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I understand that regulations are to be drafted that will define admissible objections. The criteria that will determine admissible objections are unclear. I would welcome the House having early sight of regulations

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which will presumably define these in due course. I hope that the Minister can assure us on that point. Further, the criteria should require objective and evidenced submissions by bus operators such that admissible objections can be properly judged in light of the public interest. It is also unclear who will make the decision about whether an objection is admissible. If it is an independent third party such as the Traffic Commissioner, we will require an informed understanding of the wider public transport context in order for such decisions to be appropriately made.

My second point concerns quality contracts. These already affect the franchising of a network of services similar to the way in which the majority of the rest of public transport in the UK is provided, such as bus services in London and the national rail network. However, there are considerable practical obstacles to the introduction of quality contracts, not least of which is that the incumbent operator usually has control over garages, the staff and the buses and if they fail to win the quality contract competition they are under no obligation to hand them on to the winning bidder. Such practical difficulties can be overcome if passenger transport executives or authorities are able to invest in modern depots and services in the process of awarding quality contracts.

Further, the process outlined in the Bill for an authority to secure quality contracts is still very time- consuming with the potential for an elongated appeals process. These decisions should be taken at a local level by local authorities as elected representatives of their local communities instead of being delegated to external, unelected bodies, such as approvals boards or transport tribunals as the Bill currently outlines. I hope that the Minister will further consider this point in terms of decision-making.

The Bill does not fully address the need to protect passengers, taxpayers and bus workers in any transition from the current situation to quality contracts. The Bill does propose that TUPE will apply in so far as the operators of a quality contract wish to take on staff from previous incumbents where their pay and conditions will be maintained. However, that guarantee is not written into the Bill where the bus operator may not want to transfer staff in the numbers that are currently employed or within the terms and conditions that they currently have. That needs to be carefully looked at.

The Bill makes provision to strengthen the enforcement powers of traffic commissioners with regard to improving the general punctuality and reliability of bus services. It also permits them to reject registrations to run new services in quality partnership areas in the light of criteria provided by the local authority. However, the Bill does not address the issue of increasing both the resources and the skills level of traffic commissioners in the light of those additional responsibilities. It is essential that they be trained and have appropriate resources if their role in the process is properly recognised and valued.

I welcome the move in the Bill that enables passenger transport authorities or executives to own bus vehicles, which should permit greater competition on subsidised bus services and their tenders.

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In conclusion, I greatly welcome the thrust of the Bill. When we move sensible amendments in Committee, we can strengthen the arrangements further to ensure that cities such as Manchester have the bus service that they deserve and clearly want.

6.21 pm

Baroness Scott of Needham Market: My Lords, during the dying days of the previous parliamentary Session, I spent many hours in your Lordships' House dealing with the then Local Government and Public Involvement in Health Bill. I found it a fairly dispiriting experience, because I disagreed with almost everything that the Government sought to achieve in that Bill, so it is a relief to discuss a Bill on which I am fundamentally in tune with what the Government seek to achieve. I would like clarification on some issues today, and to introduce some thoughts that might not have occurred to the Government.

Until July, for six years I was a member of the Commission for Integrated Transport, and was involved in producing a report last year looking at the whole question of transport provision and governance. Having taken evidence from around the country and talked to many people, we came to the conclusion that the failure thus far had been because there was not an effective sub-regional tier of decision-making for transport issues. Existing regions are too big, and local authorities are on the whole too small. The Bill goes some way to address that, although it misses out on the most fundamental point—how money is raised. This is not a time to go into detail about local government finance, but it seems a crying shame that we are so centralised that the great cities of this country such as Manchester and Liverpool have to go cap in hand to the Government, year after year, to fund the transport projects that they believe are right for their areas.

I wish to concentrate on the impact that the Bill will have on local decision-making, because there is certainly quite a patchwork of systems across the country. Responsibility for particular areas of transport lies in different parts of local government. My main experience is in shire counties such as Suffolk, where I was a councillor for 15 years. There, most transport responsibilities sit with the county council and the system works pretty well, although the fact that off-street car parking and concessionary bus fares lie with the district council causes problems from time to time. The real issues are in metropolitan areas—the sort of areas covered by Transport for London and the PTAs—where the split responsibilities have been much more problematic, with public transport in the remit of one group of people and the highway network in the hands of another. It is certainly evident that, across the country, the areas where the most progress has been made—not just with public transport, but in the likes of walking and cycling—are those served by unitary councils. Places such as Brighton, Reading and York all spring to mind. All the levers of decision-making and policy there lie in one set of hands.

In many of the areas covered by the PTAs, we have reached an impasse. Bus operators are saying that they will not invest any more in quality until the highway network is changed to give bus priority and

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is upgraded. Councils are refusing to put in bus lanes until the bus operators improve, and the PTAs are stuck in the middle, trying to improve the service for their passengers and finding that they are unable to do so. The noble Lord, Lord Rosser, explained well how difficult it would be to achieve a quality contract under the current arrangements, because the legal hurdles are now so difficult. The noble Lords, Lord Snape and Lord Marland, do not think that quality contracts are a good idea anyway. I do not propose to get into that debate but, until we sort out the question of responsibility for the highway network, it will be difficult to improve bus services even to the point of a quality partnership. Until we get the partnership right, we certainly cannot think about moving on to contracts.

I welcome the provision for the new integrated transport authorities to have powers to deal with the highway network in their areas. That will make a fundamental change. However, I hope that the noble Lord can clarify something from the Bill for me. I am not clear on whether the new ITAs will automatically take over highway powers or whether there has to be a review before they can do so. I would appreciate it if he could clarify the timetable for the reviews. As we heard from my noble friend Lord Bradshaw, we cannot deal with congestion until the question of highway powers is sorted out.

There will always be conflicts between a local perspective and the more strategic perspective of the PTA. Both points of view are perfectly valid; the question is about how you arrive at a system where both sides can be heard but that does not stop progress. I welcome the strengthening of the PTAs by turning them into integrated transport authorities, and particularly by giving them the general power of well-being and the provision to alter their boundaries and create new transport authorities. How will the reviews be carried out? Will they be from the bottom up—at the request of local areas—or directed by the Secretary of State? How will he avoid destabilising the existing arrangements? We have to remember that PTAs have complicated arrangements for contracts, often stretching many years into the future. For example, Merseytravel operates not just buses, but ferries and the Mersey tunnels. It even has its own train set.

I have a few questions about the governance of the new authorities. If the noble Lord does not have time to respond today, I hope that he can write to me. How will the transport plans drawn up by the ITAs fit in with other planning documents such as local development frameworks? Will local plans have to fit in with the strategic vision, or will the strategic vision be some conglomeration of the local plans? How will the new ITA structure fit in with the local strategic partnerships, which are such an important part of local authority governance now? Those bodies will agree targets and funding with the Government, and it is important that we understand how the new ITAs will fit in with that. What will the relationship be between the ITAs and the emerging regional agenda

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and multi-area agreements? Beyond that, how will ITAs work with national transport providers such as Network Rail and the Highways Agency?

I would also appreciate some comments about the governance of the new bodies. Can the noble Lord assure the House that the constituent parts of ITAs—the local authorities that send representatives to them—will continue to be party-politically balanced and to run their own governance arrangements, and will not be forced to go down the route of local authorities and have a single person with all the executive power? Can he explain how the Government think that the non-elected nominees to those bodies will be chosen? If an ITA wishes to bring in stakeholders from its area, that seems fine and a matter for it, but having nominees imposed by the Secretary of State would be a step too far. Will those people be allowed a vote when they are on the ITA? Given the not insignificant levy that the PTAs and ITAs will be setting—not precepting—on constituent local authorities, it is important that the people who do that are in some way democratically accountable.

To someone who comes from a rural area, it seems to me that the Bill’s provisions will do very little for transport and public transport in rural areas, which is a problem. The big difference is that in rural areas public transport is about accessibility, not congestion or the environment. It is about the quality of life for the significant minority of people who do not have access to a car, and unfortunately the Bill does not address that.

I do not share the concerns that have been expressed by some noble Lords about congestion charging in rural areas. Whatever we feel about congestion charging, it will be enormously controversial and no local authority will undertake it lightly; its political future will depend on that. I cannot imagine a situation in which a rural local authority would introduce congestion charging on rural roads other than perhaps in, for example, national parks where there might be some issues of overuse. Beyond that I cannot see that noble Lords need worry about congestion charging or road-use charging in rural areas. The key to getting this right is ensuring that public transport improvements extend into the rural hinterlands so that residents of rural areas do not feel that they are paying for improvements that go only to improve life for people who live in towns.

I hope that the Minister will be able to answer at least some of the many questions I have asked, but I am happy to receive some answers in writing. I look forward to the Committee stage.

6.31 pm

Lord Hanningfield: My Lords, I am pleased to be able to speak at the end of such an insightful and well rounded debate. I thank my noble friends Lord Attlee, Lord Roberts of Conwy and Lord Glentoran for their contributions, particularly on the Welsh question, which I hope the Minister might be ableto answer tonight. We are very concerned that about on this side of the House. I thank

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my noble friend the Duke of Montrose for his contribution on Scotland and my noble friend Lord Marland for his contribution.

The consensus on the objective of the Bill is clear. We all appreciate and understand the need to reform transport and tackle congestion. That much is evident. It is, of course, the detail that is questionable, as we have discussed today, and we shall be debating that in this House over the next few weeks. As leader of one of the largest local authorities in the country, I am acutely aware of how the local transport debate has evolved of late and of the pressing concerns we face. I shall approach our debates on the Bill from that perspective.

Speaking of the general tone of the Bill, I would contend that under the guise of pro-localism the Bill is promoting a selective form of devolution that serves only to pass down to local authorities those powers the Government might feel were politically unattractive for themselves. It is interesting to observe that most of the devolutionary proposals seem to focus on removing the Secretary of State’s involvement, rather than on allowing the full remit of powers to be brought down to the local level. As one or two noble Lords have said today, while local authorities are unable to raise money locally, local decision-making will always be taken to a national level anyway. Bringing powers down to the local level would much more effectively tackle the issue of transport and congestion, bringing with it the benefits we are all aiming for.

With regard to road pricing, little is mentioned on other forms of tax. I shall talk about that later. Since within the Bill lies the acknowledgement that decisions regarding transport are best decided locally, surely there is a case for the administration of existing road taxes also to be devolved. Again, I shall talk about that later. Devolution cannot be used as a tool when it suits; that serves to undermine local government. I am confident that local authorities could do much more, and do it more successfully, if the handing down of powers were full and rational instead of the patchwork mosaic suggested.

My authority, Essex County Council, in one way or another spends around £70 million a year on transport, including subsidies, school transport, transport for the elderly and all sorts of transport in the county. That includes a £7.5 million subsidy for bus routes. With increasing cost pressures, the modern local authority is conscious that funds cannot be spread liberally. I for one would prefer to be given the ability to get the best result I could out of that figure, and I would like legislation to enable me to try. It is unfortunate that the Bill does not go far enough in allowing us to achieve that.

I welcome the discussion of community transport in the Bill. The noble Lords, Lord Bradshaw and Lord Cameron of Dillington, mentioned this element of rural transport in particular. Done properly, reform could be achieved with community transport helping to reinvigorate rural communities where commercial bus services are not viable. After all, increasing public transport usage is what we are striving for. For example, if we combined community transport with school transport, transport for the elderly, bus services and

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all sorts of other services, we would really get value for money. We will be seeking to refine the Bill’s proposals in this area in Committee to see what can be achieved.

The punctuality monitoring regime put forward by the Bill is sensible. Both operators and local authorities should be held responsible for the quality of services. Punctuality is one of the main determinants of the perception of a local route and has the ability to turn potential passengers back to their cars. Reliability is very important for buses, and that will be even more noticeable if there are going to be more people using them.

What the Bill neglects to consider, however, are the other factors that turn passengers away from using a bus service. Currently, a change to a bus timetable requires a 56-day notice period in England, yet in Scotland a full 70 days need to be given. During the consultation period it was suggested that England’s requirement should be increased to match that of Scotland, with restrictions placed on the number of permissible timetable changes. It may be sensible to place some minimum conditions on the length of time new operators intend to run a new service. Such measures would help to reinforce and revive the public’s opinion of, and confidence in, their local services.

The partnership approach has worked well alongside the deregulation of bus services, and additional measures to strengthen that and increase uptake are to be welcomed. I agree with the view expressed by many today that franchising is not required for a local bus system to be successful. However, the proposals concerning partnerships will need to be refined for benefits to be maximised. As it is, there is no clear factor that would compel bus operators into agreeing to the maximum fares, timings and frequencies that are proposed. The definition of “admissible objections” needs to be tightened.

If a partnership is truly to function, there needs to be recognition and respect of the arrangement across the board. The unfortunate situation at present is that local authorities and operators have sometimes been forced into unnecessary opposition. An example of this can be demonstrated by the lack of clarity surrounding the new concessionary fares framework, which the noble Lord, Lord Bradshaw, mentioned at the beginning of the debate and which we all support. It starts from next April. However, the guidance from the Government is still inadequate on how reimbursement will operate. Such factors undermine the success of co-operation. Perhaps the Minister can let us know about that.

The proposals in the Bill on reforming transport governance are to be welcomed. My counterparts in metropolitan areas will be especially glad of the change, and we have heard several contributions today that mainly support that. For too long the rules around governance have been stiflingly inflexible; they stand in the way of what is often logical. Initiating a review of local arrangements should indeed come from the bottom upwards, with the implementers of change deciding how their arrangements should work without the direction from the centre being overly strong. In addition, the potential implications of allowing non-elected persons to be

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members of an ITA require further investigation about their specific role. I agree with all the questions on governance just raised by the noble Baroness, Lady Scott of Needham Market. I hope that the Minister will reply to those questions—if not today, then in writing—because who we place in those roles is important. The amended role of traffic commissioners, as proposed by the Bill, needs to be scrutinised in order to ensure that their position is justified and that they are not merely unelected replacements for the Secretary of State.

Evidently, road pricing could be an effective tool in reducing congestion on our roads—many noble Lords have mentioned that today—particularly in areas such as Manchester and other big cities. I again agree with the noble Baroness, Lady Scott of Needham Market, that it is not ever going to happen on rural roads. With a national scheme not forthcoming, it appears that local road pricing has been pushed forward to allow central government all the benefits of observing a trial scheme without any of the political responsibility. Some noble Lords referred to the delivery of nearly 2 million signatures to Downing Street illustrating the sensitivity of such an introduction; I have reservations regarding the motivation of the Secretary of State’s approval role, as it has been removed. In addition, local people need to play a role when deciding if a charging scheme suits their area. In Committee we will explore options on how the public could be consulted—whether in the metropolitan or urban area or the rural areas around it—such as referendums or other consultation options.

The measures in the Bill are ostensibly locally driven. However, should the level of transport grants and the like be phased out, one can imagine a situation where local authorities could be coerced into charging on their roads purely for financial reasons. All Governments, I am afraid, have introduced new ideas, saying, “You can raise money by doing this”, and then removing it from the revenue grant that we get locally. Perhaps the Minister will reassure us on that point. Similarly, the role of the Transport Innovation Fund, as a potential lever for central government to encourage charging schemes, undermines the local decision-making process. That should not be the case.

I would contend that the biggest indicator of whether a road-pricing scheme is likely to be a success appears to be whether it is perceived as a stealth tax by the public, as mentioned by one or two noble Lords today. Little mention is made of the implications of road charging for other forms of road taxation, or of how the total cost of motoring is to shift. I would suggest that if other forms of taxation were in local authorities’ hands, a more balanced and informed decision could be reached on the road-charging debate. For instance, as I have proposed several times, vehicle excise duty could be localised. A brief consultation of Department for Transport statistics demonstrated that around 700,000 cars were licensed in Essex last year. That money would go a long way towards improving our roads and would be a local form of taxation. The public would see that they were getting something for their investment.

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In a similar vein, both authorities and the public require transparent information on how road pricing is to function alongside tolls. I am a supporter of tolls on roads—we have proposals in Essex to construct a toll road. No mention is made in the Bill and I would like the Minister to comment on tolls and road pricing. I also remain unconvinced that more than one charge on the same road is fair or acceptable. For the same reason, the allowance in the Bill for London authorities potentially to place more than one charge on a road will require further examination.

As I said at the beginning, we have had an interesting debate. There is general agreement that the Bill—in the right way—could be helpful and improve matters. The points raised merit further investigation if we are to produce effective legislation. I look forward to continuing the debate in Committee, where we can look to improve the areas highlighted in discussion today.

6.45 pm

Lord Bassam of Brighton: My Lords, I start with general thanks to all the noble Lords who have taken part in what was a lively and interesting debate. The noble Lord, Lord Hanningfield, expressed it well when he said it was a well rounded and interesting discussion. That was certainly true.

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