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Rural Bus Services (Norfolk)

11.1 am

Mr. Henry Bellingham (North-West Norfolk) (Con): The House will know that local bus services in counties such as Norfolk are vital to many people. A large number of people without access to private transport rely on those services. For example, local buses bring 500,000 people into King's Lynn town centre and that excludes those buses that bring in students to the local educational colleges and schools. Bus passengers contribute £12.5 million to the retail economy, and that shows the importance of bus services to King's Lynn.

The days of Eastern Counties' double-decker buses plying routes around Norfolk two-thirds or three-quarters empty are over. There is now a new breed of bus company in Norfolk. Most are privately owned, flexible, highly focused, well managed and with highly motivated work forces. One such example is Norfolk Green, based in King's Lynn in my constituency. Its managing director is Ben Colson, who has a huge amount of experience in the industry. His company, founded in 1992, runs 39 buses with an average age of 7.5 years, slightly ahead of the industry average. Its buses cover roughly 4 million km a year, operate on 850 miles of mostly unclassified rural roads with variable maintenance and carry 1.2 million passenger journeys a year. The company employs 75 people, most of whom are on flexible working arrangements to fit their needs, and the buses put a substantial amount of money into the local economy. Norfolk Green is typical of the new generation of bus companies in Norfolk and East Anglia.

However, life for the medium-sized rural and urban bus operator is becoming more and more difficult and challenging. First, traffic congestion is unquestionably getting worse and worse; it is costing the UK economy £25 billion a year. Scaled down by population alone, that represents an additional cost of £1.8 million for King's Lynn. In fact, King's Lynn is more congested than average; peak-hour journey speed on London road is about 3 mph, lower than that of central London before congestion charging. The real cost of congestion in King's Lynn is probably more than £3 million a year.

Modern buses cost roughly £30 an hour, or £1 for every two minutes, to operate. In the King's Lynn area, that is slightly more than the average fare paid; every two minutes of extra time on the timetable because of congestion means that bus companies have to carry one extra passenger. Bus industry costs are rising at roughly 9 per cent. a year. The main culprits are employer and public liability insurance premiums and fleet insurance premiums. In addition, there has been a very big increase in regulatory pressures, which I shall come to in a moment.

First, I should like to say a word or two about the situation in King's Lynn and West Norfolk. We are seeing a number of planning decisions that have consistently tilted the balance in favour of car use. Recently, we have had a number of developments of out-of-town and edge-of-town shopping stores. All of them are geared entirely to the car user, and unfortunately we do not yet have a park-and-ride scheme in King's Lynn.
 
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Furthermore, roadworks in King's Lynn never appear to be properly co-ordinated; I hope that my local borough and county councils will get to grips with that. I can understand why the environmental health department is keen that work does not continue after 6 o'clock, because of intrusive noise to residents. However, at one stage last summer, there was resurfacing on Gaywood road and work at the South Gate scheme, the Loke road junction and the Anglia Canners access junction, and the result was almost total gridlock in King's Lynn. There was a total lack of co-ordination between the borough council and the county council; I hope they will address that.

I turn to some national regulatory issues that affect the industry and the bus operators in our Norfolk constituencies. For the period between 2004 and 2007–08, there is a swathe of significant new transport-specific EU directives. Some of them are perfectly acceptable—especially those that will improve health and safety and those that are aimed at helping the disabled—and taken individually they might not be crippling. However, there is a concern that their total cumulative weight will bear down on companies and destroy wealth and, possibly, jobs as well.

Let us look at the cost of some of these directives. First, there is an EU directive to change weekly driver rest periods, which is expected later this year. That will take away flexibility in the way that drivers can be rostered to work, and it will have the effect of reducing bus services on Saturdays. That could have a significant impact on teenagers and other youngsters who want to have access to various leisure services and facilities in Norfolk. The additional cost to Norfolk Green's operation, if it does not abandon or reduce service levels, will be approximately £60,000 a year.

The EU new recording devices directive replaces paper recording with an EU-wide digital recording device scheme. The capital costs of that to Norfolk Green will be £40,000 over five years, plus half a clerk to administer the scheme. It will bring no improvement in safety; it is merely an EU-wide measure for conformity.

The EU directive on the financial standing requirements will come into force in January next year. It requires each operator to have financial headroom in their bank accounts; that sum will be set in relation to the size of their fleet. It also requires non-euro states to reset that sum every five years by reference to the euro. That means that Norfolk Green must have an extra £102,000 in its bank account. That is a significant sum. The one-off cost to Norfolk Green will be £10,000 a year.

Mr. Keith Simpson (Mid-Norfolk) (Con): Everything that my hon. Friend has said so far applies in my constituency. To reinforce the point he is making, can I draw attention to a constituent of mine? Mr. David Pursey is the managing director of Anglian Bus and Coach Ltd., which operates in both Norfolk and Suffolk. He has said that to get licensed in 24 hours' time, he has to prove to the traffic commissioner that he has £162,000 of headroom in the bank. That has meant that he has had to refinance his bus fleet. He and other bus operators are not against having financial stability
 
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and probity, but this will eventually put many bus companies out of business, which will be detrimental to our constituents.

Mr. Bellingham : My hon. Friend reinforces the point. He mentions the extra financial headroom that is required of that bus company, and it is a slightly larger sum than the £102,000 that Norfolk Green will need.

It is one thing if directives are properly consulted on, but the change to operators' licences that will be introduced in 2006 was not consulted on. Currently, operators can opt for either a national or an EU-wide fleet operation status. I gather that, as part of implementing the directive, the UK Government, for their own administrative convenience, amalgamated the two tiers into one at the higher international cost level. The cost to Norfolk Green in this case will be £31,000 a year. I ask the Minister: did the UK Government have any choice in that matter? Could they have implemented at the lower, national level, or were they obliged by the EU directive to go for the higher international cost level?

We then have the EU directive on driver retraining, which requires all bus drivers to receive a minimum number of days' retraining per annum, regardless of their individual standards, professionalism and experience over previous years. Norfolk Green said to me that if it cannot source the extra drivers—there is a local and national shortage—bus services will have to be cut. The additional cost to Norfolk Green would be £20,000 a year.

Then there is the EU draft directive on driver age; there is no start date yet. That will increase the minimum age for bus drivers from 21 to 24, thereby reducing career prospects and attractiveness in the industry, which is a pity. The additional costs resulting from that will depend on the age mix of staff at the introduction of the directive, but there will certainly be an extra cost to industry. Will we, as a country, have any flexibility to perhaps get a derogation from that directive?

I want to mention the Disability Discrimination Act 1995, which is mainly a UK piece of legislation, and which most people support. My concern, in terms of the road transport industry, is that under the Act there is a reasonableness test for buildings and other built structures, and particularly for houses, but there is an absolute requirement for the road transport directive to be implemented. The regulatory impact assessment carried out by the Department showed that a financially positive change would result for urban bus services, but not for rural bus services. Norfolk Green, for example, will have to spend a lot of money replacing vehicles over the next 10 years. The new compliant vehicles will cost roughly £75,000, whereas the modern non-compliant ones cost £50,000. The compliant vehicles are wider, lower and cannot always access some very small rural lanes, thereby leading possibly to less access for some communities.

There will be a substantial additional cost to Norfolk Green as a result of the DDA—roughly £57,000 a year. However, that is a measure that will benefit bus users in Norfolk, and we welcome it. The problem is that all these other EU directives will be a cost and a drag on the business, and will reduce the money available for investment.

Mr. Richard Bacon (South Norfolk) (Con): My hon. Friend has been listing a whole litany of regulations,
 
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most of which, with the honourable exception of the Disability Discrimination Act, seem to be making things worse rather than better. Does he agree that there are some very simple things that bus companies and local authorities could do to make things better? For example, constituents of mine found out by accident of a late-night bus service, run by Simonds bus company, from Norwich to my constituency. When I asked the county council whether the timetable could be made available on every single bus, they said that timetables were distributed through parish contacts, libraries and so on. Does my hon. Friend agree that a simple rule that the timetable for a bus must always be available and displayed on the bus would do a whole lot more good for consumers than many of the regulations that he has been talking about?

Mr. Bellingham : I agree. That is a common-sense suggestion from my hon. Friend, and I can tell him that most of the bus companies in my constituency have gone down that path, and that is to be welcomed. Obviously, in this climate of extra regulation, most bus companies will bend over backwards to try to make life easier for the travelling public.

The last directive that is of great concern is the road transport directive, which is coming in on 23 March. I gather that we will hear more details about that from the Department imminently. The UK had an individual opt-out from the original EU working time directive. That came in under health and safety; it was not under the social chapter. The working time directive restricts the working week for particular employees to 48 hours. As I understand it, the road transport directive came in under what is called a horizontal amending directive procedure. That overrules the original working time directive, and there is no UK individual opt-out. It will substantially increase the cost to many of our bus companies. A similar directive has been applied to junior doctors' hours and it costs the NHS a great deal of money. This provision will cost the rural and urban bus companies a substantial amount of money. I will explain why in a moment. It will add about £45,000 to Norfolk Green's costs. The total costs of all the extra regulations will be £236,000 a year for Norfolk Green. That is a substantial sum to a medium-sized company.

On top of those EU directives there are all the other burdens that are being put on business at the moment. Only last week, the British Chambers of Commerce estimated that the total cost of the extra burdens that have been imposed on business since the previous election is now £40 billion a year. That includes all the extra employment and social costs, in addition to the road transport-specific directives and costs.

Mr. Anthony D. Wright (Great Yarmouth) (Lab): I congratulate the hon. Gentleman on securing this debate. Does he not accept that part of the burden that we now face was created in the early '80s, when deregulation of the bus services occurred? In my constituency, we had Eastern Counties running a good rural service from Great Yarmouth to King's Lynn, Norwich and other parts. We also had our own bus undertaking—the blue bus undertaking—which was regarded as one of the best in the region.

The bus service that we had in those early days was decimated. The burden is now on the residents of Norfolk, who are suffering through lack of services in
 
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many areas. The rural bus subsidy grant is trying to assist by giving more services to remote areas, such as parts of both my constituency and the hon. Gentleman's constituency.

Mr. Bellingham : I am grateful to the hon. Gentleman for that take on the overall situation. Some of his points are valid, but I would point out that small independent operators in my constituency are running services from Spalding to King's Lynn and on to Cromer, and from Cambridge to Wisbech to King's Lynn and on to Cromer. Many of the smaller villages are involved. For example, there is a service from King's Lynn to Gayton to Great Massingham to Harpley. Many of those services had lapsed under the old regime. There was the regular sight of large Eastern Counties double-decker buses going round Norfolk's lanes, most of them three quarters or half empty. It was not an economic way of operating. We now have many more flexible operators providing services. They are doing their level best in a difficult regulatory environment.

I want to say a few more words about the road transport directive. It was aimed mainly at long-distance drivers. Obviously, they come under more stress. It is much more monotonous to drive down a motorway. Someone driving a lorry or a bus on a long journey comes under more stress and there is a greater likelihood of their getting tired. Someone driving in an urban or rural environment and going over shorter distances faces much less stress. That is why the EU brought in an exemption under the road transport directive for journeys of less than 50 km. As I understand it, having talked to various experts from the industry, the idea was to exempt urban and bus companies. That is obviously sensible, because such journeys are shorter and should not be subject to the directive. However, many of Norfolk Green's routes are more than 50 km long.

I know that the Minister is having meetings with the Confederation of Passenger Transport UK. The industry is rightly pressing for that limit of 50 km to be raised to 80 km. That would solve many of the problems. We are not asking for drivers to be made to work longer hours or for them to take risks on health and safety. I understand, however, that several Norfolk bus companies are having difficult discussions with drivers, who are worried that they will lose substantial sums under the directive. They may well be considering alternative employment, where there are obviously other opportunities. That cannot be good for the industry.

As we want the Minister to have at least 10 minutes for the winding-up speech, I will conclude. The Government must carefully consider whether, through discussions with their EU colleagues and with the Commission, that 50 km limit can be raised to 80 km. Can the Minister say anything about the other directives, where there may be some scope for flexibility? Can she tell us anything about the overall picture for the future of rural bus services? As I mentioned, we have a significant number of dynamic companies serving our constituents in Norfolk. They are exceptionally focused and efficient companies with highly motivated work forces, but the overall burden of regulation on business has now reached the stage where they will have to take difficult decisions and probably reduce the number of services. That will be to the detriment of our
 
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constituents, so I hope that the Minister will be able to answer some of those points and give us some cause and hope for optimism.

11.20 am

The Parliamentary Under-Secretary of State for Transport (Charlotte Atkins) : I congratulate the hon. Member for North-West Norfolk (Mr. Bellingham) on securing this important debate.

The hon. Gentleman raised the issue of congestion in King's Lynn, particularly focusing on the lack of co-ordination of roadworks. He will be delighted to know that the Traffic Management Act 2004 will help considerably in ensuring such co-ordination. As he will know, local authorities will have the power to fine, for instance, utility companies for digging up the road and overstaying their welcome. We are currently looking at the implementation of that Act, and it should help a lot.

Another congestion issue is bus priority measures, which many local authorities have introduced via their local transport plans to great effect. I urge the hon. Gentleman's local councils to consider them. He also mentioned the impact of planning decisions that are geared to the car user. His local authorities should consider a park-and-ride scheme for King's Lynn, as I understand that one does not exist at the moment, to ensure that people park their cars outside and then take the bus into town.

Many of the details about the EC directives could be best dealt with by correspondence. For instance, the road transport directive to which the hon. Gentleman referred does not apply to local journeys under 50  km. If he really is concerned about raising the level to 80  km, I would be interested to hear from Norfolk Green, or any other local bus operator, and the confederation about how that would affect rural bus services. We do not want to create any obstacles for rural bus services, but I am concerned that he doubts whether we should be pushing for driver retraining. In my experience of using buses in rural areas and that of my constituents, driver training is vital. A bus user's confidence is reliant on the driver's attitude. For a passenger who happens to be disabled, whether or not that involves using a wheelchair, driver response is vital. I do not know exactly what the hon. Gentleman's concerns are about that directive, but I would not like any reduction in the focus on retraining.

Mr. Bellingham : Yes, but the point is that some drivers are very experienced and extremely proficient. I know that a number of the drivers in my constituency were recruited from the armed forces, where they had experience driving heavy vehicles, and after some years in the commercial sector they have a huge amount of experience. My point was that surely it should be up to the company to decide whether they need retraining, rather than being mandated by a EU directive.

Charlotte Atkins : Possibly that is the case, but we are dealing not necessarily with a good local firm such as Norfolk Green, but with the general situation. I have heard stories that I would not like to repeat here about particular drivers in particular companies who desperately need training.
 
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On the point about the shortage of drivers, I believe that many companies are doing innovative work in, first, creating more flexible working for drivers to make the job more attractive and, secondly, recruiting drivers who are already trained from Poland, the Czech Republic and other such places. On the Disability Discrimination Act 1995, I would not want to tell my rural constituents that they should receive less of a service in terms of disability access than their urban neighbours, so I would be very concerned about reducing the level of responsibility.

The hon. Gentleman talked about access to lanes. As I shall say later in my speech, many rural services now offer flexible, demand-responsive buses, which tend to be the smaller vehicles. The Government have significantly improved the funding arrangements for rural bus services, and Norfolk in particular has benefited. During the past seven years from 1998, nearly £450 million has been allocated specifically for the support of rural bus services, mainly through the rural bus subsidy grant, providing some 2,200 new or improved bus services. Norfolk has had the highest allocation of RBSG of any local authority in the country—£2.4 million this year alone, rising to £2.5 million in 2005–06. That is a large sum by any stretch of the imagination.

My hon. Friend the Member for Great Yarmouth (Mr. Wright) referred to deregulation. Sure enough, far from being a golden age of rural bus services, under deregulation such services were heavily reduced. We are bringing back a range of subsidies to ensure that rural residents receive the same sort of service as urban residents.

Mr. Anthony D. Wright : On the point that people deserve an equal service, does my hon. Friend accept that there are people in many rural areas, such as parts of my constituency in the northern parishes, who still suffer from a lack of service? I understand that there probably are not enough passengers to fill a bus, but such people should still be able to travel backwards and forwards to and from work by public transport if required.

Charlotte Atkins : Absolutely, because many rural households do not have access to a car.

Norfolk has been allocated a total of £16.5 million since 1998 under the rural bus subsidy grant. That supports some 70 rural bus services in the county and more than 1.6 million passenger journeys, which is a good start. Increasingly, those services are flexible, so that they can be used by a range of people who do not necessarily want to use a scheduled bus service. Recent examples of the services set up by RBSG funding include a feeder bus from villages in west Norfolk into the Cromer-King's Lynn service, and a flexibus service in the Acle area, which links into a half-hourly Peterborough, Norwich, Great Yarmouth and Lowestoft service. The RBSG also supports a bus service originally set up by five parishes in South Norfolk using parish transport grants. That is another way in which local people can help to ensure that their services remain helpful to the local community.

The use of demand-responsive transport and feeder services forms part of many of the developments that we are introducing in rural bus services. Norfolk has
 
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16   demand-responsive services, and an increasing number of such services are being developed to take advantage of the relaxed rules that the Department has introduced. That means that subsidies can be obtained for flexibly routed services. Already, 100 such services have been registered since the change was introduced last year. That is important because in rural areas it is not always feasible to have a scheduled bus going every hour throughout the day. It is important to have a feeder service. An example is the feeder car service in the Great Massingham area. So we can be proud of many things happening in Norfolk. Norfolk Green will benefit from many Government subsidies—subsidies that did not exist before 1997. I am proud of our record on rural buses. My own constituency includes a large rural area, and we have much to be proud of in what we have been doing. I have not been able to go through the details—

Mr. Deputy Speaker (Mr. Frank Cook): Order.

11.30 am

Sitting suspended until Two o'clock.

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