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17 May 2004 : Column 793


Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Human Rights

That the draft Human Rights Act 1998 (Amendment) Order 2004, which was laid before this House on 22nd April, be approved.—[Gillian Merron.]

Question agreed to.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Northern Ireland

That the Northern Ireland Act 1998 and Northern Ireland Act 2000 (Modification) Order 2004 (S.I., 2004, No. 1164), dated 20th April, a copy of which was laid before this House on 20th April, be approved.—[Gillian Merron.]

Question agreed to.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Question agreed to.


Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

Co-operation with the Occupied Territories of the West Bank and Gaza Strip

That this House takes note of European Union Document No.12441/03, draft regulation amending Council Regulation (EC)No.1734/94 on financial and technical cooperation with the Occupied Territories; welcomes this amendment; and supports the European Commission's continued support for Palestinian development and the Middle East Peace Process.—[Gillian Merron.]

Question agreed to.



17 May 2004 : Column 794

Bus Re-regulation (Manchester)

Motion made, and Question proposed, That this House do now adjourn.—[Gillian Merron.]

10.30 pm

Mr. Graham Stringer (Manchester, Blackley) (Lab): I am grateful for this opportunity to debate the catastrophic effects of the deregulation of buses in 1986 and the potential for re-regulating the bus system in Manchester and other metropolitan and county areas.

This is not a dry academic subject based on economic theory or the history of transport legislation; it is a real story of people in my constituency whose lives have been and are being damaged because of the ineffectiveness of the bus system. I could spend the time allotted to me for this Adjournment debate just going through my casework. There are hundreds of cases of people who are upset and complain that, because the 149 does not turn up, they have missed hospital appointments, or because the 151 service is withdrawn they have difficulty getting to work.

In parts of my constituency, fewer than a third of people have access to a car and therefore are particularly dependent on buses and vulnerable when those buses do not turn up. It is a little known fact that outside London, Manchester, at 22 per cent., has the highest percentage of people using buses. It is well known that one of the largest factors keeping unemployed people from employment is their lack of access to transport. It is estimated from surveys that 40 per cent. of people give that as a reason for not getting a job. Therefore, failures in the bus system have a terrific economic impact and a terrific impact on those who want to use North Manchester general hospital.

A particular problem in my constituency in north Manchester has been the extremely poor performance of First group in providing services. Some 12 months ago, in one week in particular, it had 600 failures, which meant that the bus did not turn up. That means that if only 10 people wanted to use each service, 6,000 people that week were stranded or had to wait for the next service. When the passenger transport authority considered its reliability performances, it was found that on its 10-minute services a third were not making the scheduled time, and on its 15-minute services 20 per cent. were not running to schedule.

On point-to-point fares, First group has higher fares on every rate and distance compared with Stagecoach in the south of Manchester. Its weekly ticket is more expensive, although some saver tickets are better than those of other bus companies operating in the area. But overall, its performance on reliability, punctuality and fares is appalling, and that is still the case. More recently, it has averaged 300 failures a week, so there was not just a peak 12 months ago. The service has been consistently bad.

First group's appalling performance created a crisis before Christmas—it has given a number of reasons to explain why that happened. It claimed that it did not have enough drivers; but when it recruited drivers, it did not have the engineers to start the buses, so the problem did not involve drivers because the buses simply were not there.
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When the Transport Act 1985 went through this House, it was not envisaged that that would happen because competition was supposed to ensure that an ineffective, badly operated company, which First group is in north Manchester, could not succeed. Other bus companies should have come in, provided a better service and competed on fares, the market should have worked well and the passengers should have been happy.

That has not happened because the people who framed the 1985 Act got it wrong. Nationally, 85 per cent. of the market has been consolidated by five companies, and that situation has been replicated in Greater Manchester. In the north and west of the city, First group run between 80 and 85 per cent. of services, and Stagecoach has a similar dominance of the market in the south of the city. Although about 40 bus companies operate in Greater Manchester, two of them dominate the market. That is a cartel—a monopoly situation—and it was not supposed to happen under the 1985 Act. I am happy to call the situation a cartel, because if it has got a black, cold nose, it wags its tail and it barks, then it is a dog. The two major operators in Manchester engage in little competition and they form a cartel that disadvantages the travelling public.

What are the remedies? The 1985 Act did not work in the way in which it was envisaged. I have written to the Office of Fair Trading on a number of occasions, and it always asks, "Where is your evidence that there is anti-competitive behaviour? Where is your evidence that meetings have taken place between Stagecoach and First group to arrange those anti-competitive practices?" I do not have such evidence. The evidence is that services are poor and that competition is lacking. The OFT says, "The market should take care of that."

The Transport Committee has seen that the OFT does not have a high regard for evidence because the OFT relies on dogma and theory. When it argued the case for deregulated hackney carriages, we took evidence in the Transport Committee showing that where taxis are deregulated, against theoretical expectations fares increase beyond the average and waiting times increase. It simply ignored that evidence and said that competition would drive down fares and waiting times, which has not happened in practice, and it views bus services in a similar way.

I do not know whether you have seen "Planet of the Apes", Mr. Deputy Speaker. The OFT reminds me of the apes who were in charge of the planet and who believed that flight was impossible. When the human beings, who had travelled forward in time, made a paper aeroplane, the apes simply did not believe that it flew. That is how the OFT operates. For an integrated, effective transport system, we need integrated routes so that the timetables meet and people can change from one bus to another. The OFT says that that is anti-competitive and it tries to stop the co-ordination of services. It has failed within the bus industry, and it has no role in examining buses.

Let us consider the traffic commissioner, with whom I believe the Greater Manchester passenger transport authority is in communication. If it was effective in persuading her of the unreliability and lack of
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punctuality of First group, what are her remedies? They are to fine the company or tell it to remove the service. Removing the service would not be helpful to the people whom I represent when other groups prefer not to operate those routes. First group sometimes tells me that that is because its computer systems try to reduce the dead mileage between the destination and the garages. If that means that it stays on the same routes and does not compete much with Stagecoach and other operators, that is another method of getting computers to arrange an anti-competitive contract for the company.

What remedies exist in the Transport Act 2000? Can we have a quality contract that would enable the specification of service levels and fares and ensure that competition occurred at the tendering stage, with the public sector controlling the routes? I welcome the fact that the Under-Secretary is consulting on reducing the 21-month rule for introducing a quality contract when the scheme has been agreed. However, I do not believe that there is much hope that Greater Manchester or anywhere else can go down the quality contracts route because the hurdle in section 124 of having to prove that a quality contract is the only practicable way of implementing the authority's policies is simply too high.

In Coventry, which tried to introduce a quality contract, Arriva flooded the area with buses and claimed that there was no need. It might take three and a half or four and a half years to implement a quality contract. If the bus operators do not want it, they can change what they are doing to prevent the PTA from surmounting the legislative hurdle.

What is happening in Manchester and Greater Manchester? Since deregulation in 1986, a drop in passengers of between 30 and 40 per cent. has occurred in all metropolitan areas, including Greater Manchester. There is potentially good news in the bare statistics, which show that, during the past three or four years, the number of people who use buses in Manchester has increased by 6 per cent. However, when we look into that, we find that it has made the position worse because the major operators, not only in Greater Manchester but in other metropolitan areas, are consolidating their services on the main routes, where they pick up more passengers, but withdrawing from the non-radial and cross-conurbation routes and from marginal areas. That leads to social isolation and makes using buses more difficult.

Companies are also withdrawing services from the weekends and times outside the rush hour. They put more and more buses on the radial routes and during the morning and evening rush hours. People who want to travel at other times are finding it difficult to do so. That led the National Audit Office, in its recent report on trams, to point out that it is not a sensible use of public money to have private sector operators competing against a light railway system. The Government have put money—I hope that they will put some more—into the tram system in Greater Manchester.

When bus companies consolidate on the radial routes, it means that, if the PTA wants to keep the routes going, it must put the route up for tender. The costs to the PTA in Greater Manchester have more than doubled to £13 million. There is little competition and the bus
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companies that previously ran the routes tender for them, usually at a considerably higher cost. That is the experience throughout the country.

We find the public sector supporting the buses through concessionary fares in increasing amounts—it is between £55 million to £60 million in Greater Manchester. Also, it is not widely recognised that, as the buses travel backwards and forwards more on the radial routes, they are doing more miles, even though they are going to fewer places. Even when passenger numbers were decreasing, the buses were making that first consolidation and doing more miles, which means that they get more bus service operator grant.

More money is going into concessionary fares—£60 million in the case of Greater Manchester—via supported tendered services, and the bus service operator grant is going up as mileage goes up, yet we are getting a worse service. In fact, public money is being used to isolate communities and make the public transport system worse. I do not find it tolerable that public money should be used in that way. It is a fact that throughout the metropolitan areas, 30 to 40 per cent. of the bus services' income comes from the public purse, but the passenger transport authorities and county councils have no control over how that money is used. The travelling public find that very difficult to understand.

I believe that bus services should be re-regulated, but they are opposed to that idea. That is not surprising. The one area that was not deregulated in 1986 was London. There, the bus companies get 8 per cent. of their income from the public purse, whereas those in the metropolitan areas get considerably more than that. Over the period since deregulation, and with very low subsidies, there has not been the loss of passengers in Greater London that there has been in the metropolitan areas, and with more money going into the system, we are now seeing huge increases in the number of passengers using buses in Greater London. The Government have to answer this question: why, if a regulated scheme is good enough for London, is it not good enough for the rest of the country? It is better for the travelling public and for the public purse, people know what they are getting for their money, and the system is transparent.

I should like to finish by citing my right hon. Friend the Deputy Prime Minister, who was asked on at least two occasions when he came before the Select Committee whether it was possible to have an integrated transport system without re-regulating the buses. He was clear and unambiguous in his response, which was that that was impossible, because it is not possible to co-ordinate the services to the benefit of the travelling public. I agree with him that that is the case.

I hope that the Government will listen to the arguments and consider re-regulating the buses, whether through a pilot scheme or in some other way, because the pathway to a more sensible use of public money and to a more effective transport system—not just in Manchester but throughout the country—is through a different system from the one that we have. At the moment, the bus companies are laughing all the way to the bank. They are taking more and more money from the Exchequer and providing a service that is less and less good for the travelling public. That is leading to social exclusion and keeping people from jobs and from access to health and education services.
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I do not expect my hon. Friend the Minister to stand up and say, "Yes, we will do that tomorrow", but I hope that he and the Government realise the power of the arguments that have been put tonight and that the current situation is not a sensible way of providing a transport system or of using public money.

10.49 pm

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