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Mrs. Villiers: No. I believe that the Barnsley road example illustrates the fact that it is voluntary partnerships that are delivering around the country. There are many examples of that, some of which I shall come to in a moment.

We believe that the move in the Bill to include fares and frequencies in quality partnerships must be accompanied by measures to ensure that transport authorities take a reasonable approach to such arrangements. There must be proper safeguards in place to ensure that it is not possible for a local authority to put provisions in its quality partnership arrangements that would be uncommercial and impractical to implement. That is why we will scrutinise with great care what is meant by an “admissible objection” as set out in clause 18, and how the reasonableness test envisaged by the Bill will work in practice. It would clearly be wrong for local authorities to be able to impose regulation via the quality partnership system without putting in place the safeguards envisaged for quality contracts.

The concept of admissible objection will be pivotal in determining whether that risk materialises and whether the quality partnership provisions will be workable, so clear guidance on the meaning of the term is needed at the earliest opportunity. I therefore appeal to the Minister to publish the guidance—the Government tend to rely on guidance—on the clause as soon as possible, preferably before the Bill goes into Committee. That would be extremely helpful in establishing the meaning of that important term.

Clauses 19 to 40 are on quality contracts, which are another centrepiece of the Government’s bus policy, but which take us in the wrong direction. It is no surprise that they have sat on the statute book as a white elephant since their introduction, unused and irrelevant to effective attempts to improve bus services for passengers. I am the first to admit that the history of the deregulated bus network has not always lacked controversy, but I believe that the private sector has, in general, made a positive contribution when it comes to quality of service for passengers. There are undoubtedly some bus operators who underperform; that happens in all markets.

Ms Dari Taylor (Stockton, South) (Lab): Will the hon. Lady give way?

Mrs. Villiers: In one moment. I believe that, overall, the investment stimulus, innovation and entrepreneurial skills and expertise in product development and marketing that the bus companies have introduced have had a positive impact on services. It seems clear that private enterprise has facilitated a more rapid renewal of the bus fleet and a more efficient cost base than would ever have been possible under the old system.

Dr. Blackman-Woods: I must confess that I am struggling to follow the logic of the argument. Quality contracts have often not worked because their structure has been too inflexible to meet local requirements. The point of the Bill is to free the system up a little, so that contracts can reflect local circumstances and services can be tailored to local needs. I do not know why the hon. Lady and her party do not support that as a way forward.

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Mrs. Villiers: We are not supporting that because we do not believe that quality contracts will deliver the service improvements and increased ridership that we all want. I do not believe that those benefits will be delivered by winding back the clock to the 1980s and re-regulating the bus network. That is why we oppose moves in the Bill to make the quality contract route back towards regulation easier for local transport authorities to use.

Mr. Truswell: Will the hon. Lady answer the simple question that has been asked several times by Labour Members: if she thinks that regulation in London is good and acceptable, why is it bad for my constituents, her constituents, and the vast majority of constituents represented in the House?

Mrs. Villiers: What I have said repeatedly is that the increase in ridership in London is not due to the regulatory system in use in London. It is due to the £638 million a year that is spent on subsidising the bus network. It is also partly due to Transport for London taking an aggressive approach to enforcing bus priority. Both those circumstances distinguish London from the rest of the country.

Ms Angela C. Smith: I thank the hon. Lady for giving way; she is very generous with her time. Do I detect a change in Opposition policy? Are the Opposition actually in favour of subsidy, given that their argument is that it has worked in London? If so, does she recant Tory Bromley council’s judgment against the Greater London council in the early 1980s, which outlawed subsidy?

Mrs. Villiers: There is no change in policy. Our policy on bus services in London has been consistent.

Judy Mallaber: Did the hon. Lady not hear the intervention made by my hon. Friend the Member for Manchester, Blackley (Graham Stringer)? He pointed out that before there was subsidy in London, bus ridership was decreasing outside London, but stayed stable in London, and when there was subsidy, bus ridership further increased in London? Does she not agree that that proves the point? The figures show that regulation helped bus ridership in London, and those figures were given to her in an earlier intervention.

Mrs. Villiers: If the hon. Lady looks at the figures, she will see that the steepest fall in bus ridership occurred before deregulation, when there was an increase in car ownership across the country. The decrease in bus ridership started to level off in the years immediately after deregulation.

Rob Marris: If I understand the hon. Lady’s argument on London and other metropolitan areas—I represent a seat in one such area, the west midlands—she is saying that the reason for the increased patronage in London is high levels of subsidy, rather than the regulatory regime. If that is her argument, is she telling the House that she would cut the subsidy in London? Or would she increase subsidies in metropolitan areas to encourage patronage?

Mrs. Villiers: What I am saying is that introducing the regulatory system applicable in London to the rest of the country would not deliver the service improvements that we want. In future, we would certainly look to
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remove quality contracts altogether as an option outside London; we think that they are neither necessary nor effective in improving bus services in the UK. The Opposition believe that successful partnerships between local transport authorities and bus companies are the best way to deliver improvements in reliability and service quality.

Mr. Betts: I thank the hon. Lady for giving way again. Let us look at the issue in a slightly different way. My understanding is that the Opposition are now in favour of greater freedoms for local authorities. That is their policy. As I understand it, the Bill does not force local authorities to enter into quality contracts; it gives them the right to do so if they wish, because of local circumstances. The Conservative-controlled Local Government Association has actually called for councils to have

Does that not conflict with the policy statement that the hon. Lady made to the House this afternoon?

Mrs. Villiers: It does not conflict. The hon. Gentleman misunderstands localism, which does not always mean devolving to local bureaucracies. It means vesting power in the customer and the consumer. We believe that a deregulated bus system is the best way to vest power in the consumer and the passenger.

Norman Baker: What representations on the Bill has the hon. Lady received from local Conservative councillors, and does her local group of Conservative councillors approve of the amendment that she has tabled?

Mrs. Villiers: I have had many representations on the Bill from a number of groups, including Conservative councillors.

The best examples around the country demonstrate what can be achieved when a transport authority is prepared to take difficult decisions on bus priority, and when bus operators respond with investment in better training, better vehicles and better facilities. Areas such as Brighton and Hove, and Telford and Wrekin, demonstrate that successful partnership working can produce better vehicles, more investment, better information, simplified fare structures and ticketing, higher-quality services and, most important of all, increased ridership.

Andrew Gwynne: Will the hon. Lady give way?

Mrs. Villiers: No, I will make progress now. Close partnership working in Brighton delivered a 5 per cent. year-on-year growth in ridership and a 10 per cent. decrease in town centre traffic. The Government are wrong to see statutory quality partnerships and quality contracts as ends in themselves. The rarity of such partnerships and contracts is further proof that in many areas, voluntary partnerships can work well for local authorities and bus companies that have the mutual confidence to work together for the benefit of passengers, without the need for the local authority to resort to formal powers to control and regulate services.

Far from encouraging that kind of partnership working, the Government recently lobbed a hand-grenade into the relationship between transport authorities and bus operators. I am referring, of course, to the way in which they are introducing concessionary fares. Of course, the goals of the scheme are entirely laudable, but the way it
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is being put into practice is damaging the relationships that are vital to making bus partnerships work. It is clear that the scheme is leaving local authorities with a huge funding headache and council tax payers with a large bill.

Ironically, in some cases, as a result of the local authority funding crisis caused by the concessionary fares scheme, bus routes are under threat, either because the local authority is concerned that it can no longer afford to subsidise routes, or because the bus company finds routes uneconomic as a result of the financial pressures of the scheme. In a further ironic twist, Brighton and Hove—a striking bus success story in recent years—is one of the areas hardest hit by the problems with the concessionary fares scheme. That scheme has all the hallmarks of a proposal rushed through on Budget day without proper thought about how it would be set up or funded. That was playing politics with the bus network in a way that is simply unacceptable.

Andrew Gwynne: A moment ago the hon. Lady spoke about transport authorities that had taken tough decisions to get quality bus measures on the ground. The example that she gives, Brighton and Hove, is a unitary transport authority. How does she reconcile what she is saying with the measures in the Bill that she opposes? In the metropolitan areas, the transport authorities are the passenger transport authorities, which will become integrated transport authorities. In Greater Manchester, where there are 10 highways authorities, getting them to agree to a single standard for quality bus measures is difficult. The measures in the Bill will give those powers to the integrated transport authority. How does she reconcile that—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman must know that an intervention should be brief, not a mini-speech.

Mrs. Villiers: That takes me on to my next point. Some of the changes proposed in the Bill in relation to the structure of transport authorities and the Government’s arrangements could be useful. We would not oppose every single one of those governance changes. I particularly welcome the representations on the issue that I have received from the PTE group.

The Opposition share the PTE group’s view that there should be no scope for imposition by the Secretary of State of non-elected members on the renamed integrated transport authorities. There will be consensus across the House with the PTE group’s point that we should not seek to impose uniformity on passenger transport authority areas or PTE areas or their governance arrangements, as no single model will be right for every area. With reference to the example given by the hon. Member for Denton and Reddish (Andrew Gwynne), the arrangements clearly worked in that context. It is not necessarily the right model for other parts of the country, which is why it is important to ensure flexibility in the Government’s arrangements.

Mr. Stewart Jackson (Peterborough) (Con): Does my hon. Friend agree that not for the first time, one of the key problems with the policy is that there is no robust methodological analysis of the likely take-up of the
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scheme? That has significant financial implications for local authorities. It is all very well for the Government to announce it, but the fact that they have not done the detailed work to assess the likely take-up will impact on council tax payers across the country, including those in my constituency.

Mrs. Villiers: I take it that my hon. Friend is referring to the concessionary fares scheme. It is a particular concern that the cost of the scheme is extremely unpredictable. That is one of the key problems. Local authorities do not feel that they know how much the liability will ultimately be. That makes it difficult for them to plan, and they are not getting adequate guidance from the Government on how to deal with that uncertainty.

I return to the governance issues. The proposals in the Bill to give increased flexibility to allow individual non-metropolitan districts to join a PTA or integrated transport authority, without the need for a whole county to join, seem broadly sensible, as are powers to enable the Driver and Vehicle Licensing Agency to share with local authorities information about foreign registered vehicles.

One of the most controversial elements of the Bill is the provisions in part 6 on local congestion charging schemes. The Opposition believe that congestion charging should not be used to seek to price people off the road altogether, and nor must it become just another stealth tax. We must not ignore the fact that there is a social justice angle to the debate on road pricing and congestion charging. The freedom to travel is an important element of people’s quality of life.

Judy Mallaber: Will the hon. Lady explain to me why she uses the term “stealth tax”? Nobody could say that a scheme such as the congestion charge in London was introduced by stealth. Does she agree that her choice of words is based on pure political dogma, rather than proper analysis?

Mrs. Villiers: Given that so much of the revenue from the London congestion charge is generated by fines, there probably is a fairly stealthy element to it.

I return to the point that I was making. A key part of reconciling local congestion charging projects with social justice is to ensure that where they operate, they are accompanied by viable alternative travel arrangements open to those on lower incomes. We hope that before embarking on the schemes envisaged in part 6, local authorities will make the greatest efforts to ensure that they are accompanied by measures to improve local public transport. That is why we are seeking the clearest of guarantees from the Government that the funds raised by these schemes will stay local and will be used for improvements to local public transport and local roads. Yes, there are safeguards in clauses 97 and 98, but we all know that ways can be found to squeeze budgets and grants in the expectation that the local authority can make up the shortfall with revenue from congestion charges. We will test these clauses strongly in Committee to do all we can to ensure that no such circumvention is possible and that the funds stay local and remain devoted to transport.

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We will scrutinise the provisions on interoperability carefully to seek to ensure that we will not end up with a patchwork of different requirements across the country requiring multiple equipment for drivers.

Rob Marris: The hon. Lady is being very generous. Do I understand that the Conservative party now supports hypothecation? If that is the case, can she remind me when the hon. Member for Tatton (Mr. Osborne) announced that policy?

Mrs. Villiers: I do not see this as an instance of hypothecation. The charges are about transport. They should be devoted to transport.

A central concern for the Opposition on this part of the Bill is that on local charging schemes, the Government are trying to have it both ways. On the one hand, the Government clearly want the charging schemes to go ahead, or they would not have made transport innovation fund bids conditional on the introduction of congestion charging. On the other, they do not want bear the political risk that goes with those schemes. The Secretary of State wants to keep her head below the parapet and let local transport authorities take the flack for introducing new charges. That is wrong.

Mr. Greg Knight: Is not my hon. Friend fully justified in using the phrase “stealth taxes” in relation to congestion charging, because in the Bill the word “congestion” does not appear? The reference is to road charging schemes. Such a scheme would not necessarily have to have reducing congestion as its main aim. It could be used for raising taxes.

Mrs. Villiers: My right hon. Friend raises an important point. As ever, he has studied the Bill carefully.

The transport innovation fund should not be used to bully or coerce local communities into introducing charging schemes. The decision on those schemes should be taken locally, not in Whitehall, so TIF bids should be judged on the merits of the transport ideas that they propose, regardless of whether they include congestion charging.

Mr. Llwyd: The point of the way in which the Bill is framed in the context of the Welsh Assembly, for example, is for the Assembly to decide whether or not road charging is appropriate. Instead of being dictated from this place, the matter should be devolved to Wales to be decided locally.

Mrs. Villiers: I shall come to that clause in a moment. I am astounded that the Bill seeks to water down the requirements to consult local communities on charging schemes. The Opposition will strongly oppose clause 104, which contains the same text as the much-criticised clause 73 of the draft Bill, which downgrades the importance of consultation. We note the concerns expressed on the clause by organisations such as the Select Committee on Transport, the RAC Foundation for Motoring and the Association of British Drivers.

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