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My criticism is the point on which I intervened—the time at which the Government amendments were tabled. It was very close to Report, a gap of some months from
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the termination of the Committee stage. There may well have been detailed discussions going on that were so complicated that no earlier date was possible, or it might be the Machiavellian reason that the Government wanted to give bus operators little notice of the amendments. Be that as it may, we have had to absorb a number of amendments in very little time. However, that is a small point if the amendments are broadly right, which I think they are. No doubt if I read the small print afterwards I might find something slightly wrong with them, but that seems to be the case at the moment.

I wish first to pick up on the issue of quality contracts, which are at the heart of the Bill in many regards. In my view they are certainly the most important proposal in it. I think that the hon. Member for Wimbledon might agree about that even though he objects to them somewhat, because he recognises the importance of the proposal. Many of us are concerned that although the original arrangements in the Transport Act 2000 went in the right direction, they did not work in encouraging local authorities to bring forward quality contracts. I made that point in Committee, as did Labour Members. Above all, we did not want a repetition of the Government bringing forward powers that no local authorities actually wanted to take up.

I felt, and I think other members of the Committee agreed, that the hurdles that were in place—the quality contracts boards, the Transport Tribunal and the possibility of judicial review—were one hurdle too many for local authorities that wanted to go down this road. Therefore, the move towards the arrangements that the Minister has set out today was right. He neglected to mention that the proposal introduced today to make the quality contracts board a consultee was one that I made in Committee—I am sure that was an oversight on his part, so I put it on the record for his benefit—and it is an eminently workable solution.

5.15 pm

For the benefit of the hon. Member for Wimbledon, I should make the comparison with a planning authority that is receiving a planning application in respect of a flood area, because the quality contracts arrangements in the Bill are similar. Such an authority would have to consult the Environment Agency, which may recommend refusal or approval. The local authority still has the right to approve, against the recommendations of the Environment Agency, but it would have to make its decision stand up if an appeal was made to the Government inspector—the Transport Tribunal is the equivalent in this case. The arrangements in the Bill have a direct parallel with those in respect of planning in flood areas—those arrangements work, as will the ones being placed in the Bill today.

I am also pleased that the Minister has sought to define more closely the role that the, now advisory, body may have in picking up points of law, being satisfied that statutory requirements have been met and analysing the closely defined public-interest criteria. A concern was expressed in Committee that the quality contracts board, as it then was, was far reaching and might have adopted powers outwith its responsibility—or outwith that for which we thought it should be responsible—even though that was not closely defined. In particular, it might have had a view on the democratic decisions that a local council or transport authority had
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reached on its local transport plan. To be fair, the Minister has tied that matter down. I, for one, no longer have a concern about it, because the Bill has been improved significantly.

Improvements have been made to the quality contracts process, and I hope that local authorities will have the confidence to take the quality contracts route in a way that they would not have done had the amendments not been introduced. That is a significant step forward, because over the past 20 years the cost of travelling by bus has increased significantly, particularly outside London; the increase has been far higher than inflation. Even in the past 10 years, the cost of travelling by bus has increased by 13 per cent. above inflation, whereas the cost of motoring has reduced—we must remember that. In addition, bus usage has decreased, except in London and in one or two other isolated examples; services have dropped off, particularly in some rural areas, where it is almost impossible to get a bus unless it is 3 pm on a Tuesday, and then one is given only half an hour to go to the bank and come back again, if one is lucky; and bus company profits have rocketed. If those four factors are put together, they do not add up to a success story for public transport or for public administration.

Something has to be done to correct that situation, and I believe that the quality contract route is one such way forward. It provides the opportunity for local authorities to have responsibility for transport in their areas—why should they not have that responsibility? The hon. Member for Manchester, Blackley (Graham Stringer) is right about that, because local authorities are elected, they have their own mandate and they should be responsible for transport. Equally, there needs to be an external check to ensure that statutory requirements are being followed, and that is provided by the mechanism being put in the Bill now. We must also bear in mind the possible effect on small bus operators, who could be disadvantaged. I think that the balance will now be right in the Bill, so I have nothing but approval for the amendments that the Government have tabled in that regard.

It is also right that tendering should be allowed to begin while appeals are under way. Local authorities will take their chances on that. If they wish to take a chance and incur some expenditure with the possibility that they might lose in the end, that is their problem. They should have the right to take that course of action if they believe it is the correct one. I suspect that, on most occasions, authorities will weigh up the matter carefully and all they will do is to ensure, in line with their intention, that a hiatus is not created. That will be the right course of action, but if they want to take a risk, that is up to them.

The same point applies in respect of judicial review, which has been mentioned. A successful judicial review is no more likely as a consequence of these amendments. Judicial review may be more likely, but it is unlikely to be successful. However, that is a matter for local authorities to judge in the circumstances, as democratically elected bodies. It is a local responsibility, so they should make that judgment. If they get it wrong, they should be held to account for that, but it is not for us to second-guess them, or to impose unelected bodies to regulate what is properly a local function.

The Minister also mentioned the TUPE regulations. I welcome the fact that Ministers have considered the points made in Committee. I have not had much time to
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look at the amendments, given how many have been tabled in the last week, but they appear to be sensible ones that meet the concerns expressed in Committee.

It is also important to close the loophole relating to operators of last resort, even though those provisions may never be used. Indeed, their very existence makes their use less likely, and that is welcome. I concur with the concern expressed by the hon. Member for Manchester, Blackley about what happens when the nine-month period begins to run out. According to the arrangements set out in the amendments, the last three months of the 12-month period will be subject to approval by the traffic commissioner. Obviously they will consider the matter at that point, but they will also need to be involved at some time before the nine months is up. They may be persuaded to grant an extension for three months, but it is not clear what would happen if no solution had been found at the end of that time. When the Minister winds up, he must tell us what would happen then. If that is not made clear, individuals who have an interest in a lack of clarity at the end of the 12 months may be encouraged to drag matters out and ensure that clarity is not achieved. We need an answer on what would happen if the matter were still unresolved at the end of the 12-month period.

The technical amendments sensibly address points raised in Committee, and I have no quibble with that. I do not wish to make a Third Reading speech now, so suffice it to say that we broadly welcomed the Bill on its introduction, although we identified room for improvement. To be fair to the Government, many of those improvements have been made, so if the points identified by the hon. Member for Wimbledon are pressed to a vote, we will support the Government.

Ms Angela C. Smith: I support the amendments on the approvals process for quality contracts, the operator of last resort and the TUPE regulations. Like my hon. Friend the Member for Manchester, Blackley (Graham Stringer) and other hon. Friends—and indeed the hon. Member for Lewes (Norman Baker)—I am delighted that we are considering the amended Bill today. It is much improved and, like my hon. Friend, I am very grateful for the work done by the previous Minister, my right hon. Friend the Member for Doncaster, Central (Ms Winterton). She did a great job in getting the Bill into shape after Committee and ensuring that the points raised were fed into the Bill before consideration on Report. I also commend the new Minister on the speed and competence with which he has grasped those points. The result is before us today and is very welcome.

A demand for change led to the tabling of this Bill and it should not be ignored. That demand is underpinned by the evidence. The overall subsidy levels for the bus industry in this country have now risen to 40 per cent. of bus industry income at £2.5 billion. At the same time, the use of buses in passenger transport executive areas has declined by 8.6 per cent. in the past 10 years. More subsidies are going into the bus system, but the level of patronage, in PTE areas in particular, has declined by 8.6 per cent. At the same time, patronage in London has increased by 54 per cent. It is quite clear that the issues to do with patronage and subsidy versus regulation are not quite as clear cut as the hon. Member for Wimbledon (Stephen Hammond) would have us believe. There is a relationship between regulation and whether or not a bus service can succeed.

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Stephen Hammond: If that is true—if the hon. Lady believes that and thinks that she has the evidence for it—why is it that in regulated Belfast patronage continues to fall?

Ms Smith: The matters before us today do not relate to Northern Ireland, but I turn the question back on the hon. Gentleman. If he is so sure about regulation, why will not the Conservative party revisit the matters devolved to the City of London if—and that is an uncertain if—it returns to government?

The Bill is about “Putting Passengers First”, which was the title given to the original proposals. That title should not be forgotten. The Bill is about giving more local control to bus users up and down the country—not just in London, but in all our areas. It is particularly aimed at those living in metropolitan areas—often including quite considerable rural areas, too—where the need for re-regulation is at its greatest.

Local control is a form of devolution that I would have thought that the Tory party would be keen to pursue. I thought that the Conservative party was now the party that believed in local control and in giving local people more say in how their services were delivered. The responses given by the hon. Gentleman to my interventions exposed what I think to be the true Conservative position. That position is unreconstructed and unmodernised and is based totally on dogma rather than an appreciation of what is pragmatic and what will deliver for local people. [ Interruption . ] The hon. Gentleman may laugh, but passengers in Sheffield, South Yorkshire, Manchester, Greater Tyneside and all such areas would not be laughing if a future Tory Government repealed this legislation.

Stephen Hammond: We do not need any lessons in dogma from the hon. Lady. After all, this is her dogma that she is putting forward. If she wants to try that argument, she is being equally dogmatic.

Ms Smith: I struggle to make any sense of that intervention, so I shall move on.

Norman Baker: It is worth mentioning, to be fair to the hon. Member for Wimbledon (Stephen Hammond), that not everyone in the Conservative party seems to share that view. Conservative councillors to whom I have spoken seem to be rather keen on the Bill and to use the provisions. Would it be helpful, perhaps, if the future Conservative Government—if there is such a thing—or this Government found out the views of Conservative councils so that the House could be fully informed?

Ms Smith: I would recommend that to a future Conservative Government. They might start with Birmingham, where I understand that there is quite strong support for the Bill from Conservative councillors. Indeed, the Conservatives have some councillors in South Yorkshire, I understand, in Rotherham. I understand that they would join the consensus in South Yorkshire, among all political parties, that the Bill is absolutely necessary to the future of public bus services in the area. As I say, the Bill is all about giving more local control to bus users in areas outside London, so that bus services can be improved. The amendments put forward will make it a great deal easier for us to deliver the improvements that we want—the quality contracts.

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5.30 pm

The original points of difference between us have, for the most part, been ironed out. For example, there is now to be a consultation board, rather than an approvals board, thanks to Government amendments. The only point of difference that remains concerns the use of the Transport Tribunal for appeals. The Minister said earlier—I think that I understood him correctly—that the system for appeals, which will be prescribed in regulations, will be no more onerous than the current system. I would like to hear more from him on that point when he responds to the debate on this set of amendments. A new tiered system will come into effect as a result of the Tribunals, Courts and Enforcement Act 2007, but in the Transport Tribunal, we certainly do not want a number of tiers to come into operation in the appeals process, replacing the hoops and obstacles put in place by the Transport Act 2000. Those obstacles are what made it so very difficult to introduce the quality contracts that we are keen to see in our metropolitan areas. That issue needs exploring even now, and even more clarity is needed on the subject than was provided earlier in this debate.

I welcome the new amendments on the TUPE regulations. People often underestimate or forget how important drivers are to the delivery of a good bus service. They are not always that well-paid, and the status of their employment has not always been that well-protected. We need to make sure that we deliver the best deal possible, because they need to be happy in their work and sure about their pension scheme if they are to deliver the punctual, courteous service that we want. One reason why we have problems getting the kind of service that we want in south Yorkshire is the difficulties that bus operators have in recruiting bus drivers. Levels of sickness are high, too. The aspects of the Bill that relate to the TUPE regulations are therefore very important to Labour Members. We know that the issue is not just about the rights of workers and so on, important though they are; it is also about the quality of the service delivered. I am absolutely delighted that the TUPE regulations are now in place.

I share the concerns of my hon. Friend the Member for Manchester, Blackley and the hon. Member for Lewes about the operator of last resort. As I see it, the most likely scenario in which the operator of last resort power would be used is one in which a quality contract is awarded to an operator, and another operator who did not win the contract decides to walk away and deregister, leaving the service to flounder while the local authority or integrated transport authority establishes the new contracted service.

Of course, it should take no longer than nine months to put services run by the local authority on the road, and to replace them by means of a new quality contract. However, I welcome the extension to 12 months. We must think through the possibility of instances in which the new quality contracts are not delivered within nine months, and instead take up to 12 months to be put in place. It would be foolish of us to exclude the possibility of the process taking even a little while longer than that. It would be sensible to put clear provisions in the Bill, or perhaps in regulations, that would make it possible for the period to go beyond 12 months in exceptional circumstances. It would be really unfortunate if, despite the best attempts of local authorities and ITAs, things
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went wrong, and we were left with a crisis situation because the Bill’s provisions meant that the local authority could no longer fill the gap while it was in the process of establishing an alternative service via a quality contract.

Overall, however, this is an excellent Bill, and the one for which we have been waiting for some time. It is not based on dogma. It is not based on a belief that we must run the system in one way and no other. It is based on the evidence that we have been hearing from our constituents, the bus users in our areas, over a period of 20 years. That voice has been rising from a whisper at first to a crescendo of dissent against the current arrangements for running bus services in areas such as Sheffield, Barnsley and Manchester. Our constituents demand change. They demand that local councils improve services and do something about those that people are no longer getting. Sometimes bus services are changed every three months, withdrawn or diverted. Buses do not turn up on a regular basis, letting people down as they try to get to work.

Recently there were two changes to bus services in my area. Within three weeks I had received 1,000 signatures from local people demanding that something be done about those withdrawals of service. The hon. Member for Wimbledon may look away. He may take no notice, but the evidence exists. The service must change, and the Bill is the way to change it.

Mr. John Leech (Manchester, Withington) (LD): As a member of the Public Bill Committee and of the Select Committee on Transport, I welcome the opportunity to speak in the debate on the amendments relating to quality contracts.

I begin by welcoming the Under-Secretary of State for Transport, the hon. Member for Gillingham (Paul Clark) to his post and as a Report-stage substitute for the right hon. Member for Doncaster, Central (Ms Winterton), who is now the Minister of State, Department for Work and Pensions. I am tempted to describe him as the David “Supersub” Fairclough of the Government’s transport team. He has come on late in the second half and changed the game in respect of quality contracts and the approvals board.

The Government’s new clauses take on board the concerns raised by both Liberal Democrat Members and some Labour Back Benchers in Committee and introduce proposals to limit the power of the new quality contracts scheme board by effectively making it a super-consultee, rather than a decision-maker. I am happy for the Minister to attempt to take some of the credit, just as the Government did when they took on Lib Dem plans for free travel for the elderly prior to the 2005 election. We are more than happy for the Government to implement Lib Dem proposals.

The need to amend the legislation on quality contracts is clear. The Transport Act 2000 has not resulted in a raft of quality contracts, and in large swathes of the country outside London bus patronage continues to fall. Had the amendments not been tabled, there is a great danger that quality contracts would continue to be the pot of gold at the end of the rainbow, or that bus companies would be able to cause unending delays in implementing a scheme through a drawn-out appeals process.

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