Committee stage in the Lords
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The Deputy Chairman of Committees (Lord Tordoff)Liberal Democrat- Quote
- I start by making the usual statement that if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes. Clause 17 [Regulations about schemes which specify frequencies, timings or fares]: [Amendments Nos. 18 to 21 not moved.]
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Lord HanningfieldNon-affiliated- Quote
- moved Amendment No. 22:
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Lord Bassam of BrightonLabour- Quote
- Before I get on to the amendment, I want to record my thanks to the noble Lord, Lord Hanningfield, and the noble Earl, Lord Mar and Kellie. We have had some discussions about having an extra session in Committee before Christmas, and I know that this has caused some difficulties. I want to thank colleagues for their forbearance on this. I hasten to add that it is not a problem that has been caused by my own side. I understand that there have been some difficulties—
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- Lord HanningfieldNon-affiliated
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- If we manage to finish at a reasonable time on Tuesday, that is—
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- Lord Bassam of BrightonLabour
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- I understand that the noble Lord has other responsibilities, and I am very sensitive to that. I shall certainly do my bit to make sure that matters are kept as brief as possible. I want to record my thanks also to other colleagues who have played a part in this. This is an interesting amendment, but not one that I ultimately find attractive. It raises some interesting points and subjects. The effect is that every change in the requirements for frequencies, timings or maximum fares in a quality partnership scheme would need to go through an extensive consultation process. I understand that the noble Lord wants fair and reasonable treatment for operators; I understand that he seeks clarity and transparency. We seek a balanced approach. We certainly regard consultation as an excellent thing—I have not heard many speeches against the value of consultation in my time in your Lordships' House—but one has to have a sense of proportion. It is important to approach things in that way. I see two problems with the approach adopted by the noble Lord. First, fares and frequencies are market-sensitive issues—I am sure that the noble Lord appreciates that—and a scheme is more likely to be acceptable in competition terms if there are provisions that allow such matters to be regularly reviewed, so that operators in the scheme are not bound to standards that may have been realistic at the outset but are not in the longer term, and so that new operators are not crowded out of the market by the high frequencies demanded of those in the scheme. A regular review process—perhaps once a year—should be an integral part of the system. It should be agreed at the outset so that all the participants know exactly where they stand. That would not be compatible with going through the variation procedure with full public consultation. That could take almost a year to complete in itself. There is a danger that the process gets so cumbersome that there are not enough resources to put into the scheme and it would not then deliver its objectives. A second concern is that if there is not the reassurance that any provision on frequency, timing and fares can be revised quite quickly and easily, operators are less likely to make the commitments in the first place and may well have admissible objections to doing so. All those factors are interrelated and we could easily upset the balance. Bus operators will have to be fully engaged in the review process. It is perhaps worth reminding the Committee of the regulation-making powers that Clause 17 would insert into Section 122 of the Transport Act 2000. Those include, in paragraph (3)(c), a power to make provision, “for any requirement as to frequencies, timings or maximum fares to be revised only if there are no admissible objections to the revision from relevant operators”. So it would be possible, under the provisions as drafted, to provide that such revisions could not take place without consulting relevant operators, without the need to impose the full, heavy-handed and perhaps sometimes overbearing consultation process in respect of such changes. I hope that the noble Lord is satisfied on that point. I certainly understand his desire for greater clarity and transparency in these matters, but we need a sense of balance and proportion. I have a feeling that if the noble Lord were, in his own patch, to go along the route that he is recommending in the amendment, he could find himself rather bogged down and mired in consultation that could be never-ending.
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- Lord HanningfieldNon-affiliated
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- No one wants to be bogged down in consultation that is never-ending. I repeat, as the Minister said, that we are looking for some clarification and transparency about the processes. We will read carefully what he said today to make certain whether we want to clarify the matter any further at a later stage but, with that, I beg leave to withdraw the amendment today. Amendment, by leave, withdrawn. Clause 17 agreed to. Clause 18 [Quality contracts schemes]:
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- The Deputy Chairman of CommitteesLiberal Democrat
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- In calling Amendment No. 23, I should point out that, were it to be agreed to, I should not be able to call Amendments Nos. 24 to 31 because of pre-emption.
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- Lord HanningfieldNon-affiliated
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- moved Amendment No. 23:
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Lord RowlandsLabour- Quote
- I want to ask the Minister briefly about the application of these quality contract schemes to Wales. In an otherwise extremely helpful note in the Explanatory Memorandum on the territorial applications of the Bill, there is no reference to Clause 18. Can we first clear up whether these quality contract schemes will apply and, if so, how they will be implemented and by whom? Secondly, what consultation has taken place, not only with Ministers in the National Assembly but also the National Assembly itself? I know a later clause is the subject of proper consultation, but these clauses have not been. I wonder whether we can get some clarification as to the exact territorial extent and application of Clause 18 and the quality contract schemes.
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Lord SnapeLabour- Quote
- I do not wish to detain the Committee by having a Second Reading debate on quality contracts and their necessity, but I ask the Minister what consideration has been given by the department to the question of compensation raised by the noble Lord, Lord Hanningfield, if companies themselves lose certain routes, or parts of routes, because of a franchising scheme which would be the natural outcome of Clause 18. What consultation, if any, has taken place with shareholders in bus companies? Despite the generally held myth, they are not all Montecristo-smoking fat capitalists. Indeed, many of those working in the bus industry are shareholders in the company for which they work. I have already drawn your Lordships’ attention to my entry in the Register of Members’ Interests, and do so again. Certainly, the two bus companies for which I have worked both have a considerable number of their employees as shareholders. In the National Express Group, accepting shares was actually a condition of employment. Obviously, any diminution of earnings for those companies arising from this clause about quality contracts will impinge on those shareholders and the employees as well, as many of them are one and the same. Will the Minister therefore address the point about compensation for shareholders and the impact of the franchising system in the clause on local bus services? Again, although it might sound superficially attractive to some to say that there should be a franchising system in a particular area, one cannot imagine that the losing applicant, if that is the right way to put it—the person or the company that already operates the services—will be prepared to walk away, handing in the keys to garages and passing over their assets, without seeking some compensation. I have no idea what the likely outcome of such an approach is—I am glad to say that I am not a lawyer—but one can envisage a fairly protracted and difficult situation arising in the circumstances that I have just outlined. I therefore hope that the Minister will spend some time on this point when he replies.
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- Lord Bassam of BrightonLabour
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- I am grateful to noble Lords who have contributed to the debate, and I will try to deal particularly with the points made by the noble Lord, Lord Snape. It is rare indeed for us to hear any words in favour of what has become known as the “only practicable way” test. One must concede that at the outset. The noble Lord, Lord Hanningfield, was right to remind us that, as yet, no one has gone down the quality contracts route. One of the main objectives of the Government’s policy document, Putting Passengers First, onwards has been to replace the “only practicable way” test with something that is more suitable yet still sufficiently exacting to ensure that quality contracts schemes are not made unadvisedly or without regard to the cost or the consequences. The noble Lord, Lord Snape, is right to pick up on some of those consequences. It is certainly right to understand them, and obviously we have endeavoured to do so. I assume from what the noble Lord, Lord Hanningfield, said that the main purpose and drift of his amendment is in essence to preserve the status quo—I think that that is where he is coming from—where quality contracts schemes are a theoretical possibility but bus operators are pretty confident that they will never be used. The noble Lord, Lord Snape, reminded me that when, back in 2000, Ministers described quality contracts schemes as a last resort, they assumed that they would be an option that could be resorted to in the right circumstances. We have moved on from that experience, and the experience of the past few years suggests that even that may have been a touch overoptimistic. For various reasons, even the local transport authorities that are convinced that only a quality contracts scheme can deliver the improvements in bus services that the public rightly demand are daunted by the task of proving that there is absolutely no other practicable way of making those improvements. Probably, on reflection, the “only practicable way” test is somewhat odd in other ways. In theory at least a local transport authority could develop a policy that by its very nature could be implemented only through a quality contracts scheme. A uniform fare structure across the whole area of the authority might be an example. That could never be achieved in a deregulated market or even under a quality partnership scheme. Perhaps it is worth noting that only maximum fares and not the actual fare could be specified under the amendments proposed in Clause 12—at least not without blatant breach of competition legislation. So, on the face of things, the “only practicable way” test could be passed by an authority whose public interest case did not have much merit. Rather than relying on that test, Clause 18 will substitute a series of positive criteria that a proposed scheme will have to satisfy, and against which it can be measured when a decision is needed on whether to keep it in force. Without these criteria, against which an independent approvals board can check and evaluate a scheme, much else in this part of the Bill would not work as intended. The additional requirements on consultation and affordability in Clause 19, which we shall come to shortly, would make the whole procedure even more daunting than it is at present. I come close to agreeing with the noble Lord, Lord Snape, in his assertion that we see this very much as an approach of last resort. There may be occasions when it is deemed a sensible approach when all else has failed and when a quality contract—a quality partnership—clearly is not delivering the goods. We need to increase bus patronage and usage. If that is not happening in a particular area, the provisions set out in Clause 18 on quality contracts schemes would be the right approach. I know that there is some enthusiasm for that approach, and understandably so. The noble Lord, Lord Snape, asked about consultation with operator shareholders. I understand where the noble Lord is coming from. We have had several consultations with bus companies, which have been very responsive in telling us exactly what they thought. It is only fair to say that bus companies and their shareholders’ interests will be very much aligned. The noble Lord also asked me about compensation, which has been raised forcefully by bus operators in response to consultation on the draft Bill. In the end we cannot accept their arguments. A quality contracts scheme will not deprive operators of their assets—primarily the buses themselves. Of course, they would be free to deploy them elsewhere on a network that they operate if they do not wish to tender for quality contracts, or fail to win any tenders. Of course, the buses themselves will retain a substantial value if the companies ultimately had to dispose of assets. The same applies to land holdings and depots, which might become surplus to an operator’s requirements. The provisions in Clause 18 mean that a local transport authority would need to satisfy fairly exacting criteria to get a scheme approved. There is still agreement on that point, and that would include a proportionality test. That test is an important protection. Any adverse affect on operators’ businesses would need to be proportionate to the increase in public benefit from achieving the objectives of the scheme. I am sure that Members of the Committee will be aware that the department has published a draft of its proposed guidance for local authorities, which should assist them in understanding how to apply the proportionality test, and encourage them to ensure that all operators have a fair opportunity to compete for quality contracts in the areas affected. The noble Lord, Lord Rowlands, asked about the application of this part of the Bill to Wales. Local authorities in Wales can make a quality contracts scheme at present and still will be able to do so. But, unlike the operation of the scheme in England, Welsh Ministers will continue to approve the schemes as now. In a sense, that it is not a particularly relevant consideration. New criteria will apply in Wales, as in England. I understand where the noble Lord, Lord Hanningfield, is coming from on this. I am confident that we will make nearly all the progress that we want to make through the quality partnership route, which is the major thrust of government policy. There may be occasions when the quality contract route, because all else has failed and because of local circumstances, ends up being embarked upon. But there are important tests and protections in place to ensure that that approach will be proportionate and appropriate, with each party understanding their part.
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- Lord HanningfieldNon-affiliated
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- Does the noble Lord have knowledge of any authorities that want to take up quality contracts?
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- Lord Bassam of BrightonLabour
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- There apparently are a few considering the approach, but we do not have any hard and fast data at the moment. In fairness, we are at quite an early stage of the journey of legislation through Parliament and it is not surprising that there is not a mad rush of enthusiasm at this stage.
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- Lord SnapeLabour
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- I have no wish to detain your Lordships unduly, but I want to raise two points arising from the Minister’s reply. I am grateful to him for what he said. Many people on both sides of this argument in the bus industry would be grateful for clarification on how he sees the way forward. I caution him on two matters. I do not mean to be insulting, but the Minister rather brushed aside what happens to companies’ assets—I shall come to compensation in a moment. He implied that vehicles can always be deployed if a company loses a contract or a franchising system is introduced, but that is not always the case. I have bored Members of the Committee before on the subject of bendy buses in Birmingham and I do not wish to do so again. But they were bought specifically for one route. Usually, it is operators who are condemned for reneging on discussions. In this case it was one of the highway authorities. I do not want to cause too much grief to the Liberal party, but they were part of this decision. However, a particular bus lane was removed and, in a city such as Birmingham, it is very difficult to imagine bendy buses being deployed on many routes. The city does not lend itself to the use of those vehicles. Some Members of the Committee might feel that no city does. 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.
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- Lord Bassam of BrightonLabour
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- 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.
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- Lord HanningfieldNon-affiliated
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- 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.
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Lord RosserLabour- Quote
- moved Amendment No. 24:
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Lord Smith of LeighLabour- Quote
- 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 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.
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Baroness Scott of Needham MarketLiberal Democrat- Quote
- 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 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.
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- Lord SnapeLabour
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- 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. I am making no criticism, but I cannot imagine any Government of any political hue having the ability—or the inclination—to spend that sort of money countrywide. We have to accept that London is a different market from the rest of the country. My noble friend shakes his head, but he will have to accept that it is the capital city and that that is because of congestion, I presume—I am not saying that other cities, including Wigan, do not have a degree of congestion, but that their congestion is nothing like it is in London. I understand why no Government of any political hue will follow that example—certainly financially. The noble Lord, Lord Rosser, asked—presumably, he was asking me, as some of his remarks seemed to be aimed in my direction—for examples of local authorities that were not co-operating with the bus industry.
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- Lord RosserLabour
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- Before—
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- Lord SnapeLabour
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- Let me make the point.
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- Lord RosserLabour
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- That is an incorrect statement. All my questions were addressed to my noble friend who will be responding to the debate; none of my questions were addressed to the noble Lord, Lord Snape.
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- Lord SnapeLabour
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- I am grateful but I am also in some ways sorry because I always enjoy exchanges with the noble Lord.
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- Lord Bassam of BrightonLabour
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- I am not quite so grateful.
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- Lord SnapeLabour
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- Ministerial gratitude is not a commodity that is in long supply at the best of times. I am afraid that the Committee will have to put up with this spat between the two of us. Whether the remarks of the noble Lord, Lord Rosser, were aimed at me or not, I did not find them particularly new. That view has been held by local authorities for many years—certainly since the passage of the Transport Act 2000. As my noble friend Lord Smith of Leigh said, it is a question of partnership, but it is not always the bus operators who fail to implement partnerships. I have a couple of examples involving not so much local authorities, although they are involved as well, but when Passenger Transport Authority executives—the elected element—have not followed through. Sometimes that is because of change in the political control of PTAs, of which Birmingham is a fine example—or perhaps not so fine an example—of the sort of situation that I am outlining. Because of the change in political control, the money to the constituent authorities and policies are seen through a different prism. Despite agreements being made at PTA level, because the district councils are themselves the highway authorities responsible for implementing some of those agreements entered into at a different level, such agreements have not been implemented; indeed, they have been countermanded. There are examples of failure on both sides since the passage of the Transport Act 2000; I am sure that my noble friend will accept that. Let us take the example of the bus industry—I hesitate to start quoting my own experience once again, but I shall do so. I served on a passenger transport authority in Greater Manchester in the early 1970s as an elected councillor. It was then known by the long-winded name of south-east Lancashire and north-east Cheshire PTA. I do not think that any bus passenger would have said at the time that the services that we ran were quite as comprehensive and as rosy as those that both my noble friends seem to feel would be run if only the local authorities had a greater part to play once more. On Second Reading and during our discussion on an earlier amendment, I pointed out to noble Lords that the biggest survey of bus passengers carried out by my noble friend’s department indicates that outside London something like 83 per cent of bus passengers are content or reasonably content with the services provided by the “wicked capitalists”—if I might put that phrase in inverted commas—whereas, despite that increase of 1,600 per cent, only 78 per cent of passengers in London are satisfied with the socialist paradise provided by Ken Livingstone, the Mayor of London. That does not indicate—although these surveys are not 100 per cent accurate—that there is massive happiness with the situation in London. As a regular bus user in London, I am very impressed by the system, but whether I would be impressed enough to fork out the money that I am going to be asked for as an occasional council tax payer in London remains to be seen. The bus services are far superior to those before the mid-1990s. My noble friend Lord Rosser felt that there should be no independent approval for quality contracts and gave his reasons. Again, it is a strange system where one side makes one proposal, another side makes a counterproposal and the side that made the first proposal then says that they are going ahead anyway. There has got to be some fallback position and some independent element that makes that decision. Having met quite a few of them, I am more than happy that the traffic commissioner, some of his staff and other people participate in this decision-making process. Traffic commissioners, by and large, are pretty under-resourced and I hope that if they are going to play this role my noble friend will tell us that there will be much greater resources passed in their direction. Most people in the bus industry would agree that if anyone is capable of making an independent decision on a quality contract or some other controversial aspect of such a scheme, a body chaired by the traffic commissioners is as good as any that I can think of; although I would be interested if the Minister can think of another. I will paraphrase what my noble friend who replied from the Front Bench said on Second Reading when this point was debated. He felt it was important that an independent assessor looked at these matters before this decision was made. My noble friend Lord Rosser talked about people seeking compensation. Again, I have no wish to add to the so many guineas a word that our learned friends in the legal profession make out of these matters, but it is an inevitable consequence of the quality contracts scheme that someone who loses out will seek some sort of reparation. I am not saying that that is right, sensible or a course of action that I would advocate. But it seems to me that someone would seek some sort of judicial review if they lost out under the terms of this clause. I return to the point that it needs two to tango and that once they make agreements both sides should stick to them. It has been a justified long-time criticism by local authorities that they had to provide the resources—the highways and the bus priority measures for the private sector which operated the buses—and yet the private sector benefited financially from that provision, in some cases enormously. In the West Midlands, we, as the major bus operator at that time, sat down with the passenger transport executive to try to agree some system of payment that we as the bus operator could make for the provision of those facilities, because we thought that that was fair, since we were going to benefit from them. We agreed a sum of up to £30 million over a number of years in part-funding. If the executive paid 50 per cent of the cost of the highway arrangements, Travel West Midlands, the bus company that I chaired at the time, would pay the other 50 per cent. After five years in the job, when, somewhat wearied and feeling the strains of old age, I stepped down as chairman, the bus company had spent about £300,000, because getting these schemes to come to fruition was enormously difficult. Despite the best wishes of the Passenger Transport Authority, highways authorities—again perhaps because of a change of political control—were all too often not very keen on bus priority measures in their area. I left in 2000, but even now, nearly eight years later, the National Express Group, the last time I checked, spent no more than £1 million on these facilities because of the nature of getting agreement with the highways authorities and the PTA that were implementing these schemes. It is not a question solely of private bus operators failing to deliver; there are weaknesses on both sides. I have to say to my noble friends that, without the benefit of a brief provided by someone else, local authorities are not good at taking quick decisions or implementing them. I am sure that one of the reasons why the previous Prime Minister wanted to change the system of local government in this country was that he felt equally frustrated. That is not an attack on councillors—I was one myself—but the system these days does not lend itself to quick commercial decision-taking. I apologise for detaining the Committee for so long, but that leads me to my last point. It is important that an independent element rules on these decisions, although I do not encourage private operators to go to court. I do understand the fears expressed by many local authorities that the bus services are not as comprehensive as they could be if they had a greater say, but services and fares in many areas are discussed by both sides in this community. It is for the private operator, who after all invests a considerable amount of money in a bus fleet, to take the final decision as to how its assets are deployed. That is how private operators see it, and it is very difficult to argue with that. As for the point that councillors make pledges which independent approvals boards overturn—a sentence that I wrote down as the noble Lord, Lord Rosser, said it—many local authorities would be quite glad when they make these pledges that someone else has to say yea or nay. It is easy to make pledges when seeking election at any level—those of us who have sought election have all been tempted to make pledges in certain areas—but it is not always easy to implement them afterwards, and the fact that there is an independent body that can decide whether those pledges should be implemented might be somewhat welcome, whatever councillors might say publicly. My very last point—I mean it this time—is about competition. I have listened to this debate continuously since 2000, but I am still not sure what local authorities want. My company in the West Midlands—I had better stick to that area as I know it best—was part of the National Express Group at the time and was accused on the one hand of running a monopoly. On the other hand, when there was competition—the private sector working the way it does, bus drivers whom we had fired for various actions, and who were working quite often for small bus operators, would buy a couple of buses and, under some of the Barnett provisions of the 1986 Act, would turn up on the most lucrative route in the area and invariably run two minutes in front of our buses vehicles that quite frankly would have disgraced provincial Birmingham in the 1930s—we were accused of driving them off the road. I know nothing about the Stagecoach discussion in Preston, so I cannot comment in detail on what the noble Lord said earlier, but I certainly had enough experience in Birmingham of never knowing what the local authorities wanted. They were against us having a monopoly, then they were against unbridled competition, and I was never quite sure exactly what they wanted. These days, Birmingham has a new chairman who is not me, argumentative as my noble friends might think I am, and a new chief executive of the Passenger Transport Authority, both of whom appear to be united in the view that quality partnerships are the best way forward and that, by working together, they provide a better service for the customer, which is what the Bill and our amendments should be about, rather than about who runs the buses and who does not.
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- Lord Bassam of BrightonLabour
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- This has been a very stimulating and interesting debate, and I congratulate my noble friend Lord Rosser on tabling amendments that have provoked such a debate. Usually as a Minister you get the amendments listed in your notes, but there were so many amendments in this group that the top of the paper simply reads, “and a group of approximately 30 related amendments”. I congratulate him on doing so. I have been listening to what has been said over the past half hour or so, thinking that this goes back to issues that were raised as a by-product of what I viewed back at the time, in the mid-1980s, as a rather crazy bus privatisation and bus deregulation Bill put through by the then Conservative Government. That legislation heralded in a time when I thought that we would simply see a continued acceleration of what officials said to me in my local authority was going to be managed decline. Year on year, it seemed that there would be fewer people on our local municipal buses and fewer people on the old green buses run by Southdown. There would be greater irritation as the fares seemed to get larger and larger as a proportion of people’s incomes. I do not think that there were many people who would ever have argued the case for the 1985 legislation in the longer term. Some imaginative bus operators, whose work came about as a result of the shakedown in the structure of companies that took over services, clearly did see a business opportunity, and I speak as one who lives in an area where it has worked. But it has not worked for the reasons that were set out at the time of the passing of the legislation under Nicholas Ridley. It has worked because in some areas there was a strong desire to see effective, co-operative and partnership working. This legislation and the 2000 legislation seek to build on that concept of partnership to try to improve the quality, standard and variety of services on offer. That is in essence what we are trying to do here. There has been a lot of criticism this afternoon that the legislation is going in the wrong direction and people have said that the 2000 legislation was a failure. I do not accept that it was a failure in the terms that have been set out before the Committee, because it has played its part in forcing the process of partnership, and we have seen the development of many successful voluntary partnerships. That is to the good, and we should work from that experience and seek to improve on it. No one is saying that voluntary partnership is a bad thing; most people are saying that it is a good thing but that there are circumstances where we need to give it more of a framework and more of a body and encourage and do more to stimulate the bus market. As we know, there is a tremendous amount of capacity in the bus industry, with much greater capacity to move passengers around, and it has tremendous potential for growth. Those are the issues that we should be wrestling with. The amendments tabled by my noble friend Lord Rosser stimulate some debate about the best way to go. I am aware that, for instance, the question raised on the Approvals Board is an issue that has caused many strongly voiced opinions during consultation. Many are in favour of Approvals Boards and there are also people who are opposed. We have tried to strike a reasonable balance between those competing interests. My noble friend Lord Rosser has opposed the Approvals Board on two grounds. First, he says that it is undemocratic, and, secondly, he says that it will cause delays in what is bound to be a lengthy process to set up a quality contracts scheme. The Transport Committee in another place was fully aware of those arguments, yet it recommended not that the whole idea of a board should be scrapped but that it should simply be modified to amend those concerns as far as possible. That is what we have sought to do.
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- Baroness Scott of Needham MarketLiberal Democrat
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- Can the Minister confirm that a judicial review of the running of the tribunal is a possibility? I cannot imagine that it would be outside judicial review proceedings. I am not sure that relying on that as an argument for having a tribunal is entirely valid.
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- Lord Bassam of BrightonLabour
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- Of course, if there is disagreement with the decision and if there are reasonable grounds it will be open to do that. We have put tribunals in place in many areas of public law to try to tease out the need to have recourse to a higher court. That is welcome, because it makes the process easier and more accessible and produces a decision at a lower cost. Ultimately, in the circumstances that we jointly understand, a judicial review would be a practical proposition. If we are seeking to resolve issues in the best interests of the public, we do not want to end up going there on many occasions. For reasons of cost, a judicial review procedure would weigh heavily on a small operator, but less so against a larger transportation group. The impact on a local transport authority of an expensive and possibly protracted judicial review would be far greater than the impact of an operator appealing against a decision to the Transport Tribunal, which should provide a relatively quick and inexpensive form of redress. We can be quite sure that if the decision-making process were entirely in the hands of a local transport authority with no right of appeal to a tribunal, the temptation for those operators who can afford to go to judicial review would be extremely strong. The noble Lord, Lord Rosser, asked a lot of questions. If I miss any—I am sure I will—we will, as always on these occasions, come up with a letter at the end of the Committee proceedings, which will seek to analyse in some detail what lies behind the questions and provide more information than I can give this afternoon. One of his early questions was how long it would take a local authority to get a quality contracts scheme in place. We recognise the need to ensure that the approvals process does not impose an undue hurdle or delay on implementing schemes. We estimate that a small uncontroversial scheme could go through the statutory processes beginning with the statutory notice prior to consultation in about 15 months. Within that estimate, six weeks is allowed, roughly speaking, for consideration by the Approvals Board. For a complicated scheme we may need to add up to 10 months for the tendering process, and for appeal to the Transport Tribunal perhaps a further three months. In addition, the approvals board may require a scheme to be modified, which may require some further consultation. We accept the case for inserting time limits into the stages leading to approval by the board. We have made provision in the Bill, but the timings will need to be specified in regulations. The noble Lord raised the issue of admissible objections, the process for which will be set out in regulations, and he asked about quality contracts schemes more generally. There is a power to hold public inquiries, and there are provisions to protect the confidentiality of financial information, which is right. It would be unusual if that were not the case. He asked whether the quality contracts scheme was possible only when there has been an attempt at a partnership scheme that has failed. The whole point of moving away from the “only practicable way” test is to avoid trying quality partnerships and failing first. It comes back to the point about how best to get improvements in the quality, range, frequency of services, and so on. We all recognise that working away at the quality partnership scheme, whether voluntary or otherwise, is the best way to get there. We need to see how it will work in practice and ensure that any quality contracts scheme is proportional and in the public interest—in other words, improves services. The noble Lord also asked about the powers of the Transport Tribunal and appeals to court. I can fairly say that appeals against decisions of a Transport Tribunal will revolve round a point of law only. The powers of tribunals will be set out in new Section 126E. I have covered the point about whether approvals boards can overturn the policies of elected authorities. That is not their primary purpose. It is for the local authority to determine policy, which is distilled from manifestos and commitments of local politicians. The noble Lord, Lord Rosser, also asked about the costs. That will depend on the nature of the scheme. There probably is scope for cost reduction. A quality contracts scheme could help to avoid overbussing on busy routes, and the tendering process should help to maximise value for money for the local taxpayer, so there are potential benefits.
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- Lord SnapeLabour
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- Before the noble Lord, Lord Rosser, replies—again, I apologise for detaining the Committee for a moment—may I ask about compensation? I do not want to labour the point. Does my noble friend agree that Parliament has made provision over the years for payment of adequate compensation for dispossessed incumbents who sustain losses as a result of changes in regulatory rules on the application of regulatory policy? Contrary to what the noble Lord, Lord Rosser, said earlier, there are lots of examples of compensation being paid—for example, in the energy market restructuring, in the introduction of retail competition in the water market and in the regulation of telecommunications. Indeed, the PTAs themselves were, quite rightly, the beneficiaries of compensation paid to them under the privatisation process of the rail industry. Financial compensation via a deed of assumption was paid to many PTAs because of the loss of facilities and amenities as a result of that Act of Parliament. So there is previous provision. Although I do not want to detain the Committee by spending too long on this, as I said, my noble friend did not mention that in his winding-up speech and I would be grateful if he would do so if he replies again .
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- Lord RosserLabour
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- I will read our proceedings in Hansard to check, but I am not sure that I laboured the point of compensation in my contribution.
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- Lord Bassam of BrightonLabour
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- Actually, I think that it was the noble Lord, Lord Smith of Leigh. Without wanting to labour the point, I went over the issue at some length. I know that the noble Lord, Lord Snape, does not entirely agree with our position on this. He makes a general point about compensation when assets change hands as a result of privatisation, and so on. I understand the point, but our point here is that assets are still in play and it is open to companies to deploy those assets as best they can. I understand the argument; it is not one on which I entirely agree with him.
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- Lord RosserLabour
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- My noble friend said that he will respond to the questions that he has not covered in his response—there may be one or two. I will obviously look forward to receiving those responses. There is a fundamental disagreement between us. I think that the processes will put people off the Approvals Board and the Transport Tribunal; clearly my noble friend does not. I think that he referred to the need to meet the requirements of the European Convention on Human Rights. Have the Government had legal advice that it is only by including the provision for an Approvals Board and a Transport Tribunal, as well as the right—which obviously anyone has—to go to court if he is aggrieved, that the position in respect of the European Convention on Human Rights can be covered? My argument has been that we do not need the processes of the Approvals Board and the Transport Tribunal and that if a party feels aggrieved by a decision by the local authority—either the decision, the way in which the local authority has carried out its consultation, whether it has listened to responses, whether it has met the criteria laid down in the guidance or whether a party feels that it has been effectively put out of business either completely or in part by the decision of the local transport authority—it has the right to go to court. My point is: is my noble friend saying that, bearing in mind that parties would have as of right a facility to pursue the matter through the court, the Government's legal advice is that that would not be sufficient to meet the requirements of the European Convention on Human Rights? It would be very helpful if my noble friend could reply in very specific terms on that issue. I will obviously read Hansard carefully concerning what my noble friend said about how long it will take a scheme to go through the process. I am sure that he will correct me if I am wrong, but I think that he said that a non-controversial scheme might take 15 months, although he had said that it would take only six weeks at the Approvals Board and subsequently three months at the Transport Tribunal—at least, that is what I have written down. When he went on to speak by inference about a controversial scheme—one that is being contested—I am afraid that I got a bit lost, because I sensed that on top of the 15 months, we were getting a 10-month period thrown in, and then a three-month period, and I was not quite sure what we were ending up with as the total time that it might take. My contention was that the quality contracts will be strongly opposed, so that unless the decision by the Approvals Board and the Transport Tribunal goes the way of bus operators—I say this only because I know that they are very much against the arrangements that we have in London—they will pursue it as far as they can, as is their right. If it is not clear in Hansard, I hope that my noble friend will spell out what he thinks will could be the maximum period for a case that is contested right down the line. I believe that my noble friend also said—once again, I may have misheard him and, if I have, I apologise—that you could end up in the Court of Appeal only on a point of law. Is my noble friend saying that it will not be possible to go to the Court of Appeal and, under the pretext that it is under a point of law, reopen the whole proceedings and effectively have a rerun of what was heard before either the Approvals Board or the Transport Tribunal? In other words, will that be allowed only on a very narrow point of law? It would be very helpful if we could get on record whether that is what my noble friend is saying. My noble friend Lord Snape made a point about the cost of the arrangements in London. That point is often made in criticism of the franchising arrangements in London. My answer to that is that a political decision to spend X amount of money on the provision of bus services is not a matter for bus operators, it is a matter for local authorities. They should be making those decisions. If they get them wrong and have to increase their local taxes because the amount of money that they get from the Government is not sufficient to cover what they want to do, or if they have to make cuts elsewhere to provide the money, they are accountable to the electorate for that decision. That is as it should be: an elected body should make the decision on how much should or should not be spent on the provision of bus services and is accountable at the ballot box for that decision. That is the purpose of the amendments.
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- Lord Bassam of BrightonLabour
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- I ought to try to respond to my noble friend’s reiterated questions. It is the case that in Government we would not disclose the nature of our legal advice, which is usually rightly protected, for reasons that my noble friend would properly and fairly understand. On the ECHR point, we believe that the mechanism that we have described and set out in the legislation is the best way of resolving those issues. My noble friend has, fairly, said at the outset that there is a disagreement on this aspect of our policy. My noble friend is right to pursue that, and he has done so vigorously. My understanding is—I have made the point before—that appeal to the Court of Appeal would be on a point of law, and it would have to be on that narrow range of consideration and it could not be to unpick the policy that has led to the way in which the process has been used. On the time taken to see this process through, I have described it at some length in my earlier reply. I am minded, if my noble friend continues to be unhappy about the way in which I set that out, to try to get officials to construct a timeline so that my noble friend can see how the thing operates over a particular period. As I made plain at the outset, I am more than happy to put some of this stuff down in writing and respond to points that I perhaps have not covered as fully as I should. I always try to do that. I will share the contents of that letter with all noble Lords and put a copy in the Library of the House. I am grateful to noble Lords for having taken part in the discussion, which may not have moved us on a great deal further, but at least we have some greater understanding.
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- Lord RosserLabour
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- I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 25 to 33 not moved.] Clause 18 agreed to. Clause 19 [Notice and consultation requirements]: [Amendments Nos. 34 to 36 not moved.]
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Earl AttleeConservative- Quote
- moved Amendment No. 37:
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Baroness CrawleyLabour- Quote
- I am grateful to the noble Earl, Lord Attlee, for the passionate way in which he has put forward the needs of blind and partially sighted people who use buses and who may wish to comment on proposals for quality contracts schemes. As the noble Earl will know, there are other groups who, for one reason or another, are unable to read printed text. Local authorities of course have general responsibilities towards people with visual impairment under the Disability Discrimination Act 1995. We therefore fully expect local authorities to take their particular needs into account. Since December 2006, it has also been unlawful for certain transport operators, including bus operators, to discriminate against disabled people in the provision of goods, facilities or services, or to fail to make a reasonable adjustment so that their services are accessible. Where a local authority wishes to consult all members of the public, or all constituents living in a particular area, it needs to make provision for those who cannot read normal printed matter. A talking newspaper, if there is one in the area, may be an efficient way of doing so. However, as the noble Earl has said, the Transport Act 2000 does not require the local transport authority to consult all members of the public, but only various representative bodies. These consultation requirements are not being substantially modified by this Bill and there will continue to be a requirement to consult organisations which represent local users. Advertising in a local newspaper—a common requirement in legislation—gives the public a reasonable opportunity to respond. I take on board the point made by the noble Earl about the typeface of that print and the importance of it being easily read. But even doing that is not, and cannot claim to be, a guarantee that it will reach everyone. Many people do not read a local newspaper and those who do may not read them from cover to cover. The primary consultation is with the representative organisations. The precise way in which consultation is carried out is left very much to the discretion of the authorities. We would not wish to make the requirement more prescriptive than it needs to be. Many, I hope, will want to consult local organisations representing blind or partially sighted people and people with other forms of disability. They also may want to consult representatives of certain minority groups. How best an individual authority does this without going to disproportionate lengths is very much a matter for each to determine, taking into account the particular nature of their local area. All local authorities are accustomed to consulting on all manner of issues and I see no need why the general duties on local authorities in this area should not be seen as adequate. Nevertheless, we have looked at this amendment very seriously. We have an opportunity to include something relevant in the guidance to local authorities. The important thing will be to draw their attention to the need to consult local representatives of disabled people who may have an effective means of communicating with their members in the most appropriate medium. I accept that this point is not covered in the published draft, but there will be plenty of opportunities to add to that. I shall certainly draw this to the attention of departmental officials working on the guidance document. I hope, with those assurances, that I can persuade the noble Lord to withdraw his amendment.
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The Earl of Mar and KellieLiberal Democrat- Quote
- I know that the noble Lord, Lord Low of Dalston, is not present, but did the Minister reply to his Amendment No. 38? It would be convenient for the Committee if she did. It is grouped.
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- Baroness CrawleyLabour
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- Yes, in the sense that it will be covered in guidance, the same point applies to the amendment of the noble Lord, Lord Low.
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- Earl AttleeConservative
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- I am grateful for the Minister’s carefully considered response. I was careful not to comment on the amendment of the noble Lord, Lord Low, on his behalf. I will read carefully what the Minister has said, and hope that it meets our requirements. Subject to the usual caveats, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 38 to 44 not moved.] Clause 19 agreed to. Clause 20 [Approval of proposed scheme]: [Amendment No. 45 not moved.] Clause 20 agreed to. Clauses 21 to 23 agreed to. Clause 24 [Appeals relating to applications for approval: areas in England]:
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- Earl AttleeConservative
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- moved Amendment No. 46:
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- Baroness CrawleyLabour
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- I am grateful to the noble Earl, Lord Attlee, and I entirely agree that neighbouring local authorities should have a right of appeal against a decision by the Approvals Board, whether that is a decision to approve a scheme, to reject it or to modify it in a way that might affect that other local authority. However, my point today is that that is already provided for. Section 125(3) of the Transport Act 2000 requires the local authority proposing the scheme to consult other authorities that might be affected by the scheme, and any person who was consulted in accordance with Section 125(3) has a right of appeal under new Section 126D. Regarding the continuation of a scheme, this requirement also applies by virtue of new Section 131A(4), to be inserted by Clause 29, with a parallel right of appeal in new Section 131D. A neighbouring authority—that is, one with a common boundary to the authority making the scheme—would normally be affected by it and would fall to be consulted under Section 125(3). It would therefore have a right to appeal. But that might not always be the case, because if the scheme was fairly small, and based at one end of the county, it might have no impact at all on a county bordering at the other end. For example, would Essex County Council be affected by a quality contracts scheme promoted by Suffolk that only affected the area, say, around Lowestoft? Conversely, a local authority that does not have a common boundary with the one making the scheme might be affected by it, particularly where there are small unitary authorities. Travel-to-work patterns can cross more than one boundary. The wording in the Transport Act 2000 would catch them too. Apart from the specified consultees, there is a general category of, “such other persons as the Authority thinks fit”. That could include a local authority that is not directly affected by a scheme, but which might, nevertheless, as the noble Earl has said, have a legitimate interest and valid observations to make. My view, therefore, is that the powers in Clauses 24 and 32 are just as wide as they need to be; to go further would be to risk the appeal process getting out of control. I therefore hope that I can persuade the noble Earl to withdraw this amendment.
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- Earl AttleeConservative
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- I am grateful for the Minister’s response. Of course, experienced parliamentarians know that there are only three types of opposition amendment. The Minister suggests that this one falls into the “unnecessary” class. I shall read Hansard carefully and, subject to the usual caveats, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. Clause 24 agreed to. Clause 25 [Making a scheme]: [Amendments Nos. 47 and 48 not moved.]
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- Lord RosserLabour
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- moved Amendment No. 49:
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- Lord Bassam of BrightonLabour
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- My noble friend Lord Rosser has made some interesting and valid points, but in the end I am not convinced by the entirety of his argument. A quality contracts scheme must in current circumstances be regarded as something of an experiment. No one has yet tried one, and although the noble Lord referred to London and there are perhaps continental examples where a similar system is in force, we are very much at the experimental stage. Those are places where there has long been a publicly operated network, which has then been franchised out to private operators. A quality contracts scheme would replace deregulated services, and the task of setting up a regulated network from scratch is of a very different order from the task of adapting an existing one. It could well be that a quality contracts scheme is set up which simply does not work. “Very well”, you may say, “the local authority can always revoke it”, but institutional inertia may set in, and those who have a vested interest in keeping it going may seek to have their way. Other cases will be less clear-cut. The scheme may not be doing very well, not at all well even, but the local authority may still be optimistic that, given a bit more time, it will succeed. In the mean time, bus operators may be champing at the bit, noticing all the mistakes that the authority is making, but powerless to put them right. Under the current legislation, the local authority would effectively have to start again from scratch if it wanted a scheme to continue in force. In response to comments from stakeholders, the Bill provides a mechanism to enable a scheme to be continued, with a modified process for approval. At the end of the period for which the scheme is approved, which may not exceed 10 years, for it to continue in force it must be reviewed and a further consultation must take place to ensure that it has delivered at least some of what was promised, and is still relevant and likely to deliver more. This new process provides that if the scheme will not expand in scope and not involve new areas or new bus services, it can go ahead without the board’s approval, though with an appeal mechanism. If it will expand, the approval of the board or, in Wales, the Ministers, will still be necessary. The second amendment in this group concerns the length of individual contracts rather than the whole scheme. In the Transport Act 2000, the contract length is set at five years and the scheme at 10 years. There were many representations from local transport authorities that five years was too short for a large-scale, good-value bus contract, and we tried to respond to those. I understand that my noble friend’s point is that a maximum length is set out in community legislation. That being the case, however, it need not be set in our own legislation. I cannot follow the noble Lord’s argument that local authorities should be able to take advantage of the extra 50 per cent that is allowed in some circumstances under the new EC regulation, which will come into force in 12 months. A contract to run a bus network, or part of a bus network, is not comparable to designing, building and operating a contract for a light rail system. The Community regulation recognises the difference by specifying a maximum of 15 years for rail contracts and 10 years for bus contracts. The extra 50 per cent on either limit for significant assets is not likely to be relevant in the case of a contract to run bus services, or even a whole bus network. There are many good arguments why a private company should not be given such a lengthy contract to run a public service. We are not persuaded by the noble Lord’s arguments, and I hope that he will withdraw his amendment.
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- Lord RosserLabour
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- I want to ensure that I have understood the point that has been made. On the second amendment, I think that my noble friend is saying that the Community legislation would not apply in the circumstances of the bus contract. I took his reply to mean that he drew a distinction between bus and rail. On the first amendment, which would allow a quality contract to continue and not have to be re-let with a lengthy process, as set out in the Bill, I shall paraphrase what I believe my noble friend said. His argument is that the quality contract might not be satisfactory and might not be working as people intended. It might be working adversely against the interests of bus operators, so there should not be the facility simply to renew it after it has expired and then carry on with it in the same form. Is he saying that if you agree a quality contract that does not work as intended, let us say from a bus operator’s point of view, the bus operator has no redress until the 10 years for which the contract was let has expired, if that is how long the contract has been let for?
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- Lord Bassam of BrightonLabour
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- I will deal with the second issue first. In those circumstances, one would expect the bus operator to enter into discussions and negotiations with the local authority. That may not be quite the same as saying that there is a form of redress, but it would be rather strange if the contract was not working and there was no facility or opportunity to revisit current arrangements and see what they are delivering and not delivering. One would expect that to happen in those terms. On the noble Lord’s first issue, the Community regulation applies, but there is a difference, which is what I was drawing attention to. The regulation recognises the difference by specifying a maximum of 15 years for rail contracts and 10 years for bus contracts. The extra 50 per cent on either limit for significant assets is not likely to be relevant to a contractor on bus services. This is because of the difference in the nature of the service being offered. I am happy to set out more of the rationale for the noble Lord when we pick up some of these issues in correspondence.
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- Lord RosserLabour
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- I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 25 agreed to. Clauses 26 and 27 agreed to. Clause 28 [Extension of maximum period of quality contracts]: [Amendment No. 50 not moved.] Clause 28 agreed to. Clause 29 [Continuation of scheme for further period]: [Amendments Nos. 51 to 54 not moved.] Clause 29 agreed to. Clause 30 [Approval of continuation of scheme]: [Amendment No. 55 not moved.] Clause 30 agreed to. Clause 31 agreed to. Clause 32 [Appeals relating to continuation of scheme]: [Amendment No. 56 not moved.] Clause 32 agreed to. Clause 33 [Variation or revocation of scheme]: [Amendment No. 57 not moved.] Clause 33 agreed to. Clauses 34 to 36 agreed to. Clause 37 [Guidance about quality contracts schemes]:
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- Lord RosserLabour
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- moved Amendment No. 58:
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- Lord HanningfieldNon-affiliated
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- I shall speak to Clause 37 stand part. We are told that the Bill will put power into the hands of local transport authorities, and allow them to decide the appropriate mode of bus operation for their areas. I was therefore interested to see that Clause 37 allows the Secretary of State in England, and the Welsh Ministers in Wales, to issue guidance concerning the performance of quality contract schemes; we have had a lot of discussion about that this afternoon, but this is an additional point. Under the second part of the clause, it is stated that authorities must have regard to such guidance. What sort of guidance does the Minister expect that national authorities may have to give, and why is it required? In the case of poor performance, how does he envisage this guidance may be of assistance and what could be done? My concern is that this advice could turn into central regulation—we have seen enough of that—which is not what local bus operators need or would benefit from. I am therefore uncertain that this clause is needed. The Bill already contains measures to consult widely and, although these could be improved by our previously suggested amendments, they should presumably suffice in ensuring a quality contract scheme is fair. Can the Minister justify why this clause is needed, and what would be the effect if it were removed?
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- Baroness CrawleyLabour
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- I am grateful to my noble friend Lord Rosser and to the noble Lord, Lord Hanningfield. We have two sides of the coin in this set of amendments. We have heard varying views on the subject of guidance documents on quality contract schemes. My noble friend Lord Rosser proposes what we might call an elaborate parliamentary procedure for approving guidance. By contrast, the noble Lord, Lord Hanningfield, wants to remove the guidance clause altogether. I turn first to the argument of the noble Lord, Lord Hanningfield. I should begin by explaining why we need Clause 37 at all—the thrust of the noble Lord’s argument. The Transport Act 2000 in its present form contains no power for the appropriate national authority to provide statutory guidance on quality contracts schemes. In response to requests from local authorities and others, the Department for Transport issued guidance, which might, I suppose, be described as an advisory document, intended to help local transport authorities in preparing their submissions for approval. As under the current legislation the Secretary of State himself or herself would be approving the schemes, and could only do so if in his or her opinion the criteria were met and the public interest served, there was no reason then to have a statutory power to issue guidance. However, the Bill proposes to transfer the Secretary of State’s approval role in England to an Approvals Board independent of the Government. It would be possible, of course, for the Government simply to stand back and let the local authorities and the Approvals Board work out for themselves how best to handle proposals for quality contract schemes. But such is the public interest, and such are the legitimate concerns of bus operators that the system will work to their disadvantage, that we think it would be irresponsible of the Government to take such a hands-off approach. For similar reasons, there is a power in new Section 126B(7) for the Secretary of State to issue guidance to the Approvals Board. Clause 37 of course gives a power to the Welsh Ministers, as well as the Secretary of State, to issue guidance, as they are the appropriate national authority for a scheme in Wales. As the Welsh Ministers will themselves continue to be the approval authority, there may not be such a pressing need for the provision as in England, but since our Ministers in England found it useful to issue guidance on a non-statutory basis in any case, it seems entirely reasonable to allow Welsh Ministers the option of a statutory power, and they are in favour of having it. Issuing guidance under a statutory power of course gives it extra weight. There may well be cases where the Committee would see advantage in that. For example, we have been debating earlier today the provision of facilities for disabled people and ensuring that their concerns are taken into account in consultation about local schemes. We came to the conclusion that that might be a suitable matter to include in guidance, rather than in the Bill. If Ministers included advice on that in the guidance document, I am sure that noble Lords would want local authorities to follow it. They are more likely to do so if the guidance has statutory force. In response to the points raised by my noble friend Lord Rosser’s amendments, we have no objection in principle to the parliamentary scrutiny of departmental guidance. Indeed, a draft guidance document has already been made available for the House—and the Committee in particular—to consider. It forms Volume 4 of the large guidance document that has been laid in the House Library, and copies are available in the Table Office. That volume is a draft of what could become the guidance under Clause 37 if it is enacted. It is very much a preliminary draft, but we hope that publishing it at this stage will help inform the parliamentary debates. Nor do we have any objection to consulting on the guidance, in particular with the local transport authorities to which it is addressed. Indeed, in this day and age it would be most unusual for a document of this type to be published without a period of formal consultation. The department has not done so formally to date, because it is still an early stage in the Bill process. However, there has been informal consultation with a range of interested parties, and the department has taken account of the views of the various stakeholders, even at this stage. The document is available on the internet, and the department would welcome any comments that noble Lords might have. We do not believe that it is necessary for the guidance to be made by order and in particular for such an order to be subject to the affirmative resolution procedure. We anticipate that the guidance may need to be amended in the light of experience, and it is important that the Secretary of State and the Welsh Ministers have the flexibility to do that as we learn from the implementation of the process. Requiring a debate in both Houses would be very time consuming for Parliament and might mean that the guidance would be revised less often than would be helpful. That could be counterproductive. I say to my noble friend Lord Rosser that the department will, of course, go out to full consultation before any guidance is issued in its final form. We hope by then to have had the benefit of many lively debates in this House. I hope that noble Lords who have not already done so will avail themselves of the opportunity to read the draft guidance, which is intended to make things clearer for local authorities rather than to put additional hurdles in their way. My noble friend Lord Rosser asked whether we would consult on guidance. As I have just said, we certainly will consult. We have already published the initial draft, and we will consult fully and formally next year. My noble friend also asked whether guidance would face parliamentary scrutiny. The Delegated Powers and Regulatory Reform Committee did not see the need for an elaborate parliamentary procedure that underpins the view that we have as far as the Government are concerned on not going down that more elaborate parliamentary path. The noble Lord, Lord Hanningfield, asked a question to which I do not see an answer in my notes. If I have not covered it, I will ensure that he receives an answer in writing.
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- Lord RosserLabour
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- In the light of that response, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 37 agreed to. Clause 38 [Quality contracts: application of TUPE]:
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- Lord RosserLabour
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- moved Amendment No. 59:
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- Earl AttleeConservative
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- I have tabled Amendment No. 60 in this group. The introduction of the TUPE provisions in Clause 38, following consultation on the draft, seems sensible if it works. The noble Lord, Lord Rosser, has outlined the TUPE problem far better than I could. As I understand it, there has to be both an economic entity transferring and an equivalent job available. In the case of only part of a depot needing to transfer, and the new employer not requiring as many staff, would TUPE automatically apply? The rail industry had a pension scheme, whereby an individual’s pension rights are protected regardless of employer on the transfer of a rail franchise between companies. The noble Lord, Lord Rosser, touched on that. Is this not the same principle as that involving the franchise of a bus network, or part thereof? My amendment would similarly protect the pension rights of individuals when setting up a quality contract. That would provide security to employees in the industry, which is surely in the interests of fairness. It would also prevent any unnecessary interference in the process by employees fearful of their pension rights. We want the costing of including pensioners to be part of the consultation when deciding to propose setting up a quality contracts scheme. Operators would have to take this into account when placing their bid. No doubt the Minister may say that the Government will want local authorities to specify TUPE-style requirements that go beyond the minimum requirements set out in the Bill, but some clarification of where the Government stand on this issue would be helpful and would provide security to employees in the industry.
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- Lord SnapeLabour
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- Both amendments relate to very serious points. For the first time in Committee, I agree entirely with the words of my noble friend Lord Rosser. These matters should certainly be included in the Bill, but the clause does not properly include them. Mind you, this does point out a few disparities in the system that my noble friend seeks to embrace. Indeed, the whole principle of franchising, which is behind the principle of quality contracts, depends on someone bidding lower than someone else to obtain a particular franchise. For some reason, my noble friend and those who brief him apparently overlooked this point, so we come to the clause. Of course it is essential that pension provision is properly protected. Indeed, reputable companies such as FirstGroup and National Express did so when they acquired companies. National Express provided a mirror-image scheme to the local government pension scheme to guarantee that employees continued to be protected and enjoy the same benefits that they would have enjoyed had the company that was acquired—West Midlands Travel—remained in the municipal sector. Similarly, FirstGroup gave exactly the same mirror-image guarantees to the companies that they acquired. A great deal has been said about this in our debates on the Bill, but I have to point out that the London experience was based on entirely the opposite premise. The original franchises for London were based on the cheapest operator bidding on the ground of buying out the terms and conditions, including the pension provision, of many bus workers in London at the time. Yet we are told that this is the example that local authorities and those who speak on their behalf before your Lordships should follow. It was not until Transport for London and the current mayor’s present policies were actually followed that many of the working conditions which the London bus staff had been deprived of were restored. I would go so far as to say that working conditions have nothing to do with regulation or deregulation. The London experience, and its admitted benefits, is based entirely on the amount of money that is being thrown at—I choose my words carefully—the London bus industry. Apparently, people see no contradiction between demanding a franchising system and then saying, “But hey, you’ve got to protect the interests of the workforce”. I agree with them; you should protect the interests of the workforce. The more the interests of the workforce are protected, the less likely it is that there will be quality contracts in the areas in which people are now advocating that philosophy. There is more to this, of course, than wages and pensions. Companies such as FirstGroup and National Express have share-saver schemes for their employees. Under existing Revenue rules, share-saver schemes are available only to the employees of that particular company. If a company such as National Express or FirstGroup—I name those two because they are the ones I have the most experience of—bid for a quality contract and failed, their employees would, under existing Revenue regulations, have to give up their participation in the share-saver scheme. I wonder whether my noble friend and those who brief him have discussed these matters with those employers or whether he would consider adding to his amendment that some provision ought to be made—although I very much doubt whether Revenue and Customs would allow it—for share-saver schemes to be transferred across in the event of a franchise operation. Both the amendments are eminently sensible and I hope that my noble friend can accept them. I would be delighted to hear his view on some of the other benefits, not just the ones that I have already mentioned. Some people in local government talk about competition and the lack of it. All too often, smaller competing companies—for very good reasons, although I do not defend them—do not provide things such as canteens, proper uniforms or union recognition. Why does my noble friend not write that into some of his amendments? I am sure that it will not come as a great surprise to him that some smaller companies that would take the quality contracts that he and those who brief him are so anxious to include in the Bill would love to be able to derecognise many of the major trade unions in the industry. I hope that he will come back with further amendments to make sure that they do not. I repeat that if my noble friend accepts both amendments, as the Government should, it will reveal the nonsense of quality contracts and the injustices of the franchising system that lies behind quality contracts. Finally, if we are to have proper, comprehensive bus services, we should pay the staff properly and give them adequate working conditions, not subject their employment conditions to the lottery of franchising and quality contracts. I hope that my noble friend can accept the amendments and I congratulate those who have tabled them for the common sense that lies behind them.
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- Lord Bassam of BrightonLabour
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- I am grateful to all Members of the Committee who have contributed to the debate. A vast range of subjects has been raised and I shall not be able to answer all the points this afternoon, but I may in the end reach a position that noble Lords may think is more helpful than it was when we started thinking about these issues. The TUPE regulations, and the Acquired Rights Directive which they implement, deal with straightforward cases where a workforce employed on a particular public function, such as waste collection, is transferred to do the same work under a new contractor. As noble Lords have pointed out, the position when a quality contracts scheme is set up is more complex because the starting point is different. Before the scheme is introduced, employees are working for the provider of bus services, in most cases, on a commercial basis by a private sector operator. When the scheme comes into force, those services are instead to be provided under contract to the local authority, either by the same operator or by a different one, depending on who wins the contract following a competitive tender. The end state is very similar to that of a refuse collector employed by a contractor of the local authority, but the workforce is not being transferred from the local authority or from another contractor doing the same work on behalf of that authority. The transfer of work will not necessarily involve the transfer of physical assets, such as vehicles or depots, although in some cases it may, as we have discussed. The pattern of services to be delivered under quality contracts may differ considerably from what the operators provided under deregulation. Indeed, one of the main reasons for making a quality contracts scheme may be that the authority wants a different, and better, network. Often, too, there will not be a one-for-one correspondence between the old employer and the new one, and some personnel will not have to transfer at all because particular routes will not transfer. Duty rosters may have to be redesigned and staff moved from one depot to another. It is not a straightforward transfer—or at least it will not be in all cases. Let us assume that the local market is divided by two or three large employers and a handful of small ones. Under quality contracts, the market may be carved up in a very different way, but some of the changes may balance out. So it may be easier for an employer to keep the same drivers and allocate them to different routes than to transfer them to another operator who has taken over the routes that those drivers originally worked on and get some different ones back in exchange. That might also be a great deal easier for the drivers themselves. I am not saying that will happen everywhere, but we need to make allowance for it. Clause 38 says, in effect, that any employee who is transferred to the holder of a quality contract will be transferred on TUPE terms. It does not require all the contractors to take over all the workforce, but it will apply TUPE to a number of transfers that would not fall under the regulations but for this clause.
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- Lord RosserLabour
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- As my noble friend has said that he will take the issue away and look further at it—although I appreciate that that is without making any commitments—I am happy to beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendment No. 60 not moved.] Clause 38 agreed to. Clause 39 agreed to. Clause 40 [Competition scrutiny of functions and agreements relating to buses]:
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- The Earl of Mar and KellieLiberal Democrat
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- moved Amendment No. 60A:
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The Deputy Chairman of Committees (Lord Geddes)Conservative- Quote
- I think that the noble Earl meant to say at the beginning, “On behalf of the noble Lord, Lord Berkeley, I beg to move”.
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- The Earl of Mar and KellieLiberal Democrat
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- I am not certain I can say that because I had no prior agreement with him.
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- The Deputy Chairman of CommitteesConservative
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- If it is not said, the amendment cannot be moved.
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- The Earl of Mar and KellieLiberal Democrat
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- On behalf of the noble Lord, Lord Berkeley, I beg to move.
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- Lord Bassam of BrightonLabour
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- My speaking note does not take account of the noble Earl’s contribution, but I shall deal with the issues raised by virtue of the amendment. We agree that there are a good many circumstances in which the interests of bus passengers can best be served by co-operation between bus operators and, in many cases, the local authorities involved. At this point, perhaps I may also pay tribute to the Campaign for Better Transport, which undertook some work earlier in the year on this aspect of the Bill. That work has been very helpful in reinforcing the importance of ensuring that competition law genuinely serves the best interests of passengers. This is why we have made provision in the Bill for a “tailored” competition test, which would apply to voluntary partnership agreements and certain other agreements involving a local authority, in place of the test contained in Chapter I of the Competition Act 1998. In taking this rather innovative approach, we have sought to ensure that the interests of bus passengers are well served while also ensuring that our approach does not undermine the Government’s wider policy on competition. I am sure that Members of the Committee will recognise that maintaining healthy competition is an important driver of innovation and growth in our economy. The leading role played by local authorities in developing and negotiating voluntary partnership agreements is critical here. It is this feature of voluntary partnership agreements that, in the Government’s view, justifies the departure from the usual provisions of the Competition Act. We recognise that passengers may benefit from certain types of agreement between two or more bus operators—for example, to ensure that services operate at evenly spaced intervals. Where such provision is in agreements which support voluntary partnership agreements or quality partnership schemes, the provision in Schedule 2 would provide that, in certain circumstances, they would be subject to the new Part 2 test. Those circumstances are where the local authority certifies that the agreement is in the public interest and that any restrictions which would affect competition are necessary in order to meet the objectives of the scheme or agreement. But where a local authority does not make such a certification, the agreement would need to satisfy the appropriate test in the Competition Act 1998. The intention behind the agreement is clear. It is right that such an agreement would not by itself fall within the scope of the new competition test, but, in our view, that provides a useful incentive for operators to work in partnership with local authorities. The scope of the proposed new test is intended to encourage bus operators to explore scope for agreement, not in isolation from the local authority’s efforts to improve services but in close partnership and collaboration with them. We consider that this partnership approach is more likely to deliver the best outcomes for passengers than if local authorities and bus operators pursue their own agendas independently. I hope that Members of the Committee will appreciate that the approach we propose has been given careful thought and that it shows more flexibility on the part of the Office of Fair Trading. We consider that it provides a real improvement on the current situation and preserves the right incentives for bus operators to work not in isolation but in partnership with local authorities. We do not think that we can accept the proposal in the amendment, namely that any agreement between two operators should automatically fall within the scope of that provision, but we are prepared to consider whether anything more can usefully be done in this area. Without absolutely committing myself to bringing anything back at a later stage, I am prepared to say that we will give it some further thought and see what more we can do. I recognise the importance of the issues that the amendment raises.
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- The Earl of Mar and KellieLiberal Democrat
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- I think that I am quite happy with the Minister’s answer. On behalf of the noble Lord, Lord Berkeley, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 40 agreed to. Schedule 2 [Competition test: amendments of Schedule 10 to the Transport Act 2000]:
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- Lord RosserLabour
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- moved Amendment No. 61:
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- The Earl of Mar and KellieLiberal Democrat
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- My noble friend Lady Scott had indicated her intention to oppose the Question that the schedule stand part of the Bill. On her behalf, I indicate that she no longer opposes it.
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- Lord Bassam of BrightonLabour
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- We are well aware that competition legislation can place constraints on operators and local authorities from acting in what they perceive to be the public interest. Often it is unnecessary as a constraint and arises from an overcautious attitude to competition law. At the same time, there are certain boundaries that must not be crossed. In the package of draft guidance that we published to inform the debates, the largest single volume is the one that the Office of Fair Trading and the Department for Transport, working together, have provided, dealing with competition aspects of quality partnership schemes and voluntary agreements. While much traditional OFT guidance has been aimed at warning undertakings of what they cannot do, this tries to be far more positive in its approach and encourages bus operators to take full advantage of what they can do. I would like to think that that is a step forward that, I am sure, will be greatly welcomed by local authorities and bus operators.
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- Lord RosserLabour
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- I note my noble friend's statement that he believes that what I seek to achieve through the amendments is already covered in the Bill. I am not sure that I necessarily agree with that, but my noble friend has put that on the record, and I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendment No. 62 not moved.] Schedule 2 agreed to. Clause 41 agreed to.
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- Lord HanningfieldNon-affiliated
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- moved Amendment No. 62A:
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- The Earl of Mar and KellieLiberal Democrat
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- From the perspective of someone who lives in Scotland, when I looked at the scheme for England, I remember thinking that something like this probably would happen, and it seems to be happening. I am certainly interested in hearing the response.
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- Lord Bassam of BrightonLabour
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- The noble Lord, Lord Hanningfield, is to be congratulated on his persistence on this issue. I recognise that this is the topic of the moment. Whether everyone in Essex is talking about it, I cannot yet judge.
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- Lord HanningfieldNon-affiliated
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- It is being talked about in local government circles.
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- Lord Bassam of BrightonLabour
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- I am due to go to a 60th wedding anniversary celebration in the new year when I shall test the guests on the noble Lord’s assertion. Given where they live, I guess that they will be more likely than most to be using a bus pass. As the noble Lord said, reimbursement was discussed not long ago and certainly at length during the passage of the Concessionary Bus Travel Bill, which received Royal Assent in July. Operators are reimbursed for carrying concessionaires according to the objective that they should be no better or no worse off. Operators are entitled to reimbursement for certain additional costs over and above the basic operating costs; for example, if extra costs are incurred by providing additional services or larger vehicles to cope with rising demand. We are not afraid of rising demand. We want to see more people using buses. I agree that the national bus concession should be properly funded. The Government are providing a further £212 million to local authorities in England, through a special grant, from April next year. That is in addition to the existing funding provided by central government through the formula grant process. Following the introduction of the national bus concession next April, the Government will provide approximately £1 billion a year for statutory concessionary fares. No Government have ever been more generous in this regard. I am pleased to hear from the noble Lord that the party opposite shares our enthusiasm for this policy. We consulted with local authorities on the formula distribution of the special grant funding to ensure that it is targeted to meet the extra costs of reimbursement. We are confident that the total to be distributed is sufficient, based as it is on generous assumptions about fares, pass take-up, extra journeys and additional costs. I fully understand the concerns that arise over any formula distribution of funding. However, this amendment would oblige central government to underwrite fully the cost for deals done by local authorities with bus operators. That would pass all risk to the taxpayer while leaving control with the local authority. I am not sure that that is exactly what my noble friend intended. I know that he is a strong localist, but were he in the position that I occupy, or in the position that the bus Minister at the Department for Transport occupies, I am not sure that he would want to pass over that responsibility in quite the same way. There is no incentive in the proposal to fight fraud or to negotiate hard with bus operators the overall cost of concessionary travel. Inevitably, it would lead to significant increases. Authorities could also use the concessionary reimbursement as a back door for subsidising marginal routes, again at the expense of the national taxpayer. I would question the desirability of that strategy. We acknowledge that the current arrangements for concessionary fares reimbursement are not perfect, which is why we are working with operators and local authorities to put in place revised and more efficient arrangements for the national bus concession from April next year. It is vital that we secure the best deal for the taxpayer in taking this work forward. Those interests have to be understood and properly represented. I cannot accept the amendment. I accept that there may be difficulties in some parts, but we will continue, as we have throughout the introduction of this policy, to talk to our colleagues in local government and to work with bus operators to secure the best possible outcome and the best possible deal. I hope that the noble Lord will feel able to withdraw his amendment.
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- Lord HanningfieldNon-affiliated
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- As the Minister knows, I am very much a localist, but during the course of the legislation, there was potential for having a national scheme operated centrally. There was the potential, as there is now, for running it through district councils in two-tier areas, but there was also the potential of county councils running it. Obviously, county councils have many more resources for raising money than district councils, because of their size. One district council, my district council of Chelmsford, has a deficit of nearly £500,000. That is the council that is going to refuse to pay and the operator is going to sue the district council. It had a deficit of £150,000 this year and predicts £350,000 next year. Some £800,000 is owing to bus operators in our county, which the districts are refusing to pay, and the bus operators are going to sue. It is dissolving into chaos. I know that all sorts of letters have been written asking to see the Secretary of State and so on this week as the problem begins to unravel. Therefore, I am not at all happy with the Minister's answer. The whole thing is collapsing in front of us because the district council cannot cope with it. Perhaps we could go back to the solution of the Government operating a national scheme. Although I was opposed to that in the first place, that might be the best way to do it. It was suggested during the course of the legislation. Perhaps the Minister will comment on that aspect.
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- Lord Bassam of BrightonLabour
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- I did not take the legislation through the House. Although I was tangentially aware of some of those debates, like the noble Lord, I think that it is much better in general terms for these issues to be resolved locally. I am sad that conflicts are arising in the way that he describes. I am sure that if people are wise and sensible, they will seek a reasonable resolution to those issues. I certainly appreciate the noble Lord’s point about county councils having the size and capacity to manage such budget issues. I have heard the complaints in my county as well, where it is said that councils such as Wealden are making “a bit of a profit” out of this, whereas the more heavily populated urban areas such as Brighton and Hove, and perhaps Eastbourne and Worthing, have similar difficulties to those that the noble Lord describes. I accept that the formula is not absolutely perfect, but it is the mechanism for distribution and it has a long history to it. When the noble Lord’s party was in government, their Government obliged authorities to operate within its rigours, and I guess that that is what we are going to have to do here. We continue to listen to what our friends in local government have to say on the matter and, as I outlined in my response, we seek to perfect the operation of the scheme as it kicks in from April next year. I am not going to be drawn into making comments about the desirability or otherwise of using a national mechanism. I am sure that powerful arguments were made that it could work locally, for the simple reason that local people are closer to where the service is being used and they probably have a better understanding of how it will operate. For those reasons, I will not be drawn any further into that debate, but I give the assurance that we in government continue to listen to understandable concerns and that we have the opportunity to see how it works out as it is implemented from April next year.
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- Lord HanningfieldNon-affiliated
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- I thank the Minister for that answer. We have talked about partnership today. The problem that I have outlined is that those partnerships are breaking down. I realise that we cannot go any further on the matter today, but I hope that by the time we reach later stages of the Bill, there may be clarity and Ministers may be able to see some way to support some of the district councils that seem to be having enormous problems. With that, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Schedule 3 agreed to. Clause 42 [Determination of applications for registration where restrictions in force]:
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- Lord HanningfieldNon-affiliated
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- moved Amendment No. 62B:
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- Lord Bassam of BrightonLabour
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- We are a bit puzzled by some of the reasoning behind the amendment. If a traffic commissioner is called on to decide whether a proposed registration is detrimental to a quality partnership scheme, he or she will decide that it is or is not detrimental following consultation with the relevant local authorities and operators. If it is decided that it is not detrimental, the commissioner must accept the application and register the service. If the commissioner is persuaded that it would be detrimental, he or she can either refuse it outright or ask for it to be amended in some other way. I do not see how amending it to require the service to be operated for a minimum period would in most cases be compatible with a decision that the registration would be detrimental in the first place. The provisions already contained in the Bill, if enacted, will enable an authority to introduce a registration restriction, which stipulates that services within the area of the scheme should be operated as registered for a minimum period. However, there might be services for which a shorter registration period would be appropriate—for example, a tourist service that operates only during the summer holidays. If such a condition were to be in place, the traffic commissioner could accept only an application to operate for a shorter period or to vary or withdraw a service after such a period of time as the relevant authorities and operators were content. Any subsequent failure by the operator to provide the service for the period of the registration could lead to enforcement action by the traffic commissioner. The other option would be for the Secretary of State to make regulations under the Transport Act 1985 to impose a longer notice period for registrations in the areas where a quality partnership scheme is in place. This is an option that the department will consider in consultation with others in due course, but that would be a rather more rigid approach, which would apply everywhere, whereas the imposition of registration conditions would give each area much greater flexibility. We conclude that the amendment is unnecessary and that the options that I believe the noble Lord wishes to have available are probably already in the Bill. I hope that that explanation helps the noble Lord, and more particularly I hope that it helps him to withdraw his amendment.
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- Lord HanningfieldNon-affiliated
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- I thank the noble Lord for that answer. I moved the amendment to try to create some stability. We all know that if services are there, people get used to them. Nothing switches people off buses more than when services keep being changed. I was trying to create some stability, but I shall look at the noble Lord’s answer. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 42 agreed to. Clause 43 [Applications for registration where quality contracts scheme in force]:
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- Lord HanningfieldNon-affiliated
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- moved Amendment No. 62C:
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- Lord Bassam of BrightonLabour
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- This is an intriguing amendment for one or two reasons that I shall illuminate. In a quality contracts scheme, the traffic commissioner in essence has a passive role. The role of enforcing compliance with the terms of a quality contract, for example, falls to the local transport authority rather than to the commissioner. All the commissioner can do under existing legislation is penalise an operator who runs a service in a quality contracts area without the authority’s permission. Clause 43 was introduced to give operators an opportunity to register services in addition to those provided under the quality contracts scheme. It would be entirely for the authority to decide whether the service could go ahead. The traffic commissioner would merely register any service that the authority was willing to accept. This is a rather less bureaucratic alternative than giving the authority the power to issue permits for additional services, as Transport for London does in London under the Greater London Authority Act 1999. It was never the Government’s intention that the traffic commissioner should interfere in the decision whether a particular service should be part of a quality contracts scheme or be allowed to operate outside that scheme. What intrigues and surprises me is that the proposal embodied in the amendment would run counter to upholding the right of local authorities to take their own decisions. I am really rather intrigued as to why the noble Lord, with his local government hat on, has come up with a scheme that would provide the traffic commissioner with what some might see as a rather dangerous, interfering role. Is that really what the noble Lord wants? I am not quite sure why he wants to do that.
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- Lord HanningfieldNon-affiliated
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- This is really a probing amendment to consider different ways in which it might work and to hear the Government’s views on how it might be looked at differently.
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- Lord Bassam of BrightonLabour
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- I do not think that the amendment adds much to the Bill, nor do I think that it will improve it. For those reasons, I hear what the noble Lord says, but it is not an approach that we can endorse. I hope that the noble Lord will withdraw the amendment.
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- Lord HanningfieldNon-affiliated
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- I thank the noble Lord. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 43 agreed to. Clauses 44 and 45 agreed to.
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- Baroness CrawleyLabour
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- moved Amendment No. 63:
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- Earl AttleeConservative
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- moved Amendment No. 63A:
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- Lord Bassam of BrightonLabour
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- The noble Earl has made some interesting points about punctuality enforcement, although I do not see a golden thread of consistency of approach in the three amendments. Perhaps we expect too much sometimes. The first amendment would limit the circumstances in which the traffic commissioner could formally engage with a local traffic authority to cases where bus punctuality had been consistently poor over a period of time. Where a bus operator is faced with a licence sanction for poor performance under Section 26 of the Transport Act 1985, the traffic commissioner has to be satisfied that there is no reasonable excuse and that the conduct involves either danger or frequent failure. The situation here, however, is rather different. The events described in subsection (1)(a) of new Section 27A, which the clause will insert into the Transport Act 1985, will trigger not disciplinary action against the bus operator but engagement with the local traffic authority. The Government continue to work with stakeholders to develop a robust regime for managing bus punctuality. The stakeholders are keen to encourage such engagement to begin at an earlier stage, for example where operators identify a traffic problem and encounter difficulties in keeping to a timetable without actually failing to meet the punctuality standards. They would like to use the tripartite process of commissioner, authority and operator to nip potential problems in the bud rather than to wait for them to become manifest. The Government fully support that in principle but consider that there is no need to spell it all out in legislation. There is nothing to prevent the three parties meeting to discuss these matters and developing strategies to prevent them getting worse. The existence of stronger legislative powers if the situation does get out of control would spur them to do so. Clause 54 will provide that spur and give the traffic commissioner sufficient teeth to act when appropriate. The amendment, however, would pull in the other direction and would in effect deter the traffic commissioner from taking steps unless things were in a very poor state indeed. In practice, the traffic commissioners will use their judgment and common sense, as they usually do, and the clause gets the balance about right. The noble Lord’s second amendment moves in the other direction. It aims to limit the type of remedial measure that the traffic commissioner could recommend to the local traffic authority in his report under new Section 27A(4). It is clearly our intention that any remedial measures recommended should be reasonably practicable to implement and consistent with the local transport plan, so far as that plan goes into such a level of detail, or at least not inconsistent with it. However, I am not persuaded that we need these words in the legislation. In practice, traffic commissioners recognise that they are not experts in traffic management techniques and would be most unlikely to make a recommendation that had not been discussed with representatives from the local authority and accepted by them as a reasonably practicable step that they could take that would not have an adverse impact on any of their other traffic management objectives. They are also under a general obligation to exercise their functions in a way that is reasonable and rational. It is not necessary to spell it out in detail in legislation, as the noble Lord suggests. The third amendment in this group is most odd. It affects an order-making power of the Secretary of State or the Welsh Ministers to amend the maximum penalty which a traffic commissioner can impose on an operator under Section 155 of the Transport Act 2000. At present, that sum is £550 for each vehicle that the operator is authorised to operate under any of the PSV operators’ licences. There will of course be more than one if the operator has operating centres in more than one traffic area. The order-making power simply enables a Minister to substitute a different figure for £550. The order is by statutory instrument, and any proposed use of the power would be subject to consultation. It would be most bizarre for the Secretary of State or Welsh Ministers to be obliged to issue guidance in advance, setting out how they proposed to use the power, which would be the effect of the amendment. I see no value in that at all. It would appear to be asking Ministers to fetter their own discretion, or that of their successors, in a way which, if the noble Lord sat back and thought about it, would be most unsatisfactory. The amendments seem to go in different directions. The last amendment is most strange in terms of what it seeks to achieve. Perhaps the noble Lord sees it as a probing amendment, but I am not quite sure what the noble Lord is seeking to find as a result. I am not persuaded by the amendments, and I ask him to think about them carefully and not to press them.
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- Earl AttleeConservative
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- I am grateful for the way in which the Minister gently declined my carefully thought out amendments. I shall look carefully at how Amendment No. 64A works and will read carefully what the Minister has said. In the mean time, subject to the usual caveats, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. [Amendment No. 63B not moved.]
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- Baroness CrawleyLabour
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- This may be a convenient moment for the Committee to adjourn until 3.30 pm on Monday 17 December.
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- The Committee is adjourned. Committee adjourned at 7.32 pm.
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