Bus Services (No. 2) Bill [HL]
Lord Hendy of Richmond Hill ExcerptsThursday 13th February 2025
(1 week, 2 days ago)
Grand CommitteeRead Full debate Bus Services (No. 2) Bill [HL] 2024-26 View all Bus Services (No. 2) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 54-III Third marshalled list for Grand Committee - (12 Feb 2025)
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, Amendment 49 in the names of the noble Baronesses, Lady Pidgeon and Lady Grey-Thompson, and the noble Lord, Lord Hampton, and Amendment 78 tabled by the noble Baroness, Lady Jones, seek to place a statutory requirement on reviewing the Bill’s impact on rural areas and villages. I also heard clearly the point from the right reverend Prelate the Bishop of St Albans—and, incidentally, I agree with him about the need for cross-subsidy to help bus routes that are not in themselves profitable.
I note and understand the importance of serving villages and rural areas. Indeed, the Government intend the choices available to local transport authorities in the Bill to address just those points—including, for the avoidance of doubt, as we discussed this on a previous day, the appropriate use of demand-responsive transport.
The monitoring and evaluation of the Bill, which include the impact on rural services, will be completed as part of a wider evidence review of bus franchising. It will take several years—up to five years—for local authorities to transition to a franchised network or to form local authority bus companies, so any review prior to this would not be able to consider the full impact of any such transition. I listened very carefully to the noble Lord, Lord Burns, and I have very high regard for the work that he did in both south Wales and north Wales; he made elegantly that very point. In addition, the full impact of franchising is not expected to be seen until franchising schemes have been operating for some time. Therefore, the timing of a full assessment of impacts on local services needs to reflect that timeline.
I say to my noble friend Lord Snape that while a dose of realism is always a good thing in a discussion about the future, the evidence from the stages of franchising in Manchester is that a remarkable change in both the reliability of the bus service and the volumes of patronage and revenue has been seen as a consequence of the introduction of franchising in various phases.
Lord Snape (Lab)
I respectfully point out that Manchester is scarcely a rural area, and the amendment from the noble Baroness, Lady Pidgeon, specifies rural areas. It might be a bit more difficult to run cross-country services in rural areas than it is to run a franchising operation in cities such as Greater Manchester.
Lord Hendy of Richmond Hill (Lab)
Indeed. I am grateful to my noble friend for that observation. I should have also mentioned the situation in Cornwall, which is more or less franchising and in an area that can be called rural, where the consequence of a decent set of organised services in a rural area has been a considerable increase in patronage. My noble friend’s point about realism is right, and I think the real point of what he was saying is that these things take some time to mature and come into effect.
On rural areas, there is no doubt that considerable damage has been done to public transport by an approach necessitated by the previous Government’s funding mechanisms, which have reintroduced routes that were withdrawn, withdrawn again routes that were reintroduced and given a lack of continuity to services that need it in order for people to rely on them.
I thank the noble Baroness, Lady Pinnock, for bringing forward Amendment 53 about statutory changes to local council powers. The Government believe that such changes will be wholly beneficial to communities in the United Kingdom. There may be legislation in this Session that alters the powers of local councils to provide them further powers on transport. Given the proximity in timing of any such legislation to this Bill, it would not be appropriate to provide such a review, as the powers would not have had sufficient time to be in force.
I appreciate that this Bill and the English devolution Bill, as well as the forthcoming railway reform Bill, will or may have related provisions to enhance the role of local councils, and we will work closely across and between departments to ensure that they most effectively give local councils control over their own transport networks. In respect of buses, the extensive guidance already available on enhanced partnerships in franchising from government, and the Bus Centre of Excellence, which has been referred to previously, will be available.
Amendment 62 in the name of my noble friend Lord Berkeley would introduce a statutory requirement for the Secretary of State to review within six months the Bill’s impact on certain local transport services. I refer to the remarks I have already made about the length of time it would take to take a good view about changes. I know that my noble friend is a long-standing campaigner on ferry services and the important role they play in connecting communities. I also note his description of the ferry service to the Isles of Scilly as “bumpy”, which is undoubtedly true. I agree that these services provide a crucial lifeline for many communities and ensure that people can access essential services, as he says.
The noble Lord also asked at Second Reading about tram services. Again, they are an important part. However, the meaning of this Bill is clear: it is focused on the provision of local bus services and a tram is clearly not a bus—a ferry is even less so. On ferries, though, I understand that the Isles of Scilly Council has been in touch with the Ministry of Housing, Communities and Local Government regarding both this matter and broader support for the islands. I hope that the noble Lord will note that I have said that.
Turning to Amendment 73, I thank the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, for bringing it forward. The Committee will have heard the noble Lord’s remarks about the handling of passenger complaints. The Government remain committed to ensuring that services are continuously improved with passengers. This amendment is consistent with our approach to rail, for which guidance on how to resolve complaints already exists. I agree with the noble Lords that it is important to deal with complaints properly, but it is my view that, apart from the handling of the original complaint, the resolution role sits with passenger watchdogs. The department is in the process of undertaking work with existing passenger watchdogs—Transport Focus and London TravelWatch—and bus stakeholders to identify issues and make recommendations on embedding standardised complaint-handling processes, ensuring that passengers have clear escalation. I agree wholeheartedly with the noble Lord that the way to deal with complaints is not to file them in the waste-paper basket, but I do not wish to cut across the engagement that is currently under way.
I shall now address the points from the noble Lord, Lord Moylan, about help for local transport authorities in route planning and fare setting. Of course, he has missed the fact that virtually every local transport authority in Britain has existing experience in both since, for the past 40 years, they have had to tender services that have not been found by commercial bus services to be worth running. I cannot believe that there is a local transport authority in the country that does not have some experience of both route planning and fare setting.
Amendment 79B in the name of the noble Lord, Lord Moylan, seeks to impose new requirements on the provision of real-time passenger information. I absolutely agree with the noble Lord that ensuring that passengers can access high-quality, real-time information about their services is critical, but he will, I hope, be aware that there are existing obligations on bus operators. The Public Service Vehicles (Open Data) (England) Regulations 2020 provide the foundation for those obligations and, from these regulations, the Bus Open Data Service was launched in 2020 to facilitate the provision of high-quality, accurate and up-to-date passenger information across England, outside London. The Government will continue to work with local authorities and the sector to help drive improvements in real-time information.
I know that the noble Lord will have noted the part of our earlier discussion about the requirement in this Bill to ensure that real-time information is available on an accurate basis; the worst thing you can have is inaccurate real-time information. However, this Bill is also about empowering local areas. Part of that is trusting them to take decisions on what is best for the communities that they serve and working with them constructively, particularly in areas where there are existing regulations to ensure that services are improved. This is why I believe that the noble Lord’s Amendment 79B is not necessary.
Turning to Amendment 79D, again I thank the noble Lord, Lord Moylan, for bringing it forward. As he said, it is about working with local transport authorities and airport operators, but I do not believe that the amendment is necessary. My department is currently carrying out a call for ideas for the integrated national transport strategy, which will set out a single national vision. This will have people who use transport and their needs at its heart and will empower local leaders to develop integrated transport solutions. As part of the Bill, we want better links across modes—links that connect people and businesses and support the economy. We are working with operators, local authorities and passengers in that way to deliver more reliable public transport networks in general. The noble Lord will, I hope, understand that I do not wish to cut across the engagement on the integrated national transport strategy that is currently under way.
Lord Berkeley (Lab)
I am grateful to my noble friend the Minister for his remarks in response to my amendment. He said in passing that a tram is not a bus, which is of course true, but it often fulfils the same role as a bus by moving lots of people in relative comfort. A lightweight tram scheme is now being built in Coventry, which I hope will be working in the next few years. It is very much cheaper to build, which is excellent, because it needs lighter track work. However, the question of who decides the timetable and fares of that tram and any bus service that Coventry City Council might wish to encourage will need looking at in future. Has the Minister’s department thought about that?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for his intervention. First, the ultra-light tram development in Coventry is still a tram—it has steel wheels on steel rails, so it is still a tram. Secondly, all those schemes, even ones that will, I hope, produce a relative reduction in capital cost, have to be considered through the Transport and Works Act orders and other mechanisms for building infrastructure. The consequence of that is that those schemes are generally under the control of public authorities and are almost always in urban areas. One of the consequences of the freedoms that this Bill will give to local transport authorities will be the introduction of franchising, binding together all the public transport services in those conurbations, including both timetables and fares, to give an integrated service to citizens who live in those towns and cities.
Baroness Pidgeon (LD)
The Minister has clearly heard the strength of feeling from across the Committee about rural communities and the importance of connectivity and access to bus services. The comments of the noble Lord, Lord Snape, about funding are important, because funding is always the elephant in the room. But what we are discussing are new measures, including franchising, which will be the new tool to help local government and local transport authorities to address some of these socially necessary routes—not profitable routes—as part of bus route packages. Our amendments simply try to improve this legislation; we are very supportive, overall, of its aims. I am reassured to have heard from the Minister about this wider review and ensuring that rural communities and areas are part of that, so I am happy to withdraw my amendment.
Lord Hendy of Richmond Hill (Lab)
My Lords, Amendment 51 tabled by the noble Baroness, Lady Pidgeon, would require local transport authorities to review the impact of bus fares on patronage. Where a local transport authority has delivered fare interventions to encourage patronage, such as Cornwall’s bus fares pilot and the West Yorkshire Combined Authority Mayor’s fare intervention, they have already commissioned independent evaluation reports to measure their success. Bus service improvement plans already in place also include measures addressing bus fares to encourage greater use of buses. We must recognise that changes to fares are usually delivered at the same time as other transport interventions that support and improve bus services. It would therefore be challenging to attribute any change in patronage solely to a change in the fare charged to passengers.
Your Lordships will have noted that the Government are in the process of negotiating the outcomes for which local transport authorities will be held accountable in respect of buses, as part of their recent respective comprehensive funding settlements. In addition to outcome monitoring at a local level, we will continue to monitor fare impacts at a national level to inform future fare cap decisions.
In passing, I note the noble Baroness’s observations about whether Shropshire adopted the £2 fare cap. I am informed that all except six bus services in Shropshire were covered, although I would not say that the bus network in Shropshire was either adequate or satisfactory. One of the effects of the Bill, when it becomes an Act, will be to enable local transport authorities to do better by the various means embraced within it. I therefore submit that the amendment from the noble Baroness, Lady Pidgeon, is unnecessary because of the actions already taking place.
I thank the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, for Amendment 63, which seeks to examine the impact of ending the £2 national bus fare cap. The department has prepared a full monitoring and evaluation report of the £2 national bus fare cap, which has just been published. The report is available to read and I will make sure that noble Lords present have the link to it. It suggests that urban populations are more likely to have used the scheme, where of course journeys are shorter and fares are more likely to be £2 or less. In fact, the average fare payable on buses prior to the scheme’s introduction was between £2 and £3. The Government’s adoption of a £3 cap, and the added safeguard of increases above £2 being limited to the rate of inflation, do a great deal, at the cost of £150 million, to continue to ensure that millions can access better opportunities and get greater bus use.
Lord Moylan (Con)
A study of the effect of the £2 bus cap would be very valuable—let us remember that the noble Baroness, Lady Jones of Moulsecoomb, said that in her rural part of Dorset it was transformative; I think that was the word she used about it having a significant effect in that part of the world—and we look forward to reading it. But my noble friend Lord Effingham was also asking for a study of what the effect of increasing it would be when that is introduced, which would be equally valuable and show the other part of the equation, if noble Lords see what I mean. I press the Minister because I do not want him to miss the point inadvertently. Is a similar study of the effect of increasing the cap to £3 after an appropriate period—six months or a year—something to which he can commit himself today to illuminate that picture for us?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for that. I will certainly think about whether, and at what stage, the department would look at that further. I am certainly not going to commit to it today, because we are looking at wide-ranging legislation about bus services in general, but I wanted to inform the Committee that the work on the £2 bus fare cap is now published.
Amendments 74 and 80 from the noble Baroness, Lady Pidgeon, also concern the £2 bus fare cap, which I have just addressed. They are clearly intended to seek its reintroduction. Bearing in mind what the average bus fare is, that the Government are proposing to continue with a £3 cap and that fares between £2 and £3 will go up only by the rate of inflation, I hope she will agree that those amendments are unnecessary. However, the noble Baroness referred to the wider retailing of bus tickets, which is obviously a good idea; from time to time, I find myself agreeing with the noble Lord, Lord Moylan. Access to bus services should be widely available, and not understanding the fare structure or being able to buy a bus ticket are the worst reasons for not using the service.
In my view, and in the Government’s view, the provisions in this Bill that allow local transport authorities a choice of enhanced partnerships or franchising, or even their own bus companies, will enable local transport authorities to look at wider retailing. Of course, the ultimate aim is not to sell bus tickets at all but for people to use credit cards or bank cards directly as means of payment. We want the bus industry and bus services to move towards that, and I believe that this Bill will facilitate it.
Amendment 77 in the name of the noble Baroness, Lady Jones, looks for a review of the English national concessionary travel scheme. The Government want everybody who needs it to have access to public transport and are committed to improving the system. The English national concessionary travel scheme costs about £700 million annually, and any changes to the statutory obligations, such as the hours in which the pass can be used being extended, would need to be carefully considered. As I said to the noble Lord, Lord Moylan, on a previous occasion in the Chamber, the Government are not considering changes to the scheme at the moment.
However, local authorities in England already have the power to offer concessions in addition to their statutory obligations. We see this in London, where individuals aged 60 and over are eligible for the 60+ Oyster card, and similar schemes already exist in other parts of the country, where local authorities have chosen to provide specific support to their communities through offers that go beyond their statutory obligation. That ability for local transport authorities will continue, and no part of this Bill will restrict it. A review into the English national concessionary travel scheme concluded in 2024, and my department is currently considering the next steps.
Amendment 79 in the name of the noble Baroness, Lady Jones, would require the Secretary of State to review the impact of making buses free for children. The Government remain committed to exploring targeted solutions that deliver value for money to taxpayers while ensuring affordable bus travel for those who need it most, particularly young people. Bus operators can choose to offer concessions to children and young people. In fact, youth concessions are currently offered by at least one commercial bus operator in 73 out of the 85 local authority areas in England outside London. Local authorities also have powers to introduce concessions or discounts for young people. Since buses are local and the Government are committed to devolution, that is where we believe that such choices should be made in respect of free and reduced-rate travel for children.
Finally, I note the observations by the noble Lord, Lord Moylan, about demanding or wanting reports following my noble friend Lord Snape’s helpful intervention. This Bill has been carefully thought through. The first requirement when it becomes an Act of Parliament will be that it works for local authorities, communities and bus passengers. No doubt there will be reports in due course but, frankly, I am not looking for any of them to be carried out now or in the immediate future because, as my noble friend observed, our efforts ought to be concentrated on running the bus service better rather than writing reports about why it does not work.
Baroness Pidgeon (LD)
I thank the Minister. I am reassured by him saying that the Government ought to continue to monitor the fare impact at a national level and will circulate the link to the review of the £2 cap. That is to be welcomed. I hope that he will drive forward the point about ticketing and modernisation because it is important for passengers.
However, I go back to the comments that I made earlier. The hefty report that I have here, the final-stage impact assessment, says:
“There may also be benefits associated with increasing bus usage through lowering fares”.
We have heard today about Cornwall’s hugely successful pilot but, if you read the trade press, it is clear that there are concerns about it continuing, and this goes back to the funding point that we discussed earlier. Probably for the first time in this Committee, I strongly disagree with the Minister about the £2 bus cap. We think that it is essential. The Minister described my amendment as unnecessary. We do not agree with that, we think that it is very necessary, but, at this stage, I will withdraw it. I am sure that we will come back to it at a future stage. I beg leave to withdraw the amendment.
Lord Moylan (Con)
My Lords, I am grateful to those who have spoken in this short debate. I have great sympathy with what the noble Baroness, Lady Grey-Thompson, said, as she knows. We will support her in her continuing campaign, and that of the noble Baroness, Lady Brinton, and my noble friend Lord Holmes of Richmond, to put the case on behalf of disabled people for proper consideration in relation to public transport services.
I was mildly tickled by the proposal from the noble Baroness, Lady Pinnock. One of my deep concerns, which I have tried to express in as gentle a way as possible throughout this Committee, has been the adequacy and competence of local councillors to take on the role envisaged for them by this Bill. I had not imagined that a vice-chairman of the LGA should give such ringing endorsement to my concerns, to the point where she actually said that training should be mandated by statute for those who will take part in making those decisions. We are at one on this in our concern.
None the less, I am not entirely sure—here I suspect that I will sound a bit like the Minister, and I speak as a former local councillor—that the idea of a statutory training programme in this area would be appropriate. There is a false analogy with training for the exercise of planning and licensing functions, because those are almost invariably what are referred to as quasi-judicial functions that relate to individuals making applications relating to their property, business, premises or whatever. They need to be taken in an appropriate legal framework, rather than a political framework. It is appropriate that councillors are given training in that legal background where they are called on to make those decisions.
The sort of decisions that will be made here are not in that category, so I wonder whether this approach is necessary. In fact, even it were appropriate to have statutory training, I would not have training on the provisions of this Bill, which is what the amendment calls for but, rather, training of the sort that perhaps the noble Lord, Lord Snape, could provide: training in how to run a bus company and make the hard, crunchy decisions that you will be confronted with about how to manage your resources in a way that maximises your revenue while allowing you to provide as many, but not necessarily all, of the socially important services that you would like to provide. Those are the hard, crunchy things that people will need to be trained in, rather than understanding the legal background provided by this Bill.
In a way, I am delighted to find myself holding hands with the noble Baroness, Lady Pinnock, on this topic, but I am not sure that I can support her on the wording of this amendment.
Lord Hendy of Richmond Hill (Lab)
My Lords, I will address Amendments 54 and 55 together. I listened carefully, as I hope that I always do, to the noble Baroness, Lady Grey-Thompson, who talked about her real experience of travelling by bus. Anything less than 100% accessibility is unacceptable, and I completely agree with her.
The Government are determined that power over local bus services is put back in the hands of local leaders across England. That is why the department recently allocated over £700 million of bus grant for local transport authorities in 2025-26 by formula. Funding for bus services is also provided through the local government finance settlement. In fact, specifically, the 2025-26 funding included money for additional officer capability, for either additional officers or help equivalent to additional officers, to help each local transport authority in the choices that this Bill will give them.
The Government have also established the Bus Centre of Excellence, which I am sure we will continue to return to. Work is also under way to provide even more active support to local transport authorities that wish to explore franchising. I take this opportunity to make noble Lords aware of the Government’s plans to pilot different franchising models particularly suited to more rural areas. This funding, along with potential local transport authority bus funding in future financial years, is available to support implementation of the Bill’s measures.
It is, of course, wholly reasonable to expect the people who deliver policies and support services that help disabled people to understand their legal rights, needs and expectations. This afternoon, we will come on to the primary training needs of bus drivers, who are the visible front line of the bus service. The Government are clearly committed to helping authorities deliver the service improvements that we all want to see, whether it is through tailored assistance, the additional funding to which I have referred or the Bus Centre of Excellence.
Lord Moylan (Con)
My Lords, with his amendments, the noble Lord, Lord Hampton, has opened up one of the most important and least discussed areas to do with bus operations in a way that presents many of us who have experience of responsibility, one way or another, for bus services—in my case, a non-executive responsibility for a number of years—with real challenges and difficulty. The question we must ask ourselves is whether bus operators have the right mentality about safety. I say that in the light of what has been achieved in the construction industry, for example, over the past 20 years, where a focus on zero accidents and injuries has transformed the way of working. Of course, zero is never quite achieved, but very close to zero is now achieved on construction sites. A deliberate programme and a deliberate change in mentality has brought that about. On the railways, there is a strong focus on that mentality, and I wonder whether it exists on the buses: are we, in fact, way out of date in our attitudes towards safety?
I want to mention that I have just become an officer of the newly reconstituted APPG on Women in Transport. The relevance is that many of these issues to do with safety are women’s issues. There is the obvious question of violence against women and girls on buses; the APPG will look at that, but there is the broader issue of safety in general. I do not have up-to-date statistics, but it used to be the case, admittedly some years ago, that a very large percentage of women over the age of 65 presenting at A&E were there because they had suffered an injury inside a bus—not from a bus collision but inside a bus, very often because of aggressive or inappropriate braking on modern buses, which have very sharp brakes. The safety regulators, of course, think, “Yes, we must have the sharpest and most modern brakes, just as for a motor car”, but in a motor car you are sitting down and strapped in, whereas on a bus you are frequently standing up, because buses are designed to carry standing passengers. Sharp braking results in people falling over. Very often, proportionally, it is elderly women who are falling over and being injured. Do we take proper account of that? Are we recording it? Are we thinking actively about what we should do about it? The situation has not improved in the 20 years or so that I have been making this point about elderly women inside buses.
Then there is the question, which is very pertinent to the Bill, of the way in which franchise contracts operate. My experience is somewhat out of date, but it is a London-based experience where franchising is used, and to some extent the London model is the basis for the Bill and is being rolled out elsewhere. The emphasis in the contracts is on keeping to the timetable, and that is very difficult in urban areas because of congestion and unpredictable events, including roadworks and so forth. Very often, drivers are under pressure—they have a clock and are in direct communication with their control—to make up time because gaps in the service have arisen, and they can do that only by going faster and braking more sharply. Quite apart from the potential effects on passengers inside the bus, which I have already mentioned, the risk of knocking into something, often with very serious effect if that something happens to be a human body walking in the street, is increased.
We are all here saying how wonderful it is—not all of us are saying it with the same level of enthusiasm, admittedly, but there are people in the Room saying how wonderful it is—that we are extending a franchise model, but the structure of the contract on which those franchises will be based needs to be looked at carefully in the light of safety considerations. We should all be very grateful to the noble Lord, Lord Hampton, for bringing up this issue.
In relation to Amendment 60, I am not persuaded that we should have a new and separate statutory provision about working time in the Bill, when we already have quite extensive and elaborate working time legislation elsewhere. There is a lot to be said in favour of Amendments 58 and 59. I have a suspicion that they will reappear on Report; if they do, they will deserve very serious consideration indeed.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Hampton, and the noble Baronesses, Lady Jones of Moulsecoomb and Lady Pidgeon, for Amendment 58. It seeks to require local authorities to ensure that bus operators provide their drivers with access to the Confidential Incident Reporting and Analysis System, which I will refer to as CIRAS.
The Government are always concerned, as they should be, about any safety incidents in the bus sector, or indeed any other public transport sector. That is why a number of official routes exist to allow anyone to provide confidential, anonymous reporting on safety and standards in the sector, backed up by enforcement. Anyone may anonymously report a lack of safety or conformation to standards in the bus sector to the DVSA intelligence unit, which may use this information to investigate the situation, including by working with other government departments and agencies, as well as police forces.
Comprehensive standards bridge all aspects of bus operation, across the roadworthiness of vehicles, operation of services and driver standards. As I said, they are enforced by a number of organisations, principally the DVSA. The operators of the vehicles are licensed by the traffic commissioners, who consider non-compliance issues seriously and ensure that operators are effectively regulated. The judicial process of the traffic commissioners can and does result in depriving people of operators’ licences and depriving managers of their certificate to run bus operations.
CIRAS provides another route for employees to report concerns. Both Transport for London and Transport for Greater Manchester are members of CIRAS. Being able to report such concerns in a confidential manner is clearly important, and I would encourage employees of member organisations to consider using this service where appropriate. But CIRAS is a third-party service, and it would not be appropriate to include it within the scope of the Bill.
However, I did a bit of personal research on this, and I will say that if we are asking people to report bus safety issues to the DVSA intelligence unit, it would make a lot of sense for access to it to be freely available. When I looked at it, it was quite difficult to find, which is really unhelpful, so I commit that we will see what needs to be done to make sure that the route to report directly to the government agency responsible for safety on buses is as efficient and easy as possible.
I thank the noble Lord, Lord Hampton, and the noble Baroness, Lady Jones of Moulsecoomb, for bringing forward Amendment 59. Road safety is a priority for the Government, of course, and we expect bus operators, as I hope I have just said, to adhere to the highest standards of safety. Buses are one of the safest modes of road transport in Great Britain, and my department remains committed to improving safety with appropriate vehicle construction standards and ensuring the safe operation of vehicles. As we have heard, franchising authorities report safety in detail, and I expect that a consequence of this Bill, as it enables other franchising authorities to be established, will be to enable them to report safety in a similar way to how London and Manchester already do. In effect, the franchising authority is taking responsibility for procuring and delivering a bus service.
In respect of operations that are not part of franchise bus services, we have heard this afternoon that this is carried out through the STATS19 framework, which relies on reports from the police. These reports are based on locations identified by geographical co-ordinates. This is a role that cannot be delegated to local transport authorities and ought to stay with the Driver & Vehicle Standards Agency because it relates to PSV operator licensing requirements. However, I note the remarks of the noble Lord, Lord Hampton, in respect of accidents away from public roads, which I will go away and have a close look at. I am not familiar with that nuance, but it is clearly important. Trying to divide any sorts of accidents into fault and no fault is fraught with difficulty. In fact, it must be subjective, and therefore I am not sure that we would want to go down that road. I understand his point about recording accidents on public service vehicles wherever they occur, and I will go away and see what can be done about that.
Amendment 60 from the noble Lord, Lord Hampton, seeks to change long-established rules about daily driving time on regular bus services. There are two sorts of driving time rules: one for services that do not go beyond 50 kilometres and one for services that do. These daily limits are well and long established, and I think the gist of my conversation with the noble Lord was that he was looking for an ability for people to report scheduling requirements on bus drivers that make drivers feel that they are not safe. That is a matter that could well be drawn to the attention of the DVSA because it goes to the heart of the repute of the operator. I understand that there may well be drivers who feel that what they are being asked to do is potentially or actually unsafe. That goes back to the process that I have referred to and the ability to report it to either CIRAS, if the people responsible for the operation are members of it, or the DVSA if they are not. I note what he said about this amendment seeking to draw to our attention this important matter.
The noble Lords, Lord Hampton and Lord Moylan, talked about the timetable. No bus timetable in Britain should have any requirement for people to drive unsafely or exceed the speed limit. As a seasoned operator with some background in this, I say to them that very often, certainly in urban areas, what you are in fact looking for is not the timetable to be operated but the reliability of the bus service to be as good as it can be. My experience is that drivers should not feel under pressure to return to the timetable. In many cases, any substantial delay makes that impossible. The training given to bus drivers is about driving safely, having absolute regard to the safety of passengers and, in practice, maintaining the regularity of the service rather than the timetable.
If there are cases where drivers feel that they are being asked to drive unsafely, either by schedule or in practice, it is the reporting mechanism that we need to address because there are people trained in this stuff who can address those issues.
Lord Moylan (Con)
With the Minister’s permission, I do not think that we are disagreeing and, therefore, I do not think that what he just said about timetables is quite the answer to my point. It may be my fault for expressing it in the way I did. I am sure that I talked about adhering to the timetable—I will look back at it—but he has cast it differently. He said that reliability—that is, the frequency between buses arriving—is what operators seek to maintain, but that is precisely what can lead to the sort of pressure on drivers where a controller says, “Hurry up because the gap between you and the bus ahead has got too large”. That is really what I was talking about and what I meant to express, although I used the language of timetabling.
The key question that the Minister will need to address is to what extent does the contract reward that behaviour? To what extent is reliability rewarded in the contract? In many cases, companies and people behave according to financial incentives. If your narrow margins as a bus operator or a franchise depend on maintaining certain levels of reliability and certain gaps between buses along the service, that is what you will be pushing your staff to do. It comes back to this question of what the contract says and what it rewards.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his intervention. Before I got to the railway, I spent most of my adult life trying to encourage people who control bus services not to rely on the timetable but to adhere to a regular frequency. Of course, the truth is that in most urban areas, once you have lost time, the chances of ever regaining it are, frankly, pretty small, and they are even smaller with the increasing use of speed limits of 20 miles per hour. I take the noble Lord’s point but, in the end, this is about people either being required to drive unsafely or believing that they are required to do so. It is certainly possible, and I have seen it done to encourage people to attempt to make time up but, in my experience over the 50 years I have been driving buses—now and again, more recently—it is very difficult to do so.
Let us go back to the safety aspect of this. Where the noble Lord, Lord Hampton, is going rightly concerns finding a way for bus drivers to express that they are being either expected to drive unsafely or encouraged to do it. I take his point about that very clearly. As I said before, there are all these requirements on franchised authorities, which will report on safety because they are procuring the service. CIRAS is available, where people have chosen to join that third-party organisation, but, where they have not done so, it is about making the route to complaining clearer and more available. I very much hope that that answers the noble Lord’s points. I will leave it there.
Lord Hampton (CB)
My Lords, I thank all noble Lords who took part in this debate. I genuinely thought that this was this place at its best, and I realise that I have trespassed on a landscape of real expertise, but I think we got some cross-party consensus that we really need to push safety to the front of the Bill if it is not there already. I think the implication was there, but it is not in the Bill. The noble Lord, Lord Moylan, talked about zero injuries in the construction industry which was very interesting, and we need to take that on board. Once again, we have got back to this: we need a really good reporting mechanism that people can use, and we need to publish what data is coming out as much as possible. I trust the Minister when he says that he will go away and think about this a lot. In that case, I beg leave to withdraw the amendment.
Lord Burns (CB)
My Lords, can I use this opportunity to point out that one of the great benefits of the contactless system is the ability to have integrated fares across a region? One of the things that I discovered in North Wales was the frustration of many people—again, particularly in rural areas—when they were taking several journeys to get to their destination. The ability to have this all taken care of within one transaction is of enormous benefit. Of course, as we know from London, it gives also you the opportunity to have daily caps on the prices of tickets and a great deal of improvement in the experience of people who are making complicated journeys, often across different modes but certainly across different bus journeys.
I see this as an important part of the future. If we are to have an integrated public transport system, we need an integrated fare structure as well. The contactless system is an important step on the way to achieving that important part of the pricing mechanism for the future. Despite the issue that we heard about earlier in terms of the £2 fare cap, my own view is that having an integrated system of the kind we enjoy in London is one of the most important things for the future usage of buses.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Earl, Lord Effingham, and the noble Lord, Lord Moylan, for their amendments; I also thank the noble Lord, Lord Burns, for his remarks just now. The Government know how important affordable and reliable bus services are in enabling people to access education, work and vital services. We also know that buses are particularly important for people in the lowest-income households, who make nearly twice as many bus trips as the average, and for younger people, who are much more likely to use buses than other age groups.
The Government also understand the importance of making payment methods on buses accessible and available to all. This is why we have provided guidance to local transport authorities and bus operators on developing their bus service improvement plans, which encourages both parties to work in partnership on improving the provision of fares and ticketing to ensure that the needs of all local bus users are taken into account. To this end, local transport authorities are also encouraged to capture local information about cash usage and electronic payments to inform the development of their bus service improvement plans. The bus franchising powers in the Bill will also give local authorities greater control over fares and ticketing while, through their enhanced partnership arrangements, they can work closely with bus operators to ensure that fares and ticketing policies are inclusive for passengers.
I should just add that, from my own experience as the person who was at the time responsible for the removal of cash payments from buses in London, contrary to the belief of the then mayor that it was the poorest people in London who habitually paid cash, it was completely the reverse: the poorest people in London had already worked out the value of Oyster cards and of daily, weekly and monthly ticketing. In fact, it was the ABC1 males who insisted on trying to pay the enhanced cash fare. When we withdrew it, they immediately moved to Oyster cards themselves. We have already discussed better ticketing once this afternoon, of course.
Amendment 71 looks to have integrated ticketing across the bus network; I note that the noble Lord, Lord Moylan, largely took Amendments 71 and 72 together. His sentiments are right: it is good for passengers, as well as for the bus network, its operators and franchising authorities, to have the most modern methods of payment with the lowest possible transaction costs. I completely agree with him.
What we do not want is to try to force people to do things that they cannot currently do while the work in progress that the noble Earl described is going on, to make payment methods as easy as possible. He asked me for a timetable, which I am not sure I can give him, but the multiplicity of back offices across the bus and railway networks in Britain needs to be untangled, and substantial work is going on within the department to enable multimodal ticketing, particularly in Manchester and the West Midlands, outside London. The consequence of that will be—I hope in time, and as quickly as possible—to allow the back office, in the way that he wants and as the noble Lord, Lord Burns, described, to provide seamless ticketing across bus networks. That work continues, and will take some time. He is, of course, right that in London the volume of transactions was so great that the credit card companies were willing to come to the table very easily. Outside London, it is a bit different, but the department is working very hard to do it.
Since the noble Lord, Lord Moylan, rightly says that the Government are moving quite well in that direction—and he also observes, as I can confirm from observation just now, that the English national concessionary pass has the English rose on it, because mine has it on—I submit, on his own assurance that the Government are moving quite fast, that neither amendment is necessary.
The Earl of Effingham (Con)
I thank my noble friend Lord Moylan, the noble Lord, Lord Burns, and the Minister, who have all contributed to this short debate. It really is critical that we ensure financial inclusion for everyone. Based on what the Minister has just said, we will look at this issue further, but for now I beg leave to withdraw my amendment.
Lord Moylan (Con)
My Lords, I heartily endorse the comments made by my noble friend Lord Effingham and the support given by the noble Baroness, Lady Pidgeon. To be crystal clear, the fundamental issue is not the increase in national insurance rates as such, but the reduction in the threshold at which national insurance becomes payable.
Many of the people who drive special educational needs buses are part-time semi-volunteers. They may be working a few hours in the morning and a few hours in the afternoon, and their overall salary, as things currently stand, brings them in below the level at which national insurance contributions are payable. That is approximately £10,000 a year; I am using a very rough figure there, as I do not have the actual figures at hand. The Government’s proposal is a reduction to £5,000 a year of the point at which national insurance contributions become payable—again, an approximate figure. It is that reduction which brings these people within scope of national insurance contributions, which is potentially fatal to the operation of many of these services. They will simply not continue. The best that can be hoped for would be a more expensive service, after a lengthy period of retendering and disruption, in which maybe the same or maybe different operators are providing a more expensive service to the local education authority in many cases.
Separately, there is also the question of private schools and putting VAT on the bus services they provide, which would be bizarre because no other form of transport is subject to VAT, as far as I am aware. It is one of the consequences of the Government’s vindictive action against private schools. But the SEND issue is not simply about private schools; it is about the whole range of schools, and it is crucial that it is resolved soon.
Lord Hendy of Richmond Hill (Lab)
Before I address the amendments in this group in turn, I wish to say that I am grateful to the noble Lord, Lord Moylan, the noble Earl, Lord Effingham, and the noble Baronesses, Lady Pidgeon and Lady Harris of Richmond—who raised her concerns at Second Reading—for raising the importance of home-to-school travel for children with special educational needs. Although this is not directly within my department, my officials continue to work with the Department for Education to understand the issues and how they are best addressed. No child should struggle to get to school because of a lack of suitable transport.
Your Lordships may already be aware that the Government are clear that the system for educating children with special educational needs and disability—SEND—requires reform. The Department for Education will work with families, schools, local authorities and other partners to deliver improvements so that children and young people can access the support that they deserve. It acknowledges that challenges in the SEND system extend to the arrangements for home-to-school travel and has committed to ensuring that more children can receive the support they need in a local mainstream school. This will mean fewer children needing to rely on long and complex journeys to access education.
Turning to Amendment 65, home-to-school transport is the responsibility of local authorities with education functions, not local transport authorities. For example, Transport for Greater Manchester is the local transport authority for the Greater Manchester region but responsibility for home-to-school travel rests with the 10 local councils within the region. The Education Act 1996 places a statutory duty on local authorities to arrange free home-to-school travel for eligible children. A child is eligible if they are of compulsory school age, attend their nearest suitable school and would not be able to walk there because of the distance, their special educational needs, a disability, a mobility problem, or because the route is not safe.
It is for local authorities to decide what travel arrangements they make for eligible children. For example, they might provide them with a pass for free travel on public transport or arrange a dedicated bus, minibus or taxi. However, to meet their duty, the travel that they arrange must be suitable for the needs of the child concerned. The Department for Education provides comprehensive statutory guidance to help local authorities meet this duty.
The Government already expect local transport authorities to take account of the needs of all people travelling, including children travelling to school. Effective collaboration between local transport authorities and local authorities delivering home-to-school transport may bring benefits, but it would not be appropriate to place a duty relating to home-to-school transport on local transport authorities when statutory responsibility for that service rests elsewhere. For these reasons, Amendment 65 is unnecessary.
Amendment 66 relates to children travelling outside their local authority boundary to access a suitable school place. The statutory duty that requires local authorities with education functions to arrange free travel for all eligible children applies regardless of whether a child’s school is outside the council’s boundary. Where a child with special educational needs has an education, health and care plan, the school named in that plan will almost always be considered to be their nearest suitable school for the purposes of assessing their eligibility for free travel. It is already commonplace for local authorities to arrange free travel. For this reason, this amendment is unnecessary.
Amendment 67 concerns the application of VAT to transport for pupils with special educational needs who attend private schools. These services may already be exempt from VAT; for example, passenger transport in a vehicle with 10 or more seats does not pay any VAT, and operating a vehicle that has been constructed or modified to cater for the special needs of people with disabilities may also not pay any VAT. The Government’s ambition is a state-funded school place for every child who wants one, whether they have special educational needs or not. The Department for Education’s reforms, which I have already mentioned, will deliver an inclusive mainstream system that meets the needs of as many children and young people as possible in their local community.
I also draw the noble Lord’s attention to the consultation on the national insurance contributions Bill, which says at paragraph 2.13:
“The policy intention is to only capture education services and vocational training supplied by a private school, or a ‘closely connected person’, and closely related boarding services. The government recognises that other goods and services ‘closely related’ to education, such as school meals, transport, and books and stationery, are integral to children accessing education. As a result, other ‘closely related’ goods and services other than boarding (i.e. goods and services that are provided by a private school for the direct use of their pupils and that are necessary for delivering the education to their pupils) will remain exempt from VAT”.
I therefore consider this amendment unnecessary.
Finally, Amendment 68 concerns the impact that the increase in employer national insurance contributions will have on bus services for children with special educational needs. The Government recognise that the increase to employer national insurance contribution will have a varying impact across sectors but had to make difficult decisions to help restore economic stability.
As I have remarked already, local authorities are responsible for arranging home-to-school travel and deliver this through a range of providers. Department for Education officials engage regularly with local authorities to understand the challenges that they face and will continue to monitor this situation. It is expected that private sector organisations that contract with local authorities will take the impact of national insurance changes into account, along with other changes to their cost base, in the usual way through contract negotiations.
My noble friend Lord Livermore, at Second Reading of the NIC Bill on 6 January, said in response to a question about NICs and special educational needs transport:
“The right reverend Prelate also asked about SEN transport. In the Budget, the Government announced £2 billion of new grant funding for local government in 2025-26. This includes £515 million to support councils with the increase in employer national insurance contributions, which covers special educational needs home-to-school transport schemes”.—[Official Report, 6/1/25; col. 601.]
Lord Moylan (Con)
My Lords, does the noble Lord accept that that is true for special educational transport needs provided directly by local education authorities using their own employees but not for contracted services, which are very widely used?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his intervention. I was referring to support to local authorities for home-to-school transport schemes. I will take that away and come back to him with the clarification that he seeks in this respect. I can say that the Government do not expect the changes to national insurance to have a significant impact on home-to-school travel for children with special educational needs, so it would not be proportionate to conduct the assessment as the amendment suggests. I do not think that it is required.
The Earl of Effingham (Con)
My Lords, I thank the noble Baroness, Lady Pidgeon, my noble friend Lord Moylan, and the Minister for their contributions in this debate. We have heard so much in the Chamber about how SEND pupils may be adversely affected by various new government policies, so we feel that a review, or an impact assessment as per these assessments, is a fair and reasonable request. For now, I beg leave to withdraw the amendment in my name.
The Earl of Effingham (Con)
My Lords, perhaps I might briefly address one of the suggestions of the noble Lord, Lord Goddard. I was present in the Chamber, as I frequently am, during the Football Governance Bill. I appreciate that he might not be that interested in the difference between the crests and the arms, but the College of Arms is run by my noble kinsman His Grace the Duke of Norfolk, and I can tell him that the argument put forward as between crest and arms is relevant and has implications. It is important to realise that. He may well want to look into it; I am happy to explain to him why it is important, if he is interested.
Lord Hendy of Richmond Hill (Lab)
My Lords, the imminence of the recess suggests to me that I should not challenge the noble Lord, Lord Moylan, in his knowledge of the history of the traffic commissioners, but I will do that over a drink some time. I am less interested in the development of the Road Traffic Act 1930, or indeed the Transport Act 1985, than I am in the future of the bus service in the 2020s.
Traffic commissioners play an important and strategic role in the transport sector and, these days—principally but not wholly—in road use safety. I certainly refute completely any suggestion that there is an absence of enforcement; the Driver and Vehicle Standards Agency does that. Traffic commissioners are an admirably economic and cost-effective way of dispensing justice to bus operators and bus drivers—those who are licensed to provide these important and, indeed, safe services—in a way that is widely celebrated in the industry and regarded as far more effective than any other solution. Indeed, the independent review of the traffic commissioner function undertaken by the Ministry of Justice, published in May 2023, found that
“the Traffic Commissioner function generally operates effectively”
and noted a strong level of support from the industry for functions continuing to sit with the traffic commissioner. The truth is that for a regulatory arrangement to be so widely celebrated by the industry it regulates is something to be celebrated, rather than abolished.
Lord Moylan (Con)
My Lords, is the Minister not rather concerned that the regulator is so widely celebrated by the industry it regulates?
Lord Hendy of Richmond Hill (Lab)
One of the reasons why is because it is not in the industry’s interest to have poor-quality operations competing with it; that is true in respect of both the goods sector and the passenger transport sector. When the traffic commissioners take enforcement action, including depriving drivers or operators of their licences or curtailing them, it is widely celebrated by those operators who do take account of the law and operate safely. That is what is important.
On our earlier discussion about the safety of bus operations and bus drivers, finding a mechanism that is effective for disciplining those drivers and operators who transgress the law—sometimes with no intention of complying with it—is very effective. I encourage noble Lords to consider the alternative mechanism of taking taxi drivers in front of magistrates’ courts, which are often found by everybody looking at the actions of the magistrates to be excessively lenient and persuaded by drivers’ explanations of their behaviour that would never pass muster with the traffic commissioner. It is a very important judicial function, and the commissioners need to be supported.
Returning to the Bill, your Lordships will have noticed that some limited changes are proposed to the functions of the commissioners. These include changes to services operating under service permits with enfranchised areas and powers to act against bus operators who breach the mandatory training requirement. The Bill is about empowering local leaders to take decisions on how best to run bus services in their areas. The presence of traffic commissioners across the regions of England—and, for that matter, Scotland and Wales—is complementary to this Bill’s objectives. They are well placed to use local knowledge to take the decisions they do in the execution of their powers, and I certainly do not believe that the noble Lord has made any case for change in the way that this amendment suggests.
Member’s explanatory statement
This amendment provides for Clause 21 of the Bill to be brought into force by regulations instead of coming into force two months after Royal Assent. This is to allow sufficient time for guidance under new section 144D of the Transport Act 2000 (inserted by Clause 21 of the Bill) to be prepared.
The Earl of Effingham (Con)
My Lords, I am aware that we have already discussed various aspects of this amendment in the debates, so I will be brief. Before we move forward with significant changes to our bus services, we think it very important to pause and ask: what will this mean for rural communities? That is precisely why this amendment is so important. It would ensure that before Clauses 1 to 15 of the Bill take effect, the Secretary of State must publish a report assessing the impact on rural areas.
This report is not about delaying progress; it is about ensuring informed progress. We need to understand whether these reforms will improve rural connectivity or unintentionally make services even harder to access. Will funding be allocated fairly? Will small operators that serve rural routes still be viable? Will local authorities have the powers and resources needed to support these services? These are critical questions that must be answered before the Bill comes into force. I beg to move.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Earl, Lord Effingham, for his remarks on Amendment 82. I also thank him, the noble Lord, Lord Moylan, and all other noble Lords for the issues they have raised in Committee. I have found the exchanges useful in discussing the purpose of the Bill and considering issues raised across your Lordships’ Committee. The Bill reflects how important it is to improve local buses for passengers across the country, including those who are woefully underserved in rural areas. Throughout this process, the needs of people living and working in and visiting rural areas have been integral to policy development.
Government officials have worked hard to publish a thorough and comprehensive impact assessment that has been rated green by the independent Regulatory Policy Committee. The assessment covers every one of the Bill’s measures in detail, including in the context of rural areas, so I am afraid I would struggle to justify why a further duplicate assessment is required. Although the noble Earl says this is not about delay, the amendment would have the potential to delay progress on the Bill and therefore to delay its introduction in areas that need its provisions.
It is important to remember that the freedoms allowed by the Bill to franchise and set up a local authority bus company are entirely optional. These powers simply give local transport authorities more choices in how their bus networks are operated. If a rural authority decides to establish a local authority bus company, it will have the flexibility to scale the company to match the needs of its local passengers, its ambitions for the network and the available funding. Additionally, it is important to highlight that the Government have allocated funding to build LTA capacity and capability on buses, including, but not limited to, the Bus Centre of Excellence. They also plan to pilot different franchising models that may be particularly suited to rural areas.
I conclude my remarks there, and once again thank all noble Lords for the excellent debates across the days we have shared in Grand Committee. I look forward to further debate on Report.
Bus Services (No. 2) Bill [HL]
Lord Hendy of Richmond Hill ExcerptsTuesday 11th February 2025
(1 week, 4 days ago)
Grand CommitteeRead Full debate Bus Services (No. 2) Bill [HL] 2024-26 View all Bus Services (No. 2) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 54-II Second marshalled list for Grand Committee - (7 Feb 2025)
Baroness Pidgeon (LD)
My Lords, this one of the most important groups we are debating on this legislation. I will first speak to Amendment 41, which addresses disability training across the sector. Bus services are a lifeline for many people, providing essential access to employment, education, healthcare and social activities. However, for people with disabilities, navigating the bus system can present significant challenges. It is therefore really important when we consider legislation to look to make improvements, to ensure that public transport is accessible and inclusive for everyone. By incorporating comprehensive disability guidance into staff training, we transform the whole passenger experience.
Years ago, I attended bus driver training at one of the bus garages in Camberwell in London. I have to say, to describe it as not fit for purpose would be an understatement. I know significant changes have taken place since then, but we need quality training across the country. For example, training will increase understanding and equip staff with the knowledge and skills to understand the diverse needs of passengers with disabilities, ensuring the right support and assistance. It will also help staff identify and address barriers to accessibility, ensuring that buses and related services are designed and operated in a way that supports all passengers, including those with physical, sensory and cognitive disabilities. When staff are well trained in disability awareness, it leads to a much more positive experience for all passengers, so I will be interested to hear the Minister’s response to that amendment.
We have already heard some powerful case studies as we have discussed these amendments, in particular the detailed one of the noble Baroness, Lady Grey-Thompson. I saw an interesting story in my press cuttings this morning concerning a freedom of information request Transport for All had published in London. It showed that wheelchair users were denied access to London buses 441 times in the last year due to inaccessibility. In some 56 instances, the bus ramp failed, and in 385 the user was refused admission for other reasons. That is why this discussion today is so important: people are being denied access to public transport when they are in a wheelchair or have other disabilities.
Many other amendments in this group have been clearly detailed and powerfully set out by my noble friend Lady Brinton and the noble Lord, Lord Holmes. All of them would strengthen the Bill considerably. All are aimed at tackling accessibility issues, whether that is training, bus stops or bus services, but there is a serious issue we are discussing today, and that is bus stop bypasses. In designing something to keep cyclists safer on our roads, so they are not at the point where buses pull out, and to keep them away from motorised transport, a barrier for blind and visually impaired passengers has been created. While keeping cyclists safe is very important, it is also important that we keep blind and visually impaired bus passengers safe. Design has to be inclusive, as we have heard. I will be really interested to hear how the Government plan to address this serious concern, because consistency of design and design standards is essential.
We must look to create a truly accessible transport network that is for everyone. I look forward to hearing the detailed response from the Minister to the many points raised in this important group of amendments.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, before I commence my response, I would like to update your Lordships on progress since day one of the Grand Committee. I have met with several noble Lords to discuss the Bill, including exploring matters that were the subject of amendments debated in your Lordships’ House. I am also considering the role of guidance, such as bus franchising guidance, in providing clarity on the department’s expectations. I thank noble Lords for offering their thoughts on these issues and look forward to continuing our discussion. As the noble Baroness, Lady Brinton, did, I welcome the presence of representatives of the National Federation of the Blind UK, to whom I spoke at the end of the last Committee meeting.
I begin by taking government Amendments 44 and 45 together. Amendment 44 makes a minor change to Clause 22 to clarify that where it refers to a public service vehicle, it means a public service vehicle as defined in the Public Passenger Vehicles Act 1981. In practical terms, this is the standard definition of a public service vehicle, referenced in the Transport Act 1985 and used in other legislation, whether relating to accessibility or otherwise. This amendment seeks to ensure consistency of understanding between this and other clauses and existing legislation. It does not change the intention or function of this measure.
Amendment 45 is intended to future-proof Clause 22 by anticipating the use of autonomous vehicles in local bus services. Clause 22 currently requires specified authorities to have regard to guidance on the safety and accessibility of stopping places. Facilities in this context include those that assist a driver of a public service vehicle to enable passengers to board or alight from the vehicle. The feature most commonly used to do this is the painted cage on the roadway, which keeps an area free of obstructions to enable the driver to position their vehicle flush with the kerb, but it is conceivable that, in future, there may be facilities that support the autonomous alignment of the vehicle without the involvement of a driver. As such, this amendment seeks to remove the reference to a driver in the relevant definition of facilities. It is clearly important that we make legislation for not just the services of today but those of tomorrow and, where possible, avoid the need for future amendments to primary legislation.
I thank the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, for Amendment 11. The intention behind the option directly to award contracts is to support the transition to a franchising model. As part of the direct-award contract, the franchising authority can stipulate the accessibility requirements that it expects the operator to deliver. There is existing guidance in place that supports this. This amendment would be likely to delay the transition to bus franchising and increase the burden and cost on the franchising authority, and for these reasons I believe that it is unnecessary.
I turn now to the amendments that the noble Lord, Lord Holmes of Richmond, has tabled to Clause 22. He is one of the many champions in this House for inclusivity and accessibility in transport, and, of course, I absolutely respect his views, as I do those of the noble Baronesses, Lady Brinton and Lady Grey-Thompson, given the experiences that they have talked about today and elsewhere, and those of the noble Lord, Lord Hampton. I will respond to each of the amendments tabled by the noble Lord, Lord Holmes, in turn.
Amendment 35 seeks to amend Clause 22 by including a power to make guidance to ensure that inclusive design principles are complied with in full. I know that the noble Lord supports the premise of this clause, including our intention to ensure that new and upgraded bus stations and stops are inclusive by design. I am concerned, however, that the amendment as drafted would place unnecessary constraints on how the guidance can be drafted and might make it more challenging for local authorities to implement it effectively. Instead of providing authorities with choice, the guidance would need to encourage the adoption of a single set of principles that might not be relevant in every circumstance. It would also constrain the collaborative development approach that we intend to take. I assure the noble Lord that we have included Clause 22 because we know that stopping-place infrastructure must be more inclusive. However, I am concerned that his amendment would frustrate our ability to achieve this rather than support it.
Amendment 36 seeks to emphasise the importance of independent travel for disabled people. Clause 22 currently allows the Secretary of State to provide guidance for the purpose of facilitating travel by persons with disabilities. This amendment would clarify that it is for the specific purpose of facilitating independent travel. As currently drafted, the clause allows the Secretary of State to provide guidance to facilitate travel by all disabled people, whether travelling independently or otherwise. The amendment could have the undesirable effect of requiring guidance to focus principally on those not travelling with companions. I am sure that the noble Lord would agree that bus stations and stops should be safe and accessible for everyone, and I believe that the current clause draft is more appropriate for achieving this.
Amendment 37 seeks to specify in greater detail what stopping-place features can be covered in statutory guidance. It does this by providing a list of specific stopping-place features that the noble Lord considers to be important to cover. However, Clause 22 already specifies that guidance can cover the location, design, construction and maintenance of stopping places and related facilities. That list is intended to be permissive and overarching. It is important for the decision on what facilities to cover and what advice to provide to be informed by specialist input and stakeholder engagement. We will work closely with the Disabled Persons Transport Advisory Committee, or DPTAC, as we develop the guidance. We will also engage with other organisations representing disabled people and others to ensure that the guidance covers the right subjects and can be effective in supporting provision of safe and accessible infrastructure. It seems likely that the features that the noble Lord identifies, as well as others he has not, would be highlighted to us as important for inclusion, regardless of whether his proposed amendment is accepted.
Baroness Brinton (LD)
To correct the record, Amendment 41 was in the name of the noble Baroness, Lady Pidgeon, not in my name.
Lord Hendy of Richmond Hill (Lab)
I am so sorry to both noble Baronesses. That is my error.
Amendment 42 in the names of the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, seeks to protect access to local transport services by requiring the statutory guidance to recommend the use of demand-responsive transport, or DRT, where other options are not viable. As I said on the previous day in Committee, DRT has the potential to improve the local transport offer. I agree with the noble Lord, Lord Grayling, that demand-responsive transport is not mutually exclusive from accessibility. Accessibility must be part of that offer, where it is part of the local transport offer. I agree that authorities should consider a range of transport options when reviewing the future of services, but I am not convinced that the stopping places statutory guidance is the right place for this recommendation.
Clause 22 is principally about ensuring that stopping places provide a safe and accessible environment. There may well be times when it is appropriate to consider the role of DRT when planning such work; however, it is more appropriate when considering service provision generally, which is beyond the scope of the statutory guidance about stopping places. I reassure noble Lords that the Government have a strong interest in DRT for areas without regular fixed-route connections, many of which—though not all—might be rural. The department is currently undertaking a monitoring and evaluation exercise on the DRT rural mobility fund pilots and will produce best practice guidance to support local transport authorities interested in setting up DRT services in their areas.
Amendment 56 seeks to require relevant authorities to publish a report on the accessibility standards of bus services within their boundaries, including an assessment of how satisfactory they consider them to be. I fully support the spirit of this amendment, which is designed to incentivise local authorities to take responsibility for driving up accessibility standards in their areas. It is precisely because of the need for greater focus and consistency in the provision of safe and accessible infrastructure that the Government are requiring authorities to have regard to the statutory guidance on safety and accessibility at stopping places.
However, throughout the process of developing Clause 22, the Government have been clear that the clause and subsequent guidance need to consider a variety of factors. That is why the requirement has been designed to be both proportionate and flexible. In contrast, this amendment as drafted would place an unreasonably high reporting burden on local authorities. It would also introduce significant duplication, with authorities with overlapping jurisdictions required to report on the same matters. For instance, both Eastbourne Borough Council and East Sussex County Council would be required to report independently on the accessibility of bus services in Eastbourne.
Achieving compliance could entail a lot of work with little benefit for authorities, which would be asked to report on services for which they are not responsible. For instance, a district council with no responsibility for bus services would still be required to report on the accessibility of services in its area. While I recognise the accountability and positive change that noble Lords seek to encourage, I am not convinced that this is a sufficiently proportionate way to achieve it. As I have indicated, I will think about it further and talk to noble Lords to identify how we can help authorities take decisions on local transport provision with a sufficient understanding of the impact of services on disabled people.
Amendment 57 seeks to bring bus operators explicitly within the remit of the public sector equality duty under the Equality Act 2010. The amendment proposes to achieve this by adding bus operators providing services to the list of public authorities in Schedule 19. Local transport authorities are already subject to the public sector equality duty as listed public authorities in Schedule 19, and this would include franchising authorities. The duty must also be met by an entity that exercises a public function, even if it is not explicitly listed in Schedule 19. This would include any bus company that exercises such functions, such as a local authority bus company.
Baroness Brinton (LD)
I would like to ask a brief question about the Minister’s Amendments 44 and 45. They refer to automated vehicles. Those of us who worked on the Automated Vehicles Act 2024 will remember that Section 83 disapplies taxis, private hire vehicles and buses in their entirety because of the issues about driver versus non-driver vehicles. I am not asking the Minister for a reply now, but could he write to me in light of Section 83 and say how that would sit with this Bill?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Baroness for her intervention, and I will certainly write to her on that basis.
Lord Moylan (Con)
My Lords, inspired by the Minister, I shall be brief. Much as I expected, there were many valuable insights in this debate, particularly from public transport users who are disabled. We all learned a great deal from what was said, although, for many of us, very little of it was new because we have heard it before—though we are not always hearing sufficient progress in response.
That meant it was all the more disappointing that the Minister, although he is known to be sympathetic to this agenda, responded to the debate by saying no to everything. He appears to be programmed by the department to say no to every amendment that is put forward. There is always an excuse why each amendment must be turned down. When we return to this Bill on Report, if amendments are put forward as they have been debated in this group, this side of the Committee will consider them very carefully for support. If my noble friend Lord Holmes puts forward amendments based on his current Amendments 38, 43 and 45A, the Official Opposition would certainly be there to support him.
There was a great deal of reference in the Minister’s speech to private meetings he is having with Members of your Lordships’ House and to the prospect of discussion and debate after the Bill is passed about statutory guidance. This will suit the Minister and the department, but we should say—I hope I can speak for every Member of the Committee—that we are here as Members of this House to hold the Government to account in this forum. If it is not possible for us to make progress with amendments in Committee, that is a further reason for saying that we will want them debated and passed on Report or even at Third Reading. Private meetings and promises of consideration when statutory guidance is produced are not enough. For the moment, I beg leave to withdraw my amendment.
Lord Moylan (Con)
My Lords, in this group we are debating one of the principal means by which local transport authorities can intervene in existing provision in order to change it. They would change it by the use of socially necessary routes and networks. That potentially means that it has very powerful ripples in how the rest of the market operates.
I have a number of amendments in this group. In my Amendment 24, I take the opportunity to keep hammering away at demand-responsive transport as a potentially important way forward in trying to ensure that local transport authorities consider demand-responsive services, not simply fixed-route services, as means of meeting social necessity and social need. Again, this is an important point that is not mentioned elsewhere in the Bill, so I have inserted it here as a means of meeting social need, which it must be. Surely anyone who thinks about this for a moment must regard demand-responsive transport as simply being something that whoever drafted the Bill just forgot about. Anyone who understands transport and how it operates nowadays must realise that that has to have its place in the Bill, not least in relation to socially necessary routes.
My Amendment 25 considers a different angle and concerns competition in the market. How are the contracts for these socially necessary routes to be awarded, and to what extent will they effectively allow large operators to lever off existing resources to exclude smaller operators entering the market? No consideration is given to these market issues in the Bill. It is simply assumed that with the state in charge, everything will be absolutely fine. That might be so if you had a completely communist system where all the buses belonged to the Government and nobody was allowed to run a competing service, but that is not what we will have as a result of the Bill. We will have a mixed system, and the effects of the big beast, which is the state throwing itself around the room, on the rest of the market system need to be considered, and it seems that no thought has been given to them. This is one of the areas where those effects might be biggest.
My final amendment, Amendment 29, goes to the heart of the problem that this Bill presents us with, which is that socially necessary routes are possible only if somebody is going to pay for them, and there is no funding in this Bill. Of course, I would not expect a funding package to be in the Bill itself, nor am I proposing that one is inserted into it. My amendment does not do that, but it requires reports on the funding that is being made available for these socially necessary routes. The simple fact of the matter is that there is no promise of funding for this. The £1 billion that was allocated in the October Budget—£750 million to local authorities and £250 million directly to bus companies—is spent. A much larger amount is going to be needed if these provisions are going to have any real effect. Of course I know that a spending review is happening and that the Minister will not be able today to pre-empt it, but unless he addresses these issues head on and give some sense to the Committee and your Lordships’ House on Report that there is real money behind this, he is simply holding out a bogus prospectus to the public. That is why I have tabled Amendment 29, so that the Government would be under an obligation to report on the money that they are making available to support socially necessary services. I think that is the heart of the whole thing in this group, and I hope that the Minister has more to say about it than he was able to say at Second Reading.
Lord Hendy of Richmond Hill (Lab)
My Lords, I shall speak first to Amendments 26, 27 and 28, which have been tabled by the Government. A review of enhanced partnerships is under way and is due to conclude in the summer. The objective is to identify areas of improvement to deliver a better minimum standard of bus services across the country. Amendment 26 supports improvements to enhance partnerships designed to enable the enhanced partnership scheme to include a broader set of measures that are directed at improving services generally across the entire local area—for example, setting consistent reliability targets across the entire area rather than on specific routes.
Amendment 27 supports the improvement of enhanced partnerships and relates to situations where a local transport authority develops interventions, such as bus lanes and traffic light priority. Where these interventions result in direct and indirect savings to bus operators, it will now be possible for local transport authorities and operators to include measures in the enhanced partnership scheme requiring this additional revenue to be reinvested. This will support the delivery of the bus service improvement plan objectives and improvements for passengers and ensure that the reduction in operating costs is not entirely absorbed by bus operators as profit.
The Government’s final amendment in this group is Amendment 28. Most enhanced partnerships have developed a bespoke variation process through which they can make changes to the scheme rather than rely on the variation process in the Transport Act 2000. However, there may be circumstances where this bespoke mechanism is not working for everyone. This amendment therefore provides local transport authorities with very limited circumstances where they can utilise the statutory variation provisions instead of the bespoke variation mechanism in the EP scheme to make changes to their scheme.
The purpose of this amendment is to allow local transport authorities to make an application to the Secretary of State when an operator is acting unreasonably and has objected to a proposed variation that would be made under an existing bespoke variation mechanism in an EP scheme. If on application by the local transport authority the Secretary of State is satisfied that the variation cannot be made, due to unreasonable or obstructive behaviour by one or more operators, or that the variation would benefit the people using the local services, they can direct the parties to follow the statutory variation process instead. The measure is designed to provide some protection to local transport authorities to deal with deadlocks in partnership negotiations and to enable changes to local services that are in the best interests of the people who use them.
Amendment 21 would alter the definition of socially necessary local services in the Bill to explicitly include entities that have a healthcare or educational aspect. I reassure noble Lords that the definition of “socially necessary local services” includes areas outside large towns and cities and that it includes local services that enable passengers to access essential goods and services. As such, the definition already encapsulates access to healthcare and schools, but I shall look further at what the noble Baroness has said on this matter.
I thank the noble Baroness, Lady Jones, supported by the noble Lord, Lord Holmes, for her Amendment 22, which looks back at services cancelled in the last 15 years to look at socially necessary services in the present and future. I recognise that there have been services recently discontinued that may be considered by a local transport authority as addressing the needs of some of the communities they serve. I shall take that away and look further at what we do in this respect.
Amendment 22A, tabled by the noble Lord, Lord Moylan, seeks to ensure that when a local transport authority provides a tendered service, it receives the same level of protection as a commercial service. On the assumption that the reference to tendered services refers to services subsidised by the local transport authority, these already receive the same level of protection as other commercial services under this measure. Clause 12 does not differentiate between a tendered service and one provided on a commercial basis. If a local service is considered to be a socially necessary local service, Clause 12 requires the local transport authority to list it in their enhanced partnership plans, irrespective of whether it is tendered or purely commercial. On this basis, the amendment is unnecessary.
I thank the noble Baroness, Lady Pidgeon, for Amendment 23. This would have the effect that, where a socially necessary local service has been cancelled, the local authority will step in to provide a service when another bus operator cannot be found. It also sets out the implementation steps once the local authority establishes a replacement service. I reassure the noble Baroness that under Clause 12 when an operator wishes to cancel or amend a service, they will need to consider alternatives to mitigate any adverse effects of changes to such services.
I point out that local transport authorities are already under a duty to secure public passenger transport services that they consider appropriate to meet the requirements of the area and which would not otherwise be met. This is likely to include socially necessary local services. Clause 12 should result in additional transparency by identifying the socially necessary local services in enhanced partnership areas. This will provide the Government with additional information to inform decision-making around funding for local bus services. Local transport authorities have the best understanding of the needs of their local communities. Any additional obligations introduced through legislation would place an undue burden on local authorities and undermine their independence.
I turn to Amendments 24, 25 and 29 tabled by the noble Lord, Lord Moylan. Amendment 24 proposes that demand responsive bus services be specifically considered as a measure for mitigating the possible adverse effects caused by the cancellation of a socially necessary local service. I consider that such considerations should be left to the local transport authority. The Bill sets out that enhanced partnership schemes must include requirements that apply when a socially necessary local service is cancelled or materially altered. These must include consideration of alternative options to mitigate the effects of a cancellation. This will include how demand-responsive bus services could be deployed.
The purpose of Amendment 25 of the noble Lord, Lord Moylan, is to ensure that local transport authorities have regard to maintaining a competitive market. I believe this amendment to be unnecessary because there are existing legislative protections that will ensure that local transport authorities sufficiently consider the impact of their actions under this measure on the market. The decision about how to manage the local network rightly rests with the local transport authority. In making decisions around what measures to include in their enhanced partnership, local transport authorities will need to consider impacts on competition. Existing legislation also requires LTAs to consult with the Competition and Markets Authority when varying their enhanced partnership under the new clause. If the local transport authorities were to decide to set up a local authority-owned bus company or provide service subsidies to fill a service gap, there are wider legislative and regulatory frameworks that will apply and are sufficient.
“Measures specified in schemes(1) The Transport Act 2000 is amended as follows.(2) In section 138A(6)(b) (contents of schemes), for the words from “routes in” to “local services” substitute “local services in the whole or part of that area”.(3) In section 138D(2)(a) (measures specified in scheme), omit “serving the routes” (in both places).”Member’s explanatory statement
This amendment widens the measures that can be taken by a local transport authority under an enhanced partnership scheme so that they can relate to any local services in the area concerned.
Baroness Pidgeon (LD)
If I can continue without being heckled, I am assured that they are probing and that the noble Lord does not want to see these clauses completely removed. He has raised an interesting point about commercially sensitive data. As we know, in running a transport network, data and information are absolutely crucial and transparency is key. All this helps us improve services, so I will be interested to hear the Minister’s response, particularly around commercial sensitivity.
Lord Hendy of Richmond Hill (Lab)
My Lords, I will respond to the noble Lord, Lord Moylan, and the noble Baroness, Lady Pidgeon, on Clauses 18 and 19.
On Clause 18, there is currently no one single source of information for passengers about bus service registrations or similar information about services that operate outside traffic commissioner-administered areas. Information on local bus services is fragmented, and this clause seeks to improve this state of affairs. As such, it enables the Secretary of State to make regulations requiring franchising authorities to submit information about services operating in their areas. This information will be similar to that provided on the registration of a service with the traffic commissioner, and it will be provided to the Secretary of State.
Together with Clause 17, Clause 18 lays the groundwork for a new central database of registration information, bus open data and information about services operating outside traffic commissioner-administered areas. This will provide passengers with a single source of information about local services. It is important to clarify that this provision does not reinstate the requirement for franchised services to be registered with a traffic commissioner. Rather, it provides the power to require franchising authorities to provide information to the Secretary of State, thereby enabling its inclusion in the new central database.
In addition, Clause 18 broadens the categories of data that the Secretary of State may collect regarding local services and the vehicles used to operate them. This power extends to gathering information from franchising authorities concerning franchised services and allows the department to collect additional data aimed at improving transparency within the sector. It might be said that the clause would answer the earlier intervention from the noble Baroness, Lady Brinton, about whether all buses actually conform to the PSVAR regulations and, therefore, it would be useful in that respect, too.
Crucially, Clause 18 also empowers the Secretary of State to collect data that will support the monitoring of local service operator performance and assist in the effective exercise of ministerial functions. That might include, for example, information relating to the costs associated with operating a service and the number of staff involved in its operation. I hope that explanation is sufficient to allow the noble Lord, Lord Moylan, to withdraw his opposition to the inclusion of the clause.
On the noble Lord’s opposition to the inclusion of Clause 19, the clause works in tandem with Clause 18 to support greater public transparency, and thus accountability, over local bus services. While Clause 18, in part, provides for greater information collection going forward, Clause 19 ensures that equivalent historical information already held by the department can be published. The clause achieves this by amending the Statistics of Trade Act 1947 to insert two new sections to enable the publication of existing operator-level bus data. It also provides for the Secretary of State to give notice to industry prior to the publication of such data.
Section 9 of the Statistics of Trade Act requires the consent of individual undertakings before information identifying them can be published. The newly inserted Section 9B disapplies Section 9 of the 1947 Act in relation to information about relevant local services that has been collected under Section 1 of that Act from PSV operators’ licence holders, or their representatives. This disapplication applies during a qualifying period, beginning on 1 May 2015 and lasting until the day when this clause of the Bill comes into force. Disapplying the requirements in Section 9 will allow the department to publish operator-level information collected during the qualifying period, even in cases where consent cannot reasonably be obtained from the large number of individual operators concerned. That point is crucial. The requirement to obtain consent from each individual operator would result in inconsistent data provision. This, in turn, would mean some communities not having access to the same level of information about local bus services as others, or indeed equivalent information for all services within a single community.
The newly inserted Section 9C requires the Secretary of State to publish a notice specifying the information intended for publication at least 30 days in advance, and further details the locations where such notices must be published. These provisions will enable the timely and transparent publication of operator-level bus data, improving access to information while maintaining appropriate safeguards.
Although the noble Lord, Lord Moylan, is of course right that in a commercial undertaking, this information might be considered commercially confidential, it is also essential for the local transport authority representing the users of these services to be able to access such information in order correctly to plan bus services in their areas, for the benefit of all the people who live there. That is the justification for this clause, so I hope he will accept it and withdraw his opposition to it.
Lord Moylan (Con)
I did not hear anything in what the Minister said that remotely addressed the question of commercial confidentiality. The practical effect of this Bill is likely to be that some areas, possibly quite few, take up franchising as an option, while others continue with enhanced bus partnerships. One or two may even set up a municipal bus company, although I doubt whether many will. The fact is that a great part of the bus services provided in this country will continue to be provided by private companies, very often on a commercial basis. The Government’s whole strategy depends on a healthy, prosperous, well-functioning private sector being able to continue. To treat it in this way, as if its commercial considerations were an afterthought, bodes very ill for the way the Government are approaching this topic.
Lord Moylan (Con)
My Lords, I beg the Committee’s indulgence for a moment to respond to that magnificent expostulation of a classic Marxian view of the world. It is very hard to see how the noble Lord has found himself on the Liberal Democrat Benches when he believes that one has just to eliminate the profit for the surplus released to pay for everything you might want. The truth is that you need an awful lot of subsidy to run socially necessary services to places that have insufficient passengers to justify commercial services. Those subsidies are necessary, whether you release the modest profits that bus companies make or not.
Most of the country relies on private bus operators. Manchester is a special case because of the density of the population. We rely on private bus services and those companies need to flourish. The Government are not remotely thinking about their interests; they are an afterthought. It bodes very ill for the future of bus services in this country that the Government are so inconsiderate of them.
Lord Hendy of Richmond Hill (Lab)
My Lords, I feel compelled to respond to the last point.
Lord Hendy of Richmond Hill (Lab)
I will finish it by feeling compelled to respond to the last two interventions. The noble Lord, Lord Moylan, referred to his doubt that you could see the cost and revenue for each bus service in London; I beg to differ, because I was responsible for running the thing for 15 years. I absolutely assure him that we knew, to the nearest penny, the revenue and cost allocation for all the routes. That enabled us to provide a broadly acceptable service, in very different circumstances, over the considerably varied area of Greater London.
I also assure the noble Lord that that knowledge is collected by any responsible bus operator in the rest of Britain. The point is that it ought to be available to local transport authorities which are keen to offer comprehensive bus services in circumstances where a number of bus operators do so. Many of them are not competed against by others, because they cannot match their comprehensive standards. That means that the local transport authority does not have the information to understand what might be substituted in its place for communities that have a very poor service.
I defend both these clauses very strongly. I think good information about this is absolutely necessary. This is not about selling biscuits or buckets; it is about providing public services for people in this country who wish to go about their business and go to work, school, hospitals and other places.
Member’s explanatory statement
This amendment amends the definition of “facilities” so that it captures facilities provided to assist with the positioning of both automated and non-automated public service vehicles.
Lord Hampton (CB)
I have had conversations with bus operators and bus drivers, who are very worried about this issue. Bus drivers tell me that the very act of opening a door to walk out and face a passenger is seen as aggressive. The noble Lord, Lord Moylan, is absolutely correct on this one.
Lord Hendy of Richmond Hill (Lab)
I should say to the noble Lord, Lord Moylan, that I completely agree with his sentiment, but I think that he has misunderstood what this clause seeks to achieve. There is absolutely no intention whatever that, as a result of this clause, drivers or other staff should be asked to put themselves at risk.
Baroness Pidgeon (LD)
Amendment 48 is a small but important amendment picking up on a potential anomaly within the Bill. It is something that Baroness Randerson flagged with us before Christmas. The Bill is clear that it wants to see cleaner zero-emission buses providing bus services across the country, and that is something that I would have thought the majority of noble Lords would support. However, this requirement does not seem to cover mayoral combined authorities. This amendment, therefore, seeks clarification from the Government on whether the provisions of new Section 151A on zero-emissions vehicles also apply to mayoral combined authorities. If not, this amendment should be agreed to ensure that every authority is covered.
Transport is a significant contributor to pollution in the UK. In 2021, transport was responsible for producing 26% of the UK’s total greenhouse gas emissions, and the majority of those emissions come from road vehicles, which account for 91% of domestic transport emissions. Getting more cars off the road and more people using quality bus services is essential, as is ensuring that those bus services are as environmentally friendly and zero-emission as possible. I hope that the Minister can provide clarity in this area and put on record today clarification about the subsection at the bottom of page 29, which states:
“The date specified under subsection (2)(b) may not be before 1 January 2030”.
Those I have been talking to in the bus industry are concerned and I think are misunderstanding what is meant by this. Some clarity on the record would be helpful for all concerned.
Lord Hendy of Richmond Hill (Lab)
My Lords, these amendments cover zero-emission buses, as the noble Lord, Lord Moylan, and the noble Baroness, Lady Pidgeon, have rightly said. The restriction on the use of new non-zero emission buses will not take effect any earlier than 1 January 2030, but the clause places a restriction on the use only of new buses. The noble Baroness is right to raise this issue; I myself have heard some misapprehension about what this actually means. It is about new vehicles, and the flexibility to determine when to replace diesel buses with new electric buses will remain, because if the date were to be 1 January 2030, all vehicles in service on 31 December 2029 would be able to carry on in service.
I will shorten the speech I have been given because it replicates some arguments about the use of electric vehicles, but it is common ground between all those who have spoken on this issue today that the operation of zero-emission buses is a really good thing. I do not think we need a complete assessment from local transport authorities. The important point that the noble Lord, Lord Moylan, made is that there are circumstances in which there can be some further exemptions. In fact, the Bill already provides for the Secretary of State exempting certain vehicle types or routes from the restriction. That is the proposed amendment to the Transport Act 2000, new Section 151A (3)(c), which states:
“The Secretary of State may by regulations … specify local services or descriptions of local service in relation to which subsection (1) does not apply”.
There is a considerable flexibility here, in particular the recognition that there may still be services where zero-emission buses at the date at which the Secretary of State sets may not for some reason be capable of operation. However, I hope the noble Lord recognises, as I think the noble Baroness, Lady Pidgeon, does, that this is generally seeking to do the right thing in respect of air quality and local bus services.
Amendment 48, tabled by the noble Baroness, Lady Pidgeon, probes the scope of Clause 27. I understand and am sympathetic to the concerns she raises. The clause will apply to mayoral combined authorities but as drafted, it will not apply to franchised bus services within such areas. I offer assurance that the Government are actively looking into potential options to address this. I hope to return on Report with an update and, were I to need to speak to the noble Baroness, I hope she would be happy if I did so.
Lord Moylan (Con)
I am grateful to the Minister for his remarks, and I am glad he acknowledged that there are areas of concern. We may want to return to this, but for the moment, I beg leave to withdraw the amendment.
Passenger Standards Authority
Lord Hendy of Richmond Hill Excerpts(1 week, 4 days ago)
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Baroness Pidgeon
To ask His Majesty’s Government what progress they have made in establishing the Passenger Standards Authority.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
As part of the Government’s plan for change, the creation of Great British Railways will unify track and train to deliver better services for passengers, increase revenue and reduce the cost of the railway. While GBR will lead in delivering a customer-focused experience for passengers, we are committed to establishing a powerful passenger watchdog alongside it to champion their interests. My department will publish a consultation on the railways Bill imminently, which will provide detail on our plans to establish a passenger standards authority.
Baroness Pidgeon (LD)
My Lords, passengers have faced fewer, shorter and overcrowded trains and increased fares for too long. Will the new passenger standards authority have enforcement powers and oversee a new charter for passengers confirming the minimum level of service that all new publicly owned lines will guarantee?
Lord Hendy of Richmond Hill (Lab)
We have been working hard to ensure that the new PSA will be a powerful watchdog, making sure that passengers have an independent voice in the industry which stands up for them. It will have increased powers, enabling it to become a strong advocate through holding GBR to account for improving the passenger experience, and particularly for disabled people, as discussed during the passage of the public ownership Bill. The public consultation I referred to will seek the views of the public and industry on the proposed scope and functions of the PSA. After the consultation is published, I will be happy to meet the noble Baroness and other interested noble Lords to discuss it.
Lord Grayling (Con)
My Lords, the Government are establishing a passenger standards authority, but Network Rail says that the industry should not use the word “passenger”. Who is right?
Lord Hendy of Richmond Hill (Lab)
The document that the noble Lord refers to was actually published during the time he was the Secretary of State for Transport—by Network Rail, I should say—so it is not a recent document. It is advice about writing letters using words of fewer than four syllables, and it is in fact good advice. Much of the correspondence that the noble Lord must have been given in his time as Secretary of State, which I am given as the Minister and which I was given as the chair of Network Rail, was indigestible in practical terms, so a guide for people about how to write letters in simple English is a really good thing.
Lord Watts (Lab)
My Lords, the previous Government introduced changes which led to reduced services and a higher cost for the passenger. Can the Minister say what that has cost the taxpayer? Does he have any estimates about the changes the previous Government brought about—the failed railway reorganisation?
Lord Hendy of Richmond Hill (Lab)
I cannot easily find that number my noble friend refers to. But it is true that, for example, the failure to resolve the wages issues with the principal trade unions led to the most prolonged national dispute in railway history and cost the taxpayer and the customers about £800 million.
Lord McLoughlin (Con)
Can the Minister just remind the House—I am sure he knows the figure—what the passenger numbers were before privatisation and what they were just before the outbreak of Covid? What was the rise in passenger numbers over that time?
Lord Hendy of Richmond Hill (Lab)
I am sure that if I cannot remember, the noble Lord will be able to. But he is right: roughly, the numbers doubled, and they did so because at the time of privatisation there was a huge amount of white space in the timetable. It is an acknowledged fact that the early years of privatisation in particular produced more trains and a better train service, partly because the old British Rail was starved of investment. But we are not dealing with a railway in that position now; we are dealing with a railway that does not have the numbers or the revenue it had before Covid but still has all the costs.
Lord Spellar (Lab)
My Lords, will the Minister reflect on the fact that the increase in traffic was driven substantially by the economic boom under the last Labour Government, as well as by the increase in population?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for that, too. He is of course right: it is quite hard to distinguish what is going on on the railway from the general economy, principally because connectivity drives growth, jobs and housing, and he is right about both the features he mentions. In respect of the railway itself, the principal feature I would draw attention to is the one I did in my response to the previous question, which is to say that if you have a lot of white space in the timetable, you can run more trains at relatively marginal cost. That white space, on many parts of the railway, no longer exists.
Lord Young of Cookham (Con)
My Lords, you wait a long time for one Secretary of State for Transport and then three come along at once. Will the Minister confirm that the Government remain totally committed to the principle of open access on the railways?
Lord Hendy of Richmond Hill (Lab)
It is always a pleasure to see so many ex-Secretaries of State on the other side of the House—all of whom I have respect for and at least one of whom appointed me to my previous job. The Secretary of State’s recent letter, which was made public, sets out the precise conditions in which open access is an asset to the railway, not a detraction. One thing we have to be very careful about is that if, inadvertently, revenue that would otherwise accrue to the public purse and reduce the subsidy is diverted, that may not be a good deal for the taxpayer. I am sure the noble Lord has read that letter, and I would refer him to it as a very accurate description of the conditions under which open access is a good thing, and the conditions under which it is not.
Lord Beith (LD)
My Lords, will the passenger standards authority have any ability to engage with the companies about the new east coast main line timetable, given that it involves halving number of services to London from Berwick-upon-Tweed and making the journey time longer?
Lord Hendy of Richmond Hill (Lab)
We will see when the time comes whether the new passenger standards authority is set up in time to deal with that question, but I am glad the noble Lord raised the east coast main line timetable, because it is one of the justifications for having a guiding mind for the railway. Our nation invested over £4 billion in upgrading the east coast main line, and it has taken several years to achieve a situation where a timetable which is remotely acceptable to all the operators and passengers, even though it has detractions in some places, was capable of being put into effect. It is a startling exposition of the fact that there is no controlling mind that the person who in the end took the decision to put that timetable in was me.
Lord Moylan (Con)
My Lords, is the Minister persuaded that when the consultation document on the future of the railways is published, which I hear might even be this week, it will have a convincing explanation of how Great British Railways is going to reconcile the inherent conflict of interest that exists between its role as a passenger service operator on the one hand and its position as a strategic authority, allocating paths and resources to freight, open access operators and others, some of them in direct competition with it, on the other—or is that the issue that has been holding up its publication for so long?
Lord Hendy of Richmond Hill (Lab)
The noble Lord is right: I promised him it would be ready in December. I was advised by a colleague here that I did not say which December, of course, but, as I said, it is imminent. The question that he asks is germane in a mixed-use railway, and not a question unique to this network at all. It is a question which in various forms has been a question for all railway operators for as long as there has been freight, express passengers and so on. It is clear that a controlling mind will have to have some criteria to allocate access, and those criteria will have to form the basis of decision-making. It is also clear that because there are third parties on the railway, they should have a right of appeal. The document that I am referring to, which will be published imminently, will deliver a proposed solution to those issues.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, the last thing I would want to do is create problems for one of our Ministers—particularly this Minister—but he will recall the good days of the old Caledonian Sleepers, including one that came from Stranraer all the way down to London. It was used by many of our colleagues from Northern Ireland, and very effectively so. Recently, under the unfortunate auspices of the Scottish Government, the Caledonian Sleepers are really terrible and are making a huge loss. What advice would the Minister give to the Scottish Government, and would he perhaps even consider taking over the Caledonian Sleepers and integrating them into Great British Railways?
Lord Hendy of Richmond Hill (Lab)
I would not propose to take over anything from the Scottish Government. They are quite capable of running their railway themselves. The sleeper from Stranraer was abandoned some 15 years ago; it was also a sleeper from Barrow-in-Furness and other places. The purpose of sleeper trains is to enable overnight travel. Actually, the Caledonian Sleeper, now operated by ScotRail, does rather well at it. I doubt that it is particularly profitable but it must be worth running—certainly in the view of the Scottish Government, because they run it.
Airport Expansion
Lord Hendy of Richmond Hill Excerpts(2 weeks, 5 days ago)
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Lord Moylan (Con)
My Lords, Heathrow Airport Ltd is a 100% privately-owned company, which is subject to a form of economic regulation with which many noble Lords will be familiar from the water sector. In that light, can the Minister confirm that the long-standing, cross-party policy that any project for a third runway should be paid for wholly by the private sector and not the taxpayer will continue, and in particular, that any proposal as part of that project to relocate, tunnel or bridge over the M25 is also part of the cost that is to be paid for by the private sector and not by the taxpayer?
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
The noble Lord, Lord Moylan, is completely correct about the ownership of Heathrow Airport Ltd, which of course is likely to be a promoter—but possibly not the only one—of a third runway at Heathrow Airport. It certainly is government policy that a third runway should be paid for by a third party, but the detail of what it is and what other work is necessary to allow it to happen is not clear. The Government have invited proposals to be brought forward by the summer and promoters will hopefully make them, at which point it will then become clear how much they entail, how much other work is needed and how much they are proposing to pay for.
Baroness Pidgeon (LD)
My Lords, the U-turn announced by the Chancellor in support of airport expansion across the south-east is astonishing. Can the Minister explain how a third runway at Heathrow will meet Labour’s four tests—on growth across our regions, climate, air pollution and noise pollution? Does he agree that far more investment in regional transport infrastructure would be a more sustainable way to secure economic growth across the country?
Lord Hendy of Richmond Hill (Lab)
I assure the noble Baroness that the criteria that she has set out for airport expansion proposals are indeed those that the Government would use to look at any application for a development control order. We do not have that application yet because this is in the early stages. However, the proposition that connectivity drives growth, jobs and housing in line with the Government’s missions and the plan for change is no different in respect of air connectivity, which also drives economic growth.
Baroness Bennett of Manor Castle (GP)
My Lords, in responding to my honourable friend in the other place, Siân Berry, on the question of how this could possibly fit within the Government’s legal climate commitments, the Government suggested that the answer was sustainable aviation fuel. That currently represents less than 0.1% of aviation fuel, and it would take an awful lot of fried fish and chips if we were going to rely on used cooking oil. Does the Minister stand by the claim that somehow we will see a massive explosion in sustainable aviation fuel?
Baroness Winterton of Doncaster (Lab)
My Lords, does my noble friend the Minister agree that airport growth can be a great stimulus to the local economy, especially in places such as Doncaster Sheffield Airport? The airport closed under the previous Government but I was pleased to see it mentioned by the Chancellor in her speech. Can he assure me that his department will do all it can to support the reopening of Doncaster Sheffield Airport?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for that question, and this department will do all it can to facilitate the reopening of Doncaster Sheffield Airport.
Lord Grayling (Con)
My Lords, I was the Secretary of State who took this proposal through the Commons seven years ago, and I declare an interest as an adviser to AtkinsRéalis. The Chancellor suggested that work on the runway could begin before the end of this Parliament, which is only in four years’ time, and that for that to happen, it would be necessary for the process to start part-way through it. Do the Minister and the department believe they have to go back to square 1 and start from the beginning with a national policy statement and then a DCO again, or do they believe that that process can be short-circuited and they could start somewhere further down the track?
Lord Hendy of Richmond Hill (Lab)
The noble Lord is very familiar with the processes that have been gone through so far. The answer to that question is that it really depends on what is submitted by the promoter this summer. We all know that there was a proposal for a third runway in the north-eastern quadrant of the airport. To start with, it depends very largely on whether that submission is very similar to the one the promoter made previously or if there is something substantially different.
Baroness Kramer (LD)
My Lords, in 2014, the cost estimate just to build the Heathrow third runway was £18 billion, to be paid for in the end by higher fees on the airlines. British Airways was clear that it would not pay. In addition, Transport for London costed the upgrade to local transport as between £15 billion to £20 billion, of which the airport offered to pay £1 billion—the rest was to fall on London businesses and TfL. That project failed because the business case is completely ludicrous. Will the Minister now update us on the range of costings and, more importantly, who will pay?
Lord Hendy of Richmond Hill (Lab)
The costs of a third runway depend, of course, on the proposals of the promoter to deliver it. Without that proposition, we cannot usefully have a debate about how much it might cost, but my earlier answer to the noble Lord, Lord Moylan, stands about the cost of the runway itself. The only other thing I point out to the noble Baroness is that, since 2014, the Elizabeth line has opened, and a significant amount of extra railway capacity has already been provided to Heathrow Airport.
Baroness Blower (Lab)
My Lords, a good deal of air freight arrives at Heathrow. Does my noble friend the Minister think it would be possible—and rather a good idea—to redirect some of it to Doncaster Sheffield Airport, which is currently standing idle, thereby freeing up possible slots for other flights to come into Heathrow, and possibly obviating the need for a third runway?
Lord Hendy of Richmond Hill (Lab)
I am not intimately familiar with the proportion of air freight that arrives in Heathrow on aircraft solely adapted for cargo. My understanding is that much of the air freight that arrives there in fact arrives in the holds of passenger aircraft, therefore redirecting it is far from a simple process. But the earlier point about the success of regional airports stands, which is that the Government are very anxious to reopen Doncaster Sheffield and will do everything they can to achieve that.
Baroness Sugg (Con)
My Lords, I am sure the Minister agrees with me that expansion must be affordable, improve operation resilience for passengers and freight, and be compatible with environmental commitments. The modernisation of our airspace is a key part of that; modernising our skies is a crucial project that has been going on for many years—I remember it well from my time as Aviation Minister. Can the Minister update the House on the progress of that important project?
Lord Hendy of Richmond Hill (Lab)
I shall have to write to the noble Baroness, but otherwise I agree with everything she said.
Lord Wallace of Saltaire (LD)
My Lords, the Minister will remember Boris Johnson’s promises of levelling up. This Government’s recent announcements on support for economic growth in transport and advanced manufacturing have favoured the south and east very strongly. Will they please ensure that in future planning they think about the impact on the rest of the country, and take into account that the south-east is short of water and is certainly short of renewable electricity?
Lord Hendy of Richmond Hill (Lab)
An expansion of Heathrow will be of benefit to the entire UK, not just London and the south-east. A recent analysis suggested that over half the benefits would in fact be in the rest of the UK and not in the south-east of England.
Lord McLoughlin (Con)
My Lords, in welcoming the Government’s announcement that they are considering a third runway, may I ask the Minister what their attitude will be to airports outside London expanding? Does he think the expansion of Heathrow will at all put in danger the expansion of regional airports?
Lord Hendy of Richmond Hill (Lab)
I will be interested to discuss with the noble Lord his view of the question he has asked, because, of course, he was Secretary of State for Transport in his time. Certainly, the view here is that it will not affect the development of regional airports. The Government are quite clear that the appropriate development of regional airports is the right thing to do for the development of regional economies.
Bus Services (No. 2) Bill [HL]
Lord Hendy of Richmond Hill ExcerptsTuesday 28th January 2025
(3 weeks, 4 days ago)
Grand CommitteeRead Full debate Bus Services (No. 2) Bill [HL] 2024-26 View all Bus Services (No. 2) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 54-I Marshalled list for Grand Committee - (24 Jan 2025)
Lord Moylan (Con)
My Lords, I was not going to speak on this group after my noble friend Lord Effingham spoke, but I am prompted to do so by an earlier intervention.
It is very important that, when you make a large change, as is proposed here—the Government will claim that this is a significant change, I think, and rightly so—you are clear about what you are trying to achieve. We might assume that everyone wants better buses and so ask why there is a need to say it, but you need to be clear about what you are trying to achieve. Of course everyone wants better buses, but what actually constitutes better buses? When the railways were nationalised, everybody wanted better railways. They did not necessarily imagine that, in the 1960s, that would involve slashing nearly all the branch lines in the country and making a dramatic change to the way in which the railways operated by cutting them back.
I am in some sense trying to help the noble Lord, Lord Berkeley, with his question on the purpose of the amendment. There is also a further question: if you have an objective, who is to be held to account for that objective? This seeks to hold the Secretary of State firmly to account and put him at the centre of the chain of being responsible for this Bill.
It seems to me that there is nothing else in the text of the Bill that explicitly puts passengers, passenger needs and the quality of the service they receive at its heart. I think that there would be great benefit in doing so. We know that the Government and local transport authorities are responsible to multiple stakeholders—not only the users of their services but their workers, trade unions, local electors and so on. They have to balance the large number of needs and demands on them. The amendment says that the requirements of passengers come ahead of those others and that the Secretary of State would be held accountable if the Bill did not work out in improving passenger services. I find it difficult to see, first, why the noble Lord, Lord Berkeley, has difficulty understanding that point and, secondly and perhaps more importantly, why the Minister, should he be moved to resist this amendment, would want to do so.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the first group of amendments relates to the Bill’s purpose. At Second Reading, I set out the need for this Bill and explained why the Government are taking action to transform bus services across England. The Bill provides new powers for local leaders, so that local communities in England have greater control over bus routes and schedules. I thank the noble Earl, Lord Effingham, and the noble Lord, Lord Moylan, for their amendment and the opportunity to revisit the Government’s objectives.
Amendment 1 would place a direct requirement on the Secretary of State to have regard to improving the performance and quality of bus passenger services in Great Britain—in fact, it would make this the statutory purpose of the Bill. I absolutely support the reasons why noble Lords have drafted this amendment: they, too, want to achieve a better bus network that is more reliable and performs well. That is a shared goal. The reason we are here debating this important legislation is to reform the industry.
I recognise the points made by the noble Earl, Lord Effingham, about the KPMG report, and by the noble Baroness, Lady Pidgeon, about the benefits of buses to individuals and communities, as well as the inadequacies of the current arrangements. However, I am bound to disagree with the assertion that there is no evidence for the Government’s approach. There is plenty of evidence, some of which we have already talked about, such as the improvements in Manchester and elsewhere, including Cornwall, which is not a large conurbation. I also disagree with the assertion that there is public good and private bad in here. This is a very large menu of choices for local transport authorities. It is certainly not one size fits all.
As the noble Baroness, Lady Pidgeon, observed, during the passage of the Passenger Railway Services (Public Ownership) Act 2024, the noble Lords, Lord Moylan and Lord Gascoigne, tabled a very similar amendment. It sought to insert a purpose clause setting out improvement of passenger railway services as the purpose of that Act. At the time, I explained that the Secretary of State’s and the Government’s wider plans and objectives for the rail network included improving performance but noted that this was not the sole purpose. I offer the Committee the same rationale for this Bill. The amendment to the public ownership Bill was not carried.
Of course the objectives of this Bill include improving reliability and performance. They are important aims, but the Bill seeks to do more. It seeks to improve safety and accessibility, to provide local leaders with the powers to make the right decisions for their local areas, to support reaching net zero and to put passengers at the heart of the Government’s reforms. The noble Lord, Lord Grayling, was kind enough to suggest that I would not let ideology triumph over the right solutions. In this case, the Government are not doing that, either.
The Bill contains a range of solutions for local bus issues, which allow local choices for the best solutions and would recognise, in appropriate cases, both the adequate provision of bus services by their existing means, with commercial operators, and the range of solutions, including both large and small operators. To single out one objective would undermine the message that the Government are trying to convey to local authorities, passengers, operators and the wider industry. Thus, I do not support the proposal.
Extending this requirement across Great Britain also presents significant difficulties. The Committee will have noted that most of this Bill extends to England and Wales but applies only in England, with a limited number of clauses that extend and apply to Wales and/or Scotland. In tabling Amendment 1, noble Lords appear to be seeking to apply all the Bill’s measures across the whole of Great Britain. That would raise the potential of cutting across the powers of the Scottish and Welsh Governments to decide how to run their own bus networks and what is best for their local communities. That would not be the right approach. It would mean the UK Government interfering in policy areas where the devolved Administrations categorically do not want that. It also potentially undermines their reform agendas; as some noble Lords will be aware, the Welsh Government are due to introduce their own Bill into the Senedd in the coming months, as they seek to introduce bus franchising.
This amendment would also have significant ramifications on time and resources. Local transport is devolved, so legislative consent Motions would be required. That would potentially slow down the passage of the Bill and the pace of the Government’s reforms, which would be a bad outcome for passengers, who desperately need better bus services now, for the reasons set out by the noble Earl and the noble Baroness earlier. I am sure that noble Lords opposite would not want this outcome and therefore hope that this amendment will be withdrawn.
The Earl of Effingham (Con)
My Lords, I thank the Minister for his response, but I cannot hide the fact that we are disappointed. The former Secretary of State for Transport in the other place, Louise Haigh, stated:
“Reliable, affordable and regular buses are the difference between opportunity and isolation for millions of people across the country”.
She went on to pledge that a Labour Government would empower every community
“to take back control of their bus services, and … support local leaders to deliver better buses, faster”.
Action speaks louder than words and we must see follow- up. That is why we must ensure that the Bill lives up to the expectations of those who rely on bus services every single day.
Promises will do little to help the millions who depend on reliable transport. They need tangible improvements and accountability to be enshrined in this legislation. I believe that placing this explicit duty on the Secretary of State would provide a valuable guiding principle throughout the Bill’s implementation. It would ensure that every step taken under the Bill would be aligned with the objective of improving bus services for all those who rely on them.
I remind all noble Lords that paragraph 1 of the Government’s Explanatory Notes for this Bill states:
“The Bus Services … Bill brings forward primary legislative measures intended to support the government’s commitment to deliver better buses”.
Please may I ask: what better way is there to show commitment to passengers than by committing to this amendment? If the Government do not feel that this purpose clause is necessary for the Bill, can the Minister please explain how they will make clear their wholesale commitment to passengers across the board? On that note, I beg leave to withdraw the amendment standing in my name.
Lord Hendy of Richmond Hill (Lab)
My Lords, this next group of amendments, as we have heard, relates to bus franchising. I will first turn to Amendment 8 in my name. This amends paragraph 9(3)(a) of the Bill’s Schedule, which sets out the procedure for varying a franchising scheme. It is minor and technical in nature. The amendment inserts the words
“which have one or more stopping places”
into this paragraph. This is the form of wording used elsewhere in the legislation, including elsewhere in the Schedule, to ensure that cross-boundary services are captured. This wording ensures that if a franchising authority reduces its franchising scheme’s area, it must consult all those operating cross-boundary services, as well as those operating local services wholly inside the area. This is an entirely appropriate requirement if a franchising authority is seeking to reduce a franchising area, and it is important that the language is updated to reflect that and to ensure consistency across the Bill.
I am not sure which amendment it would refer to, but I thank my noble friend Lord Berkeley for his intervention about Cornwall. As a matter of fact, I was with the person he referred to, Nigel Blackler, the architect of the Cornwall bus scheme, this morning, and also Councillor Davis from Devon from the south-west. They are so keen on the Cornish experience that they are proposing, after the passage of this Bill, assuming it becomes law, to extend it to the whole of south-west England. This is a testimony to the broad level of support for these measures given, as no doubt noble Lords will know, the political composition of Devon County Council.
As to Mr Blackler’s experience, I think he has devised an extraordinarily good scheme for Cornwall, despite not having worked in either London or Manchester. The heart of that is the understanding of the local need for bus services, not necessarily the technical characteristics of a franchise. I commend him on the success of the scheme, as has been described by the noble Lord, Lord Berkeley.
Moving on to other amendments in this group, I thank the noble Lord, Lord Goddard, for Amendment 2, which seeks to amend Clause 4. I understand that its intent is to test whether the Bill’s removal of the requirement that the mobilisation period be less than six months removes the requirement to have a mobilisation period at all. The mobilisation period is, of course, the time that expires between a franchising authority letting a contract for franchised services and those services coming into effect on the ground.
We want to give franchising authorities the flexibility to set the mobilisation period that suits their needs, so they are better placed to make the right decision for their communities, but I want to clarify that the Bill does not remove the requirement that a franchising authority sets out a minimum mobilisation period. While a franchising authority could make this period as short as it chooses to because of the Bill—for example, a minimum of one day—this determination will be based on the practicalities applying to individual franchising authorities on the ground. It is therefore best left to those authorities’ devolved decision-making. There is also, incidentally, no removal of the requirement for a minimum mobilisation period in the transitional provision in this clause. I hope that this clarification satisfies the noble Lord and allows him to consider withdrawing his amendment.
The noble Lord, Lord Moylan, has tabled Amendment 3 on service permits. He readily admits that this amendment, if it were included in the Bill, would largely wreck the franchising model. Of course, I respect his knowledge of the history of road services licensing from the 1930s, as well as the long and distinguished history of London Transport and its successors. As he is aware, service permits provide franchising authorities with a mechanism to allow bus operators to provide commercial services within franchising scheme areas, including important cross-boundary services. The measures in the Bill add further tests that franchising authorities can use when determining whether to grant a service permit.
I reassure the noble Lord, Lord Moylan, that these new tests allow franchising authorities to consider a wide range of benefits that these commercial services could provide, therefore giving authorities more scope to grant service permits and harness the additionality that the market can provide. The amendment would remove not just the new tests proposed by the Bill but the existing test already in legislation. It would mean that franchising authorities would be required to grant all applications for service permits, including those which compete directly with franchised services, for example. Because this amendment would undermine franchising authorities’ ability to run coherent and affordable schemes, I ask the noble Lord to consider not pressing it, noting that it does allow, in appropriate cases, commercial services to be provided as a matter of additionality.
Amendment 5, also tabled by the noble Lord, Lord Moylan, seeks to include the data and criteria that can be used by an independent assessor when reviewing a franchising assessment. It must be for the local transport authority to decide which data it will use to carry out the franchising assessment and determine its affordability, not the independent assessor. The remit of the independent assessor is limited to ensuring a robust assessment of the information that the franchising authority has used. The local transport authority is best placed to understand the issues it faces, as it did in Cornwall, and how best to assess these from the available datasets. New datasets, fortunately, become available frequently as technology develops. This amendment is therefore unnecessary and I look to the noble Lord not to press it.
The noble Baroness, Lady Pidgeon, spoke to Amendment 6, brought forward by the noble Baroness, Lady Brinton. This proposes a change to Clause 9. As noble Lords know, as part of the Government’s commitment to improve bus services and hand more powers to local leaders, the Bill aims to accelerate and lower the cost of the franchising process. To that end, the Bill will remove the existing requirement that those conducting independent assurance of authorities’ assessments must be auditors. This requirement has significantly restricted the pool of people able to undertake these reports. Instead, qualifications and other experience enabling someone to undertake reports will be set out in secondary legislation.
The amendment seeks to
“inquire whether the Secretary of State intends to issue the criteria for the ‘approved persons’ role in the near future”.
Clause 9 will come into force by regulations at a time the department chooses. The intention is to bring it into force only when secondary legislation is ready. My officials are engaging with a range of stakeholders to identify appropriate qualifications and will work in a collaborative way to bring forward secondary legislation in due course.
The amendment in the name of the noble Baroness, Lady Brinton, also seeks to ensure that any secondary legislation is subject to the affirmative procedure. Because the qualifications that would enable a person to conduct assurance reports are likely to change over time, it is important that the secondary legislation remains agile and responsive to such change. These changes are technical in nature and therefore I do not believe that the affirmative procedure is proportionate.
I hope that reassures the noble Baronesses that the Government seek to work co-operatively with the House to ensure that appropriate secondary legislation is brought forward in a timely manner and that, therefore, the need for appropriate qualifications will be addressed. As a result, I hope they will feel able not to press their amendment.
Amendment 7, from my noble friend Lord Woodley, intends to remove the time limit of 112 days on the notice period for varying or cancelling the registration of an existing bus service in an area that is transitioning to franchising. The existing time limit is essential in ensuring that the franchising process moves forward within a reasonable and predictable timeframe. It serves to maintain momentum in the implementation of franchising schemes, which is essential for creating certainty in the market. The time limit also helps safeguard the interests of passengers by minimising disruption.
Without the time limit, there is a risk that the franchising implementation process could be drawn out unnecessarily, leading to prolonged uncertainty for both operators and passengers. Such delays could cause operational instability and undermine the benefits of a timely transition. I will, however, consider further the point raised by my noble friend Lord Woodley, about the early withdrawal of service. But for the moment, the amendment is unnecessary, so I ask my noble friend not to press it.
I thank the noble Lord, Lord Goddard of Stockport, for Amendment 12. I recognise the history of the determined effort of Manchester—including the efforts of the late, great Sir Howard Bernstein—to take control of its bus services. I am delighted not only with the success of what has been achieved but because a former colleague, Vernon Everitt, who has been mentioned and who is now the transport commissioner for Transport for Greater Manchester, has helped to deliver what is demonstrably a better bus service, with increasing passenger numbers, as the noble Lord observed.
Amendment 12 would require franchising authorities to publish an evaluation report no later than one year after franchised services are first delivered through a scheme and to set out the scheme’s costs and benefits. I point out to noble Lords that a key purpose of the Government’s franchising guidance is to provide authoritative best practice. For instance, the revision to the franchising guidance published in December 2024 includes new content based on feedback from Transport for Greater Manchester and other mayoral combined authorities seeking to adopt that approach. The department will continue to undertake this best practice-focused approach to developing further iterations of the guidance. I therefore hope the noble Lord will consider not moving his amendment and not placing an additional requirement on franchising authorities.
On Amendment 14 in the name of the noble Lord, Lord Moylan, I think this is the right place to directly challenge the noble Lord’s assertion that the permission of the Secretary of State should be needed for local transport authorities to go down this road. He is a distinguished local government politician, as the noble Baroness, Lady Pidgeon, observed, who fiercely—in my time at least—fought undue central influence. I am astonished to now discover that he advocates such interference, not even up to a point. Mind you, he might have been subsequently converted by being a very distinguished deputy chair of Transport for London.
Lord Grayling (Con)
Will the Minister accept a challenge on that point? He will know that, in terms of the current role of local authorities in areas such as mine, if that happens, they will step in and provide a service where the private sector cannot do so. It is not as if there is a total vacuum and the local community is completely exposed to the decisions taken by the bus operator.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his interjection. In his case, it is true, but there are other cases where the market has shown a considerable inability to respond across the country.
To conclude on Amendment 14, it is for the reasons I gave that I ask the noble Lord, Lord Moylan, not to press his amendment.
Amendment 15 in the name of the noble Lord, Lord Moylan, would require a local transport authority to carry out a preliminary assessment if it was considering franchising its bus services. Much of what the noble Lord has proposed to be included in the preliminary assessment is already included in the current legislation and must be included in the local transport authority’s franchising assessment. An assessment may or may not conclude that franchising is the best option. The assessment would then be published if an independent assessment had been carried out and the decision was that franchising was the best option. This amendment is therefore unnecessary, and I would welcome the noble Lord not pressing it.
Amendment 16 in the name of the noble Lord, Lord Moylan, seeks to impose a five-year moratorium on repeating franchising scheme assessments in the same area if the previous attempt was unsuccessful. The aim of the Bill is to simplify the process for authorities wishing to pursue franchising, ensuring that decisions are made at the appropriate level and in a timely manner. This amendment would introduce unnecessary constraints on local transport authorities by adopting an overly rigid approach. There are many factors that might lead an authority to decide against pursuing franchising initially, only to reconsider this later; indeed, the period of time suggested by the noble Lord would in some cases exceed the cycle of local authority elections, in which a different party that chooses to do something different might be elected. Imposing a blanket restriction limits authorities’ ability to respond flexibly to evolving conditions and opportunities. Assessments are costly and time-consuming so will not be undertaken lightly. This amendment is unnecessary; I hope that the noble Lord will not press it.
Lord Moylan (Con)
My Lords, on that point, the Minister has made in his response no reference whatever to the private sector. We are talking about circumstances in which buses are provided by the private sector in a particular area and the local transport authority, using powers to be created under this Bill, enters a franchising assessment model with a view to terminating the business of that bus operator—not terminating its activities but terminating it as a business and turning it into, simply, an agent of the local transport authority operating to instructions for a fee of some sort. That is one of the potential outcomes.
If you face that threat to your business, so to speak, and if the Government are equanimous in thinking that that is an appropriate threat to impose on the private sector, surely, if the decision at the end of that assessment is not to proceed, that private company deserves a degree of stability. Indeed, without that stability it is very unlikely to invest in any of the things we would like to see happen. Those might concern improved buses or better technology, but also better training for staff, proper recruitment, investment in the workforce and so on. An answer entirely focused on how the public sector might behave totally misses the point of what this amendment is trying to achieve.
Lord Hendy of Richmond Hill (Lab)
Of course I respect the noble Lord’s view, but the needs of local communities as expressed through local transport authorities are continuous and there are many examples across the country, unfortunately, of private sector operators choosing, for legitimate commercial reasons, to significantly vary the bus network in their area with the minimum statutory notice. They are quite adept at changing their business in accordance with market circumstances, whereas I think it is quite right to afford local communities the chance—through their elected local transport authorities—to choose to take a view about whether the bus service they are being offered is good enough to continue in its present model, or whether to choose to do something different. If there is a degree of jeopardy attached to this, that jeopardy can be expressed by the continuous need for commercial operators in those circumstances to continue serving the local area well. That would therefore make it unnecessary for the local transport authority to pursue franchising, when there are already remedies in the Bill and a mixture of measures offered to local areas to achieve their aims.
The next four amendments are from my noble friend Lord Woodley, and Amendment 17 is the first of these. He has been joined by the noble Lord, Lord Whitty, who also spoke about this. It seeks to place a requirement to establish a joint forum between the franchising authority, bus operators and trade union representatives. However, current legislation states that franchised services must be provided under a local service contract between the bus operator and the franchising authority. It is then for an individual bus operator, as an employer, to discuss and determine staffing and employment standards within the bus company, in consultation with staff and their trade union representatives. It is also for the franchising authority to decide what forums it wants to put in place to support the delivery of its bus services.
It should not be for the Government to dictate how a local transport authority should run its services. I know that noble Lords are concerned about driver welfare standards, and I am pleased to tell them that this issue is covered in the current franchising guidance. I will consider further what is said in the guidance about consultation with the workforce, and workforce planning, as a consequence of this discussion. For the moment, I do not believe that this amendment is necessary and I ask my noble friend not to press it.
Amendments 18, 19 and 20 were also tabled by my noble friend Lord Woodley. They raise the important issue of ensuring that employee rights are protected when a local authority bus company is established or during the transfer to franchising. This country already has robust legislation in place to safeguard employees. As noble Lords know, the transfer of undertakings regulations apply to employees of businesses in the United Kingdom. Should a local transport authority choose to establish a bus company, it would be necessary for it to consider the application of TUPE regulations, which are supported by additional guidance to help employers and employees understand their respective responsibilities.
Similar principles apply to franchising. Section 123X of the Transport Act 2000 already provides for the TUPE regulations to apply to staff transfers resulting from the introduction or transfer of a bus franchise, meaning that proposed Amendment 20 would add little or no value beyond what is already in place.
Furthermore, the franchising statutory guidance offers detailed advice on how to determine whether a member of staff is “principally connected” with a service. In line with existing regulations, this guidance advises franchising authorities to work collaboratively with local operators and employee representatives to agree on criteria for determining which staff are principally connected with affected services. For example, such criteria could include the amount of time that an employee spends working on franchised services or whether the employee is part of a specific group assigned to those services. TUPE would then apply to employees identified as being principally connected.
It is of course worth emphasising that, like some other public service employers, existing local authority bus companies often go beyond basic statutory requirements to support their employees. This is particularly true for individuals from protected groups, with many local authority bus companies offering attractive terms and conditions, such as higher rates of pay, flexible working arrangements, and generous holiday and maternity and paternity provisions. However, as I said in respect of the previous amendment, I will consider further what is said in guidance in this respect beyond what is already there. I therefore ask my noble friend not to press these amendments.
The final amendment in this group comes from the noble Lord, Lord Hampton, and I note and welcome his interest in safety on the bus network. He will be aware that some of the most important parts of the Bill for passengers are around disability and addressing crime and safety, which includes provisions on training for front-line and wider bus staff. However, this amendment specifically relates to training for officials from franchising authorities on IOSH, which is about providing managers with the tools to maintain a safe environment, and NEBOSH, which is a qualification in health, safety and environmental management— I refuse to say either of those as an acronym.
The effect of this amendment would be an increase in the cost and time it takes to franchise, if staff had to undertake this specific training before starting the franchising process. We all understand that safety is paramount for bus staff, passengers and the wider public but there are only a small proportion of franchising cases and those involved in franchising where having such qualifications would be relevant. It may also be that some of the training for holders of an operator’s licence, the Driver Certificate of Professional Competence, might be equally appropriate.
Part of the reform is to simplify and speed up franchising and drive down costs. This amendment would disproportionately impact authorities in considering franchising, including those in smaller towns and rural areas. This would disenfranchise local authorities, which goes against some of the core tenets of the Bill. Nevertheless, I will consider further what might be said in guidance about these important qualifications for those involved in this process who should hold them. As a result, I hope the noble Lord will feel able not to move this amendment.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
Does the noble Lord, Lord Goddard, have any more to say, or does he wish to withdraw his amendment?
Baroness Pidgeon (LD)
My Lords, first, I want to speak to Amendment 33. It is one that Jenny Randerson had marked up in her paperwork for this Bill, so we felt that it was really important to table it for her.
Although there are many bus operators across the country—as of last October, there were some 367 in England—the reality is that around three-quarters of bus services are run by a handful of large companies. This amendment would enable local transport authorities to prioritise small transport operators when allocating grants, thereby helping to promote diversity in the sector. Some local, smaller operators may know the area and community far better than a large company; we felt that it was important to acknowledge this when looking at the grants that a transport authority may choose to award.
Such operators are also more likely to provide services in rural and less connected areas, including those that will be deemed socially necessary routes. For example, bus routes in Bishop’s Waltham in Hampshire are particularly poor. Despite it being a sizeable town, it lacks adequate bus connections to Winchester and the surrounding area. A small operator may be able to provide this service in a way in which the larger operators are clearly choosing not to do currently. Additionally, such grants may enable small operators to invest in cleaner, more modern vehicles, contributing to environmental goals and improving the overall quality of service. This amendment is designed to support a competitive and dynamic transport market that ultimately benefits passengers.
Amendment 52 would provide a duty on relevant local authorities to promote bus services in their area. With this new focus on improving bus services, it is right that they are properly supported and that their benefits to the local environment, as well as their wider social and economic benefits, are promoted locally. Promoting bus services will help reduce the number of private vehicles on the road, leading to lower greenhouse gas emissions and improved air quality. Reducing congestion can help improve the local economy and ensure a more reliable bus service, thereby facilitating access to jobs, education and other services. Although this is a probing amendment, its aim is to ensure that there is wider thinking about what happens beyond this legislation if we are to have the step change in bus services across the country that all sides of the Committee, I am sure, would support.
With Amendment 4, my noble friend Lady Pinnock has raised the elephant in the room: the adequacy of central government funding to support local bus services. Although this legislation gives local transport authorities a choice of options in providing services, money is needed for that, and this is not just coming from local and regional government. One of the large operators, Stagecoach, has flagged with me that bus services can be successful only if they are properly funded, irrespective of the delivery model. Securing long-term clarity and certainty around funding for this sector will help enhance the benefits delivered to local communities—exactly the point that my noble friend Lord Bradshaw has just made. The noble Lord, Lord Moylan, also touches on funding allocation in his Amendment 31, on which he spoke in great detail.
The Bill also talks about net cost for contracts that are direct awards, which implies that the revenue risk sits with the operators. It is not clear how that sits with control of fares being within the remit of the local transport authorities. Perhaps the Minister can explain the thinking regarding these contracts and funding from government going forward. My noble friend Lady Pinnock has also touched on the enforceability of by-laws, the need for model by-laws and staff training if by-laws are going to work in practice. Operators are concerned about the requirements for training and whether additional funding will be provided to cover this new requirement. Again, we are back to the elephant in the room: funding.
My noble friend Lord Bradshaw has spoken with his extensive experience and knowledge about the need to improve the reliability of bus services and ways to incentivise this through conditions in any financial support.
A wide range of other amendments in this group pick up improving the passenger experience with what we would expect from a modern bus service, whether that is wifi, charging or accessibility improvements. We do not know what we will need in the future. Things will move along. At the moment, we think about plugging things in to charge them up. Technology moves at such pace. I am not sure whether these are needed in the legislation, but perhaps they should be in the guidance. I look forward to hearing from the Minister on that point.
I would like clarity from the Minister, on the record, about demand-responsive bus services. I raised this at Second Reading, and it was made clear in the Minister’s letter in response that this legislation enables demand-responsive bus services. They may well be the solution in some parts of the country, but I want assurance that this legislation enables that rather than prevents it. I look forward to hearing detailed responses from the Minister to these important points.
Lord Hendy of Richmond Hill (Lab)
I will now address the amendments relating to local authorities, specifically the Bill’s grant-making powers, functions and duties. Before I address the amendments tabled by your Lordships, I will talk to the government amendment in my name, Amendment 81. This makes a minor change to Clause 30, providing for the provisions under Clause 21, on local transport authority by-laws, to come into force by regulations. Clause 30 sets out the commencement details for each clause of the Bill. The majority of clauses will come into force on days appointed by the Secretary of State by regulations. The current exceptions are Clause 21, “Local transport authority byelaws”, which is due to come into force two months after Royal Assent, and Clause 23, “Safeguarding duty: drivers of school services”, which comes into force six months after Royal Assent.
Clause 21 empowers local transport authorities to make by-laws addressing anti-social behaviour on their bus networks. It also allows the Secretary of State to issue statutory guidance about the exercise of enforcement functions in relation to local authority by-laws. Bringing Clause 21 into force by regulations, rather than two months after Royal Assent, is imperative to ensure that officials in my department have time to develop meaningful guidance to aid local transport authorities and their officers in undertaking enforcement functions. If the change cannot be made, local transport authorities may make by-laws before the guidance can be issued, or there may be insufficient time to develop comprehensive guidance that will be of the most use to local transport authorities and their enforcement officers. It is therefore an important change to make.
I move next to Amendment 4, tabled by the noble Baroness, Lady Pinnock. I thank her for her recognition that the Government’s recent settlements for local transport authorities are comprehensive for the moment. Her amendment seeks to include further consideration of funding requirements in the scheme assessment that authorities must undertake when developing a franchising scheme. I reassure her that consideration of the affordability of proposed franchising schemes, and therefore funding, is already a central part of the assessment. The existing legislation states that the assessment must include consideration of whether the proposed scheme would be affordable to set up and operate. As for a requirement for a specific analysis of the funding required to maintain or improve services for all communities, I stress that the legislation already requires the proposed franchising scheme to be properly costed and compared to another course of action, such as an enhanced partnership.
Finally, I note that both the franchising assessment and the independent assurance report must be published alongside the consultation. This ensures transparency around the local transport authority’s decision.
The Government have set out their ambitions to consolidate and simplify bus funding streams and to provide the long-term certainty that local transport authorities and bus operators have been calling for. The forthcoming multi-year spending review provides a real opportunity for the department to assess the sector’s funding needs so that bus services are adequately funded to support economic growth and, in particular, to overcome the barriers to the Government’s missions. Of course, any future spending decisions must be subject to the outcome of the spending review process. For all those reasons, and with that statement, I hope that the noble Baroness will feel able to withdraw her amendment.
Lord Moylan (Con)
The Minister makes a very important point there. When the last grant was allocated—in round numbers, of £1 billion, £250 million went to bus operators and £750 million went to local authorities—a new methodology was introduced for allocating it. It was based on three factors; I cannot remember what they were but, in a way, that does not matter, because the important point that I raised was that there was no evidence underlying the choice of these three factors. Although it is true that the Minister answered my point in the Chamber, he offered no rationale or evidence for the choice of those three factors; they will come back to me the moment I sit down.
However, that is not my main point. My main point is not to drag over the coals of what was discussed in the debate we had on that Statement but, rather, to point out that the Minister now appears to be saying that the same unevidenced methodology, with no rationale to explain it—a third this, a third that, a third the other—will be applied when the department comes to distribute whatever funding it has available for buses as a result of the upcoming spending review. That is a very important point, if he is making it. Does he want to confirm that that is what he meant? Or did he, perfectly understandably, fall into a momentary lapse that he would want to withdraw? We really need to know.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his intervention; my response to him will probably be very similar to what I said at the time. First, the allocation methodology was far more transparent than the previous Government’s allocation methodology: it allocated money to all local transport authorities in England for bus services when, previously, there had been occasions when money was competed for via a long and tedious process not necessarily winding up in success. I, too, am struggling to recall all three of the criteria, only because my mind is currently full of these amendments, but two of them were population and bus mileage, which are self-evidently the sorts of indexes that you would use for this process.
Lord Hendy of Richmond Hill (Lab)
The noble Lord is absolutely right. I thank him for his further intervention; we got there between us, even though neither of us could remember to start with.
Those are pretty central ways of allocating that funding. I will not necessarily commit the department precisely to that methodology in future because, obviously, we have the right to consider the matter further. Equally, we would of course be open to any other proposed indices to consider against population, deprivation and place need, but, in my view, those seem to be pretty good ones; I cannot see that they are obviously wrong. In conclusion to this little excursion into this matter, it is certainly better than partial allocations and competing for money without local transport authorities being certain of success—I am certain of that.
It is important to note that much of the funding to local authorities and local transport authorities is consolidated. That funding is not hypothecated by central government, thus it is for the local transport authority to determine how to apportion its funding. For example, the Ministry of Housing, Communities and Local Government provides local authorities with funding through the local government funding settlement. Money from that can currently be used to support bus services, for example by tendering. In future, it is possible that a local transport authority could choose to put some of that funding towards a bus grant using the powers proposed by Clause 16. The same is true for funding provided through the Department for Transport’s bus service improvement plans. Local transport authorities can decide how to allocate that funding towards a variety of bus initiatives.
Local authorities also have access to other sources of funding, including council tax money and retained business rates. Some of this money could be used to establish a local bus grant without recourse to funding provided by central government. The Government do not wish to tie the hands of local transport authorities by specifying the total funding to be used to carry out the functions under this section. It is for them to work out how much they wish to spend on such grants from within their wider allocations.
The powers proposed under Clause 16 are optional and would be available to local transport authorities if they chose to use them. It is thus hard to see how the statutory guidance—which may be published but its publication is not mandatory—could contain the information that would be required by the noble Lord’s amendment.
Lastly, I fear that the amendment does not fully recognise that the statutory guidance provided for by Clause 16(6) is intended to set out factors that a local transport authority should consider when choosing to design and pay a grant to bus operators. The local transport authorities will be very aware of their financial situation when doing so. The amendment is therefore not needed and I ask the noble Lord not to press it.
Turning to Amendment 32, it is good to see that the noble Lord, Lord Moylan, recognises the important role that demand responsive transport can play in contributing to local public transport provision. The amendment takes a belt-and-braces approach—both proposed subsections would have the same effect by ultimately requiring local transport authorities to think about flexible bus services, a form of demand responsive transport, if they chose to use the powers that would be granted by Clause 16 to design and pay grants to bus operators. I contend that neither the belt nor the braces are needed. There is nothing in Clause 16 to prevent a local transport authority choosing to use the powers therein to have regard to, and to support flexible bus services, to the extent that they meet the definition of “service” in Clause 16(2). I am happy to have that on the record, as the noble Baroness, Lady Pidgeon, requested.
Other types of demand responsive transport—for instance, that provided using private hire vehicles—are not likely to fall within the definition of “service” in this measure. Indeed, in our drafting of Clause 16 we have deliberately made it possible for local transport authorities to support a wider range of bus service types than the Government can through the existing powers available to the Secretary of State under Section 154 of the Transport Act 2000. This is because we want local transport authorities, in line with the devolution agenda, to be able to design grants that best support the outcomes that they see as important. That is key to help ensure that local bus services are able to contribute to economic growth and to breaking down barriers to opportunity.
Noble Lords will also be aware that Clause 16(6) gives the Secretary of State the option to publish the statutory guidance. If we feel that the guidance is needed, we will publish it.
Local transport authorities will be best placed to determine whether demand responsive transport is a viable option for their areas. The Bill and other aspects of our devolution agenda—including building on the devolution deals introduced by the previous Government —are aimed at giving local authorities more freedom and flexibility. However, given that flexible bus services are a key part of the bus offering in some areas, and will continue to be an important option for local authorities when considering the appropriate mix of services, it would seem strange for the statutory guidance, if it were published, not to contain references to flexible bus services. I hope I have demonstrated that the amendment is not needed and I therefore request the noble Lord not to press it.
I thank the noble Baroness, Lady Pidgeon, for Amendment 33. I note with sadness that the late Lady Randerson is not here to be able to debate it herself. It is a terrible shame. As noble Lords will all be aware, economic growth is one of the core missions of this Government, and the amendment rightly highlights the important role small and medium-sized enterprises have to play in delivering growth. The Bill supports the economic growth mission by giving local transport authorities greater freedom in deciding how they support their local bus services to boost economic growth and remove barriers to opportunity.
The amendment is intended to ensure that local transport authorities that choose to use the new powers to design and pay grants to bus operators think about the needs of small bus operators when designing those grants. However, the amendment is not needed because under the grant-making powers given to them by the Bill, there is nothing preventing local transport authorities designing grants that prioritise and support smaller operators of bus services, subject to other competition and subsidy controls. Because most local transport authorities are in enhanced partnerships, they will be best placed to understand the needs of small operators. They will certainly know those in their areas and whether such grants would be appropriate.
As public authorities disbursing funding, local transport authorities will, however, need to ensure that any grants they design, using the powers that would be granted by the Bill, comply with relevant subsidy controls to ensure that they are not distorting their local market or the national market. I hope that assurance allows the noble Baroness, Lady Pidgeon, not to press her amendment.
Lord Snape (Lab)
If I may intervene on my noble friend on that point, the noble Baroness, Lady Pidgeon, painted a picture of small local authorities taking on routes that the major operators do not, to paraphrase her, and filling in gaps that they have left. If that were the case, why did they not do it after the 1986 Act? That Act said that anybody could run a bus service anywhere they liked, provided that it was registered with a traffic commissioner.
The reality was, of course, that these smaller operators used clapped-out vehicles and non-union staff, while providing none of the facilities that the major operators did. One well-known case in the West Midlands, which ended in front of a traffic commissioner, was about one of these smaller operators whose idea of a break for the driver was for him to get out of his cab at the end of the journey and urinate against the front wheel. We had to put up with that sort of smaller operator in the area where I was involved in a bus company, the West Midlands. Can my noble friend point out to the noble Baroness that, sincere though she might be, the reality of life was somewhat different? What would my noble friend put in the legislation to ensure that these smaller operators abide by the normal regulations, treat their staff properly and recognise trade unions?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for his intervention. The real security in this—at least for passengers, and indeed for local transport authorities—is actually with the traffic commissioners. We will no doubt come to this later on in another of the amendments from the noble Lord, Lord Moylan. In fact, the process that my noble friend referred to is an elegant example of where the activities of the Driver and Vehicle Standards Agency, if followed up with the traffic commissioners, place a burden on operators to behave properly—to treat their staff properly and offer an adequate and safe service to the public. That mechanism of inspection by the DVSA and subsequent action by the traffic commissioners, should it be necessary, is a very elegant method of regulation. It is, incidentally, also strongly supported by the industry at large.
Amendment 34, tabled by the noble Baroness, Lady Pinnock, would require local transport authorities to publish a review when proposing to create new by-laws under the provisions in Clause 21. The purpose of this clause is to address a current inconsistency that means only some authorities have powers to make bus by-laws. The requirement for a review before exercising these powers would place additional burdens on local transport authorities, increasing costs and slowing down the implementation of by-laws, and that is not desirable. The inclusion of this clause comes from the Government’s engagement with local authorities and an understanding of the tools that they need to best operate safe and inclusive bus networks for their local communities. It is also not necessary because similar powers to those proposed by the Bill are available to some local transport authorities and railway operators in operating their rail and light rail networks, so there is some experience of this.
I draw the noble Baroness’s attention to the engagement with local authorities and existing by-laws in answering her question about whether these by-laws would work. The procedure in Clause 21 draws on and is analogous to that found in existing legislation, including the Railways Act 2005 and the Local Government Act 1972. Neither Act imposes requirements on local transport authorities or operators to undertake a similar review. I undertake to go away and consider with colleagues whether there are, or should be, model by-laws available. I therefore ask the noble Baroness not to press Amendment 34.
On Amendment 50, it is a real pleasure to see the noble Lord, Lord Bradshaw, in his place this afternoon. I understand the point that he is making about his proposal to place a statutory duty on local highway authorities or other authorities to take, create, implement and report on a traffic reduction strategy with the aim of improving bus journey times—I should have said that he is supported by the noble Lord, Lord Goddard. Improving the reliability and frequency of local bus services is a key part of the Government’s plans for buses, and the Bill helps give local transport authorities the right tools and levers to do that.
However, I do not believe that this amendment is the right way to do that. For example, local transport authorities are already obliged under the network management duty, established by Section 16 of the Traffic Management Act 2004, to consider the reduction of congestion and improving traffic flow in how they manage their roads, so this new duty would in effect replicate that. It would also go against the principles of devolution—giving more freedom and fewer obligations —that we have committed to with the Bill. Local transport authorities are already able to effect positive changes in bus reliability through enhanced partnerships with operators of bus services in their areas.
The recent experience in Manchester of franchising has served to illustrate, at least to me, that the power of franchising has very quickly drawn to the attention of the authority—in that case, Transport for Greater Manchester—those elements of the management of the local road network that need to be improved in order to drive a safe and reliable service.
The noble Lord’s amendment links the production of this traffic reduction strategy to any financial support issued by the Government,
“for the provision of bus services”.
This brings a range of funding streams into scope beyond just grants that are intended either to support bus services themselves, such as the bus service operators grant, or to improve infrastructure, such as bus priority schemes that could improve bus journey times through the bus service improvement plans. Some government funding—for example, grants to make buses more accessible—may be caught under the broad wording of this new measure. There is, of course, no obvious link between this kind of grant and traffic reduction, and it would be inappropriate in such cases to produce a corresponding traffic reduction plan. However, I understand the noble Lord’s point, and I will consider further how and in what way we might address the very valuable point that he is making. On that basis, I ask him not to press his amendment.
The noble Baroness, Lady Pidgeon, has brought forward Amendment 52 to place a duty on authorities to promote bus services and publish regular reports detailing progress towards achieving that objective. I firmly believe that all authorities and operators are interested in promoting their bus services in their local areas and that it is not necessary to bring forward an amendment that places a direct requirement on authorities to do so and to report on how they have met their objectives.
The Transport Act 2000 already places a duty on the local transport authority to develop and implement policies which promote and encourage safe, integrated, efficient and economic transport in their area. Buses form part of that duty, and we know through bus service improvement plans that local transport authorities are already doing this. A local transport authority also needs to have wider monitoring and evaluation plans in place to assess the outcome of its policies. It also has to answer to its communities.
The Bill is all about providing choices to local transport authorities and ensuring that decisions are made at the right level ultimately to improve the bus network for their communities. It should therefore be for the local transport authority to decide how it will measure its successes. On that basis, I ask the noble Baroness not to press her amendment.
I turn lastly to Amendment 69, which I thank the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, for bringing forward. The amendment would require local authorities to promote the adoption of customer-facing technology. The Government remain committed to ensuring services are continuously improved for passengers. I agree with noble Lords that it is important that passengers experience good access to technology, such as free wi-fi and charging facilities. As noble Lords have noted, many operators already seize these opportunities. We would be keen to encourage further adoption, albeit that we can have little control, given that operators would need to assess its cost impacts.
From a passenger-information perspective, the Government are committed to delivering better bus services, and part of this work is working closely with bus operators and local transport authorities to improve the information available to passengers about their bus services. The Bus Open Data Service was launched in 2020 and requires all bus operators of local services in England to provide passengers with high-quality, accurate and up-to-date passenger information including timetables, fares, tickets and vehicle location information. As part of this work, the Government understand the importance of having real-time information widely accessible in a range of spaces that passengers use and are conscious of the need to continually consider new ways to improve access to real-time information, while staying in line with wider government digital and data strategies. I note what the noble Baroness, Lady Pidgeon, says about the continuing progress of technology and the difficulty of specifying now what it might deliver in the future.
I hope that the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, will understand that I do not wish to cut across the work which is currently underway. On that basis, I would ask them not to press Amendment 69.
Baroness Pinnock (LD)
My Lords, I thank the Minister for his detailed reply and the clarity of his answers to all our amendments. I remind the Committee that my Amendment 4 seeks to encourage the Government to respond positively to the need for funding, such as TfL has enjoyed. I note that Amendment 30 from the noble Lord, Lord Moylan, is using funding to discourage enfranchising. There is quite a world of difference between us.
Member's explanatory statement
This amendment brings paragraph 9(3)(a) of new Schedule 9A to the Transport Act 2000 into line with paragraph 5(4)(a) of that Schedule.
Baroness Pidgeon (LD)
The amendments from the noble Lords, Lord Woodley and Lord Moylan, show both ends of the spectrum in this area—one wanting to make it easier for a local authority bus company to be directly awarded a service, and the other wanting the Secretary of State to be involved and lots of bureaucracy to make it even harder. But I absolutely agree that these amendments throw up some real questions around direct awards, and I hope the Minister can provide some clarity.
Direct awards can be made to existing operators where the post award services are deemed “substantially similar” in the context of direct awards. What criteria will be used to determine that? What is the precise definition of “substantially similar” services? How will the requirement for operators to take on real operational risk be defined and enforced under a direct award? As the noble Lord, Lord Moylan, has just rightly stated, in situations where multiple operators currently run services, what are the criteria for selecting an operator to receive a direct award? Will all existing operators be awarded a direct award? What guidance is going to be provided to local authorities regarding the structure of direct award contracts? What flexibility will they have in negotiating terms?
The bus industry welcomes this legislation but it will want some certainty. I hope the Minister can provide that in his response to this group of amendments.
Lord Hendy of Richmond Hill (Lab)
I will first address Amendments 9 and 10 from my noble friend Lord Woodley. The option of a direct award is designed to support the transition to bus franchising, bringing forward some of the benefits of franchising while delivering service continuity to passengers. Expanding the scope of direct awards to include local authority bus companies under all circumstances would not meet these objectives, which are limited and designed to deliver continuity and would, in the case of his amendments, prevent fair competition with private operators. With respect to my noble friend, these amendments are unnecessary and I would ask him to withdraw Amendment 9 and not press Amendment 10.
I thank the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, for tabling Amendment 13. It is up to local leaders to determine how to run their bus services best and to assess the effectiveness of the delivery of their franchising contracts. Franchising authorities using direct awards are subject to comprehensive reporting requirements and the Bill does not change this. The additional requirement would create unnecessary additional burdens.
Noble Lords asked whether the clause complies with the Procurement Act 2023. As I said in my letter to all noble Lords, Clause 11 is limited to the direct award of net cost contracts, also called concession contracts, where the operator provides franchise services in return for the fare revenues. These contracts are exempt from the Procurement Act 2023—see paragraphs 21 and 37 of Schedule 2 to that legislation—and instead fall under the Public Service Obligations in Transport Regulations 2023, which the Bill is amending. Therefore, this clause does not impact on the Procurement Act 2023.
On the questions raised about there being more than one operator, this is a transition arrangement in order that the passengers involved, the customers of bus routes, and the operators get more certainty in the transition than might otherwise be the case. Clearly, the provision of direct award can be useful to authorities seeking to move to a franchising model both now and in the future. It also provides flexibility to stagger the full implementation of franchising, for example, tendering competitive franchise contracts at different times. It can be used only for the first franchise contract in an area to support the transition. Direct award contracts will have a maximum duration of five years, and in many cases a shorter duration will be appropriate. Long-term franchising contracts will be competitively tendered in the usual way. For clarity, in areas where there is more than one operator, only the incumbent operator can receive a direct award contract for the same or substantially similar services. It is uniquely placed to provide service continuity to passengers during this transition.
The amendment tabled by the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, would create unnecessary additional burdens on local and central government to complete the assessment. I therefore ask them not to press their amendment.
Avanti West Coast
Lord Hendy of Richmond Hill Excerpts(3 weeks, 5 days ago)
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Lord Bradley
To ask His Majesty’s Government what plans they have to review the service provided by Avanti West Coast between Manchester and London.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My department is clear that the performance of Avanti West Coast has not been good enough. Officials routinely meet Avanti and Network Rail as part of a relentless focus on improving railway performance, bringing together track and train far more than previously and holding both sides accountable. The Secretary of State met the managing director in January to understand Avanti’s plans to address industrial action. I will meet him, together with the Network Rail route director, on Friday, to further discuss performance.
Lord Bradley (Lab)
I thank my noble friend the Minister for that reply and note my interest as a weekly user of Avanti trains and praise the many excellent staff on these trains and the brilliant services provided by Stockport booking office. However, the performance during November and December 2024, as the Minister has mentioned, was utterly woeful and frustrating. Journey after journey was subject to huge delays, with numerous cancellations and subsequent declassification throughout the trains, standing room only or people sitting on the floor of the carriages, and no refreshments, not even the smallest bottle of water, throughout the train. On behalf of Avanti’s long-suffering passengers, will the Minister carefully study again the contract at his meeting with management later in the week, to end this misery and ensure that customers and taxpayers get the value for money that they so deserve?
Lord Hendy of Richmond Hill (Lab)
I strongly sympathise with my noble friend on his experiences in his weekly travelling. My postbag, email and every other means of communication is full of criticism of Avanti West Coast. It was given a contract for three years in October 2023. I assure noble Lords that as hard as we look at the contract, the company has not yet failed to meet the performance target standards that the previous Government set it.
Lord Evans of Rainow (Con)
My Lords, I pay tribute to Macclesfield station staff for their excellent work. I have an idea for how we can monitor the number of delays. There is something called Delay Repay. Does the Minister know much how is paid out by Avanti to passengers? If not, perhaps he could let us know. It may be a good thing for him to keep his eye on, for key performance indicators in terms of staffing and getting staff to work—particularly at weekends.
Lord Hendy of Richmond Hill (Lab)
I will have to write to the noble Lord about the amount of Delay Repay. I have statistics here about the number of trains on time and the number of trains cancelled. Although the number of trains being cancelled has been reducing, it is still far too high. Passengers dislike cancelled trains even more than they dislike them being later than in the timetable. I will write to him and put a copy of that letter in the Library. However, I think that the evidence of Delay Repay is the same as the evidence of the performance statistics—that the performance is just not good enough.
Lord Goddard of Stockport (LD)
My Lords, Avanti has a simple objective in life: to supply three hours of train from Manchester to London. It is not complicated. It is a straight line. I will give a snapshot of this weekend. On Friday morning, the 8.43, a peak-time train, was cancelled with 20 minutes’ notice. On Saturday, five trains were cancelled due to a lack of staff or extra maintenance being required on trains. This morning, the 8.43, a peak-time train, was again cancelled. Five more trains back to Manchester were cancelled this afternoon. It is utterly unacceptable. I feel for the staff, who try to give us a good service every day on the up and down journey, but the management is lamentable. If you gave Avanti a local pub in London with a 24-hour licence, free beer and free food, it would still not make a profit. It is astonishing. I am lost for words.
Lord Goddard of Stockport (LD)
I am rarely lost for words. Seriously, the customers are at the heart of this, day in, day out, with children, having the service that the noble Lord, Lord Bradley, has described. It is unacceptable. I hope that the Minister will take cognisance of what is going on. This is nothing to do with the weather, strikes or lines. This is incompetent management.
Lord Hendy of Richmond Hill (Lab)
The noble Lord is clearly not lost for words. However, it is not within my gift to award free tenancies of public houses in London—probably wisely. A lot of what he says is right, and I will reflect on that with the Avanti management on Friday. My only cautionary note is that the effect of the storms on Friday and Saturday has led to significant disruption to most of the railway in northern England and certainly in Scotland. I have some sympathy with train operators in those circumstances, because there are occasions on which their staff cannot get to work simply because of the effects of the wind and associated damage. One should therefore be a bit careful. As a former operator of public transport, I know that it is sometimes difficult to get the right staff in the right place at the right time, when those circumstances happen. When they do not happen, however, you would expect train operators such as Avanti to have sufficient staff to be able to resource the service and have some reserve of resilience to keep it going in difficult circumstances. I sympathise entirely with what the noble Lord says.
Lord Liddle (Lab)
My Lords, I speak as another regular Avanti user. Has my noble friend noticed that, increasingly, the company seems to regard the northern point of its franchise as Preston, without running trains on to Carlisle and Glasgow, which has very damaging effects for tourism in the Lake District and the Borders? Is this not a breach of its franchise obligations? I notice that Avanti is now telling us that, because of Network Rail improvements, the railway will be closed at certain points in the next two or three years. Is it not the case that it must be deprived of its franchise? It is just not doing its job.
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for that question. Indeed, I have discussed with him and others the rather too frequent regularity of cancellations north of Preston. I will not reiterate what I have just said about the effects of the storms last week. There have been other occasions when the railway infrastructure has not been up to withstanding the weather and storms. However, I agree with my noble friend, as I agreed with the noble Lord, Lord Goddard, that one expectation of those who run railway services for the department is that there should be sufficient resilience in what they do to cater for the exigencies of normal operation. It is this that I will be discussing in some detail with Avanti and Network Rail on Friday.
In respect of the future renewal and upgrade of the west coat main line north of Preston, the news that was in the papers in the past few days is premature because it was Network Rail’s proposition to renew the overhead wires between Preston and the Scottish border. The arrangements are not yet agreed, and the release of that information to the public—I think by one of the train operators—was premature. That was industry’s consultation, and there will be more to be said about it at a future date.
The Earl of Effingham (Con)
My Lords, I would simply like to ask the Minister exactly the same question that many of his own noble friends felt it was fair and reasonable to ask us when we were working hard to solve the Avanti issue. The noble Lord, Lord Snape, asked:
“What will it take for the Government to do their job and relieve Avanti of any responsibility for being involved in our railway system?”.—[Official Report, 26/10/22; col. 1527.]
The noble Lord, Lord Liddle, asked:
“Why have the Government not acted, as a decisive Government would, and withdrawn the franchise from these disastrous operators?”.—[Official Report, 1/12/22; col. 1947.]
Finally, the Captain of the Honourable Corps of Gentlemen-at-Arms, the noble Lord, Lord Kennedy of Southwark, asked
“why the Government are not doing something immediately to end this shambles and outrage on one of our country’s major lines?”.—[Official Report, 7/9/22; col. 261.]
Lord Hendy of Richmond Hill (Lab)
The answer to those questions is that the contract that these people have been given does not allow the withdrawal of the franchise for performance that many people in this House think is lamentable. Of course, the other action that the previous Government took was to allow Avanti to offer an extraordinary amount of money—£600 to drivers working rest days—which has been the subject of much criticism ever since, particularly recently, but is rarely attributed to the previous Government’s action in allowing Avanti to pay it.
Airports Slot Allocation (Alleviation of Usage Requirements etc.) Regulations 2025
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Lord Hendy of Richmond Hill
That the draft Regulations laid before the House on 4 December 2024 be approved.
Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 January.
Railway Electrification
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Lord Faulkner of Worcester (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and refer to my railway interests as listed in the register.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
Updated plans are currently being developed by Network Rail for where and when electrification is required to deliver a fully decarbonised railway over the next 25 years. Those plans will consider the integration of both track and train through Great British Railways and the significant recent progress in battery technology. All investment decisions will be subject to current and future spending reviews and will be for the first time integrated with rolling stock decisions.
Lord Faulkner of Worcester (Lab)
My Lords, at the railway industry reception in the House of Commons last week, my noble friend said—I think I am quoting him correctly—that in the context of Railway 200:
“We’ve got … to celebrate all of the history. But we’ve also got a chance to celebrate the future”.
Does he agree that his Answer to me just now is a way of celebrating that future, provided we can embark on a programme of investment in electrification, battery power and new technologies which allows the railway to grow and the freight business and the passenger business to take on new markets with new traffic? Does he further agree that that is the only way that we can meet the net-zero emission targets and make the railway completely carbon free?
Lord Hendy of Richmond Hill (Lab)
Of course, I strongly agree with my noble friend that whatever I said last time was the right thing to say.
Lord Hendy of Richmond Hill (Lab)
More seriously, I agree with my noble friend that the point at which we celebrate 200 years of the first public passenger railway in the world is a very good moment both to contemplate the fact that the railway is already uniquely green and to look forward to full decarbonisation. The most exciting prospect has emerged since the last traction decarbonisation strategy of 2020: the significant development of battery technology, the significant introduction of bi-mode trains across Britain and very recently, by one of the most forward-looking freight companies, the introduction of a tri-mode freight locomotive, all of which enables electrification to be far more finely tuned to both cost and value for money yet produce at the end of it a fully decarbonised railway.
Lord Wigley (PC)
My Lords, shortly before the last election, the Conservative Party in its death throes gave a commitment to electrification of the line from Crewe to Holyhead. Do the present Government stand by that commitment?
Lord Hendy of Richmond Hill (Lab)
That commitment was one of many in a hurriedly put together document entitled Network North, which incidentally went as far south as Tavistock and went to Holyhead. The characteristic of that shoddy document is that virtually nothing in it was funded, nor indeed was much of it thought through. The last serious work on electrification of the north Wales main line was done by Network Rail in 2010 and that commitment—if it was a commitment—was put in that document with absolutely no reference to any business case nor current set of costs for delivering it.
Lord Anderson of Swansea (Lab)
My Lords, some years before their death throes, the last Conservative Government made a firm pledge to electrify the line between Swansea and Cardiff and then, because it was presumably unfunded, like hospitals, they shamefully abandoned it. Can my noble friend confirm that this line is at least now being considered and may well be back on track?
Lord Hendy of Richmond Hill (Lab)
My reference earlier to integrating the electrification programme with rolling stock decisions reflects the fact that many trains on the British railway network are now capable of operating in either electric or diesel mode. That is a consequence of rolling stock purchases over the past 10 years. It enables some more choices to be made about the very expensive infrastructure cost of electrification versus electrification where it makes a real difference in both time and volume of rail traffic, and where trains that will run on electricity—when the electricity is there—will also serve parts of the network where it is not.
Some of the decisions which have been taken in rolling stock will last 35 years, like the rolling stock itself. That is true of the Great Western main line electrification, where those trains happily run on the wires as far as Cardiff and then travel by diesel not only to Swansea but further west to Carmarthen and to the south-west as well. A similar situation is true on the Midland main line, where bi-mode trains will be in operation. There is no point in investing in very expensive infrastructure if we can find another way of creating electrification for the vast majority of the network. The study being done by Network Rail, which will be completed and feed in to the department’s overall review of capital projects, will point out where that valuable public money ought to be best spent.
Lord Moylan (Con)
My Lords, the electrification of the north Wales main line, that the Conservative party committed itself to in its manifesto, was to be funded from the savings made from HS2 and the Minister should not say that it was an unfunded commitment.
Lord Moylan (Con)
There is a report out today from Rail Partners which says that the costs of rail freight have been rising three times faster than the costs of carrying freight by road. Part of this is due to the rising cost of electricity. Has the Minister discussed with his colleagues in other departments the effect on the economic case for electrification of their pursuing policies that are giving us the highest cost and the most expensive electricity in Europe?
Lord Hendy of Richmond Hill (Lab)
I will continue to claim that the Network North plan was unfunded, because it depended on money that had never been properly allocated in the future to HS2 phase 2. When this Government took office, there was no evidence of any financial plans to deliver virtually any part of that agenda. In respect of the cost of electricity, of course, it is dependent on the relative price of electricity compared with other forms of propulsion for rail, but in terms of electrification of the railway and its use for freight, other considerations are far stronger than the cost of electricity and where it is generated. I shall concentrate in answering this Question on the electrification of the railway, because that is the Question that was asked.
Baroness Pidgeon (LD)
My Lords, rail services in the south-west are just not fit for purpose. A report last week recommended battery power for parts of the route on existing trains, recharging at new electric islands, to help transform the Exeter line for both passengers and freight. As the Government are about to take ownership of South Western Railway, will the Minister consider those proposals?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Baroness for her question. The future of the service from Salisbury to Exeter on South Western Railway, which she refers to, is dependent on the fairly imminent life expiry of the existing rolling stock. We will consider, as part of the future of the publicly owned railway, what we do to replace it, bearing in mind that what is now available to replace that rolling stock is far more amenable to discontinuous electrification and battery or other forms of recharging.
Baroness Deech (CB)
My Lords, on the topic of celebration and timescale, does the Minister agree that in Oxford there is no celebration and no timescale? Oxford has been devastated and cut in half. When the Minister comes to Oxford on Friday to see the devastation, why will he not meet the people of Oxford rather than confine his meeting to a few selected, invited people?
Lord Hendy of Richmond Hill (Lab)
The noble Baroness refers to the Botley Road bridge in Oxford, which has taken far longer to replace than it should and is a complex story. I am going to Oxford on Friday. The logistics of meeting people in Oxford are such that it necessarily has to be limited by the time available to do it, but I am very mindful of the case that she has made both this afternoon and earlier about the disruption caused by this bridge, which is partially caused by the development of East West Rail in Oxford. Together with the chief executive of Network Rail, we have some things to say to the population which I hope will be useful for them to hear.
Lord Snape (Lab)
My Lords, does the Minister recollect that more than 40 years ago, Sir Peter Parker, the then chairman of British Rail, recommended a rolling programme of railway electrification on the grounds that it would assist to keep together those responsible for doing the work and, perhaps more importantly, be far cheaper in the long run than the piecemeal approach that we have adopted over the years since? As we have a long-term plan for road building and repairs, why cannot we have the same for the railway?
Lord Hendy of Richmond Hill (Lab)
My noble friend raises a very good point. The intention of both the Secretary of State and me in respect of the review of capital projects in the department is to produce a list of projects which are the best for economic growth, jobs and housing, and then that can go into the Government’s 10-year infrastructure plan. It is important that the supply industry that develops electrification has a strong domestic market, because there is also a strong export market which it can fully serve only if domestic demand is relatively constant.
Airports Slot Allocation (Alleviation of Usage Requirements etc.) Regulations 2025
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Lord Hendy of Richmond Hill
That the Grand Committee do consider the Airports Slot Allocation (Alleviation of Usage Requirements etc.) Regulations 2025.
Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, these draft regulations were laid before Parliament on 4 December 2024 and will be made under powers conferred by the Retained EU Law (Revocation and Reform) Act 2023, also known as the REUL Act. They are an example of the UK making use of the freedom gained from the UK’s departure from the European Union.
This legislation amends Council Regulation (EEC) No 95/93, which sets out the rules for allocation of airport slots. In taking these amendments forward, we are moving ahead before the European Union. Slot allocation rules apply only at what are known as co-ordinated airports, where capacity at the airport is unable to meet demand for slots at those airports. Nine airports are now covered by these rules, including the main London airports of City, Gatwick, Heathrow, Luton and Stansted, as well as Birmingham, Bristol, Manchester and Leeds Bradford.
The regulations will update the definition of a new entrant air carrier—or airline, as most of us would refer to it—for slot allocation purposes. This will allow air carriers with a small presence at a co-ordinated airport the opportunity to benefit from greater priority in the allocation of airport slots from the slot pool, prior to the start of the summer or winter scheduling seasons. This change not only aligns UK regulations with international guidelines but has the potential to provide more choice for consumers in terms of routes, destinations and the carriers they can fly with.
In addition, the regulations will amend assimilated EU law to enable the UK to respond in the event of a pandemic, epidemic or other outbreak of disease, such as was experienced during the Covid-19 pandemic. It will remove the need for emergency legislation to provide alleviation from slot usage rules, as was the case during the Covid-19 pandemic, in order to protect consumers, the environment and the aviation sector.
Noble Lords will be aware that co-ordinated airports are the UK’s busiest airports and that gaining a slot at them can be a challenge. It is not uncommon for air carriers to have to spend several years on the waiting list before being allocated a slot. Added to this, the current new entrant definition restricts new entrant carriers from being able to obtain enough slots for the number of daily rotations necessary to make a route commercially viable. Pursuing the necessary number of slots results in them losing their new entrant status and the benefits that come with it.
This hampers competition, which is why my department wants to update the definition of a new entrant. This seemingly small change is the difference between a new entrant air carrier being able to successfully establish and maintain a service and having to give up after a few years. The revised definition of a new entrant also brings the UK’s legislation in line with the Worldwide Airport Slot Guidelines, which provide the air transport industry worldwide with a single set of standards for the management of airport slots at co-ordinated airports.
Regulation 95/93 sets out that air carriers must operate their airport slots 80% of the time in order to retain the right to those same slots the following year. This is known as the 80:20, or the “use it or lose it”, rule. Under normal circumstances, the 80:20 rule helps encourage the efficient use of airport capacity while allowing air carriers a degree of flexibility in their operations. However, throughout the Covid-19 pandemic, the 80:20 rule was waived to avoid environmentally damaging and financially costly flights with few or no passengers—so-called ghost flights. Using powers afforded to the Government in the Air Traffic Management and Unmanned Aircraft Act 2021—known as the ATMUA Act—a full waiver from the 80:20 rule was initially provided. However, as the industry recovered from the pandemic, usage ratios and other measures set out in that Act were amended, allowing a managed return to business-as-usual operations as demand for aviation recovered.
Due to the unpredictability of the Covid-19 pandemic, the powers granted under the ATMUA Act were necessarily time-limited; they expired in the summer of 2024. However, the experience of Covid-19 has shown that a permanent provision for slot alleviation relating to a pandemic, epidemic or other outbreak of disease is needed. This is to provide a means by which a collapse in aviation demand because of an event of a similar magnitude to Covid-19 can be managed as part of normal operations by the UK’s airport slot co-ordinator. Without this provision, if a health crisis similar to Covid-19 were to occur, the Government would need to bring forward further primary legislation, as was done through the ATMUA Act, in order to enable alleviation from the 80:20 rule.
Turning to the content of the statutory instrument, this draft instrument will amend Regulation 95/93 to change the definition of a new entrant carrier. The purpose of the new entrant rule is to stimulate competition. New entrant carriers are given priority in the allocation of slots, as the regulation requires that 50% of slots shall first be allocated to new entrants unless the requests made by new entrants are less than 50%. Currently, an air carrier is a new entrant if it has fewer than five slots at an airport on a given day. Under this instrument, a new entrant is defined as a carrier that holds fewer than seven slots at an airport. The update to the new entrant rule is designed to enhance the presence of new entrant carriers at slot co-ordinated airports.
As I said, the instrument will also build on previous regulations that provided carriers with slot alleviation during the Covid-19 pandemic by introducing a permanent provision for carriers in order to obtain slot alleviation where there are government-imposed measures relating to a pandemic, epidemic or other outbreak of disease, provided that certain conditions are fulfilled. This will put in place a much simpler process by which an event such as Covid-19 can be managed for slot co-ordination purposes.
In conclusion, in this instrument, the Government have recognised the need to update the definition of a new entrant and to provide additional reasons for allowing alleviation from slot usage rules in order to protect the aviation sector from the potential impact of another pandemic occurring, however remote that possibility might or might not appear. The provisions in the instrument were subject to consultation with the aviation sector in 2023 and received strong support from across industry. The Secondary Legislation Scrutiny Committee flagged these regulations as an instrument of interest but did not make any adverse comments. The Joint Committee on Statutory Instruments did not report this instrument. I hope that noble Lords will join me in supporting these measures. I beg to move.
Lord Kirkhope of Harrogate (Con)
My Lords, I want to make a shortish contribution. First, in general, I welcome these proposals. I declare my interest as a former director of Newcastle Airport, which is of course not on the list of co-ordinated airports because of the lack of congestion—I think that is the term used. I am also a private pilot so I have a particular interest in the way in which this interesting phenomenon of slots has developed over the years.
It seems to me that, in terms of their balance sheets, quite a lot of airlines would not be able to operate unless they had slots as part of the asset base, which isa little unreal and unacceptable. In my opinion, that also puts pressure on obtaining slots out of the pool—or, indeed, in any other way possible. Airport Coordination Limited, which is the organisation that decides on the allocation of slots, therefore has a difficult job, particularly in areas where the return of slots from airlines is quite a difficult situation. Obviously, there are far too few slots relating to all the airports on the list of co-ordinated airports.
Interestingly, although Leeds Bradford Airport is now included as a co-ordinated airport, it certainly does not appear in much of the evidence that I have read in relation to ghost flights, and so on. Will the Minister let me know whether Leeds Bradford Airport has been a late entrant on this list? I would be interested to know.
Lord Hendy of Richmond Hill (Lab)
I thank noble Lords for their consideration of these draft regulations. I will attempt to respond to as many of the specific points raised as I can.
The noble Lord, Lord Kirkhope of Harrogate, asked about Leeds Bradford Airport. It is a late entrant, entered in 2024, and is subject to slot allocations only in the summer months. The noble Lord also asked how the 80:20 rule is administered. The answer is that, if under 80% of flights over the entire season are not used, they are lost. For desperate circumstances other than Covid, the regulations already have some alleviation, but this statutory instrument adds to them in respect of Covid. I will come back to the change from five to seven slots in answering some other points.
The noble Lord made a serious point about consumer interest in consultation. The Competition and Markets Authority was consulted and supported all the changes. The Civil Aviation Authority was also consulted because it has consumer protection obligations; it, too, fully supported this measure.
The noble Lords, Lord Empey and Lord Rogan, mentioned the provision of adequate services to Northern Ireland from Great Britain. From some previous work that I did on the union connectivity review, I know that this is a subject of much concern—and, occasionally, criticism—in Northern Ireland. Recently, I answered a Question in your Lordships’ House about the cancellation of an early flight from Belfast to London; that cancellation seems to have been astonishingly ill advised from the point of view of the airline operator, judging by the number of noble Lords and Members of the other place who were inconvenienced by it. So I understand the noble Lords’ points and the previous proposals for Bills in this direction.
The noble Lord suggested a more fundamental review of slot allocation system; such a wider reform would need primary legislation. The previous Government consulted on this from December 2023 to March 2024, and the current Government are now considering the need for wider slot reform; I am sure that the specific availability of slots from Northern Ireland will be part of that consideration.
I draw to the attention of both noble Lords the fact that, as I noted in the union connectivity review, the Government have a public service obligation and support flights from Derry/Londonderry to London precisely to make sure that there is connectivity from Northern Ireland to London.
The noble Baroness, Lady Pidgeon, made two points about the extent to which the European Union is in advance of or behind these changes. In both cases, we are making these changes in advance of the EU making similar changes in respect of both Covid and the minimum slot allocation. On her point about moving from five to seven slots, that move is certainly helpful to consumers because, as other noble Lords have noted, increasing the number gives an opportunity for new services to support themselves in viability and, therefore, to be more permanent. So the answer to that question is that it will help. On whether the number is the right one, there was certainly consensus that the number should be increased but little consensus about what it should be, so bringing ourselves in line with international legislation seems, frankly, a pretty sensible thing to do.
The noble Earl, Lord Effingham, asked whether new entrants can be protected in some way. Of course, I raised in my original speech that new entrant carriers are given priority in the allocation of slots, as the regulation requires that 50% of the slots shall first be allocated to new entrants unless the requests from them are less than 50%. That seems a sensible provision to allow new entrants a first opportunity here.
Lastly, the noble Earl asked how the Government will ensure that the provisions for severe disruption are used only in exceptional circumstances. In respect of something like a pandemic, it is pretty clear that the provisions have to be drastic. There are other provisions in existing regulations for alleviation, which will continue to apply.
I hope that I have covered all the points made by noble Lords on this proposed statutory instrument. I conclude by saying that it will make two permanent changes to Regulation 95/93, reducing barriers to entry at UK airports and making the slot allocation system more resilient. This instrument is putting the UK on the front foot; as I said, we are now in advance of the European Union on both of this measure’s substantial subject matters. I commend this instrument to the Committee.
Driving Tests: Secondary Market
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Lord Young of Cookham
To ask His Majesty’s Government whether they plan to ban the secondary market in driving tests.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
The Driver and Vehicle Standards Agency has announced measures to review the driving test booking system. It launched a call for evidence on 18 December seeking views on the current rules to book tests. This will lead to consultation on improving processes with potential future legislative changes. On 6 January, the same organisation also introduced tougher terms and conditions for driving instructors booking and managing car driving tests for their pupils.
Lord Young of Cookham (Con)
I am grateful for that Answer, but I think the answer to my Question is no—although it was very skilfully camouflaged. This is a racket. Middlemen are hoovering up slots on the DVSA website and then charging learner drivers a premium to access them. I googled this morning “Book your driving test earlier”. I got eight hits on the first page, with lots of inducements: “You can receive a test a month earlier than you would usually find on the DVSA website” and “Get your driving licence faster with early test bookings”. Another one said, “Book a driving test quicker with our booking system”. Trustpilot reveals that some of those are scams, with people paying £90 and not getting a test. Last month, the previous Secretary of State said:
“we will review and improve the rules around booking tests, including”,
as the Minister has just said,
measures to ban the resale of driving test appointments”.—[Official Report, Commons, 18/12/24; col. 52WS.]
Why do the Government not just get on with it and ban this racket?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his research. He is right that there are some people making money out of this and they should not do it. My Answer was not just no; one of the considerations in working through what needs to be done is that we do not inadvertently make it more difficult for legitimate people looking for tests to book them. Less than one-quarter of total test bookings in September last year had been swapped from one licence to another, which means that swapping affects only a minority of tests.
The real answer is to reduce the length of time it takes to get a test. Currently in England, it is nearly 21 weeks. The Government have a target to reduce that to seven weeks by the end of December this year. For this purpose, we are recruiting 450 extra driving examiners on top of the 1,456 full-time equivalents there already are. That will make a very substantial difference, with the aim of obviating any activity as he describes and getting people tests when they can take them.
Baroness Pidgeon (LD)
My Lords, given the disparities in driving test availability that the Minister has just mentioned, will he consider incentivising local authorities to help address these shortages by supporting additional mobile driving-test centres in areas with high demand or limited access?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Baroness for her question. The issue with the availability of tests is very substantially related to the availability of driving examiners, rather than the locations in which they are conducted. As I said, the additional 33% increase on top of the current number of full-time equivalent driving examiners is the thing that will make a real difference.
Baroness Hayman (CB)
My Lords, the current situation is grossly unsatisfactory for learner drivers. The noble Lord who asked the Question referred to a cost of £99; I have knowledge of someone who paid £400 simply to get a local, quick driving test. Many people are suffering because they need that. Can the Minister tell us, as well as recruitment, what his department is doing to ensure that industrial relations are better between driving examiners and the department, in order to get us back to the situation—which we have never got back to—as it was pre-Covid?
Lord Hendy of Richmond Hill (Lab)
One consideration in improving the relationship between driving examiners and the DVSA is to have enough of them to conduct tests on a basis where people do not feel excluded or significantly delayed. It is not the only action the Government are taking: my honourable friend the Future of Roads Minister made a Statement in the other place on 18 December with a seven-point plan, all of which is designed both to help people get tests when they need them and to reduce the amount of time it takes between applying for a test and actually taking one.
Lord Moylan (Con)
My Lords, I thank my noble friend who, after a lifetime of bicycling, offers greater advocacy for learner drivers than the Government appear interested in doing—possibly he is looking for a driving test himself at this late stage. During the previous Government, in the last 18 months, the DVSA issued 283 warnings and 746 suspensions, and closed 689 alleged businesses all over this scam. None of this enforcement activity has been mentioned by the Minister. Has it been dropped? Has the DVSA gone slack under a Labour Administration, while they are focusing on consultations and reworkings of processes?
Lord Hendy of Richmond Hill (Lab)
As a matter of fact, the statistics I can quote back to him are that 344 warnings and 791 suspensions have been issued, and 811 business accounts have been closed since the new Government took office. I think that comprehensively demonstrates that there has been no such slackening off and that the DVSA is on top of this. The real answer, however, is to reduce the amount of time it takes to get the test in the first place so that people do not feel very early in their learning journey that they have to book a test long in advance of it taking place. The Government’s aim is to get that down to seven weeks by recruiting a large quantity of driving examiners, to whom I previously referred.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, does the Minister recall that there was a civil servant who drove all the way to Barnard Castle to test his eyesight for driving? Can the Minister take time out from his very busy schedule to advise Mr Dominic Cummings that he should stick to driving and improving his driving, rather than trying to undermine the elected Government of this country in association with Elon Musk?
Lord Hendy of Richmond Hill (Lab)
I have no need to do that; my noble friend has just done it for me.
Lord Grayling (Con)
My Lords, the Minister has just said that 25% of tests appear to go through some of these third-party sites. My noble friend has also said that some of these sites are genuine scams. Why is it that any driving test can be booked anywhere except on the official DVSA website? Why can he not just sort that?
Lord Hendy of Richmond Hill (Lab)
One of my colleagues said, sotto voce, “For the same reason that you did not”, which is perhaps not an unreasonable point.
Lord Hendy of Richmond Hill (Lab)
This system has to allow people to book tests at the time that they need them. I did not say that 25% had been through one of these websites; I said that a quarter of total test bookings had been swapped from one licence to another. Of course, the reason why you would go to a driving instructor who has a number of pupils is that a driving instructor can apply for a test for one pupil and then transfer it to another if the second pupil is making faster progress than the first. That is how it should be. The number of people going through these agencies is clearly more than zero and, since it is, we should do something about it. But we have to do that in a way that does not prevent driving instructors from running decent businesses and also allows people to change their bookings when they need to. That is what takes time and care, and that is what the DVSA is working on.
Lord Watts (Lab)
My Lords, would it not be possible just to allow driving instructors to book on behalf of someone else and make it illegal for anyone else to do it?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for his question. Many tests are booked by the applicants themselves, and there cannot be any reason why you could not be able to do that, as a potential holder of a driving licence. Equally, driving instructors have to be able to run a business, and one of the benefits of going to a registered driving instructor is that they have some flexibility in tests for their pupils.
Lord Hannan of Kingsclere (Con)
My Lords, secondary markets almost always develop as a consequence of state failure, and this is no exception. We all know people affected—I have two children who have been. The state failure, and the explosion in these websites, began with lockdown. Is not the ultimate answer to get these and indeed other government employees to come back to the office?
Lord Hendy of Richmond Hill (Lab)
The one thing that driving examiners cannot do is work in an office.
Lord Hendy of Richmond Hill (Lab)
That must be self-evident. The real answer to this whole issue is to reduce the amount of time it takes from an application to the test occurring. If, as we expect, we can reduce that with the recruitment of 450 driving examiners, the first of which are about to start doing driving tests—and if we can reduce it from the current 21 weeks in England to seven weeks by December—we will have obviated the problem.