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Session 2007 - 08 Publications on the internet General Committee Debates Local Transport Bill [Lords] |
Local Transport Bill [Lords] |
The Committee consisted of the following Members:John Benger, Committee
Clerk
† attended the
Committee
Public Bill CommitteeTuesday 29 April 2008(Morning)[Ann Winterton in the Chair]Local Transport Bill [Lords]10.30
am
The
Chairman:
I greet members of the Committee on this happy
morning when we shall be spending two and a half hours
together.
Clause 19Quality
contracts
schemes
Graham
Stringer (Manchester, Blackley) (Lab): I beg to
move amendment No. 96, in clause 19, page 17, line 40, leave out
‘proposed’.
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 97, in clause 19, page 17, line
41, leave out
‘proposed’.
No.
98, in clause 19, page 17, line 43, leave out
‘proposed’.
No.
99, in
clause 19, page 17, line 44, leave
out
‘proposed’.
No.
100, in
clause 19, page 17, line 46, leave
out
‘proposed’.
No.
101, in
clause 19, page 18, line 1, leave
out
‘proposed’.
No.
102, in
clause 19, page 18, line 4, leave
out
‘proposed’.
No.
103, in
clause 19, page 18, line 6, leave
out
‘proposed’.
Graham
Stringer:
Good morning, Lady Winterton. We now come to the
kernel of the Bill, which seeks to make it easier to set up quality
contracts than was the case under the Transport Act 2000. Although the
Government’s intentions to make it easier to bring in
quality contracts are welcome, I hope that the amendments will make the
process even more effective. Before getting to the meat of the
argument, it might be useful to explain that when I tabled the
amendments to reduce a seven-stage process to a three-stage process I
also tabled consequential amendments Nos. 104, 194, 106, 107, 112, 113,
114, 120, 121 and
125.
It is clear that
the Clerks have seen a significant case—that if some of the
other amendments were taken on their own they would vary the Bill in an
interesting fashion. However, if they were taken separately, the
changes that they would make remain opaque to me so I shall concentrate
on the main argument for making the process of bringing in quality
contracts even easier than set out in the Bill.
There is a
clear difference in the thoughts of those on the
Conservative Front Bench and the Liberal Democrats and the Labour
party. When we considered related matters last week, Labour Members
said that many Conservative councillors agreed with my right hon.
Friend the Minister rather than with the Opposition, so I checked the
position of Conservative councillors on my passenger transport
authority. Before I excite the Opposition, I do not want to make the
case that all Conservative councillors agree with the Labour party on
the matter but, to put it simply, many of them, particularly those
whose work is related to transport, agree with the Government and the
series of amendments that I have
tabled.
I do not know
who should be more worried about this—Opposition Members or
me—but in open debate, much to his surprise and mine, the Bolton
Conservative member of the Greater Manchester
passenger transport authority, having watched the Second Reading
debate, said that he agreed more with me than with the hon. Members for
Chipping Barnet (Mrs. Villiers) and for Wimbledon. The
leader of the Conservatives on Greater Manchester passenger transport
authority—I think that she has it right—said that she was
taken by the case that there needs to be more regulation and more
public accountability for the money that is going into
buses.
The
hon. Member for Wimbledon is making an ideological case that is removed
from that of Conservative councillors who are actually looking at what
is happening on the ground.
Mr.
Greg Knight (East Yorkshire) (Con): How many of the
Conservative councillors the hon. Gentleman is alluding to are in
opposition, and how many are in control? I suspect that the majority of
them are in minority groups in
opposition.
Graham
Stringer:
The ones I was referring to are members of a
passenger authority that is, in effect, hung; it has a Labour chair but
there is no overall control. If the right hon. Gentleman checks with
the Conservative chairman of West Midlands passenger transport
authority, he will find that his views are not so different from those
of the Conservative members of the Greater Manchester passenger
transport authority. I hope that helps him to realise that Opposition
Front-Bench Members are out on a limb on the matter, compared with the
rest of the Conservative party.
The
Conservative spokesman on Greater Manchester had it right, because we
are talking about bringing a form of franchising regulation into what
is called the commercial network. When I talk to people in business
about commercial matters, they do not usually include in what is
commercial, businesses that obtain so much public subsidy. On Second
Reading, it was made clear that in the so-called commercial sector
there is an average subsidy of £35,000 per bus per annum. On
behalf of taxpayers, we have a right to ensure that there is public
accountability for the use of that money, particularly as the subsidy
has increased fivefold in cash terms over the lifetime of the
Government.
I do not
expect an immediate response from my right hon.
Friend the Minister because she is currently consulting on what to do
with the bus service operator grant, so I realise she is restricted in
how she can answer my points. However, what lies behind the
Government’s thinking on how to start quality contracts is that
bus operators
do not like the scheme. They do not like it because it will stop them
making three and four times the profit that they make in London. I am
sure that by whatever process—judicial or legal—they will
try to stifle the Government’s good intentions.
I ask my right hon. Friend to
consider that some of the aggression from the bus companies might
change if the BSOG was transferred to the integrated transport
authorities. At present, there is an incentive for
bus companies, whether on concessionary fares or the introduction of
improvement and regulation of services, to go for bigger subsidies and
to attack local democratic bodies. If those bodies, which we hope will
be in charge of the networks, were also in charge of handing out a
great deal of money and making that money work in favour of the
environment and transport, there would be a change of attitude in some
of the rather aggressive bus owners. It would offer a greater
inducement for them to work with the integrated transport authorities
than the long process currently in the Bill.
The Bill
contains a seven-stage process, with the transport authority going out
for consultation, then to an approval board, then a tribunal. The
amendments, and the consequential ones, ask whether we need such a long
process. Is it not right in principle for elected councillors to make
the decision, rather than an approvals board and a tribunal? Those
matters are of great local concern—the electorate and our
constituents care about them. Is it not right that the electorate have
a say about the people who make the decisions, and that the people who
stand for election and campaign for better bus services, a new route or
whatever, make the decision? That is the essence of the
amendment—the integrated transport authority should make the
decision.
Having
listened to the Second Reading debate and had a number of discussions
with my right hon. Friend the Minister, I recognise that there are a
number of reasons why the Government have not come to the same
conclusion that we have. They agree in principle that
it is better—as in the rest of devolved democracy—that
councillors make decisions and they recognise that there is a threat
from bus companies, so they have tried to protect local authorities and
the travelling public from judicial review by their proposed process.
That is the principle. However, will it really protect the process, or
will it just lengthen it? Will the provision stop judicial
review?
What worries
me most about the process, apart from the fact that
local councillors will not take the decisions, is that economic
viability will be part of the assessment made by the approvals board
and the tribunal when they come to their decision—not the
decision of the elected councillors who put the scheme out to work. Is
what is proposed sensible? That is difficult to assess, unless it is
tried out. Furthermore, saying whether something is economically viable
is close to a policy decision. For example, in an area that I know
well, south Manchester, putting out a tender in Wythenshawe for groups
of minibuses rather than larger buses on the main routes is a serious
policy matter in respect of council estates that were built without
easy access to buses. That decision, as part of a tender, should be
left to elected members, not to what would necessarily end up as an
argument between professors of transport economics, who could get it
wrong. One could say that they might be right in their argument, but
that the process will protect us from
judicial review, because we will have been seen to be
reasonable—the people putting the scheme out to tender would not
make the
decision.
Second-guessing
the courts is always difficult, but when the nature of what is going on
is to test the market to say which scheme the transport authority
thinks is viable, how can professors of transport or economists be
better at knowing the market than the tendering bus companies? They are
the market. If the transport authority is wrong, it will be clear from
the tenders coming back that the bus companies do not think the scheme
viable. It would not be beyond the wit of integrated
transport authorities to put variabilities—on fares and
routes—in the tender, so that bus companies had a range of
mix-and-match options. One would not expect a simple assessment that
could be made in a day. Tenders for fixed-route tram systems, for
instance, are complicated documents and such complicated tender
documents would be better dealt with by competitive tender than by
outside
assessment.
10.45
am
A second,
subsidiary argument is that if things are left to the
market, it will somehow allow the bullies of the bus
industry—the likes of Stagecoach, Arriva and First
Group—to push out the smaller operators. I know that my hon.
Friend the Member for Preston (Mr. Hendrick) has been
greatly exercised by such problems in Preston, and he has set them out
in Adjournment debates. However, I do not think the argument is a good
one. If an integrated transport authority does not want a large company
operating its scheme, it should package the tender to make it more
attractive for a small operator, but if one of the large operators
comes in with the best bid, it would be the duty of either the
tribunal, the approvals board or—if the amendments go
through—the integrated transport authority to take the decision
on best value and the practicalities of operating the routes. In the
current situation, the process of external decision making proposed by
my right hon. Friend the Minister would not really be a protection
against judicial review. Having the cash might be better
protection.
When my
right hon. Friend answers the debate, and between now and Report, I
hope that she will reflect on those issues. Our proposals are workable;
they would be quicker, and as long as a bus company did not win a
judicial review, the process could go on.
There are other ways of
protecting an integrated transport authority. One might be by having
the approvals board as a statutory consultee, which is close to what
the Liberal Democrats are proposing in their
amendment. That is a sensible proposal that requires
consideration and debate. Another way might be to stick with my right
hon. Friend’s proposals and to restrict the two-stage process to
dealing with procedure, not trying to second-guess the market and not
taking policy decisions—however we define policy—but
leaving them to the elected representatives. There is a lot of
scope.
I
shall deal with one other argument before I sit down. I know that my
right hon. Friend is concerned not just that small bus companies may be
pushed out but also that small districts may not be able to undertake
the process as effectively. However, the integrated transport
authorities will not be small shire districts, they will all be large
in financial terms, with decent local facilities,
and will not be awed by a judicial review case that
might cost £50,000 or £100,000. Even the smallest
authority that is likely to become an integrated transport authority is
likely to have a decent legal department. We are not talking about
small shire districts whose turnover might be only between £12
million and £18 million; we are talking about much more
substantial authorities. I hope my right hon. Friend will reflect on
that, as many of my hon. Friends are concerned to make sure that the
process
works.
Mr.
Clive Betts (Sheffield, Attercliffe) (Lab): I support the
amendments standing in the name of my hon. Friend the Member for
Manchester, Blackley, and I support his argument that there is in
general a need for a change. I challenge Conservative Front-Bench
Members to explain to my constituents, and to many other people up and
down the country who feel considerably disadvantaged by the current
arrangements, why no change is
needed.
The reality of
the situation in South Yorkshire is that in what some would say were
the halcyon days of the South Yorkshire transport system we had a cheap
fares policy, lots of widely used bus services and, as a result,
little congestion. Yes, there were failings, and no
one would actually want to return to those precise arrangements, but
our present free-for-all, with bus operators in effect determining most
of the services that run—or that do not run, in many
cases—is unacceptable.
For every
three bus passengers in Sheffield at the time of deregulation, there is
now only one, and a lot fewer buses to ride on. That is the scale of
the fall in bus usage, which we have to do something to
correct.
Of course,
franchising is a possibility, and there are quality contract
arrangements in the current transport legislation, but I think everyone
has accepted that the status quo is not feasible for the simple reason
that quality contracts have not been used in the form currently
available. The “only practicable way” test is one that no
authority will meet; indeed, no authority has met it.
South Yorkshire began a process to try to meet it because the authority
recognised the need to do something about ending the current
free-for-all. Wherever we stand on the issue, it certainly cannot be to
support the status quo in terms of a piece of legislation that has not
yet been operated and is effectively
defunct.
We
have a choice: either to say that transport authorities, whatever their
form, will never have any powers to challenge the current deregulated
environment, or that they will have powers, which are effective and can
be used where appropriate in their areas. No one on the Labour Benches
is arguing that every transport authority in the country has to move to
a quality contract situation; simply that an authority should have the
right to do so if it is in the best interests of the population in
their area. I find it very difficult to understand how there can be any
argument against a transport authority with elected members being able
to decide what is best for people in their area.
Surely that is a fundamental
issue for people such as the hon. Member for Harwich, whose writings
about new localism I was reading in The
Daily Telegraph
the other day; in effect, he was asking why the electorate should
bother to go out and vote at local elections when local councils had so
few powers, and saying that what we ought to be doing is looking at
enhancing the powers of local authorities, so that they could really
relate to the electorate in their areas. It was very interesting. I did
not agree with absolutely all of it, but the general thrust—that
when people vote, they should actually be able to change things and
elect a council that delivers the services they want—seems to
run completely at odds with the support of Members on his Front Bench
for the removal of franchising powers and not allowing elected members
at local level to make those decisions. How can a new localism position
be supported when a Member wants on the one hand to argue a case for
more powers to local councils, and on the other hand, to vote in
Parliament to take those powers away and not give them at
all?
I am very much of
the view that these are matters where the right should be with the
local transport authority to have a quality contract situation in their
area if they believe that it is best, and they can demonstrate that it
is best, for delivering services to the people of their area. It is not
just a question of the three-for-one passenger exchange; fares have
gone up from the rather famous 10p that used to be paid in South
Yorkshire to around £2 for the same journey. It is the constant
changes that people cannot get their heads around. People plan their
lives; they get a job and have to get there early in the morning so
they work out the bus route, but at 42 days’ notice, the bus
route changes. That is a fundamental
problem.
A man and
wife have many happy years of marriage, but one of them has to go into
an old persons’ home—we have all talked to people who
have had that experience. They find a home that the partner living at
home, who does not drive, can reach easily by bus, but then the bus
route changes and there is no comeback. They go to the local councillor
and their Member of Parliament, who are powerless in those
circumstances. That absolutely cannot be right.
I was talking to constituents
on Westfield crescent the other day about Crystal Peak, a significant
district shopping centre in my constituency where many women work
because the hours suit their family lives. The problem is that although
the working hours in the shops suit their family lives, they cannot
actually get there on the bus because the bus services do not run early
in the morning or late at night. Elected members at local level must be
given powers to address such problems if they think that is the
appropriate way forward.
How can we reach a situation
where quality contracts can be put in place, if that is thought right
at local level? In London, we clearly have a situation that works.
Transport for London makes the decisions, puts the franchises out,
private firms tender for them and bus passenger use has grown
enormously, so that is a model we can look at. There have been rows
about concessionary fare schemes in local authorities up and down the
country, where concessionary fares are built on the back of a free
market, deregulated environment. A complicated argument is made about
operators not being any better or worse off as a result of a
concessionary fare scheme. That argument disappears in the London
environment because concessionary fares have become part of the
tendering process, and all the firms tendering build the concessionary
fare arrangements into their tendering process, so there is no
administrative nightmare.
I shall try
to reinforce some of the points that my hon. Friend the Member for
Manchester, Blackley has already made. Clearly, the Transport Act 2000
did not get the issue of quality contracts right but now we have an
opportunity to get it right, and not to replace one set of insuperable
barriers with another. There is the democracy argument that the matter
is for local decision makers on the transport authority, so we do not
need an approvals board and tribunals. Why do we need the approvals
board to second-guess and in some cases override or veto a
decision? That is the fundamental problem that some of us
face.
I respect and
understand the Minister’s intention, as I see it, not to
override local democracy. I know that she is committed to local
councillors having powers and operating them in the best interests of
their electorate. I also understand her desire to protect small
operators and councils in particular, and to avoid a judicial review
position in which courts decide matters, often on a technicality,
rather than decisions being taken at local level by whatever process is
appropriate. However, I still have worries about the approvals board
and the tribunal coming together as part of an extended process; not
merely about where power lies in that process, but about the
timing.
I was talking
to another constituent—I have been talking to quite a few
recently because of the local elections—on Ribblesdale drive.
She said, “I’ve got a small car, but I generally
don’t really want to use it, I’d much sooner use the bus.
The problem is on a Sunday there’s no bus service and I have to
walk half a mile.” Sheffield has a few hills in it, so she is
all right walking down the hill to the bus stop, but getting back,
particularly when carrying shopping, is an
impossibility. I told her, “I have good news for you. I’m
sitting on a Committee next week and we’re going to look at how
we can give powers back to local councils, if they wish to take them
up, which would enable them to decide the framework and frequency of
services.” She said, “Oh, that’s great, and
when’s that going to happen?” I said, “Well, we
might get the legislation through some time this year, and then the
regulations are going to follow, and then, well perhaps another three
years afterwards?” She said, “It’s not very quick,
can’t we do it any quicker than that?” There will be a
lot of public frustration when people understand how long the process
could take.
The
Minister has said that she wants to lay down maximum time limits for
the various processes to be followed in the approvals board and the
tribunal. It would be helpful if she indicated what she sees
as the way forward. The Passenger Transport Executive Group has
said that it could take 18 months for a transport authority to come to
a view, after all the necessary consultations, that a quality contract
is the right way forward and that it could then take up to another 14
months to go through the approvals board and the tribunal. Although all
that is designed to stop judicial review, there is nothing to prevent
an operator going for judicial review at the end of the approvals board
and tribunal process, which could take up to another six
months.
11
am
So, it could
take three years from the legislation coming into effect to go through
all those stages, which would cause an awful lot of frustration for
people who
do not have access to a bus service, but who desperately need one for
economic, social or personal reasons. It would be helpful if my right
hon. Friend the Minister said what she sees as a maximum time limit for
the process.
My view,
as I said, is that local democracy should prevail. I hope that my right
hon. Friend responds on the approvals board and what it will be able to
do. Reading the Bill carefully, I cannot see any reference to the
powers of the approvals board to change or veto a decision of a
transport authority being limited in any way. I cannot see anything
that limits in any way the powers of an approvals board to say no, or
yes with conditions. I may have read the Bill wrongly, but I cannot see
that. I worry, because it effectively says not that
the approvals board has a view over the process—whether the
right process has been followed, which might offer some protection
against future judicial review—but that the board has a right to
say whether a policy is right or wrong. That is undemocratic, and I
find it difficult to
support.
If the
purpose of the approvals board is to protect
authorities, particularly small authorities, from a
judicial review process—I hope that we do not get there and that
that time is not taken up—why are the powers of the approvals
board not limited to looking at whether proper process has been
followed by a transport authority, rather than the board having
complete power to reverse or change a
decision?
The
Minister talked about an approvals board perhaps saying not yes or no,
but, “Please can we look at some issues again?” It may
then enter into a dialogue with the transport authority on the precise
details of the scheme proposed—is it correct in every aspect?
The board might say, “Yes, we think you have the right approach,
but we need to discuss modifying or changing one or two
aspects.” How will that be built into the time
periods?
The
Minister talked about an iterative process between the approvals board
and the transport authority. Will that process be open-ended, or
time-limited as well? If it is to be an iterative process, will the
operators, who might be objecting to a scheme, be part of it? It is
difficult to understand how we will be able to have an open public
hearing by an approvals board on a quality contract proposal, with the
operators presumably putting counter-evidence, but then exclude the
operators if the approvals board comes to a view that it wants further
discussions. That could get incredibly difficult and
complicated.
I might
be misreading the Bill, but we must be clear, or we
could end up with a time-consuming and complicated process if the
legislation is passed in its current form. If the intention is to
ensure that the process is done correctly to avoid judicial review, why
do we need an approvals board and a tribunal? Why two bodies instead of
one? Why not simply have a tribunal, for example, which could look at
whether process had been followed properly? I hope that, through such a
mechanism, we might avoid the need for judicial
review.
There
has been some discussion about the economists working with traffic
commissioners to test the viability of schemes, but I agree with my
hon. Friend the Member for Manchester, Blackley that viability will be
tested by the tendering process. That is what will happen. If an
authority has to justify in public—through the approvals
board process and then an interim
discussion—precisely what the viability of the scheme is deemed
to be, will that not put into the public domain an awful lot of
confidential information on the economics of the tendering process? It
will undermine the authority’s position when it puts the scheme
out to tender. I raise that issue because it is interesting to know the
Government’s thinking on how the process will
operate.
Finally, the
approvals board could have another role. As my hon. Friend mentioned,
that is perhaps down to the Liberal Democrat suggestion to which I
referred earlier. If there is a need for expert external advice, the
approvals board perhaps ought be able to give that while the transport
authority is considering the adoption of a quality contract. It could
feed in at that stage so that it would not add to the time period, but
would inform the process without having a veto. For
example, the Environment Agency is a statutory
consultee on flooding matters. That proposal would not give a veto to a
non-appointed body nor would it extend the time period, but it would
achieve a better-informed decision that should strengthen the
authority’s position if a judicial review challenge were to take
place.
My
position is clear. Given the general support across the House for
devolving more powers and for giving a thrust to
localism—supporting it to ensure that our constituents get a
better deal and get the bus services that they need—it is right
that we change the current process on quality contracts and give
authorities the right to have them. We must also examine carefully
whether the process laid down under the Bill is right one and whether
we should make changes to it to allow local democracy to have much
greater force and
impact.
Norman
Baker (Lewes) (LD): In a useful contribution to the
debate, the hon. Member for Manchester, Blackley began by saying that
quality contracts schemes are the kernel of the Bill, and so they are.
If we can get this right, we will hold out the prospect of increased
bus patronage, the deficiencies of the current system being addressed
and the problems of the Sunday service, which the hon. Member for
Sheffield, Attercliffe referred to a moment ago, being corrected to the
benefit of all. However, if we do not get it right, we will be in
severe danger of repeating the mistakes of the 2000 Act. The best will
in the world, which created that Act, will have created this Act, which
will simply be filed on a shelf to gather dust while things carry on
pretty much as normal, with local authorities trying to use the
legislation, but probably not succeeding too well because of the
hurdles that have been put in
place.
When faced with
a number of hurdles, the ITAs may well conclude that the game is not
worth the candle and just not bother. That would be very sad, and not
at all what the Minister and her team want. I readily accept that they
have introduced the Bill to improve
things.
The difference
between the Minister and her colleagues—I align myself with her
colleagues on this matter—is over whether the Bill will achieve
the ends that she wishes or whether those ends are too onerous to be
achieved. In that sense, there is a practical difference between the
arguments that we are making now and the Conservative position, which
is a separate issue. I want to dwell on that for a second. I hope that
we hear from the hon. Member for Wimbledon in due course, as this is an
important part of the Bill and we must test his party’s
position.
I must reflect on the fact that
the motion tabled by the hon. Member for Chipping Barnet on
Second Reading on 26 March
began:
“That
this House declines to give a Second Reading to the Local Transport
Bill [Lords] because it encourages the introduction of Quality
Contract schemes to regulate bus networks, thus preventing free
competition between bus
operators”.
That is a
different position from that outlined by those who have spoken this
morning. Furthermore, the hon. Lady
said:
“In
future, we would certainly look to remove quality contracts altogether
as an option outside London”.—[Official Report, 26
March 2008; Vol. 474, c. 204-09.]
If that philosophical position has been
adopted, it is incumbent on Conservative members of
the Committee to demonstrate how they would address the inefficiencies
under the current system without resorting to quality contracts. In the
debate, the hon. Member for Wimbledon put great stress on the use of
partnerships
generally.
Stephen
Hammond (Wimbledon) (Con): On Second Reading and at last
Thursday’s sitting, I said that partnerships are undoubtedly the
best way forward and that we would prefer voluntary partnerships to
work. Where they cannot work, we want to ensure that
statutory partnerships work. That is our stated
position.
Norman
Baker:
I am grateful for that intervention, which
clarifies matters a little, but the question I put to the hon.
Gentleman when he was summing up on Second Reading was, “What
happens if partnerships are ineffective?” There are effective
partnerships up and down the country—he has referred to some, I
have referred to some and we all know where they are; Brighton and
Hove, Cambridge and so on—but the question the Conservatives
have not answered is, what happens where partnerships are ineffective
and what recourse is there, or should we just leave that to fester,
with poor service for many people across the
country?
Stephen
Hammond:
Is the hon. Gentleman joining the hon. Member for
Manchester, Blackley in saying that he sees no future in statutory
quality
partnerships?
Norman
Baker:
No, not at all. I am, I hope, joining the position
that quality partnerships have a role to play, but there needs to be a
further dimension of quality contracts for when quality partnerships
have failed to achieve the desired result. That seems to me to be an
entirely logical progression. Without that further option being
available, quality partnerships would be less likely to work, in my
judgment. If the hon. Gentleman wants quality partnerships to work, the
existence of quality contracts will help to achieve that end. No doubt
we will hear from him in due
course.
There
is one more aspect of the Conservative position that it would be
helpful to clarify. If these arrangements need to be removed altogether
as an option outside London, as the hon. Member for Chipping Barnet
says, I fail to see what is so different about London that means that
some sort of regulation works there despite it apparently being
entirely inappropriate for the rest of the country. Frankly, that is an
insult to people in Manchester, Birmingham and other big urban areas,
as well as those in rural areas, across the
country.
Stephen
Hammond:
I do not think that the hon.
Gentleman was here on Thursday afternoon—his
colleague the hon. Member for Manchester, Withington was—when we
went through a number of arguments about regulation and had a debate
about where regulation is and is not working, or is viewed to be
working or not. That is one point we can park. On the second point, he
knows as well as I do that the Greater London Authority Act 1999
impacts on what we can do elsewhere, as does other devolved
legislation. That, I am sure, is why my hon. Friend the Member for
Chipping Barnet made the point about outside
London.
Norman
Baker:
I am not sure that that justifies the
philosophical difference, but let me leave it there. The Conservatives
can make their own bed and lie in it in due
course.
Across the
country, we have seen a significant decline in bus usage over the last
30 to 40 years. Some of that is social, as people
have gained access to private transport, but some of it is not. It is
down to very poor bus services, which have driven people to use cars
when they would not otherwise have done
so.
The hon. Member
for Sheffield, Attercliffe referred to the situation on Sundays, when
people might be forced to use cars because of the lack of a bus
service. I have referred previously to a constituent of mine who lives
in the village of Ditchling and wanted to work in the nearby town of
Burgess Hill. There was a bus service, which operated early in the
morning and enabled that person to take a job offer. Shortly after
taking the job, 42 days’ notice was given and the bus service
was simply withdrawn. That person was left high and dry, with no way of
getting to work, and had to leave the
job.
We cannot treat
people’s lives like that. We cannot say to people that the whim
of the bus company means that you are out of work, which is what
happened on that occasion. We need a better system than that. I think
that the system laid down in the Bill is the right one, as I made clear
on Second Reading. Is it going to work? That is the matter I want to
take up with the Minister, rather than the philosophical difference
with the Conservative party. I am not sure that it is; there are just
too many hurdles.
I
have had a conversation with the Minister, who made her position clear
on Second Reading. I think she is well intentioned—if I did not,
I would say so—and that she is genuinely trying to build in some
protection for local councils and local authorities to ensure that
there is not a successful challenge to the whole scheme. I understand
that, but the difficulty is that the number of protections built in
acts as a discouragement to local authorities taking the necessary
action to improve local bus services. There is no guarantee that the
existence of a number of protections will prevent a judicial review
from the bus companies, if they wish to go down that
road.
The
bus companies will not ask, “Will we win at judicial
review?” They may ask, “How much is it going to cost us
to do this, how long can we string it out for and is the cost of the
judicial review less than the sum of money we will make in the short
term from thwarting the plans of the local transport executive or the
ITA?” That is the financial calculation they will
make.
I do not think
that the Minister’s well-intentioned efforts to stop judicial
review will work for that reason,
although I understand her point. That is not to say
that we need a complete free-for-all with no legal recourse for bus
companies. That would leave ITAs open to legal action, which would
probably succeed. Therefore, the balance has to be
struck.
11.15
am
I think that
to have an external approvals board, which is unelected and which can
effectively trump ITAs, and then a transport tribunal, and then a
judicial review, is to have one level of approval too many. I do not
think that to have those three levels is necessary for the Minister to
meet her objectives in providing a robust scheme, which is proof
against legal
action.
Lady
Winterton, there is a slight difficulty here because, as you will
appreciate, some of the alternatives are referred to in subsequent
groups of amendments, so it is perhaps rather difficult for us to
structure this debate in a sensible way. For example, amendment No. 194
in the fourth group on the selection list is consequential, leading on
to a very large group in clause 23, beginning with amendment No. 157,
which covers many of the alternatives. I am not clear whether you think
it sensible for us to go into the alternatives at some length now,
thereby curtailing the debate on clause 23, or whether in fact the
purpose of this group is to draw attention to the deficiencies of what
is proposed in the Bill, thereby allowing the alternatives to be set
out in the later parts of the debate. It would be helpful to have your
view on
that.
The
Chairman:
The latter case is the one
which should be followed at present, so stick to the finite issues that
we are
debating.
Norman
Baker:
I am grateful for your guidance, Lady Winterton. In
that case, I shall simply say to the Minister that there are
alternatives, which I shall explore when we get to the relevant part in
the Bill. One of them is indeed the idea which has been flagged up
already, of having the approvals board as a sort of statutory
consultee, perhaps to give advice like the Environment Agency, which is
exactly the model I had in mind. The approvals board would not
necessarily be able to compel the ITA to take its view, but the ITA
would have to listen to it, otherwise it would be difficult for the ITA
to defend its action subsequently in any legal
action.
Another
alternative might be to abandon the transport tribunal. Different
approaches are possible. One might be to cancel the approvals board
altogether, but I would not be in favour of that because having
external validation from experts is a good thing. However, there are
ways to make the Bill work. I ask the Minister, in the light of the
comments that not only I but her hon. Friends have made, and in the
light of the views expressed by local authorities up and down the
country, of all three political persuasions, who all want the Bill to
work and who all welcome its introduction, to find a way to make sure
the Bill does work and does not end up gathering dust on the shelves
like the Transport Act 2000
did.
Ms
Angela C. Smith (Sheffield, Hillsborough) (Lab): I start
by reiterating the support that I gave to the Bill on Second Reading,
and in particular the provisions that will make it much easier for
integrated transport authorities to develop quality
contracts.
We have heard this morning about
how quality partnerships could achieve much of what the quality
contract promises, but the example we have in Sheffield does not fill
me with confidence on that score. The process of adopting quality
partnerships was started in Sheffield in 2002, when Labour was returned
to power in the city; however, we did not achieve a quality partnership
of any sort until 2007. We are grateful for what we have got—the
Barnsley Road scheme, which serves one of the most deprived areas in
the city, in the constituency of my right hon. Friend the Member for
Sheffield, Brightside (Mr. Blunkett)—but that leaves
the rest of the city without a solid foundation for delivering the
sorts of service that my hon. Friends and the hon. Member for Lewes
have been talking about this morning. I doubt that quality partnerships
are the answer for a big city like Sheffield or for the
metropolitan areas generally.
My hon. Friend the Member for
Sheffield, Attercliffe is right: if we believe in localism, we have to
give the right to choose the appropriate option for the delivery of bus
services to elected representatives at that level. The hon. Member for
Chipping Barnet opposes Bill, so I found it interesting that last week
she saw fit to visit Sheffield, Hillsborough and the adjoining
constituency of Barnsley, West and Penistone. She
issued an interesting press release that mentioned how much she was
looking forward to improving public transport in Penistone and in
Sheffield. I found that quite astounding given her opposition to the
Bill, which promises to deliver the required improvements to villages
and towns in the north of Sheffield and the west of
Barnsley—areas which, when it comes to the delivery of bus
services, are suffering as much as any inner-city area in Sheffield,
Doncaster or
Rotherham.
It is the
remote, outlying areas of South Yorkshire that have suffered most from
deregulation in the past 20 years. Surveys in
Sheffield have repeatedly underlined that point. In 2002, the council
conducted a huge citywide survey to establish whether there was a
groundswell of support for bringing back some form of regulation of the
bus services. Support for that option was overwhelming. My own surveys
over the past year, which made use of the much-derided communications
allowance, underlined that point. I have conducted surveys across my
constituency and, to a person, every respondent has expressed support
for the re-regulation of bus services and a return to the days when
they could rely on the bus turning up on time and getting them to
wherever they wanted to go.
That brings me to the key point
about the provisions of the Bill: the importance to places such as
Sheffield, Barnsley, Rotherham, Doncaster and Manchester of having a
public transport network that can be relied on to get people to work.
Services to a city centre are not the only important thing. In cities
such as Sheffield or Rotherham, people work only in the city centre,
but in the Don valley, Hillsborough and Attercliffe. There is a wide
range of workplaces across the area, so we must have bus services that
go not only into the centre, but across the city.
We must also
recognise the importance of getting young people to college and
university. In my constituency, we have a tram network that runs to
Hillsborough further education college. However, large parts of my
constituency do not have access to the tram network
and have a very poor bus service. For young people living in Burncross,
Chapeltown or even Ecclesfield, getting to Hillsborough college for 9
o’clock in the morning is very difficult. Equally, someone on a
vocational course must go to the city centre, where Castle college
provides a range of courses. At the moment, it is difficult for people
to ensure that they get to college on time if they come from one of the
places that I have just mentioned.
Another problem is transport to
hospital. One of the biggest responses that I got in my surveys of bus
users was, “I cannot get to the Northern
General.” Royal Hallamshire hospital is on the tram network, so
to some extent it is easier to get to, but Northern General hospital is
tucked away in Fir vale, which does not enjoy any access to the tram
network, and where the No. 17 bus runs on a very ad hoc
basis—there is something like one bus an hour—from
Hillsborough. The difficulty of getting to the Northern General is
immediately apparent. In the places that I mentioned, such as
Burncross, Chapeltown and Ecclesfield, the problems are even
greater.
From my
perspective, meeting the needs of people who cannot afford to buy or
run a car are paramount, so that they have access to hospitals, the
workplace, college, university and opportunities for shopping and
leisure. That is why my hon. Friends and I support the Bill.
Deregulation has created a network that does not meet any of the above
criteria in the way that the bus service used to in places such as
Sheffield.
As an example
of the irrationality of the current situation, I refer to what has
happened in High Green in my constituency, which has 2,000 buses
running through it each week. High Green is a village and all those
2,000 buses run on one road. Yet two miles down the road, in Burncross,
there is provision that is commissioned and the route is heavily
subsidised by the passenger transport authority because the operators
will not serve the area on a commercial basis. How irrational is that?
There are 2,000 buses in High Green and a patchy, inadequate provision
in Burncross. That is why we need the Bill. At the moment we have a
provision that does not work in the interests of everybody who needs to
use a bus service and everybody who would rather use a bus service but
cannot because they cannot rely on the bus service to get them to work,
to hospital, to leisure opportunities or to
college.
Mr.
Knight:
So that the Committee can be certain, is the hon.
Lady saying that she sees the provisions of the Bill as a way of
providing fewer buses, and that is why she supports
it?
Ms
Smith:
The right hon. Gentleman misunderstands my
comments. I am saying that it is irrational that the bus services we
have at the moment should leave one area with a provision that is
barely adequate, with people unable to get to where they need to be,
whereas another area only two miles down the road has 2,000 buses a
week going through it because it is effectively the terminus for the
service and not because it needs 2,000 buses a week. We need a more
strategic overview of the network in areas such as Sheffield to ensure
that everybody’s needs are properly
served.
The changes
are also needed because the current bus services are not reliable, as
my hon. Friend the Member
for Sheffield, Attercliffe said. The biggest complaints that I receive
are about routes that are changed at short notice, as the hon. Member
for Lewes pointed out, and where buses do not turn up on time.
Occasionally, we hear accusations that bus drivers have cut out parts
of a route because they are running late and they need to get back on
track. That often happens to areas such as Burncross, where the service
is sorely needed.
We
need to see a change in bus service provision. The economic and social
case for that is irrefutable. I welcome the provisions that give
integrated transport authorities the right to opt for franchising if it
is right for the area. The debate is now about how we deliver quality
contracts, not about whether we need them. On that point, the
Conservatives have been left well behind by the views of the vast
majority of the country. When the Bill has finally passed through
Parliament and quality contracts are on the way to being developed
across the country, we shall find that the Conservatives suffer quite
badly when it is realised more widely that they opposed the
improvements outlined in the Bill.
At the
moment, we have a procedure for developing quality contracts that
requires a referral to the approvals board and to a tribunal, as my
hon. Friends have pointed out. I understand the Minister’s
arguments on why we need that process. Equally, however, I ask her to
understand my and my hon. Friends’ nervousness about whether the
process outlined could end in lengthy delays and in attempts by the bus
operators to undermine the new process in order to ensure that quality
contracts never
happen.
11.30
am
Given our
experience over the past few years, it is critical that we air such
issues and, if possible, arrive at a way forward. My concerns and those
of my hon. Friends must be recognised in the outcome of the debate. In
the end, there has to be a balance between the need to ensure that
quality contracts go ahead and are successfully implemented, and the
need to ensure that they are viable and recognised by bus operators as
the inevitable way forward in areas such as South Yorkshire and Greater
Manchester.
The
crucial point for me is what the public interest can be deemed to be.
My right hon. Friend the Minister pointed out that the public interest
is about delivering a bus service that is used by more people, reduces
congestion on the roads and serves the economic and social interests of
a given area. The problem, bound up in the need to meet those clear
criteria of the public interest, is the need to achieve a balance
between the commercial routes, which bus operators will always be happy
to deliver because they make money on them, and the commissioned and
subsidised routes, which the PTA ensures are provided year after year.
Ultimately, the argument within each quality contract will be about the
balance between those two
elements.
I would be
interested to hear from my right hon. Friend how much the need to serve
the interests of people living in those areas where routes are
subsidised will be at the heart of the final process. Without that
subsidy, bus operators would never run them. What about those areas
that have no provision at all? What about bringing them into quality
contracts to ensure that they get some form of bus service, allowing
them to participate in the full life of their community?
I know that
my right hon. Friend will listen to what is said this morning. I would
like to hear her comments on the discussion needed to get the right
process in the end—one that gives me and my hon. Friends the
confidence to believe that we will get quality contracts in areas such
as South Yorkshire and that they will work
effectively.
The
other key point was mentioned by my hon. Friend the Member for
Sheffield, Attercliffe, who drew attention to the impatience in South
Yorkshire for quality contracts and for getting them moving as quickly
as possible. That is absolutely right. Just as my hon. Friend was
saying, one of my great difficulties explaining on the doorstep that we
have now tabled legislation that will, I hope, help to resolve the
problems with public transport is then having to say, “But I am
not quite sure when we are going to be able to deliver this—it
may be two or three years, or longer.” Our constituents do not
like that. They need to know when they can expect the improvements to
take place.
I again
plead with my right hon. Friend the Minister to listen to what has been
said and to commit this morning to ongoing dialogue—not just on
the process and how much confidence it gives us as to whether we will
get quality contracts, but on us getting those quality contracts moving
as quickly as
possible.
I am looking
for clear time limits on how long it can take from the moment the
contract has been developed and the scheme consulted on to the moment
it is approved by the approvals board and, if necessary, has gone
through the appeals process. We need clear time limits in the Bill. An
outcome of the legislative process cannot be an open-ended procedure
for developing quality contracts. That is not acceptable, and I ask the
Minister to
respond.
The
Minister of State, Department for Transport (Ms Rosie
Winterton):
I shall try to follow your ruling on these
amendments, Lady Winterton, and I suspect that some of the more
detailed debate will come on the later amendments. The first set is
consequential on some later
amendments.
I shall
open with some general remarks on points made by my hon. Friends and
the hon. Member for Lewes about what happened on Second Reading. What
has been said is right—this part of the Bill is welcomed by
local authorities up and down the country, of all political hues. I
know that last week poor Mr. Greaves was dismissed by the
hon. Member for Wimbledon as some kind of throwback who did not really
represent the views of any of his colleagues in the Conservative party.
I think that Councillor Greaves was reflecting a lot
of the feeling I have heard from Conservative councillors, which
indicates, I am afraid, that Conservative spokespeople are out of touch
with the general
public.
Stephen
Hammond:
I hope that we are not going to go through those
arguments again. Mr Greaves is not the person who wrote the
letter—let us be clear about that. Mr Greaves was copied in on
the letter; he is not the man expressing its sentiments. He may have
commented later, but the sentiments were those of Councillor King, who
has subsequently spoken to my hon. Friend the Member for Chipping
Barnet and other colleagues to say how disappointed he is that the
Daily Mirror put that. [
Laughter.
] Only
because that does not represent his views in total. It is a selective
part of his views.
Unlike the
hon. Member for Manchester, Blackley, I have had the good fortune to
talk to the chairman of Centro-PTA since we last met and he expressed
none of the views that the hon. Gentleman expected him to express. We
should be careful about quoting selectively from newspapers that, after
all, follow the Minister’s persuasion and can hardly be treated
as
impartial.
Ms
Winterton:
I am afraid that that simply will not do, it
really won’t. The hon. Gentleman must know in his heart of
hearts that it is simply not the case. Presumably, we must now dismiss
Councillor Greaves and Councillor King as irrelevant in Conservative
party policy making. Frankly, I believe not only that councillors were
horrified at the idea of opposing the principle of quality contracts,
but that they were even more horrified at the thought of going even
further and saying that they would abolish quality contracts if, by any
misfortune, they were ever returned to power. For bus passengers, that
must be a horrific
concept.
Any quality
contracts that were introduced would be abolished, so all the work
local authorities had put in to improve bus services
in their area would count for nowt. I think that they will find that
totally unacceptable, as my hon. Friends have said. When people realise
what is going on in the minds of Conservative Front-Bench spokespeople,
they will be
horrified.
Norman
Baker:
As I understand it, the Conservative policy is to
abolish quality contracts except in London. Can the
Minister help me to understand philosophically why it is right to
abolish quality contracts outside London—where apparently they
are no use—but to retain that option in
London?
Ms
Winterton:
If I were a Londoner, benefiting from a very
good transport system and a good system of franchising and tendering, I
would be slightly worried about what the future might hold were a
certain candidate—[
Interruption.
] If the
hon. Member for Wimbledon says that voting for the hon. Member for
Henley (Mr. Johnson) will somehow be good for public
transport in London, he should look at what is being said about
abolishing quality contracts. If all the quality contracts outside
London are to be abolished, how will the Conservative party justify
keeping them in London? That is the logic in question. If, in
principle, it is so marvellous to have those contracts abolished for
everybody outside London, surely all members of the Conservative party
in London, the councillors and the Mayor will say, “If
it’s good enough for them, why isn’t it good enough for
us?” That is what I would be thinking about at this
time.
As my hon.
Friends and the hon. Member for Lewes have set out,
there are good reasons why we must introduce and make more flexible
this system of quality contracts schemes. The key aim of the Bill is to
make quality contracts schemes a more realistic and practical option.
Often, that will represent a major change to how bus services are
provided in an area, and it will be extremely important to get the
underpinning assumptions right before taking such a step. For that
reason, for schemes in England, the Bill will give the approval role of
the Secretary of State to a new independent approvals board, as we
discussed this morning. That will be chaired
by a traffic commissioner, supported by two other experts in transport
planning and transport
economics.
This has
not been mentioned, but I want to say at this stage why we think it
important to remove that role from the Secretary of State. Within the
Department, we would like the ability to work with local authorities
that wish to look at improving their services. As part of that, they
may wish to introduce a quality partnership scheme or a quality
contract. We want to be able to advise, talk about best practice and
work on guidance with them. It would be difficult to do that if the
Secretary of State was the final source of appeal. Hon. Members should
bear that important point in mind.
I also want to refer to the
Transport Committee. As my hon. Friend the Member for Sheffield,
Attercliffe said, I am certainly not in favour of second-guessing
policy decisions made by local government. He referred to South
Yorkshire and the 10p bus fare. My father was on South Yorkshire county
council at the time and, as I have said many times, even though we are
talking 30 years ago, people in my constituency still talk in hushed
terms about the ability to get round South Yorkshire for
10p.
I
absolutely understand and often make the point that if local
councillors talked more about the improvements they want to make in
public transport, people would realise what a great role they play in
improving the quality of life of their
constituents.
11.45
am
I certainly am
not in favour of trying to second-guess policy decisions; I believe
that local authorities should determine their own destiny. However,
quality contract schemes create a unique situation and many complex
issues need to be taken into account. It is also true to say, as was
mentioned earlier, that the only redress for bus operators who felt
that a local authority had erred in any part of the decision process
would be through judicial review, both under the current model and if
the changes proposed by my hon. Friend the Member for Manchester,
Blackley were accepted.
We are trying to replace the
current system with one that gives the ability not only to go through
the process and to make representations, but to provide some protection
from judicial review. I understand the point made by my hon. Friends
and by the hon. Member for Lewes in particular, that the protection is
still not there, but there is strong advice that if an appeals process
is in place, it is much more difficult to get leave to go to judicial
review. That is generally accepted. At the point of
applying for judicial review, what will be taken into account is
whether the first processes—the approvals board and Transport
Tribunal—have been gone through. If those processes are still
open, it will be difficult to get leave to go to judicial review. If an
application is made after those processes have been gone through, it is
more difficult to say what grounds there could be for judicial review,
because, while allowing for an unreasonable decision, there is an
endorsement at both levels for the decision taken by the local
authority.
Norman
Baker:
This is an important point. I understand
that if the ITA were to take a decision with no other external
validation, of course the case for judicial review would be easier to
make. However, even
in the scenario I outlined, which has been referred to this morning,
there is still the Transport Tribunal. Does not the existence of the
tribunal provide the appeal mechanism that makes judicial review less
likely in any
case?
Ms
Winterton:
It would provide some protection, but not the
full protection that we are talking about. I reiterate that the point
about having the approvals board and the Transport Tribunal is that it
will be possible to go back to the local authority and talk about
making modifications to a scheme, if necessary and recommended.
Judicial review is not only incredibly time consuming and expensive; it
is either in or out. An authority has to go right back to the beginning
if a judicial review finds against them.
Stephen
Hammond:
I am listening carefully to the Minister. I know
that one of the many legal firms that advised the Government was
Bircham Dyson Bell; that is what one of the senior partners of that
firm told us. If that is the case, I wonder why another member of that
firm says that the probability of a legal challenge to a scheme is high
and sets out three grounds he sees for such a challenge. One is
procedural, as the Minister said; one is substantive; and one is
founded on the Human Rights Act 1998, which the Government
introduced.
Ms
Winterton:
I am not quite sure what point the hon.
Gentleman is making. I am not quite sure that this person from Dyson
Bell, or whatever it is called, was our legal adviser, as my officials
are looking rather puzzled. I give way to the hon.
Gentleman.
Stephen
Hammond:
I am happy to correct the Minister. The senior
partner of that firm told us that he was advising the Government on the
Bill. Perhaps the Government chose to disregard his
advice.
Stephen
Hammond:
Not the wrong Bill; absolutely this Bill. All I
am saying is that, contrary to what the Minister is saying, someone
else from that firm is saying that the probability of legal challenge
is high.
Ms
Winterton:
I am not sure that that takes us much further
forward. I can only say that I do think that there is a general
acceptance that an approvals board and a Transport Tribunal provide
protection. I think that is all that experience has shown so far.
Mr.
Knight:
This is a totally different point. The Minister
has said that the appeal panel she referred to would have the benefit
of two experts. Will they be full-time or part-time appointees, and
will they have experience of the private
sector?
Ms
Winterton:
Later in the Bill, there are powers taken to
appoint a panel that the traffic commissioner could draw from when
making a decision to establish
an appeals board. I suspect that they would have experience of the
private sector. As I have said, one of the experts would be an expert
in transport planning, and I guess transport planners can get their
experience from a wide range of jobs. The other expert would be an
economist.
I want to
come on to the points made by my hon. Friend the Member for Sheffield,
Attercliffe. The first is on the question of timing. In the process
that we envisage, we are not talking about an approvals board being set
up to veto the transport policies of local authorities. It is
absolutely the case that those policies are a matter for local
authorities in consultation with their electorate—a role that I
value, as I have already said. The role of the approvals board would be
to provide a robust check that a proposed scheme was consistent with
that policy; that it gave value for money; that it satisfied the
criteria prescribed in legislation; that it was in the wider public
interest; and that due process had been
observed.
It
is important to remember that in its recommendations, the Select
Committee on Transport said that
“the independent approvals board
for quality contracts, as envisioned in the draft Bill, is the right
approach.”
The
Committee said that it was right to have that independent endorsement.
However, the Committee also said that it had
“reservations, however, about the
Senior Traffic Commissioner (STC) automatically chairing the approvals
board”
That
is why we have revised the Bill so that the approvals board would
normally be chaired by the traffic commissioner who, in the senior
traffic commissioner’s opinion, had the most relevant knowledge
of the area concerned. The Committee also recommended that
“provision for a traffic
commissioner not to chair the board where he or she feels that his or
her ability to act impartially is compromised should be
retained.”
We have
retained that provision.
The Transport Committee also
said that the
“The independent
approvals board should not have the power or authority to substitute
its judgement for that of elected councillors on transport authorities
on matters of transport policy. It should base its decisions on whether
or not the transport authority has followed the correct procedure and
behaved in a reasonable
way.”
As
I said, we agree that transport policy is a matter for the local
authority. I repeat, the approvals board would not opine on whether an
authority’s transport policies were right; instead, it would
look at whether due process had been followed and whether a proposed
scheme was consistent with the authority’s
proposals.
The
Transport Committee also recommended that the Bill limit the time for
the approval period, including appeal to the Transport Tribunal, to a
maximum of six months. The Bill provides a power to specify in
regulations a period in which an approvals board should normally reach
its decisions. We will consult on that. It is important to have that in
regulations, not on the face of the Bill, which would be far too
inflexible. To be frank, there is a learning process to be gone
through, which is why putting such things in a Bill is not realistic.
However, I want to put it on the record that our initial view is that
the approvals board stage of the process could take as little as six
weeks—that is what we are looking for. In addition—again,
we will
consult—under our proposals
the approvals and appeals stages together might take around six months
for a standard application, and less for a simpler one. Judicial review
is less predictable and would take a lot longer, and it might well mean
that the whole process had to start all over again, at big expense to
the
authorities.
To
take up a point made by my hon. Friend the Member for Manchester,
Blackley and others, the scheme will not be confined to ITAs. It will
be possible for smaller county or unitary authorities to adopt quality
contracts schemes. It is important to remember that, in such cases,
smaller authorities might well be deterred by what could be an
expensive and lengthy process of judicial review. We want to be able to
give authorities in such circumstances greater certainty regarding the
ability to undertake a scheme, perhaps with the Department giving
advice on how to put together good schemes. It is important for them to
have that
certainty.
Before
moving on to the other amendments, which deal in greater detail with
the processes to be gone through, I want to answer the point made by my
hon. Friend the Member for Manchester, Blackley about the tendering
process and how that would sort out the economic viability of a
scheme.
Mr.
Betts:
I want to go back to the powers
of the approvals board. I am still a little mystified about precisely
what they are. The Minister says that the approvals board’s job
is not to second-guess a policy decision of an authority, but to test
whether what an authority is proposing is consistent with its policies.
That must, at least to a degree, be a subjective judgment, not a
completely objective one. Once an approvals board has the power to
determine whether a scheme is in the public interest, that surely opens
the whole thing up to its reaching its own view on the matter, which
could simply be a different view from that of the transport
authority.
12
noon
Ms
Winterton:
In our draft guidance, when we talk about the
public interest test, we mean that the local transport authority will
need to be able to demonstrate that the quality contracts proposal will
ensure that passengers get a better deal from the scheme than under a
deregulated market. My hon. Friends have raised problems in that
respect. The quality contracts proposal should also be good value for
money, with the overall benefits of the scheme exceeding the cost,
taking into account all the impacts on a wider set of users, such as
motorists, bus passengers, and operators, and the impact on public
resources, the environment and the local economy. It should also be
demonstrated that any other adverse impacts,
including on congestion and on bus operators, are acceptable and
proportionate to the benefits. The analysis of the quality contracts
proposals needs to be focused on the impact on passengers, as well as
considering the broader impacts on other objectives and
groups.
Ms
Winterton:
Let me finish the point about financial
information. A point was made about the tendering process sorting out
whether the scheme was viable or
not, but we want local transport authorities to provide a full
assessment of the likely costs of introducing a quality contracts
scheme and a statement of how any costs incurred under the scheme are
to be defrayed. The costs included in that assessment might
include—this important point relates to what will happen before
a tendering process starts—the cost of service enhancements,
such as additional routes, higher frequencies, improved quality,
marketing or information, because those additional capital or operating
costs are likely to be reflected in the tender itself. The assessment
might also include the cost of new and better vehicles, particularly if
they were to be purchased by the local transport authority itself and
leased to a contracted operator, and the costs of new infrastructure
and facilities, such as bus lanes, other priority bus measures and,
potentially, any real-time information. It might also include the cost
of depots, if it was felt more efficient for them to be owned by the
local transport authority, particularly if that allowed new entry into
the market and in some instances allowed more effective competition. If
necessary, it should include detail of how those would be leased back
to the successful bidder at a commercial rate to cover initial
costs.
A
range of matters would not be covered in the tendering process, but are
important to making a good and effective quality contracts scheme.
Obviously, those are the sort of matters that any assessment of the
proposals will have to cover, to give certainty that the scheme overall
provides good value for money. That is entirely separate from the
tendering process. The analysis of my hon. Friend the Member for
Manchester, Blackley is that if the scheme were not viable, nobody
would tender for it. but that is so far down the line that if the
tender process completely failed because the scheme was not viable and
nobody tendered for it, it would mean going right back to the
beginning. We are trying to provide a process that, unlike judicial
review, allows for modification as it goes along, rather than having to
go back to the beginning. However, the process should also provide some
certainty.
Norman
Baker:
The Minister has gone on a bit so I wanted to pull
her back to the answer that she gave to her hon. Friend the
hon. Member for Sheffield,
Attercliffe.
Norman
Baker:
It was. The hon. Gentleman referred, as did the
Minister, to the phrase “in the public interest”. There
is an important point of principle here, and I would be grateful if the
Minister clarified her views on it. It is surely right for the
definition of what is in the public interest to be decided by those who
are elected locally to represent local people, rather than by an
approvals board consisting of three unelected members of the great and
the good—no matter how experienced they are—who might
reach a different conclusion. Is not the way to deal with that to
ensure that the approvals board checks that the proposal is robust
against the criteria—in the way set out by the
Minister—but then reports back to members of the ITA or the
unitary council so that they can make the final decision? They, not
three unelected members of the great and the good, must be the ultimate
arbiters of what is in the public interest.
Ms
Winterton:
The hon. Gentleman slightly misses the point of
my description of the approvals process. The local
transport authority would have to demonstrate that the proposal was in
the public interest. As I said, the proposal would have to stress that
passengers would get a better deal under the scheme than they would
under the present system and that it would be good value for money,
with the overall benefits exceeding the costs. A range of elements make
up the public interest. The role of the approvals board and the
tribunal is intended to give protection against somebody saying,
“We just don’t agree that this decision is in the public
interest. It is unreasonable.” The approvals board cannot
overturn the transport authority’s policy, but it can examine
the scheme as part of an iterative process whereby it could say that a
proposal, as put together, would bring greater benefits for passengers
and provide value for money, which would give the local authority
certainty.
Norman
Baker:
But the Minister’s scheme allows the
approvals board to decide that a proposal is not in the public interest
when the local authority or the ITA has decided that it is. That would
allow unelected persons to veto the local authority’s definition
of public interest, which would have consequences for the policy of
that elected body; indeed, it might have to adjust its policy to
reflect the comments of the approvals board.
Ms
Winterton:
As I have said, the Bill sets out a very
specific definition of the public interest in this context, and the
board will assess whether the authority has met the criteria
set out in legislation. That does not necessarily mean that the
authority will have to go right back to the beginning; the board can,
however, say that it believes that the public interest test will be met
if certain modifications are made. It is highly unlikely that an
approvals board would completely kick out a scheme, which is what could
happen under judicial review. That is the point that we are trying to
get to.
Ms
Smith:
One reason why we are concerned about the issue of
the public interest is that there is a real risk, if we do not get this
right, that ITAs and other passenger transport authorities will scale
down their ambitions to ensure that they do not fall foul of the
approvals board and the tribunal later in the process. The proposals
could induce a self-policing effect. Will my hon. Friend therefore shed
more light on the criteria? I am most concerned that they should
reflect not only the economic case, but the social case for ensuring
that routes that are not profitable, or that operators do not run
properly because they are not profitable, are a fully fledged part of
any quality contract by right.
Ms
Winterton:
That is why the public interest test is about
ensuring that passengers get a better deal from the scheme than they do
in the deregulated market. It is absolutely about identifying the
difficulties with the current system and explaining why it would be
better to have a quality contracts scheme. We certainly want quality
contracts to bring those benefits with them, and that is why we believe
that the public interest test is not about the previous system and the
only practical means of delivery, but is about being able to say that
the new approach will benefit passengers. In many cases, we do
not say that a certain increase in passenger numbers must be achieved;
the result of what is done could be to halt the decline of bus services
provision, which was referred
to.
Ms
Winterton:
Yes, but I think that I should bring to an end
this part of my remarks before getting on to the meat of the other
amendments.
Norman
Baker:
I intervene only because I think the point is an
important one to nail down. Suppose that an ITA or local authority
decides that electric or very low-emission vehicles or some other
cutting-edge environmental features would be in the public interest.
Would not it be open to the approvals board to decide that they were
not in the public interest, because it took a different view and
thought such features were uneconomic, and effectively to veto
them?
Ms
Winterton:
No. We envisage the approvals board
looking at the totality of the scheme and considering
whether in its totality it would bring benefits to passengers and
whether it was good value for money. To take a worst-case scenario that
might apply to one part of a scheme, if, in the example I gave earlier
where the local authority had decided to buy all the new low-emission
vehicles and lease them back to the commercial operator, the local
authority had not demonstrated that it had the money to do that, there
would obviously be a discussion about where the money was to come from,
because it had not been shown in the contract that it was possible to
buy those vehicles. We would not want a scheme that depended, in order
to function and to run any services, on the purchase of a new fleet of
vehicles, if the local authority that was making the proposal had not
demonstrated where the money would come from. That is where the
discussion about how the different parts of the scheme fitted together
would come.
It is
important that we have a process in place that allows, if necessary,
assistance and advice from the Department to facilitate matters.
Therefore, we need the approvals board and Transport Tribunal process
to be able to ensure that a lot of those operators are not open to
judicial review.
Mr.
Betts:
I am still really concerned about
the question of public interest, however it is defined, being decided
by an appointed body that can override the wishes of an elected body.
There is something not quite right about that, which needs further
discussion.
To pick
up also on the term “value for money”, the real problem
surely is that if value for money means what costs more or less, and
what we get for the money, which presumably it does, that can only be
absolutely determined once the tender has taken place and we know how
much the successful operator will want by way of subsidy for the
service, or how much it is prepared to contribute to pay for the
service. Until that point, all that there will be about value in the
figures will be the best guesses of the economists at the transport
authority or the approvals board, trying to decide what the ultimate
tender arrangement is likely to be. Those two best guesses might be
different. I think
that something enormously complicated is being
proposed, which will cause a real problem when it is put into
practice.
12.15
pm
Ms
Winterton:
Let me emphasise again that we have tried to
make the public interest test quite clear in the Bill. Clause 19 states
that
“the proposed scheme
will result in an increase in the use of bus services...the
proposed scheme will bring benefits to persons using local
services...by improving the quality of those services...the
proposed scheme will contribute to the implementation of the local
transport policies of the authority or authorities...the proposed
scheme will contribute to the implementation of those policies in a way
which is economic, efficient and
effective”.
Those are
measurable outcomes that we would want to see in a public interest
test. As I have said, it is not for approvals boards to overturn the
policies of a transport authority. I suspect that we shall have a much
fuller debate about the provisions as we move on to the next set of
amendments, which is similar to this set. It would perhaps be more
appropriate to have the fuller debate then. I hope that, with the
promise of that fuller debate to come, I can persuade my hon. Friend
the Member for Manchester, Blackley to withdraw the
amendment.
Graham
Stringer:
I am grateful for my right hon. Friend’s
full explanation, but it has left me less happy at the end of the
debate than I was at the beginning. I suppose it has served the purpose
of facilitating greater understanding of what is behind the
Government’s proposals in the Bill. When I
started the debate, I thought that we were dealing with a Conservative
policy that was pretty blind to the objective facts of what was
happening in most of the country. The Conservatives seem unable to
recognise that there must be something fundamentally wrong with the
deregulated system if private bus companies in Manchester are making
three times the profit that they are making in London and their buses
are older.
People may
want to hold in their mind this image, which the Conservatives seem to
think is absolutely all right: in effect, every year for every bus in
the so-called commercial sector, a local government officer or a
central Government officer puts a briefcase on the bus with
£35,000 in it, and says, “There’s no
accountability for that money. Run your bus wherever you want to go,
bus operator. Even though we have collected that tax
from taxpayers, you do whatever you like.
We’re pleased to have you running the bus anywhere you
want”. The Conservatives are defending that system. It is plain
silly. They are pretending, for ideological reasons, that things are
not like that. I look forward to any public debate in a general or
local election in which the Conservatives try to defend that position.
The point is relatively
straightforward.
I
thought at the start of the debate that Labour Members who have spoken
were much closer to the Minister and the Government’s position,
but I am less convinced about that at the end of the discussion. I
shall try to go through the reasons why without
repeating what has been said. A good place to start is probably the
Select Committee report. The Minister referred to
the recommendations of the Transport Committee on page 19 of the report.
She rightly said that the Select Committee, of which I was a member,
was in favour of an approvals board, but if we look at the reasoning
and the details of the logic, we see that there were two serious
qualifications behind it. The first was that many of our witnesses at
the time estimated that it would take five years to go through the
process. When the Secretary of State came along, she estimated that the
period would be between 14 and 20 months, so what looks like—as
it was presented—support for the Government’s position
was actually quite a radical position, because we said that the whole
process, if it included an appeals board, should take six
months.
It was also
said—the Minister referred to this—that
there should be no substitution of the views of the
appeals body for the views of the members of the transport authority.
It should be trying to protect, as is the Government’s position,
an ITA or another authority going through the process, from judicial
review. That was accepted, but as I and my hon. Friend the Member for
Sheffield, Attercliffe said, on the basis that it was only on
procedural matters. In fact, it was very different from what we found
to be the Government’s position.
I was relaxed
about the matter—I thought I understood it—when the
Government said that they wanted to take the Secretary of State out of
the process in order to help local authorities that were proposing
quality contract schemes. I was slightly worried at that stage, because
the Department for Transport’s dealings with local authorities
have not always been an unalloyed pleasure—with officials saying
exactly where a pelican crossing should be placed in a big city when
they have little knowledge of the area, or exactly how a tender for a
tram system should be put together, all of which can add to the costs.
One or two small warning lights went on at the time.
When it was explained what
“help” meant—this is at the heart of local
democracy—it seemed to me that there would be a double lock on
ITAs or local authorities using the scheme. One lock was the two
processes of consideration and appeal; the second was that Department
officials, in the name of the Secretary of State, would be looking into
the details of the proposed scheme throughout the
process—whether it gave value for money, whether it would
produce more passengers and whether it would do this, that or the
other. I did not understand why before this debate, but it will be a
pathway to more central control, whereas I was hoping that it would be
a pathway to more decentralised control.
I am willing to give way to any
Member, whether in Committee or in the House, who
thinks that somewhere out there in the real world, a local authority or
a potential ITA—whether composed entirely of Labour,
Conservative or Lib-Dem members, even Green party members or
whoever—would propose a scheme that made things worse for
passengers, albeit not intentionally, and that if they did the
Government would be in a better position than they were. Those bodies
are human; they make mistakes, and there might be unintended
consequences. However, the idea that the man—it nearly always is
a man from the Department for Transport in Whitehall—would know
better whether a scheme would produce more passengers or better value
for money is something about which I am very
doubtful.
Ms
Winterton:
I want it to be absolutely clear that if
there was a future role for the Department for
Transport, it would simply be in an advisory capacity—if asked.
We are not talking about schemes having to go through the Department.
Taking the Secretary of State out of the role is meant to be entirely
helpful and reassuring. It certainly is not about providing any kind of
veto. I am not sure whether my hon. Friend is mixing up the Department
with the approvals board. They are entirely
separate.
Graham
Stringer:
I am grateful for that reassurance.
I am definitely not mixing up the Department with the
approvals board. I was simply worried about the process. My right hon.
Friend has clearly read the Select Committee report on the Bill.
Immediately before that report, the Committee produced a report on
local transport plans with evidence from local authorities—of
all political complexions—that when advice was given by the
Department for Transport and officials but not taken, there was
punishment in the form of grants not being awarded or permission for
particular transport schemes not being given. The Transport Committee
saw a lot of such evidence.
I am greatly reassured if my
right hon. Friend is telling me that if South
Yorkshire, Lincolnshire, Greater Manchester, the west midlands or
wherever decide that they do not want the Department’s advice on
those matters, they will not have to take it. I shall ask for that
reassurance on the Floor of the House. It is important because my right
hon. Friend is saying that in coming to qualitative decisions, the
Department will have a view on viability and whether a plan is in the
interests of passengers, but that those decisions are better made by
local
people.
Mr.
Knight:
The hon. Gentleman is clearly
still unhappy about the position. As he has detained the Committee for
nearly two hours on the amendments, will he today have the courage of
his convictions and press the matter to a
Division?
Graham
Stringer:
I hope that the right hon.
Gentleman has enjoyed the debate—we have learned some things
today, which is the purpose of my amendments. As I have explained, the
amendments are probing; I have been trying to find out what is in the
Government’s mind. On Report, some of the amendments could be
put to a vote if Mr. Speaker selects them, but I am hoping
that Labour members of the Committee can come to an agreement. My right
hon. Friend the Minister’s point was helpful in reassuring
me.
Mr.
Knight:
I cannot say that I have enjoyed the debate. I
have found it interesting, but I am not sure that I would join you,
Lady Winterton, in calling it a happy
morning.
Norman
Baker:
It is certainly the case that the Conservatives
have not detained the Committee this morning.
May I pursue
the important point that the hon. Gentleman is making about the
predilection of the Department for Transport to intervene in local
councils’ affairs on occasion and certainly in local transport
plans? What is the relationship between the process for
awarding quality contracts and that for local
transport plans? Is there any overlap? If there is an overlap, there is
indeed potential for interference.
Graham
Stringer:
The hon. Gentleman makes an
astute point, but I am not sure that it is quite in line with what I am
saying. Clearly, if an integrated transport authority had agreed a
local transport plan, it would be perverse in the extreme if they
produced a quality contract scheme that was not in line with it. If a
local transport scheme completely differed from a quality contract
scheme, an appeals board or court could find that an odd and
challengeable decision had been made. The hon. Gentleman made the
astute point that the Government are involved at that stage of the
local transport plan
process.
Following the
reassurances of my right hon. Friend the Minister, I come back to the
fundamental point. As the Select Committee said, it would be simpler to
deal with procedure and leave policy to elected members, and simpler
still to leave the matter to the ITA. Let us put the debate into the
real context of aggressive bus operators who do not want to be slimmed
down from their diet of huge amounts of public
money.
When
ensuring that the quality contract delivers value for money, is in line
with the local transport plan and will try to attract more
passengers—one of the Select Committee’s
recommendations—most local authorities will be aware that some
bus companies may challenge them. In a sense, that check is as strong
as having several layers of bureaucracy above what is going
on.
12.30
pm
As I have
explained to the right hon. Member for East Yorkshire, I will withdraw
the amendment, but I have one last point, which my hon. Friend the
Member for Sheffield, Attercliffe has also made on a number of
occasions. I do not believe that a professor of transport, the
Secretary of State for Transport or officials, can judge the viability
of a scheme without testing the market and going out to tender. Until
we know the actual costs of what is coming back, how can we judge the
scheme? One very important part of the equation is missing, and on that
point—with my apologies for not entertaining the right hon.
Member for East Yorkshire; I will try harder—I beg to ask leave
to withdraw the
amendment.
Amendment
negatived.
Stephen
Hammond:
I beg to move amendment No. 47, in
clause 19, page 17, line 40, after
‘increase’, insert ‘of
10%’.
No. 48, in
clause 19, page 17, line 44, after
‘relates’, insert
‘, which are substantially
greater than those that would pertain under a quality partnership
scheme,’.
No.
49, in clause 19, page 17, line 47, after ‘authorities’,
insert
‘substantially
more than would a quality partnership scheme’.
No. 50, in
clause 19, page 18, line 4, leave
out from beginning to end of line 8 and
insert—
‘(e) there are shown
to be no adverse effects of the proposed scheme on operators or on
persons living or working in the area to which the proposed scheme
relates.’.
No.
51, in
clause 19, page 18, line 8, at
end insert—
‘(2A) In
subsection
(1)—
“economic”
means that the cost of implementing the proposed scheme to the local
authority will be no greater than implementing the same services under
any other
means;
“efficient”
means that the proposed scheme will be no less efficient than if the
same services were implemented under any other
means;
“effective”
means that the proposed scheme will be no less effective than if the
same services were implemented under any other
means.’.
No.
52, in
clause 19, page 18, line 19, after
‘services’, insert ‘by
10%’.
Stephen
Hammond:
You are obviously in a happy mood this morning,
Lady Winterton, because you have been extremely lenient with the
Committee as we wandered well beyond clause 19 in our debate. I am sure
that we will return to the approvals board in considerable detail later
on.
Amendments Nos.
47 to 52 are simple. Amendment No. 50 tests what the Government really
mean when they talk about adverse effects. In amendment No. 51, the
Government will not be surprised to see that I am trying to provide
some definition of “economic”, “efficient”
and “effective”—it is an argument that we have
been through before. Amendment No. 52 is again a test, to insert
“by 10%”.
I am sure that the amendments
will appeal to the hon. Member for Sheffield,
Attercliffe. In his contribution to the last group of amendments, he
told us that he was concerned that quality contracts should demonstrate
that they are the best, and better than quality partnerships. The
amendments would ensure that quality contracts are seen as evidentially
better than quality partnerships. That is important.
There have been many comments
this morning about the Conservative position; the amendments will help
to define it for the whole Committee. I have said several
times—I am happy to reiterate it—that we prefer the
partnership route, although we understand the need to have some backing
for it. Last week, we supported the Minister after her qualifications
and reassurances about statutory quality partnerships.
Just because people take a
different view about the method of achieving an end, it ill becomes
them to undermine the view that someone else can believe in the same
end. That is what we have heard today. We do not think that quality
partnerships will give the end that the Government want, and we are
concerned about that. So far, we have heard the view that quality
partnerships, turning the clock back to the 1980s, will represent
re-regulation. Let us not forget that the period between the end of the
second world war and the 1980s, before the Transport Act 1985, was when
bus ridership fell fastest—a point that always seems to be
conveniently forgotten by a number of people.
There seems to
be surprise every time the Conservatives say we would like some
evidence from the Government that quality partnerships will work. The
Minister flies off and says there are a huge number of Conservative
councillors out there—of course, there are a huge number of
Conservative councillors and there will be even more after Thursday
evening—who oppose what Front Benchers say. Equally, there are
others who are very supportive of what we have
said.
The Minister
talked about the London situation. She knows full well that at present
the London situation is covered by another Act, whose removal would
need consequential legislation. The Minister talked about the
Conservative candidate for Mayor, my hon. Friend the Member for Henley,
and said that nobody in their right mind would vote for him because he
would undermine public transport. Presumably she is saying that her
colleague the hon. Member for Vauxhall (Kate Hoey), who said this
morning that she is joining Team Boris, is out of her mind. Presumably
she also thinks the Liberal Democrat candidate who said in The
Times last week that he would work with Boris is out of his
mind.
The point we
have made time after time is that we support statutory quality
partnerships, which we dealt with last week, and they offer the new
ITAs and local transport authorities the chance to work in partnership
to bring better services. There is nothing in the Bill at
the moment that tells us evidentially that the
imposition of quality contracts will necessarily do anything to
increase ridership above what could be achieved through partnership,
either voluntary or statutory.
Norman
Baker:
I understand the hon. Gentleman’s
wish to go down the partnership route wherever
possible—indeed, I think he said the voluntary partnership route
wherever possible—but what is his answer if quality partnerships
do not work and we do not see a transformation in bus patronage in
areas where they either have not been tried or are not successful? What
is his solution in those
circumstances?
Stephen
Hammond:
As we have not yet tried statutory quality
partnerships in the depth that the Bill proposes, that is what we
should be doing. We continue to support that idea and we think it
should be tried first. Nothing that the hon. Gentleman can say today
will give us an evidential view, rather than an assertion, that quality
contracts will better the travelling experience of the
customer.
Ms
Smith:
The hon. Gentleman’s constituents enjoy
regulated bus services, which evidentially are better than the bus
services enjoyed by my constituents. What is good enough for his
constituents is surely good enough for
mine.
Stephen
Hammond:
My constituents enjoy a good bus service. It has
not yet been proved by anyone that regulation is the cause of a service
being better. A huge
amount of public subsidy goes into those services and it is the size of
the public subsidy that improves them, rather than
regulation.
Norman
Baker:
If regulation is not the cause of the good bus
services in London and it is only a matter of public subsidy, why does
the hon. Gentleman not simply deregulate
London?
Stephen
Hammond:
We went through that argument in Committee last
week when the hon. Gentleman was not present. As I said then, there are
other regulated areas of the country but there is only one regulated
area where bus ridership has declined in the past ten years. Regulation
is evidentially not the
cause.
Ms
Smith:
The hon. Gentleman said something
interesting. He suggested that heavy subsidy in London is the reason
for the success of the city’s bus service. Is it the position of
Conservative Front Benchers or of the hon. Member for Henley that the
subsidy is unnecessary, and would it continue in London during the next
period?
Stephen
Hammond:
It is not our position that the
subsidy is unnecessary. The question for us and for
many organisations, including London First, is whether the amount of
subsidy being used is providing the best bus service for London and
whether reorganisation of the bus service in London might provide an
even better service on core and support routes in the suburbs than the
current Mayor’s bus
network.
Ms
Smith:
The hon. Gentleman is being extraordinarily
generous in giving way. The position of the hon. Member for Henley, if
I have read his comments correctly, is that subsidies to Transport for
London will be cut if he becomes
Mayor.
Stephen
Hammond:
No. Nothing that my hon. Friend the Member for
Henley or I have said implies that. It is a complete fabrication. This
week’s 11 percentage point gain in the poll for my hon.
Friend’s candidature shows that people in London do not believe
the nonsense being
said.
The
Chairman:
Order. Although there tremendous enthusiasm in
the Committee, we are moving a little wide of the amendment. I ask
Committee members to consider what they might ask Mr.
Hammond, who has the floor.
Stephen
Hammond:
Thank you, Lady Winterton. I give way to my right
hon. Friend the Member for East Yorkshire.
Mr.
Knight:
Should not the hon. Member for
Sheffield, Hillsborough support my hon. Friend’s amendment,
which refers to 10 per cent? I thought that she had an affinity for 10
per cent.
Stephen
Hammond:
I was surprised when the
Minister talked about 10p, but there we are. I have listened to your
stricture, Lady Winterton.
There is huge concern about
what the Bill might do to restrict trade. Several Members have said a
lot about greedy bus companies and their legal redress. The point made
by several lawyers is that the most likely elements of redress include
the public interest test. A gentleman in Transport Times who
appears to be a transport lawyer happily suggests that the easiest line
of attack for aggrieved operators would be through the public interest
test. The other obvious line of attack is through the Human Rights Act
1998, which the Government introduced, so they are likely to face legal
redress from bus operators under measures that they put in
place.
My amendments
are to clause 19, which would revise the criteria that local
authorities must use to decide whether a quality contract is
appropriate. Doing so would amend section 124 of the Transport Act
2000. The five criteria in the Act are that schemes must increase the
use of bus services in the relevant area; improve the quality of those
services, bringing benefits to local people; fit in with local
authority transport policies and do so in an economic, efficient and
effective manner; and they must not have adverse effects on operators
that are greater than the improvements to the well-being of local
people and bus services.
I judge those criteria
problematic for several reasons. None of the criteria is perfect, and I
hope that my amendments to clause 19 would address
the imperfections. The first amendment deals with the criterion that in
order to implement a quality contract, a local authority must be
satisfied that the scheme will increase the use of bus services in the
relevant area. I have said several times that I am in favour of the
partnership route, so I have proposed that the authority must be
satisfied that the scheme will increase the use of bus services by 10
per cent. I am prepared to concede that 10 per cent. is an arbitrary
barrier, but under the current wording of the clause, a local authority
could draw up a quality contract if they thought that patronage would
increase by any amount. It could be an increase of only one
person—who knows what that would save? We need to be clear,
therefore, that when drawing up the quality contract, local authorities
or ITAs are absolutely sure that the increase in bus services that will
appertain will be of an order of magnitude that makes it worth
doing.
12.45
pm
Graham
Stringer:
Paragraph 57 of the Select Committee report,
which I am sure the hon. Gentleman recalls, considers that point in
great detail. We followed his logic that bus patronage had been
falling. The Select Committee therefore felt that the recommendation
should be changed to an increase in predicted passengers, because a
local authority might want to have a quality contract in an area with a
difficult market to alleviate the decline. Does he agree that what is
proposed in the amendment is much too tough a
hurdle?
Stephen
Hammond:
I want to be absolutely clear that the increase
in passenger usage will, under quality contracts, be at a level that
makes it worth having a quality contract, whether or not that is based
on a
predicted increase. It is
important that there is guidance for local authorities as to what
either the predicted increase or the increase should be. The predicted
increase could be whatever they think it is going to
be.
Kerry
McCarthy (Bristol, East) (Lab): I am slightly confused
because in an earlier contribution the hon. Gentleman said that the
success of the London model was down to high subsidy. You are saying
that quality contracts would be acceptable if the people introducing
the scheme could predict that there would be an increase in passengers.
On the basis of your previous argument, are you not really saying that
it would need a heavy subsidy to make that work? Are you saying that
quality contracts can work without subsidy or that they need
subsidy?
Stephen
Hammond:
As I pointed out, I am concerned to test the
criteria that the Government have laid down in the Bill. It is
important that we see not just a negligible increase due to quality
contracts, but that there is a substantial increase in ridership. That
is what amendment No. 47 would
do.
Norman
Baker:
May I refer the hon. Gentleman to a later amendment
that he has also tabled—amendment No. 55, which is germane to
this issue? He is setting the hurdle rather higher than he is telling
the Committee, because amendment No. 55 would require local authorities
to provide clear evidence indicating that the 10 per cent. would be
met, not simply to indicate a reason for believing that that increase
would be met. That hurdle would be difficult for local authorities to
jump, would it
not?
Stephen
Hammond:
I am not sure that it would be. The hon.
Gentleman could make the assertion that his party’s candidate is
likely to be the next Mayor of London, but the evidence for that is not
there. I can make that assertion on behalf of my party because there is
evidence for it. There should be evidence; we can all make
assertions.
Earlier, I
made the point that it is asserted that quality contracts will increase
bus ridership, and I want to know that there is evidence that backs
that assertion up. It seems to me not unreasonable that, either in my
later amendment or in this one, I follow a line of logic that says that
there must be a ridership increase that makes introducing quality
contracts
worthwhile.
Ms
Smith:
I thank the hon. Gentleman for
giving way yet again. Is not the process of encouraging car users back
on to buses a confidence-building measure that could take some time,
given the deterioration in the services over the last 20 years?
Therefore, would not arbitrarily putting a percentage increase into a
quality contract be very unhelpful? In fact, is this not a wrecking
amendment?
Stephen
Hammond:
I do not see how the hon. Lady
can say that. I think she wants to say it because she
does not want to address my argument. The Government have used the
phrasing that there must be an increase in bus ridership. I am saying
that, for the imposition of a
quality contract, there must be evidence that ridership will increase
substantially. That is what the proposal would do.
If it could be shown that
ridership would increase by, say, 10 per cent., it seems to me that
there would be a valid argument that a quality contract might well be
worth pursuing—indeed, would be worth pursuing. It would show
that there would be substantially higher numbers of
people prepared to ride the buses other than would do so under a
voluntary or a statutory quality partnership. If that were the case,
the hon. Lady could say that I was completely wrong. The point,
therefore, is that we want to ensure that the imposition of the quality
contract achieves significantly higher ridership than might have been
possible under any other method. That is the thrust of amendment No.
47.
We
could say—I guess the hon. Lady would—that 10 per cent.
is too arbitrary and too high a test. We could easily have that
argument, but such a number seems about right. My amendment No. 48 has
the same intent as amendment No. 47. The second criteria, which would
have to be satisfied before a quality contract could be introduced, is
that it would
“bring
benefits to persons using local services in the area to which the
proposed scheme relates, by improving the quality of those
services”.
Again, the
point I want to emphasise is that, before quality contracts are
considered, I want to be clear that all avenues of partnership have
been explored. Why not look at the partnership as the route
forward?
With that
objective in mind, I am again suggesting the same sort of
test—that the benefits of a quality contract should be
substantially greater than those obtained under a quality partnership
scheme. The line of logic seems to me to be absolutely clear.
Partnership schemes can deliver benefits and improvements to bus
services. That has been shown and proven. On top of that, there are
local authorities and bus operators that work
together to provide that common aim of increasing bus ridership. Only
if the benefits to passengers can be shown to be substantially greater
than under a quality partnership should we consider going down the
quality contract
route.
Mr.
Betts:
Some of us might be slightly suspicious that the
hon. Gentleman is trying to legislate quality contracts out of
existence, but would he like to define
“substantially”?
Stephen
Hammond:
If I take the Minister’s word, it is what
is common parlance, or common sense. I thought that
“substantially” might be 10 per cent., but others might
disagree, as I tried to say in one of my answers. I was trying to be a
little more generous here, rather than specifying an arbitrary
number.
We
have heard several times in Committee an argument that a definition
should be put on a word; other times we have heard that we should not.
That is another reason why, later on, I have defined for such purposes
“economic, efficient and
effective”.
It
seems also that the third criteria that the Government state must be
satisfied before a quality contract can be introduced is that the
scheme
“will contribute
to the implementation of the local transport policies of the authority
or authorities”.
My amendment follows the same logic, using
the words
“substantially
more than would a quality partnership
scheme”.
The
aim of that amendment is simple. I say it again: I think that
partnerships, voluntary or quality, are preferable to quality
contracts. We should encourage partnerships. We should ensure that they
are the first
route.
The fourth
criteria that must be satisfied before a quality contract can be
brought in is that
“the
proposed scheme will contribute to the implementation of those policies
in a way which is economic, efficient and
effective”.
We have had
several debates on the real meaning of that provision; for the purposes
of this part of the Bill, I believe that it would be useful to include
some
definitions.
Norman
Baker:
Unless I misheard, the hon. Gentleman seems to have
skated over amendment No. 50, which says that there should be
“no adverse effects of the
proposed scheme on
operators”.
Will he
explain what that means? Would it mean that a cut in profits ruled out
such contracts? That is a black-and-white way to put
things.
Stephen
Hammond:
The hon. Gentleman is obviously enjoying my
contribution, but he will have to wait for that little piece; I shall
reach it in a moment. [
Interruption.
] Let me
finish. It seems to me that if “effective, efficient and
economic” is properly defined, the quality contract might be
considered preferable to the partnership option. Again, I want to be
clear that the benefits of a quality contract will be substantially
greater than those that would appertain under a partnership
arrangement.
Ian
Stewart (Eccles) (Lab): The Conservative spokesman
advocates the partnership and voluntary approaches. He will understand
that the Government are fully in favour of those approaches. Indeed, no
Government could have done more in the last two Transport Bills to
promote those
concepts.
If the hon.
Gentleman is arguing for that, and if he accepts and acknowledges that
the Government have practised it over the last 10 years, will he say
whether it has been completely successful and whether our constituents
face any problems? If they face problems, and if the voluntary and
partnership approaches alone have not been able to meet them, what
would the Conservative party do instead?
Stephen
Hammond:
I readily accept from members of
the Committee that in some areas of the country the
partnership approach is not working. I assume, therefore, that the hon.
Gentleman wants to ensure that the Government’s proposals for
quality partnerships are given the chance to work. That is where I want
to go. The new proposals for quality partnerships from Labour Ministers
are the way forward. I want to see clearly that those quality
partnerships are given the chance to work for the benefit of
passengers. That seems to be a perfectly fair way
forward.
The fifth
criterion that must be satisfied before a quality contract can be
brought in is, as the hon. Member for Lewes says,
that
“any adverse effects
of the proposed scheme on operators will be proportionate to
the improvement in the well-being of passengers living...in the
area to which the proposed scheme
relates”.
Stephen
Hammond:
I am explaining that that is what the criterion
says. If the hon. Gentleman will wait a second, I am about to explain
why my amendment is going there.
The problem with that
definition is that there seems to be no definition of “adverse
effects”. How, then, can we define “well-being”
and “benefits” for local people? I assume that the
Minister has worked out a formula for measuring personal utility on
that basis. I presume that the Government intend that the effects on
operators will be financial and that they believe that the benefits to
local residents will be related to lifestyle, but that has not yet been
defined. At the moment, it does not appear that we are combining like
with like.
I ask the
Minister, what is meant by “proportionate”? What
proportion do the Government have in mind? Who will decide on that
proportion and, again, where is it defined? The Government recognise
that the potential consequences of a quality contract include not only
an increase in bus ridership, but the fact that some bus operators may
choose
to—
It
being One o’clock, The Chairman adjourned the Committee
without Question put, pursuant to the Standing
Order.
Adjourned
till this day at Four
o’clock.
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