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My hon. Friend the Member for Sheffield, Hillsborough mentioned the nonsense that for years the passenger transport executive in South Yorkshire has been trying to get through-ticketing among the various bus operators, but they will not have it. They want to concentrate on
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their own narrow interests and on making profits for their company. If people happen to live in an area where First runs the buses and they want to get on the tram, which is run by Stagecoach, it is hard luck. They will end up paying more because the through-ticketing simply does not work.

We have the tram in South Yorkshire. I shall be a bit critical of my right hon. Friend the Minister because it should be extended. It is a great system. It works. It is popular. The Youth Parliament did an excellent survey in Sheffield which assessed young people’s attitude towards public transport. It was generally positive, but most positive about the tram, which it saw as a quality service because it was safe and reliable. It should run to Rotherham.

The tram was a top concern when the regional assembly looked at its list of transport priorities, but the Government said that it was not worth the money. I am a bit critical of that, and we might return to it at another time. However, the tram was designed as part of an integrated public transport service. Bus services linked in to it so that people could get on the bus, get a feeder service on to the tram and get quickly into town. As soon as the tram came in, we got a deregulated environment and the bus companies saw it as their job not to co-ordinate with the tram, but to compete with it. They designed their bus routes to run parallel with the tram instead of linking into it. That is a policy of nonsense. It undermines and undervalues all the public investment that went into it.

Mrs. Villiers: The hon. Gentleman clearly sees regulation as the solution to those problems, but we had the problem of buses competing with trams in Croydon, in the capital city. Transport for London ended up in court because it was deliberately scheduling buses in a way that was very competitive with the Croydon Tramlink. On that point, and I think on a number of others, simply regulating will not deliver the solution to the problems that concern him.

Mr. Betts: I would be interested to hear what solution the hon. Lady proposes if regulation is not the answer, because deregulation has proved an unmitigated disaster in terms of integrating transport. I challenge her on the point about London. She said that the situation is down to the subsidies rather than the regulation. My hon. Friend the Member for Manchester, Blackley (Graham Stringer) pointed out that prior to the extra subsidy, passenger numbers were holding steady in London while they were falling in the rest of the country. If the element of subsidy in London is so important, would she advocate, as a policy, putting that subsidy into a deregulated environment? How could a subsidy of that kind and amount operate in any scheme except a regulated one?

To pick up on just one point about subsidy and deregulation, one of the problems—hon. Members have expressed this at various times—of dealing with subsidies for the concessionary fare scheme in a deregulated environment is how to calculate that a bus company should not lose or gain as a result of its being introduced. It is a difficult and complicated calculation, which will always end up in an appeal or in the courts. The concessionary fare scheme is part of the tendered arrangement in the regulated environment in London.
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There are no arguments about calculation because each bus company that tenders for the arrangements makes its calculation about the concessionary fares along with its calculation about the overall tender. I would argue that that is a much better system in that sense as well, but again perhaps the hon. Lady does not see it that way.

As other Labour Members have pointed out, parts of our constituencies are not served at all. I could cite a number of examples, but recently the treasurer of Woodhouse Mill working men’s club came to see me. He lives in Woodhouse, at one end of the enlarged village, and Woodhouse Mill is at the other end. Because he lives at the wrong end and the bus service now stops at 7 pm, he cannot go to the club unless he drives. He has a car, but he should not really drive and encourage others to drive when they are going for a drink at a working men’s club.

Between those two areas is a magnificent new retirement village, Brunswick Gardens, which has proved to be a great success and a great improvement on other facilities in the environment. The people who live there, however, cannot go to the shops in Woodhouse at night. The removal of the bus service has taken away their lifeline. That is nonsensical, but the bus companies will not respond to complaints because they do not understand the wider issue.

South Yorkshire council was so concerned about the position that a couple of years ago it embarked on the process of adopting quality contracts, but it hit the high barrier of a quality contract being the only practical way of delivering services. I accept that ultimately more subsidy may be needed to make the scheme work more successfully, but at that time the council was faced with the reality of, in some cases, up to 20 buses an hour running on a single route while a neighbouring estate had no bus services at all. If the whole arrangement were put out to tender, it would probably be possible to manage with 15 buses rather than 20 on the main route with no loss of service or passenger numbers; but it would be possible to increase revenue and passenger numbers by using the other five buses—no more resources, just the buses—to serve the areas that are currently not served at all, and give people an incentive to travel to them.

Quality contracts make it possible to increase passenger numbers and improve services with the same amount of money that is being spent now. That will be a challenge for passenger transport authorities, but it is something that they will have to consider. As I have said, ultimately even more subsidy may be needed, and I agree with my hon. Friend the Member for Manchester, Blackley that there is too great a disparity between subsidy levels in London and outside. That too will have to be considered.

I welcome the principle of allowing passenger transport authorities to adopt quality contracts if they wish. As the Local Government Association has pointed out, it is a matter of choice for authorities—something that I thought the Conservatives now supported. Although during their 18 years in government they did not give local authorities much choice, I thought we had seen a conversion, but we seem to be back with the same old Tory party. “We at the centre know best, and there should be no freedom for local transport authorities to decide”: that is their policy, and they should come out
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and admit it. I do not think that every transport authority should have to adopt a quality contract, but there should be a range of options of which that should be one.

Mr. Stewart Jackson: I am listening to the hon. Gentleman’s speech with great interest. He is obviously passionate about the issue, and, like the hon. Member for Manchester, Blackley (Graham Stringer), something of an expert on it. However, it ill behoves him to lecture Conservative Members on central control when his Government are using blackmail, monetary blackmail, to force on—

Mr. Deputy Speaker: Order. I do not think that the hon. Gentleman was in the Chamber earlier when I said that I was not very happy with that particular word. Perhaps he will use a different term.

Mr. Jackson: Forgive me, Mr. Deputy Speaker. I was engaged in other duties involving a statutory instrument, so I missed that exciting part of the debate.

The Government are using coercion, financial coercion, to force on local transport authorities schemes that their electors have not chosen to pursue.

Mr. Betts: I do not believe that any authority has been forced to adopt any particular scheme, although there is money for which authorities can bid if they wish to introduce innovations in their areas. I shall deal later with the issue of congestion charging.

As I was saying, quality contracts empower local transport authorities and give them choice, and I pay tribute to my right hon. Friend the Minister and her colleagues for finally moving in that direction. Some of us had been arguing for some time that the present arrangements were not working, and that we needed to do something about them. However, I still have reservations about the procedure. I fear that, ultimately, it could allow an unelected approvals board to second-guess and override the decision of an elected transport authority.

I take on board the point—I shall want to pursue it further if I am involved in the Committee stage—that there might be dialogue with the approvals board; it might want to make some suggestions for the transport authority to look at to improve the scheme. I have no problem with that. My problem is that if the approvals board says it does not believe that it is in the public interest or represents value for money for a quality contract scheme to be adopted in an area, will that mean that it cannot be adopted, because that would override the view of a local, elected, accountable body?

To refer to an interesting point made by the hon. Member for Lewes (Norman Baker), before he spoke I had already written down in my notes the idea of having a statutory consultee. In considering whether to move to a quality contract or what the best approach is for local transport in an area, if a transport authority were required to take on board comments from statutory consultees, of which an approvals board could be one, that would enable input from such a board, but in the end it would be up to the transport authority to make the decision. If the authority overrode the advice of the approvals board, that could be taken into account in any challenge in a future court case. Appeals could still be made to the transport tribunal to ensure that the transport authority had followed the procedure laid down in coming to its decision.

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The idea is that the transport authority has to go through a certain procedure, then the approvals board has to go through one as well and almost second-guess the process—I welcome the fact that it has to do it within the time frame that the Minister laid down—and then there is a tribunal that is meant to be held instead of judicial review, although there can be a judicial review as well. My hon. Friend the Member for Pudsey said that that was like replacing the high jump with a marathon; I think it replaces it with a series of high hurdles. It is possible that the democratically elected transport authority might fall before it crosses the finishing line. I feel uncomfortable with the amount of second-guessing going on and the fact that the approvals board can override purely in terms of its views about value for money or public interest. I would want to explore that further in later stages of the Bill’s passage. I agree with hon. Friends who have said that some of the bus operators are so determined to prevent this from happening that they will go to judicial review whatever consideration is given by whatever body before a quality contractor is brought into place.

I am pleased that my right hon. Friend the Minister has recognised the issue of the potential threat of withdrawal of services by operators and will allow powers for the PTAs to run or purchase buses in the meantime as an interim measure; that is helpful. If we are to have real competition in moving towards quality contracts, she might also have to address the issue that South Yorkshire looked at concerning the provision of depots and of the PTE owning them in future, instead of an existing monopoly supplier being in a position to dictate terms and conditions. These are details, however, and the Government’s general approach of allowing choice locally is in principle welcome, and can move us forward from the current poor situation that many of my constituents find themselves in.

On integrated transport authorities, I welcome the Government approach of allowing local arrangements to be formulated at local level. We get ourselves in an awful mess if we are prescriptive about how things should operate, when there are many different local circumstances in different parts of the country. The Government should be congratulated on their hands-off approach. There are reservations, however, about the possibility of non-elected members being able to have a vote on transport authorities. In Sheffield, the city region is partly in South Yorkshire and partly in north Derbyshire, north Nottinghamshire and north Lincolnshire. A lot of people who come to Sheffield to work or for entertainment or other reasons live outside not only the city or county, but the region. There must therefore be possibilities for expanding the local passenger transport authority boundaries with the consent of, and after consultation with, the authorities and population in other areas, if we are to have a sensible long-term approach to passenger transport in the area. Again, the Government’s flexible approach allows for such local arrangements to be introduced if they are thought appropriate.

My hon. Friend the Member for Sheffield, Hillsborough and I are probably two of the few people in Sheffield who have put their heads over the parapet and said that we support, in principle, the idea of a congestion charge
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scheme in the city. Such a scheme is probably inevitable in the medium term, let alone in the longer term. I am pleased that the Government now recognise that the decisions about such schemes in cities should be made at local level. I shall draw a contrast: if local authorities can be trusted to get this right, cannot they be trusted to get quality contracts right too? In one case an unfettered power is being given—although there must be consultation, ultimately the decisions lie with the local authority—but the same thing is not quite being offered on quality contracts.

One thing rightly pointed out by hon. Members—my hon. Friend the Member for Tyne Bridge (Mr. Clelland) has mentioned this—is the need to improve public transport before congestion charge schemes are introduced, because there must be that alternative. I accept that getting the money up front is difficult, but the New Local Government Network has come up with an idea on tax, income and funding as a general principle for local government, and central Government ought to examine it. It suggests that local government should be able to anticipate the projected future revenues of a congestion charge scheme and borrow against those so that it can fund up front the capital improvements necessary in public transport before the scheme is fully introduced and motorists have to pay. Ideas have been proposed in this area, and I hope that Ministers will examine them.

One of the things that makes my heart sink is when someone walks into my surgery to complain about a local bus service, because I know that, in reality, I will probably not be able to do anything about a legitimate grievance. Other hon. Members have touched on that point. I have been in this House since 1992, and I have argued strongly on many occasions for a change in the legislation on passenger transport, because the bus service provision substantially disadvantages many of my constituents. The Bill offers the opportunity for many of my constituents who do not have it to get the bus services that they need and deserve. I welcome and support the Bill.

5.7 pm

Paul Rowen (Rochdale) (LD): May I apologise for missing the start of the debate, Madam Deputy Speaker? I had another meeting to attend, which was tied in with my Front-Bench responsibilities.

I join other hon. Members in welcoming the broad provisions in the Bill, particularly the end to deregulation. All who represent urban areas have seen the devastating effect that deregulation has had on our communities and on the bus services on which many of them rely so heavily. If one looks outside the urban areas and visits rural areas, one will see that the bus network has virtually disappeared; as hon. Members have said, buses are infrequent.

Perhaps with one or two exceptions—places such as York, Cambridge and Brighton—deregulation has not worked, primarily because, as the hon. Member for Manchester, Blackley (Graham Stringer) said, we replaced what was largely a public monopoly—most bus companies were run by local councils—with a private monopoly; in most areas, it was replaced by five major bus companies operating in the conurbations. As he rightly said, the interests of those bus companies are about profit and maximising the amount of subsidy that they can get, rather than about providing a public service.

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I served on a passenger transport authority, where I saw what happens each year as it prepares its budget. I have seen how the bus companies juggle which services they will deregister to maximise the subsidy and how the PTA is then forced to make cuts in its regular subsidised service or to increase costs to students and, in the past, to pensioners. Such a system does not have a good effect in terms of enabling proper planning and ensuring that the bus service and bus network meets the needs of the local community.

Deregulation has served those five major bus companies, especially when one compares the profits that those bus companies make with the return that they get in London, where there is a regulated network. In London, the return is 7, 8 or 9 per cent., but in Greater Manchester and Yorkshire, it is double that. In those urban areas, the private bus companies have profiteered at the expense of passengers and they are not providing the services that we want them to provide.

I do not accept the claim by the hon. Member for Sheffield, Attercliffe (Mr. Betts) that the past was a golden age. I remember one of my first actions as a local councillor was trying to get GM Bus, as it was at the time, to change a bus route, which proved impossible. When deregulation was introduced, we were promised that it would enable that responsiveness to passenger demand. That has not happened, and instead we have seen the withdrawal of bus services. An area such as Rochdale is primarily served by one company—FirstGroup—which provides a poor quality of service that does not meet local needs. Meeting local needs is not the company’s aim, because its aim is maximising profit.

I welcome the proposals in the Bill to introduce regulation, whether through quality contracts or quality partnerships. We have talked a lot about the ills of the past 20 years this afternoon, but we must start to consider what will happen now. As the price of oil increases—I am shocked that the Department for Transport works on an oil price of only $50 a barrel, when the reality is that it is already double that and likely to increase—and people are increasingly unable to use their cars, they will want to rely on public transport, so we need to develop those services. They need to be integrated and, at the same time, we need to address the environmental issues.

Some of the problems that affect urban areas outside London are that our buses are less environmentally friendly, much older and do not deliver a very good service. That is why they are not attractive to people and why light rail is so much more attractive. One of the disappointments of the Bill is the fact that the total bus subsidy that is paid to the operators as well as to the passenger transport authorities has not been put together. I am talking about the vehicle excise duty rebate, which at the moment is going straight back to the bus companies. I know that the Government are consulting on that point, but it would make much greater sense if, during the passage of the Bill, we could include the VED rebate as a part of the subsidy and forming part of the quality contract. If we want to encourage bus operators to run buses that are full, modern and environmentally efficient, we should grant the subsidy to those operators that can deliver those benefits. That would be a powerful incentive.

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