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The Parliamentary Under-Secretary of State for Transport (Gillian Merron): I am delighted to have the opportunity to respond to this very important debate.
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The future of buses is a subject close to the hearts of my Lincoln constituents, and to the hearts of constituents throughout the country. I shall begin by making some general points, and then deal with the specific issues that Members raised.

It is the future role that buses will play in our communities, in the lives of our constituents for the better, and in our determination to tackle congestion and to contribute to a cleaner, greener Britain that led this Government to conduct an extensive review of the bus service and bus sector across England. As many Members know, in the past few months I have travelled around the country to see for myself and hear about the real issues that bus passengers, operators and local authorities face. I have been very pleased to see and hear about the real improvements that have been achieved. I congratulate all those involved on their hard work and on the intelligent partnerships that are making a real difference to the lives of people throughout the country.

On the manufacturing front, I saw at Expo 06 in Birmingham impressive new British-built buses that break new ground—something that we can all celebrate. My hon. Friend the Member for Falkirk (Mr. Joyce) asked about opportunities for industry, and there are indeed tremendous opportunities as bus patronage improves and increases in future. I can tell him that I did indeed see the new hybrid buses from Alexander Dennis, as well as the Wrightbus hybrid double-decker, the Euro 4-engined buses from East Lancs Coachbuilders and—last but not least—the Optare Essex Pullman. That is another example of a bus that is no longer called a bus, but which provides an excellent service.

Of course, we in central Government also have a strong part to play, which is why we are spending £2.5 billion a year on bus subsidy. Following the introduction of the new national bus concession in 2008, the Government will spend some £1 billion a year on concessionary travel for older and disabled people.

Judy Mallaber (Amber Valley) (Lab): In considering the welcome extension of concessionary fares nationwide, will my hon. Friend pay particular attention to counties such as Derbyshire, where we have an excellent gold card scheme covering discounts and many other concessions? As an attractive county, it has many tourists, but we will have to pay back the bus companies for concessionary fares and will not necessarily receive the funding to cover that. Will she take that into account?

Gillian Merron: My hon. Friend represents an attractive county that attracts many visitors and I can assure her that we are considering that very point in dealing with concessionary fares.

Concessionary travel benefits some 11 million older and disabled people. Despite year on year difficulties in some areas with bus patronage, many communities want a better standard of bus services. Hon. Members have reported many difficulties, and that is why we published “Putting Passengers First” in December. It is important to re-endorse our key proposals as we move towards legislation, because the changes that will arise
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from the document will enable us to deal more effectively with the issues that cause particular concern to our constituents.

The key proposals include making quality contract schemes a realistic option; working with stakeholders to develop a new performance regime; giving more opportunity to the community transport sector; providing enhancements to the existing arrangements for partnership schemes between local authorities and bus operators; and considering the scope for refocusing the current bus subsidy regime. Those are definite responses to the concerns that have been described to the House today.

The proposals will modernise bus services for the better and mean a long-term, sustainable future for bus services. They have been formulated following discussions with operators and local authorities, and I wish to take this opportunity to acknowledge the support that we have received from all our key stakeholders. I am also grateful to the Transport Committee and its members for their work on the Committee’s report on bus services. The Government’s response to the report has been published today.

We are in the process of further developing our proposals for an overall package of reforms with the transport industry, local authorities and other key interested parties. This debate will greatly inform the work that we are doing and the proposals will be included in the draft road transport Bill. We have heard today some of the reasons such legislation is important.

Opposition Members made spirited, if somewhat rose-tinted, contributions to the debate. I know that the Opposition have apologised for the privatisation of the rail industry, and I wondered whether we might hear an apology for bus deregulation from the hon. Member for North Shropshire (Mr. Paterson), but that was not to be. I am sure that many of my hon. Friends will be disappointed about that. I was delighted, however, that the hon. Gentleman acknowledged the increasing prosperity in this country under this Labour Government, and it is true that that has led to an increase in car ownership. The competition is between the car and the bus. Labour Members are committed to addressing that because many of the more vulnerable in our society have no choice and we have a duty to them. I confirm that the Government see a clear role for public expenditure on buses, but that must work hand in hand with the changes that we seek to make.

The hon. Member for Canterbury (Mr. Brazier) made an interesting remark about young people on buses in London. I was somewhat confused, as I thought Conservative policy was to hug yobs and love them: now it seems that we must turf off them off the buses and snatch their passes away.

It is important to get some perspective on the matter. Not all the young people getting free travel in London cause difficulties on buses, and we must not forget that many young people are themselves the victims of crime. I am worried that Conservative plans to abolish free travel for children and young people in London is disguised as an effort to save the rest of us. In fact, buses are one of the safest ways to travel, and the monthly figures for incidents show only small fluctuations year on year. I consider the Conservative approach to be a complete misrepresentation of the facts.

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Mr. Brazier: The Minister said that we proposed to remove travel passes from children, but I thought that I had made it clear that the intention of our GLA team was to replace the existing scheme with one aimed at schoolchildren. There have been many complaints about vandalism and yobbery on the buses by older teenagers, who can now travel on them free. That is why our GLA team is talking about introducing a pass for children.

Gillian Merron: A cut is a cut, as far as I am concerned. The matter is clear—the young people who have access to free travel under Labour would lose it under the Conservatives.

I was rather disturbed when the hon. Member for North Shropshire described the contents of “Putting Passengers First” as “guff”. The LGA hailed the bus reforms contained in the report as a “victory for common sense”, and the passenger transport executive group welcomed the review as a “fresh start for buses”. Moreover, the Confederation of Passenger Transport said that it welcomed the Government’s recognition of effective partnerships as the key to better bus services, and considered that “a clear way forward” had been set. None of that suggests to me that the report is “guff”.

In addition, there is no evidence that deregulation arrested the decline in patronage. The hon. Member for North Shropshire may wish to look at “Putting Passengers First” again from that perspective.

The hon. Member for Ilford, North (Mr. Scott) mentioned the No. 148 bus. I know that route well as, when younger, I spent many hours travelling through his constituency between my home in Dagenham and school. I was grateful for his support of Labour policies. I noted his wish not to be political, but whether one supports buses or not is clearly a political question.

The hon. Member for Rochdale (Paul Rowen) was another to cause me some confusion. First he said that he wanted regulation, and then that he did not want to return to re-regulation. However, I remember him saying in a Westminster Hall debate:

That seems clear, but people in the House and outside it will want to know what the Liberal Democrat proposals are.

I turn now to some of the points raised by Labour Members. My hon. Friend the Member for Manchester, Blackley (Graham Stringer) asked for confirmation that the Government were up for the fight. I confirm that we are certainly up to do what it takes to improve buses for passengers.

My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), whose enthusiasm for the Government’s concessionary fares scheme is much appreciated, as is her understanding of the reality of people’s lives and the effect that a good bus service can have, asked whether the Government would indemnify local authorities’ transport authorities, should they be subject to legal challenge. Under the current system we cannot do so because the Secretary of State has a legal
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role in the process and has to give final approval. For future proposals, we cannot indemnify, but the system will be robust and fair and will allow operators to challenge decisions, as is right. That will mean that operators will have to bear the cost of irresponsible challenges and justify that to their shareholders.

My right hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) was characteristically generous and gracious in his welcome of “Putting Passengers First”. He asked about smart cards. The Department entirely supports the use of smart cards. We have done a great deal and will continue to work hard to promote the use of smart ticketing. He mentioned light rail. We have always recognised that trams can be effective in attracting people from their cars. We will continue to support light rail schemes where they are the best solution for local circumstances. It is important to say that bus options are likely to offer the most cost effective solutions on many corridors.

My right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown) asked about concessionary fare funding for Tyne and Wear. I have been very involved with that. The Department for Communities and Local Government continues to talk to the relevant local authorities, including Tyne and Wear, about the matter. It is important to note that local authorities have long argued in favour of unhypothecated single pot funding and, indeed, wanted us to make it available through the revenue support grant. The existence of winners and losers, as has been illustrated today, is not unique to concessionary fares.

My hon. Friend the Member for Ipswich (Chris Mole) described local circumstances arising from the actions of the Conservative-Liberal Democrat council. I regret the council’s decision, but I commend my hon. Friend for being a strong voice for his constituents. I hope that the good people of Ipswich will express
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themselves, as I am sure they will, in the appropriate manner at the appropriate time.

My hon. Friend the Member for Hartlepool (Mr. Wright) raised the issue of trade unions and concerns about recognition for the work of bus drivers. I confirm that I am aware of the valuable contribution that bus drivers and all the staff who work in the industry make in providing services to millions of bus passengers. I have had talks with unions as part of the bus review and I am keen to see their continuing involvement.

My hon. Friend the Member for Pudsey (Mr. Truswell) asked me to send a firm message from Government about operators who may in some way be fixing the reimbursement they receive. I am happy to send such a firm message. If there is evidence of operators abusing a system, local authorities are at liberty to reduce their funding accordingly. I would also wish to know of any such abuse.

My hon. Friends the Members for Pudsey and for the Sheffield, Attercliffe (Mr. Betts) and others asked about quality contracts and how long it would take to get one through. That is an important question. The direct answer is that the estimate, if there was no appeal, is 14 months and, if there was an appeal, 20 months. It could be longer if there was a judicial review, although that would be unlikely. The time is the minimum to allow proper safeguards, such as those that my hon. Friend the Member for Sheffield, Attercliffe mentioned. There must be a public interest case made for removing any commercial freedoms. That is why we are proposing clearer criteria that will provide the right balance and allow for the public interest case to be made. I am sure Members understand that we must have a proper appraisal system for schemes.

The basis for concessionary fare reimbursement—

It being Six o’clock, the motion for the Adjournment of the House lapsed, without Question put.

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Local Government (Single Status and Equal Pay)

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

6 pm

Mr. Chris Mullin (Sunderland, South) (Lab): I thank Mr. Speaker for reinstating my little debate after our accident last week.

I want to raise an issue that has not had the attention it deserves and which is fast becoming a crisis in some parts of the country. Part of the reason for the lack of attention at Government level is, I suspect, because the issue has been perceived as a northern one and thus has not caught the imagination of officials whose view of the world tends to centre around London and the home counties. For the same reason, it has not until recently been high on the agenda of the Local Government Association. Furthermore, to be frank, the local authorities that have taken the greatest hit tend to be those that bent over backwards in the 1980s and early 1990s to protect their employees from the chill winds of Thatcherism. They resisted pressure to outsource and are now saddled with demands that cannot be met and which they would not have had to meet if they had privatised. One cannot help feeling that there is an element of “serves you right” in the initial response when the issue was first raised at national level.

The good news, however, is that word of the impending disaster has reached Ministers. I hope that when the Minister for Local Government replies to the debate he will be able to demonstrate that he and his colleagues are taking the issue seriously; otherwise, I fear the impression will linger that Ministers are still in denial about the magnitude of the problem.

Before I get down to detail, I want to make one more general point. The situation is an example of compensation culture gone barmy. What started as a laudable and legitimate quest for justice and equality has been perverted by the intervention of a particularly parasitic species of no win, no fee lawyers, in a form of madness that risks damaging the lives of the very workers who were supposed to benefit. What is more, it risks destroying the public services that those pressing claims say they want to protect. Local authorities face the prospect of being sued by one group of employees if they do not implement the agreement and by another if they do. Where unions have reached agreement on behalf of their members they, too, face legal action if they settle for anything less than the maximum. Far from reaching agreement, the no win, no fee lawyers are encouraging employees to take their case to tribunals, flooding the tribunals and enriching themselves.

I single out for dishonourable mention a solicitor—Mr. Stefan Cross—who has made a speciality of pursuing claims against unions and local authorities without regard for the consequences. He would say that he is merely representing the interests of his clients. I say that ultimately he will damage the interests of his clients, not to mention those of the public at large, and that he is making himself rather rich in the process.

The sequence of events is approximately as follows. First, protracted negotiations between unions and local
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government employees, during which I am told that it was argued by some on the union side that the exercise would prove cost-neutral, resulted in the signing of the 1997 single status agreement. The agreement envisaged a harmonisation of terms and conditions for the majority of local government employees, accompanied by a huge job evaluation exercise intended to sweep away injustices and anomalies that had accumulated over decades and replace them with a local government pay structure that reflected equal pay for work of equal value. The agreement was to be implemented by 31 March 2007—an honourable ambition.

As the deadline approached, an awful truth began to dawn: there would be losers as well as winners. Indeed, there would be more losers than anyone had anticipated, some of whom would lose out very badly indeed. In Sunderland, for example, bin men and road sweepers found themselves facing cuts of up to 20 per cent. in their take-home pay. Nursery nurses found that they would no longer be paid during holidays. The council’s hard-working gardeners found that they too were faced with big pay cuts. Needless to say, they were not happy. That gave rise to a new demand—that there should be no losers and that those faced with potentially catastrophic falls in income should be indefinitely protected.

Reluctantly, and at great expense, the local authority in Sunderland agreed to four years protection. At that point, the lawyers moved in. First, they threatened action against councils who delayed implementation. Then, they took action against unions that had settled for anything less than the maximum. Finally, once protection for the losers had been agreed, they started encouraging those who have already been substantially compensated to sue local authorities, arguing that they should be further compensated in order to maintain parity with those who had been temporarily protected.

One by one, Stefan Cross and his colleagues are unpicking agreements that everyone thought had been signed and sealed. I am told that the week before last, in Sunderland alone, more than 800 new claims were received, mainly from people who have already pocketed up to £9,000 a head in compensation, plus handsome pay rises, and who are now coming back for more. And so it goes on. No one knows where it will end, or how. As if that situation were not dire enough, somewhere along the line an employment tribunal decreed not merely that injustices should be put right and anomalies rectified, but that those found to have lost out should be compensated six years in arrears—as opposed to the two that had been the norm up to that time—thereby adding another huge sum to the local authority pay bills.

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