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Session 2007 - 08 Publications on the internet General Committee Debates Local Transport Bill |
Local Transport Bill [Lords] |
The Committee consisted of the following Members:John Benger, Annette Toft,
Committee Clerks
† attended
the Committee
Public Bill CommitteeThursday 24 April 2008(Afternoon)[Ann Winterton in the Chair]Local Transport Bill [Lords]1
pm
The
Chairman:
I welcome everyone back to the Committee this
afternoon. I see that not much progress was made this morning, but
there it
is.
Clause 12Development
of policies by ITA no longer joint duty with district
councils
Question
proposed, That the clause stand part of the
Bill.
The
Minister of State, Department for Transport (Ms Rosie
Winterton):
As I said this morning, clause 12 will result
in the duties to develop local transport policies and to produce local
transport plans applying just to the integrated transport
authority—following consultation with its constituent
councils—in each integrated transport area. The changes will
help to promote a more integrated approach to transport planning across
major conurbations outside London. The clause relates to transport
planning duties in the six metropolitan counties. In the metropolitan
counties, the duties in the Transport Act 2000 to develop transport
policies and to produce a transport plan setting out those policies sit
jointly with the passenger transport authority and the metropolitan
district councils.
The
wording of the duty to develop transport policies is proposed to be
amended by clause 8. As amended, the duty on local transport
authorities will be to
“develop policies for the
promotion and encouragement of safe, integrated, efficient and economic
transport.”
A further
duty in the 2000 Act is for local transport authorities to
“carry out their functions so as
to implement those
policies.”
Clause
12 reflects a shift in responsibility towards integrated transport
authorities—the new name that will be given to passenger
transport authorities by the governance part of the Bill. The clause is
thus an important plank in our policy for the Bill and I hope that the
Committee accepts
it.
Question put
and agreed
to.
Clause 12
ordered to stand part of the Bill.
Clause 13Quality
partnership
schemes
Stephen
Hammond (Wimbledon) (Con): I beg to move amendment No. 40,
in clause 13, page 13, line 25, leave out subsection
(3).
Good afternoon,
Lady Winterton.
This
is a probing amendment because, having read subsection (3) several
times, I am not sure what it achieves. Under section 114(3)(a) of the
2000 Act, authorities must be satisfied that a quality partnership will
“improve the quality of local services provided in the whole or
any part of their area, or combined area, by bringing benefits to
persons using those
services”.
The Bill
proposes a change to that: authorities must be satisfied that a quality
partnership will
“bring
benefits to persons using local services in the whole or any part of
their area, or combined area, by improving the quality of those
services”.
It seems to me
that this is just an exercise in moving words around. The meaning of
the provision seems to be exactly the same, so I look to the Minister
to explain exactly why the words have been turned round in this
fashion.
Ms
Winterton:
I am grateful for the hon. Gentleman’s
explanation of the intention behind the amendment, which was not
terribly clear to us at first sight. He is probably quite right in
saying that there is a certain moving around of the words and I shall
explain why.
Under the
2000 Act, before making a quality partnership scheme, the local
authority must be satisfied that the provision of the facilities under
the scheme and the provision of bus services to the specified standard
will meet one of two requirements. They must either improve the quality
of local services by bringing benefits to passengers or they must
reduce or limit congestion, noise or air pollution. It is true that, on
reflection, the wording in the current legislation seems slightly odd
because it is quite difficult to see how services can be improved by
bringing benefits to passengers. Surely, it should be the other way
round: benefits are brought to passengers by improving services. In
effect, the Bill changes that wording around. The amendment would
revert back to the original slightly odd wording.
I hope that right hon. and hon.
Members agree that the new wording makes better sense and rightly puts
the immediate focus on how schemes can be used to benefit passengers. I
hope that helps to clarify the position for the hon. Gentleman and that
he will withdraw his
amendment.
Mr.
John Leech (Manchester, Withington) (LD): I take a
slightly different view of the Conservative amendment, which appears to
go out of its way to make it more difficult to introduce a statutory
quality partnership. On Second Reading, the Conservatives appeared to
argue that statutory quality partnerships were preferable to quality
contracts, but the amendment would make it more difficult to set up a
statutory quality partnership.
Stephen
Hammond:
I made the intent of the amendment clear in my
opening remarks. I know that the hon. Gentleman is leading us down a
certain path, but there is no point in his saying what he thought I
meant when I told him exactly what I meant. I hope he will accept
that.
Mr.
Leech:
I thank the hon. Gentleman for his intervention,
but, given what was said by Conservative Front Benchers on Second
Reading, I feel that perhaps there may be a little more to the
amendment than he has put forward in his speech. It appears that in
reality the Tories in Parliament are showing their true Thatcherite
colours regarding the provision of bus services. They do not seem to
want any changes that would be to the benefit of passengers if it would
in any way affect the profits of the
operators.
The
amendment would mean that an authority must be satisfied that both the
provision of facilities and local services of the standard specified by
the statutory quality partnership would improve the quality of local
services, rather than simply bringing benefit to the people using local
services, which is what the Government propose in the Bill. The
Government’s wording is slightly more relaxed and will make it
much easier to introduce a statutory quality partnership, which will
obviously have benefits for local transport authorities and bus
operators.
The
Conservatives are clearly hopelessly divided on the issue of statutory
quality partnerships. They support the idea of statutory quality
partnerships in local government, but in this and subsequent amendments
they appear to be trying to wreck any opportunity to introduce them. If
the interests of the public are paramount—as indeed they should
be—the phrase
“bring benefits to persons using
local services”
should
be sufficient to permit the implementation of statutory quality
partnerships.
Stephen
Hammond:
It would have been easy to fall asleep during the
Liberal Democrat contribution. Having explained exactly why I tabled
the amendment, it might have been helpful if the Liberal Democrats had
simply accepted that rather than trying to prejudge in their own mind
why I might have introduced it—one can hear the hon. Member for
Lewes behind that
oration.
The
Minister explained fully exactly why the words have been changed
around. As I said at the start, this is a probing amendment to test why
the words seem to have been moved around—almost all the same
words are being used. I can assure the hon. Member for Manchester,
Withington that the intent of the amendment is nothing more than that
in this instance. Therefore, I beg to ask leave to withdraw the
amendment.
Amendment, by leave,
withdrawn.
Stephen
Hammond:
I beg to move amendment No. 41, in
clause 13, page 13, line 30, leave
out subsection (4).
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 42, in
clause 14, page 14, line 36, leave
out subsection (2).
No. 43, in
clause 15, page 15, line 3, leave
out subsection
(3).
Stephen
Hammond:
The amendments look at some of the provisions of
the quality partnership. We are trying to understand the
Government’s thought process in detail. From the outset I think
we are all agreed that if the Bill is to do anything it should be to
increase bus patronage and usage, and for the benefit of passengers. We
are all agreed that where partnership has worked it should be followed
in other instances, and it is to be congratulated. Statutory quality
partnerships are a tool for local authorities and the bus industry. If
an operator wanted to produce a service for passengers beyond what is
provided for by the quality partnership, the amendments would try to
find out whether the quality partnership should restrict the
introduction of that service on that route, which in essence is what
subsection (4) does. It would allow the authorities to impose
restrictions on any local services where such services were believed to
be detrimental. I am not sure that there is yet an evidential case to
be put to prove whether that might be detrimental to the quality
partnership in
place.
Ian
Stewart (Eccles) (Lab): I thank the hon. Gentleman, and it
is good to see you in the Chair, Lady
Winterton.
Does the
hon. Gentleman accept that what is really meant is the opposite of what
he is saying? Does he not understand that our constituents—his
too, I am sure—are concerned when a bus operator takes a bus off
a remote and perhaps not so viable route, only to run it on the most
viable route? That happens regularly and that is what the clause on
quality partnerships is
about.
Stephen
Hammond:
That may be what the hon. Gentleman believes. I
am interested to hear what the Government believe. If there are viable
bus operator services on certain routes that will benefit passenger
transport, I want to know why that should not be allowed by the quality
partnership. So that bus passengers can benefit, should there not be
the opportunity to have more than one service? That is the thrust of my
amendments.
Ian
Stewart:
But how does the hon. Gentleman, the spokesperson
for the Conservative party, reconcile that with the fact that some of
his own party members—Mr. Greaves, a local authority
member, for example—totally disagree with his national
party?
Stephen
Hammond:
The hon. Gentleman is referring to a letter
written by a retiring councillor, copied to Mr. Greaves,
which was leaked to today’s Daily Mirror—ably
shown up by the hon. Member for Bristol,
East.
I am not
surprised that there are councillors up and down the country who
disagree, as well as councillors
who agree. The Labour party had the experience of party members and
councillors disagreeing with the Budget—until the Government did
a U-turn yesterday. To suggest that any party will have 100 per cent.
agreement is
nonsense.
Kerry
McCarthy (Bristol, East) (Lab): You seem to be implying
that the letter was written by one person. I understand that quite a
few Tory councillors signed it. Do you have any idea how many people
signed?
Stephen
Hammond:
Lady Winterton has probably not had the benefit
that I have had, which is to have seen the letter. It was signed by one
Tory councillor, who is retiring. He is inaccurate in almost all his
letter. At the outset he states that he has never had any invitations
to London from Tory shadow Transport Ministers. In fact, I have invited
him to Parliament twice, and he has accepted the invitation twice. My
colleague, the former shadow Secretary of State, my hon. Friend the
Member for Epsom and Ewell (Chris Grayling), invited him twice, so he
has visited at least twice. One needs to be careful about picking out
the sentiments expressed in just one
letter.
The
Chairman:
Order. We have had a little bloodletting and it
is about time that we got on with the substance of the
amendment.
To return to
the amendment, I want the Minister to clarify what restrictions might
be imposed by local authorities on the registration of services not
included within the framework of the quality partnership. Why does she
consider it necessary for the traffic commissioners to be told how to
do their job? Surely they will be aware of all operational quality
partnerships in the relevant area and will not need to be told by the
local authority what the impact of accepting or rejecting an individual
registration application might mean. Does she agree that there could be
a restriction of opportunity for bus passengers because of the
provision?
We are keen
that the partnerships work and we understand the need for quality
partnerships. However, I am extremely doubtful whether restricting
services outside the quality partnership will necessarily be beneficial
to the Bill’s aim of increasing bus
patronage.
1.15
pm
Mr.
Knight:
When responding to my hon. Friend the Member for
Wimbledon, will the Minister clarify the precise meaning of subsection
(4) and proposed new
subsection (3C)? He reads it as a direction that tells the traffic
commissioners how to do their job. My reading of the provision is
slightly different from his and I would like to know which of us is
correct. To me, all it seems to be saying is that reasons need to be
given, so that when the traffic commissioners make their unfettered
decision they know the reasoning behind what has happened. It is rather
like a judge in a court giving reasons why he has found in a particular
way. Subsection (4) and proposed new subsection (3C) do no more than
that.
Mr.
Betts:
I am sorry that the hon. Member for Wimbledon did
not give way to me. Unless we have a proper dialogue about the
implications of the Bill and the practical applications for our
constituents, all we shall receive from the Opposition is a theoretical
free-market diatribe that does not relate in any way to what most of us
experience on a daily basis when we see constituents. If there are no
restrictions on other operators in the context of a quality
partnership, it will not
work.
I do not have
quality partnerships in my constituency; they are being developed in
north Sheffield. However, I have one major route on which operators
fall over themselves to deliver a service. There are probably 15 or
more buses an hour. Many pensioners living on estates near by, who do
not have a service in their area, find it a struggle to get to the main
route.
Stephen
Hammond:
Had the hon. Gentleman not risen on my very last
word, I would have given way to him. I will be happy to do so in future
so that we can have a
dialogue.
I
am interested in the example that the hon. Gentleman has given, because
it does not take away from my amendment. He said that a quality
partnership was needed for that estate because pensioners cannot get to
the main route. This is my argument: if there were a quality
partnership on the other route, which has 15 buses, should there be
only one operator on it? My amendment would allow operators to work in
conjunction with a quality
partnership.
Mr.
Betts:
I thank the hon. Gentleman for explaining why he
did not give way earlier. I accept that he had finished his speech, and
I look forward to further
exchanges.
It might be
possible to have a quality partnership with the operator on the main
route, or even with more than one operator on the main route, and to
take two or three buses off the main route when there are 15 an hour
would probably not detract from the service. Those buses could do a
little detour and be used in other areas that are not adequately
served, providing a much better overall service. However, if there was
no power to put restrictions on other operators coming on the scene and
taking over the released slots on the main route, the quality
partnership would never get off the ground because no operator would
divert services from the main route if they considered that somebody
else was about to bat through behind them and replace the services.
Because of the need for certainty and for things to be worthwhile for
the passengers, the local
transport authority and the bus operator coming into the deal, there has
to be some ability to restrict other operators coming in, otherwise the
whole thing would fall apart and it would not
work.
Ms
Winterton:
I agree with my hon. Friends the Members for
Eccles, for Bristol, East and for Sheffield, Attercliffe that the
amendment illustrates how out of touch Conservative Front Benchers are
on the issue. As my hon. Friend the Member for Sheffield, Attercliffe
so rightly pointed out, many of our constituents want us to take action
to improve bus services. The hon. Member for Wimbledon may say that the
amendment is simply probing, but it reflects the view of Conservative
Front Benchers on Second Reading, where it was said that these are
controversial provisions and that Conservative Members
had
“yet to hear from the
Minister exactly what can be achieved using a statutory arrangement
that cannot be delivered using the voluntary arrangements that already
have a proven track record in many areas of the
country.”—[Official Report, 26 March 2008; Vol.
474, c. 206.]
There are some
places where voluntary arrangements have worked, but there are too many
places where they have not. We therefore need to bring in statutory
quality partnerships if we are to respond properly to what local
authorities have told us.
Stephen
Hammond:
I am sure that the Minister will be keen to put
it on the record that where voluntary partnerships work and where they
can be helped to work, that is much the preferable
route.
Ms
Winterton:
It depends on what is going to be best for
passengers; part of the test here is to ensure that it will deliver. I
do not know whether the hon. Member for Ilford, North objected when, in
particular reference to the issue of registration restrictions, the
Transport Committee said:
“Quality partnerships
will not work if operators outside the partnership are allowed to come
into the area and compete against partnership services, possibly
overloading the network on the core routes and undermining the
efficiency of the
partnership”.
Southend-on-Sea,
a Conservative borough council, said
that
“the benefits of a
Statutory Partnership are important to this Council rather than a
Voluntary Partnership as a means of ensuring frequency, timing and
maximum fare levels. This has not been achieved through the current
voluntary partnership arrangements and it is unlikely that this will be
achieved even within the new proposal for voluntary partnership as set
out”.
People want to be
able to have these statutory quality
partnerships.
Ian
Stewart:
I distinctly remember saying at the first sitting
of the Committee that I was in favour of always trying a voluntary
approach first. As a Government, we did that in previous Bills. That
system has been tried. Some of us highlighted what we thought were the
limitations of the voluntary approach and those have come to
pass—there are weaknesses in such an
approach.
Does my
right hon. Friend agree with me—and with Tory councillors on
passenger transport executives throughout the country who do not agree
with their
own party—that now is the time for provisions to be introduced to
deal with the limitations of a voluntary
approach?
Ms
Winterton:
My hon. Friend is absolutely right, and it is
extraordinary that Conservative Front Benchers do not recognise the
strength of feeling out there. Hertfordshire council, which is
Conservative controlled,
said:
“The
overall vision for quality partnerships, whether voluntary or
statutory, remains vulnerable to other operators moving in and
upsetting the balance required to make the partnership work. In
Hertfordshire we have had experience of this, compromising the
potential of voluntary partnerships and effectively neutralising the
benefit to the operators concerned. This has a damaging legacy for the
scope to introduce future partnerships unless something is done to
control other
providers.”
Norfolk
county council, which is also Conservative controlled,
said:
“There is
however concern about the ability of operators that do not participate
in a partnership still being able to operate along the route,
especially if their services are of a lower standard. They have the
potential to undermine delivery of the agreed benefits to passengers,
particularly by taking revenue from operators within the partnership.
It is suggested that these problems could be overcome by giving the
Traffic Commissioner powers not to accept operators’
registrations except with the agreement of the relevant local
authority.”
That
is exactly what we are trying to achieve through our proposals, which
have been amended from the draft Bill in response to comments from such
councils and the Select Committee. The amendment would simply remove
the traffic commissioner’s ability to do
that.
Stephen
Hammond:
The Minister is quoting a number of councils, and
has chosen to quote Conservative councils. She will accept that a
number of voluntary partnerships are working well in Labour-controlled
councils. For example, when Brighton had a Labour-controlled council,
it worked well in voluntary partnership, as did Nottingham, York,
Oxford and so on. We could spend our time in Committee discussing why
voluntary partnerships have worked in Labour areas, as well as what she
is doing, which is suggesting that they have not worked in Conservative
areas.
I am trying to
establish what evidence the Minister has for deciding whether allowing
another operator on to a route that goes into a voluntary partnership
would negate the possibility of bus patronage
increasing.
Ms
Winterton:
Our proposal with registration restrictions is
that if a local authority had specified timing, frequency and fares,
and another operator decided to try to use the facilities, which would
effectively undermine the scheme and be detrimental to it, the traffic
commissioner could restrict it from operating on the route. It is quite
simple.
We believe
that there are instances of local authorities and operators being
willing to invest in a scheme and to provide, for example, four
services an hour—one every 15 minutes—with a specified
maximum fare. That would provide certainty and stability. If it is
achieved, we do not want someone else to undercut that service, perhaps
by arriving two minutes before the other service, when we know that
that would have a detrimental effect on the scheme and on
passengers.
That is one of the most
important points to be made to us on how voluntary partnerships operate
now and how quality partnerships should operate in future. That is
exactly why we are doing this, with safeguards. We shall come to
admissible objections, but the point is to have a well thought out,
properly developed and properly funded
scheme.
Mr.
Leech:
Is there not a bit of a fantasy from the
Conservative party here? Local authorities are deciding to introduce
quality partnerships because the local bus operators are not delivering
the services. To suggest that we introduce a quality partnership and
suddenly other operators are going to try to run a service that they
have not tried to run in the past is fantasy
land.
Ms
Winterton:
The hon. Gentleman is quite right. There are,
as I have pointed out, local authorities of all political hues that
have said they need greater powers in this area. As was backed up by
the Select Committee, we need to look at the issue of registration
restrictions; it is absolutely right that we respond to that. That is
the reality of what is happening out there in the country, and that is
what local authorities and passengers are experiencing. We need to make
these changes to respond, and I am afraid that the amendment would
undermine
that.
1.30
pm
Stephen
Hammond:
I seek confirmation. We have to consider all
sorts of circumstances, but does the Minister accept that an operator
running a service—one that evidentially would be
beneficial—alongside a quality partnership would not be excluded
by the
proposal?
Ms
Winterton:
This is how we envisage the quality
partnerships: the local authority will say that it wants to set up a
scheme—for example, to introduce a bus corridor or to have
better information at bus stops, which might mean real-time
information—and that it is prepared to put in the investment. It
will then probably specify that it wants whoever uses the route to have
a particular standard of bus. In future, it will also be able to say
that it wants services to run at a particular time and frequency, and
that there could be a maximum fare imposed.
One or two bus operators might
agree to participate in such a scheme. What we do not want is to allow
another operator to disrupt the scheme if that will be detrimental to
passengers and the scheme. We are saying that, given that the authority
will have laid down registration criteria, the traffic commissioner
will be able to refuse a registration if involving another operator
would disrupt the scheme
.
Stephen
Hammond:
I was well aware of how the quality partnership
is intended to work, but I am grateful for that further
explanation.
The Minister
used the term “detrimental”. I accept the point. Does she
accept that perhaps there is a circumstance in which the quality
partnership will work so well that it might be beneficial to bus
patronage in the area if another operator ran alongside? Will she
confirm that, in such a circumstance, even though she
does not think it likely to occur, the registration of that service,
given that it would evidentially be beneficial, will not be
restricted?
Ms
Winterton:
First, of course it is true to say that if a
new service is not going to be detrimental to the scheme the traffic
commissioner will say that it is acceptable. We will expect the traffic
commissioner, in those circumstances, to consult the local authority
and the operators about how the scheme will work. The local authority
at that point will be able to make representations, saying, for
example, “We do not believe that there is enough patronage along
that route to sustain another service. We have asked these operators
and they have agreed to run the scheme with a maximum fare. If another
bus arrives two minutes before the buses that they are operating, it is
likely that they will not be able to make an adequate
return.”
That
is the idea behind these restrictions. Of course, if bus patronage
improved massively and the buses of the two operators running along the
route were packed all the time, the local authority could say that it
was happy to have another service. The traffic commissioner would say
that it would not be a detriment to the scheme and therefore would
accept it.
The
provisions are not horrendously complicated or against common sense. As
I said, we added them in response to Select Committee recommendations
and representations that we received from local authorities. That is
why I am extremely concerned that the amendments proposed by the hon.
Member for Wimbledon would remove the provisions, thereby removing the
opportunity for authorities in those circumstances to take action to
try to curb disruptive competition. Given that explanation, I hope that
the hon. Gentleman will not press his
amendment.
Stephen
Hammond:
I am grateful to the Minister for her extensive
explanation. What she said at the end was the reassurance that I asked
for in my opening remarks, for which I am grateful. Therefore, having
had the reassurance that I seek, I beg to ask leave to withdraw the
amendment.
Amendment,
by leave, withdrawn.
Graham
Stringer (Manchester, Blackley) (Lab): I beg to move
amendment No. 89, in clause 13, page 14, leave out
lines 23 to
25.
The
Chairman:
With this it will be convenient to discuss the
following: Amendment No. 44, in
clause 18, page 16, line 39, leave
out paragraph (a).
Amendment No. 90, in clause 18,
page 17, line 2, leave out from ‘revised’ to end of line
3.
Amendment No. 45,
in clause 18, page 17, line 8, leave out paragraph
(e).
Amendment No. 91,
in clause 18, page 17, leave out lines 8 to
12.
Amendment No. 94,
in
clause 18, page 17, line 9, at
end insert
‘on the basis
that an “admissible objection” will be restricted to
matters dealing with the undermining of the commercial viability of
existing local services being operated in any part of the area to which
the scheme would relate,’.
Amendment No. 95, in
clause 18, page 17, line 10, at
end insert
‘, provided
that such provision specifies that the meaning of “relevant
operator” shall not include any person who does not operate
local services within any part of the area to which the scheme would
relate,’.
Amendment
No. 92, in clause 18, page 17, line 11, after
‘determination’, insert
‘by the
authority or
authorities’.
Amendment
No. 93, in
clause 18, page 17, line 12, at
end insert—
‘(f) to the
extent that such a determination is to be made by a person other than
the authority or authorities, for the notification of the authority or
authorities that an objector has purported to make an admissible
objection and for the authority or authorities to make representations
regarding that objection to the person making the
determination,’.
Government
amendment No.
81.
Graham
Stringer:
I am not sure about the procedure in this
situation. With the Committee’s permission, I intend to withdraw
amendment No. 93, which would make the transport authority party to
admissible objections, and amendments Nos. 94 and 95, which would limit
the scope of admissible objections. After I tabled the amendments, the
Government issued new draft guidelines that cover those points. I am
unsure whether to withdraw the amendments now or at the end of the
debate on this
group.
I shall try to
deal briefly with amendment No. 92, which would transfer responsibility
for dealing with admissible objections from the traffic commissioner
back to the local transport authority. I expect that we will deal with
the point in principle in more detail when we discuss quality
contracts, but it is a regular and well-used procedure in local
government that objections—whether to planning permissions,
licensing conditions or changes in traffic management or parking
schemes—are made directly to the local authority. That would be
more appropriate in this case than going to an outside
body.
In a sense, the
clause gives an incentive to any operator to put in an objection on the
basis of potentially wrecking the scheme. That would be more sensibly
dealt with by the local authority, which, of course, would have to
treat any objection in a reasonable way. It would be subject to the
normal challenges that any objector could make via the courts if it did
not behave in a reasonable way and follow a reasonable
procedure.
I
understand the Government’s wish to make the procedures as
watertight as possible and I have no doubt about the
Government’s intentions in these areas. Clearly, the intention
is to make bus services better and to have a much better way of dealing
with the services than the deregulated system that we have now. What
worries me about this proposal, a number of proposals that we shall
come to later and provisions in other Bills and Acts of Parliament that
are or have been before the House is that often the answer to
a
problem is seen to be the creation of a quango or an office that is
outside the normal democratic process. This is just one relatively
small example. I am trying to replace the appeal body with the local
authority, as is consistent throughout the rest of local
government.
The other
amendments, starting with amendment No. 89, deal with removing what is,
in effect, a veto of potential operators of quality partnership
schemes, but before getting into the reasoning behind that, it is worth
making a few comments about the place of quality partnership schemes
within the breadth of the Bill. The Bill is intended to improve bus
services by bringing a measure of off-road competition instead of
on-road competition, a measure of regulation to bus services and a
measure of accountability to the public money that is spent in that
regard.
There
are three ways of improving the system. At one end are voluntary
partnerships, which tend to work best where there is a monopoly bus
operator—sometimes a municipal bus operator—and a
relatively small or historic town. Those partnerships work relatively
well, but although they are often accompanied by increasing ridership,
they are also often related to a decline in the network of services
that people can use, so they are not, of themselves, totally wonderful.
They are not a panacea, but they do work in parts of the
country.
At the other
end are quality contracts, which I and the Government are keen to see
come into operation. Quality contracts are the next item on the agenda.
I think that those two types of scheme are where most bus services will
end up. I have become very sceptical about whether quality partnerships
will work, because where there is a good relationship between the
authority and the bus companies, probably everybody will prefer a
voluntary arrangement, and where there is a poor relationship and
services have been in decline, a franchise system, as envisaged in a
quality contract, is likely to be the best
solution.
Mr.
Leech:
Does the hon. Gentleman not agree
that, in certain circumstances, local authorities and operators may
choose to have a statutory partnership—a quality
partnership—simply to avoid the competition from other operators
that might try to get in on the act when there is a voluntary
arrangement?
Graham
Stringer:
That is a fair point, although it is not quite
the point that I was making. One quality partnership exists in the
country, in South Yorkshire. I might be over-cynical, but I think that
it has been brought in as one example that the bus operators can give
to say, “We really don’t need quality contracts,”
which is what would give the taxpayer and the travelling public the
best result. However, what he describes could
happen.
I
did not start off by believing that quality partnerships could not
work. I did not believe that until my right hon. Friend the Minister
was good enough to allow me to talk to her legal advisers and the Bill
team. I went through the details and asked practical questions about
how the most profitable slots are allocated between different bus
operators. The most profitable time in most cities is between 7.30 and
8.45 am—I cannot think of one where it is not—so that is
when most buses want to
operate.
1.45
pm
The nature of a
quality partnership is that the integrated transport authority invests
in real-time information and bus shelters, and the bus companies agree
to put on newer, better buses with disabled access, possibly with
real-time information on them. That is the background of the provision.
However, if two or three competing bus companies have put in
investment, how will it be decided who gets the most profitable slots?
An inbuilt conflict in the system will make it difficult to operate.
That is where I am coming from and, in a sense, I do not think that
many quality partnerships will ever happen. In the Government
consultation during the pre-legislative scrutiny of the Bill, they
effectively agreed to give the bus operators a right of appeal, which
was dealt with in the previous
amendment.
Mr.
Lee Scott (Ilford, North) (Con): Is the object of the
amendment to stop bus operators making any amendments to the measure
whatever?
Graham
Stringer:
No. The objective of the amendment is to remove
the right of veto over the schemes of some bus operators. If the
difficulties in the schemes can be made to work, why do we need to give
bus operators a veto? In the House of Lords, the Government said it was
highly unlikely that the veto would be used. Competition elements in
the Bill that must be abided by would make it difficult. That part of
the legislation is unnecessary and if the amendment is taken together
with amendment No. 92, the bus operators could still make objections,
but it would be to the local authority rather than an outside body.
Doing the latter would undermine the motivation behind the scheme. As I
said, in the real world, we are more likely to end up at both ends of
the
proposals.
Stephen
Hammond:
I am interested in that last remark. I have just
looked again at amendment No. 92, which relates to local authorities
determining the admissible objection. That is clearly the thrust of
where the hon. Gentleman wants to go. If local authorities are
determining the objections and are party to the quality partnership,
would it not be better to have an individual, independent adjudicator
instead of the local authority because there is a possibility that it
may not be
independent?
Graham
Stringer:
I understand the hon. Gentleman’s point,
which is a good legal point. However, it is not unusual for local
government to receive objections to its schemes, whether they relate to
planning or highways. If there is a partnership, it would be sensible
to proceed in such a way. If a local authority or a transport authority
behaves unreasonably, there is the normal recourse to the
courts.
Ms
Winterton:
It might be helpful if I make
some general remarks about admissible objections—what they are
about, why they are in the Bill, and how we expect them to work. After
I have dealt with the amendments, I will speak to my amendment No. 81.
I am slightly unclear at what point I should address the amendment
proposed by the hon. Member for Wimbledon. Perhaps I will do mine first
and then he will move his—I ask for
guidance.
The
Chairman:
For the advantage of the Committee, the only
amendment being moved is Mr. Stringer’s amendment No.
89. We are discussing the other amendments, but they will be moved
later.
For our
policy partnership scheme to deliver results, it is important for bus
operators to be willing partners in the scheme. That was stated in the
Transport Committee report on the draft Bill. It is in no one’s
interests for the scheme to include requirements that are simply
unrealistic or undeliverable. It is also important to remember that in
the changes that we are making in the Bill we are allowing a whole new
set of criteria to be included in quality partnership schemes: fares
most importantly, and frequencies and
timings.
My concern in
setting out the role of traffic commissioners and the need for
admissible objections is particularly about small operators in the
scenario. Small operators, in the drawing up of a quality partnership
scheme, may already be running a service along a route, but might be
forced to abandon that route because they simply did not have the
resources to meet quality partnership scheme requirements, if the
requirements were unnecessarily
demanding.
To address
the point made by my hon. Friend the Member for Manchester, Blackley
about dividing up profitable routes in a quality partnership scheme, we
see a need for negotiation between all the operators involved and the
local authority, ending up in a fair deal for everyone. The Bill will
change competition law provisions to make that feasible. As hon. and
right hon. Members may know, one of the problems at the moment is that
it is difficult for operators to sit down in discussion together or
with the local authority, because it goes against competition law. We
are changing that so that operators can look at what is proposed and
reach an agreement about how it would work. I do not share my hon.
Friend’s gloom about the fact that those quality partnership
schemes will be unachievable. I think that they will be achievable,
particularly because of the changes that I have just
outlined.
We are
certainly not talking about individual bus operators having a veto over
the standards proposed in a quality partnership scheme. Moreover, we
certainly do not want schemes that are in the best interests of
passengers to be undermined by frivolous or vexatious objections. That
is why we have moved to a system whereby only admissible objections to
requirements in a scheme, by relevant operators, would require the
local authority to think again about a particular standard or an aspect
of it. I will come back to the “thinking again”
bit.
It might be
helpful if I explained what we are talking about when we say
“admissible objections” and “relevant
operators”. There was understandably quite a lot of concern
about that. I hope that in some instances the guidance that we have now
published makes much clearer what we are talking about—as my
hon. Friend said. To help the Committee, we have also published a draft
set of regulations, which cover those matters.
An operator
should be able to object only if it is a “relevant”
operator. There was a fear initially—this is relevant to an
amendment tabled by the hon. Member for Wimbledon—that the scope
of “relevant operators”
would be widened. We are saying that for an operator to be relevant, it
must show that it is either already providing local services within the
scheme’s area, or had already applied to the traffic
commissioner to register such services. It must be involved at the time
in running services or have registered to run
services.
Mr.
Leech:
Is there a danger of operators, when they hear that
a local authority may be considering going down the route of a quality
partnership, notifying the traffic commissioner of their intention to
start operating services so that they become an operator that must be
consulted?
Ms
Winterton:
That point has been raised, but I hope that I
can reassure the hon. Gentleman by saying that merely registering a
service and pretending that it will be operated would not do. If an
operator wanted to register a service, the traffic commissioner would
be interested in whether it had relevant depots and staff and adequate
vehicles. It would not be just a question of disruption. Traffic
commissioners will be wise to people who just want to register a
service on the off chance. They would have to show that they were
serious about running a
service.
We have
proposed that an objection should be admissible only when it would not
be practicable for an operator who is providing, or intends to provide,
services to the standard specified in the proposed scheme, or when it
would not be commercially viable for a competent and efficient operator
to provide services to a standard specified in the scheme. I shall
return to how the proposals will work in
practice.
The draft
regulations propose clear criteria that must be met before an objection
would be admissible. They specify deadlines for each stage of the
process to ensure that the making of a scheme is not unduly delayed by
the admissible objection process. What specific issues in a quality
partnership scheme could an operator object to? In terms of
practicality, which is the first ground that I addressed, an operator
could object if it needed more time to procure vehicles or to take on
more staff to deliver the quality enhancement stipulated in the scheme.
If the operator was operating only one service an hour on a route and
wanted to operate two services, for example, it could ask for more time
to recruit extra staff, to provide more buses or to adapt existing
buses if there were accessibility
issues.
On commercial
grounds, the operator might object that it would not be possible to
provide the requested service and make a reasonable financial return. I
shall return to that, and explain how it will be particularly
beneficial to small
operators.
Objections
under the commercial criteria, however, would have to be addressed case
by case, taking account of local circumstances, market trends and cost
and revenue implications in the context of the scheme as a whole. It
would be for the bus operator to make its case, but if it said that the
scheme was not commercially viable, the local authority or the traffic
commissioner would have to take into account issues such as the
estimated cost of operating services to the specified standards, the
expected revenue from operating those services—taking into
account any potential increase in demand—whether the operator
could be expected to
secure an appropriate rate of return from the operation of services to
the standard specified in the scheme, taken together with other
services the operator provided in that area, and the views of other
relevant operators about whether it would be commercially viable to
provide services to that standard. Therefore, where two operators were
satisfied that a particular set of requirements was commercially
viable, but a third operator objected, it seems unlikely that the
objection would be
admissible.
2
pm
A key point
here is that the operator and the traffic commissioner would be
considering what would be expected from a competent and efficient
operator—not necessarily the operator making the objection. To
determine that, they would need to have regard to the appropriate rates
of return for operating similar local services elsewhere.
The aim of the process is to
prevent ill-conceived, vexatious or frivolous objections, while
protecting the legitimate interests of operators involved in the
provision of local services and who would be affected by the scheme.
If, in response to consultation—because the process would be
that a local authority would say that it wished to make a
scheme—an operator in the area felt they had grounds to object
to the authority’s proposals on fares, frequencies and timings,
which are the possible issues for objection, the operator would
initially object to the local transport authority. If that authority
rejected the objection, the operator could refer the matter to the
traffic commissioner for a
determination.
The
traffic commissioner would make a decision and inform all parties. If
the commissioner decided that the objection was not admissible, the
local transport authority could make the scheme as proposed. If the
objection were admissible, the authority would either have to amend the
scheme or omit that particular provision. It does not mean that a
scheme could not be made. It is not a right of veto, but the traffic
commissioner might say, “We do not believe this will work at 50p
a passenger, but it might work at 75p a passenger.” It does not
mean the authority would have to go right back to the beginning; it
could simply amend that bit of the scheme to make it practical or
commercially
viable.
I
shall illustrate why we think that is helpful to smaller operators, who
have made representations to us. They do not feel that they would
always have the economies of scale to respond to the demands of a
quality partnership scheme. The process we are suggesting has the
flexibility for them to make the case that if they are a competent and
efficient operator, they should not be subject to unreasonable demands.
For example, if a local transport authority proposed a particularly
demanding scheme that two big operators could live with—because
economies of scale meant that they could absorb the costs—a
small operator could still successfully make an objection by comparison
to similar operators of their size in similar environments.
A practical
example would be a small, traditional operator—many of us know
that some smaller companies in our areas have been running local
services for years without complaint, at relatively low but not
necessarily rock-bottom prices. The local transport authority could
decide to invest in new bus lanes city-wide and enter
into negotiations with, for example, the major operator in the city. It
could then consult on a quality partnership scheme with tight fare
controls on the basis that the large operator—operator
B—was willing to commit to low fares throughout the whole city
because he expected more fare payers on the busiest routes and could
use the extra money to offset less revenue on
others.
The small
operator would not have the luxury of using the busiest routes and
being able to subsidise the others. He might face bankruptcy if he was
forced to live with the fares. He would make representations to the
local transport authority saying that the fares were unreasonable but,
if it ignored those representations, he could go to the traffic
commissioner who could consider the matter on the basis of comparisons
with other small operators in similar areas and decide whether that
small operator was making an unreasonable
objection.
The small
operator would have the protection of being able to make
representations that it would not be commercially viable for him to run
the scheme and that it would drive him out of business, perhaps in some
circumstances leaving only one operator in the town. By the same token,
the traffic commissioner could say that the small operator had been
operating inefficiently for years and that a competent operator could
easily live within the proposed fare limits. In each case, the
objection would be inadmissible and the local transport authority could
proceed as proposed. We are not saying that means that the quality
partnership would not be allowed; we are saying that it might need to
be varied or that, for example, it did not include fares. The measure
is important protection, particularly for small
operators.
Some
concerns have been expressed about how long the admissible objections
procedure might take. In response, the procedure prescribed under the
regulations sets clear deadlines for each stage of the process. For
example, if a local authority notifies a bus operator that it does not
consider its objection to be admissible, that operator would have 14
days to refer the matter to the traffic commissioner. The regulations
stipulate that, if either party fails to meet a deadline such as
getting further information to the traffic commissioner, a
determination can still be made. Operators would not be able to employ
stalling tactics to delay the
process.
Even if there
were no opportunity for operators to register admissible objections, we
anticipate that making a quality partnership scheme would take a
minimum of 18 weeks from when the local transport authority first
publishes the notice and launches a consultation about the proposal to
when the scheme is made. Under our proposals for admissible objections,
in a best-case scenario the admissible objection procedure need not add
anything to that time scale. Even in a worst-case scenario, in which
more information might be requested from either the local authority or
the operator, we would expect the admissible objections procedure to
add no more than seven weeks to the overall timetable. We have set out
the details on page 13 of the
guidance.
Mr.
Betts:
I am listening carefully to my right hon. Friend.
The process sounds quite complicated. I was concerned that operators
might have a veto, but it
seems that the traffic commissioner has one. Let us suppose that the
traffic commissioner refers the scheme back to the authority and says
that it would not work at that fare level, but would at another fare
level. Presumably, the operator would implement the traffic
commissioner’s decision and change the scheme accordingly, and
that would be the end of it. The scheme could then be
implemented.
However,
if the authority says that the traffic commissioner’s scheme
would not work without more changes and, as a result of the extra fare
level, it would have to vary that aspect of it too, would it become a
new scheme? Would there be a chance for further objections to the
traffic
commissioner?
Ms
Winterton:
No. The idea is that when the traffic
commissioner goes through the process he would say that he wants
particular aspects of the scheme modified. For example, if it were the
fare scheme, that aspect would be dealt
with.
The most likely
scenario would involve the small operator. Let us suppose that he said
that it was not feasible for him to take part in the process, but that
he was an efficient, capable operator. He might say he was not making
undue profits from the service and that he had run along the route and
was now being excluded from it, but that he could show how it was not
feasible for him to continue the service. That would be the stage at
which the traffic commissioner could say that the transport authority
should modify the scheme.
The important thing about the
process is that it would not go back to square one every time. We would
have a discussion about the different ways the scheme could work in
terms of fares. If an ordinary, competent, efficient operator would
need to charge 75p instead of 50p the scheme would go back to the
transport authority for consideration. It would then, we hope, be
modified.
Admissible
objections can relate to only three areas—fares, timings and
frequencies—not about whether there is the right kind of bus. It
would be appropriate in those circumstances for a discussion to take
place about whether the particular point raised by the
operator—that is, about fares—should be addressed. If
points about fares, frequencies and timings were raised, the traffic
commissioner might wish to consider them all. If it was simply a
discussion about fares, that is the issue that would go backwards and
forwards. It would not necessarily mean trying to redesign the whole
scheme. It would depend on what an individual had objected
to.
Mr.
Betts:
I thank my right hon. Friend. If an objection is
made on fares and the traffic commissioner says, “Okay I partly
take on board that objection; I think the scheme will work but only at
different fare levels”, that would be reported back. The
transport authority would take that on board and simply implement the
scheme with the new fare levels. However, when a scheme goes back to
the transport authority, it presumably has to discuss it with the
operators in the partnership. If they say they can modify the fare
levels but that in doing so they may have to change the frequencies as
well, does that become a new scheme to which further objections can
be raised? It seems to me that it will because it has changed another
element that was not objected to previously, because it was thought to
be part of a package that has now been
changed.
Ms
Winterton:
I do not think that would need to be an
entirely new scheme. It is probably a slightly grey area. I suspect
that in practice we are talking about authorities making modifications
in terms of the traffic commissioner’s suggestions. As I have
said, that does not need to be a one-way process—going right
back to the beginning to consult all over again. The idea is to find
something that meets the requirements of all those interested and is
for the benefit of passengers.
Mr.
Knight:
On a similar point, where the traffic commissioner
decides to modify the scheme—let us say there has been an
objection on two grounds and he tinkers with both of them and the
scheme goes back—could another operator who sees the amended
scheme and does not like it put in an objection at that stage because
the scheme now being proposed is not the scheme to which he did not
object in the first
place?
Ms
Winterton:
The only operators who would
have an interest and would be able to make representations—as I
said earlier and as is clarified in the guidance—are those who
would be running along the route, and had registered and said they were
going to run it. As I said, the idea of somebody doing that on a whim
would be fairly transparent and unlikely. In those circumstances there
are likely to be one or two operators and during the process they would
be involved in the
discussions.
2.15
pm
To start with,
this goes through the local authority procedure so it is the local
authority which, in the initial instance, decides whether it wants to
listen to an operator objection and take them on board. It also
determines whether those objections are admissible and whether it
agrees with them and then appeals to the traffic commissioner if it
does not.
It is
highly likely, in those circumstances, that both the operators would be
involved in the discussions. If there were two operators in a scheme,
they would both be involved in the discussion about fares, timings and
frequencies in the first place. It is certainly not our intention that
admissible objections go on and on after the traffic commissioner has
made his decision. We have published draft regulations and, if people
feel that there might be a possibility of revisiting objections over
and over again, we would look at that. To go back to my earlier point,
this concerns trying to get partnership agreements. We anticipate that
most of the participants in this will be those who want to find with a
local authority a way of ensuring that the quality partnership scheme
can work. We believe that this is an effective way of doing
so.
Ian
Stewart:
Does my right hon. Friend
understand my anxiety, which is shared by others, that the new powers
of effective veto given to the transport commissioner put him or her in
a position of second-guessing everything that is going on? That could
act as a dead weight and hold up, or stop, what would be good schemes
that
would benefit our constituents. I heard the Minister say that she does
not envisage a plethora of admissible objections, but can she
understand our
anxieties?
Ms
Winterton:
Of course I can understand that people feel
that this might become a long, drawn-out process. Page 13 of the
guidance shows that in the worst case scenario we anticipate that a
scheme might be delayed by something like seven weeks. My hon. Friend
must recognise that the reason it is important to involve the traffic
commissioner in the discussions is that we are also talking about
registration restrictions. We are also taking an important new power to
give to traffic commissioners to keep others out of the scheme.
It is important that,
from the outset, the traffic commissioner is involved in drawing up the
scheme and looking at fares, frequencies and timings. If he or she is
to have the ability to introduce registration restrictions, it is
important that that is not done in a vacuum. My hon. Friend needs to
see those two parts of the equation together. We are giving an enormous
power to traffic commissioners to insist on registration restrictions,
so it is important that they can look at the scheme—particularly
on those issues—from the outset. That would enable the
commissioner to take the later powers as well, which would be difficult
to do
otherwise.
Mr.
Leech:
In the past, operators have been
quick to threaten legal action about the possible implementation of
faulty contracts. Is it not possible that operators will threaten legal
action if the traffic commissioner alters a scheme significantly enough
for them to argue that it is no longer the scheme that was originally
proposed?
Ms
Winterton:
The real danger would be an operator taking
action if there were no ability to appeal to the traffic commissioner
so that the commissioner could come to a final decision with the local
authority as to whether the scheme could work, because it would be much
easier to apply for judicial review otherwise. Part of the point of
introducing this process is to give certainty to a local authority in
these circumstances that they can implement the scheme.
Amendments Nos. 89 to 91 would
remove the opportunity for operators to register admissible objections
at all, leaving it for local authorities alone to determine the
requirements in a scheme. I emphasise that we are not talking here
about a general right of veto, and the guidance illustrates the very
specific circumstances in which an objection from the relevant
operators would be admissible. I hope that that reassures my hon.
Friend the Member for Manchester, Blackley about the way the system
will work.
The effect
of amendment No. 92 would be to leave it to local authorities alone to
determine whether an objection is admissible. As I said, the problem
with that is that it would leave a bus operator who believes his
objection is admissible with no recourse other than to seek judicial
review. That is an expensive and time-consuming process and the
proposal in our draft regulations is that the traffic commissioner
should act as arbiter when needed. The commissioner’s existing
expertise in the bus industry and his independence
from those involved makes him a good candidate for providing an
independent arbitration on areas of
disagreement.
The
draft regulations also propose that the traffic commissioner be able to
call on independent expert advisers when necessary. If he needs to make
a judgment, for example, as to whether an objection is admissible on
commercial viability grounds, he may seek the advice of an expert
assessor. That strikes me as a much quicker and more effective
alternative.
Mr.
Knight:
Will the traffic commissioner have the power to
award costs if he feels an objection is absolutely frivolous, and a lot
of people have taken a lot of time to collect the evidence to reject
the objection? Would he be able to award costs against someone whom he
feels behaved
unreasonably?
Ms
Winterton:
The right hon. Gentleman makes what would be a
good point if we had not clearly narrowed down the areas for making an
objection and who can make one. The first test is whether the objection
is admissible. Is it someone who runs along the route? Is it someone
who is registered? The fear was that anyone might object, such as
someone who lived alongside the proposed quality partnership scheme or
any operator from another part of the country. That brings me to the
Conservative amendment, which I fear would allow that. That is when we
would be more likely to get into the area of frivolous objections. We
have tried to narrow it down, so that an objection would be only from
interested parties. It would also, as I said, be a fairly quick
process. It would be up to the operators to provide evidence. We are
trying not to have a system in which costs are a deterrent but trying
to avoid costly judicial review. We have put the package together so
that we are not talking about huge costs.
The amendments of the hon.
Member for Wimbledon obviously take the completely opposite view from
that of my hon. Friends. Amendment No. 44 would guarantee operators the
right to lodge admissible objections about absolutely any requirement
concerning frequencies, timings and maximum fares. It would remove the
scope to specify any exceptions in
regulations.
I
understand why operators might be nervous about how we have narrowed
down the scope of “admissible objections”, but there are
good reasons. One situation in mind is that in some places a local
authority may be subsidising a bus operator to provide services to a
particular standard. For example, there might be a subsidised service
agreement under which the authority is paying an operator a subsidy to
run two services an hour on a particular route, at a maximum single
fare of £2. Suppose that the authority proposes to make a
quality partnership scheme including the set of requirements on that
route—two services an hour, maximum fare £2. Should bus
operators be able to argue that those requirements are uncommercial and
hence register an admissible objection to their inclusion in the
scheme? Clearly, operators objecting on that basis would be
unreasonable, because the local authority is already providing a
subsidy to compensate for the fact that the requirements cannot be met
commercially. That point is covered in regulation 4 of the draft
regulations, which I hope will provide some
reassurance.
Amendment
No. 45 would remove the power to make regulations defining
“admissible objections” in the context of quality
partnership schemes. However, we believe that it is important to be
able to provide greater clarity about the meaning of “admissible
objections”. That goes to the heart of what we have been
discussing. I think that Parliament wishes to know more—as
probably do the industry and local authorities—about what we
mean by admissible objections. The draft regulations enable us to do
that and remove the uncertainty that there would be if there were
none.
Stephen
Hammond:
For the sake of clarity, the admissible
objections, which we now know are being defined by the Government, are
being defined by
guidance.
Stephen
Hammond:
Are the admissible objections currently in
guidance, which is then going to be made into regulations? Is that what
the Minister is
saying?
2.30
pm
Ms
Winterton:
There is guidance and, at the back of the
guidance, draft regulations. That is what is in this note, which the
Committee should have. We are consulting on those, but thought it would
be useful for the Committee to have them in order to inform its
discussions.
It is
not clear from the hon. Gentleman’s amendment whether he is
saying that all objections should be admissible. If that were the case,
we would find it difficult to agree with him because we want to ensure
that good schemes cannot be undermined by frivolous, vexatious or
ill-founded objections. That is in the interest of operators and local
authorities but particularly that of passengers.
I turn to Government amendment
No. 81. I have already explained the role we envisage for the traffic
commissioners in the admissible objections process. Although the
commissioners have considerable expertise relating to bus services
through their existing regulatory roles, they might wish to call upon
an independent expert—for example an expert in transport
planning or economics to help them reach a judgment about the
commercial viability of a particular set of requirements in a scheme.
If a traffic commissioner wishes to call on independent expertise it
will be necessary to remunerate that person.
The purpose of the amendment is
to ensure that the necessary powers are in place for such payments to
be made. The details of any payments would need to be specified in
regulations. In the draft regulations that we published last week, we
propose that where a traffic commissioner employed the services of an
independent expert, he should pay that person such remuneration as
determined by the Secretary of State. I am sorry for speaking at such
length but this is an important part of the Bill. My hon. Friends have
raised a great number of questions through their amendments. I hope
that I have
been able to give some reassurance on those matters and that hon.
Members who have tabled amendments will withdraw them and support this
Government
amendment.
Stephen
Hammond:
This is a large set of amendments. I listened
carefully to the hon. Member for Manchester, Blackley explain his
amendment No. 89. I had read it as amendment designed to wreck quality
partnerships and so prevent any admissible objection. Although his
explanation was helpful, the guidelines now define admissible
objections such that amendment No. 89 is no longer applicable. My
concern was, and still remains, that, even if it was not a wrecking
amendment, taken together with amendment No. 92, it could effectively
stop any objection—even if it fell within the criteria specified
within the guidelines. I therefore remain concerned about amendment No.
89.
I turn to my
amendment No. 44. The Bill makes significant changes to how quality
partnerships will operate. It amends the Transport Act in such a way
that there is now specification as to the requirements of fares,
frequency and timings. When the Committee met in the other place, there
was considerable discussion, as there has been this afternoon, about
admissible objections. Clause 18(3), which amendment No. 44 addresses,
says that admissible objections provisions can be overridden
“in such circumstances as may be
prescribed”.
This is
where the amendment looks to the Minister for detail, although we have
had a great deal of detail and I think that I am reassured by her.
However, when this clause was discussed in Grand Committee in another
place the Minister there said:
“Virtually every circumstance
could be prescribed.”—[Official Report, House of
Lords, 6 December 2007; Vol. 696, c.GC86.]
That is what I am trying to get to in the
essence of the amendment. The Minister said that circumstances are to
do with frequencies, fares and timings by relevant operators and must
not be ill-conceived, frivolous or vexatious. If that is the
prescription, I would look to withdraw the amendment. If it is not and
the prescription is wider than that, then I would press this amendment.
I look again, hopefully, for the Minister to intervene to say that what
I have set out as the terms of the prescription is right. Otherwise,
what is being said in another place is considerably wider than what she
has just said to the Committee. If she can reassure me I am happy to
withdraw. My concern is with what the Minister in the other place
said.
Clause 18(3)
says that admissible objections provision can be overridden in
circumstances that may be prescribed. As I understand it, the Minister
is now saying the prescribed circumstances deal with frequencies, fares
and timings by the relevant operator provided they are not
ill-conceived, vexatious or frivolous. If she could confirm that those
are the prescribed circumstances and they are not wider than that, then
I am happy to
withdraw.
Ms
Winterton:
Obviously, the Minister in the other place was
saying that within the Bill there were lots of circumstances that could
be prescribed but what we have done in the draft regulations is to make
it much
clearer and more specific. I think he was giving the undertaking there
that we would be clear about the circumstances that could be
prescribed, which is what I have been trying to describe
today.
Stephen
Hammond:
That is extremely helpful. I am sure the Minister
will understand that what was said in the other place was extremely
wide-ranging. We needed that reassurance.
Every so often, Lady Winterton,
one makes a complete mistake. Sometimes it is better just to be honest
about this. My amendment No. 45 failed to recognise that these were not
just guidelines but regulations. I had been wondering why we were
amending guidelines in a Bill about regulations. Clearly, I have made a
mistake. I will not seek to press that one. I apologise to the
Committee.
Government
amendment No. 81 seems to be dealing with provisions to appoint a
person as adjudicator or assessor in order to determine whether an
objection is admissible. To a large extent that is sensible. We have
had the specification of admissible objections. There is clearly some
ability to update those guidelines.
It must be clear what defines
the competencies of the adjudicator and the assessor and how they are
to be selected. It must be clear under which procedures they are going
to operate. For local authorities and bus operators, having an
adjudicator and an assessor is better than it being done by the local
council, the route suggested by the hon. Member for Manchester,
Blackley. I understand that the Minister will be putting into guidance
the criteria for how these new posts are to be appointed and the
procedures to be followed. Government amendment No. 81 enhances the
Bill and will have our support.
Mr.
Leech:
Clause 13 is crucial and these amendments are very
important in determining whether or not the Local Transport Bill will
be a success in improving bus services. I had intended to give a
personal example from my constituency about why effective quality
partnerships were important but, given the length of the debate so far,
I have decided not to so that my remarks can be briefer.
Deregulation of the bus
services in the majority of the country has been a complete and
unmitigated disaster. It has been about putting profit before
passengers, which is why statutory quality partnerships and quality
contracts are so essential in areas where bus companies are not willing
to work with local authorities to get the best deal for
passengers.
Quality
partnerships and quality contracts must be workable, and bus operators
should not be able to veto reasonable schemes. Existing legislation has
made it almost impossible to introduce quality partnerships and quality
contracts and, as the hon. Member for Manchester, Blackley said, only
one has been set up since it was put in place. Amendment No. 89 would
remove the ability of bus operators to make an admissible objection to
a statutory quality partnership that covers maximum fares, frequency
and timings. It has been tabled because there is a clear desire to
protect the interests of passengers and the right of local authorities
that have made significant investment in transport infrastructure to
demand a certain standard
of service from operators of bus services within their area. In my
constituency, hundreds of thousands of pounds have been spent on
creating a quality bus corridor but, unfortunately, no bus operator is
prepared to run a quality service along that
route.
Ideally, local
authorities would engage with bus operators at an early stage of
planning before publishing a proposed scheme. That would give operators
an early opportunity to offer input to the feasibility and
acceptability of a scheme and therefore help to minimise the number of
situations in which a bus operator later felt compelled to submit an
admissible objection. Operators should have a right to object. That
said, not all objections should be of sufficient weight and importance
to impede a statutory quality partnership that specifies frequency,
timings and maximum
fees.
It is therefore
important that the definition of what constitutes an admissible
objection and a relevant operator is worded tightly under the
regulations to ensure that it cannot be abused by operators who do
simply do not wish to be constrained by the requirements of a
reasonable quality partnership. A watertight wording is also in the
interests of operators who need to know that, when they genuinely need
to object on commercial grounds, they can do so. Whatever side of the
divide we fall, the need for clarity and certainty in such matters is
paramount. The uncertainty of whether there will be legal action needs
to be eradicated as much as
possible.
We also
recognise that operators must have a voice with which to object to
unreasonable demands from local authorities. We are particularly keen
to ensure that the Bill does not harm small, family-operated bus
companies in rural areas, for example, that provide a basic but
well-run service that meets local needs by subjecting them to
compliance with such grand demands such that a quality partnership
might price them out of the market. I was glad to have reassurance from
the Minister that that has been taken into consideration, and that the
matter is not about ensuring that only large bus companies can enter
quality partnerships and object to
them.
Given our
worries about small operators, we added our support to amendment No. 94
under which an admissible objection would be restricted to matters
dealing with the undermining of the commercial viability of existing
local services being operated in the area to which the proposed scheme
would relate. It would mean that, if a relevant operator who was
running an existing scheme was unable to provide services to the
standard specified in the quality partnership on a commercially viable
basis, it would constitute an admissible objection. We want the
Government to clarify in which circumstances they envisage that would
be the case. Would it apply in subsidised service agreements under
which the local transport authority provides a subsidy to an operator
such that they can reach the standards specified in the scheme or might
there be other circumstances in which bus operators would not be
allowed to object?
The recently published draft
regulations specify that an objection from an operator must be made in
writing to the local authority within four weeks of the
publication of the notice and launch of the consultation on the scheme.
It is then for the local authority to request further information from
the operator if needed and to determine whether an objection is
admissible. The guidance is clear that an objection for an operator to
an authority must give a full statement describing the basis of an
operator’s objection, and include evidence as to why the
operator believes that the grounds for the objection are satisfied.
2.45
pm
In order to prove that a
service cannot be provided in a commercially viable way, would the
operator have to pass commercially confidential information to the
local authority? That appears to be the case, but, should the local
authority decide the objection is not admissible, and should the bus
operator subsequently refer the matter to the traffic commissioner, the
guidance states that, where the commissioner has to make a
determination as to whether the commercial viability ground has been
shown, the commissioner may seek the advice of an expert assessor. That
is provided for by Government amendment No.
81.
Indeed,
when the Bill was in Committee in the Lords, Lord Bassam of Brighton
said that the traffic commissioner would have to certify the evidence
submitted by the relevant operator. How does that work if the local
authority takes a decision? Does it also have powers to certify an
operator’s evidence? We are not clear about what access, if any,
the local authority has to commercially confidential
information—which may be objectionable to operators—or
whether, in the case of objection on the ground of commercial
viability, the local authority would be able to take an informed
decision and therefore have to lengthen the admissible objections
procedure, simply to refer the matter back to the operator and on to
the traffic commissioner and assessor for determination.
The Government acknowledged in
Committee in the House of Lords that the sharing of commercially
confidential information and its coming into the public domain was a
complicated issue and that admissibility would depend on exactly what
was submitted. Further details of what exactly might be submitted and
who might see it are urgently required, together with further
clarification of the procedures, particularly with regard to objections
on the basis of commercial viability, if the Committee is to be able to
scrutinise this part of the Bill
effectively.
Graham
Stringer:
I thank my right hon. Friend the Minister for a
full and comprehensive explanation of how quality partnerships work. It
was a bit like when I talked to the lawyer from the Bill team; the more
one goes into the detail of how the partnerships will work, the less
convinced I am that they will ever happen in that way, for some of the
reasons the hon. Member for Manchester, Withington outlined. We will
end up either with voluntary partnerships where everybody agrees or
with statutory quality contracts.
I listened carefully to what
the hon. Member for Wimbledon said and I hope I have not misled him in
moving amendment No. 89. The essence of what I was trying to say in
that amendment—maybe I did not say it very clearly—is
that we are effectively turning traffic commissioners into economic
regulators. They will be expected to be able to judge commercial
matters about
the profitability of buses running on particular routes. If there is a
real partnership, that is better done in negotiation—and if
there is no negotiation than there is no partnership. That was the real
point of that amendment: to say that this is better done not by an
external body but by the transport authority in negotiation. I listened
carefully to what my right hon. Friend the Minister said and ask leave
to withdraw the
amendment.
As
for amendment No. 92, in answering some of the Committee’s
points, my right hon. Friend the Minister has gone a long way in
defining “admissible objections” pretty
closely—she made great efforts to do so. If she intends to
continue with a traffic commissioner under the more tightly drawn
guidelines, I hope that she will look again at having the local
integrated transport authority determining the objections, as opposed
to the traffic
commissioner.
On the
viability of a route and partnerships where both bus operator and local
authority are investing, the more my right hon. Friend went through it,
the more likely it seemed that things would be done by negotiation
between the parties, rather than by a straightforward objection to the
local authority. I hope she will look again at that, as a compromise
position on the two amendments. Having said that, I am happy to
withdraw amendment No.
89.
Ms
Winterton:
With leave of the Committee, I want to give my
hon. Friend some reassurance. The regulations provide for the local
authority to decide, in the first instance, whether an objection is
admissible. The traffic commissioner will deal with an appeal against
what the local authority has decided in the first place. In such
instances, that will involve only an appeal against what the local
authority has decided.
As my hon. Friend knows,
traffic commissioners are used to making determinations on bus
operators, so we feel that they have the experience. However, it is
firmly in the local authority’s gift to decide in the first
place whether an objection is admissible, and to take that into
account. The traffic commissioner comes in only on the appeal
front—that addresses the Liberal Democrat point about judicial
review. It is important to have a process that will ensure that that is
not the only recourse available. The hon. Member for Manchester,
Withington raised a number of questions that I may need to write to him
about. I was not able to make note of the whole variety, but if I feel
that anything has not been answered I will of course come back to
him.
Amendment,
by leave,
withdrawn.
Question
proposed, That the clause stand part of the
Bill.
Stephen
Hammond:
I have only a few words to say on the clause,
which begins the section of the Bill dealing with quality partnerships
and quality contracts and which marks a return to
re-regulation—in some small way with quality partnerships and
considerably more
with quality contracts. At this stage, it is appropriate, before we go
down those lines, to remember some of the
facts.
While it is
true that bus ridership has declined after regulation, it is also true
that bus ridership fell more quickly between the second world war and
when the bus system was deregulated. It is also true that patronage
numbers have declined more slowly post-deregulation than
pre-regulation. Such points are important. It is clear that, during the
past 10 years, the reliability of services has improved. Ten years ago,
operators ran 98 per cent. of scheduled mileage on time. Now, the
figure is 98.9 per cent. Overall customer satisfaction with the bus
service is generally high at about 81 per
cent.
While we
understand where the Government are going with the provision, it is
clear that voluntary partnerships are working well in large areas of
the country. I would have hoped that the Minister might at least have
acknowledged that at the beginning of her
remarks.
Mr.
Leech:
Does the hon. Gentleman accept that there are
larger parts of the country where voluntary partnerships are not
working well—in fact, that they are working well in the minority
of
areas?
Stephen
Hammond:
I accept that there are large areas of the
country in which such partnerships are not working well. I could spend
time talking about geography, but I shall not do so. I understand why
the Government want to move on from voluntary partnerships to quality
partnerships. We have had a good debate and, as a result, some things
have become a lot clearer, and quality partnerships stand a decent
chance of working.
Ian
Stewart:
I am pleased that the hon. Gentleman made that
statement, but was it sincere? How does he reconcile his words with the
views of members of his party, who genuinely seem to be questioning the
sincerity of the Conservative party leadership on such matters?
Opposition Front Benchers are treating members of the Conservative
party like country
yokels.
Stephen
Hammond:
Lady Winterton has ruled on that matter already.
We spoke about it in some depth about an hour and a half ago, but I am
happy to go down that line and say that that was the expression of one
councillor. He was the only signatory to the letter and he is retiring
at the end of April. I have already explained to the Committee that I
have invited him twice to London at least, on my own initiative. I do
not regard Councillor King as a country yokel. He has done an
extraordinary job for transport in West
Yorkshire.
None the
less, the hon. Member for Eccles has referred to the view of one
person. Equally, as I said a few moments ago, there were probably
several councillors throughout the country who were unhappy that they
were not consulted about the 10p tax rate. We can all play that game. I
hear the Minister saying that she was unhappy about the 10p tax rate.
[
Interruption.
] Oh, she wishes to change her
view.
Ms
Winterton:
I said that local councillors do not administer
the 10p tax rate. The important point is that local councillors are
heavily involved with the provision of public transport in their area,
and it is absolutely true that Conservative councillors are dismayed by
the attitude of their Front Benchers towards the
Bill.
Stephen
Hammond:
There will be a number of letters from other
Conservative councillors to make it clear that they are not dismayed
and that Opposition Front Benchers have consulted them. I notice that
the right hon. Lady did not demur from my comment about the 10p
rate.
It is important
to move on now. While discussing quality partnerships under this and
other clauses, we have been absolutely clear about several things, such
as the prescription, who will assess admissible objections and our the
belief that partnerships would be better. The hon. Member for
Manchester, Blackley said that it would be better if work between the
local authority and the operator were done by consultation and
negotiation. That must be the way forward. We have had useful debates
on the amendments. I want to lay it down in the stand part debate that,
while we have supported certain things that the Government have done in
this section of the Bill, we need to put history into context as
well.
3
pm
Graham
Stringer:
I shall be brief. I cannot let the hon.
Gentleman get away with repeating what I think is an inaccurate
assessment of the history of bus patronage. My first point, which I
made during the discussions on amendments to this clause and to clause
18, is that where voluntary partnerships are working and patronage is
going up, they are working on a reducing network—the network is
declining and the bus companies are focusing on radial routes. That has
been the case in many historic towns where the headline figures are
given, but not the detail of what is
happening.
Graham
Stringer:
The general picture is one of decline in the
networks. There is a particular example in Nottingham where there has
been many changes. What always riles me and other hon. Members on this
side of the Committee is the non sequitur that because bus patronage
had been in decline since the second world war, deregulation had no
impact on bus patronage.
Bus patronage had been
declining evenly across the country. We have a direct
comparison—I refer the hon. Gentleman to page 9 of the Transport
Committee report on the Bill, which shows the graph. When buses were
deregulated, that decline continued in metropolitan areas. Bus fares
went up. London offers a comparison because it was the same as
everywhere else in the country, but when it was regulated while the
rest of the country was deregulated and there was no
subsidy—that can be taken out of the equation—the graph
went flat for London. So, we have a real comparator.
The Conservatives like to
pretend that deregulation has not damaged bus services, but all the
real evidence says that it
has.
Mr.
Douglas Carswell (Harwich) (Con): Does the hon. Gentleman
not accept that people in London are naturally more reliant on public
transport than people elsewhere and that that could account for the
difference?
Graham
Stringer:
It is the case that 92 per cent. of people in
London use public transport to go to work, whereas the figures in other
parts of the country are much lower.
Graham
Stringer:
Yes, it is. I am coming to that point, but I do
not think that it detracts from the essential argument that transport
across the country was in decline fairly evenly. There was a regulated
system in London, which continued to carry the same number of people,
and a deregulated system in the rest of the country. I know that this
is causing a lot of pain to the Conservatives, who are having to face
up to the objective
facts.
Stephen
Hammond:
I am delighted to talk about the objective facts.
The hon. Gentleman’s argument is undermined by the other area in
the United Kingdom that was wholly deregulated, which is Belfast. After
the Good Friday agreement, Belfast had 21.4 million passenger miles
being travelled. It has been wholly regulated, as the hon. Gentleman
suggests, and is now in steep decline.
Graham
Stringer:
The hon. Gentleman often makes an exceptional
case for London, where the facts do not bear that out. If he thinks
that one can compare what has been happening in Belfast over the past
30 years with events in the rest of the country, he makes a major
error. Further, the regulated system in Belfast is not the same as the
regulated system in
London.
Stephen
Hammond:
This is the point I am making, and it is where
the Minister is out of touch. She will remember that there was the Good
Friday agreement, and we are looking at a period that did not involve
the exceptional circumstances that people might want to look to.
Therefore, we can look at 10 years of another wholly regulated market,
which is showing a different experience. The hon. Gentleman makes the
point about London, but he must accept that there is another wholly
regulated market, which is experiencing something rather
different.
Graham
Stringer:
We could go on swapping facts for a long time on
this matter. I do not believe that Belfast has shown the same curves as
the rest of the UK has shown over the last 30
years.
Graham
Stringer:
Indeed. The important factor is that London was
exactly the same as the rest of the country in relation to the decline
in bus passengers. As soon as it was regulated while the rest of the
country was not, that flattened
off.
Mr.
Carswell:
Is the hon. Gentleman perhaps confusing
correlation with causation? Yes, London has had a regulated market and
bus patronage may have increased, but does he not accept that there
other factors in London—for example, car ownership? Car
ownership in London was 61 per cent. in 1994; it was 61 per cent. in
2004. It has levelled off. That is not the case in the rest of the
country. Might that also account for the
differential?
Graham
Stringer:
I understand the difference between correlation
and causation. The graphs are so explicit. Put the point the other way
round: it is much easier to argue that people have not invested in cars
because there is a good, regulated bus service. That is why there is a
difference from the rest of the country.
I could not resist correcting
the hon. Member for Wimbledon. We have had this debate many times in
Westminster Hall and on the Floor of the House. I hope that one day
that the Conservatives will sit down and look at the facts about bus
fares and bus
patronage.
Question
put and agreed
to.
Clause 13
ordered to stand part of the Bill.
Clause
s
14
to 16
ordered to stand part of the
Bill.
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