Clause
41
Competition
scrutiny of functions and agreements relating to
buses
Stephen
Hammond:
I beg to move amendment No. 231, in
clause 41, page 36, line 13, at
end insert—
‘(c) agreements
between two or more local bus operators relating to bus
services.’.
A
large number of bus services up and down the country are being revised
as a result of voluntary partnership agreements between a bus operator
and the local authority. These are not statutory quality partnerships
yet; they are not affected by those. As I have said many times,
voluntary partnerships are the best way to move forward. We have seen a
number of excellently performing bus services. Any provision that
encouraged such partnerships would have the support of my party. For
that reason, I welcome clause 41, as did my hon. Friend the Member for
Chipping Barnet (Mrs. Villiers) on Second Reading.
Clause 41
addresses the scenario in which bus operators and local authorities
want to form a voluntary agreement for the benefit of the travelling
public but are constrained by competition law, going through some of
the competition tests. While I understand and appreciate that there has
been a huge amount of relatively extensive consultation on this matter,
there are one or two things on which I wish to probe the
Minister.
Schedule 2,
which we will discuss later, introduces the new competition test. Any
agreements that are subject to that competition test will become an
exemption from the relevant elements of competition law. The purpose of
the amendment is to explore further the issue that was raised in
another place. Lord Berkeley tabled an amendment that would have
extended the scope of the competition test such that it applied to
agreements between two operators. In other words, it would have allowed
two operators to have an agreement without being subject to some of the
competition law and not have the involvement of the local authority if
it were proven to be helpful to bus patronage. The gist of my amendment
is not
dissimilar.
There are
situations in which operators might wish to enter into agreements
relating to bus services that would definitely benefit bus passengers.
An obvious example might be timetable co-ordination. If two operators
were discussing something that could clearly be of benefit to
passengers, that should not be hindered by competition
law.
The clause was
amended in another place by means of a Government amendment. That
represented some progress. What I am unsure about is whether that
amendment covers an agreement of the sort that I have mentioned.
Schedule 10 of the Transport Act 2000, as amended by the Bill, sets out
the competition test and its application to voluntary
partnerships and other agreements. I would like to know whether the
Government amendment covers two operators discussing
something—particularly timetable co-ordination—that would
be to the benefit of bus passengers.
Ms
Winterton:
The amendment would extend further the new
competition test that will apply only to voluntary
partnership agreements and certain agreements between bus operators.
Through the changes that we are making to the competition test, we have
tried, for example, to allow two operators to agree to co-ordinate
their timetables to provide even patterns or services that connect with
each other. That was in response to representations received from local
authorities and bus operators about obstacles in the way of them
working in partnership, through voluntary partnership agreements, and
agreeing with local authorities on improvements, in the best interests
of passengers.
When
the Bill was introduced in another place, the new competition test
applied only to agreements between one or more bus operators and one or
more local authorities. However, the Government were persuaded to
extend it, so it now applies also to certain agreements between
operators only, provided that the local transport authority has
certified the agreement as meeting the necessary requirements, which
are that the agreement is in the interest of persons using local bus
services in the relevant area and does not impose unnecessary
restrictions on the operators concerned. It may impose only
restrictions necessary to achieve what are referred to as the
“bus improvement objectives”. Those objectives are
identical to those used to assess whether potentially anti-competitive
measures in a quality partnership scheme may be justified.
As I said, those amendments
were made in another place. I think that bus operators were pleased
with the changes, as too were the Campaign for Better Transport and
local authorities. Furthermore, it is right to put on the record my
thanks to the Office of Fair Trading for its help in preparing the
provisions. However, my problem with the amendment is that it would
allow bus operators to come to an agreement without the local authority
having certified that it meets the requirements that I set out. Such an
agreement should not be allowed unless the local authority agreed that
it would improve public transport in the area and that it was to
passengers’ benefit.
I appreciate that the amendment
is probing and aimed at finding out the reasons for the changes made in
another place, which further extend the requirement. However, we do not
believe that agreements should be made without the local
authority’s endorsement and
certification.
Stephen
Hammond:
I am grateful to the Minister for her
explanation, and I can certainly see the thrust of her argument. I
shall consider what she said, particularly on local authority
certification. I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
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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