventilate their concerns, resulting in lessons being learned and an accumulation of failings being halted, with serious harm prevented. All the major rail companies, many of which also own bus companies, such as FirstGroup, Go-Ahead Group and Stagecoach, have signed up to CIRAS.
I should declare another interest inasmuch as I am a frequent user of my local bus services in Gateshead, as I do not own a car. A very good bus service is provided by Go-Ahead Group in my locality, but unfortunately not all my constituents can benefit from such great services. The bus company tries its best and provides excellent bus services during the peak hours, but as the evening goes on, unfortunately, their frequency dwindles.
Bus workers outside London should also be able to access CIRAS. That would be the effect of the new clause, which would reproduce CIRAS in franchises or quality partnerships. In response to a spate of deaths and serious injuries involving buses on London’s roads, Transport for London successfully extended the CIRAS scheme to London buses. London has one of the best resourced bus networks and some of the newest buses anywhere in the country. CIRAS itself supports the extension of the scheme to bus operators nationwide. In line with other aspects of the Bill—including matters unconnected to franchising and partnerships, such as audio and visual announcements—a nationally mandated approach is warranted and would be greatly desirable.
I rise to support amendments 14, 16 to 23, 15 and 24 to 28, which are in my name and those of my right hon. and hon. Friends. Amendment 14, which is very straightforward, would ensure that a local transport authority could not make a franchise scheme if passenger benefits can be provided by a quality partnership scheme, an advanced quality partnership scheme or an enhanced partnership scheme.
Amendments 16 to 23 are mainly drafting amendments, but it is important that a franchising authority should be satisfied, rather than that it should just have considered the issues in a franchising assessment. As we heard in the debates on clause 4, it is clear that franchising should not be an easy option. A local transport authority should not be allowed to take a simple punt at franchising without having given full and detailed consideration to all the other options available. There will of course be other options, not least the partnership arrangements that we have looked at, and to which we will surely return in the near future.
The Bill contains stringent tests, but I think it would be very easy for a local authority to say that it has considered whether a proposed franchise regime would contribute to its transport policies; whether it has the capability and resources to operate the scheme; or, just as importantly, whether it can afford the scheme and that it represents value for money for local taxpayers—in other words, our constituents. It is quite another thing, however, for the authority to say that it is satisfied that its proposals will do these things. Surely, given the importance of the step the local authority is proposing to take in implementing a franchise scheme, it is not too much to ask whether it is convinced that its proposals will do exactly what they intend. That is what my group of amendments sets out to achieve.
Amendment 15 simply complements amendment 14, although it looks at the issue from a slightly different angle. I will not say anything more about amendment 15, except that we cannot really have amendment 14 without amendment 15. Amendment 15 requires a franchise assessment to specify the benefits of a proposed scheme for passengers and to explain why those benefits can be delivered by a quality partnership scheme, an advanced quality partnership or an enhanced partnership scheme.
Amendment 24, probably the most important amendment in this group, is all about compensation. The key is to bring into play a degree of fairness. The Bill is silent on the matter of compensation and I think that is wrong. I know what the Minister will say in his response. He will probably say that he will go along with the Transport Committee when it said in its recent report that there is no case for compensating operators who lose their business. I am fully aware that compensation would not have been available under a quality contract scheme, but the days of quality contracts are severely numbered. The fact that there was no compensation under that scheme does not mean to say that it is not right to have compensation for the new arrangements. The loss of business would be bad enough for the large plcs, which would have to redeploy their staff and their assets, but what about the smaller operators?
I am listening carefully to the hon. Gentleman. Will he explain—so far, he has not done so—on what basis compensation would be given when every bus company is able to compete to run buses via a franchising process?
I am not an expert on this, but the small and medium-sized bus companies in my constituency tell me that they are very concerned indeed. They have established their businesses on the back of a lot of hard work, and they have taken a lot of risks. One company that came to see me said that its directors had re-mortgaged their homes and invested their life savings to ensure that the company grew. They stand to lose—not because they have not performed properly, not because they are a bad company, and not because the passengers have decided that they no longer want to use those services—if they do not win a bid to continue to do what they have been doing successfully for many years. I suggest to the hon. Gentleman that this is a fair measure and I ask the Minister to consider it.
The wider point is this: what message does it send to businesses looking to invest in the UK? We want businesses to come to the UK to invest. We should be saying to them, “You’ve come to the UK to invest, and if local authorities take your business off you there will at least be some compensation.” This measure will, in the longer term, represent good value for the taxpayer, because it shows that taxpayers’ money will be put to a good use. If businesses are put out of business because of measures in the Bill, then surely there should be some recourse to compensation.
The hon. Gentleman rightly talks about the importance of delivering value for money for the taxpayer. In the north-east, as in many parts of the country, there is not good value for the taxpayer. The Competition Commission has shown that a very limited number of bus operators have a monopoly over our services. The competition that was meant to follow deregulation has not materialised. This is not good value for the taxpayer. The Bill would allow smaller operators to break into a market on which the big boys currently have a stranglehold.
The hon. Lady makes a fair point. I can judge only on the basis of what is going on in my area, but I hope that the Minister will take into account what she said. I want more competition and more small operators. There are a lot of big operators around; I want to see the small ones flourishing. It is certainly the case in Norfolk that the small operators, companies such as Norfolk Green, were able to move in on routes and bring a new culture and new service ethic into place—it has done a fantastic job. I defer to the right hon. Member for Leigh (Andy Burnham), who knows a lot about this subject, but these operators have been able to get more customers on to routes and even to re-open routes that had previously been closed down.
The trouble with what the hon. Gentleman is saying is that it has not worked that way under the current regime; passenger numbers have gone down in Greater Manchester. My worry is that he seems to be speaking for the bus companies rather than for the travelling public—that is what it sounds like to me. Can he assure me that this is not a wrecking amendment? Is he hoping that the fear of paying compensation will persuade local authorities not even to try to use these powers because they cannot afford to pay that compensation? Is that what he is trying to do?
I can assure the right hon. Gentleman that I am not trying to wreck the Bill in any way or do anything that is untoward. I am simply trying to make sure that SMEs are treated fairly.
Let me move on quickly to amendment 25. It is a simple amendment that is designed to ensure that any auditor appointed by the franchising authority has no commercial interest or association with the franchising authority that might create or could be perceived to create—perception is very important as well—a conflict of interest. I very much hope that the Minister will accept this amendment. It is reasonably anodyne, but quite important. I urge him to look at it very carefully indeed.
Amendments 26 and 27 are quite small amendments, too, but they are important. If a franchising authority fails to make a case for a franchise scheme or decides not to progress its proposals, should it be permitted to come back to that scheme the following year, the year after that or indeed within months? I suggest that it should not. These amendments to clause 4 would prevent the authority from coming back with fresh proposals within five years.
In the autumn statement, my right hon. Friend the Chancellor said:
“I know how much business values certainty and stability”.—[Official Report, 23 November 2016; Vol. 617, c. 908.]
I think he was right. One thing that business dreads is uncertainty, which affects investment plans, recruitment decisions and the way that businesses, particularly SMEs, conduct their everyday activities. Bus operators are understandably and justifiably concerned that some of these measures could put their businesses under threat—in the worst-case scenario, with the franchise authority coming back to the franchise time and again within the five-year period. We want to create a situation in which there is a workable franchise scheme and the franchise authority cannot keep chipping away at it.
These amendments are not vital, they would also help local authorities. We know that the burdens on local authorities are growing the whole time. They are under massive pressure to deliver better services and better value for money, whether it be in respect of refuse collection, care for the elderly, street lighting, planning and so on, with ever-dwindling resources. The local authority might have a lot of pressure put on it by its elected members or other bodies to devote time and energy to bringing back a franchise exercise that was not progressed in the first place, which I think would be a mistake.
I would like clarification and reassurance from the hon. Gentleman. It sounds to me as if the combined effect of these amendments is to open up some confusion, to create possibilities for bus operators to use legal challenge, and to delay and tie the hands of the combined authority in the case of Greater Manchester and in other combined authorities elsewhere. Can he be absolutely clear that that is not what he is trying to do? It sounds to me, for all the world, that that is the real intent behind these amendments.
I have a lot of time for the right hon. Gentleman. I remember asking him questions in past times, when he was a Minister and I was on the Opposition Benches, and we have engaged in debates in Committee. I assure him that I do not intend to do what he has suggested. I think that small and medium-sized enterprises and the smaller bus companies will support the amendments.
Will the hon. Gentleman not acknowledge that the very fact of having the opportunity to take franchising powers enables local authorities to put pressure on operators, not all of which are small and medium-sized companies—in fact, most of them are very large—in order to bring them into partnership arrangements? If a local authority does not have the potential to develop franchising schemes, many operators will not seriously enter into negotiations on either advanced quality or enhanced partnerships.
I was under the impression that authorities had those powers anyway, but the Minister will obviously have heard what the hon. Lady has said. It is up to the Minister to listen to what we have said, and then to make a decision.
I now want to say something about amendment 28. I will be brief, because I have already taken up a fair amount of the House’s time. The amendment would allow fares structures to be specified as part of an enhanced partnership scheme only if all the operators involved agreed. The key issue is the ability of commercial bus operators to set their own fares, which is an important feature of a deregulated market. Of course fares structures are set competitively. In the same way, a commercial enterprise looks at what its competitors are charging, and structures its own charges accordingly. The competition authorities have introduced important safeguards to ensure that bus companies do not collude to stitch up the market and set fares at levels that disadvantage passengers. There are checks and balances, and that is extremely important.
What the hon. Gentleman is saying seems to suggest that the powers of a local authority, or collection of local authorities, in the areas that he represents would be less than those currently enjoyed by the voters of London when it comes to oversight of the running of an integrated transport system. Why should electors in all the other parts of England have an inferior set of arrangements?
I simply say to the hon. Gentleman—for whom I have a huge amount of respect—that I have listened to bus operators and passengers in my constituency. We now have more bus services in our remote communities and villages that we did, say, 20 years ago, when the hon. Member for Cambridge (Daniel Zeichner) was standing for election to a rural Norfolk seat—and he nearly won that seat in 1997; I think it was Mid Norfolk—because SMEs have stepped up to the plate.
I have taken enough of the House’s time. Let me simply say this to the Minister. I believe that the amendments go a modest way towards improving the Bill, without undermining or sabotaging parts of it. I think that they will help bus operators—especially the smaller ones—and passengers and local authorities by providing clarity.
I want to talk about the new clauses and amendments relating to franchising, including amendments 14 to 23, 26 and 27.
The strength of the Bill lies in devolution, and its proposal that decisions on how to provide local bus services should be devolved to local transport authorities, which should consider what works best in their areas. It is important to remember that the Bill has come about because of dissatisfaction among members of the public—people who want to use buses—with the way in which the current system operates. There have been a number of attempts to change the Transport Act 1985, which deregulated transport services, but none of those attempts —which have been made under successive Governments—has resolved the problem. The Bill is important because it tries to address the difficulties that the public have experienced, and to create a thriving bus sector.
The Transport Committee examined the Bill in detail from the perspective of passengers. We welcomed the possibility of new and smaller entrants to the bus market, but what worries me about the new clauses and amendments is they may prevent the proposed devolution from taking place. There are two aspects of that. The first relates to combined authority areas with directly elected mayors having the power to proceed with franchising. There is a lack of clarity about the regulations that will be introduced, or imposed, to impede the ability of the mayors to do that. Will it be an absolute right, or will onerous, complex and perhaps unknown regulation be imposed? I hope that the Minister will clarify that issue, because it relates to a fundamental part of the Bill.
Secondly, the Bill proposes that transport authorities in areas that are not run by combined authorities with directly elected mayors may have powers to introduce franchising in certain circumstances. The amendments make that proposal extremely complex. It would be impossible to assess whether the transport authorities would be able to proceed with franchising if they wished to do so. The Transport Committee looked at good practice, and concluded that transport authorities should consider existing ways of operating in partnership with operators before moving to a franchising system, but we did not think that that should be part of the regulations. This proposal introduces new hurdles, but it is not fully specified what those hurdles are, or—this is equally important—how they would be assessed before the authority could adopt the franchising system. That, I believe, strikes at the heart of the Bill.
The Bill is intended to improve transport services in localities and devolve to local transport authorities the ability to act on the needs of their areas, but the hurdles introduced by the amendments might enable future Ministers to impede its objectives, and I am sure that present-day Ministers would not wish that to happen. I am extremely concerned about the amendments. I hope that the Minister will tell us more about what they mean, and will make clear whether the Government intend franchising to go ahead, as they have stated, without introducing complex hurdles which would make the proposed system extremely difficult to achieve.
It is a pleasure to follow my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who chairs the Transport Committee. As she said earlier, the Committee has considered this issue on a number of occasions, and—my hon. Friend the Member for Gateshead (Ian Mearns) mentioned this—we have never been able to find a reason why London should have one system and the rest of the country should have another. The hon. Member for Wimbledon (Stephen Hammond) grins at that, and I do not blame him, because the regulated system in London is superior to the system in the rest of the country.
I listened to the responses of the hon. Member for North West Norfolk (Sir Henry Bellingham) to my right hon. Friend the Member for Leigh (Andy Burnham) about his not wanting to wreck the Bill, and I take that at face value. However, I do not think the amendments reflect the reality of the nature of bus services, certainly in urban areas. I am not an expert on bus services in Norfolk and suspect the hon. Gentleman knows more than I do about Norfolk, but if he is concerned about small bus companies, he should support this Bill as it is or seek to improve it, because what has happened in the west midlands, Merseyside, Tyne and Wear, Greater Manchester and the great urban areas of this country is precisely the opposite of what he wants: small companies have been driven off the road by large companies.
I could not agree more with my hon. Friend about the impact on the small bus service providers. When bus services franchising was introduced, I remember visiting Merthyr Tydfil to see Gateshead football club play Merthyr in a Conference fixture, and—lo and behold—there in Merthyr Tydfil were Go-Ahead Gateshead buses being used in a local bus war to destabilise a local small bus company. So in terms of the impact on small and medium-sized bus companies, that particular horse bolted long ago.
My hon. Friend is right: the deregulation of bus services has not led to greater competition and has not benefited SME companies. They have been literally driven off the roads, because on the odd occasions when there has been on-the-road competition, it has led to congestion and eventually a large monopoly operator taking over. FirstGroup, Stagecoach, Arriva, Go-Ahead and one or two other companies have taken control and have therefore been able to exploit the situation through introducing high bus fares and sometimes withdrawing services for other areas.
I have listened with interest to the hon. Gentleman’s comments on small and medium-sized bus companies, and there is a lot of truth in what he says about the smallest bus companies, but does he agree that the greatest concern is for medium-sized operators? There are not many medium-sized companies in the country, but there are some in counties such as mine, Nottinghamshire, and neighbouring Derbyshire: Marshalls of Sutton on Trent and trentbarton —which the hon. Member for Nottingham South (Lilian Greenwood) will be familiar with—are good medium-sized bus companies and they stand to lose a lot from this. They will grow exponentially if they win a franchise, or they could find 30 years, in the case of either of those companies, of hard work going down the toilet with no compensation whatsoever.
The hon. Gentleman makes a fair point, and I will come on to it. He is right to be concerned about that, but I want to develop the logic of the argument that I am making as to why these are not sensible amendments. In large parts of the country, where most bus passengers are, we do not have competition. The basis of the Transport Act 1985 was that there would be on-the-road competition and that would provide good services, and if bus companies lost out because of on-the-road competition, they lost out as in any other capitalist-competitive market situation. That has not happened, however; we have moved to monopoly.
Incidentally, when the 1985 Act was implemented in 1986 no compensation was paid to those bus companies—of which there were a number—running on regulated routes. Mayne in east Manchester, for instance, had run for many years in that area; when it had to compete, it did not get compensation.
We are now moving—through principled objectives, in a different way—to a competitive system, in those areas that choose that, because there will be choices for Norfolk, Greater Manchester and other areas at some stage. As with rail franchising, in a competitive situation, when a company loses out, it loses its business, even if it has invested in it previously. In fact, one of the difficulties with franchising is that we end up with investment up front and a lack of investment at the end; that is just the nature of franchising.
On the point of the hon. Member for Newark (Robert Jenrick) about medium-sized bus companies, that can of course be taken into account in the way that franchises are set up, by local choice. Areas can set them up in as many different ways as they wish, so medium-sized companies could be given the right to tender for routes that fit the size of the company if that was what the franchising authority wanted to do.
That brings me to a point I made in Committee, and which was rejected. Rather than the amendments we have here, I would have preferred the Bill to say that the regulations should not be overly burdensome and that they should reflect local conditions. If they were reflecting local conditions, they could take into account those small and medium-sized companies. There is a large point here, however, and, as my right hon. Friend the Member for Leigh said, the large companies would be more pleased than the small bus companies if these amendments were passed.
There is not a single quality contract in this country, and that is because when they were brought in under the Transport Act 2000, it contained a clause that is very similar to measures here, saying that they are the only practical way of delivering a better bus service. That is an incredibly high hurdle to jump, which is why there are no such contracts. Quality partnerships were referred to; I asked the Minister in Committee how many of them there were in the country, and, after a little help from the officials, we discovered that there were 10. So even quality partnerships are not abundant on the ground in this country. We do not need overly burdensome regulations. We want to make this work because it will improve the service for passengers, be more competitive and lead to better services.
We are not discussing them now, but there are huge guidance notes associated with this Bill, which I think tend to be overly prescriptive. I prefer to rely on the good sense of local councillors; they will make some good decisions and some bad decisions, but there are many bus companies with vested interests who are opposed to this, and if local authorities behave in an unreasonable way, they have the right to apply the Wednesbury principle and go for judicial review.
Rather than having lots of prescriptions, and putting ever more hurdles in the way of locally elected people making decisions, we should rely on their good sense. Sometimes they will get it wrong, as sometimes national politicians in Governments and Cabinets get things wrong, but we can rely on them and the common law, which will ensure that if bus companies feel that they are being unfairly treated and that transport authorities are behaving in an unreasonable way, they can take that to court.
So I hope the Minister will reject these amendments. We have held in the balance throughout our discussions the question of what is central and what is going to help local authorities, transport authorities and elected mayors to make these decisions, and these amendments do not help move us towards having a better local transport system.
There is a wide range of amendments in this group, many of which we support, but some we do not.
I genuinely hope that the Minister will consider new clause 4 on bus safety, despite his comments in Committee. More disappointment has been expressed to me on that aspect of our Committee discussions than on any other, partly because the comments of the Minister in the other place had been encouraging, but also because I cannot believe that there is any disagreement on the value of improving bus safety, and this is widely seen as an effective and cost-effective way of achieving that goal.
I think the Minister suggested in Committee that he might be minded to insert some guidance to encourage bus operators to sign up, but the evidence on voluntarism is clear: to my knowledge, no bus operator outside the London franchises is signed up to any independent, confidential incident reporting system. We have an opportunity now to end that situation. As my hon. Friend the Member for Gateshead (Ian Mearns) said, such a system is not expensive. It works in the railway industry, and I have not heard a strong case made against it. It seems to work well and I urge the Minister to grasp the opportunity.
Amendments 14, 16 to 23 and 15 appear to us to be unnecessary and to go against the spirit and devolutionary nature of the Bill. The assessment process laid out in the Bill and the extensive guidance—168 pages—available for it are extremely thorough and tough, and do not need to be added to. Amendment 24 undermines the assessment made by the Government of the issues relating to compensation and sufficient time to enable operators to plan. Provisions already in the Bill fully satisfy all value-for-money considerations. We are pleased that the Minister confirmed on Second Reading and in Committee that the aim of the process is not to put barriers in the way of authorities proceeding to franchising. We fear that the amendment threatens the very heart of the Bill. Amendment 25 also seems to be unnecessary, as additional appropriate independence, rigour and structure for the audit process will be ensured by the Government, to which I think the Minister is about to speak. Amendments 26 and 27 also seem at odds with the devolutionary nature of the Bill, because it should be for elected authorities to make the decisions, based on their local judgments.
We strongly support amendments 6, 7, 10, 11 and 13, tabled by my hon. Friend the Member for Gateshead. The arguments were well made in Committee, and perhaps even more strongly today. In any transfers workers should be properly protected, and we have the opportunity to ensure that. I fear that the Government will choose not to take the opportunity, but I urge them to do so.
The respective roles of central Government and local government were a running theme in Committee, and I think we are back to it this afternoon. I will begin with the amendments that deal with the franchising schemes.
The decision to move to a franchising system is a big one for any authority or combined authority to take, and it is therefore not to be undertaken lightly. It must have at its heart improvement for bus passengers, but it must be very much a local decision. That principle has underlain the Bill right from the beginning. We want to ensure that authorities contemplating franchising do so with their eyes wide open to the opportunities, the risks and the costs, and we expect them to have consulted widely on their proposals.
The Bill sets out clearly the processes that authorities must follow before they can implement franchising. Those include developing an assessment of the proposed franchising scheme—in effect, a business case. As part of that assessment, the authority must consider the value for money and affordability of the proposal and must compare making the proposed scheme with other courses of action, such as a partnership—very much as my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) suggested.
Several of the amendments in the group would change how those arrangements are operated. Amendment 24, tabled by my hon. Friend, would require an authority to include in its assessment consideration of whether the proposed scheme will be more efficient, effective and economic than any other option, taking into account any compensation payable to operators. Given the extensive requirements I just set out, I do not see a need to make those similar additional matters a separate part of the assessment. Also, it is not necessary or appropriate to refer to compensation in this part of the Bill, or indeed any other. Any move to a franchising scheme will not come as a surprise to bus operators; the clear processes and consultation arrangements we have set out will give them sufficient warning and sufficient opportunity to express their views on the proposed scheme, as statutory consultees.
The Minister says that competition will continue, but does he accept the evidence that the Transport Committee took from the Competition Commission, which was that the commission was unable to find much evidence of any on-road competition?
My point is that competition will move, but it will not disappear from the market. Competition now takes place on the road; it will move from the roadside to the tender. I do not accept that competition disappears from the marketplace. I came to this place from a robust private sector background, where competition was the daily bread-and-butter activity, and I am sure that it can have a positive impact on customer service, innovation, price and so on.
The Minister kindly met my constituent John Marshall, who in addition to running a medium-sized bus company chairs the east midlands passenger transport organisation that represents other small and medium-sized bus companies in the region. He tells me that for him and his members, the question of compensation remains unanswered by the Bill. For the sake of clarity for bus operators, will the Minister say whether the Government intend that in the event that franchises are lost, no compensation will be or should be paid to any bus company in the UK?
We do not think that it will be a requirement to pay compensation, but an authority that goes down the route of developing a franchising model will of course be free to offer payments as it sees fit. It is not Government policy that such compensation will be mandatory.
Amendments 16 to 23, which were tabled by my hon. Friend the Member for North West Norfolk would require a franchising authority to be satisfied of, rather than to consider, certain matters when making its assessment of a proposed franchising scheme. That is a significant distinction. The assessment as set out in the Bill does not require the authority to pass certain tests or to prove that franchising would achieve certain outcomes. Instead, it reflects the standard approach for public sector investment decisions of requiring a view to be taken on the overall merits of the scheme.
That is a deliberate move away from the quality contract scheme process, under which no local transport authority has established a franchising system. A requirement for a franchising authority to satisfy itself that franchising will deliver certain outcomes risks raising an impossible hurdle. It would be difficult for authorities to satisfy themselves with certainty, as their analysis, by its very nature, will be based on assumptions and projections about the future. The amendments therefore risk making the Bill unworkable in practice. We agreed to deliver as part of our devolution commitments franchising powers that would be more usable than the existing quality contract schemes, and that is what the Bill does. I hope that, on the basis of the explanations I have given, my hon. Friend the Member for North West Norfolk will not press amendments 16 to 24.
In addition to requiring a franchising authority to prepare an assessment, the Bill requires the authority to obtain a report from a qualified auditor. In relation to the consideration of affordability and value for money, the report must set out whether the authority has used information and conducted an analysis of sufficient quality. The authority must publish the auditor’s report as part of its consultation process. Amendments 2 and 3 make it absolutely clear that the auditor appointed for this purpose must be independent. It has always be our intention that the auditor should be independent, but we wanted to make that absolutely clear and put it beyond any doubt. Amendment 3 imposes duties on the Secretary of State to issue guidance on the matters that a franchising authority is to take into account when selecting an auditor and on the criteria to be taken into account by an auditor in reaching a view on the relevant aspects of the authority’s assessment. An authority or auditor must have regard to such guidance.
I am happy to say that I am in total agreement with my hon. Friend the Member for North West Norfolk on amendment 2. He may be surprised to hear that I also agree with the principle behind amendment 25, but the nuances of how independence from the authority can be demonstrated are better addressed through guidance rather than on the face of the Bill. That is the thinking behind amendment 3. For example, amendment 25 would require an auditor to have five years of independence from the authority, which could be difficult to deliver. For the combined authority of Manchester, for example, it would have to be demonstrated that none of the bigger accountancy firms had dealt with any of the constituent authorities on any issue over the past five years, which could be quite a challenge. However, the principle of independence has absolutely been in the Government’s thinking since the beginning. I support that principle, which is behind my hon. Friend’s amendment, and that is why I hope that he will feel able to withdraw amendment 25.
I am grateful to the Minister for his comments on amendment 25, but will it be possible to include the spirit of the amendment in the guidance that the Secretary of State will issue? If he can give an undertaking that that could happen, I would be prepared to withdraw amendment 25.
I can give my hon. Friend that assurance. We will deal with independence in the guidance, and independence from the decision-making body will be a basic criterion for the auditor.
I am reassured by what the Minister said this afternoon in rejecting amendment 14 and other related amendments. I ask him to go a little further and commit to the House that the spirit of his remarks today will be carried into the guidance and regulations that will follow the Bill—the consultation on them closed sometime last week. Will he also work closely with Transport for Greater Manchester and other metropolitan transport authorities to ensure that the wording of the regulations and the guidance is consistent with what he has said today and what is in the Bill?
I can provide the right hon. Gentleman with that assurance. We are not seeking to stand in the way; we want to create a suite of powers for local authorities to make decisions about what is right for their area. In some cases, it will be a franchising model, but that will be at the margins and not what will happen in most parts of the country. However, some parts, such as Greater Manchester, have indicated much interest in that model. It is not one of our objectives to block local authorities from choosing what is right for their area. We want a thriving bus industry, with local authorities working with bus operators to deliver a better network with a better deal for passengers and more passengers on buses. That is our objective with this Bill.
Amendments 4 and 5 make clear the precise requirements that a person has to satisfy to be appointed as an auditor. We are proposing the changes in response to effective representations we have received from a number of Members and following meetings that the Secretary of State and I have had to discuss the practicality of existing provisions with potential auditors. I hope that the amendments will be broadly supported by Members across the House.
The aim of amendments 14 and 15, once again tabled by my hon. Friend the Member for North West Norfolk, is to prevent a franchising scheme from proceeding if the passenger benefits it is expected to deliver could be achieved by making a partnership scheme. I sympathise with much of my hon. Friend’s intentions. Indeed, my hon. Friends the Members for North West Norfolk and for Wimbledon (Stephen Hammond) have done a significant job in speaking up on behalf of bus passengers for a considerable time. I do not want to see franchising pursued for any reason other than passenger benefit, and certainly not for ideological reasons. Passenger benefit is a theme that runs throughout the Bill. We want to see passenger experiences improve.
As I have made clear, however, the Bill already requires a local transport authority to compare making a franchising scheme with one or more other options. I hope that my hon. Friend the Member for North West Norfolk will be reassured to know that that should be a proper consideration of the options available. Indeed, the draft guidance, on which we recently consulted, states:
“Identifying realistic options should not be a desk exercise… and authorities should engage with bus operators in the area”
to see whether there is “a realistic partnership proposition”. It also states that an
“authority should not dismiss realistic”
alternatives without detailed assessment. The decision-making arrangements for franchising in the Bill are appropriate. Following a consultation on its assessment of the options, which should include bus operators and passenger representatives, an authority that decides to implement franchising must have satisfied itself that franchising is the right option for its area. Importantly, it should have a clear rationale for that decision with passengers at its heart. I therefore hope that my hon. Friend the Member for North West Norfolk will feel able to withdraw amendments 14 and 15.
The final set of amendments relating to franchising decisions are also from my hon. Friend the Member for North West Norfolk. Amendments 26 and 27 aim to prevent an authority that has developed a franchising proposal, but not progressed it, from making another franchising scheme for a period of five years. Those amendments go against the spirit of devolution. Banning the introduction of a franchising scheme for an arbitrary time period would severely restrict the capacity of an elected mayor, or other franchising authority, to take local situations into account and to act accordingly. It could also undermine the democratic process by preventing a new mayor elected within the five-year period from developing a franchising scheme, even if he or she had had franchising in their manifesto. In practice, if an attempt to franchise were to fail, it is highly unlikely that an authority would seek to make another scheme without devoting a reasonable and significant period of time to learning lessons from the experience. Given that, I hope that my hon. Friend will withdraw the amendments.
I will now move on to consider how much freedom a mayor or local transport authority should have in implementing franchising and partnership schemes. Amendments 6 to 13 and new clause 4, tabled by the hon. Member for Gateshead, seek to limit that freedom in various ways. As I said in Committee, I do not believe that mandating the basis upon which contracts are procured by local transport authorities, or the contents of those contracts, is appropriate, but that is exactly what amendments 6 and 9 propose in relation to the terms and conditions of employees. I can assure the hon. Gentleman that the power to achieve the outcome that the amendments seek will already rest with the franchising authority that will be letting the contracts. Employees and their representative groups will have plenty of opportunities to raise such points during the consultation process for the respective schemes. Indeed, it may be appropriate to put the proposals to the mayoral candidates of each of our parties.
I am a little surprised that the amendments have been tabled, because we discussed the practical concerns about them in Committee. For example, it is not clear which terms and conditions would apply where people with different arrangements had previously transferred under TUPE, and the cost of the proposals could also prove sufficient to prevent some authorities from pursuing a franchising scheme.
Does the Minister accept that injuries can also occur to passengers? As a regular bus user, I have witnessed such injuries on a number of occasions. This is not only about pedestrians and other road users. Bus passengers, often without the vehicle being involved in any sort of collision, can be injured when, for instance, the bus brakes abruptly. Surely the travelling public on buses—the customers of the bus operators—have a right to some Government protection.
I recognise the hon. Gentleman’s point. There is no doubt that passengers can be injured on a bus. I am also a regular bus user—not that that is particularly relevant—and all of us who travel on buses will have seen such injuries. He makes a reasonable point, but it does not necessarily mean that we need to mandate a reporting system in primary legislation.
Transport for London is the main example of confidential reporting by a bus operator, and it has featured in our debates in Committee. I understand that TfL pays the CIRAS subscription. When the London Underground and rail contract came up for renewal, the CIRAS contract was extended to cover buses at no extra cost to TfL. That prospect is different from mandating that every bus operator subscribes to such a system.
As I mentioned in response to an intervention by my right hon. Friend the Member for Basingstoke (Mrs Miller), there are 30 rail companies and 1,000-plus bus companies in this country. We also need to consider the evidence. I have not been made aware of any robust evidence to suggest that arrangements introduced in London have had a significant impact on safety. If a franchising authority wishes to stipulate a system such as CIRAS as part of its conditions of contract, it is of course free to do so—that is what TfL has done here in London. Authorities that negotiate partnerships could also include bus safety measures as part of such an arrangement, so I will explore through guidance how we could encourage operators and local transport authorities to consider the benefits of an independent confidential reporting system, but we will probably limit that only to a franchising or partnership scheme to start with.
I hope that, in the light of my comments, the hon. Member for Gateshead will feel able not to press amendments 6 to 13 and new clause 4.
I have been speaking for far too long, Mr Deputy Speaker. I am sure that you and Members on both sides of the House will be pleased to hear that I am coming to the end of my remarks.
Amendment 28, tabled by my hon. Friend the Member for North West Norfolk, addresses decision making in enhanced partnership schemes. It would prevent requirements on how tickets are purchased or fares paid, on how fares or ticketing arrangements are publicised and on the price of multi-operator tickets from being specified in such a scheme unless all parties agree. Ticketing is a key element of the Bill’s partnership proposals, and one of the key principles of the enhanced partnership regime is that it does not require consensus by all operators.
Instead, affected operators may object to the enhanced partnership proposals at key points in the process, and the authority cannot proceed with its proposals if more than a sufficient number of operators object. Details of what amounts to that sufficient number will be set out in the draft regulations, on which we have recently finished consulting.
Leaving aside the objection mechanism, there are further safeguards to ensure that individual operators are treated fairly when ticketing requirements are included in an enhanced partnership scheme. A key safeguard is the ability for any proposals relating to ticketing, or any other element of an enhanced partnership scheme, to be subject to scrutiny by the Competition and Markets Authority, which will be a statutory consultee on the proposals. Our draft guidance on enhanced partnerships also makes it clear that all documents should include a section on competition, and it provides clear advice on how individual operators can raise concerns with the CMA at any point during the development or implementation of a scheme.
Perhaps most importantly, I can reassure my hon. Friend that an authority making a scheme has to be satisfied that any restrictions on competition introduced by an enhanced partnership, such as setting the price of a multi-operator ticket, are balanced by the benefit to passengers. The effect on small and medium-sized bus operators should also be taken into account as part of that process, and we have built protection for small and medium-sized operators into the Bill by requiring them to be considered, whichever regulatory model is chosen locally.
I make it clear that the provisions are about fairness, and not about protecting the commercial interests of operators. Bus operators may well prefer their passengers to buy a ticket for use only on their buses, rather than one that can be used on any bus service. That is of course in a bus operator’s commercial interest, but it might not necessarily be in the interest of a bus passenger.
If my hon. Friend’s amendment were to be accepted, only one operator would need to put its commercial interests first to block an improvement to ticketing for passengers that might grow the entire market in its area. Overall, the safeguards I have outlined are enough to ensure that proposals relating to ticketing are fair and reasonable to bus operators while delivering improvements that benefit passengers. I hope he finds my explanation reassuring and will therefore not press his amendment.
I believe the Bill already has decision making right and is in the right place to get the best outcome for passengers. In doing so, it will deliver on our devolution commitments, and I trust the House will agree.
I would like to think that the Minister will provide within the guidance to the Bill, once it is enacted, a reference to the Confidential Incident Reporting and Analysis System as best practice in the industry. Notwithstanding that, I do not seek to press the new clause or amendments 6 to 13. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Amendments made: 2, page 16, line 38, after “an” insert “independent”.
This amendment and amendment 4 make plain the status of the persons who may audit an assessment under section 123B produced by a franchising authority or authorities.
Amendment 3, page 17, line 2, at end insert—
“( ) The Secretary of State must issue guidance as to the matters to be taken into account by a franchising authority when selecting a person to act as an auditor.
( ) Franchising authorities must have regard to any such guidance.
( ) The Secretary of State must issue guidance concerning the matters to be taken into account by an auditor when forming an opinion as to whether the information relied on, and the analysis of that information, by an authority is of sufficient quality for the purposes of subsection (2).
( ) Auditors must have regard to any such guidance.”
This amendment imposes duties on the Secretary of State to issue guidance on the matters to be taken into account by a franchising authority when selecting a person to act as an auditor and to issue guidance on whether the information relied on, and the analysis of that information, by an authority is of sufficient quality. It also imposes duties on franchising authorities and auditors to have regard to any such guidance.
Amendment 4, page 17, leave out line 3 and insert
“For the purposes of this section an auditor is independent, in relation to an assessment of a proposed franchising scheme, if the person would not”.
See explanatory statement for amendment 2.
Amendment 5, page 17, line 8, leave out from “person” to end of line 9 and insert
“eligible for appointment as a local auditor by virtue of Chapter 2 of”.—(Andrew Jones.)
This amendment alters the definition of “auditor” so that it means an individual or firm eligible for appointment as a local auditor by virtue of Chapter 2 of Part 42 of the Companies Act 2006 as modified by the Local Audit and Accountability Act 2014.
Bus companies: limitation of powers of authorities in England
I beg to move amendment 1, page 78, line 4, leave out clause 22.
This amendment would remove Clause 22.
Amendment 1, which appears in my name and those of my hon. Friends the Members for Middlesbrough (Andy McDonald), for Birmingham, Northfield (Richard Burden) and for North West Durham (Pat Glass), would remove the clause that bans county and district councils in England, combined and integrated authorities in England and passenger transport executives in England from setting up companies to provide local services. In short, we seek to overturn the Government’s ban on municipal bus companies.
This clause is a piece of ideological dogma that has no place in an otherwise agreeable piece of legislation. We visited this issue in Committee and I fear that the Government are not minded to budge, but I and many others found the Government’s arguments there extremely unconvincing. In Committee, the Minister said:
“Our view is that passengers will see the most benefit where the commissioning and provision of bus services are kept separate…as such we do not think authorities should be able to set up new bus companies.”––[Official Report, Bus Services Public Bill Committee, 14 March 2017; c. 57.]
The Opposition also want passengers to see benefits; we simply do not agree that municipal bus companies cannot be a part of achieving those benefits.
The latest annual Transport Focus bus passenger survey, which was published just last week, demonstrates once again that municipal bus companies provide some of the best services in the country. Nottingham City Transport and Reading Buses—municipal bus companies —had higher overall satisfaction results than the big five private national bus operators. The Government’s attempted ban on new municipals therefore flies in the face of all the evidence.
The ban also flies in the face of the Government’s purported commitment to the spirit of localism and devolution, which they claim the Bill encapsulates. Although they say that the Bill will provide local authorities with a range options and tools, and that local authorities are best placed to make a decision about how local bus services are organised and run, they are imposing an arbitrary ban on one of those options—and not just any option, but one that has been shown to work very well for passengers.
Of course, many of us suspect that the clause is about pacifying some private bus operators, which the Minister once said
“are already on a journey here”.
Without wishing to rehash every fine point from the Committee, we do not see municipalisation and competition as necessarily antithetical. In fact, it is the Government who are undermining their long-held admiration for competition by imposing barriers to the market to stop municipal bus companies from competing with private bus companies. Are the Government really afraid that local authority-run bus companies might just be better? The Competition Commission has reported that it has seen no evidence that municipal operators distort competition in the bus market.
Ministers have short memories about how an awful lot of the big bus franchise companies came about in the first place. Some of them were based on old municipal bus companies, which were sold off at a pittance with their entire estates of bus depots, bus parks and vehicles, only to be floated on the market a matter of months later for 10, 15 or 20 times the value at which they were bought in the first place.
My hon. Friend is absolutely right. Some of the people who worked on the buses in that period still feel very aggrieved by the process that was gone through 30 years ago, which left so much of our country with services far poorer than the universal coverage that was available at the time.
The Competition Commission suggested that municipal companies might be minded to run services and routes that make less sense for economic reasons—perhaps those unprofitable routes and services that bus operators have been cutting left, right and centre. The Institute for Public Policy Research has also described municipal bus companies as an innovative transport solution that demonstrates that
“conventional commercial operations are not the only option.”
Sadly, they soon will be if the Government have their way with this measure.
I will give way to my hon. Friend the Member for Blackley and Broughton (Graham Stringer) first.
Two have come at once! Does my hon. Friend agree that, aside from the reasons given by the Competition Commission, municipal bus companies can provide a benchmark? In a rational debate, we should be able to get from the Government a reason why, when municipal bus companies have performed in an excellent way, they are not allowed to compete. Does he agree that that reason was not forthcoming in Committee?
I very much agree with my hon. Friend. The point about keeping the market honest is important. When I was first elected as a local councillor, the housing officer told me that one of the roles of an in-house operation was to keep the market honest. That is an important role.
Will my hon. Friend give way?
I give way first to my hon. Friend the Member for Nottingham South (Lilian Greenwood).
Is not one reason that Ministers have given for objecting to municipal operations that they would prevent the market from operating effectively? When we look at the latest bus passenger survey, is it not interesting that Nottingham City Transport has the highest value for money of any single operator in the country?
My hon. Friend consistently makes the case for Nottingham. That is made far easier for her by the excellent local services she has. People from my city of Cambridge have gone to Nottingham to see how to do it. Part of the lesson is that a municipal can do it really well, but according to the Bill, that will not be possible.
The Minister stressed the importance of vigorous competition. Is it not the case that if a franchising process were used, the existence of the municipally owned option would enable those doing the franchising to drive an even harder bargain on behalf of the public, because there would be that fall-back option if the private sector could not come up with the goods? Therefore, would it not enhance competition and enable the passenger transport authority to get an even better deal for the public?
My right hon. Friend is correct yet again. Interestingly, much of the discussion in Committee was about moving competition from on the road to off the road. I think we agree that in areas where there has not been competition, franchising would be far from a less competitive system. People in London talk about just how competitive the system is, so no Government Member should be worried about a lack of competition. My fear—this is why it is so important that we have protection for the workforce—is that if we are not careful, competition can bring the risk of a race to the bottom. That is why we believe that we should have the provisions that we have just debated. I think the evidence is clear that the franchising system would benefit from having municipals as an alternative.
The conclusion of the Opposition is that banning local authorities from running their own bus companies is slightly unworthy of the spirit behind the Bill. The evidence is clear that they work for bus passengers and are able to put social values at the heart of what they do. This measure has drawn the attention of the public more strongly than other parts of the Bill. It has rightly brought a strong reaction from local councils across the country. They do not understand why they should be prevented from doing something that they strongly believe is in the interests of their local constituents. Some trade unionists feel strongly about this measure, as do passengers, and I pay particular tribute to the organisation We Own It, which has campaigned strongly against it. We believe that this is a petty measure that sits uneasily with the rest of the Bill, and I urge the Government to look at it again and accept our amendment today.
I just wish to say that I am grateful to the Minister for his response to my amendments in the previous group. I was not quick enough on my feet to catch your eye at the time, Mr Deputy Speaker, but I have been in this place long enough to know that one should quit when in front. I am grateful to the Minister for saying that my amendment 25 is going to be incorporated into the guidance and for the useful reassurances he has given me on amendments 15, 26, 27 and 28. I was disappointed on the issue of compensation, but, as he pointed out, there can indeed be scope for the authorities to compensate if need be. On that basis, I will not seek to press those amendments to a vote, although I say so a touch belatedly.
I rise to support amendment 1, for the reasons given by my hon. Friend the Member for Cambridge (Daniel Zeichner). This is all about devolution and local transport authorities deciding what is best for their areas. No good reason has been put forward for not permitting new municipal operators as an option. The Government have expressed concern about possible conflicts of interest, but that cannot be taken seriously. We need look no further than the experience in Nottingham, as cited by my hon. Friend the Member for Nottingham South (Lilian Greenwood), and in Reading to see that there is the perfect ability—this has already been done in those areas—for the proper distance to be established between the local authority as a local authority and the transport operator as an operator in terms of letting out franchises. The Bill is about giving more local choice, and it is entirely unjustifiable to remove from local authorities the option of having a municipal operator. The Department has found a way to put forward complex regulations on franchising and if it still has concerns about this topic, regulations could also be introduced on setting up municipal bus operations. I therefore urge the Government to think again.
I want to support amendment 1, and we had a long discussion on this issue in Committee. I spoke then and on Second Reading about the success of Nottingham’s municipal operator, and so, much as I love Nottingham City Transport, I will restrain myself and not repeat myself.
I continue to question the Government’s motivation for their determination to ban local transport authorities from establishing new municipal bus companies, as Ministers have simply not made the case for such a ban. The Transport Committee, chaired so ably by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), describes it as a “disproportionate response”. Clearly, this measure is anti-localism and it prevents councils from acting in the best interests of their residents. In Committee, the Minister said that there should be a split between the commissioning and the provision of bus services. I do not disagree on that, but this ban goes far beyond that. As was noted in Committee, local authorities with municipal operators have proved themselves very capable of managing just such a split when tendering for supported services.
In Committee, the Minister also suggested that the existence of municipal bus operators
“could easily deter investment from the private sector”.
When I asked him what evidence he was drawing on in making such an assertion, he admitted
“of course we do not have any evidence for it. I am just looking at what the risks may be.”––[Official Report, Bus Services Public Bill Committee, 14 March 2017; c. 67.]
The Minister’s risk aversion is simply unnecessary and can be shown to be such. Nottingham has an excellent municipal operator, but it does not deter private sector investment; as the hon. Member for Newark (Robert Jenrick) mentioned, we have excellent private sector operators in Nottinghamshire, such as trentbarton. I hope that even at this late stage the Government will rethink their commitment to what I can describe only as an ideological obsession, and take this opportunity to end their unreasonable position and accept amendment 1.
This amendment, tabled by the hon. Members for Cambridge (Daniel Zeichner) and for Middlesbrough (Andy McDonald), proposes to remove clause 22. We debated this at length in Committee and I wish to reiterate that the several existing municipal bus companies, including Nottingham City Transport and Blackpool Transport, which serves the area of the rail Minister—my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard)—deliver a high standard of service, and I will expect that to continue. Their ability to provide that is not affected in any way by this clause. The franchising and enhanced partnership tools in the Bill will provide authorities with more influence over bus services than they have now, and striking that right balance between local authority influence and the role that the private sector bus operator can play is important. Our view is that passengers will see the most benefit where the commissioning and provision of bus services is kept separate. As such, we do not think that authorities should be able to set up new bus companies.
We have seen encouraging innovations from the private sector—although not exclusively within that sector—such as the introduction of smartcards, the installation of wi-fi and increased accessibility in our bus network. Those improvements have all been delivered through private sector investment and they show overall that the industry is always innovating and delivering a good deal for its passengers.
The Minister will be aware that over the past six and a half years local authorities up and down the country have seen significant and ongoing reductions in their revenue support grant. Ministers from the Department for Communities and Local Government have always been encouraging local authorities to be entrepreneurial and enterprising, and to go out there and earn money to backfill where the RSG once existed. By this measure, the Minister is precluding local authorities from doing just that.
I recognise what the hon. Gentleman says, but it is also fair to say that no local authority has either set up a municipal bus company or approached me with a view to doing so. Therefore, this is in some ways a slightly notional or theoretical debate—[Interruption.] Making sure we get clarity is the entire point here.
This Bill seeks a balance between local authority influence—we are providing local authorities with a variety of tools to address local issues—and the role that private sector bus operators can play, in order to ensure that both are incentivised to deliver the very best services for passengers. This Bill is about local authorities and commercial bus operators working together to improve local bus services. It is about co-operation, all designed to improve the benefits for bus passengers. I hope that this has made the Government’s position clear and that the hon. Member for Cambridge will not press this amendment to a vote.
The Minister has finally let the cat out of the bag. If there has not been a queue of local authorities coming to him with requests to form companies, he does not really need to legislate to ban them from doing so. This is pure ideology. There has been a great deal of agreement on the Bill—we have found a lot of common ground—but on this issue, I assure the wider world that there is clear red water between the Opposition and Government Benches. We will press the amendment to a Division, and its effect will be achieved by a future Labour Government.
Question put, That the amendment be made.
Consideration completed. I will now suspend the House for no more than five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will be tabling the appropriate consent motion, copies of which will be available shortly in the Vote Office and will be distributed by Doorkeepers.
I can now inform the House of my decision about certification. For the purposes of Standing Order No. 83L(2), I have certified the following provisions of the Bus Services Bill [Lords] as relating exclusively to England and within devolved legislative competence: clauses 1, 3 to 7, 9 to 14, 16 and 18 to 22 of, and schedule 2 to, the Bill, as amended in the Public Bill Committee, and including amendments made on Report. Copies of my certificate are available in the Vote Office.
Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Does the Minister intend to move a consent motion?
I beg to move.
A simple nod of the head would suffice, but the Minister said it with eloquence and charm to which he is no stranger.
The House forthwith resolved itself into the Legislative Grand Committee (England) (Standing Order No. 83M).
[Mr Lindsay Hoyle in the Chair]
I remind hon. Members that, if there is a Division, only Members representing constituencies in England may vote on the consent motion.
That the Committee consents to the following certified clauses of, and schedule to, the Bus Services Bill [Lords]:—
Clauses and schedule certified under Standing Order No. 83L(2) as relating exclusively to England and being within devolved legislative competence
Clauses 1, 3 to 7, 9 to 14, 16 and 18 to 22 of, and Schedule 2 to, the Bill as amended in the Public Bill Committee (Bill 158) including any amendments made on Report.—(Andrew Jones.)
Question agreed to.
The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).
The Deputy Speaker resumed the Chair; decision reported.
I beg to move, That the Bill be now read the Third time.
I am grateful to all hon. Members who have engaged so constructively with the passage of the Bill, and demonstrated their shared commitment to improving bus services and increasing bus passenger numbers.
Buses are already England’s most used form of public transport, accounting for more than 4.5 billion passenger journeys a year. They are vital to the economy, connect our rural and urban communities to employment, schools, hospitals and leisure, and are used by people of all ages. That is why the Bill has bus passengers at its heart. It allows local authorities and operators to adopt measures to improve services and grow passenger numbers. This is, therefore, an enabling Bill that is fundamentally about improving bus services for passengers, and that recognises the need for local solutions to local transport problems.
By working together, local authorities and operators can tackle key transport issues, such as pollution and congestion. They can support local businesses and help to drive the local economy. The Bill introduces a range of tools that will achieve those aims. It builds upon the success of partnership working. Local authorities and operators can agree the standard of services in a particular area. This could include multi-operator tickets, better connections between transport modes and improved vehicle standards, all of which will drive an increase in bus usage and increase performance. I emphasise that this part of the Bill has been widely welcomed by local authorities, operators and hon. Members, although it is, of course, not the only opportunity that the Bill brings.
The Bill will bring the opportunity to refresh powers for local authorities to franchise, delivering on our devolution agenda. It is only right that many of our larger cities have the opportunity to make franchising a success, just as TfL has done in London. Of course, franchising is not for everyone, and authorities must have a compelling case to implement such a scheme. I am of the firm belief that the Bill, as amended by this House, will deliver a better standard of bus services. It reinstates automatic franchising powers to mayoral combined authorities, which will preserve a degree of commercial certainty and help to maintain the significant private sector investment that we have already witnessed in the bus market. In addition, the requirement of an independent auditor as part of the assessment for franchising schemes will ensure that a scheme is implemented only with proper scrutiny.
A necessity to buy separate tickets or to pay with cash when travelling by bus can be frustrating and costly. Authorities will, therefore, have improved advanced ticketing powers to create multi-operator ticketing schemes that cover not only buses but other modes of transport such as tram or light rail. They can also make use of emerging technologies such as contactless and Bluetooth ticketing. The Bill will make it easier for passengers to access information on timetables, fares and routes. App developers will be encouraged to develop innovative products that will make this information available to passengers. I firmly believe that these improvements will deliver significant benefits to passengers, and will therefore attract more people on to public transport.
The Bill will also deliver accessibility improvements. Indeed, the audio-visual provision introduced in the other place has attracted more public attention than any other part of the Bill. It has certainly dominated my inbox more than any other matter by a factor of many. The provision will ensure that bus services in England, Wales and Scotland are accessible to those with a hearing or sight loss disability and, at the same time, will provide valuable information to all passengers. I know from personal experience the importance of next-stop announcements in London and elsewhere. All passengers will benefit from this significant improvement.
I want to see the bus market thrive and encourage more people on to public transport. As I said at the beginning of this speech, the Bill will have significant benefits for the environment, congestion and the local economy. Ultimately, we seek to reverse a decline in bus usage and put passengers at the heart of bus services. I thank all hon. Members who have engaged and contributed to the Bill, especially those on the Bill Committee, as well as the Committee Clerks and parliamentary counsel for all their work. I particularly thank my team within the Department. A significant amount of hard work has got us to this point. We have a good Bill that has been welcomed widely and reflects the importance of buses in local communities. We want the bus industry to thrive, and that is what has driven the Bill. I commend it to the House.
I will pick up where the Minister left off and thank everyone who has contributed to the Bill, especially my hon. Friends who served on the Public Bill Committee, and the officials. I pay tribute to the wonderful work of the Transport Committee and everything it has done on this matter. I also thank hon. Members’ staff for their efforts, particularly Juliet Eales, who is soon to leave the shadow Transport team, but whose contributions have been invaluable throughout the passage of the Bill.
The Bill is ultimately underlined by broad consensus, which has been reflected in the generally cordial spirit of our debates. At its heart, the Bill offers local authorities the opportunity to improve the way in which buses are run in their areas, should they choose to take it. We have fought for this over many years—first, 17 years ago through legislation that failed to make the impact we had hoped, and then from the Opposition Benches for seven years. Since 2010, we have sadly heard, time and again, of bus routes axed, constituents campaigning hard to keep their vital local bus service, and disabled people, jobseekers and students unable to afford the rocketing cost of travel. We have heard these issues, and we have fought for a revision of the bus market to give local areas the power and flexibility to control their bus services as local circumstances best allow.
Although the Bill is not perfect and is certainly not the silver bullet to fix the bus system across the whole country, there is much to be positive about. Mayoral combined authorities will now be able to unlock powers to regulate their bus services, increasing parity between areas such as Greater Manchester and London. We have fought to ensure that those powers can be accessed without delay, and that the process for bringing in those powers will be clear and free from hidden barriers. We had hoped that all areas of the country, whether they have an elected mayor or not, would have access to those powers, but we will have to continue that argument another day.
The Bill provides new partnership options to local authorities for working alongside bus operators. We hope that local authorities will be encouraged to use these new tools to improve journey times and vehicle standards, and consequently to reduce congestion—huge environmental and health issues that affect us all. The Bill gives the Secretary of State the power to make regulations requiring buses providing local services to have in place audio-visual information systems. We are so pleased that the Government included this provision following strong pressure from Labour in the other place, and an excellent campaign from Guide Dogs. That measure could make a real difference to people’s lives.
What is missing? Stronger employment protections, clearer accessibility provisions and bus safety improvements. We fought for those and we won the arguments, but we lost the votes. That is the tragedy of being in opposition. The Bill could have been better, and we were disappointed by the lack of movement from the Government in these areas. The Bill is not perfect, but it will go some way to reversing the damage of deregulation that we have fought to fix for three decades. Going some way to reversing that damage is better than going no way at all. For that reason, and on behalf of all those constituents waiting at bus stops right now, we will support the Bill on Third Reading.
I assure the House that my contribution on this important Bill will be brief.
The partnership provisions in the Bill are welcome and important. Partnership working between local authorities and private sector bus companies have delivered a whole range of improvements for passengers in many parts of the country. The goal of the Government here should be to focus on encouraging that kind of co-operation, whereby the business acumen and expertise of the private sector can work alongside the local understanding and commitment of local authorities, so those provisions in the Bill are welcome. During the passage of the Bill, hon. Members have cited a number of positive examples of different parts of the country, such as Brighton, where partnerships between private sector operators and local authorities have had a transformative and positive effect on services.
I regret that I was not able to be here for the debate on the amendments tabled by myself and my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham), but I very much welcome the assurances given by the Minister on a number of them and the recognition of the importance of a number of the principles contained in them. In particular, I urge him to take seriously the objectives of amendments 14 and 15, and I hope the guidance issued will clearly set out that franchising schemes should be a last resort and will be approved only if partnership working will not deliver the benefits that are sought for passengers.
I warmly welcome the Secretary of State’s support for amendment 2. Ensuring that those who audit a franchise assessment are properly independent significantly strengthens the Bill. It would be unfortunate if those checking out a franchise assessment were not independent of the local authorities essentially making the decisions on franchising authorities.
To return to a theme I talked about at some length on Second Reading, I hope the Government will do everything they can to facilitate certainty in the private sector bus operators market, because that certainty is the key to investment in new fleet, better ticketing measures and a range of passenger improvements. Anything that leads to uncertainty could jeopardise investment, which would have a negative effect on passengers. I particularly have in mind the importance of delivering smarter ticketing, which is crucial not only for passengers’ convenience but in persuading them that the bus can more often be an attractive and viable alternative to the car.
There is a certain irony in the fact that it is a Conservative Government who are taking through this Bill, which, as the House is aware, partially rolls back one of the major privatisations of the Thatcher era. There are mixed views on the role of private sector bus operators in delivering transport services, but I believe they have brought significant benefits for passengers, and I hope nothing in the Bill is allowed to jeopardise the reliance on the expertise and investment that the private sector has brought to bus operations over the years.
Will the right hon. Lady give way?
I am afraid I am about to conclude, but the right hon. Gentleman will get his chance very soon.
I close by once again thanking the Minister for his assurances that he takes seriously the points raised in the amendments and for commending partnership working between the private sector and local authorities, which is one of the best ways to deliver improvements for passengers.
The Bill is an important step in achieving a modern, thriving bus sector, and I welcome it. In doing so, I pay tribute to the Minister and his colleagues and to the shadow team for the work they have done. I also commend all the members of the Transport Committee for the work they did in scrutinising the Bill. Although some of the points we made have not been acted on, some have been considered, and this is now a better Bill.
I first spoke on bus deregulation a very long time ago. When it was introduced through the legislation in 1985, I was the leader of Lancashire County Council. I opposed the legislation very strongly because I was concerned it would result in a reduction in bus patronage outside London, and the intervening years have indeed shown that it did. The Bill does not repeal that legislation, but it does make substantial changes to it, which I very much welcome.
A thriving, comprehensive bus network across England is not an optional extra but an absolute necessity. The basic principle of the Bill—that there should be more devolution, and that local transport authorities should decide what is best for their areas—is the right one, and I welcome it very much. Although I am disappointed that the Government have not gone as far as I would have wished in some areas, I welcome the Bill as we have it now.
I welcome the provisions on the accessibility of buses, and particularly those on access and information for people who are impaired. If information about bus services and the operation of individual buses is made more accessible to people who have a disability, everybody else benefits as well, so it improves the bus sector as a whole.
I thank everyone who has been involved in the Bill. It makes major strides in producing better bus services for the people of this country—those who currently use our buses and those I hope will do so in future—and I am pleased to support its Third Reading.
Bus services are the mainstay of the public transport system, yet, historically, the House has given them comparatively little attention, and I am pleased that the Bill begins to correct that.
I congratulate the Secretary of State, the Minister and, indeed, the Government on the way they have stuck to the terms of the devolution deal and delivered a Bill that will bring real benefits to the travelling public in Greater Manchester and beyond. I also congratulate those on the Labour Front Bench on the constructive way in which they have engaged in this debate.
It is also appropriate to congratulate council leaders in Greater Manchester. The Bill was a clear demand of Labour leaders in Greater Manchester as part of the devolution deal struck with the former Chancellor of the Exchequer, so it is, in effect, as I think the right hon. Member for Chipping Barnet (Mrs Villiers) was hinting a moment ago, a Labour Bill and, I am proud to say, a Greater Manchester Bill. In that sense, the Opposition take great pride in it clearing its Third Reading tonight.
My right hon. Friend is making a very interesting speech, but he should not put bad ideas into the Government’s mind—they might change their mind and vote against the Bill.
Well, I will call it a partnership Bill, if that makes my hon. Friend feel a bit more at ease. It is certainly a rare example of common sense breaking out on both sides of the House.
I want to pay particular tribute to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman). As she said a moment ago, she has consistently spoken of the damaging effects of bus deregulation—the free-for-all, the decline in the quality of services and the increase in fares. She has been consistent, and she is vindicated tonight as the Bill finally goes through the House. So, too, is my hon. Friend the Member for Blackley and Broughton (Graham Stringer), who made the same argument throughout the years, including under the Labour Government, and who has waited a long time to see this Bill come to pass.
To be successful in the new role that I seek, I will seek to use the powers in the Bill for the benefit of the travelling public in Greater Manchester. For 32 years, we have had a bus service that has been run for private vested interests rather than in the public interest. Only last week, a whole new series of service alterations were announced that will decrease the quality and coverage of services across Greater Manchester, with no real ability for communities to challenge those decisions. Well, that way of running bus services is coming to an end.
I am very much enjoying my right hon. Friend’s speech. Does he agree that, contrary to what the right hon. Member for Chipping Barnet (Mrs Villiers) said, the Bill seeks to enhance competition and the role of the private sector by having really effective competition off the road? On-road competition has not delivered for passengers.
That is absolutely the point. If we construct a franchise process that really puts the public interest first, and we then ask the private sector to meet that public interest, that will be a much better system; indeed, it is the system the right hon. Lady’s constituents benefit from in London. The question I was going to ask her was, why, if she thinks that is okay for her constituents, is she seeking to deny it to ours? That is not an acceptable position for her to take.
Obviously, I do not want to go back over the whole debate we had on this, but there is a range of ways in which the bus sector is very different in London, not least the fact that Londoners pay millions of pounds in congestion charges, which support the bus network. That is one of the major reasons why bus services in London are different from those in the rest of the country; it is not necessarily the regulatory structure that makes the difference.
That is, if I am honest, the kind of London-centric argument that gets this House a bad name—“London’s different and therefore it needs different rules and all the extra attention.” If the system works in London, why cannot it work in a city region like the west midlands, Merseyside or, indeed, Greater Manchester? If the principles are good ones that deliver a good bus service for people here, then surely they should be extended to the other major cities of our country, and those decisions should be devolved.
If I am to be in a position to use the powers in this Bill, I would use them to bring fares down. Fares are much more expensive in Greater Manchester than they are in London, for instance. I would use them to increase and improve disability access, including audio-visual provision. I would use them to pave the way for an integrated ticketing system. We are currently denied an Oyster-style system. Because of the free-for-all, all the operators use different ticketing systems and cannot provide an integrated system. I would use the powers to give every community a decent, reliable service. I would use them to introduce a free bus pass for all 16 to 18-year-olds.
Will my right hon. Friend muse for a moment on why companies are making twice as much profit on routes that they operate in places like Tyne and Wear and Greater Manchester than on routes that they operate in London? They are the same companies, but the operating profit on the routes that they run in those two places is twice as much as it is in London.
It is simple, is it not? We have, in effect, an unregulated system, and because of that companies are able to increase fares outside London faster than they have been increasing in London. That is how they make those profits. There are good bus operators out there, and I would not want to punish them. I have a smaller operator, Jim Stones Coaches, in my constituency —a brilliant bus operator. We would want those good operators to be part of the new regime. It is time to call time on the profiteering off the backs of the travelling public in places like Greater Manchester.
The decline in quality and the rise in the cost of bus travel in places like Greater Manchester has, over the 32 years since buses were deregulated, put more and more cars on the roads, to the point where conurbations like Greater Manchester are becoming increasingly congested. As I said earlier, it is cheaper for young people in some parts of Greater Manchester to get a taxi than to use a bus service. That cannot possibly make sense. It tells us that something is seriously wrong with the way that the system is operating. I say to the right hon. Member for Chipping Barnet that the people of Greater Manchester deserve a bus system equally as good as London’s, if not better. That is what, using this Bill, we will now seek to deliver.
Question put and agreed to.
Bill accordingly read the Third time and passed, with amendments.
On a point of order, Mr Deputy Speaker. On Monday last week I asked for an emergency debate under Standing Order No. 24. I do not seek to reapply for that debate, but last week Mr Speaker said that he would
“hope and anticipate that the usual channels would find time for it to be debated.”—[Official Report, 20 March 2017; Vol. 623, c. 655.]
Business collapsed at 4.35 pm last Tuesday and it is finishing at 7.43 pm tonight. This is completely illogical to me and to everybody else watching elsewhere. Can you advise on how I could get a debate on the significant concerns that I still have about the Tories’ two-child policy and rape clause before it is implemented in 10 days’ time? If now is not the time, when is?
That is not a matter for the Chair but it is a matter for the Government. The main thing is that it is definitely on the record, and I would hope that the usual channels would have picked up on the comments that have been made.
Consideration of Bill, as amended in the Public Bill Committee
New Clause 1
“(1) The Secretary of State must, within 12 months of the day on which this Act is passed, publish a national strategy for local bus services setting out the objectives, targets and funding provisions for rural, urban and inter-urban local bus services in the ten years after Royal Assent is given to this Act.
(2) The national strategy must include a consideration of a reduced fare concessionary scheme for young people aged 16 to 19.” —(Andy McDonald.)
This new clause would require the Secretary of State to publish a national strategy for buses.
Brought up, and read the First time.
Although some local authorities still provide concessionary fares for young people, many do not. Local government is already under huge financial pressure—hence the cuts to supported bus routes and services that the Campaign for Better Transport has identified. Unfortunately, the number of local authorities able to provide a discretionary young person’s pass has dropped from 29 to just 16 since 2010. That is why we want the Government to publish a national strategy for buses, and to include proper consideration of a concessionary scheme for young people.
Ultimately, there is not a word about funding in the Bill as it stands, yet cuts to local authority budgets mean that thousands of routes and services have been withdrawn since 2010, and young person’s concessionary fare schemes have been cut, while large operators have experienced generous profit margins.
There will, of course, be a bare-knuckle fight. This is not just about having a rational look at how best to provide bus services. Because there has been no accountability, a small number of people who have set up what are more or less monopolies in our great conurbations have made a huge amount of money. The Souter family, the owners of Stagecoach, have become billionaires. I am not against people who make a profit, and I do not suggest that people who innovate should not be rewarded for that, but I am against people who game the system and are parasitic on public money while those whose responsibility is to look after that public money do not say what should happen.
The new clause may well not be accepted today, but I think that in the fairly near future, when the Bill becomes an Act and the benefits of re-regulation are seen, we will move towards regulation throughout the country.
27 March 2017
The House divided:
Question accordingly negatived.View Details
New Clause 2
Report on the provision of concessionary bus travel to apprentices aged 16 to 18
“(1) The Secretary of State must, within 12 months of the day on which this Act is passed, lay a report before each House of Parliament setting out possible steps to support local transport authorities in providing concessionary bus travel to persons aged 16 to 18 who are participating in statutory apprenticeships.
(2) Any report under subsection (1) shall include, but will not be limited to, an evaluation of whether section 93(7) of the Transport Act 1985 should be amended to enable local transport authorities to provide concessionary bus travel to persons aged 16 to 18 who are participating in statutory apprenticeships on the same terms as that which may be provided to persons aged 16 to 18 receiving full-time education.
(3) In this section—
(a) “local transport authorities” has the meaning given in section 108(4) of the Transport Act 2000; and
(b) “statutory apprenticeships” has the meaning given in section A11 of the Apprenticeships, Skills, Children and Learning Act 2009.”
This new clause would require the Secretary of State to publish a report setting out possible steps to support local transport authorities to provide concessionary bus travel to apprentices aged 16 to 18.— (John Pugh.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
27 March 2017
The House divided:
Question accordingly negatived.View Details
New Clause 4
“(1) An operator of a local service may not participate in any scheme under sections 1, 4, 7 or 9 of this Act, and an authority or authorities may not approve the participation of an operator as part of any such scheme, unless the operator has given a written undertaking to the applicable authority or authorities that—
(a) it has subscribed to the Confidential Incident Reporting and Analysis System (CIRAS) and that it has made all possible efforts to ensure that all staff of the operator have been made aware of their right to use CIRAS as a confidential reporting channel in respect of any safety concerns,
(b) it will collect and monitor bus casualty data in a manner to be prescribed by the applicable authority or authorities from time to time, and
(c) it will make its bus casualty data available to the applicable authority or authorities by way of a report on at least a monthly basis.
(2) The authority or authorities must publish on their own website every quarter the bus casualty data that they have collected from operators.” —(Ian Mearns.)
This new clause would require bus operators taking part in any scheme to subscribe to the Confidential Incident Reporting and Analysis System and to make bus casualty data available to local authorities at least monthly. It would also require local authorities to publish that data quarterly.
Brought up, and read the First time.
The cost of membership of CIRAS is in no way, shape or form prohibitive. It is relatively modest and based on a bus operating company’s turnover. A bus operating company with a turnover of less than £1 million would have an annual fee of only £300 to pay. For a very big operator with an annual turnover of, for instance, £200 million, the fee would still be only £25,000. The fees are low and modest, and they are unlikely to present a serious obstacle.
If the Government are not willing to consent to the new clause, I hope that Ministers will agree to make regulations or at least guidance in this area, or to consult all bus companies throughout the United Kingdom—not just those that participate in a franchise or quality partnership scheme—on signing up to CIRAS. The consultation should indicate Government support for signing up to CIRAS.
The amendments would ensure that employees working under local service contracts and not covered by TUPE protections could not be employed on terms and conditions less favourable than those provided by TUPE. There is a concern that in anticipation of changes in local provision, a bus service operator might curtail a route, rendering the drivers on the route redundant, and another operator might start up the same route only a week or 10 days later. As the Bill stands, those drivers would not have automatic TUPE protection, although I am sure that their representative unions would fight for it. Workers’ terms and conditions should be no worse for the duration of the franchise, and new employees must not be employed on terms worse than those of existing employees.
There are precedents for such agreements. For example, with Government support, the contracts for the public-private partnership for the tube protected workers’ conditions. More recently, the Scottish Government’s contracts for rail and ferries provided similar protections. For ferries, an additional protection was provided by stipulating that the successful bidder could not make savings by reducing staff jobs or conditions.
Not only would the amendments prevent a race to the bottom in conditions, but they would aid recruitment and retention within the industry and thus help to secure a high-quality, stable workforce, the lack of which blights many franchise areas. Since the introduction of privatised franchises, I have been on many buses where, frankly, the driver did not know the route and had to ask passengers which way to go. Legislating or regulating that out is not beyond the realms of possibility.
More importantly, the amendments would prevent a further worsening of the bus driver shortage, which has affected services. BusMark, the bus and coach benchmarking club of the professional logistics and transport body the Chartered Institute of Logistics and Transport, has published its findings from a survey about addressing the current driver shortage in the industry. Out of 15 reasons given for the problems with recruitment and retention, the three most cited, by some distance, were poor pay, poor conditions and industry image. If the Government are not willing to concede the amendments, I hope that Ministers will agree to consider making regulations or, at the very least, giving some guidance to the industry.
Amendment 10 would automatically make the dismissal of an employee for the sole or principal reason of introducing a franchising scheme an unfair dismissal, and amendments 12 and 13 would automatically make the dismissal of an employee for the sole or principal reason of the award of a contract under an enhanced partnership scheme an unfair dismissal. There is concern about the potential for a company that has lost a bid to run a franchise or that does not wish to participate in the franchising process simply to abandon its route, as has happened on numerous occasions. For a company to do so, it needs only to deregister the route by notifying the traffic commissioner. We want the Bill to protect workers and passengers from a company conducting itself in such a manner, and we are also concerned about workers slipping outside the protective net of TUPE.
If a company abandons a franchise, the passengers who rely on the bus service day in, day out will often be left without the means of getting to and from their place of work. Transport Ministers have criticised rail unions about disruption that has had an impact on the ability of people to get to and from their places of work, and they should equally be concerned about the scope for a bus franchise owner to abandon its franchise for business reasons. Given the particularly loose way in which the bus sector is currently arranged, there is an elevated risk of that occurring.
At the moment, the Bill provides TUPE protection only at the point of transfer, or earlier if agreement is reached with the successful bidder. These amendments mean that the termination of a worker’s employment for a reason connected with the introduction of a scheme or a transfer to a new scheme would automatically be considered unfair dismissal. Not only would the amendments protect bus workers jobs, but in doing so they would help to ensure the continuity of the service if the bus service operator sought to stop providing services or to reduce services because of the threat of a franchise or because it did not win the bid for a franchise.
The Manchester Evening News of 21 March showed that bus companies in Manchester are already cutting services in readiness for the Bill, no doubt as a show of strength in advance of negotiations on bus franchising. Indeed, we have been reliably informed that the whole timetable for the Bill is being driven by Manchester as part of the devolution deal. My right hon. Friend the Member for Leigh (Andy Burnham) mentioned that on Second Reading.
Again, if the Government are not willing to concede these amendments, we hope Ministers will agree to make regulations or, at the very least, to issue guidance to the industry.
Bus operators are required to give 56 days’ notice of their intention to vary or cancel a bus service. The Bill contains provisions to enable authorities to extend that notice period to a maximum of 112 days, to enable the authority to take steps to ensure that services continue to operate. That is an important point in relation to the amendments tabled by the hon. Member for Gateshead (Ian Mearns). Bus operators of all sizes will still be able to compete when a franchising system is implemented, if that is what is decided locally. Competition will take place off the road for contracts, rather than on the road at bus stops, but competition will still exist. Generally, only operators that choose not to compete or do so unsuccessfully will no longer be able to run services once a franchising model is implemented, and in any event they are free to register new services elsewhere.
Amendments 10 and 13 address potential dismissals. Again, I have some sympathy with the intention behind the first two proposed subsections, concerning redundancies of employees before or after the introduction of a local service contract, but the scenario that they seek to address is unlikely to occur. I very much doubt that any employer would choose to dismiss an employee and bear the redundancy costs if it were able to transfer them under TUPE instead. In any event, employment law already deals with the unfair dismissal of employees.
For similar reasons, I cannot accept amendments 7, 8, 11 and 12, which would broaden the Bill’s provision so that TUPE protections apply where a new operator begins providing local services sometime after the previous service ceased. The Bill already enhances employee protection by prescribing that TUPE and pension protections will apply in particular circumstances. We strike the right balance in that regard, and it would not be appropriate to broaden the provisions further. Indeed, one of the first things we established in preparing the Bill was for TUPE and pension protection in the event of franchising.
The hon. Member for Gateshead also proposes in new clause 4 to require bus operators to subscribe to a confidential reporting system in order to participate in any bus scheme provided under the Bill. The new clause would require operators to collect and monitor bus casualty data and make them available for publication. I assure the House that I take road safety very seriously. Although the number of pedestrians killed or seriously injured outside London in incidents involving a bus or coach is falling, we cannot be in any way complacent. There have been a number of debates on that matter, both in Committee and in the other place. Although I can agree with the objective of this new clause, it is not appropriate to mandate it in primary legislation.
27 March 2017
The House divided:
Question accordingly negatived.View Details