Local Transport Bill [Lords]

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Clause 59

Additional sanctions for failures by bus operators
Stephen Hammond: I beg to move amendment No. 247, in clause 59, page 53, line 5, leave out from ‘money’ to end of line 7.
The amendment deals with a very specific power of the traffic commissioner. I welcome and support the general thrust of clause 59, which states that, when an operator is fined by the traffic commissioner, the money must be invested either in the provision of local services or used to compensate passengers on such services. That is clearly sensible and laudable. If passengers suffer as a result of poor services, it is only right that the fines should be used to improve the services or directly compensate passengers.
I can think of other areas of transport in which such an approach might be welcomed. When Network Rail was fined by the regulator for disruption to passengers over new year, the money went straight to the Exchequer and not back into rail improvements. Perhaps the Minister could impress it on her colleague the Under-Secretary of State for Transport, the hon. Member for Glasgow, South (Mr. Harris), that a similar approach in that field would be welcomed as well.
To return to my amendment and compensating bus passengers, the clause says that the compensation can take the form of payments of money or such form, including the provision of free travel or travel at a reduced price, as is specified. That raises a number of questions about whether or not the latter part is tightly defined or clear enough. For example, does it mean that only passengers previously affected by the poor provision of service will be offered free or reduced travel? Or does it mean that travel on the offending routes will be free or reduced for a period of time, which would benefit people who had not previously been caught up? Therefore, if an operator was obliged to offer the latter—the free or reduced travel for a period—it could result in some unintended consequences.
I am in favour of fining the operators if they fail to provide the right service and of reinvesting the money or giving it to those who need to be compensated. The best way for that to happen and to ensure that there is no ambiguity—unless the Minister wishes to add some other words to the clause—is to make a direct monetary payment to the passengers.
Ms Winterton: What we want to achieve is to give a traffic commissioner more choice in the sanctions that can be imposed against operators in such circumstances. The hon. Gentleman is right to say that a traffic commissioner can fine an operator up to £550 for every vehicle operated under the licence. That penalty is paid into the general fund. The problem is that that could worsen the position for passengers, because the operator may simply pass on the cost of that fine through higher fares without making any improvement to the services. When an operator provides a bad service, there should be a way in which sanctions can be used to bring direct benefit to those passengers who have been affected. Ideas, such as offering free or reduced travel, were developed in collective discussions in the Bus Partnership Forum, which is a collective of industry, local authorities and others, including the senior traffic commissioner.
By giving traffic commissioners a range of options, they will be able to assess what is right on a case-by-case basis, taking into account local circumstances. Sometimes, it might be appropriate to give some free or reduced fare travel. Having that flexibility can only add value to the work of the traffic commissioners. If the operator was not happy with the sanction that had been taken, it has the right to appeal to the Transport Tribunal. I hope that the Committee will agree that these are sensible additions to the tools available to traffic commissioners and that the hon. Member for Wimbledon can be persuaded to withdraw his amendment.
6.15 pm
Stephen Hammond: I am always open to persuasion if the argument is full of good reason. I am prepared to accept that the traffic commissioner should have a range of tools available to him, although I prefer the reinvestment in local bus services. I can see that he may wish to direct free travel or whatever, but the question remains that there may be an unintended consequence of people trying to use that free travel even though he did not intend them to do so. None the less, we will not go to the stake on this one. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stephen Hammond: I beg to move amendment No. 248, in clause 59, page 53, line 30, leave out from ‘to’ to ‘, and’ in line 31 and insert ‘the appropriate local authority’.
We have agreed the principle that the traffic commissioner should have the right to impose sanctions, and one of those sanctions is that the money from fines should be reinvested in the bus service in the area. Under the amendment, any fines payable under the clause would be payable to the local authority and not, as the clause is currently drafted, to the Secretary of State or Welsh Ministers. That is appropriate: it fits in with the nature of the bus industry, which is a very local industry. As we have stressed throughout proceedings on the Bill, the local authority should have a key role in determining the provision of bus services in the area. That function is carried out by local transport authorities and local operators, so having any proceeds of fines paid to national Government is an anomaly in comparison with the rest of the Bill. I strongly believe that the proceeds of fines should be reinvested in the bus services, and that that should be done by the appropriate local authority, not by moneys going to the Secretary of State or Welsh Ministers.
Mr. Leech: I do not intend to say much on the amendment; I just want to support it strongly. It is very important that where services have been affected locally, the proceeds of fines go into improving local services. It is completely appropriate that, rather than going to the Secretary of State, the money should be reinvested locally.
Ms Winterton: I would not like to raise expectations unduly, but the amendment does raise some interesting points. I am not sure, however, that it would work. It does not, for example, talk about ring-fencing, and there are difficulties with the suggestion, but I am prepared to have a look at the points that the hon. Member for Wimbledon has made. As I said, there are difficulties. I am not sure whether the proposal fits in with other cases, as we would require local authorities to spend money on a particular area, which carries with it certain considerations. However, I am prepared to look further at whether there would be benefits for passengers. Discussion would be required with a number of other Departments, particularly the Treasury, with regard to directing funds to a particular area. I cannot promise the hon. Gentleman that it will be possible to introduce an amendment, but I will certainly give the proposal careful consideration.
Stephen Hammond: After seven and a half sittings, that is probably as near as I am going to get in persuading the Minister to agree to one of my amendments. I hope that she will put the point to the Treasury carefully, stating that it is road user charges that are being reinvested and that this is not about hypothecation of tax. I am sure that the Treasury will see the wisdom of the amendment and that, on Report, the Minister will introduce something similar. Following her reassurances, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr. Knight: I shall not detain the Committee long. However, I would like the Minister to confirm that her understanding of proposed new subsection (1A)(d) of section 155 of the Transport Act 2000 is the same as mine and that the power being given to the Secretary of State, in respect of England, and to Welsh Ministers, in respect of Wales, relates only to the range of sanctions available, and that it is not a power to intervene in any specific case.
Ms Winterton: That is correct.
Question put and agreed to.
Clause 59 ordered to stand part of the Bill.

Clause 60

Operational data
Question proposed, That the clause stand part of the Bill.
Graham Stringer: In my quest to make the Whips’ lives that much easier, I thought that it would be worthwhile to ask some questions and make some statements on this clause to save us having a debate on new clause 10. The purpose of the previous three or four clauses that we have debate is to increase the enforcement powers of the traffic commissioners and to help them to deal with bus services that do not comply with registration requirements. Clause 60 deals with the prevention of the misuse of records and the need to make them available for inspection. It seems to me that both aims are quite worthy; I agree with them and support the clause.
If, however, we really want to check rogue and cowboy operators, both large and small, it would be worth while ensuring that bus companies have real-time, global positioning system information available, and requiring them to keep that information on a historical basis. We have only to talk to drivers, certainly of the larger bus companies in Greater Manchester, such as Stagecoach and FirstGroup, and they will explain very quickly that if they are running behind schedule, they will either miss out stops or take shortcuts, and that they will not comply with their registration. However, the records will show that they left on time and arrived on time. They will not show that they did not travel along the right route.
The only way for commissioners or any inspection body ever to get that right is for accurate GPS information to be made available in real time and kept for historical inspection purposes. That is the purpose of new clause 10, but it might save time if, in considering clause 60, my right hon. Friend would recognise that problem and agree that there are more effective forms of record keeping.
Ms Winterton: As my hon. Friend said, the clause will enable traffic commissioners to impose sanctions on operators who fail to meet statutory requirements to provide bus punctuality. It is important that we ensure that traffic commissioners have access to regular and accurate information on the punctuality of bus services, enabling them to pinpoint areas of consistent underperformance. That will enable them to investigate the underlying causes.
My hon. Friend made a good point about GPS systems and ensuring that, as far as possible, bus operators use them. However, we should seek to achieve that in other ways. When we talk about quality partnership schemes and quality contracts, the thrust of the Bill enables local authorities to have greater discussions with bus operators about the use of such equipment to ensure that proper records are kept. That is not something that we want covered under primary legislation, but it is an extremely important point. There are areas in the country where, for example, local authorities have invested with bus operators in installing GPS to enable them to have joint information about punctuality and important real-time information. When local authorities want to say that the next bus arrives in 10 minutes and so on, they often need the support that comes with GPS to be able to do so.
While I take my hon. Friend’s point about supporting the idea of giving more power to traffic commissioners to request information about bus punctuality, it means that local authorities will be able to work with bus operators and that, in some cases, reaching agreement about the fact that they would like buses operating with the GPS if that were appropriate in their area. However, we can address such issues in other ways rather than through primary legislation. I have especially in mind the fact that, as he is aware, technology can move on. I am sure that we want not want to be restricted to one type of technology under the Bill when other types might become available in future.
Question put and agreed to.
Clause 60 ordered to stand part of the Bill.

Clause 61

Revival of certain powers of PTEs
Mr. Leech: I beg to move amendment No. 261, in clause 61, page 54, line 26, at end insert—
‘(2) After subsection (1)(vii) insert—
“(viia) to require operators of public passenger services (within the meaning of section 9A) to display within any vehicle or premises used for providing those services information appropriate to enable users of those services to make representations (including complaints) about them to the Executive.
(viib) as a result of any representations (including complaints) it has received from users of public passenger services pursuant to subsection (1)(viia), to make and publish recommendations or representations in such manner and to such persons as the Executive sees fit.”’.
The amendment is fairly self-explanatory. It would require bus operators to display information in their vehicles and bus stations that detail how a customer can make a suggestion or a complaint about the services that they operate to the relevant passenger transport executive. It would also mean that the PTE could use the suggestions and complaints to inform any recommendations that it might wish to make about bus services. For example, it might want to inform the revamped Passenger Focus or the Secretary of State.
The problem is that much of the time people do not know to whom to make a complaint. Passengers get on buses and inevitably the person to whom they complain is the bus driver. I—and I am sure that this is the case for other hon. Members, too—have been told by numerous constituents who, having followed through their complaint or suggestion about the service to a bus driver, were told that the operator of the service knew nothing about it. That is mainly because the bus driver is too busy and forgets that a complaint or a suggestion was made or that such matters just never filter back to those who should handle such matters. The amendment would give people clear information about whom they can contact or speak to, and to whom they can make a complaint or suggestion. It is eminently sensible, and I hope that that the Government will take it on board.
6.30 pm
Ms Winterton: I certainly agree that there should be clear information available to bus and coach passengers about how and to whom they can make comments or complaints about the service they are using. That issue came up time and again in consultation. In response to the debate on the matter in the other place, the Government amended the Bill on Report to insert what is now clause 70. That clause will give powers to the Secretary of State to make regulations to require certain persons to display particular information in appropriate places. That could go wider than just information about complaints. What we have in mind is local authorities, bus companies and scheduled coach operators being required to display on passenger vehicles, at bus stops and bus stations or in timetable leaflets the contact information for customer service and passenger representation. Those notices might also be used to raise awareness of the new bus passenger champion and to ensure that passengers have appropriate customer service contact details.
It is more appropriate to have the powers as laid out in clause 70 than to give powers to PTEs, which would be the effect of the amendment. First, the suggested powers would help only passengers who lived and travelled in PTE areas; they would not help to address issues in other parts of the country. Secondly, we want to ensure consistency throughout England in the information available to passengers. That will be more effectively achieved by the appropriate power being with the Secretary of State.
In a sense, the amendment would also address complaints against the operator, but there might be instances where passengers wish to complain about a local authority—for example, if it is not enforcing bus lanes properly. The powers in clause 70 will allow the appropriate information to be provided to passengers who want to make such complaints.
I hope that I have reassured the hon. Member for Manchester, Withington that I take the issue of information about complaints seriously. We feel that the amendments that we have made through clause 70 are a more appropriate way to deal with that. With that reassurance, I ask him to withdraw his amendment.
Mr. Leech: We may return to the issue on Report, but with that reassurance I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Graham Stringer: I beg to move amendment No. 128, in clause 61, page 55, line 2, after ‘under’, insert ‘section 10(1)(i) or’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 129, in clause 61, page 55, leave out line 8.
No. 130, in clause 61, page 55, line 10, at end insert—
‘(7) For subsection (1)(i) (power of PTE to carry passengers by road) substitute—
“(i) in the event that a quality contract is terminated or local services provided under it cease in whole or in part to be provided, to carry passengers by road within, to and from that area for the purpose of maintaining local services provided under the quality contract for so long as is required to procure another person to provide such services under the relevant quality contracts scheme;”’.
Graham Stringer: The amendment was introduced and debated in the House of Lords, so I will not repeat everything that was said there, although the Government’s arguments for not accepting it were quite weak.
The amendment would allow passenger transport executives or integrated transport authorities to be the operator of last resort if a bus company decided to move its fleet out if it went bankrupt or for some other reason could no longer operate services. It may be that no other bus operators in the area could come in and immediately replace the existing operator. The Government’s argument against is that the PTE—the integrated transport authority—would have to comply with EU regulations, be competent in the PTE operational scheme, and have managerial competences and certification.
That is a lot of words, but when we consider some bus companies, which in effect are run by a couple of men and their dog—the purpose of the 1985 Act was to allow small bus companies to compete with large ones, among others—those words do not seem to carry much weight.
It seems slightly unreasonable not to have something in the Bill that may be used only occasionally—in an emergency. If it were used, it could be useful as a benchmarking exercise to see how a locally run, publicly initiated bus company operated against many of the private operators.
It is unlikely that this section of the Bill will be used, but we have the opportunity to include a measure that may be used occasionally, or hardly ever, and it seems unreasonable not to take it. At some future time, somewhere in the country, somebody might regret it if we do not do so.
Ian Stewart (Eccles) (Lab): It is good to see you in the Chair, Mr. Taylor. Earlier today, I highlighted instances where I felt there would be the need to allow transport authorities to be the operator of last resort, and I hope that the Minister heard as well as listened. I know that she listened, but I hope that she heard the example that I gave of a quality contracts scheme being awarded and an operator walking away from an existing contract that it provides. In such circumstances, residents, passengers and workers would be left in an insecure situation.
Over the past 10 years, I have argued in the House that it would be sensible to allow passenger transport authorities to be an operator of last resort for all sorts of different reasons. If the Government were to accept that there will be unusual circumstances in which no provider is left, a local transport authority could make provision almost as a stop-gap until such time as a private operator was found to deliver the service.
Indeed, I would like to go further and say that that should be encouraged in a wider sense, so that transport authorities could provide a service but on a temporary basis. I hope that the Minister will listen and hear what hon. Members have said.
Ms Winterton: As my hon. Friends know, the main purpose of clause 61 is to put PTEs on equal footing with other local transport authorities. While those other authorities do not have a specific power to lease buses to operators, they do so by using their general well-being powers under local government legislation. The PTEs are in a different position—first, because they have no well-being powers and, secondly, their explicit power under the Transport Act 1968 to lease out buses was disapplied by secondary legislation following deregulation.
The Bill will give the renamed integrated transport authorities well-being powers, but those powers will still not allow them to do anything specifically prohibited under other legislation. The other disapplication of the appropriate legislation amounts to a prohibition on them leasing buses. Clause 61 will restore the power to do so, but only in specified circumstances consistent with their current statutory functions.
The amendments aim at a partial restoration of the power of PTEs to operate buses, which, as my hon. Friends said, was their primary function before the implementation of the 1985 Act. One problem with that suggestion is that I am not sure whether the Committee is aware of the commitment needed for a PTE to play the role of operator of last resort.
For such powers to be of any use, it would have to be possible for the PTE to exercise them at a moment’s notice. Otherwise, it might as well let an emergency contract, which it can do. The PTE would certainly need a public service vehicle operator’s licence, the necessary financial standing and a professionally competent transport manager available any time the emergency might arise. The requirements of the licensing system need to be satisfied at all times while the licence is in force, not just on the rare occasions when an emergency arises. The PTE would also need vehicles and drivers to operate the services. Arguably, those of the failed company would be available, but they would not necessarily fall into the PTE’s lap.
Similar problems arise with the operator-of-last-resort powers in rail franchising legislation, which my hon. Friend the Member for Manchester, Blackley referred to. There are few undertakings qualified to step in and run a railway at short notice, so there is no alternative to those powers. The letting of emergency bus contracts, however, is quite a commonplace occurrence, particularly with school bus services, for example. That seldom causes serious problems.
Mr. Leech: Does the Minister accept that without those powers local authorities could be held to ransom by operators over quality contracts?
Ms Winterton: I will come to that. My point is that, taking the issue of quality contracts, local authorities already have powers to enter into emergency subsidy arrangements with an operator. We have a power in the Bill to disapply the usual tendering requirements in certain circumstances.
Mr. Leech: In fairness, the Minister has just proved my point—it is all about subsidised services and operators making a fortune at the expense of the PTE.
Ms Winterton: I do not accept that. The hon. Gentleman has to balance what he is saying. A PTE could bring in a private operator under a contract to the local authority more quickly than an authority could get hold of enough drivers, vehicles and so on to operate a service of its own.
We understand that PTEs would be concerned about the consequences of a large operator suddenly pulling out or falling on hard times and being unable to carry out its contractual duties. It is also true that in those circumstance receivers or administrators would be called in to continue to run the company’s affairs as best they could until a buyer was found. In particular, they would want to keep services going, as they would bring in revenue.
6.45 pm
Mr. Clive Betts (Sheffield, Attercliffe) (Lab): May I put a possible scenario to my right hon. Friend? She is indicating that the clause gives new powers to PTEs to enable them to purchase vehicles that they can hire out to operators on a contractual basis, which may fit this particular requirement. Would it be possible for a local authority under its well-being powers to tender for such a contract?
Ms Winterton: As I understand it, that was disapplied under the Transport Act 1968. If I mistaken in that, I will write to the Committee. In terms of emergency powers, we believe that it is possible for local authorities to have adequate facilities in place to ensure that if a contractor failed the local authority could put the contract out very quickly and the usual tendering process would not have to be undergone. For that reason, we do not believe that it would be reasonable to expect PTEs to have some of the large operators’ licences that could be possible for 200 or 300 vehicles and be able to fall back on trying to get them up and running with drivers and people running them. Frankly, it is more likely that that would be more effectively achieved by actually going through the emergency tendering process that we have in place. With that reassurance and clarification, I hope that my hon. Friends will withdraw their amendments.
Graham Stringer: I shall eventually withdraw the amendment, but in a way it will be in spite of my right hon. Friend’s arguments rather than because of them. There was one argument and one point that I do not think she dealt with, although she went through a number of scenarios. In a sense, I agree with her because, as both my hon. Friend the Member for Eccles and I have said, the provision would be used only in the most exceptional and potentially unforeseeable circumstances. The Minister has gone through all the alternatives—yes, there will be alternatives—but she did not say why the emergency powers are held in London and not the rest of England.
My second point has run through a lot of our arguments. Let me say clearly that some very decent people own and run bus companies. There are good bus companies that run services with integrity and that are good for passengers, but there are also absolute rascals out there who will use anything they can to get one over on the public sector and get subsidy. They threaten and they push. We have mentioned Brian Souter and Stagecoach. During the so-called bus wars in Manchester, that company did not behave reasonably but said, “We will close this city down. We will park buses on all the roads in the city centre if you don’t do what we want.” That part of the atmosphere in which towns such as Preston and cities such as Manchester have had to operate. To deny even relatively small powers such as the amendment proposes is to give the rascals a benefit. The powers will not do down or harm the decent bus companies.
I hear what my right hon. Friend says. All the other available powers might well be able to deal with an emergency, but they might not. I have been in a number of situations in local government where companies have gone bankrupt or other things have happened, and the lawyers have searched through the law books to see what they can do. In such situations, it is important to have as many powers and alternatives as possible to deal with something damaging to the communities we represent.
We may come back to the amendment. It is not the most important amendment moved, but the Government’s case seems particularly weak.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 61 ordered to stand part of the Bill.
Clauses 62 to 65 ordered to stand part of the Bill.
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