Grand Committee

Tuesday 21st May 2013 Grand Committee

Tuesday, 21 May 2013.

15:30

Considered in Grand Committee

Moved by

[Lord Popat]

That the Grand Committee do report to the House that it has considered the Local Transport Act 2008 (Traffic Commissioners) (Consequential Amendments) Order 2013.

Relevant documents: 23rd Report from the Joint Committee on Statutory Instruments, Session 2012-13.

[Lord Popat]

My Lords, the order before us today will allow for greater flexibility in the deployment of traffic commissioners across Great Britain. Traffic commissioners are appointed by the Secretary of State for Transport as independent regulators of the heavy goods and public service vehicle industries in Great Britain. Traffic commissioners’ statutory functions can be found in numerous pieces of primary and secondary legislation but two key Acts set the regulatory framework. The Public Passenger Vehicles Act 1981 establishes traffic commissioners, traffic areas and the general regulatory framework around licensing of road passenger transport operators, while the Goods Vehicles (Licensing of Operators) Act 1995 establishes the road haulage operator licensing system.

Most operators of lorries, coaches and buses in Great Britain must hold an operator’s licence to operate legally. Traffic commissioners’ key regulatory functions are to licence the operators of lorries, buses and coaches and to consider and take, as necessary, disciplinary action against operators who have not observed the conditions of their licences. To grant an operator’s licence, a traffic commissioner must be satisfied that the applicant has sufficient funding, is of good repute and has arrangements in place to be able to operate in a suitably professional manner.

Although the majority of traffic commissioners’ work is focused on operator licensing, they also have a number of other key functions. These include registering local bus services and matters relating to the granting of vocational driving licences or taking action against the holders of such licences. The work of traffic commissioners is funded by fees paid by the industries that they regulate.

The Local Transport Act 2008 contained a number of reform measures to the structure of traffic commissioners. One of the key reasons provision was made in that Act for this restructuring was in recognition of traffic commissioners’ strengthened role resulting from that Act—for example, in relation to bus punctuality where the Act allowed traffic commissioners to issue a broader range of penalties to bus operators. Another reason for these measures was to respond to concerns raised by the industry about different standards or processes being applied in different parts of the country.

For these reasons, the traffic commissioner reforms attracted cross-party support during the Bill phase of the Local Transport Act and were designed to strengthen the independence of the regime, with the post of senior traffic commissioner becoming statutory rather than administrative. The first statutory senior traffic commissioner was appointed in March 2009. The legislation before us will provide that officeholder with more flexibility with regard to how resources are allocated by removing, except in Scotland, the statutory link between an individual traffic commissioner and their appointed regional traffic area of responsibility.

Given the degree of devolution of their functions, in Scotland a traffic commissioner will be retained who will be referred to as the Scottish traffic commissioner. However, the Scottish commissioner would be able to act on reserved functions in England and Wales and vice versa to provide further flexibility, and the legislation before us reflects that flexibility.

It is important to note that the legislation before us, and the associated commencement order, will not directly result in any changes to how traffic commissioners are deployed across Great Britain. Any changes to how traffic commissioners are deployed is, under the Local Transport Act, a matter that must be detailed in the senior traffic commissioner’s guidance and directions, on which the senior traffic commissioner must consult as set out in the Local Transport Act. This arrangement ensures that the independence of traffic commissioners in fulfilling their regulatory functions is maintained. However, any redeployment of traffic commissioners will help ensure that the fees paid by the haulage and passenger transport industries for the traffic commissioner system are kept as low as possible, which of course is particularly welcome given the financial pressures many in the industry are experiencing.

The changes before noble Lords are intended to assist the traffic commissioner system by removing current legislative restrictions to allow traffic commissioners to operate as flexibly as possible while retaining their statutory independence. I therefore commend the order to the Committee.

[Lord Bradshaw]

My Lords, I thank the Minister for introducing the debate. I am well aware of what was intended in the 2008 Act and have no comments to make on it. However, in the past week the Parliamentary Under-Secretary of State announced in the Commons that he was proposing a review of the transport commissioners’ duties. Apparently it is a quinquennial arrangement and the duties must be reviewed on that basis. I will draw two or three matters to the Minister’s attention, with a view to him raising with the Department for Transport certain issues that should be included in the review.

The first concerns the management of highways. This Act also elevated the position of local authorities in the management of the highways. The Minister will recall the use of the words,

“broaden a lot of the penalties”.

The traffic commissioners have a duty to bring before a traffic commissioner’s court the bus operators whose vehicles either do not keep time or run erratically. That is perfectly reasonable, but in a number of cases the operators concerned find it almost impossible to run a regular and reliable service because the highway is obstructed. It may be obstructed by roadworks, which are often carried out in a very undisciplined fashion, or by inconsiderate parking. These are matters over which the local authority and not the bus operator has control.

What I am asking in the first place is that, where a bus service is shown to be unreliable, if the traffic commissioner believes that the highway authority is not discharging its duty to provide a highway along which a reasonable bus service may be operated, they should have the ability to summon the director of highways, or whoever in a local authority is responsible, to give an explanation of the way they are contributing to the operation of a decent bus service. This is not meant to be divisive, but we are moving into an era of partnership working between local authorities and bus operators, and it is reasonable that a balance should be made, and that where a local authority is not playing by the rules, it should be answerable to the traffic commissioner.

The second matter that I will raise—again, I would like it to be addressed in the upcoming review—is the question of goods vehicle operating centres. Traffic commissioners have the duty of approving premises where goods vehicle operators are based. That includes the facilities for maintaining and stabling the vehicles, and having access to the highway. However, the traffic commissioner is not allowed to take his consideration any further than the gates of the depot. Sometimes—this is happening more and more as farms become heavy haulage depots—you will find that heavy lorries are making their way on to totally unsuitable roads. I am suggesting that the traffic commissioner’s discretion should extend to the point where the lorry will meet a main road, and that we should not let our lanes be devastated by heavy lorries that not only destroy the road surface and are dangerous but make for unfair competition.

That brings me to my third issue: the question of the competition authorities. As the Minister said in opening, the traffic commissioner licenses new local bus services but has no discretion whatever about what a local bus service should be. For example, if the noble Lord, Lord Davies, runs a bus service that runs on the hour and the half hour, I can come along and register a service at 57 and 27 minutes past the hour so that I run my bus three minutes in front of his and take all his passengers. I am asking that there should be an element of discretion in the traffic commissioner agreeing to a licence. Where the people who are trying to register a new bus service can be shown to be acting in a predatory way, which is not difficult to judge, the traffic commissioner should insist that journeys are spaced out evenly so that the public get a better service and we do not engage in the thoroughly wasteful bus wars that have been going on since 1985 and still flare up in some areas.

I am quite pleased with the order being laid before us because it makes more efficient use of traffic commissioners’ time, and I hope they will be run better. However, some small additions to their duties ought to be considered in the review that is to take place.

[Lord Davies of Oldham]

My Lords, I, too, am grateful to the Minister for his introduction to this statutory instrument. I indicate from the beginning that I thoroughly endorse the principal objective of the instrument—namely, that the link between a traffic commissioner and a geographical area should end and that we should have the degree of flexibility that the SI envisages for the operation of the traffic commissioners and, particularly, the head of the service.

It was suggested yesterday that in the question I asked in the House, which I thought was suitably penetrating, I was in fact too kind to the Minister, so the Minister today will not expect me to be too kind to Ministers on consecutive days. I therefore have one or two points that are slightly more abrasive than my general introduction, in which I just said that I support the thrust of the SI, not least because it builds on legislation that was passed by the previous Administration in 2008 with regard to the commissioners.

I am not quite as constructive as the noble Lord, Lord Bradshaw, has been with his questions about the traffic commissioners. I am having difficulty in understanding the timing of this SI. Why are we doing this when the Minister announced earlier this week that he was reviewing the whole question of traffic commissioners? It seems odd to have a statutory instrument recasting the position of traffic commissioners that is predicated on the assumption that there will be a review of the whole situation in the very near future. It looks to me as if that is back to front, and I should like an explanation from the Minister for why the SI has been tabled at this particular moment, although it has merit.

I appreciate the points that the noble Lord, Lord Bradshaw, made. There is no doubt at all that the Minister will appreciate that the punctuality of services is absolutely critical to their use by the public. This is particularly so in rural areas, where people often have very limited cover when they are waiting at bus stops. Therefore, I very much appreciate the point made by the noble Lord, Lord Bradshaw. If competition is introduced and two bus companies provide a service, it is better that the commissioner regulates those services to the benefit of the public rather than allow the free wind of competition to enable one bus company to pre-empt the other by running the service just in advance of its competitor. I hope and expect that the traffic commissioners will attend to that issue. The noble Lord, Lord Bradshaw, is to be commended for having raised it and I hope that the Minister will respond to that point.

15:45

I feel that this SI represents a wasted opportunity to advance services generally on behalf of communities and that it is making it harder for a bus company to withdraw a vital local service. We all know that when services are withdrawn with a degree of arbitrariness, it causes great dismay in areas. Therefore, does not the Minister consider that the current 56-day period of notice required before an operator can withdraw or vary a bus service ought to be extended? I cannot see why that period could not in fact be doubled and then the public would have very real notice of a potential change in order to make alternative arrangements. The present situation seems to be loaded very much in favour of the bus companies.

The other aspect is that we think the Government have a poor record in regulating bus services. They have failed adequately to support transport authorities that wish to move to a regulated model for local bus services through quality contracts. This concept was, after all, discussed with the industry and was subject to widespread consultation before being put into legislation four or so years ago. Now, we see very little progress on that and many opportunities to enhance the quality of services seem to have been missed. Will the Government think again about being fair to passengers and indeed to local authorities which are seeking to respond to their local needs, rather than siding continually with the private bus companies?

I say that against a background where the Minister knows the figures and statistics. This is an industry which last year received £580 million in public subsidy. Therefore, it is an industry supported through the public purse to provide adequate and proper services. It is an industry in which the five bus operators made a combined operating profit of £580 million last year but the actual subsidy from the Government was £2 billion. That is a lot of public money. If these companies are operating at a fairly generous profit, their services ought to be up to scratch. The noble Lord, Lord Bradshaw, indicated one or two instances where the bus companies clearly failed. Such complaints are often legion, and local authorities are not enhanced or supported by the Government in improving the contracts.

I hope that the Minister can give us an assurance today that, when all these issues relating to traffic commissioners are being reviewed, things will be taken further than what this SI represents in legislation and that there will be an improvement in bus services on which so many people are dependent. I know that we all comment on the degree of car ownership and on alternative forms of travel, and I know that the Minister might be tempted to indicate just how successful Transport for London is, but all that Transport for London does is illustrate to the rest of the nation the limited capacity of a local authority to influence quality of service in the way in which the statutory arrangements for Transport for London are established.

Quality of service, particularly the guarantee of punctuality, is of greatest significance to the public, against a background where an awful lot of people who travel by bus do so through need—for example, students and young people who have to get to their place of education and mothers who have to ensure that the shopping gets done and that they can get to the place in the town centre where that is possible. Elderly people value the bus. That is why so much emphasis is placed on the retention of the bus pass—I was grateful for the reassurance given yesterday that there is no threat to the pensioner bus pass—but, as I mentioned yesterday in the House, the bus pass is of little value if there are no buses on which to use it. In rural areas in particular, we should not underestimate the dependence of communities on the bus service.

I therefore hope that the Minister will be able to give us some reassurance. He has dangled before us the fact that there will be a review of the traffic commissioner system within the next 12 months. Let that be an opportunity for enhancing the service that they are commissioned to provide.

[Lord Popat]

My Lords, both the noble Lords, Lord Bradshaw and Lord Davies, have pointed to a number of issues raised by the order. The order will allow the senior traffic commissioner the flexibility to determine what individual traffic commissioners work on and how their duties are broken down to different regions. The chances are that the traffic commissioners will become more specialised in different regions. For example, one traffic commissioner may specialise in issuing licences for buses; another may specialise in licensing the haulage industry. The order will create the consistency that we require. Currently, there is no consistency between the eight regions. I am sure that the senior traffic commissioner will give the necessary direction to traffic commissioners to create this consistency.

The noble Lord, Lord Bradshaw, spoke about competition among local bus services. This will obviously be determined by the transport commissioner for an area to make sure that competition does not make things difficult for people who use bus services and that journeys are well spaced out.

The noble Lord, Lord Davies, endorsed the order as being long overdue, which I welcomed. Whether to introduce a quality contract scheme is entirely a local decision and, like any decision, it must be made in the public interest. Central government has no role in such decisions; the Government are focused on improved joint working between local authorities and bus operators. We have seen the benefits of that approach in Nottingham, Sheffield and Liverpool.

I am sure that the consistency introduced by these changes will solve the problem of the poor regulation of bus services mentioned by the noble Lord, Lord Davies. Local traffic commissioners will be empowered by senior traffic commissioners, who will in turn take guidance and instruction from the Department for Transport.

I cannot say much about the £2 billion subsidy that we provide for buses. That has been going on for a quite a number of years and I have no figures to substantiate how the subsidy is used.

[Lord Bradshaw]

Before the noble Lord sits down, the £2 billion subsidy to the bus industry is a rather fanciful figure. A lot of it is actually a subsidy to the passengers. For example, old-age pensioners’ bus passes are paid for by the Government so that people may travel free. The bus industry did not wish them on itself. On the industry making extraordinary profits, I commend having a look at the results of FirstGroup, which were published this morning. They are really terrible and it is losing a lot of money. That is as maybe and it is up to FirstGroup, but a lot of this talk about subsidy means subsidy to passengers; it is not to running bus services which, in a commercial market, the companies would not run anyway.

[Lord Popat]

My Lords, the noble Lord, Lord Bradshaw, raises an important issue. I am glad the taxpayer is not subsidising the transport operators, whereas the taxpayer is subsidising or making free bus passes available to people aged over 60. So I am glad that the £2 billion is not going to the transport industry directly but is for the benefit of the people who use public transport.

[Lord Davies of Oldham]

I understand the point. It does not go directly as a subsidy to the buses. However, the noble Lord, Lord Bradshaw, is indicating that it is not an advantage to the industry that there is a guarantee from the public purse that certain people will have their fares paid for by the Government and be able to travel free—a position that we all endorse and are in favour of. If he does not think that that subsidy is an advantage to the industry, I wonder which world he is living in.

[Lord Bradshaw]

If I may reply to that, the bus companies are not reimbursed for the fare; they are reimbursed for a percentage of the fare, which, on average, is about 40% of what people would pay anyway. So it is not a question of handing over sacks of money to the bus companies. They have to provide more capacity to carry the extra people.

[Lord Popat]

My Lords, I take the points that both noble Lords have made. One of the questions that was raised in our discussions was why we are doing this now. Others were about some of the announcements made about the changes taking place. The traffic commissioner will be reviewed as part of the triennial review of all non-departmental public bodies. That review will be undertaken this financial year. The nature and scale of the review is yet to be determined and there are no current plans for any further substantial changes. It is for the senior traffic commissioners to take matters forward now.

I hope I have mostly addressed the key issues raised today and that noble Lords will agree that the consequential amendment order will allow the flexibilities in the traffic commissioner system, as envisaged by the Members of the House when approving the Local Transport Act.

Motion agreed.