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Punctuality and reliability also matter a great deal to passengers, and traffic commissioners have an important role to play in monitoring performance and taking action where services are not operated as registered. The Bill would strengthen the traffic commissioners' role in a number of important ways. First, it would enable local authorities, as well as bus operators, to be held to account for their contribution to punctuality performance. In some cases, action—or inaction—by the local authority can be a contributor to poor bus punctuality through, for example, poorly planned roadworks or inadequate enforcement of bus lanes. Secondly, it would allow the traffic commissioners to impose a broader range of penalties where bus operators demonstrably failed to provide a punctual service. The Bill would allow the traffic commissioners to order an operator to invest a given sum, equivalent to the fine that would otherwise be imposed, in improving services or compensating passengers. That will preserve a clear financial incentive for operators to maintain good performance, while allowing financial penalties to be applied in a way that benefits passengers.

The Bill also includes provisions to modernise the traffic commissioner system, through the appointment of a senior traffic commissioner with statutory powers to issue general directions and guidance to other commissioners. That would help to ensure consistency of approach across the traffic commissioner network. The Bill would also provide for greater flexibility in the deployment of traffic commissioners, and would make them more accountable for their work and the way in which they carry out their duties.

The Government believe that there is also a need to give bus passengers a stronger voice. In the rail sector, the Rail Passengers' Council provides a high-profile commentary on the performance of the industry and handles individual complaints. Although a number of non-statutory bodies represent the interests of bus passengers, often at a local level, responses to the consultation on the draft Bill indicated broad support for the principle of stronger passenger representation. The Bill would therefore pave the way for the introduction of a more prominent and influential voice for the bus passenger—a statutory body with a strong public role in promoting the interests of passengers across the country.

The community transport sector plays an important role in the provision of transport services where there is insufficient demand to sustain a conventional bus service. The Bill will relax existing constraints on the size of vehicles that may be used by operators under community transport permits, and will allow drivers on local services provided under Section 22 permits to be paid. In response to the views of the community transport sector, the Bill now retains the existing system whereby Section 19 community transport permits may be issued by designated bodies. It also includes measures to strengthen the permit system for all community transport permits.

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The strengthened powers for local authorities to improve bus services in their areas will be most effective if they are supported by the right arrangements for taking decisions at a local level. There is a clear consensus that, in our larger urban areas outside London, the current leadership and delivery arrangements for transport do not work as well as they might, and need to be updated to reflect changing patterns of transport. The barriers to effective transport planning and delivery in these areas include: the lack of a single focus for leadership of city-region transport; the difficulties in co-ordinating different transport modes, particularly given the split between passenger transport authorities and metropolitan district council responsibilities for public transport and roads; and the complex and sometimes unwieldy structure and membership of passenger transport authorities and executives.

The Bill would enable local areas to review their existing local transport governance arrangements, and to develop proposals for reform. In contrast to previous legislation in this area, the Bill does not take a prescriptive approach. Instead, it would allow individual areas to develop their own proposals, taking account of their particular local needs and circumstances. Following a locally led review, the Secretary of State would have the power to bring forward secondary legislation covering a variety of matters, including the existing transport responsibilities of passenger transport authorities and executives, metropolitan district councils and the Secretary of State.

The Bill would also enable secondary legislation to cover the establishment of new passenger transport authorities—or integrated transport authorities, as they would in future be called. It would enable the boundaries of existing integrated transport authorities to be changed; for example, to reflect the changing patterns of travel since they were first established.

Rising congestion on our roads is a consequence of a strong, vibrant and growing economy. However, congestion could have a significant impact on our future prosperity, environment and quality of life. Sir Rod Eddington, in his study into the links between transport and the economy, said that without further action there will be a 30 per cent increase in congestion on our roads by 2025. It is for that reason that the Government are encouraging local authorities to bring forward local road pricing schemes to tackle local congestion problems, as part of a wider package of measures. We have taken no decisions on whether to move towards a national road pricing scheme, but we can learn from the development of local schemes.

The Greater London Authority Act 1999 and the Transport Act 2000 established the legal framework for local road pricing schemes in England and Wales. Those Acts provide the basis of the existing pricing schemes in London and Durham. The Bill includes proposals to update that existing legal framework. It would place decision-making clearly at the local level by removing the existing requirement for schemes to be approved by the Secretary of State. It also provides that the net proceeds of all schemes are retained by the local authority and must be applied to local transport for the lifetime of the scheme. It also

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contains provision to help ensure that any schemes are consistent and interoperable to avoid unnecessary complexity for road users.

The Bill would confer a new framework power on the National Assembly for Wales consistent with the devolution arrangements under the Government of Wales Act 2006. That would enable the Assembly to make provision for the making, operation and enforcement of pricing schemes in respect of trunk roads in Wales. The provision has been included in the Bill specifically at the request of the Welsh Assembly Government, who wish to have the powers available that would allow them to adopt a coherent approach towards any proposals within Wales or any future national scheme. It will be for the Assembly to consider whether—and, if so, how—it would be appropriate to exercise those powers.

The Bill also includes a provision to allow the Driver and Vehicle Licensing Agency to retrieve data from its foreign counterparts, linking foreign vehicle registration numbers to their registered keepers, and to disclose that data to local authorities and other bodies. That will help in particular with the enforcement of local road pricing schemes and parking and moving-traffic offences.

The Bill would extend significant powers to local authorities to deliver transport that better met the needs of their local communities. It has already benefited from a full public consultation, based on a draft version of the Bill published in May, and from extensive pre-legislative scrutiny in another place. We are grateful to all those who have contributed to that process, because the Bill has, in our view, been improved in a number of respects as a result, and has been widely welcomed by local authorities, transport providers, transport users and others. I look forward to today’s debate and I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Bassam of Brighton.)

3.23 pm

Earl Attlee: My Lords, I am grateful to the Minister for his detailed and careful explanation of the Bill. The Bill has indeed had the benefit of proper consultation and pre-legislative scrutiny, and it now falls to your Lordships to start the formal parliamentary process today. As the Minister explained, the intention of the Bill is to reinvigorate local transport arrangements. I am sure that all noble Lords will recognise and accept the need for change.

As I see it, the Bill proposes change in three main areas. First, it seeks to improve local bus services, whose patronage has in the main remained stubbornly low outside London despite the increased usage of other forms of transport. Secondly, the Bill seeks to address some of the historic anomalies in the UK’s transport governance arrangements, which have too often proven an inflexible hindrance rather than a help. Finally, and perhaps most controversially, the Bill seeks to bring forward local road pricing schemes. I will turn to each topic in turn.

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The Minister sought to place the Bill in the proper context of the Government’s overarching transport strategy: to reduce congestion and to improve public transport. Those are laudable aims, especially considering the cost implications and the frustration caused by congestion, which shows no sign of abating. Indeed, it is worth remembering that total car traffic has increased by 850 per cent since 1955. I can remember when I used to park my car in Barnet High Street in order to go to the café—how things have changed now. Unfortunately, the Bill lacks the vision required for such revolutionary speak. What is needed is a holistic approach to the whole issue of congestion and public transport, with attention paid to all the constituent causal elements, rather than just to those that the Bill seeks to address. The Bill is a mere tweaking at the edges and will not serve the Government well in the long run.

It is clear that the existing arrangements for buses have room for improvement. Bus patronage is declining in many areas and shows little sign of improving without a dose of good management and effective legislation. Agreements between authorities and operators to devise services and timetables with the reasonable aim of providing a better service to the public can sometimes be viewed as collusion rather than co-operation. It is evident that full advantage of the provisions of the Transport Act 2000 has not been taken. The Bill seeks to make it easier for local authorities to draw up partnerships and contracts with bus operators, as explained by the Minister.

I am not confident that quality contracts are necessary for an effective local transport system. The lowering of the bar for the introduction of such schemes through proportionality criteria, as the Bill proposes, interferes with the market and risks allowing regulation by the back door. Harmonious working relationships ought to be available without franchising and a partnership approach should suffice. We will be pressing this view in Committee. Even if quality contracts were desirable, local authorities could be discouraged by the significant resources inevitably required to demonstrate and meet all of the new public interest criteria, both when setting up new arrangements and, subsequently, during potential appeals from operators. There is a lack of precedent for the quality contracts. I understand that no local authority has changed its arrangements since the Transport Act 2000. Perhaps that situation will persist.

The proposals to improve both voluntary and quality partnerships are rather more promising and worthy of development. They seek to allow authorities greater powers to enhance partnerships. We will be aiming to refine the proposals to ensure that partnerships are fair, genuine and balanced for all. Your Lordships will want to clarify the definition of “admissible objections” from bus operators, which is a bit ill defined at present. However, the real and perceived restrictions imposed by the Competition Act, which will discourage the proposed multi-operator voluntary partnership agreements, undermine the need for change. If a scheme is evidently in the public interest, common sense should prevail. Only then will partnerships have the desired result.

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Punctuality is one of the public’s main criteria in assessing the utility of their bus service; the Bill’s acknowledgement of this is welcome. Proposals for local authorities to share the responsibility with operators are fair. However, the use of traffic commissioners for this purpose will require further consideration.

The existing local governance arrangements for transport in the UK need reform. That is particularly so in large PTA-governed urban areas outside London. The arrangements in those areas are outdated and do not make much sense. The inflexibility of current legislation prevents rational changes to reflect modern patterns of transport needs. It is right that local areas should be able to decide on the most appropriate governance arrangements for themselves. The bottom-up reforms proposed to allow improved governance are welcome. It is crucial, however, that these changes arise from local action as intended. In addition to allowing local areas to initiate a review of their governance arrangements, the Bill retains the ability for the Secretary of State to do so. We need to avoid situations where this direction becomes unnecessary interference. If change is to be effective, that must not happen. Local authorities need to be partners in the recognition and implementation of change.

The Bill also makes changes to the traffic commissioner structure. While not as prescriptive as the draft Bill proposed, the Bill expands the role of traffic commissioners. In Committee, we shall seek to ensure that the proposed structure and role of the traffic commissioner is appropriate and does not become another layer of bureaucracy, while still achieving the objective that we all desire.

Perhaps the most controversial proposals concern local road pricing schemes. As the Minister explained, the proposal is to make the introduction of local road pricing schemes easier, removing the requirement of approval from the Secretary of State and ostensibly putting the power of decision into the local domain. Why? National road charging schemes have been shelved and the Bill does not make provision for the introduction of such a scheme. That has been made clear many times. The removal of the Secretary of State's approval for local schemes could, perhaps, be viewed as distancing central government from potentially controversial decisions, while leaving local authorities to gauge the acceptability of charging schemes. That is hardly leading from the front. The use of the Transport Innovation Fund, seemingly to encourage and to coerce local authorities to adopt road pricing schemes, demonstrates that all too often devolution is accompanied by terms and conditions given from the centre.

My noble friend Lord Glentoran, who speaks for Welsh affairs on these Benches, will be making important observations about the Welsh provisions with regard to road pricing and my noble friend Lord Roberts of Conwy will be adding his own perspective. I will not steal their thunder, but I recommend that the Minister listens to them with great care.

The removal of the absolute requirement to consult the public before introducing a scheme, as the Bill proposes, is unacceptable. The opacity that this

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could bring undermines the advantage of holding such decisions locally, and public support is paramount if a scheme is to be successfully introduced. Polling shows that the primary concern of British motorists appears to be the cost of motoring, and the public will not support a scheme—local or otherwise—that serves to increase significantly the cost of motoring and bring about another stealth tax. As no reference is made in the Bill to the reduction of other taxes or charges, the public cannot be assured of that at present. This is especially true in the proposals for Wales, as my noble friends will explain. Additionally, the use of pricing to bring benefits with regards to climate change is given the briefest of mentions, and should be expanded on if the Bill is serious about this issue rather than using it as an afterthought.

The Bill makes a welcome attempt at resolving the very real problem of collecting charges from foreign registered vehicles. That issue will become more apparent should local pricing schemes become widespread, and we will seek to investigate how best to refine the proposals to ensure it becomes a reality. However, as it has been demonstrated that the DVLA estimates that its records for UK drivers are only 81.5 per cent accurate, more attention needs to be given to this concern if road pricing of any sort is to be introduced successfully.

In conclusion, I believe that the objectives of the Bill are reasonably clear and agreed. I look forward to hearing your Lordships’ views on how the proposals contained within the Bill can be refined for the benefit of passengers, car drivers and the wider economy.

3.35 pm

Lord Bradshaw: My Lords, like the noble Earl, I pay tribute to the Minister, to the Minister in another place and to officials, who have been very patient. There has been a lot of consultation and pre-legislative scrutiny. We have a fairly clear understanding of what the Bill is about. My noble friend Lady Scott of Needham Market will address the issues of governance, because many of them are important, and my noble friend Lord Mar and Kellie will talk about the effects on the devolved administrations.

I want to talk first about congestion, because it is by far the worst enemy of the bus. A number of seminal papers on the subject have shown that congestion is a self-exciting phenomenon—which means that as it gets worse, it gets even worse. Something has got to be done to break the deadlock in our cities; otherwise they will grind to a halt. That is why I am particularly pleased that, regarding inquiring into the poor quality of bus services, local authorities will be asked—in fact, required—to appear before the traffic commissioners to give an account of their stewardship of the roads, a power conferred by the Traffic Management Act 2004. I am pleased that the traffic commissioners are to be reinvigorated. I would ask the Minister to give particular account to the status of the people who will be appointed to these jobs, which have to be of sufficient status to attract people of quality. They should not be part-time jobs that you can do after you have retired from the Army. You should need some background in the industry to be able to do the job properly.

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In particular, the traffic commissioners’ powers over registration of services need to be fairly wide, a point made by the noble Earl, Lord Attlee. At the moment, traffic commissioners have no power whatever to reject a registration made under the 1985 Act. They should exercise some judgment as to what is in the public interest. If one person operates a service on the hour and someone else registers a service at 55 minutes past the hour there will be no buses for the next 55 minutes. That is clearly not in the public interest. We want the public interest to become the paramount consideration.

On local transport plans, Clause 8 states that local transport authorities should “take into account” the directions of the Government on environmental matters. I would like to think that that could be slightly rephrased to take into account “as a minimum” the Government’s guidance on environmental matters, because I believe—and the Prime Minister acknowledged this yesterday—that environmental targets will be raised substantially. I am sure that local authorities involved in this will have to work with those increased standards.

I am very interested in the question of highway powers. Who is going to exercise them? Will the integrated transport authorities do it? Will authorities with highway powers, such as county councils which have responsibility both for the bus service and the highway, do it? What happens in a place where there is an integrated transport authority but two districts decide that they do not want the bus lanes, integrated traffic lights or enforcement? In those circumstances, will two of the constituent authorities be able to vitiate the policies advanced by the integrated transport authority? Will the consent of constituent councils be required? That is particularly important in any road pricing scheme. It would be nonsense to have a 10-district area where two of the districts decided that they did not want to be part of the road pricing scheme. In fact, that would torpedo the whole scheme.

Like the noble Earl, Lord Atlee, I want to know what admissible objections to quality partnerships are. I would not want bus operators, or anybody else, to have a veto over a quality partnership. Their objections must be considered but they should not be in a position to undermine what there is general consensus to achieve. While we are getting clarification in describing quality contracts—which I think are going to be difficult to achieve—the meaning of the words “economic, efficient and effective” in Clause 18 needs to be spelt out. How is somebody going to judge whether a scheme is economic, effective and efficient?

The Bill refers to an approvals board chaired by a traffic commissioner. Who constitutes the board? Is it an employer or a trade unionist, or is it somebody who has some expertise in the subject? The material put before them will be very technical and it needs to be judged by people with technical knowledge, as well as the traffic commissioner who we assume is competent in such things.

The competition test is extremely important. I can single it out as one thing in the 1985 Act and the Competition Act 1998 that is necessary. I could quote from my own knowledge, but I am quoting from the brief from the Campaign for Better Transport:

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Outside quality contracts, if a number of bus operators—two or three—get together and bring forward proposals which may involve recognising one another’s tickets—it is one of the biggest annoyances to passengers when they do not—or combining their timetables to provide a better service, somebody ought to be able to say that it is in the public interest to accept that and it should be exempt from inquiries by the Office of Fair Trading.

I know that the noble Lord, Lord Cameron of Dillington, will speak about services in country areas. I cannot understand why there is a distinction between Section 19 and Section 22 services. Parish councils which might run community transport need as much freedom as possible to operate in the best way that they can. Transport in rural areas is never going to be covered by the normal bus service network. I am talking about country areas that are away from the major routes. People there need to get to employment and training. The Bill allows for the driver to be paid. I would like there to be no restriction on what type of vehicle is used or, indeed, whether separate fares are collected.

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