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Dr. Ladyman: It is true that making quality contracts more practical is a key objective in the document, but I do not agree that the process is convoluted. It seems quite straightforward to me. We propose that if a local authority considers it to be in the public interest and can make a case for its being in the public interest, it should be an option. If the authority opts for the contract and local operators disagree with it, there will be an independent appeal process. If local authorities consider that too convoluted, they can respond to the
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document and to our consultation on the draft Bill, and we will try to deal with their concerns.

Paul Rowen (Rochdale) (LD): May I return the Minister to the subject of concessionary fares? A national scheme has been operating north of the border, and one is being proposed for Wales. Does the Minister agree that if a national scheme operated in England, it might be possible to reduce fraud and disadvantages such as passenger transport authorities being forced to cut spending in other areas? If a scheme were administered nationally, we would know where the money was going, and some authorities would not lose out.

Dr. Ladyman: I thought that the Liberal Democrats were in favour of devolution and taking power away from the centre and giving it to local authorities, but I think that I have just heard a bid for us to take control of bus services away from local authorities and bring it back into Whitehall, which is a bizarre suggestion.

We are proposing—there will be plenty of opportunities for this to be discussed in the House—a scheme under which we will provide additional funding to make it possible to have a system in which older and disabled people can travel anywhere in England for free, and after discussion with the devolved Assemblies we might be able to expand that to anywhere in the United Kingdom. I do not think that the idea that we should backtrack on local authority control of bus services is a goer, but I will be interested to hear the contribution of the hon. Member for Rochdale (Paul Rowen).

Mr. Kevan Jones: I thank my hon. Friend the Minister for giving way, and I join him in welcoming the free bus passes for the elderly. They have been tremendously welcomed in my North Durham constituency, but many of my elderly constituents are now finding that because Go Northern has removed bus services from isolated villages in my constituency, they have no access to a bus at all. The latest example of that is the community of Pelton Fell having its No. 739 bus removed without any consultation with local people. Therefore, although elderly people have got a free bus pass thanks to a Labour Government, thanks to a heartless bus company some of them have no access to a bus.

Dr. Ladyman: That is why it is right that we give control of such issues to local authorities and to local passenger transport authorities. Local people who know what the local issues are, and who know when local services are being withdrawn, can try to build partnerships with the private sector to fill gaps in services. If the private sector is acting in the way that my hon. Friend suggests, it is up to the local council to decide whether it wants to step in and provide a subsidy for a particular scheme, or to provide the service by means of a community transport option, or—if it cannot build a successful partnership—it might need to think about having a quality contract in future in order to be able to put in place the sort of service that will provide buses to such isolated villages.

Ms Angela C. Smith (Sheffield, Hillsborough) (Lab): Given my hon. Friend’s welcome comments on community local governance, does he consider it
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appropriate that traffic commissioners or transport tribunals should sit in judgment on the merits of a quality contract? Should not local government make such decisions in consultation with local people?

Dr. Ladyman: Under our proposals, it will be for local government to make a public interest case for a quality contract. Having made such a case and having moved towards having a quality contract, if commercial operators feel that they have been unfairly disadvantaged and not properly consulted, there must be an appeal process for them to go through. We have suggested that there should be such an independent appeal process, but I hope that it will never be used because I hope that local authorities that decide to go down that route will involve everybody in making their decision.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I wish to make an important point. What the Minister is trying to explain is slightly different from what appears on page 43 of “Putting Passengers First”. It says there not that there can be an appeal when a local authority has reached a decision about going ahead with a quality contract, but that that automatically goes to a senior traffic commissioner, acting together with a panel of experts, who decides whether to approve it. Beyond that, there is an appeal to the transport tribunal. However, at the interim stage involving the traffic commissioner there is no appeal. The commissioner has a right to determine whether the local authority, acting in the public interest, is correct or not. That second guessing of an elected body causes great concern.

Dr. Ladyman: I have heard my hon. Friend’s point and it will be taken into consideration. He is right that a senior traffic commissioner and a panel of experts review the decision to go to a quality contract to make sure that it is appropriate and in the public interest, and there then is an independent appeal process that operators can go through. If some hon. Friends feel that that is too convoluted or that it is unfair, they should put their comments to us and we will take them on board. I think that there is an appropriate protection in the light of the evidence that we have so far received, but I encourage hon. Friends to communicate their views.

Ian Stewart (Eccles) (Lab): I welcome the draft Bill, but I remind my hon. Friend that some of us warned Ministers in 2000 that the voluntarist approach would not be successful, and I think that it is fair to say that it has not been successful to date. The intention behind the draft Bill is good, but will the Minister assure me that the powers that local authorities and passenger transport executives will be given will mean that I can be sure that trains stop at my Swinton stations and that the bus routes will be kept going through my constituency of Eccles?

Dr. Ladyman: I would be surprised if the draft Bill included a specific Swinton stations and Eccles clause, but my hon. Friend can table an amendment on that if he wishes. The voluntarist approach has worked in
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some parts of the country—in some communities it has worked very well, but in others it has completely failed. We have put forward our proposals because we want everybody to have top quality bus services and the opportunity of increased bus patronage. My hon. Friend might have been prescient when the proposed legislation that became the Transport Act 2000 was being discussed in respect of his own local authority, but he should not assume that that is the case for everywhere in the country.

Let me make a little progress. Many colleagues want to speak—at least many Labour Members do. That there are so few Members present on the Opposition Benches shows what the Conservatives and the Liberal Democrats think about the importance of buses, and I note in particular that the Liberal Democrats have been able to put up only a Front-Bench spokesman to contribute to this important debate on public transport.

The House has debated on many occasions the issue of why no quality contract or franchising schemes have been made under the Transport Act 2000, although a number of local transport authorities have supported them in principle. The Government’s review has concluded that the barriers to quality contracts have been set too high. We recognise that they are not the right model for everywhere, but we want to make them a more realistic option for those authorities that consider that they would best address the problems facing their areas. They could be particularly valuable where they are part of a package of measures to improve public transport and reduce urban congestion.

We also recognise the need to safeguard the legitimate interests of bus operators. Currently, a quality contract can be offered only if it is the only practicable way to improve services in a given area, and the “only practicable” test is set out in legislation. We propose to replace that test with a more objective and measurable public interest test, and in order to protect operators we will replace the Secretary of State as approval authority with an independent body chaired by the senior traffic commissioner, and give a right of appeal to the transport tribunal. Those changes will make quality contracts a realistic option for authorities to pursue.

It is also clear that one of the biggest factors that will put off existing and potential passengers is lack of punctuality. If services are late—or, if I dare say so, early—or do not turn up at all, they will not be an attractive alternative to the car. Currently, bus operators are not required to provide records of punctuality, although many monitor that for their own purposes. We propose to work with the industry to develop a new performance regime that will place bus operators under a duty to keep records of the punctuality of their services, and to provide regular, reliable data to the traffic commissioner.

We also recognise that many matters affecting punctuality are outside the operator’s control, so we want to give the traffic commissioners more leverage over the local authorities as well, and to encourage them to work with operators on remedial measures. If performance fails to improve, there will be penalties that they can impose on operators. If the traffic commissioners are dissatisfied with performance on the local authority side, we propose that they should apply
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to the Secretary of State to use his intervention powers under the Traffic Management Act 2004.

Mr. Nigel Evans (Ribble Valley) (Con): Another thing that puts off passengers is hikes in bus fares. Lancashire county council is looking to plug a big hole that it has in its budget. Last year, it put up fares, which put a lot of youngsters off the idea of going to school by bus. This year, it is cutting real services, which the hon. Member for North Durham (Mr. Jones) said earlier is happening in his constituency. What protection can the Government give to the people of Lancashire—particularly those living in rural areas—in order to ensure a future for their bus services?

Dr. Ladyman: Of course, it is up to local authorities to build partnerships with local bus operators and to make sure that subsidies are properly targeted where they can best be used, in order to guarantee the success of these services. If they are unable to do that under the current powers, they might be in a better position to do so under the proposed new ones. I should point out that under this Government, the public purse is now providing £2.5 billion a year to subsidise bus services throughout the country. That money is spent on ensuring that services are available in isolated places, and that the hon. Gentleman’s constituents, for example, have access to decent services. I fail to see, however, how his party’s proposal to cut public expenditure by £16 billion would allow local authorities to receive more of the funding that they need to improve services.

The transport innovation fund will also allow local authorities to develop and deploy smarter, more innovative solutions to congestion in their areas. Up to £200 million a year—and possibly more—is being made available to authorities from 2008. Hard demand-management measures, including road pricing, will be introduced alongside significant improvements to public transport. As we have seen from the example of London, the introduction of road pricing will create a growing market for buses. The provision of improved bus services will be integral to establishing the bus as a viable alternative to the car.

Ms Angela C. Smith: I thank my hon. Friend for giving way once more; he is very generous. Is not one of the key measures in delivering better local bus services the exemption of such services from competition legislation, which is getting in the way of through-ticketing and sensible timetabling?

Dr. Ladyman: My hon. Friend needs to look at these proposals in the round. If it is not possible through the voluntary or the statutory partnership arrangements to deal with the issues that concern her, her local authority might want to look at a quality contract. Such a contract does not put an end to competition in a particular area; rather, it offers a different way of providing competition, and it will enable us to deliver to other parts of the country some of the benefits of a franchising scheme that we have seen in London.

Mr. Mark Lancaster (North-East Milton Keynes) (Con): I am grateful to the Minister for giving way. He talks about building partnerships, which we all agree is very important. Milton Keynes unitary authority is
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geographically very small, and it is surrounded by Bedfordshire, Northamptonshire and Buckinghamshire. Most buses go into Milton Keynes, but many people in the surrounding doughnut do not want to commute to Milton Keynes, but to Northampton, Bedford or Buckingham. What can the Minister do to encourage the building of partnerships between local authorities to enable the creation of such routes? At the moment, that is not happening.

Dr. Ladyman: It is not for central Government to do everything. There is not a steel fence around Milton Keynes that prevents its authority from talking to other authorities in the area, or vice versa. It is for local authorities to get together and address these issues for themselves. We provide the powers and the funding, and it is for local authorities to use them to best advantage to make sure that the services are of a type of which constituents such as the hon. Gentleman’s can make use. Of course, we are not only providing bus services, we are rapidly expanding train services and making a lot of funding available for local authorities. If a local authority wants to bid for funding from the transport innovation fund and to convince us that it is a good bid, it will have to look at issues such as the surrounding areas and the partnership arrangements between local councils.

Mr. Kevan Jones: I am very grateful to my hon. Friend for giving way again. Just before Christmas, my hon. Friend the Member for City of Durham (Dr. Blackman-Woods) and I had a meeting with our local bus companies and the county council, and one issue that we talked about was through-ticketing. They said that, as my hon. Friend the Member for Sheffield, Hillsborough (Ms Smith) pointed out, competition law prevents through-ticketing and they could not legally implement it. Through-ticketing would, however, be very beneficial to my constituents and others.

Dr. Ladyman: We are working closely with the Office of Fair Trading in examining such issues. If authorities have received legal advice that they would be in breach of competition law if they provided what would be sensible new arrangements, we need to know about such examples and to address this issue as part of the review. That is certainly what we will try to do.

Ms Angela C. Smith rose—

Dr. Ladyman: If my hon. Friend will forgive me, I will not give way. A lot Labour Members, in particular, want to speak, so let me make a little more progress.

It is clear that a key factor in areas where buses are popular is the strength of partnership working between local authorities and bus operators. Although there are statutory powers in the Transport Act 2000, all the arrangements currently in force have been purely voluntary. I am pleased to note that a statutory scheme has recently been created in Sheffield—my hon. Friend the Member for Sheffield, Hillsborough (Ms Smith) will be glad to know—and will soon come into force. Such voluntary arrangements often work remarkably well, but there are limits to what can be done in locations where there is more than one operator, because of constraints in competition legislation. We
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propose to develop a new legal test to determine when multi-operator agreements are permissible.

As well as changes to the voluntary model, we also want to extend the scope of statutory partnership schemes, so that they can cover minimum frequencies and co-ordination of timings and, possibly, allow some control over maximum fares. We also want to make the schemes more flexible, so that the facilities provided by local authorities and the service improvements made by operators can be phased in over time.

Although the bus review was mainly about commercial provision, we also fully recognise the important role that the voluntary transport sector plays, and realise that it could do even more if certain restrictions were lifted. Community transport groups are major providers of specialised services for older and disabled people, but their powers under section 22 of the Transport Act 1985 to provide local services for the general public are underused. We therefore propose to lift the restriction on paying drivers on those services more than expenses, which will encourage more drivers to come forward and allow the sector to expand. We also propose to lift the restriction regarding vehicles with more than 16 passenger seats, so that larger buses can be used. We hope that that will encourage more local voluntary groups to fill the gaps in commercial services and to reach the places that buses cannot realistically go.

We also need to consider whether local government, particularly in metropolitan areas, is empowered to take the hard decisions that need to be taken for the effective delivery of transport in local areas. For instance, there are concerns about the decision-making split in passenger transport authority areas, whereby the passenger transport executive has no powers over roads, traffic, parking and bus priority measures. We consider that governance reform in PTA areas should be an important part of establishing a quality contract scheme in a metropolitan area, and we propose to address that issue through the draft road transport Bill.

Finally, I come to bus subsidy. After declining in the decade after 1986, bus subsidy in England has almost doubled in real terms since 1997-98. Some £2.5 billion of revenue funding supports bus services in the form of reimbursement of concessionary fares, service subsidies and the bus service operators grant. We need to ensure that that spending contributes effectively to our wider objectives. For example, BSOG is currently a grant from central Government related to fuel usage. We will consider whether there is scope for reforming BSOG to link it more directly to bus operators performance or environmental outcomes. We recognise the importance of understanding fully the potentially adverse impact or unintended consequences of any reform, so as I have said, we will consider these issues with stakeholders.

Ann Coffey (Stockport) (Lab): I thank the Minister for giving way. The Oyster card system is very popular with people who travel on the buses in London because it is a pre-payment system and there are concessionary fares, for example. The other good thing is that it enables bus operators to know exactly who is travelling on their buses. Will his proposals make it easier for Greater Manchester passenger transport authority to
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introduce such a system for the convenience both of passengers and of bus operators?

Dr. Ladyman: I would certainly hope so. My hon. Friend is right. The convenience of the Oyster card is one more factor that encourages people on to the buses in London, and I would like to see similar arrangements throughout the country. I hope that our proposals facilitate such schemes and if anybody has any reason to think that they may be a barrier to the introduction of schemes, we would like to hear about it as part of this debate.

Martin Linton (Battersea) (Lab): Is my hon. Friend aware that Conservative members of the Greater London authority are trying to withdraw the free bus concession for 17 and 18-year-olds?

Dr. Ladyman: I am grateful to my hon. Friend for emphasising that point, although I was aware of it and I was reminded by my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) earlier. It is a baffling proposal and could only come from Conservatives. I may be misleading the House, because it could also have come from Liberal Democrats in other areas, who make equally silly suggestions. In London, it could only come from the Conservatives. It will be interesting to hear how the hon. Member for North Shropshire (Mr. Paterson) justifies that proposal.

Mr. Betts: Is my hon. Friend aware of real concerns that some bus operators are trying to milk the concessionary fares system for pensioners? First has just put fares in Sheffield up by 10 per cent., which means that it will want 10 per cent. more for every concessionary fare. The bus grant is going up by 4 per cent. to compensate the PTE for the concessionary fares. At that rate, within five years all the money that the PTE has to spend on bus services will go on concessionary fares with nothing left for tendered services, unless the system is significantly reformed.

Dr. Ladyman: I hear what my hon. Friend says. It is for the local authority, especially when renewing arrangements with local operators, to ensure that they get value for money from the concessionary fares scheme. If they do not feel that they are getting value for money from the schemes, they need to take appropriate action. If they feel that they do not have the powers to take appropriate action, I hope that they will feed that into the consultation so that we can be made aware of the problem. If the situation in my hon. Friend’s area is as he says, we should all be concerned.

Local authorities and private operators know that they need to work together to deliver modern, integrated transport services, and we are committed to giving those areas that want them the powers to provide better services that meet the needs of the local population. The publication of “Putting Passengers First” was intended to get people talking and there will be further public scrutiny of the proposals when we publish the draft Bill.

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