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However, Travel West Midlands, the company I worked for at the time, consulted bus passengers about the introduction of bendy buses. They prove to be surprisingly popular for women passengers who feel safer on a bendy bus with a television screen and being able to see the driver in front than they feel on a conventional double-decker bus, which is one reason why they were introduced on this route. But they are not readily deployed elsewhere, as the Minister glibly—I do not mean that in any insulting way—implied. Birmingham is not a city that lends itself to the deployment of these vehicles. If they were not used on that route, there would be a great operational problem as to where else they could be used.

As regards property, in my experience, many bus garages are in attractive areas of the city. I readily concede that they not particularly attractive buildings and often are not seen as good neighbours. A company of which I was chairman at the time had a garage at Quinton, a suburb of Birmingham, which was subject to lots of complaints about early morning and late night bus operation. All of us who care about public transport like to see it operating for as many hours as possible, but the neighbours of a bus garage might take the opposite view.

Eventually, because there were so many complaints, the planning authority held that the company was in breach of its planning permission and wanted to restrict the hours we worked. The company concerned succumbed to the blandishments of a supermarket chain, moved the buses out and sold the property at a rather decent price, as far as the shareholders were concerned, to the supermarket chain. I understand that the neighbours are not particularly happy at having noisy buses being replaced by shoppers seven days a week, some of whom are less than careful about where they park their car in the immediate area.

4.15 pm

Going back to what my noble friend said, it is easy to say that it is possible to dispose of the assets. That disposal is not necessarily what the immediate neighbours might like. It is difficult to imagine in a competitive world and a competitive industry such as the bus industry that a bus company losing an area to a franchise system under this clause would readily dispose of its assets—whether land, property or buses—to what is seen as a rival competitor. It may decide to sell to the highest bidder to the detriment of the amenities of the neighbourhood.

I do not expect my noble friend to give me a comprehensive answer on those two examples. Without sounding smug or complacent, I hope I have indicated to him that this is what happens in reality when one gets involved in these matters rather than when reading a brief which has been prepared by someone else.

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Lord Bassam of Brighton: I always listen very carefully to my noble friend because what he says is grounded in the realities and practicalities of the way in which services—in this instance, buses—operate. I take the point. This example operates outside the framework that we are proposing in legislation. The point on bendy buses is good. I agree that they are a good vehicle on the right route. They have proved to be surprisingly popular in some areas for the very reasons that my noble friend raised.

Similarly, I understand the pain that can occur when you have to dispose of an asset. I have been in a local authority and I have had to dispose of assets. We caused problems and we rubbed up against other interests. However, the proportionality test would bear very heavily on the decision-makers involved in quality contracts. Those very considerations are precisely why that proportionality test is there and why it has value. I understand and accept that that is not a complete answer to my noble friend’s point. I know that there is a sharp division of opinion about whether we should build forms of compensation into this. I do not think that we can go down that route, but I think that the proportionality test probably offers what the noble Lord is seeking. I hope that that issue will be highlighted during our debates. I certainly respect the point made by the noble Lord.

Lord Hanningfield: I thank the Minister for his response and I thank the noble Lord, Lord Snape, for his contribution. I do not think that we will pursue this much more today. I am a great believer in partnership and I think that quality partnerships could be improved to be the main answer. I do not know how people will take up quality contracts, but I am sure that we will pursue this debate further on Report. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Rosser moved Amendment No. 24:

The noble Lord said: I should like to continue the debate on quality contracts now rather than wait for Report stage. Amendment No. 24 would fundamentally change the Bill so that the local transport authority is the body that takes the decision on whether a quality contract scheme should be approved or made. If an operator believes that the decision of the local transport authority has breached its human rights, or unfairly or unreasonably prevented it from continuing to trade either completely or in part, or is not in accordance with the Bill’s guidelines, they have a right to seek to pursue the matter through the courts.

We do not want to end up with the situation in which we found ourselves following the Transport Act 2000, which provided, as we know, in theory for statutory quality partnerships and quality contracts. But, in practice, the requirements, the procedures and the criteria set out in that Act meant that those provisions were little used. As I understand it, there is only statutory quality partnership in place in England and no quality contracts anywhere in England, so it does not suggest that the Transport Act 2000 has been particularly a howling success.

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We do not want to end up making the same mistakes again, but the Bill looks likely to achieve that feat. With the right of a veto by an operator on frequencies, timings and maximum fares in a quality partnership, a local transport authority may well take the view that it is not in a significantly stronger position than it is now, where, in return for providing improved infrastructure, it essentially gets some potential improvements in vehicle quality. Hence this Bill will not result in any significant increase in the number of statutory quality partnerships, although it probably would have done before the Government gave bus operators an effective veto on frequencies, timings and maximum fares; hence the importance of quality contracts.

However, as the Bill stands, with the apparent time-consuming and costly procedures involved in securing a quality contract, it is unlikely that more than one or two of even the largest transport authorities will think it worth the cost, hassle and uncertainty of going through the extended quality contact procedure. Of course, the noble Lord, Lord Hanningfield, asked precisely that question, and did not get a very informative answer when he asked how many authorities were likely to be interested in going down that particular road.

Indeed, it seems odd that the Bill on the one hand expands the existing duty of local transport authorities to develop policies relating to transport so that they must cover all aspects of transport, and take protection and improvement of the environment into account, and on the other says, “Even though we deem you capable of carrying out this major function, we do not trust you to look after the interests of the public you serve over issues such as frequencies, timings and fares, so we are going to bring in other bodies, such as the Approval Board and Transport Tribunal, to decide what you’re going to be allowed to do to bus services”. To believe that a local transport authority is going to put its bus operator or operators out of business through unreasonable schemes and then be left trying to explain to its electorate why bus services upon which they depend are no longer running is, frankly, extraordinary. The only recent example of which I can think of an attempt to put a bus company off the road is the highly questionable methods of Stagecoach to overcome the local bus operator in Preston. Needless to say, Stagecoach is among the strongest opponents of the Bill’s proposals, which would put an end to that kind of activity if only the Government would facilitate rather than impede their implementation.

However—my noble friend Lord Snape hinted at one example—maybe the Minister has examples of local transport authorities that have sought, like Stagecoach, to use questionable measures to put bus operators off the road. If so, I ask him to give the details when he responds.

The quality contracts procedure is in marked contrast to the Bill’s provisions in relation to local road user charging schemes where decisions are to be made by local authorities, even though there will no doubt be some who say, as some bus operators claim will be the situation with quality partnerships or contracts, that a road user charging scheme would either put them out of business or adversely affect the finances of their business.

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In line with the question of the noble Lord, Lord Hanningfield, I again ask what evidence my noble friend has that local transport authorities will think it worth going through the quality contract procedure. How long does my noble friend think the procedure will take? First, as I understand it—I am quite happy to be corrected—there will presumably have been an attempt to make a quality partnership scheme in most circumstances. There will have been a veto on frequencies and timings by one or more bus operators. The matter will have gone to the traffic commissioners to consider. It is not clear whether they simply uphold or dismiss the objection, or whether they can amend the local transport authority’s partnership scheme. If they can amend it, could there then be further admissible objections by either the original parties involved in the application or a new party who claims to be affected by the amended scheme? That could lead to even more delay.

Will a party involved be able to appeal to either the transport tribunal or the courts against a decision by the traffic commissioners on a quality partnership scheme and, if so, on what grounds? If a party can make a further appeal in this way, that will be even more delay, and we have not even started on the quality contracts process. Again, can my noble friend say if it will be possible to go straight to a quality contract process only in certain limited circumstances without first having tried the quality partnership route? If so, can he reiterate under what circumstances that would be, where it would not be in danger of having the quality contract thrown out on the basis that a quality partnership would have achieved the same objectives?

The quality contracts scheme appears to be the franchising of a network of services similar to the arrangements for bus services in London and rail services nationally, except that for London’s bus services and the national rail network, there appears to be no equivalent of the procedure set out in the Bill for bus services outside London. A local transport authority submits an application for a quality contracts scheme to the Approvals Board shared by a traffic commissioner. The board considers it, presumably with public hearings—I am sure that the Minister will put me right if I am wrong—and decides either to accept or to reject the scheme, or perhaps to approve it as amended in whichever way it thinks fit. Will the Minister confirm whether my understanding is right?

There will then be a right of appeal to the Transport Tribunal on any matter as of right. The Transport Tribunal will then make arrangements for a hearing, hear the appeal, and take a decision. Will the Minister say when he responds whether the Transport Tribunal may amend the quality contracts scheme or simply uphold or dismiss the appeal? Will he also say whether the Approvals Board may amend a local transport authority’s partnership scheme? Will he also say whether a party that did not wish to challenge the original scheme but wanted to challenge the Approvals Board’s amended scheme could do so, and whether that would mean another hearing by the Approvals Board into representations by a new party into its amended scheme or an appeal to the Transport Tribunal?

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Would a bus operator have to disclose to the local transport authority concerned all information that it put in front of the Approvals Board and the Transport Tribunal in support of its case, including financial information? Would that information also be made public? I understand that, once the Transport Tribunal has taken a decision, there can then be an appeal to the courts. Will the Minister say on what grounds an appeal can be made? If it can be made on the grounds that the decision by the tribunal was unreasonable or did not give proper weight to certain evidence, presumably the case would in effect be re-run in front of the appropriate court. We should be under no illusions that, if a local transport authority decided to go down the road of the quality contracts scheme, the bus operators would resist it all the way if the Approvals Board and Transport Tribunal decisions were not to their liking. The views of the bus operators are on the record, and they do not seem to be keen on seeing anything akin to the London arrangements for buses being extended elsewhere. A lengthy process could lead to other difficulties for a local transport authority. Existing operators who had not tendered for a quality contract or who had been unsuccessful would have little incentive to improve or even to maintain their services in the area concerned. Existing users might move to alternative forms of transport, including the car, probably contrary to the local transport authority’s own transport strategies and plans.

Will the Minister, in response to the questions that I have already asked, say how long the Government intend or believe this procedure could take? If, in the normal course of events, the quality partnership route would have been expected to have been traversed before the road of the quality contracts scheme was embarked on, I hope that his view on the time involved will reflect that fact and will include an appropriate period for a local transport authority to draw up and consult on its proposals. If it managed to jump all the hurdles, I hope that it would have an appropriate period to implement those proposals. Will the Minister also say how much the Government anticipate it will cost a party to go through this procedure in full?

The amendments also give rise to the question of who should be the key player in determining the frequency and timings of services and fare levels. Those decisions are crucial in determining transport plans and policies that are in the best interests of the communities concerned.

4.30 pm

Clearly, an affected party has a fundamental right to go to law and pursue through the courts any injustice, unfairness, human rights breach or illegality felt to have resulted from a decision of a local transport authority. That decision would have to have been made after proper consultation and right-to-state-your-case procedures, set out in the Transport Act 2000. The issue is why we need all the other procedures and processes as well. The members of a local transport authority may have fought their successful election campaigns on pledges to deliver improved bus services. Is the will of the electorate to be turned over by an unelected approvals board or a transport tribunal? Does my noble friend think that the London system of

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franchising a network of bus services is unfair, or is he saying that the problem is getting from the unregulated bus monopolies that we have in reality in many areas to a regulated market of fixed-term franchises, but that once we have got there the problems largely disappear?

If the real problem is the first stage of getting from an unregulated to a regulated market, we will not get through it if we have a process and a procedure that will, in my view, deter nearly all local transport authorities—I sense that the noble Lord, Lord Hanningfield, probably agrees—from going down the road of quality contract schemes. We are in real danger of finding that this Bill will give birth to the same number of quality contract schemes as the Transport Act 2000—none—and it will not be because large numbers of quality partnership schemes covering fares, timings and frequencies are being concluded, thus negating the need for quality contracts. It will be because the procedure is designed, no doubt unintentionally, to thwart rather than to encourage progress and the extension of the democratic process into the provision of bus services for the community. I beg to move.

Lord Smith of Leigh: I support my noble friend’s amendments. This is the second time that we have tried to amend the disastrous deregulation of 1986. Looking round the Room, I think that I am perhaps the only one here today who sat in this Room eight years ago when we considered the Bill that became the Transport Act 2000. It was a failure, as my noble friend said. It did not give local authorities enough power to influence what went on on the ground, so we continued to have the bus wars that he described in Preston. Preston is not the only place affected; it happened in Manchester slightly earlier.

Why has the 2000 Act not worked? In response to an earlier question from the noble Lord, Lord Hanningfield, my noble friend the Minister used the words, “cumbersome and complicated”. As my noble friend described, the implementation of quality contracts under this system is cumbersome, complicated and costly.

I believe that partnerships are the best way forward, but local authorities should have a real alternative, because of the suspicion and the problems between local authorities and bus operators. I am not necessarily taking sides; it is always one problem, but we must admit that there are problems. A partnership will not work if there are not two willing parties to it. The local authorities should defend the interests of the public, as my noble friend said. That is their role in their area. If we are to achieve our goal of sustainability, that must include both defending the interests of existing passengers, who tend to be from the poorest and most deprived parts of the community and who rely on bus services because they have no access to any other form of transport, and encouraging more of us to leave the car at home and get on to a bus system that works for that community. I am not sure that bus companies are able to operate in those interests.

The deregulation was meant to create an effective network through competition, but it is a funny form of competition. In Manchester, a single local authority

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operator has been largely replaced by two private operators who operate north and south. There are two monopolies covering slightly different geographical areas. The situation seems to be similar in most areas.

I thought that one of the factors of competition was risk, yet we are talking about compensating people who are not able to win a contract in a marketplace. In what other areas would we be talking about public compensation for people who have lost business? If they want to go into a bus service business that involves competition, they have to accept the risk. Local authorities have a right to use their own assets as they want and we have to use the planning laws in a fair and proper manner to ensure that they do not do so in any way that affects the public.

Most bus operators rely heavily on public subsidy—the money from local authorities that enables them to subsidise pensioners and non-commercial routes. My colleagues on the Greater Manchester passenger transport authorities never feel that there is an open book arrangement on the amount of money that goes from local authorities to bus companies. Their level of risk is mitigated by public subsidy.

I hope that the Minister has listened carefully. My noble friend Lord Rosser asked him a large number of questions and he will need to think about the responses. We are saying that we should not do what we did in 2000, when we tried to change the disaster of 1986, but did not achieve it. If we make it too difficult for local authorities to have a quality contracts system, this will be another failed transport Bill.

Baroness Scott of Needham Market: I was around during the passage of the 2000 Bill. It seems like only yesterday. It is a matter of record—this is the great benefit of Hansard—that I said at some length that without fares and frequencies in quality partnerships, you would not achieve anything in a statutory quality partnership that you could not do with a voluntary one. That has proved to be the case. The many successful quality partnerships are, with one exception, all voluntary. I also recall saying at the time that the test for introducing quality contracts was so stringent that no one would bring them in. That has proved to be the case.

I make those points partly to remind myself and be smug about it, because it is always nice to say I told you so. More usefully, I urge the Government not to carry on in the same way when something clearly has not delivered what they were hoping for in 2000. The stated aims have not been achieved.

I have a lot of sympathy with the comments of the noble Lord, Lord Hanningfield, on the previous group of amendments. I would prefer voluntary arrangements. However, if we make quality contracts impossible—I would prefer that they were not used on the whole, if possible—the noble Lord should consider what might happen in areas that are seriously considering the introduction of road user charging. That really worries me, because it transforms the landscape in a way that we have not understood before. In London, the only reason that the Mayor could even consider introducing a congestion charge was that he was controlling public transport. If the Government really believe that there are local authority areas that need to introduce road

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user charging to manage congestion, giving them the option of a quality contract may be the only way in which they can introduce it. Otherwise, the local authority will be charging citizens for something that they previously enjoyed, but will not be able to guarantee the improvements in public transport that citizens will expect to be part of the deal. The Government need to think very carefully about the relationship between the two. If they are not prepared to make quality contracts useable and capable of being developed, they probably ought not to expect road user charging.

Lord Snape: I found the contributions of both my noble friends interesting—not 100 per cent accurate, but interesting. My noble friend Lord Smith said that he was the only Member of the Committee who was around at the time of the Transport Act 2000. He was immediately contradicted by the noble Baroness opposite, so he was wrong there. The same debate took place down the Corridor and I was involved in it then.

My noble friend is right that some of the fears expressed at the time of the passage of that Act have been realised, especially the fear that local authorities would not get their hands on what were their assets. Understandably, many local authorities wish to turn the clock back to pre-1986, but that is not possible. We are not going back there, and I am sure that my noble friend would agree with that. He said that he regretted the fact that the London arrangement for buses does not appertain countrywide. That view is widely shared by many local authorities. That is not perhaps surprising when one looks at the cost of the London system of bus regulation. The figures for the support of bus services in London have increased by more than 200 per cent, compared with the last full year before deregulation, which I think was 1985, and by 1,700 per cent since 1995-96. That increase continues to pile on year on year because of the policies followed by the current Mayor of London and Transport for London.

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