Bus Services Bill [Lords]

Andrew Jones Excerpts

2nd reading: House of Commons
Wednesday 1st March 2017 Commons Chamber

[Andy Burnham]

It is interesting, is it not? I read the Second Reading debate and that point was put to the then Secretary of State many times, and, Kuala Lumpur notwithstanding, there was no other evidence to support the major changes. I seem to remember that there are plenty of rickshaws in Kuala Lumpur, but I do not know whether he was including that in his argument.

That Secretary of State and his Government inflicted an ideological experiment on the country without evidence to support it. The facts show that it has been an unmitigated disaster for the travelling public. Today, Members on both sides of the House should at least agree to call time on it and give the various parts of the country the powers they need to correct it.

I want to say something about coverage and quality of services. I know, as my hon. Friend the Member for Manchester, Withington (Jeff Smith) said in his excellent speech—I wish I could have been in that café with him while Eric Cantona played chess; it was a great image—that in parts of his constituency, particularly as it goes into the centre of town, buses are nose to tail. Particularly as they get towards Oxford Road in Manchester, people can see that the bus congestion is just ridiculous. I was with the vice-chancellor of Manchester University last week and she told me that the record number of buses that students had counted along Oxford Road was 34 continuously nose to tail. Of course, that has a terrible effect on traffic congestion in the city centre and it simply does not work.

We have saturation on the lucrative routes, as the bus companies see them, but, as we have heard today, they abandon more isolated areas that do not make a profit for them. The Higherfold estate in my constituency, which is in an isolated area, has constantly had problems with services being unilaterally withdrawn. Then there is an attempt to hold the passenger transport authority to account by saying, “Give us a subsidy or there is no service at all.” That leads to large subsidies for the bus companies that operate in such a way.

A year ago, a Mrs Healy wrote to me to say that the withdrawal of the 12 and 15 services from Leigh meant that her son could no longer get to work in Little Hulton and he had lost his job. No notice was given of the withdrawal of that service. This has a real impact on people’s lives and, as my hon. Friend the Member for Wythenshawe and Sale East said, because many people in this Chamber do not use buses they might not understand how detrimental poor bus services can be to some people.

My hon. Friend the Member for Manchester, Withington mentioned the Arrowfield estate. I recently went there to meet the Arrowfield and Hough End residents group, who told me about the withdrawal of the 84 service, which he mentioned and which, I think, served Withington hospital. The group said that that service had been withdrawn without any formal consultation with the community and the new service that was meant to replace it stopped at 5.30 in the evening, meaning that people could not get home from work. It is not acceptable for the public to be treated in this way.

Then, of course, there is the cost. In London between 1995 and 2016, fares rose in real terms by 36%, but in metropolitan areas, particularly Greater Manchester, fares rose by 60%. As we have heard today, the fare for a single journey can often cost more than £3. Because of the free-for-all, because operators are all running different ticketing systems and because of the chaos, we cannot have an integrated Oyster-style system, so, again, the public lose out.

During a consultation with young people in Bury a few months ago, I asked about the issues facing them, and the cost of transport came up again and again. I asked them whether they travelled on buses and whether they could afford it—this goes back to a point made by my hon. Friend the Member for Wythenshawe and Sale East—and the answer was that it was cheaper to get an Uber. If there are four of them, they can get an Uber together and it is cheaper than the bus.

Is it any wonder that the roads of Greater Manchester are becoming more and more congested as every year goes by? As the quality and the coverage of our bus service has gone down and the cost has gone up during the past 30 years, congestion has got worse and worse. That is affecting the air quality in Greater Manchester, and it means that Greater Manchester is in breach of the standards—the legal limits—for nitrogen dioxide. This simply cannot carry on, and I welcome the focus in the Bill on air quality.

I hope that the Government will go further and give Greater Manchester the powers to introduce a clean air zone. I ask the Minister: what reason can there be for the Government to exclude Greater Manchester from the list of places that they have allowed to introduce clean air zones, other than cost? Cost is not a good enough reason. It is not good enough that children are breathing in polluted air on the way to school. We look forward to his and the Government’s help in solving that problem.

If all of this were not bad enough in the experience of the travelling public, we are paying through the nose for it as well. A £100 million subsidy has been given to the bus companies annually, while at the same time they have been paying out large dividends to their shareholders. This system really does not work for the public in any meaningful way. As I say, it is time to call time on what is a failed ideological experiment.

I give credit to Sir Howard Bernstein, who has been mentioned, and Sir Richard Leese and Lord Peter Smith, as well as other leaders of Greater Manchester, who in my view were right to insist that the Bill should be part of the devolution deal that was done with Greater Manchester. I pay tribute to the former Chancellor, the right hon. Member for Tatton (Mr Osborne), for agreeing to that request, and indeed to the current Minister and the Secretary of State for sticking by the deal and making sure that the Bill was put before the House.

However, I want to press the Minister and the Government on a number of concerns. An issue that several colleagues have raised today is the decision to reintroduce the clause that will restrict municipal ownership of bus companies. As my hon. Friend the Member for Nottingham South (Lilian Greenwood) said, why restrict people, because we could at least have that as an option? From my point of view, as someone who might consider using the franchising powers, to have the fall-back option of a publicly owned company being able to come in and provide the service if there were no bidders on the terms sought would provide leverage, would it not? It would do so if they knew they could run a service because they had such an option up their sleeve. I say to the Minister that nobody wants anything to happen to the Bill that might disrupt its passage, but the Government should surely give people such flexibility so that they can make full use of the powers proposed in it.

Another issue I want to mention is the one raised by my hon. Friend the Member for Blackley and Broughton. He talked about the regulations that have been published very recently—within the past couple of days—relating to the Bill. They state that the powers in the Bill can be given to a metropolitan mayoral area only if a “compelling case” is presented—not just a viable case, but a compelling one. In his winding-up speech, the Minister needs to spell out precisely what that means. Is he erecting a high hurdle to prevent metropolitan mayors from using the powers in the Bill?

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

indicated dissent.

[Andy Burnham]

The Minister shakes his head, but I want to see more reassurance than that. If he wants to intervene and say more about it now, he is more than welcome to do so. We cannot have such obstacles placed in our way that may actually limit our ability to use the welcome powers in the Bill.

I see that the right hon. Member for Chipping Barnet (Mrs Villiers) has retaken her seat, and I do not want to finish without making some reference to her speech. Frankly, I did find it quite difficult to listen to at times. She said that it was right for London to have the powers it gained by being exempted from the original deregulation measures because London is so different. I will tell her one way in which London is different: for every £1 in transport investment that we receive in the whole of the north of England, London gets £6. That inequality has existed for many decades. Consequently, people in London have several public transport options. They can use high-quality commuter trains, the tube network, the docklands light railway, regulated buses, and the bike scheme and dedicated cycle lanes. My constituents have no such choice. They are stuck with using the bus if they do not have a car. That is the difference. It is so wrong of the right hon. Lady to say that what is acceptable for her constituents is not right for Opposition Members’ constituents, who are stuck in their cars.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

It is with great pleasure that I close this Second Reading debate. We have had a very good debate about a very good Bill, and it has been fantastic to hear such enthusiasm for buses on both sides of the Chamber. I thank right hon. and hon. Members for their keen participation and engagement. It is clear that we all want buses to thrive because of their impact on our local communities.

As my right hon. Friend the Secretary of State set out, the aim of the Bill is to increase bus passenger numbers and to improve services by creating new options and opportunities. It also delivers on our devolution deals so that local authorities and bus operators can work together on a bus strategy that works locally. That is how local authorities can work to cut congestion, support businesses and improve air quality, and it is how operators can increase their patronage. The Bill will build on good practice to make sure that we have an industry that is open and accessible to all.

Many Members—particularly my hon. Friends the Members for Bolton West (Chris Green) and for Bath (Ben Howlett), and the hon. Member for Kilmarnock and Loudoun (Alan Brown)—welcomed the introduction of a requirement to provide on-board information throughout Great Britain, which will mean that all passengers, particularly disabled passengers, will be able to board a bus with confidence. Many colleagues have said how everybody benefits from that—I completely agree.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

Although, of course, we support this initiative, will the Minister confirm that small rural operators that are struggling to keep costs down and vital lifeline services alive might be exempted from the initial provision of the audio-visual services?

[Andrew Jones]

We will work through the phasing of the introduction of the requirement, but we do not want to hold back from it. There is a slight cost implication for operators, but we think that that will be more than offset by the extra patronage they will secure if people are more able to use the buses. This is a business-generating approach, but we will treat the issues for the smaller operators with great sensitivity. We have taken a very deliberate approach, and I hope that the hon. Gentleman and the hon. Member for Kilmarnock and Loudoun will appreciate that it focuses on the information to be provided, not on any particular technology. We hope to consult on how to take this forward later in the year.

Many colleagues have welcomed the provisions on open data, and the Bill will ensure that passengers know how much their fares will cost and at what time to catch their bus. That important aspect of the Bill will benefit passengers right across England, as my hon. Friend the Member for Cheadle (Mary Robinson) and the hon. Member for Wakefield (Mary Creagh), among others, rightly recognised. Personally, I think that it is one of the most exciting parts of the Bill.

By introducing new advanced ticketing schemes, the Bill ensures that new and existing developments in technology can be accommodated. That will enable multi-operator ticketing schemes to be introduced so that passengers can purchase tickets that will be accepted by different operators across scheme areas, and across different transport modes, such as rail or tram. Many colleagues have highlighted how complex catching buses can be—if multiple tickets need to be bought, for example—and we hope that the ticketing provisions will get rid of that problem.

One of the key proposals in the Bill is the new enhanced partnership. As the hon. Member for Liverpool, Riverside (Mrs Ellman) recognised, some partnerships are already working very effectively right across our country. That is true—we all know that—but more can be done. Providing the opportunity for improved co-operation between local authorities and bus operators will mean a more integrated transport network for urban and rural communities. Passengers, local communities, local businesses and the environment will benefit from improvements in bus services—from improvements in emission standards through to clearer ticketing options—while operators will be left with their commercial freedoms.

There has been a lot of discussion about bus franchising today. It is clear that there is a variety of views in the House, but I think that there is clear agreement that the existing powers under the quality contract scheme have not worked effectively. As my right hon. Friend the Secretary of State set out, our intention is that the Bill will give mayoral combined authorities the automatic choice to use new powers to franchise bus services in their areas. I assure the hon. Members for Liverpool, Riverside, for Blackley and Broughton (Graham Stringer) and for Manchester, Withington (Jeff Smith) that areas with directly elected Mayors can decide for themselves whether to take up the franchising powers in the Bill. There is no need for further reference to the Secretary of State.

[Jonathan Reynolds]

As the Minister acknowledges, there is consensus in the House about making sure, as the Bill proceeds, that the powers are workable and effective. One important point is how pension liabilities will be affected if the franchise changes from one operator to another. Will the Minister, either on Report or in writing to interested Members, provide clarification about that?

[Andrew Jones]

I would be very happy to provide clarification. Throughout the development of the policies, we have been looking to protect workers who transfer in that way. We have put that right at the heart of our discussions in policy development, and I am happy to share that information with the hon. Gentleman and any other interested colleague.

Several hon. Members asked about this, so let me confirm once more that the decision about whether a case to proceed with franchising is compelling is entirely for the Mayor. We should perhaps thank the right hon. Member for Leigh (Andy Burnham) for sharing the news that he is a mayoral candidate—I do not think anybody knew that until today.

Hon. Members have talked about the guidance for consultations. Some guidance for mayoral combined authorities on establishing a case for franchising has been published, but let me be clear that it is still the Mayor who will take the decision. Our guidance merely aims to assist mayoral combined authorities in establishing a well-evidenced case—that is an important point.

Several colleagues asked what such a case might comprise, so let me add a little detail. We have a number of criteria that we would expect authorities that may be able to apply for franchising powers to demonstrate: that the authority has a clear plan to make bus services better for passengers; that the authority covers an area that is sufficiently wide to make franchising work in practice; that the authority has the powers to make franchising a success, which might mean control over parking or planning policy; that the authority has sufficiently strong governance arrangements in place; and that the authority has the resources and funding to deliver franchising successfully. Those are some of the criteria we will consider when looking, case by case, at which authorities will be able to apply for and secure franchising.

[Mrs Ellman]

Will the hon. Gentleman confirm that Ministers will look on such applications in a positive light, rather than looking at the case made with a view to rejecting it?

[Andrew Jones]

I can confirm that. Our approach will be one of glass half full rather than glass half empty. We are not trying to get in the way of authorities or others that wish to improve their bus services. The whole point of the Bill is to provide a suite of enabling powers so that authorities can do what is right for their area to put more passengers on buses and provide better networks. We will certainly view all conversations positively.

As my right hon. Friend the Secretary of State made clear, benefits for passengers will need to be at the heart of any authority’s application for franchising powers. Governance, geography and evidence will be critical if authorities are to apply successfully for franchising status. I do not agree with colleagues, including the hon. Members for Middlesbrough (Andy McDonald) and for Nottingham South (Lilian Greenwood), who believe that bus franchising powers should be available to all authorities throughout England automatically.

My right hon. Friend the Member for Chipping Barnet (Mrs Villiers) recognised the very real risks to investment by bus operators that will be created if franchising powers are made automatically available to all local authorities, and the chilling effect that that might have on operators and bus manufacturers such as Wrightbus. I am aware of the quality of that business’s products. My right hon. Friend made her point clearly, drawing on her experience. I agree with the concerns highlighted, which is one reason why we will seek to reverse the changes made in the other place.

I assure my right hon. Friend the Member for Chipping Barnet that, as my hon. Friend the Member for Bolton West recognised, the Bill requires franchising authorities to consider how, in conducting their procurement process for franchising contracts, they will facilitate the involvement of small and medium-sized operators. We—and, I hope, every directly elected Mayor—want to ensure that such operators thrive if franchising is implemented. We have made that clear in the Bill.

I have been interested to hear the range of views about municipal bus companies. I agree with the hon. Member for Nottingham South and others who highlighted that those that have survived deliver great services to their passengers. I believe that there are seven municipal bus companies in England, and I saw one for myself yesterday on a visit to Reading. However, on the whole, private sector bus operators have delivered our local bus services for the past 30 years. We want to ensure that we strike the right balance, with commercial operators continuing to innovate and deliver good services for passengers.

The Bill provides local authorities with substantially more opportunities to influence the provision of local bus services in their area, whether through partnerships or franchising, and we are therefore still of the view that commissioning and the provision of services should be kept separate.

Many colleagues asked about rural services. Through franchising and partnership, the Bill will work for every area of the country—urban and rural. I assure my hon. Friend the Member for North Warwickshire (Craig Tracey), who is a great champion of rural bus services, that the Bill’s partnership powers allow local authorities to work with operators to improve the co-ordination of services, for example to link bus and rail services more closely. A good example of that is under way in Cornwall, which is already working in partnership with operators to ensure that rural areas have bus links to key shopping or employment centres at the right times of day. That is a positive development, which already uses the powers in the Bill. The local operator has invested in its fleet and increased its profitability and patronage in the area.

Several authorities are also planning bus services alongside community transport services and other types of transport, such as home-to-school or patient transport, so that rural connectivity is maximised. That is the sort of innovation that we need across the country and that we are encouraging through our Total Transport pilot scheme, to which the hon. Member for Nottingham South referred. The Government are a strong supporter of community transport.

My hon. Friend the Member for Somerton and Frome (David Warburton) was right to highlight clause 19. When routes are withdrawn, such as the 116 that my hon. Friend the Member for North Warwickshire mentioned, we want local authorities to have the information they need to decide whether and how to provide replacement services. That is exactly what clause 19 aims to achieve.

I do not agree with the hon. Member for Liverpool, Riverside that bus routes should be designated as assets of community value. As the Government explained in our response to the Select Committee report, that would force operators to continue to operate a service for six months, potentially at huge cost, which could act as a disincentive for operators improving or maintaining services, especially in rural areas.

I should like to challenge the myth, which has been perpetrated in the debate by some colleagues, that bus services were flourishing before deregulation in the 1980s and that the decrease in bus passengers started at deregulation. I have gone back and looked at the data. In the 30 years between 1955 and 1985—30 years prior to deregulation—the number of passenger journeys on local bus services in Great Britain fell on average by 2% a year. Since deregulation, the fall has gradually reduced, at an average of just 0.2% a year. The number of passenger journeys fell from 15.5 billion in 1955 to 5.5 billion in 1985. One thing has been clear in the debate: all hon. Members want that trend reversed and for passenger numbers to increase.

Many colleagues mentioned buses and air quality. I have absolutely no doubt that buses can be a critical ingredient to improving an area’s air quality. As parts of a partnership or franchising area, authorities will be able to specify the emission standards of vehicles. In fact, the Government introduced amendments in the other place to make that clearer. We have supported and will continue to support bus companies with grants to encourage the take-up of low-emission vehicles. Low- emission buses are critical to putting in place good integrated transport systems with low emissions.

The hon. Member for Liverpool, Riverside mentioned the Traffic Management Act 2004. I agree that congestion is a problem that has an adverse impact on local bus services. However, the Government and I remain to be convinced about the case for giving all authorities the powers to install a raft of new cameras on yellow box junctions or elsewhere. In the past few days, I received a letter from a councillor who said that doing that would be a great idea because it would help with council revenue collection, which was exactly what we did not want to hear.

My hon. Friend the Member for Bath asked about tourist buses. As far as I am aware, any arrangements that are already in place can continue unchanged, but I will check that and write to him to confirm it.

We have covered many issues, but I am sure that my speech from the Dispatch Box and hon. Members’ comments have touched on only some of the issues that we will cover in Committee, which I look forward to. The Bill enables improvements where they are needed. It has also been clear from the speeches made by colleagues on both sides of the House that they have been thinking about how the new powers in the Bill will be used to improve services in their areas, which is great and exactly what we want.

The bus industry has made huge strides in making the experience of bus travel more attractive. Many buses have free wi-fi, as well as CCTV and USB charging points. The vast majority of buses are now accessible.

Last year, more than 4.65 billion bus passenger journeys were taken in this country, which was three times as many journeys as on the entire rail network. Buses are as relevant now as they have ever been. I see them playing a very important part in all our transport futures. All good public transport systems will have buses at their heart. There is no shortage of energy, effort and investment in the sector to support a growing bus industry. The purpose of the Bill is to continue that great work to the benefit of bus passengers, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

BUS SERVICES BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Bus Services Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 21 March 2017.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Andrew Griffiths.)

Question agreed to.

BUS SERVICES BILL [LORDS] (MONEY)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Bus Services Bill [Lords], it is expedient to authorise:

(1) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided; and

(2) the payment of sums into the Consolidated Fund.—(Andrew Griffiths.)

Question agreed to.

Business of the House (7 March)

Ordered,

That, at the sitting on Tuesday 7 March, the following shall apply to proceedings on the motion in the name of the Prime Minister relating to the Chair of the UK Statistics Authority and on the motion in the name of Mr David Lidington relating to Standing Orders (Public Business)—

(1) proceedings on each motion may be entered upon at any hour and may continue, though opposed, for one hour;

(2) the Speaker shall put the Questions necessary to dispose of each motion not later than one hour after the commencement of proceedings on that motion;

(3) such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; and

(4) Standing Order No. 41A (Deferred divisions) shall not apply.—(Michael Ellis.)

Use of Welsh Language in Parliamentary Proceedings

Resolved,

That this House—

(1) notes the Fourth Report of the Procedure Committee, HC 816, on Use of the Welsh language in the Welsh Grand Committee at Westminster, which builds on more than twenty years of use of the Welsh language in parliamentary proceedings in Wales and at Westminster;

(2) resolves that:—

(a) whilst English is and should remain the language of this House, the use of Welsh be permitted in parliamentary proceedings of Select Committees and of the Welsh Grand Committee held in Wales and at Westminster;

(b) reasonable notice, as determined by the Chair of the relevant committee, shall be given in advance of any proposed use of the Welsh language so as to allow the necessary arrangements to be made;

(c) the Chair shall have power to insist that points of order are made in English; and

(d) the Official Report shall record contributions made in the Welsh language together with their English translation; and

(3) accordingly rescinds the Resolution of 5 June 1996 (Language of Parliamentary Proceedings).—(Michael Ellis.)

Bus Services Bill [ Lords ] (First sitting)

Andrew Jones Excerpts

Committee Debate: 1st sitting : House of Commons
Tuesday 14th March 2017 Public Bill Committees

[The Chair]

Copies of written evidence that the Committee receives will now be made available in the Committee Room. We will now start the detailed, line-by-line consideration of the Bill. I will allow hon. Members to take off their jackets during the sitting if they wish. I again remind Members to ensure that mobile phones are switched off or to silent.

The selection list for today’s sitting is available in the Committee Room. It shows how selected amendments have been grouped together for debate. Those that have been grouped together are generally on the same or a similar issue. A Member who has put their name to the leading amendment—the first named amendment in a group—is called first. Any other Member is then free to catch my eye and indicate that they wish to speak on all or any one of the amendments within that group. A Member may, if they wish, speak more than once in a single debate on a group. I will work on the assumption that the Minister wishes the Committee to reach a decision on all the Government’s proposed amendments.

Please note that decisions on amendments take place not in the order in which they are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping list, but decisions are taken when we come to the clause that the amendment affects. I hope that explanation is helpful to Members. I will use my discretion as we go through proceedings, as will the other co-Chair, to decide whether to allow a separate stand part debate on individual clauses and schedules following debates on relevant amendments.

Clause 1

Advanced quality partnership schemes

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

I beg to move amendment 1, in clause 1, page 2, line 43, leave out from beginning to end of line 4 on page 3.

This amendment removes an order-making power under which the Secretary of State may confer on a local transport authority with an advanced quality partnership scheme power to enforce traffic offences.

The amendment removes the Secretary of State’s ability to confer the functions to enforce traffic offences on authorities that make advanced quality partnership schemes. English local authorities outside London that can enforce parking violations already have powers to enforce bus lane contraventions, including moving traffic violations in bus lanes. The measure that was made in the other place would broaden those powers beyond the scope of bus lanes and allow the enforcement of other moving traffic offences such as contraventions in yellow box junctions. There are already provisions in part 6 of the Traffic Management Act 2004 to permit the enforcement of other moving traffic violations.

The Government have not yet made a decision on whether to provide these powers to authorities, but we continue to discuss the issue with the Local Government Association and other organisations; I have met the LGA to discuss this issue on two occasions. A key concern remains that if the powers are granted, they could be misused to generate revenue for local authorities—indeed, I had a letter from a councillor only a few days ago suggesting that it would be a highly desirable thing to do from a revenue-raising perspective—but their primary purpose is traffic management, and that kind of attitude reinforces the Government’s concerns.

I recognise that congestion can have a major impact on local bus services, but authorities can take action to address it through new infrastructure measures and technological solutions, for example by enforcing moving traffic offences in bus lanes, as I mentioned earlier. Given the existing powers available to local authorities and the existence of part 6 of the Traffic Management Act, I hope that hon. Friends and colleagues on the Committee will agree that the additional legislation, particularly where it relates to only one type of partnership, is unlikely to achieve better outcomes.

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Nuttall. I am sure that the discussions we will have in Committee over the next six sittings will be civil and cordial, as they were on Second Reading. Indeed, the Opposition would be delighted to save everyone a lot of time and agree to the Bill as it now stands, because we believe that it was much improved in the other place—but we appreciate that the Government have other plans. At the outset, may I put on the record that for many years I have been a member of the trade union Unite? As it represents many members in the bus industry, I have regular conversations with it.

Government amendment 1 on moving traffic offences may be a curious place to commence our discussions, but it highlights the fact that, welcome though many of the Bill’s measures are, they are only a part of what is needed to achieve what we all want to see: a much more comprehensive and thriving bus sector. Although many more public transport journeys are made by bus than by any other form of public transport, sadly the number of journeys and, in many cases, their speed is declining. The industry tells us that part of the problem is traffic congestion, which is why enforcement of moving traffic offences matters, as the Minister indicated.

When I went to meet my local bus company soon after being elected, to continue the long period of constructive dialogue that local bus manager Andy Campbell of Stagecoach and I have had over many years, he was absolutely clear that one of the biggest problems facing buses in Cambridge was the snarl-ups at a major junction where the yellow box had been removed after a major reconfiguration. However, what is the point of a yellow box if everyone knows that there is no sanction for transgressing it? That point struck me last Friday as I did exactly that at another junction in the city, just as everyone else does. The measure introduced in the other place would give local councils the powers to do what the police no longer have the resources to do. That is not their fault, but a direct consequence of Government cuts—cuts add to congestion, and they add to delays on the buses.

This destructive Government amendment removes an order-making power under which the Secretary of State may confer on a local transport authority with an advanced quality partnership scheme the power to enforce traffic offences. Part 6 of the Traffic Management Act 2004 gave the Government the power to make regulations and publish guidance relating to the civil enforcement of road traffic contraventions, such as the regulations we have been talking about for parking and moving traffic offences. As I have outlined, we believe that it is important that all councils should have enforcement powers to deal with moving traffic matters such as banned turns and yellow box junctions, to help improve the reliability and punctuality of buses, which would in turn increase bus patronage, which is something we are all trying to achieve.

It is disheartening to see the Government refusing to enact the power. According to Department for Transport figures, road traffic levels and congestion are projected to increase by 55% and 86% by 2040. The powers could help local authorities with advanced quality partnership schemes to reduce congestion, improve punctuality and increase bus ridership, so why not do it? We know that the Government do not really trust councils and run scared of press columnists who whip up scare stories. In the meantime, every driver stuck by a gridlocked crossing, and every bus passenger stuck because their bus cannot move, is the loser. I exhort the Minister to be brave and make yellow boxes work. If that is good enough for London and Cardiff, why not for Cambridge and Yorkshire?

--- Later in debate ---

[Huw Merriman (Bexhill and Battle) (Con)]

I accept your invitation on that basis, Mr Nuttall. It would be incredibly remiss of me not to make at least a brief contribution, as I see a fellow member of the Transport Committee, the hon. Member for Blackley and Broughton, looking at me and no doubt remembering some of the things I said on this point in that Committee.

I live in a constituency where we do not even have civil parking enforcement. The hon. Member for Cambridge is correct that at the moment the police do not have the resources to deal with traffic offences. In my constituency they have even given up on dealing with people who park in a bay for two hours. As a result, many parts of the constituency are chock-a-block and no one is taking responsibility.

I am greatly concerned about the fact that there is no direction from above, conferring powers but also making sure that powers are used. I do not want to vote against the Government but I would ask the Minister to consider how they can ensure that councils take responsibility for powers that they can utilise, and how to improve council enforcement with respect to traffic movement.

The Transport Committee is currently undertaking an inquiry on urban congestion, and it is clear to us that difficult decisions must be taken. I would like local authorities to be granted more powers, and I would like us to ensure that they take them rather than arguing with the police about who does nothing.

[Andrew Jones]

My hon. Friend makes an interesting point. I think that councils, rather than arguing with the police about who does nothing, have significant powers, and we should encourage them to take action. I hope that we can move to much greater civil enforcement, and to people leading their councils with a view to shaping their local areas and making them better environments, in all respects, including traffic management. As for whether the Government trust councils—a point raised by the hon. Member for Cambridge—the Bill is an enabling one that gives councils powers. Clearly his underlying point is not correct.

The Government are unconvinced that, without further controls, the proposals would be anything other than the potential for revenue-raising by councils, rather than traffic management. That view is reinforced when I receive letters such as one that I had stating, “This is an opportunity for us to get some cash in.” However, I am not against the principle and will continue to talk with the Local Government Association. I discussed it only last Thursday with the LGA—Councillor Martin Tett, the leader of Buckinghamshire County Council, is leading on it—so there are live conversations.

I am happy to give the Committee my commitment that we shall continue with those discussions, but I want to make sure that we see the issue from the point of view of traffic management. If the LGA will do further work on that we can continue to talk. I do not think that the Bill is the right place to tackle moving traffic offences.

[Graham Stringer (Blackley and Broughton) (Lab)]

I understand what the Minister is saying, but the provision is not about enabling councils to carry out a function; it is about restricting current and future ministerial teams. Why does he want to restrict the powers of his Government and following Governments, if they think fit, to confer that power on local authorities?

[Andrew Jones]

I am happy to consider the commencement of these powers, but we have to go through a number of safeguards yet. I do not think that we are in a position to go any further. I am quite happy to keep this dialogue going, but the case has not been made in a way that has convinced me or other departmental colleagues. Indeed, I think that there are reservations across the House more broadly.

This is not about restricting powers; it is about granting powers to councils to enforce moving traffic offences. I know that they want them. These powers have been on the statute book for 13 years and not commenced. Our predecessors probably had some of the same reservations that I have had. I do not think that we can go any further than my commitment to keep talking and not to be against this in principle.

[Lilian Greenwood (Nottingham South) (Lab)]

I am sure that the Minister is aware of the report by Professor David Begg for Greener Journeys about the impact of congestion on bus passengers and the fact that bus journeys have been reducing by 10% each year. If that trend continues, will he look again at traffic management? Clearly, congestion hits buses harder than it hits other vehicles. If bus speeds are reducing, that can hit bus patronage. This goes against the very ethos of his Bill, which is to increase bus patronage and encourage the use of the bus as a means of transport.

[Andrew Jones]

The hon. Lady is absolutely right. The heart of the Bill is more powers to get more passengers on to buses. That is what the Bill is for. I am certainly aware of the report by Professor Begg; I have read it and discussed it with him. Indeed, we have spoken at a couple of conferences together and discussed the matter. I have no doubt that congestion is a factor. At the same time, the Government are taking significant action to tackle it. Only last Friday morning we announced a further £110 million of schemes to tackle congestion and particular pinch points on the strategic road network.

We are aware of the impact on congestion and are taking action. I am aware of the concerns in the industry. I support, for example, the introduction of bus priority measures, where it is appropriate and when councils, as local highway authorities, take these actions. That still does not mean that we are in the right place to take this issue forward today.

Amendment 1 agreed to.

[Andrew Jones]

I beg to move amendment 2, in clause 1, page 4, leave out lines 37 to 42.

This amendment removes a requirement that, under an advanced quality partnership scheme, new buses providing local services must meet eligibility requirements contained in the “Low Emission Bus Scheme” (a programme of grants to support the use of low and ultra-low emission vehicles), where the vehicle comes into service after 1 April 2019.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 6 and 11.

--- Later in debate ---

[Andrew Jones]

The amendments would remove the requirement that from 1 April 2019 all new buses used to deliver services as part of a partnership or franchising scheme in England must be low-emission vehicles. As a result of changes made in the other place, the Bill currently requires such vehicles to meet the eligibility requirements contained in the low emission bus scheme.

I support the spirit behind the changes made in the other place. We all want to see greater use of low-emission buses. Last July, we published details of the local authorities and operators that will be sharing the £30 million budget under the low emission bus scheme. That builds on budgets that have come from previous Governments in support of cleaner vehicles. In the autumn statement, my right hon. Friend the Chancellor of the Exchequer announced that a further £100 million will be made available over the next few years to help to spread the use of such buses.

The drafting of the Bill as it stands, however, is not the way to go about encouraging greater use of these very impressive vehicles. The requirement would tie the hands of authorities looking to implement franchising, advanced quality partnerships or enhanced partnerships. It would require them to specify standards for newer vehicles that are higher than in other parts of the country. It is a bit of a centralist approach, which goes against the principle of the Bill, and it would certainly result in additional costs, which could make the difference between whether schemes are viable or not. The likely consequence is that many local transport authorities would simply not pursue such schemes at all, which would lead to lower levels of bus use and potentially worse environmental outcomes than would have been achieved without the provisions. Even where schemes are set up, the provision could be circumvented for several years if authorities simply do not introduce any new buses at all, which would be a perverse consequence and the opposite of what it seeks to achieve.

--- Later in debate ---

[Daniel Zeichner]

I hear what the Minister says, and of course there is always a debate to be had about how to drive up standards, but the evidence is clear that unless such mechanisms are used, it does not happen. It is disappointing that the Government intend to remove the provisions in the Bill that would ensure that schemes require that new vehicles delivering local services meet the specifications of the low emission bus scheme as set out by the Office for Low Emission Vehicles.

However, we are a little cheered by the fact that the Government amended the Bill to specify that the standards of service that may be specified in a scheme include requirements about emissions or types of fuel or power. Our amendment says that schemes must ensure new vehicles party to the scheme meet the low-emission specifications, but the Government’s amendment says only that standards of service may include requirements about emissions, and does not set out what they may be.

The draft guidance is not much better. It says that the Department

“would encourage authorities to think about how they can use the tools in the Bill...to help improve the emission standards of the vehicles used and therefore local air quality”,

but adds

“it is important to remember however that these tools are designed to help authorities...not dictate standards.”

While that may be a very cosy way of arranging things, it does not do what is necessary to drive up standards.

We all know how pressing the air quality issues in this country are and how frequently the Government have been losing in the courts. We think this is a straightforward opportunity to take robust action, but sadly the Government’s response is to think about it. We need more robust action to make the buses in our country greener and cleaner.

[Andrew Jones]

To say that the Government are just thinking about it does not capture the spirit of what I said earlier about our low emission bus scheme and the further funding that was allocated in the autumn statement. I agree that air quality is a significant and pressing issue, and I have no doubt that progress with buses is at the heart of improving the air quality in our towns and cities. However, the Bill is explicit that emissions standards can be specified in partnership schemes or included in local service contracts, in the context of franchising. Emissions standards can be included in schemes, thus giving local authorities the flexibility to determine an approach that is right for their area.

I am not quite as doomy and gloomy as the hon. Gentleman on this issue. From my discussions with bus operators, I see a recognition that new low-emission vehicles present a fantastic opportunity. They are moving their fleets in that direction and we are supporting them in that work. In my constituency, the Harrogate Bus Company will move to an electric fleet for much of its service. It will be a leader for low-emission buses across the country and I have supported it in its enthusiasm.

That also has good public recognition but that does not mean we should dictate cost, which could have a perverse effect rather than the positive motive behind the amendment. That is the reason the Government have tabled it.

Amendment 2 agreed to.

[Andrew Jones]

I beg to move amendment 3, in clause 1, page 6, leave out line 1.

This amendment and amendment 4 remove a requirement to consult representatives of employees of affected bus operators about a proposed advanced quality partnership scheme. The representatives must be representatives of a trade union recognised by bus operators or, if there are no such representatives, appointed or elected representatives of the employees.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 4, 8 and 9.

Amendment 22, in clause 4, page 18, line 16, leave out “advanced quality partnership scheme” and insert “franchising scheme.”

This amendment would amend a provision in the franchising scheme section that refers to advanced quality partnership schemes.

Amendment 27, in clause 9, page 44, line 33, at end insert—

“(i) appropriate representatives of any affected employees”

This amendment would make appropriate representatives of any affected employees statutory consultees when a local authority is consulting on a proposed enhanced partnership.

Amendment 28, in clause 9, page 44, line 33, at end insert—

‘(6A) In subsection (6) (i) “appropriate representatives of any affected employees” means—

(a) representatives of a recognised trade union, if an independent trade union is recognised by existing operators in the area of the proposed franchising scheme; or

(b) in any other case, employee representatives appointed or elected by the affected employees who have authority from those employees to receive information and be consulted on their behalf.”

This amendment specifies what is meant by the term “appropriate representatives of any affected employees” in Amendment 27.

[Andrew Jones]

A number of amendments have been tabled by the Government, the hon. Members for Cambridge, for Nottingham South and for Scunthorpe that relate to the consultation of employee representatives in relation to proposed partnership and franchising schemes.

Government amendments 3, 4, 8 and 9 would remove the requirement for authorities to consult representatives of employees about proposed advanced quality partnership and franchising schemes.

The Government introduced amendments in the other place to require authorities to consult employee representatives about proposed franchising schemes, as it is those schemes that are likely to impact on staff. The Bill, therefore, already places a requirement on authorities to consult employee representatives in the appropriate circumstances, which ensures that any trade unions that represent employees will be consulted on franchising proposals.

The further amendments that were made in the other place in relation to consultation of employee representatives and trade unions on proposed franchising schemes therefore partly replicate Government amendments. Government amendments 8 and 9 would simply remove that duplication. In the light of that duplication, I hope the hon. Member for Cambridge will feel able to withdraw amendment 22, which would amend further that duplicated text.

I completely understand the need for employee representatives to be consulted on proposed franchising schemes because these proposals could have a direct impact on bus industry employees in an area. It is, therefore, completely correct that they are consulted and that employee representatives can be involved in that process. However, I do not consider it necessary to consult employee representatives when establishing an advanced quality partnership or an enhanced quality partnership, as amendments 27 and 28, tabled by the hon. Members for Cambridge, for Nottingham South and for Scunthorpe, would require.

In most cases, a partnership is likely to lead to changes such as multi-operated ticketing schemes. Only in a very individual, particular set of circumstances will an enhanced partnership lead to changes for employees that could be similar to those arising from franchising.

Government amendments 3 and 4 would remove the amendments made in the other place. I hope on the basis of my explanation, and the Government’s clear intention to support employee representatives speaking up on behalf of employees in an area where there will be changes, that the hon. Gentleman feels able to withdraw his amendments.

[Daniel Zeichner]

We were rather hoping that the Government would be minded to retain the parts in the Bill on employee consultation. It is disappointing that they feel the need to remove recognised representatives of affected employees from the list of statutory consultees when authorities are making advanced quality partnership and franchising schemes.

It seems a touch petty and perhaps an ideological dig at trade unions. I cannot imagine where in the Department that might have come from but I know the Minister is better than that, so I hope he might think again.

I do not understand why the Government think that local authorities should not hear from trade unions or other employee representatives when they are consulting on schemes that could have a profound impact on the local bus workforce. One thing that strikes me about the whole discussion about partnerships, which we all support, is how few people are actually aware of them in any area. Not many of my local councillors are aware of them. We have to dig deep to find that these wonderful partnerships already in place, so here is an opportunity to involve more people and to spread the word. The expertise of those frontline staff in providing the services is unique. I generally find that if I want to know what is going on, I talk to the people delivering the service on the ground. They often have a rather different take on what is happening, so if people want to know what is happening, go and talk to the drivers. Their expertise and their local knowledge is not, it seems, to be taken into account.

We are disappointed at the Government’s removal of what seemed to us to be harmless and sensible provisions. When this was discussed in the other place, the Minister, Lord Ahmad, said:

“I agree that it is important that employee groups are consulted appropriately on proposals to improve local bus services. I agree particularly that significant changes to local bus services could well impact local bus industry employees, so it is only fair that they are given the opportunity for input in such circumstances.”

He also said:

“I agree that employee groups and others affected by the proposals should always be consulted formally on franchising schemes”.—[Official Report, House of Lords, 29 June 2016; Vol. 773, c. 1651.]

I appreciate we are extending this to the other forms of partnership, but the principle seems fairly clear.

Amendments 22, 27 and 28 are partly related to drafting issues. We think that amendment 22 corrects a minor technical error in the Bill and clears up what we think must have been a typo, because clauses 4 to 6 relate to franchising schemes but clause 4 refers to “advance quality partnership schemes”. Amendments 27 and 28 would, in our view, simply tidy it up the Bill and bring clauses 9 to 15 on enhanced partnerships in line with those on advanced quality partnerships and franchising. My amendment inserts into the section on enhanced partnership plans and schemes a requirement that a local authority or authorities must consult appropriate representatives of any affected employees.

--- Later in debate ---

[Graham Stringer]

It is a pleasure to serve under your chairmanship for the first time, Mr Nuttall. I rise not to make a long speech, but to save you from telling me that an intervention on the Minister is too long—I suspect that such an intervention would be. I want to use these amendments to ask him on what principle he has decided what should be done at the centre—what should be the Secretary of State’s or Government’s decision—and what should be devolved.

We are on our third set of amendments. The Minister has argued that the Opposition amendments are otiose and too prescriptive and, in effect, that things would be better left to normal procedures. He said that traffic management would be better dealt with by current policies and that bus emissions schemes would be better left to local schemes. A number of amendments have been tabled—some by him—that take powers away from local authorities and give them to the centre, but he has also argued that some things should be left to local authorities.

This is a good Bill, which I want to support, even if the Government remove some improvements that have been inserted by the other place, as I am sure that they will. It will still remain a good Bill that I wish to support, but will the Minister explain what principles he is using to decide what should remain within his ambit and what should be devolved? At the moment, what has been devolved down and what has been left at the centre is very confusing, if not to say arbitrary.

[Andrew Jones]

There are a few questions to deal with. Let me start with the underlying principles. I agree that devolution has not been tidy over the past few years, but it has generally progressed from the ground up. I am a great supporter of devolution; we should trust people to make local decisions wherever possible. The hon. Member for Blackley and Broughton suggested that the principle was a little arbitrary, but actually, it comes down to whether there is governance and some kind of control. If we can ensure that we have governance and control, I am happy to see devolution progress. A further point could be accountability, which we might come on to during our debate on franchising.

I am all in favour of consultation with employee representatives when there are material changes to people’s working conditions. A franchising scheme would mean that, which is why we put employee representatives in that proposed new section in the Bill. That is unlikely to be the case for the simple, more structured partnership arrangements, which are about local authorities and bus companies coming together to agree and put forward a set of consumer offers.

[Lilian Greenwood]

I wonder whether the distinction that the Minister is making is right. Employee representatives clearly have a role and need to be consulted on issues that affect the terms and conditions of their members, but does he not accept the point made by my hon. Friend the Member for Cambridge? The people who deliver those services—the frontline workers in the bus industry—have valuable expertise, so there is value in consulting them and seeking their view on operational aspects and not just the bits that might affect their employee terms and conditions. Does he not accept that there is value in gaining their expertise as part of the process?

[Andrew Jones]

Yes, I do accept that. I worked in business for 25 years before coming to Parliament. If changes are going to be made or if a company seeks to improve, the best thing to do is to talk to people and take them with you. I fully recognise that; doing so is good practice.

I would expect any authority developing partnership schemes to talk very widely. The whole point of partnership schemes is to get people to come together to decide on a set of customer benefits and deliver those benefits to put more people on buses. The authority will be free to consult as widely as it wishes—that is fine, I am all for it doing that—but in areas where terms and conditions change, we need to go further and make it mandatory. That is the difference between us on the Bill; it is not a big difference.

Is consultation a good thing? Of course it is. Are employee representatives at the heart of that? Of course they are, but where terms and conditions are changing, we need to make it mandatory.

Question put, That the amendment be made.

--- Later in debate ---

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Jones]

One of the most interesting parts of the Bill is the proposal to see greater powers in the world of partnerships between the bus companies and local authorities. Clause 1 introduces new advanced quality partnerships, which build on the existing quality partnership schemes that were first introduced in the Transport Act 2000. Under the existing schemes, a local transport authority has to invest in bus-related infrastructure. That might be priority lanes, new bus stops or a bus station. Local bus operators that choose to use those facilities improve the quality of their services in return, so there is an offer from both the operators and the local authority. Indeed, operators that do not participate cannot use the facilities provided by the authority.

Advanced quality partnership schemes have a broader scope. In addition to, or instead of, the provision of facilities, an advanced quality partnership scheme can include measures taken by a local authority that will help buses. It might use other areas within its powers as an authority, such as traffic management policies or parking policy. The new advanced quality partnership schemes can therefore include a wider range of requirements that operators must meet, including in relation to the marketing of services and tickets, the provision of information to passengers, and even smartcard requirements.

An advanced quality partnership scheme may be made only by an LTA or LTAs working together in England. The existing quality partnership scheme provisions will continue to apply in Wales, as will such schemes made by an English authority in conjunction with a Welsh authority where we are dealing with cross-border services.

This is an interesting addition to the range of powers available on a local basis. There is strong support of partnership arrangements in the bus sector. Indeed, I have travelled around our country a lot over the past couple of years looking at different bus arrangements, and good partnership working has been at the heart of progress. We have seen that right across the country. Clause 1 is a welcome addition.

[Daniel Zeichner]

There is much to agree on here. We understand the case that a bus service cannot be run without infrastructure around it and the co-operation of the local authority, so we strongly welcome the extra flexibility that the advanced partnerships will bring.

However, I return to a point I made earlier about the lack of understanding in the wider world about what is going on with these schemes. I was slightly troubled by the response to my questions to the Department about analysis of the success of existing partnerships across the country. There seems to be a certain vagueness about that, which may reflect the fact that the Department has many other things to work on. I appreciate that, but as we move on to create extra types of partnership scheme, it is useful to know what has and has not worked around the country before. I encourage the Department to do a little more research on that, as we process these schemes.

There is a question over who exactly will be come forward to use these advanced quality partnerships and the enhanced partnerships that we will come to later in the Bill. I divert back to the moving traffic issue. The hon. Member for Bexhill and Battle probably created the soundbite of the day when he referred to the many years spent talking about doing nothing. There is a further danger. It is clear to me that very few people in the wider world understand what the Government are trying to achieve here.

This is a worthy intention, and we support the Government’s proposals on advanced quality partnerships. We are disappointed that they have not felt able to maintain the amendments made in the other place, but we appreciate that that is their role in life, and we strongly support advanced quality partnerships.

--- Later in debate ---

[Andrew Jones]

I have just a couple of comments. I agree that right across the country we are seeing good partnership working. I have seen it with my own eyes, and I also look at sales data that comes into the Department. The idea that the Department is ignorant of such matters is not entirely fair. I agree that knowledge of these things might be limited locally. I have no means of quantifying that, but I suspect that there could be some truth in it. The point remains that where there is good partnership working, we see more passengers on buses. I am not too worried about whether people know about the formal structures behind the scenes. I want to see the outcome of that planning and preparation, which is a stronger bus market that is growing in an area.

Question put and agreed to.

Clause 1, as amended, accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Schedule 1

Further amendments: advanced quality partnership schemes

Question proposed, That the schedule be the First schedule to the Bill.

[Andrew Jones]

The schedule contains only consequential amendments to the Transport Act 1985 and the Transport Act 2000 that are necessary for the effective implementation of the advanced quality partnership scheme provisions. They are technical amendments that will ultimately ensure that, once the advanced quality partnership scheme provisions are in force, the existing quality partnership provisions in sections 114 to 123 of the Transport Act 2000 will enable such schemes to be made only by Welsh authorities or jointly by English and Welsh authorities. The schedule also amends the Transport Act 2000 to require local authorities in England that make advanced quality partnership schemes to satisfy themselves that any adverse impacts on competition are outweighed by the benefits secured.

The amendments that the schedule will make are perhaps a little dry, but they are necessary.

Question put and agreed to.

Schedule 1 accordingly agreed to.

Clause 3

Transitional provision

Question proposed, That the clause stand part of the Bill.

[Andrew Jones]

The clause automatically turns all existing quality partnership schemes made by English authorities into advanced quality partnership schemes. Such schemes may then take advantage of the new provisions and flexibilities of the advanced quality partnership schemes, but will not be obliged to do so.

[Graham Stringer]

Will the Minister tell the Committee how many quality partnerships the clause affects?

--- Later in debate ---

[Andrew Jones]

The clause affects all the existing quality partnership schemes. I do not have an exact number for the hon. Gentleman but, having seen some schemes in action, I am aware that there are good schemes all over the country. I could not give a precise figure without checking but it is into double figures. [Interruption.] Inspiration is now arriving in the form of a written brief that gives the answer as 10.

[Daniel Zeichner]

Double figures!

[Andrew Jones]

Yes, it is double figures.

Clause 3 is a small measure that makes transitional arrangements to turn existing quality partnership schemes into advanced quality partnership schemes. I commend it to the Committee.

[Daniel Zeichner]

A theme is emerging through these discussions. I return to my point about the number of these schemes and the understanding that exists across the country. While I entirely take the Minister’s point that, for the bus passenger, the issues are whether the bus is running, the quality of the bus, the fares and all of the rest of it, my worry is that many of the people who should know a bit more about this locally—local authorities and local councillors—are probably unaware of what has happened in the past and what the opportunities might be in the future. I encourage the Department to talk more about these partnership schemes because, if we only have 10 across the country, that rather suggests that there are many areas that do not currently benefit from these schemes.

My part of the world in Cambridge is frequently cited as one of the good examples. Although I have robust conversations with my local bus company—we will perhaps come on to that later on—the relationship between the bus company and the local authority has helped deal with some very pressing issues over many years. That has meant that the traffic in Cambridge, although still grindingly slow, has not got any slower. I would suggest that the number of my local colleagues who know about how that has been achieved is relatively small. It is not talked about or discussed.

I think that there is a lot of potential to look at the good examples—and there are other good examples across the country—and make more of the opportunities that exist.

[Andrew Jones]

The hon. Gentleman and I will spend part of the day agreeing with each other, because I do agree on that point. Partnerships have been working—we have seen that. He has direct first-hand experience; I have direct first-hand experience from many visits around the country. My focus is on consumers—getting consumers on to buses—but his point about whether the partnerships are widely understood among passengers does not worry me.

Are the partnerships understood among councillors? That is potentially a little disappointing. Perhaps that builds slightly on the pithy phrase from my hon. Friend the Member for Bexhill and Battle. Councillors really should know if their local authority is engaged in a partnership. It would be surprising and disappointing if that were not the case. As a general point, we should all take the opportunity to talk up the bus market.

I have toured many bus conferences and local markets over the past 21 months or so and it has been very good fun. I see an industry that is changing rapidly—we talked about the low emission changes earlier—but I do not think the changes are fully understood and appreciated by customers. Perhaps people have excluded themselves from the bus market in recent years and are unaware of how things have developed to offer them a much better product.

Part of what we have to do is go round and encourage people to use buses and just try it. We have a “catch the bus” week organised by Greener Journeys every year; that has been successful and is growing in momentum. I have participated in that wherever I have been able to do so—and that has been quite a lot—and I support more of that work.

I agree about partnerships being the bedrock of a good marketplace. It is about customers, and if councillors do not know about these matters, they certainly should.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Franchising schemes

[Andrew Jones]

I beg to move amendment 5, in clause 4, page 15, line 11, at end insert—

“But each of paragraphs (b) to (f) has effect only if the Secretary of State by regulations so provides.”

This amendment enables the Secretary of State to control the bodies, other than mayoral combined authorities, that may introduce franchising schemes. The Secretary of State must make provision by regulations before county councils and other authorities in England referred to in paragraphs (b) to (f) may be franchising authorities.

[The Chair]

With this it will be convenient to discuss Government amendments 7, 17 and 18.

[Andrew Jones]

Government amendments 5 and 7 reinstate the original provisions of the Bill to require authorities that are not mayoral combined authorities to apply to the Secretary of State before they can consider implementing franchising. The amendments will mean that only mayoral combined authorities will be able to access the franchising powers automatically. Amendments were made in the other place to provide automatic access to franchising powers to all authorities, regardless of the seriousness of their intent or their suitability to take franchising forward. The Government’s view is that automatic access to franchising should be available only to combined authorities with directly elected Mayors because combined authorities with Mayors, when established, will provide clear, centralised decision making for transport across a relatively wide local area such as a city region.

[Gloria De Piero (Ashfield) (Lab)]

Selston is a rural parish in my constituency. People have to turn down jobs in Nottingham because there is no bus service to get them back at night, and an elderly gentleman cannot get back from his beloved Nottingham Forest on a Saturday evening if there is a late afternoon kick-off. Why would my constituents have to apply to the Secretary of State to control their bus services and routes when others would not?

[Andrew Jones]

The hon. Lady makes a point about the value of local bus services. I agree that many people rely on them. Some communities are connected only via buses in the world of public transport. We are talking about automatic access—franchising is a significant jump for an authority that wishes to go down that route. I am quite relaxed about who franchises. We have a suite of powers and the Government are neutral.

[Julian Knight (Solihull) (Con)]

I wonder whether the Minister is familiar with the experience of the future mayoralty in the west midlands. The Mayor will give accountability to the process and, effectively, big decisions will be made at that level. Local people can therefore have a better input into what happens across the whole region.

[Andrew Jones]

I was coming to the point my hon. Friend has made and made very well. Mayors will have access to significant budgets, which they can commit to bus services if they wish, and will be responsible and accountable for a decision to move to a franchising model. This is a question not of some areas having fewer rights than others, but of ensuring that the governance arrangements are in place when making that significant jump.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

The Minister has talked about the accountability that comes with a Mayor. Can he also talk about the guidance that accompanied the Bill and why Cornwall is regarded as an exception? I welcome all areas wanting to take on powers for franchising, but I cannot distinguish a difference between the north-east and Cornwall. I cannot see why Cornwall should be looked on favourably whereas the north-east would not automatically have those powers.

[Andrew Jones]

I will certainly address that, but first I will finish answering the point made by the hon. Member for Ashfield. When a village requires a service but does not have one, local authorities have the power to tender for services and subsidise them. The point is to get more passengers on to buses to make buses a much more sustainable, financially secure mode of transport. That is at the heart of the Bill.

Franchising is a significant step and attracted much of the attention within the industry as we developed the Bill. My personal view, as I have said, is that partnerships are at the heart of the Bill. I can imagine some areas choosing to go down a franchising route, and they can do so if they wish—it could be appropriate in some areas, and Greater Manchester, for example, has indicated throughout that it wishes to go down that route. Other areas, even combined authorities with Mayors, have indicated to me that they would be unlikely to go down that route, but we are keeping the access to that route open. That is because we have Mayors with significant budgets, and they have the responsibility and accountability.

Other authorities, such as Cornwall, should be able to have access to franchising powers where they are well placed to make franchising a success and where they have a clear plan to benefit passengers. We want to ensure that franchising powers can be made available to authorities that have the ability, the powers and, importantly, the funding to make a success of franchising, and where franchising will benefit passengers. The amendments therefore enable other authorities to access the powers, with the Secretary of State’s consent, on a case-by-case basis.

It will help the Committee if I set out in more detail how we envisage things working in practice—that might address the concerns of the hon. Member for Ashfield. Last October, we published a draft policy statement setting out the sorts of factors that the Government would take into account when determining whether to provide an authority that is not a mayoral combined authority with access to franchising powers. We are clear that the Secretary of State will not take the final decision on whether franchising powers proceed in these areas, nor will he review every last detail of an authority’s plans. Our statement set out the core requirements that we consider are necessary to implement franchising successfully.

Our intention is that authorities that wish to secure the Secretary of State’s consent to pursue franchising will need to demonstrate that they have five things in place. First, they must have clear plans to use franchising to deliver better services and outcomes for passengers—this is about passengers, not process—and explain why those outcomes could not be achieved through other routes. Secondly, they should have sufficient powers to make franchising a success. Those powers could include control over local roads and parking or planning. An authority may have those powers itself, or it could explain how it will work with other authorities that have them. That might include, for example, the creation of a key route network of local roads across different authorities but under one management organisation and decision-making structure.

Thirdly, authorities need to demonstrate that franchising can be put into practice across the geography of the area, explaining why the area that they propose is appropriate—that will obviously be with reference to individual travel patterns. Fourthly, they must be able to demonstrate that they have the capability and resources to deliver franchising effectively. We will be looking for evidence of successful delivery of complex projects, previous commitments to improving public transport, sustainable local investment in transport schemes, and robust plans to resource a financing system.

[Gloria De Piero]

May I ask about a basic principle? In principle, would the Minister prefer bus routes and times of services to be dictated or set by elected politicians or bus companies?

[Andrew Jones]

It is not a case of one or the other. There will be different models in different places—I am quite relaxed about that. We cannot say that one is better than the other. I can see areas where there is a route to franchising; Manchester certainly feels that that would work for it. There are other areas where we have partnership working already and the decisions are made by bus companies that are seeing passenger growth. I want to continue to have innovative bus companies seeing markets and opening up routes to take advantage of those markets, marketing their services and developing a product that was not there before. I have seen that in my constituency. It is not one or the other, but a mixture of both. I see quite a complex market with different providers doing different things, but at the heart of that I see collaboration and co-operation, which effectively will be built into the partnership powers.

I was explaining the criteria that we will consider for franchising. The final one of the five is that the authority will need to demonstrate that it has effective decision-making and accountability arrangements for its decisions on franchising. That relates to a point that was made by my hon. friend the Member for Solihull. Those arrangements should be transparent to local people and a named individual should take the decisions—it could be the Mayor or a council leader. That is what is likely to demonstrate accountability most clearly.

[Lilian Greenwood]

I completely accept what the Minister says about local elected politicians having to take responsibility for their decisions, particularly if they move into franchising. However, will the Minister explain something that I do not understand? If Nottinghamshire County Council, for example, wanted to provide better bus services, why is that not a decision it could take? It is accountable to the electorate through county council elections and can make many decisions about the local authority services for which it is responsible. Why is the provision of bus services through a franchising model different from every other decision that the local authority might take and for which it is accountable in the normal, democratic way?

[Andrew Jones]

Moving to franchising is a fundamental change that will affect potentially hundreds of thousands of people. It is not something that can be entered into lightly. Any decision to move to franchising can only be reversed in certain circumstances. It is therefore right that people know exactly how the decision to implement franchising was taken and by whom, so that there is clear accountability for such decisions at the ballot box. The policy statement we have put out does not absolutely require a single person to take the decision to implement franchising. Authorities are free to suggest alternative approaches and explain why they believe that they offer sufficiently high levels of transparency to the public. We would, however, be likely to require some persuading that a complex structure would be an appropriate route. I am trying to keep things simple, with a line of accountability, rather than make anything more complex.

I do not want to give the Committee the wrong impression. The hurdles that we are talking about are not designed to be impossible. The Government are not seeking to put barriers in the way of authorities that wish to go down the franchising route. I am quite neutral about the different types of model they will have access to. This debate is about who has automatic access and who has a further set of questions to answer before they get the powers to do so. I have just been detailing the criteria for that.

I can see examples where franchising will work, but I am putting my thoughts into the views of local authorities, which is not exactly in the spirit of what the Bill is trying to do. I can also see areas where it will be inappropriate, which is again putting my views on the matter. That is not what the clause is about. It is about having a suite of powers so that local authorities and bus companies can come together to put more passengers on to buses, so that buses are no longer the Cinderella part of public transport that they have been, as Members have suggested today.

[Lilian Greenwood]

I thank the Minister for giving way; he is being very generous. What is the balance between a local authority choosing to go down the franchising route and a local authority taking completely the opposite view? I looked at the Campaign for Better Transport report yesterday, which shows the impact of some of the decisions that local authorities have taken. Local authorities can choose to remove all subsidy from all supported services, which seems to me a huge decision, but they can do that without asking the Secretary of State whether it is okay, yet if they want to introduce a system to improve bus services, they have to leap over the Minister’s five hurdles. It seems disproportionate that to improve services they have to leap over five hurdles, but to remove all subsidy from local authority provided bus services, no reference to the Secretary of State is required. How is that a fair balance?

[Andrew Jones]

The hon. Lady makes an interesting point. We all know that councils are under financial pressures. I was a councillor for eight years, which included financial responsibility during the financial crisis of 2008 and the years to follow, until I came here. The point is that where councils make investments to subsidise services, those will be targeted interventions, usually to meet a particular need. It could be to do with the village that the hon. Member for Ashfield highlighted, for example. We all know that that happens around the country.

However, if an area moves to franchising, it affects the entire market, not an individual route. It is a significant jump of enormous scale that affects hundreds of thousands of people, so we are looking at having greater controls before councils have access to those powers. That is all this is about. It is not about taking the view that they should not go down that route or putting up impossible hurdles. These are sensible measures that give authorities a realistic chance of effective delivery of a franchising model. They are simply sensible tests.

Amendments 17 and 18 will ensure that two cross-references in schedules 3 and 4 are correct. The relevant regulation-making power will be in new section 123A(4) of the Transport Act 2000. The amendments make that minor change and are technical in nature.

We have had a conversation about the principles of franchising and we have made the case very clearly that the Government support franchising as a model and recognise where automatic access is appropriate. We also recognise that such is the scale of the decision that further tests are required before authorities have access to those powers.

[Bridget Phillipson]

Will the Minister say a bit more about the timescales for bringing forward the regulations?

[Andrew Jones]

I will check out the timescales. Our intention is bring all this through as quickly as possible, because there are mayoral combined authority elections on 5 May, I think. That is no more than a few weeks away and it will be appropriate to have these things in place. Timescales will obviously be involved in setting up franchising schemes. We have built notice periods into some of the provisions in the Bill. I will be able to get some more information for the hon. Lady in a moment.

[Bridget Phillipson]

I understand the point the Minister is making about the areas where the powers will be available automatically, but will regulations also be brought forward for areas that do not have a Mayor and that will require the approval of the Secretary of State to commence the process?

[Andrew Jones]

We expect that the regulations will only be made if they are needed to turn on that type of authority. It would require an authority to apply, rather than the other way round. If an authority applies to the Government and makes it case, we can take that forward. It is not a question of the powers being there automatically; they would be there on an on-demand basis only.

[Daniel Zeichner]

As the Minister has indicated, the clause takes us to the heart of the Bill. We strongly welcome the opportunity for combined authorities with a Mayor to move to a franchised system. It has been the call of bus campaigners, including myself, for many years for areas to be able to adopt the London model. Finally, there is a real chance to make it happen. I will come on to my objections to limiting that opportunity only to combined authorities with a Mayor, but I will start by making it absolutely clear that, for those areas to which it is being offered by the Government, we want to ensure that it actually happens. As the Minister has indicated, with mayoral elections only a few weeks away, this is a key issue.

Those who have read the guidance closely have been alarmed by phrases such as the need to make “a compelling case”. The worry is that there will be opportunities, once again, to frustrate such schemes before they are brought to fruition. I certainly welcome the assurances given by the Minister on Second Reading when he was pressed on this point. I think he will probably assure us again this morning that he does not wish to put any hurdles in the way. That will be strongly appreciated by those who have done the devolution deals and expect the promise to be honoured.

Moving on to whether franchising should be available to other authorities, it is clear that Members of the other place felt that it should, hence their amendment. The amendments before us would enable the Secretary of State to control the bodies, other than mayoral combined authorities, that may introduce franchising schemes. They require the Secretary of State to give consent for such a franchising authority to take the preliminary step of preparing an assessment.

We have made no secret of the fact that we believe powers to franchise bus services should be available everywhere, partly for the reason raised by my hon. Friend the Member for Ashfield. Across the country people find that bus services are disappearing and that they are left completely isolated. Figures from the Campaign for Better Transport, year on year, show that more and more councils are unable to support services in key areas. People’s hopes are being raised by the possibility that something can change.

I am sure Ministers would say that resources cannot be created out of thin air, but many of us would argue that there are resources in the system and they could be applied more comprehensively. That is what authorities are looking for—to be able to use levers that are not currently available to help people who are not able to get to their local town to watch the football, do the shopping and all the other things that people need to do.

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[Andrew Jones]

There are many points to reply to, but I want to highlight some data about bus usage. This is to challenge the assumption that somehow in the mid-1980s—I am not quite sure when it was but the hon. Member for Blackley and Broughton was very generous: I was either at university or working for B&Q—that precipitated a decline in the bus industry. I just do not think the evidence supports that.

If we go back to the 30 years prior to deregulation in, say, 1985, between 1955 and 1985, the number of passenger journeys fell by 2% per year, from 15.5 billion a year to 5.5 billion. Since deregulation—and I accept that numbers have continued to fall—it has fallen at an average rate of 0.2% per year. On the idea that deregulation was the cause, those responsible for deregulation would probably argue that they stopped a precipitate decline. We should not get too worried about archaeology; we should be more concerned about what we can do for the future.

[Gloria De Piero]

rose—

[Graham Stringer]

rose—

[Andrew Jones]

Oh my goodness, I thought I was being helpful.

[Gloria De Piero]

Does the Minister know the figures for London? I am just interested.

[Andrew Jones]

No I do not, but I am sure they are available if we go and check. I was only trying to clarify something and provide extra information to help our debates.

[Graham Stringer]

I can possibly help the Minister on this point. I was referring to a number of Transport Committee reports that pointed out what he said: the bus industry was in decline because we had cheap petrol and for all sorts of other reasons. However, a straight comparison can be made from 1985 to 1999 between London— regulated—and the rest of the country. The lines went in the same way, but when the regulated system, without subsidy most of the time, was left in London, passenger numbers remained the same, whereas passenger numbers in the rest of the country went into sharp decline.

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[Andrew Jones]

I am aware we are seeing different trends in London and in cities, but London has extraordinary and acute transport needs. Planet London is quite different from many other parts of our country.

I will address some of the points that have been made. The hon. Member for Houghton and Sunderland South spoke with great passion about the importance of buses in her area. We agree on this matter. In the north-east, there was a challenged attempt to get a quality contract in place, and a lot of resource went into that. However, the legislation was cumbersome and nobody managed to achieve it, so we will repealing it as part of this process.

The question that arose in a number of places was whether we are approaching this with good faith. I can confirm that we are. We are not seeking to put barriers in place. I have met Nexus on a number of occasions and I support its positive ambitions for the area in the metro and on buses. Our door is open, should it wish to take that up.

We have heard a bit about the very interesting bus market in Cornwall. Apart from living in an important and beautiful part of our country, people have a real passion for their bus market, as my hon. Friend the Member for North Cornwall said. The authority will not have automatic access to franchising powers, but it is a good example of an authority that the Government would consider to be highly likely to demonstrate the factors we discussed. It is a unitary authority that covers a wide geography, with the necessary wider powers to improve bus services. It has a good track record of delivering projects, and it would be free to apply to the Secretary of State, just like any other authority. Is there parity between the north-east and Cornwall? Yes—both are free to request that the Government introduce regulations for that category of authority, if such regulations are not available at the time, then go further to seek the Secretary of State’s consent to proceed with franchising powers.

[Bridget Phillipson]

I am grateful for and appreciate the Minister’s earlier comments, but may I refer him to the guidance that accompanies the Bill, of which he is no doubt aware? It guidance makes it clear that during negotiations with the Government, Cornwall made a strong case for franchising powers and, as such, the Secretary of State is minded to grant them. Although Cornwall can go through that process should it wish to do so—I wish it well if that is its approach—the north-east does not have that same commitment, so although what the Minister says is right, there is a subtle distinction between the two areas. I welcome what the Minister has said and I look forward to the north-east being granted similar consideration.

[Andrew Jones]

The door will most certainly be open. We do not seek to put barriers in the way. The whole point about the Bill is that it is an enabling one. My last conversation with Cornwall suggested that it probably would not go down the route of franchising, so it may not seek to make an application to the Secretary of State. However, it has done something interesting with its bus market, which is why Cornwall gets a lot of attention. A partnership has been established with the primary local provider in Cornwall—FirstGroup, I think—which has changed networks and routes and co-ordinated services. We are seeing the company invest in a new fleet, and patronage on the bus network has grown and the market has become profitable. Cornwall is an interesting example of what can be achieved by working together, which is why the authority is often discussed and held up as a poster area for the marketplace. Interestingly, it is using some of the powers in the Bill before we have got to the Bill, but not necessarily in the franchising area.

[Lilian Greenwood]

Does the Minister not believe that the fact that Cornwall would potentially have the use of franchising powers may have assisted it in the partnership negotiations? The very fact of having access to powers can be enormously important in assisting an authority, perhaps in getting a bus company to listen in ways it would not otherwise do.

[Andrew Jones]

That is a possibility, and it would, of course, be a possibility that would exist absolutely everywhere.

[Lilian Greenwood]

Not if there are no automatic franchising powers.

[Andrew Jones]

Cornwall does not have automatic franchising powers, but it could apply for them in the same way as all other authorities. That goes a bit towards the national versus local capability that the hon. Member for Blackley and Broughton mentioned.

My general view is that we should support localism. We stand a better chance of a good delivery of a service to solve a local problem if the decision is made as near as possible to the point at which the service is delivered. The service would be tailored to the local need. That should be a basic principle, but does it lead us to question the criteria? No, because the criteria for the introduction of franchising are significant—this is a significant step. They are safeguards; it is not about putting barriers in the way but about ensuring that everything is fit for purpose in order to proceed. The key point is that we do not want to stifle investment by the bus industry, and that could well happen if an authority attempted to pursue franchising under automatic powers without delivering it. Once a category of authority has the powers, there is a permanent risk of its deciding to use them, whatever a court may ultimately decide. It is a question of getting the balance right and getting the safeguards in place without making them onerous hurdles.

The hon. Member for Cambridge said that there is hope attached to the Bill. Yes, in some ways there is. People want buses. It is a good thing. I have to say that I have been pleased to see how the industry has received more retention, not just among the big operators but from some of the smaller ones—

Bus Services Bill [ Lords ] (Second sitting)

Andrew Jones Excerpts

Committee Debate: 2nd sitting : House of Commons
Tuesday 14th March 2017 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing Government amendments 7, 17 and 18. I call the Minister to pick up where he left off in his reply to this morning’s debate.

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

If we had been paying more attention, at 24 minutes past 11 I would have said that we were done, that we had had a good debate on the issue and should now proceed to a vote. I think I have said all I need or wish to say on the issue. I hope I have answered colleagues’ questions about the principles of franchising and access to franchising, which will be a feature of our bus market. We have built in to the Bill safeguards of accountability and preparedness of local authorities, as well as protection for small and medium-sized companies.

[Lilian Greenwood (Nottingham South) (Lab)]

Will the Minister give way?

[Andrew Jones]

Yes, go on then.

[Lilian Greenwood]

The Minister is characteristically generous. During the break, I reflected on the points made by my hon. Friend the Member for Houghton and Sunderland South. The Minister has been clear that franchising should be one of the options available, particularly to mayoral authorities, in trying to deliver for passengers. He put passengers at the heart of the matter. Will he take this opportunity to condemn the language used by one of the major operators, who described local authority leaders who were trying to improve passenger services as “a bunch of unreconstructed Stalinists”? Does the Minister agree that that is unhelpful language when referring to local authorities that are seeking to do the best for their constituents?

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[Andrew Jones]

I do not know who said it, the context or to whom they said it. As a general principle, I suggest that constructive engagement and partnership is part of the way forward. People need to find their appropriate personal language that will help that to be achieved.

[Nic Dakin (Scunthorpe) (Lab)]

The Minister has been most generous in taking interventions. It is great to serve under your chairmanship, Mr Owen. Before he took the intervention from my hon. Friend, the Minister said that there is protection for small and medium-sized companies in the Bill. Will that cover companies such as Hornsby Travel, which has celebrated 100 years as a small family business doing excellent work in my constituency and the north Lincolnshire area, and is concerned about the impact of franchising on its capital, stock and drivers?

[Andrew Jones]

That protection would certainly encompass companies such as the hon. Gentleman describes. In many parts of the country there are excellent family-owned businesses that have been serving their communities for a long time with high-quality product and are much liked by their customers. I see them as having a significant role in the bus industry, whichever regulatory model is chosen by local authorities on a local basis. I most certainly do see that as part of the picture. That concludes everything I have to say on Government amendment 5.

Question put, That the amendment be made.

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[Graham Stringer (Blackley and Broughton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Owen, for what I think is the first time.

I will speak briefly to amendment 19. Punctuality and reliability are extremely important, as my hon. Friend said, in persuading people to continue to use buses and attracting people back on to them. The problem is that on many occasions it is difficult to know why the bus does not turn up or is late. Bus companies blame congestion—which is, no doubt, part of the problem—for affecting their reliability and punctuality, and they ask for more privileged use of public sector road space via bus lanes. I do not completely accept that, because the last time I looked at hard statistics—I would be interested if the Minister had up-to-date statistics—I found that about a third of reliability problems were to do with bus companies not maintaining their vehicles properly, resulting in mechanical breakdowns, and another third were due to drivers not turning up and there being no reserve pool to deal with that. It is obviously in the commercial interests of bus companies, and perhaps, on many occasions, of bus passengers, to have bus lanes, and each case should be considered separately against agreed criteria, but we really need to know why things are going wrong.

This is a slightly historical case, but some years ago the FirstGroup buses in Rochdale were in such poor condition that the wheels fell off while they were going along. The traffic commissioner wrote a report about it and the company was fined. FirstGroup does not therefore have a great record. It is also the case, not just anecdotally —there is some evidence, and even more anecdotal evidence—that when buses are delayed for whichever of those three major reasons, they do not complete the route. They take shortcuts. It would be in the interests of public service if each bus had to carry a GPS, so that under the deregulated system, and more so under a franchised or an enhanced quality partnership, the taxpayers and the local transport authority could know where the buses were at any particular time. I would interested in hearing whether the Minister thinks that all buses being required to carry GPS, and have its information made public, would help our understanding of what is happening to bus services.

[Andrew Jones]

Amendments 19 and 20, tabled by the hon. Members for Cambridge, for Nottingham South and for Scunthorpe, propose that the Bill explicitly state that bus punctuality, journey speeds and the provision of w-fi are standards that an authority could specify as part of a franchise contract. Any authority that chooses to implement franchising will be free to determine which services run in an area and the standards of services, including those important matters. Authorities will have to consider as part of their assessment of the proposed franchising scheme whether the proposals represent value for money and are affordable, taking into account the costs of requiring those standards.

I think we all agree that the provision of wi-fi on buses is an extremely attractive prospect for customers. I entirely agree that where an authority wants to require the provision of wi-fi on services, it should be able to do so, and the Bill allows for that. In terms of bus punctuality and journey speeds, there is nothing in the Bill to prevent an authority from specifying the standards it expects from operators running services under franchise contracts.

I was asked about journey time guidance. We said to the Transport Committee that we would produce guidance on setting journey time targets. We intend to do that, though I recognise, as the hon. Member for Cambridge rightly said, that the guidance is not yet drafted.

The provision of customer information was at the heart of the contribution from the hon. Member for Blackley and Broughton. He is right; customers do not always have access to the level of information that is desirable to let them plan their journeys or be communicated with should there be a problem. The Bill includes clauses on open data, and making information available will hopefully create fantastic new products through which customers can receive that information. The open data powers in clause 18 are sufficiently broad to require real-time information for all buses to be provided. That requires GPS on the buses.

I would like customers outside London to have access to the information that is available to bus customers within London, but the amendments would make provision for something that is already provided for. This is about local decision making, rather than making things mandatory. I assure the hon. Member for Cambridge that the Bill already gives franchising authorities powers to set the standards he seeks, and I hope he will therefore withdraw the amendment.

[Daniel Zeichner]

I suspect we will rehearse some of our previous arguments about whether decisions should be made at the centre or locally. Earlier, we heard about the incredibly prescriptive approach that the Government are taking to allowing local authorities to franchise; now we are told that on this issue, the Government are quite happy to leave it to local authorities to make up their own minds. I suggest there are some inconsistencies here, exactly as we discussed in relation to driving up environmental standards.

The amendment is about ensuring we get the kind of connectivity, and particularly wi-fi connectivity, that we all agree the country needs. That is not just something we would like to have. Sadly, in the modern world, although we are enjoying ourselves as well, we are often working while we travel around. For Britain to prosper in the 21st century, we need connectivity. If we leave it down to local negotiations, the operators will almost inevitably say, “This is going to raise the cost by a little bit,” which will make it harder for the franchising authority to insist upon it. We can stop that happening by specifying the key things we believe are needed. Wi-fi is an essential part of people’s daily lives. The answer is not to leave this down to local negotiations but to insist upon it in the Bill. We will pursue this, not just because it is important for bus infrastructure but because it is part of creating the kind of digital Britain that we will need if we are to prosper in the years to come.

On the points made by my hon. Friend the Member for Blackley and Broughton, I am sure that he has been involved over many years in discussions with bus operators about where the burden of responsibility lies for punctuality. Of course, if we could solve that, we would probably have solved the entire problem with the Bill. It will always be a complex debate. The partnership arrangements are partly about trying to ensure that bus operators can run their services on time. I am in no doubt that bus operators want to do so. Whenever I meet the manager of my local bus company, he is absolutely clear that that is what he wants to do. The arguments, particularly in many of our precious historic cities such as my own, are about dedicated road space. Obviously, operators would love to have that, but there are other competing interests.

We think that punctuality and journey times are key. We think that they are so important to the future of the bus industry that specifying them, not just as an accidental by-product or consequence of schemes but as part of the agreement, is far more likely to concentrate minds locally on ensuring that they are achieved. Punctuality and reliability are key qualities that bus passengers look for. We all know from our own experience that if people cannot rely on the bus to get them somewhere, they will always turn back to their cars. The only way to have modern local transport systems that people use is if they are sure that the transport is reliable enough to get them there and that they will make their connection, so they are not late for work, school or college. Punctuality and journey times are not an added extra; they must be central to the process, which is why I will not withdraw my amendments.

Question put, That the amendment be made.

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[Andrew Jones]

We are discussing a group of amendments that relate to the assessment or the business case that authorities must prepare before they can implement franchising. The Government’s aim is to ensure that authorities fully consider the benefits, impacts and potential risks of franchising before taking the decision on whether to go forward and implement it in practice.

The Bill requires authorities to conduct an assessment of their proposed franchising scheme, which should include comparing it with one or more other courses of action. Amendment 34 aims to ensure that the different courses of action that should be considered as part of that assessment should reflect local conditions. I entirely agree that authorities should compare their franchising proposal against other realistic courses of action—that just seems good practice—and that those realistic courses of action will be different in each case. The Bill does not set out what other courses of action franchising should be compared against; it will be for local authorities to decide what is appropriate. The draft guidance that we are currently consulting on highlights that further by explaining that the authority should consider which courses of action are likely to meet their objectives. I hope, and I assure the hon. Member for Blackley and Broughton, that amendment 34 is not necessary; he may consider withdrawing it.

Amendment 35 proposes removing the requirement of the Secretary of State to issue guidance for authorities to assist with the preparation of their assessments, while amendment 36 proposes adding new requirements to the contents of such guidance. Our intention has always been to assist authorities in preparing robust assessments by providing guidance. The draft business case guidance is 10 pages long, which is much shorter than that for many other schemes or projects. It has actually been developed in discussion with authorities that may use it in future. It is about seeking to help authorities, particularly by reducing their risk of being challenged for not considering other realistic options, which could save time later on—particularly in any kind of legal matters.

I recognise the point about rail franchising, but I think that actually highlights the scale of the decision to go down a franchising route and how these things have to be considered and planned for carefully. On whether local government or national Government are infallible, the hon. Gentleman and I both know that neither is and can throw up a litany of records to demonstrate that. However, this is about having safeguards in place for decision-making criteria; it is not about national control. He highlighted Rail North, but Rail North is a partnership between the Department for Transport and Transport for the North to manage the north’s two rail franchises—Northern and TransPennine. Rail North was involved in designing the programmes and judging the tenders, and is now involved in managing the franchises; it is actually the first time we have moved to a more devolved management of our railways. The team, which is a joint team of the DFT and Rail North, is based in Leeds and will ultimately become part of Transport for the North. That is quite the opposite of the national control that the hon. Member for Blackley and Broughton highlighted—it is about devolution in rail for the first time. When we look at what has happened with rail in the north—the franchises will offer quite a transformation to services and be much more tuned in to their customers—we see the progress that is made by having more local decision making.

The guidance is intended to help authorities through the process and give them some national guidelines with criteria for consideration; we have no intention of making it onerous. This is more about sharing best practice and stopping reinvention when it comes to routes that are new to authorities. Our intention is to assist authorities in making robust assessments, and we are keen to receive views through the consultation about how the guidance can be further improved. I am pleased to be able to reassure hon. Members that our draft guidance recognises that it is for the Mayor or the authority to decide whether to proceed with franchising—it is not a national decision, and central Government should have no further involvement. I can also confirm that it is not our intention to place any unnecessary burdens on a franchising authority through the guidance.

Our approach is based on the standard approach to decision making in government set out in the Treasury’s Green Book. We actually drew the phrase “compelling case for change” from the Green Book. The assessment that a franchising authority is required to develop is based on the principles of the “five case” model for public sector business cases. The draft guidance on the development of that assessment therefore draws on the associated Treasury guidance material on using the five case model, which states:

“The business case in support of a new policy, new strategy, new programme or new project must evidence: That the intervention is supported by a compelling case for change”.

This is not a question of the Government seeking to impose burdens; we are seeking to assist and streamline decision making while keeping it local. That model is an established mechanism that any authority that has ever brought forward plans for a significant transport project should be well used to, and it seems entirely appropriate to follow a similar proven approach for fundamental change to the delivery of bus services, which of course will affect many thousands of passengers every day.

The hon. Member for Blackley and Broughton asked about the number of officials. I can tell him that there are absolutely no plans to increase the number of officials currently working on this area, except in one section: there will be a small increase in the open data team, because significant work is needed to deliver that project. To put that in context, the headcount of the Department overall has fallen by 17% since the 2010 spending review. I hope that, in the light of my comments, the hon. Gentleman feels able to withdraw his amendments, although I recognise that he may wish to press one of them to a vote.

[Graham Stringer]

I thank the Minister for his reply. I will withdraw amendments 34 and 35. I take what he says about amendment 34, although I think it really would enhance the Bill.

I will press amendment 36 to a vote. It would not add to the guidance but prescribe that “the Secretary of State should not go here”. The context of this debate is that bus companies are hostile to these proposals. It is likely that bus companies will end up in court—Nexus has recent experience of that under existing legislation—and it would be helpful to say that the guidance should not be over-burdensome. It would also be helpful—the Minister did not really reply to this point—to say that where schemes have been tried and failed, or bus companies have refused to try them, they will not be reconsidered in some future scheme. I take the Minister’s reassurance that the final decision will be made by the Mayor or the authority. In the light of that, I will press amendment 36, but I beg to ask leave to withdraw amendment 34.

Amendment, by leave, withdrawn.

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[Andrew Jones]

Amendments 21, 25 and 29, tabled by the hon. Members for Cambridge, for Nottingham South and for Scunthorpe, propose to specify the terms and conditions for employees that an authority should include as part of the franchise contracts it enters into with bus operators. It would not be consistent with the rest of the Bill to mandate the basis upon which contracts are procured by local transport authorities or the content of those contracts, as the amendments propose.

The amendments would require local authorities to set out in their contracts that employees hired by the bus operator outside of the TUPE transfer of staff would receive terms and conditions no less favourable than those provided to staff transferred under TUPE. I fully understand the intent behind the amendments. The power to achieve the outcome sought already rests, however, with the franchising authority letting the contracts

The amendments also pose some real practical difficulties. First, employees transferring under TUPE will not all have the same terms and conditions. Some may have been in post for a short period, and others may have been in post longer. There may be different terms and conditions for newer staff. It is not entirely clear which set of terms and conditions the amendments refer to, and I therefore see some difficulties in implementation. In addition, the amendments could place a financial burden on operators and, through them, the local transport authority by requiring them to employ people at something other than the market rate. That could prevent authorities from pursuing franchising schemes.

It is worth noting that the employee protection rights in the Bill replicate those in the Transport Act 2000 for quality contract schemes, introduced by the Labour party. There has been no intention at any point to water down TUPE arrangements. In fact, those were one of the first things we considered when preparing the Bill, and we were committed to ensuring that they were in place right away. I am committed to ensuring that staff affected by franchising are protected. However, I am not sure that it is the job of the Bill to set out the terms and conditions of employment offered to new staff who may join the industry at some point in the future.

On amendment 26, which relates to potential dismissals, I have sympathy with the intention behind the first two subsections concerning redundancies that may be made before or after the introduction of a local service contract. However, employment law already deals with the issue of unfair dismissal of employees. It is simply not appropriate for the Bill to be a vehicle to address such issues, and the Labour party did not include that provision when drafting the existing quality contract scheme legislation. The scenario that the amendment addresses is an unlikely one. I find it hard to imagine that an employer will choose to bear the redundancy costs associated with dismissing an employee if it is able to transfer them to a new operator under TUPE instead.

The hon. Member for Cambridge asked for my opinion on a minimum national salary for bus drivers. That is an interesting idea, but it would very intrusive for a Government to intervene and say that a company has to pay its employees a particular rate. We have done that through the national living wage, to protect some of the more vulnerable workers in our society, but it gets very intrusive indeed into the relationship between a company and its employees if the Government start to direct national minimum wages. It is not the Government’s belief that we should go down that route. I suggest caution would be required in doing so.

I hope that everything I have said confirms the Government’s position and that the hon. Member for Cambridge will feel able to withdraw the amendments.

[Daniel Zeichner]

I appreciate the Minister’s comments about not seeking to water down the previous arrangements, which we accept. Our worry is that these things have never been tested, and we all now expect this situation to occur very quickly in the near future.

--- Later in debate ---

[Daniel Zeichner]

I beg to move amendment 23, in clause 4, page 20, line 11, leave out “six months” and insert “112 days.”

This amendment states that a scheme may not specify a period of less than 112 days for its start date following the notice that the local service contract has been awarded by the franchising authority.

You will be pleased to hear that this is a briefer introductory speech, Mr Owen. Proposed new section 123H(4) of the Transport Act 2000 states that

“A scheme may not specify…a period of less than six months”

for its start date following a notice that the local service contract has been awarded by the franchising authority.

The draft regulations—pages 77 and 78 relate to the deregistration of local services by operators—state that franchising authorities will have the ability to set a notice period of up to 112 days for operators wishing to deregister their services following the publication of a franchising scheme. Our concern is about the gap between the two periods. For 68 days of a six-month period, there is the potential for services to be deregistered, which we believe will cause unnecessary disruption and uncertainty for passengers. It is more of a point of clarification for the Minister. Will he consider revising the period as per our amendment, and if not why not? What advice and guidance would he be able to offer to passengers, franchising authorities and operators?

[Andrew Jones]

Amendment 23 proposes to reduce the time that must elapse between a franchise contract being awarded and it coming into force. This part of the Bill was designed with transition in mind to ensure that operators—those that are incumbent and those that would be incoming, having won the franchise contract—have sufficient time to put any necessary plans into place to deal with either of the two circumstances. Our overall aim is to ensure that all parties are ready to respond in the interests of passengers. I am concerned that reducing the time period to a minimum of 112 days —less than four months—could lead to a hurried transition, which would not necessarily benefit passengers. I recognise that there may be concerns about the behaviour of operators during that transitional period.

The Bill and any associated secondary legislation on which we are currently consulting sets out a number of ways in which authorities can help protect passengers during transition, and measures in the Bill directly address that, including enabling the authority to vary the deregistration and variation notice period that operators must observe before cancelling or changing services, and allowing services to be registered at short notice when they are replacing a service that has ceased to operate. This is about ensuring continuity of provision of service for customers. I recognise the point made by many colleagues in the Committee that people rely on services. This is about ensuring continuity during a transitional period. The Bill strikes the right balance in achieving that, and I therefore hope that the hon. Member for Cambridge feels able to withdraw his amendment.

[Daniel Zeichner]

I thank the Minister for his explanation. I am not sure I am wholly reassured. In some ways, we are moving into unchartered territory, which is why it is important we get this right.

If everybody was working with good intentions—it is almost like I am discussing other things—there would be no problem, but these transitions may not always be entirely as amicable as one might wish. Our concern is that in those circumstances, passengers could be the innocent bystanders stuck at the bus stop and be put at risk, because authorities may not always be able to make this possible if they do not have the resources and access to vehicles, depots and all the rest of it in the meantime.

I hope the Minister and his Department will talk to those who face this very real prospect and ensure that we make it work successfully for everyone involved. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Andrew Jones]

I beg to move amendment 10, in clause 4, page 24, line 41, leave out “21” and insert—

“(Bus companies: limitation of powers of authorities in England)”.

This amendment is consequential on amendment NC1.

[The Chair]

With this it will be convenient to discuss Government new clause 1—Bus companies: limitation of powers of authorities in England—

‘(1) A relevant authority may not, in exercise of any of its powers, form a company for the purpose of providing a local service.

(2) Subsection (1) applies whether the relevant authority is acting alone or with any other person.

(3) In this section—

“company” has the same meaning as in the Companies Acts (see sections 1(1) and 2(1) of the Companies Act 2006);

“form a company” is to be construed in accordance with section 7 of the Companies Act 2006;

“local service” has the same meaning as in the Transport Act 1985 (see section 2 of that Act);

“Passenger Transport Executive”, in relation to an integrated transport area in England or a combined authority area, means the body which is the Executive in relation to that area for the purposes of Part 2 of the Transport Act 1968;

“relevant authority” means—

(a) a county council in England;

(b) a district council in England;

(c) a combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009;

(d) an Integrated Transport Authority for an integrated transport area in England;

(e) a Passenger Transport Executive for—

(i) an integrated transport area in England, or

(ii) a combined authority area.’

This amendment prohibits county and district councils in England, combined and integrated authorities in England and passenger transport executives in England from setting up companies to provide local services.

[Andrew Jones]

New clause 1, which was tabled by the Government, reinstates the original provision of the Bill, which prohibited authorities from establishing companies for the purposes of operating local bus services. Amendments were made in the other place to remove that provision, which forms a key part of our proposals, from the Bill.

The Bill provides a number of new tools for local authorities to improve their local bus services, and it is important that operators and authorities work together to improve services for the benefit of passengers. We want to ensure that passengers benefit from the strengths of both local authority influence over services and the private sector. We have seen great improvements in services across the country due to private sector innovation and investment. It is also true to say that authorities have a lot to offer, with many around the country working collaboratively with their local operators to ensure that communities are well served and that services and ticketing offers are joined up.

The franchising and enhanced partnership tools in the Bill will provide authorities with more influence over bus services than they currently have. Striking the right balance between local authority influence and the role that private sector bus operators can play is important. Our view is that passengers will see the most benefit where the commissioning and provision of bus services are kept separate. That purchaser-provider split is a frequent feature of our public services, and as such we do not think authorities should be able to set up new bus companies.

[Graham Stringer]

I understand the Minister’s argument, but does he not see the case for transport authorities having the power to set up a bus company as a last resort, where private sector companies withdraw from the area?

[Andrew Jones]

The franchising provisions in the Bill detail what powers an authority has should a franchise service fail, as a stopgap measure, to ensure the continuity of service provision for passengers. I recognise the hon. Gentleman’s point about continuity of service, but we are addressing that in the Bill.

[Graham Stringer]

To press the Minister on that, I take the point about continuity of service where, for instance, a bus company goes bankrupt and can no longer provide a service. However, that was not the question I asked. In circumstances where bus companies withdraw from an area as a point of policy because they are completely hostile to the idea of franchising, should transport authorities not be allowed to set up bus companies?

[Andrew Jones]

I suggest that the answer is no. If an area has a service withdrawn simply because of some kind of principled objection by a bus company to a regulatory model, those would be very unusual circumstances, with the company turning down business. In that case, others would, I suggest, snap it up.

[Lilian Greenwood]

If only the situation were as unlikely as the Minister suggests. I invited him earlier to express a view on the remarks made by the chairman of Stagecoach. I will continue his remarks about “unreconstructed Stalinists”. He went on to say:

“The first contract that they put out on my business I’m out of Tyne & Wear completely, and they can buy 500 buses and find four bus depots.”

Is the Minister not saying precisely that Tyne and Wear could not do that? Therefore, it would be subject to the whim of a large private sector operator that knows that it has local authorities over a barrel when it is the large incoming operator.

[Andrew Jones]

The hon. Lady has been drawing on a very interesting set of quotes. The chairman of Stagecoach was obviously having a very lively day and making some lavish comments. If he wished to withdraw from the marketplace, I am sure there would be plenty of competitors saying, “Thanks very much, Brian, we will snap up that little operation.” I still do not think that changes the position. If people withdraw from a marketplace, I would expect others to pile in. That is what the nature of competition should be about.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I am grateful to my hon. Friend the Member for Nottingham South for raising the outrageous behaviour of Stagecoach over the years in the north-east. Is it not the case in the rail industry that the Government have sometimes had to step in? It has been necessary to ensure that that safeguard is in place. Were an operator to follow through on such threats—who knows whether it was a mere threat or had any intent behind it?—there should be safeguards and protection for the travelling public.

[Andrew Jones]

That is a very interesting point from the hon. Lady. Yes, we do have the opportunity in the rail sector for directly operated railways but that is for a short, interim period. That is what happened with the East Coast franchise, which serves both of our constituencies. We have such a provision in proposed new section 123O in clause 4, which allows for an interim stopgap measure.

Stagecoach obviously has a lot of experience in the world of franchises. It is engaged in the rail sector and operates in London. If the opportunity arises in the north-east—it may or may not choose to go down that route—let us see what the company says. Stagecoach has plenty of experience of franchising, should it wish to bring it to bear.

We have had some talk about the merits of the innovation and investment from private sector operators. I highlight the fact that many existing municipal bus companies, such as Reading Buses and Nottingham City Transport, deliver a high standard of service, and I would expect them to continue doing so. Their ability to do that is not affected by this provision. I remind the Committee that those operators have prospered in a competitive market in which many other municipal bus companies have struggled. Only last month, Thamesdown Transport in Swindon was sold to the private sector after what I understand was a prolonged period of losses.

I have seen the good work done by municipal bus companies. They regularly do extremely well in customer feedback. Our intention is to leave them well alone, doing the very good job that they do, but to make the balance right between public and private, which I think the Bill achieves.

[Huw Merriman (Bexhill and Battle) (Con)]

I recognise that my point is slightly off kilter with the thrust of the Bill. Brighton & Hove bus company is a superb private operator that has taken over the Swindon municipal service the Minister mentioned, and it intends to invest. In my desire to see private as the first option, would there be scope in the Bill to start with a partnership approach but, if that did not work, to cascade down to franchising? I believe the Cornish model shows that the sword of Damocles makes bus companies see sense. If there is to be an absolute fall-back, municipals could well be that fall-back.

[Andrew Jones]

I have no doubt that municipal bus companies have been delivering for their customers. If they had not been doing so, they would have gone out of business. We can also see the customer response to them in various surveys and the national bus awards.

My hon. Friend’s proposal is interesting, but we have provided for cover in the Bill. We have anticipated the situation in the read-across from the rail sector, where interim services—replacement services—are required. It would be within the powers of the franchising authority to commission services.

[Huw Merriman]

To clarify, am I correct in saying that the Government or state takeover scenarios are just for franchising and not for partnerships? If so, there is still a gap. If franchising is not applicable because of the type of authority, only partnerships are available, and it cannot go to municipal because there is a prohibition.

[Andrew Jones]

We have no intention of having authorities setting up bus companies and awarding themselves contracts. The purchaser-provider split is important. Authorities would have the capacity to intervene and directly commission services, but it would be for a short period of time only. They have the capacity to do that already. Our intention is not to have a municipal bus company do that. It would be for a short period of time and authorities would commission from the private sector.

[Chris Green (Bolton West) (Con)]

With people interested in franchising in Greater Manchester, there is an expectation that there will be a number of different providers of bus services. If any one provider failed, other providers could step in, whether they were already in Manchester or were other ones coming in. There would not be the need for Greater Manchester as an authority to be running the bus services.

[Andrew Jones]

My hon. Friend makes an interesting point. I anticipate from my conversations with Transport for Greater Manchester that it will be keen to pursue a franchising model. This will be its call, but I would anticipate not a one-size-fits-all model, but different operators providing services in different parts of his area. If one failed, others could come in. I have certainly been contacted by bus companies that see franchising tenders as a way to enter the UK marketplace. It could prove to be a spur to competition. We have powers in the Bill should there be failure, but those should involve private companies under commission, rather than municipal companies.

Amendment 10 relates to new clause 1. It concerns a cross-reference in the Bill and nothing more.

[Lilian Greenwood]

It is a pleasure to serve under your chairmanship, Mr Owen. I oppose new clause 1, as I am sure the Minister anticipated. I thank him for his recognition of the success of some of the existing municipal operators. Mr Owen, I hope you will indulge me if I explain why this is so important. I represent a constituency with a very successful municipal operator. I do not think the Committee will mind if I remind it that Nottingham City Transport, which is one of the most successful municipal operators in the country, is the only operator to win the UK bus operator of the year title four times. It also won the Route One large operator of the year award in 2016 and the award for customer focus at the European Business Awards in 2015; it had the top national bus driver in 2014 and won the Guide Dogs Award for breaking down barriers in 2014. I could go on, Mr Owen—there are many ways in which it is an exemplary bus operator. As I said on Second Reading, these things are not just being stated by me because I am the local MP—they are backed up by evidence.

When we look at the most recent national bus passenger survey, for 2015, we find that Nottingham City Transport is No. 1 one out of 50 operators for overall satisfaction, with 97% satisfaction. When we look at value for money, it is not No. 1, but it is No. 4 out of 50 operators, with 74% satisfied with its value for money, which is pretty good. On satisfaction with punctuality, again it is No. 1 with 85%, and it is joint second on satisfaction with bus journey times. There is no doubt that it is a really good example of what a good operator should be doing, and not just on those issues that are covered in the passenger survey.

I know we are going to discuss accessibility during the passage of the Bill. The percentage of accessible buses run by Nottingham City Transport’s 330 buses—it is quite a large operation—is 100%. In the other place the provision of audio-visual announcements on buses was raised. Many operators have suggested that it is too costly, but 80% of Nottingham City Transport’s buses already have audio announcement. As has been acknowledged, 100% have free wi-fi. On many levels, that shows what a bus company can do. I found it quite difficult to understand the Minister’s submission, as he acknowledged the value of municipals such as Nottingham City Transport and others—Reading Buses has also been a recent winner of bus operator of the year—which is okay, but why not allow that possibility in other areas?

--- Later in debate ---

[Daniel Zeichner]

Indeed, that point is well made. It has been possible to take back control in that case, and it is working to the benefit of passengers in that area. It seems extraordinary that we should want to close down the options when all the evidence points to the fact that, when transport systems are integrated, it is possible to get a better outcome for everybody.

I am not sure I am allowed to mention European law anymore, but it may be worth noting that, in EU regulation 1370/2007—I am sure Members know it off by heart— article 5.2 allows that:

“any competent local authority, whether or not it is an individual authority or a group of authorities providing integrated public passenger transport services, may decide to provide public passenger transport services itself or to award public service contracts directly to a legally distinct entity over which the competent local authority, or in the case of a group of authorities at least one competent local authority, exercises control similar to that exercised over its own departments.”

In Europe, local authorities are able to award contracts directly to their own company. We simply want new municipals to be able to compete in the process.

As I come to my conclusion I shall quote a further authority. Regarding municipal bus companies, the Institute of Public Policy Research said that

“authorities need to encourage and support the many innovative transport solutions–—such as social enterprises and municipal companies—that have emerged over the years.”

It added that:

“the continued strength of some municipally owned transport schemes…demonstrate that conventional commercial operations are not the only option…Choosing to operate a business without the pressure to deliver profit to shareholders can allow social values to be put at the heart of that business’s activities and deliver considerable benefits for communities.”

Our final problem with the proposal, as touched on by my hon. Friends, is that it seems as if the Department is working without any evidence. I have asked a number of written questions about the plans, and it has been revealed that

“no analysis has been undertaken by the Department for Transport to understand the potential benefits”

of the municipal model for passengers. I was later told that there are no plans to undertake any analysis of those benefits. I asked what evidential basis there is that the commissioning and provision of bus services should be kept separate, and was told:

“Supporting evidence of direct relevance is not available”.

Furthermore, I was told that a ban on municipals was not included in the bus reform workshop discussions because the provisions

“had not yet been drafted when the workshops took place.”

I simply do not understand why the Government persist with this divisive and mean measure when they have absolutely no evidence to back it up. In our view, this is a piece of symbolic, ideological dogma that has no place in an otherwise positive, enabling Bill that is broadly underpinned by consensus. We have every intention of revisiting this issue on Report.

[Andrew Jones]

I covered much of the ground in my earlier comments. I do not view this matter as the cause célèbre of the Bill, because frankly not a single local authority has contacted me to say that it wishes to start a municipal bus company. I do not think that this is at the heart of the Bill at all. Why do we have it? We have it simply because of the points I mentioned earlier—that commissioning and provision separation could easily deter investment from the private sector should this be reversed. What we have sought to do in the Bill is find the right balance and retain the strengths of private bus companies and the involvement from the public sector to find that proper partnership where we most effectively see the industry making progress for customers.

[Lilian Greenwood]

I am mindful of the point my hon. Friend the Member for Cambridge made about evidence. When the Minister says that the existence of municipal bus services or an intention to set up a municipal bus service would prevent investment from the private sector, what evidence is he drawing on? My city has a very successful municipal operator, but that does not prevent investment in the private sector. In fact, we have an extremely effective local private operator and, if anything, the competition with the high-quality municipal has driven up its investment in its services. I therefore ask the Minister to set out what evidence he is drawing on in making those remarks.

[Andrew Jones]

What I said was that it could deter investment. We are talking about projections into the future, and as the future has not yet happened, of course we do not have any evidence for it. I am just looking at what the risks may be.

What we seek to do in the Bill as a whole is to enable bus companies and authorities to work more constructively together on behalf of passengers to deliver better services. I think we have struck the right balance. There is no doubt at all that the municipal companies are, indeed, successful, but we have chosen to highlight a couple that have perhaps been at the high end of success—the Nottingham and Reading companies have quite reasonably had a lot of mentions today. The last company that I visited was the bus company in Reading, and I thought it a very successful and impressive operation, but within a few days of that visit we saw the Thamesdown service sold after many years of making a loss. The idea that it is only municipals that are successful and innovative is not true. Success has come from having the right balance, and that is exactly what we are achieving in the Bill.

On international comparators, I am not an expert on the bus markets of different countries, but I am aware that the successful transformation of our rail services, which was mentioned earlier, has led to ours being the fastest-growing railway in Europe.

Amendment 10 agreed to.

[Daniel Zeichner]

I beg to move amendment 24, in clause 4, page 32, line 47, at end insert—

“123Y Compensation liability

Where a bus operator brings a successful legal challenge for compensation against a relevant franchising authority, central government shall be liable for any financial penalty imposed by the court on the franchising authority.”

This amendment specifies that central Government shall bear the financial risk of legal challenges brought against franchising authorities by bus operators.

The amendment would ensure that central Government bear the risk for financial penalties where a bus operator brings a successful legal challenge for compensation against a relevant franchising authority. We want to protect local franchising authorities from legal action by operators and ensure that they are not prevented from bringing forward good schemes for fear of potential risk.

We heard reference in earlier debates to the attempt in the north-east—many of us would say the heroic attempt—to achieve a quality contract and how difficult that proved to be. When Nexus, the North East combined authority’s transport arm, attempted to introduce a quality contract scheme for Tyne and Wear under existing legislation, the legal decision made by the quality contract scheme board suggested that local authorities could be liable to compensate bus operators for financial losses they might incur as a result of bus re-regulation. The board concluded:

“Legislation enabling franchising should specifically address the issue of proportionality of financial loss of bus operators. It may be that some form of compensation is considered appropriate.”

It went on to suggest that local authorities could have been liable for payments of between £85 million and £226 million if the scheme had gone ahead. At that time, many of us were astonished by that conclusion, but despite the absurdity of it, that was what the board said. It causes real concern for people who may be thinking of bringing forward what I think we all agree could be the kind of schemes that will really improve bus services in our country.

I asked the Minister what assessment his Department had made of the reference in the quality contract scheme board’s report to bus operators being compensated by the Government for future losses that might be incurred as a result of franchising. The Minister responded that the decision related to existing legislation and was unrelated to the Bill. I do not think that that is good enough. It is important that we protect local authorities from that risk. It is not the case that this situation has not been rehearsed—it is out there.

If we believe that franchising will produce better services for passengers, we cannot have a situation in which authorities are worried about bringing schemes forward because they are intimidated by the financial risk. The Government might feel that that is not relevant, in which case they can demonstrate their confidence in the new system by making it clear that the risk does not lie with the local authority.

Some share the view that was expressed by the board in the Nexus case. The Confederation of Passenger Transport has, indeed, said that bus franchising

“would unquestionably amount to indirect expropriation”,

and that the Bill is “anti-enterprise” and

“silent on the issue of compensation.”

I and many others obviously do not agree. As I have said, franchising moves competition from on the road to off the road, with the system of bidding for service contracts.

More than that, any industry that receives almost 50% of its revenue from the public purse cannot be surprised that the public seek a say in how the services they fund are run. The Transport Committee found:

“We accept that the question of whether incumbent operators would suffer a loss from franchising is a complex one. However, franchising does not mean operators already providing bus services in the market cannot compete; it simply means that they must compete for the market rather than for passengers as they do at present. There is no case for compensation for operators in areas where the local transport authority decides to introduce franchising.”

The Opposition need clarity on this issue, because we fear that if the Government do not provide it, good schemes might not be introduced.

[Andrew Jones]

Amendment 24, which was tabled by the hon. Members for Cambridge, for Nottingham South and for Scunthorpe, proposes that central Government assume liability for compensation payable as a result of a successful claim against an authority that has implemented franchising. The Bill is about devolution. It gives authorities the ability to decide which model of bus service provision works best for local passengers. It makes it clear that the decision to implement franchising lies with the Mayor or the authority in question and not with central Government

Local accountability is at the very heart of the Bill. Any Mayor or authority that is not able to stand by and take responsibility for their decision should not implement franchising in the first place. Looking to central Government to solve local problems would undermine the accountability required to make a success of franchising in the longer term. Frankly, it would be out of step with the rest of the Bill for central Government to step in and assume responsibility for a local decision in which they have played absolutely no part. The proposal is very strange, and would mean a complete break between accountability and responsibility.

[Bridget Phillipson]

The Minister will recall that during the process that led to the quality contract scheme decision in Tyne and Wear, the issue was, in part, where responsibility would lie were there to be a legal challenge, not on the grounds of the scheme itself or in respect of whether any compensation would be owed, but concerning where responsibility for the legislation itself would lie. This is Government legislation, so would it not be for the Government to defend, if challenged, its principle and to take on any liabilities that arose from that?

[Andrew Jones]

In developing the legislation, we have taken into account the views in the quality contract board’s comment on compensation. We are confident that the processes in the Bill are fair and give operators sufficient notice to enable them to plan accordingly. I therefore do not think that what the hon. Lady says will apply, but we have clearly been learning from the problems that the north-east, more than any other area, experienced in the quality contract scheme.

[Huw Merriman]

The Transport Committee spoke to authorities that might consider franchising about the risks they would have to bear. Surely this is one. If they decide that it is not a risk worth taking, they will not utilise the power. It is not just a question of asking for a central Government bail-out, but a question of asking for a bail-out from my local taxpayers, who will not have the benefits of franchising. I find the proposal outrageous.

[Andrew Jones]

It is a strange idea to put forward that central Government should be liable for decisions taken in a local council or by an elected Mayor. That break between accountability and responsibility could only lead to bad practice. Any legal challenge by operators against an authority is likely to be based on the way in which the authority has approached the decision-making process. Central Government are not seeking to control that, and we should not be responsible for it. I therefore ask the hon. Member for Cambridge to withdraw the amendment.

[Daniel Zeichner]

I note that the hon. Member for Bexhill and Battle is outraged by the suggestion, but the crux of the point was made by my hon. Friend the Member for Houghton and Sunderland South and it is an important point. It is clear that some in the industry see the concept as an act of expropriation—that is what the industry body has said. The Government are proposing the legislation and we support them, but the danger, as I have said, is that if local authorities fear that they will be subject to the full force of legal challenge, people might be unable to use this good legislation. We will be back to a situation of spending many years talking about doing absolutely nothing, as the hon. Member for Bexhill and Battle said.

--- Later in debate ---

[Daniel Zeichner]

I shall speak to amendments 37 to 39. Amendment 37 would allow the franchising authority at an early stage to obtain pensions information from operators so that it can begin to understand the potential scale and impact in relation to historic and future pension liabilities. Currently, proposed new section 143A(3)(e) says:

“Information about persons employed by the operator in the provision of those local services”.

As such, it is not clear whether pensions information would be included. Will the Minister clarify whether the Bill will enable franchising authorities at an early stage to obtain information about pensions and the pension schemes of individuals employed by the operator? Does he agree that the amendment enhances the provisions by ensuring that franchising authorities have access to this relevant information in preparing their assessments?

Amendment 38 would enhance the Bill, better reflecting draft regulations and guidance. The statutory guidance includes a new obligation for authorities to consider journey speeds and reliability when developing an assessment. In order for authorities to be able to satisfy this additional obligation, an amendment to the Bill will be required so that authorities can request the data from incumbent bus operators. A large amount of the information is held only by operators and is not currently available to authorities. Currently, journey speeds and reliability are not provided for in the list of information that authorities may request from bus operators, meaning that authorities are unable to satisfy this additional consideration. Does the Minister agree that including the measure in the Bill will ensure that the Bill and the accompanying guidance are better aligned?

Amendment 39 reflects the fact that “a reasonable period” is not currently defined. Obtaining the information from operators set out at proposed new section 143A is vital to inform the franchising authority’s assessment. Any delay in providing that information will have a significant impact on the timetable for audit, public consultation and the Mayor’s decision. Does the Minister agree that 56 days is a reasonable period? If not, how does he define “a reasonable period” and will he make that definition clear in the accompanying guidance?

[Andrew Jones]

This group of amendments relates to the information authorities can request from bus operators in connection with their franchising functions. Amendment 33 would require bus operators to provide information to authorities about the services they operate under existing franchises and outside the franchised area. The purpose of clause 5 is to ensure that authorities have the information they need about the services in their area so that they can make an informed decision. I therefore struggle to see the rationale behind requiring them to provide information about services that are unconnected to the scheme they are developing or their area.

[Graham Stringer]

Business case guidance, as I said, specifically requires the franchising authority to consider the impacts of franchising on neighbouring authorities and services and transport in their areas. Surely that is a reason why the bus companies should hand over information about what they are doing in those areas.

[Andrew Jones]

The hon. Gentleman is talking about considering developing schemes and the impact on bus provision in neighbouring areas. It does not necessarily suggest that entirely unconnected areas need to have information about franchises beyond the area directly under consideration. I understand where he is coming from, but the information described in the amendment would not be material to an authority’s assessment. I am not convinced that there is any need for the authority to have access to it. I hope he considers withdrawing the amendment.

Amendments 37 and 37, tabled by the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), propose to add new categories to the list of information that can be requested by an authority—in particular information about an operator’s pension schemes, and about journey speeds and reliability. Clause 5 already allows authorities to request information about people employed by operators. That will include information about their pension arrangements. That is clearly a material consideration and will be included. I am not convinced therefore that amendment 37 is necessary.

I agree that an authority may want to consider information about journey speeds and reliability when conducting its assessment, particularly to understand where there are congestion hotspots. Having said that, I would like to think that any authority with the skills and abilities necessary to implement a franchising model already has a clear view of where congestion problems are in its network. There are other ways that the authority could access that sort of data without placing burdens on operators, such as through existing punctuality and timetable information and roadside monitoring equipment.

We are currently consulting on draft regulations under the clause that set out further categories of information that can be requested by authorities. If a clear case is made through our consultation that journey speed information would be a valuable addition to that secondary legislation, we will certainly be happy to consider it, but I am not convinced today that we should place it on the face of the Bill. I hope I have provided the hon. Member for Cambridge with reassurance that the issue will be addressed and that he will therefore not press amendments 37 and 38 to a vote.

Amendment 39 would require operators to provide the requested information within 56 days rather than at the end of a reasonable period that the authority may specify. We want to ensure that we leave as much flexibility as possible to allow authorities to work with operators on a local level. In some cases, the information requested will be very limited and could be provided in a shorter timescale. We also have to consider the full range of possibilities and give due consideration to smaller operators, which may have more difficulty collating and sharing information when their limited resources are focused on doing the day job and running their existing services.

The Bill will allow authorities to take local circumstances into account and set realistic and appropriate timescales for delivery, without an arbitrary cap. If an operator fails to take all reasonable steps to respond to a request, the Bill requires the franchising authority to report it to the traffic commissioner, who then has the ability to impose sanctions on operators that contravene that requirement, provided that the commissioner agrees with the authority that the operator has not taken all reasonable steps to respond. Given that flexible approach, which I believe will work well in practice, I ask the hon. Member for Cambridge to withdraw amendment 39.

--- Later in debate ---

Question proposed, That the clause stand part of the Bill.

[Andrew Jones]

The clause introduces new provisions for advanced ticketing schemes in England, which improve the existing ticketing powers in the Transport Act 2000 in a number of ways. First, the clause future-proofs the legislation by ensuring that new or future developments in technology can be accommodated within its framework. Secondly, the clause contains new duties for local authorities to consider linkages and compatibility with other multi-operator ticketing schemes. I must emphasise, however, that this is not about price. There is no ability for ticket schemes to set ticket pricing. An advanced ticketing scheme may only be made by local transport authorities in England. The existing ticketing scheme provisions will continue to apply in Wales and to schemes made by an English authority in conjunction with a Welsh one. This part of the Bill has been widely welcomed in our discussions and has not proved at all controversial.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8 ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 9

Enhanced partnership plans and schemes

Amendment made: 11, in clause 9, page 42, leave out lines 15 to 20.—(Andrew Jones.)

This amendment removes a requirement that, under an enhanced partnership scheme, new buses providing local services must meet eligibility requirements contained in the “Low Emission Bus Scheme” (a programme of grants to support the use of low and ultra-low emission vehicles), where the vehicle comes into service after 1 April 2019.

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Jones]

The clause will introduce enhanced partnerships in England. They go further than the advanced quality partnership schemes provided for in clause 1, which we discussed this morning. In particular, enhanced partnerships may include a broader range of requirements. They are designed to be easier to apply to a wider geographical area, and provide for the involvement of operators from the outset. They do not require every single objection from operators to be resolved.

The clause provides for enhanced partnership plans and enhanced partnership schemes. The plan provides the context for the partnership and sets out the bus improvement objectives, which are relevant to all parties. Detailed actions to be taken by the authority and bus operators on the ground locally are set out in the associated scheme or schemes. Both the plan and schemes are made by the local transport authority but are developed in partnership with any relevant operators that wish to participate. To ensure that operators remain involved and supportive, the authority can proceed at certain key points only if it has sufficient support for its plans from the relevant operators. The mechanism by which that will be judged will be set out in secondary legislation, on which we are currently consulting.

Under an enhanced partnership, competition remains generally on the road, and services continue to be provided on a commercial basis. All operators in the scheme area, whether a new entrant or an incumbent, must comply with any of the requirements set out by the scheme. Those requirements fall into two broad categories. Operational requirements can include vehicle standards—including emissions standards, as we discussed this morning—branding, payment methods, ticketing structures, the price of multi-operator tickets and information to be provided to passengers. Route requirements address the frequency and timing of particular services.

There is a menu of options so that authorities can work with operators and passenger representatives, among others, to find the best solutions for their area. That is the essence of an enhanced partnership. It is a flexible set of powers that can be adapted to local circumstances. The provisions have been welcomed by passenger groups, bus operators and local transport authorities. I think that these provisions are at the heart of the Bill.

Question put and agreed to.

Clause 9, as amended, accordingly ordered to stand part of the Bill.

Clauses 10 to 13 ordered to stand part of the Bill.

Clause 14

Traffic commissioner functions

[Daniel Zeichner (Cambridge) (Lab)]

I beg to move amendment 30, in clause 14, page 69, line 22, at end insert—

“(5) After section 6I insert—

‘6J Community bus routes

(1) Traffic Commissioners must keep a list of bus routes in their area which are of community value.

(2) For the purpose of this section, a bus route of community value is one that has been designated by the traffic commissioner as furthering the social well-being or social interests of the local community.

(3) Bus routes may only be designated by a traffic commissioner as being of community value in response to a community nomination.

(4) A community nomination must be made by a community group which is based in, or has a strong connection with, an area through which the bus route passes, and on which community the bus route has a direct social impact.

(5) A community group may be, for example—

(a) a local or parish council;

(b) a voluntary or community body with a local connection;

(c) a bus user group;

(d) a group formed for the specific purpose of maintaining the bus route;

(e) a church or other religious group, or

(f) a parent teacher group associated with a particular school or schools.

(6) The traffic commissioner must consider the community nomination, and if—

(a) the nomination is successful, the commissioner must notify the relevant parties of this decision in writing; or

(b) the nomination is unsuccessful, the commissioner must notify the relevant parties of this decision in writing and give reasons why the decision was made.

(7) An operator of a bus route which is designated as being of community value must give a minimum of six months’ notice of an intention to terminate the service, in order for the community to—

(a) work with relevant authorities to find an alternative operator;

(b) set up a community transport group in order to run the service; or

(c) partner with an existing not-for-profit operator to run the route.

(8) The community may apply to the Secretary of State for financial assistance, training or advice during the notice period in order to achieve any of the aims set out in subsection (7).’”

This amendment would give Traffic Commissioners the power to designate bus routes assets of community value.

I apologise, Mr Owen, but this bus is moving rather more quickly than I had anticipated. We are doing very well.

The notion of defining a bus route or a bus service as a community asset may come as something of a surprise to people, as it did when it was first raised with me. However, the more I have thought about it, the more significant it seems it could be. Although much of the discussion today, with our comments about Nottingham, and on Second Reading has been about urban areas, the problems facing buses in rural areas are dear to many people’s hearts. Many of us would agree that the local bus service is a key aspect of everyday life in many parts of the country.

Without rehearsing the figures, which I suspect are familiar to all of us, bus services are disappearing from many parts of the country for a whole range of reasons. As was explained by my hon. Friend the Member for Ashfield, there is quite often a feeling of powerlessness when there is a sudden change to what may be a lifeline—sometimes that is for relatively few people, but it is crucial to them none the less. Whether from urban or rural areas, I suspect all of us, as Members of Parliament, have found ourselves in the difficult situation of responding to local people who come to us and say, “The bus service is going or changing; what can you do to help?” That has been a part of the discussions we have had throughout the day.

I suspect that a discussion about advanced quality partnerships, franchising, net costs, gross costs, contracts and all the rest of it will not greatly reassure many people. They want to know what can be done about their bus service; that is what matters to them. What we suggest is that those means of communication—those routes—are seen as a community asset and put on the same legislative footing as community assets such as pubs, community buildings and land. That is not to say that something can be preserved forever—that is impossible—but the measure would slow down the process, just as we do with a potential pub closure, to give the community the chance to build the capacity and support to put something else in place. I am not sure that the big society is still with us—

[Andrew Jones]

It certainly is.

[Daniel Zeichner]

In which case, this is the big society revisited. I am sure the Minister will be commended for defending it.

The community asset legislation sits comfortably within the Conservative Government’s Localism Act 2011. It rightly recognises that community assets should be protected and given elevated status so that communities can come together and help to save or run things that they judge they cannot do without. The proposition is to establish a new class of assets of community value—bus route assets of community value—based on the route of the bus, as designated and held by the relevant traffic commissioners. It is notable that currently, bus stops can be an asset of community value. Indeed, some have been designated as such, which shows the importance that local communities place on such services.

The amendment would allow communities to come together to apply to the relevant traffic commissioner to designate the service they hold dear as a bus route of community value. The route would then be subject to a six-month moratorium should there be a threat of its being cut, which would allow precious time for the community, as defined by the Localism Act, to work with the relevant authorities to find an alternative operator, set up a community transport group to run the service, or partner with an existing not-for-profit operator. The powers mirror those in the Localism Act, and would change rural passengers’ influence over how bus services are delivered to them.

The nomination would be made by a community based in, or with a strong connection to, an area through which the bus route passes and on which the route has a direct social impact. Community groups could include a local or parish council, a voluntary or community body with a local connection, a bus user group, a group formed for the specific purpose of maintaining the bus route, a church or other religious group, or a parent-teacher group associated with a particular school or schools.

--- Later in debate ---

[Daniel Zeichner]

Yet again, my hon. Friend is absolutely right. This is about trying to find ways of tackling the relentless erosion of services that have been a key part of the fabric of many communities.

Happily, I have been provided with a particularly good example from the constituency of Witney, which I am sure a number of us have had cause to visit in the last year—well, we should have, anyway. I did. I am not sure why, in retrospect—[Laughter.] It was because I was a good friend of the unsuccessful Labour candidate. Anyway, in the face of vital service withdrawals, the local Labour and Co-operative councillors in Witney—I think it was the Labour candidate, in fact—have helped to save local bus services for the community.

The West Oxfordshire Community Transport benefit society was formed, and its people’s bus service has begun to carry passengers. It has managed to maintain timetables, fares and the routes that people in the area rely on, but one thing is different about that new service—it belongs to the community itself and will be run not for profit. As it is a community benefit society, anyone is able to join, which has an additional effect in terms of community development and bringing people together. That is a good example of the types of organisations and communities that would benefit from the amendment.

The amendment would go one step further than the existing Localism Act powers and place a duty on the Secretary of State to provide financial assistance, training and advice to communities working to save routes through the new moratorium period. We think it is an innovative proposal that could be built on by a Government that wished to join the hundreds of communities around the country that will meet today or this week to discuss ways in which they can maintain their area’s bus service.

[Andrew Jones]

Amendment 30 would reinforce the local importance of certain bus services by enabling them to be designated as routes of community value. I am fully aware of the issues that many people experience with bus services that are under threat or have been reduced, and there is no doubt that many local authorities face funding issues and therefore difficult decisions about the services that they wish to subsidise. However, in several areas of the country we are seeing innovative solutions, from the community transport sector stepping in to the provision of more integrated services and the Total Transport pilot schemes that my Department is supporting. It is encouraging to hear the story from Witney. Interestingly, that is not an area that I have been to for quite a long time. I hope that my hon. Friend the Member for Sherwood is not listening. [Laughter.] Well, it was never in doubt, was it?

The amendment would resolve issues relating to the continued provision of services on routes that are deemed to be of community value. I agree that where services are to be cut or their frequency is to be significantly reduced, commercial operators—or, in the case of subsidised services, local authorities—must do all they can to keep people informed, consult them and seek to pass on a service in some form. That is part of the thinking behind clause 19, which provides for greater information to be provided to local authorities when a service is reduced or cancelled.

However, I do not think that it is reasonable or sensible to force operators to continue to operate a service, potentially at significant financial detriment, for six months rather than the 56 days currently required. Doing so could act as a disincentive for operators to trial new services, step in to see whether they can make a service viable or operate services commercially where local authority funding is precarious and can be kept going for only a short time. The unintended consequences could easily outweigh the benefits that the Opposition wish to see. I hope that, in the light of those considerations, the hon. Member for Cambridge feels able to withdraw his amendment.

Bus Services Bill [Lords]

Andrew Jones Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 27th March 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

It will be useful for me to cover all the amendments in one, hopefully fairly detailed, set of replies.

New clause 1 would require the Secretary of State to develop and publish a national bus strategy—which we discussed at some length in Committee, where I am glad the discussions were considered, reasonable and helpful—and to consider a reduced fare concessionary scheme for young people aged 16 to 19 as part of the strategy. New clause 2 would require the Secretary of State to publish a report setting out the possible steps to support local transport authorities to provide concessionary bus travel to apprentices aged 16 to 18.

While the Government fully appreciate the importance of public transport for young people, particularly those living in more isolated areas, we also recognise that the cost of transport can be an issue for some young people, including those who are participating in apprenticeships. One reason for the introduction of the 16-to-19 bursary fund was to help with transport costs. Funding is allocated to schools and colleges and is used to support disadvantaged young people who need the most help with education and training costs, and the 2015 evaluation showed that nearly 400,000 young people were being supported. However, the statutory responsibility for transport to education and training for 16 to 19-year-olds rests with local authorities, enabling them to make decisions that best match local needs and circumstances. Many authorities and operators already offer discounts for passengers in that age group.

Both issues relate to funding. In Committee, I made it clear that the Bill is not about funding; it is about providing authorities with new tools to help them improve local services in a way that best suits their areas. As part of the 2015 spending review, my Department is protecting the bus service operators grant at current funding levels until 2020-21, already providing significant certainty of funding for bus services without the strategy proposed by the hon. Member for Cambridge (Daniel Zeichner). The funding is provided directly to local authorities and to bus operators and is not broken down into categories of service or by route. Attempting to do so would be a burdensome exercise that could risk embroiling central Government in the fine detail of local bus service provision.

At the heart of the question about a national strategy is the fact that the Bill relates to local bus services. It is not about a top-down, national plan. Buses are local by definition and play a key role in local transport planning. That is why we are seeking to support local councils with more powers. A national plan is not the answer. More powers for local authorities are part of the answer, and they are what the Bill provides.

[Graham Stringer]

One of our few disagreements in Committee was about what should be determined locally and what should be determined nationally. When the Government are spending billions a year on bus services, does the Minister not think that they should take an interest in there being more bus passengers and more bus miles and in what the fares should be? That could be stated as part of a strategy. In that respect, what is the fundamental difference between buses and trains?

[Andrew Jones]

I am happy to agree entirely that buses are a critical part of any local transport mix. I am a great champion of bus travel, which has been made clear in all my work as a Minister and in Committee. However, this is about a local issue, not a national solution. I made a joke in Committee that one of the great truths of business is, “I’m from head office, and I’m here to help.” I often was that person from head office, and I was not always quite so welcome.

This should be about local transport needs, not about a national top-down strategy. Are the Government neutral? Of course we are not, which is why we introduced the Bus Services Bill and protected the bus service operators grant, but ultimately this is about local authorities working in partnership with local bus operators to deliver the right services for their area.

[Graham Stringer]

The Minister is being typically generous in giving way. If it is about local decisions, why will he not devolve the bus service operators grant to local authorities or elected mayors?

[Andrew Jones]

Some of the grant is already devolved to bus operators, but the key reason not to devolve it further is that it goes direct to bus operators, which very frequently operate routes that cross council boundaries. Council boundaries and bus routes are not the same thing. Transport to work has nothing to do with a local authority’s geography, so it would potentially be a bureaucratic nightmare to change the system.

Having said that, we are considering how to reform the BSOG operation. The grant pays a flat 34.57p a litre in subsidy, which is why it used to be called the fuel duty rebate. We are considering how to incentivise better practice, rather than just rewarding bus operators for using fuel, which is not good practice.

[Lilian Greenwood]

It feels as if the Minister is trying to devolve all responsibility for the state of our bus services. It was announced in the 2015 local government settlement that core central Government funding to local authorities would fall by 24% in real terms, which is partly why local authority support for buses is falling. Does he not take any responsibility for the impact that is having on bus services and on people’s ability to use the buses?

[Andrew Jones]

Of course I recognise that the pressures on local government finance are quite acute. In fact, I was in charge of my local council’s financial affairs throughout the financial crash in 2008-09, so I am fully aware of that. At the same time, it does not change the requirement to recognise that buses are a local service and should be determined locally.

[Andy Burnham]

Has my hon. Friend the Member for Blackley and Broughton (Graham Stringer) not just exposed a major contradiction at the heart of the Government’s position? The Minister says that he wants local delivery but, when it comes to cross-border issues, he says that Whitehall knows best. Surely the Government’s position on bus services should be for maximum devolution, including of the budget.

[Andrew Jones]

I am not saying that Whitehall knows best; I am saying that the grant is best delivered to bus operators that are running cross-border services, and then to take it from there. It is not a question of Whitehall knows best. We are not determining the routes that operators should be operating. We are keen to see more support for buses and more routes available, but the way to achieve long-term sustainable bus growth is to have more passengers on the buses.

My right hon. Friend the Member for Basingstoke (Mrs Miller) mentioned the Paulley case, which took five years to go through our legal system and reached the High Court. Specifically, we will be inviting the Equality and Human Rights Commission to attend the meetings of our working group, on which progress has been made. We seek to have a small working group that will look at the practical implications of the Paulley case. Among the members invited so far is the Disabled Persons Transport Advisory Committee, because we want the voice of disabled groups. We also want the voice of the bus operators, so we have invited the Confederation of Passenger Transport and the Association of Local Bus Company Managers. We also want the voice of passengers, so Transport Focus has been invited. I hope we will see the Equality and Human Rights Commission, which has been invited to attend but not as a formal member. I hope to get things under way with our first meeting next month.

[Ian Mearns (Gateshead) (Lab)]

I apologise to the Minister, but may I take him back to the cross-border issue? Even in areas that do not have a landscape drawn out for elected mayors, local authorities have for the past three decades worked in partnership with one another where bus routes go across their local authority boundaries. I do not understand his point about devolving the grant to the bus company and not to groups of local authorities in travel-to-work areas.

[Andrew Jones]

The devolution of the funding goes straight to local bus companies. We are looking at how we can reform BSOG and I will take the hon. Gentleman’s points as a contributory suggestion. I do not want to change the system unless we are clear that it will keep more routes operational. We would have no guarantee, unless we ring-fenced the funding, that if we granted the devolution of BSOG to a local authority it would be used to support buses. It could go towards other forms of local transport. I want to keep it focused on buses. That is why it is with operators. However, I will take his point on board as we think about how to take this matter forward.

To answer my right hon. Friend the Member for Basingstoke a little more fully, the working group needs to be very action-oriented. The High Court encountered practical challenges in dealing with the issue of disabled access. We need to get the balance right. The space that is used for wheelchairs may also be used for parents with disabled children, the owners of assistance dogs and people who use walking frames. I want to protect everyone’s needs.

Disabled transport plans such as DPPPs are important in providing confidence and consistency for disabled people when using transport. I have much sympathy with the reason underlying my right hon. Friend’s suggestion. We will take forward a recommendation in the guidance supporting the Bill that authorities ensure that information is made available to passengers. That might be in a form that is provided by the authority or by individual operators. Again, we have been working on this issue with DPTAC, which has developed a template. I am keen to publish that with the guidance and encourage bus companies to use it. I therefore expect us to make progress in this area, which I hope will assist my right hon. Friend.

[Mrs Miller]

I welcome the Minister’s clarification with regard to the guidance being made available to passengers, but I gently remind him that when it comes to rail passengers, not only is there a regulator breathing down the neck of providers, but there are fines for non-compliance. How can he give this real teeth?

[Andrew Jones]

My right hon. Friend makes an interesting point, but I am not sure that there is a straightforward read-across from rail to buses. There are 30 or so rail companies in this country and 1,000-plus bus companies. We need to have something that is proportionate. For the very largest groups, what she suggests might be appropriate. For the smallest companies, which might be operating a single route, what we are suggesting would clearly be more appropriate to provide information to disabled passengers, which is ultimately our joint objective.

New clause 3, which was tabled by the hon. Member for Southport (John Pugh), would require local authorities that do not provide a concessionary scheme for 16 to 18-year-olds in full-time education to produce a report, setting out the impact on that group of young people and on local traffic of not providing such a scheme. As I have said, the legal responsibility for transport to education and training for 16 to 19-year-olds rests with local authorities, which are free to put in place appropriate arrangements. Those arrangements do not have to be free, but we expect local authorities to make reasonable decisions based on the needs of their population, the local transport infrastructure and the available resources.

Local authorities already have a duty under the Education Act 1996 to publish a transport policy statement each year, specifying the travel arrangements they will make to support young people to access further education and training. New clause 3 would simply replicate that duty.

In short, I do not believe that new clauses 1, 2 and 3 would add anything of value to the delivery of a bus service on a local basis or directly benefit passengers. I therefore hope that hon. Members will not press them.

[Daniel Zeichner]

Once again, we have had a constructive exchange; the points made about disabled access are welcome and will be pursued. As in Committee, much of the discussion has hinged on issues of localism. My hon. Friend the Member for Blackley and Broughton (Graham Stringer) and my right hon. Friend the Member for Leigh (Andy Burnham) described well what we and many others see as the failures of the systems over the past 30 years. We discussed at length in Committee the value of a national framework, and I did not hear a huge amount of opposition to that in the contributions from Government Members, with many seeming to suggest that they, too, could see the benefits. The Minister heroically stuck to the script and clearly does not wish to go down that route just at the moment, but as we consider in future the way we fund bus services, be it the concessionary fares schemes or the bus service operators grant, there will clearly be a debate to be had.

--- Later in debate ---

[Daniel Zeichner]

There is a wide range of amendments in this group, many of which we support, but some we do not.

I genuinely hope that the Minister will consider new clause 4 on bus safety, despite his comments in Committee. More disappointment has been expressed to me on that aspect of our Committee discussions than on any other, partly because the comments of the Minister in the other place had been encouraging, but also because I cannot believe that there is any disagreement on the value of improving bus safety, and this is widely seen as an effective and cost-effective way of achieving that goal.

I think the Minister suggested in Committee that he might be minded to insert some guidance to encourage bus operators to sign up, but the evidence on voluntarism is clear: to my knowledge, no bus operator outside the London franchises is signed up to any independent, confidential incident reporting system. We have an opportunity now to end that situation. As my hon. Friend the Member for Gateshead (Ian Mearns) said, such a system is not expensive. It works in the railway industry, and I have not heard a strong case made against it. It seems to work well and I urge the Minister to grasp the opportunity.

Amendments 14, 16 to 23 and 15 appear to us to be unnecessary and to go against the spirit and devolutionary nature of the Bill. The assessment process laid out in the Bill and the extensive guidance—168 pages—available for it are extremely thorough and tough, and do not need to be added to. Amendment 24 undermines the assessment made by the Government of the issues relating to compensation and sufficient time to enable operators to plan. Provisions already in the Bill fully satisfy all value-for-money considerations. We are pleased that the Minister confirmed on Second Reading and in Committee that the aim of the process is not to put barriers in the way of authorities proceeding to franchising. We fear that the amendment threatens the very heart of the Bill. Amendment 25 also seems to be unnecessary, as additional appropriate independence, rigour and structure for the audit process will be ensured by the Government, to which I think the Minister is about to speak. Amendments 26 and 27 also seem at odds with the devolutionary nature of the Bill, because it should be for elected authorities to make the decisions, based on their local judgments.

We strongly support amendments 6, 7, 10, 11 and 13, tabled by my hon. Friend the Member for Gateshead. The arguments were well made in Committee, and perhaps even more strongly today. In any transfers workers should be properly protected, and we have the opportunity to ensure that. I fear that the Government will choose not to take the opportunity, but I urge them to do so.

[Andrew Jones]

The respective roles of central Government and local government were a running theme in Committee, and I think we are back to it this afternoon. I will begin with the amendments that deal with the franchising schemes.

The decision to move to a franchising system is a big one for any authority or combined authority to take, and it is therefore not to be undertaken lightly. It must have at its heart improvement for bus passengers, but it must be very much a local decision. That principle has underlain the Bill right from the beginning. We want to ensure that authorities contemplating franchising do so with their eyes wide open to the opportunities, the risks and the costs, and we expect them to have consulted widely on their proposals.

The Bill sets out clearly the processes that authorities must follow before they can implement franchising. Those include developing an assessment of the proposed franchising scheme—in effect, a business case. As part of that assessment, the authority must consider the value for money and affordability of the proposal and must compare making the proposed scheme with other courses of action, such as a partnership—very much as my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) suggested.

Several of the amendments in the group would change how those arrangements are operated. Amendment 24, tabled by my hon. Friend, would require an authority to include in its assessment consideration of whether the proposed scheme will be more efficient, effective and economic than any other option, taking into account any compensation payable to operators. Given the extensive requirements I just set out, I do not see a need to make those similar additional matters a separate part of the assessment. Also, it is not necessary or appropriate to refer to compensation in this part of the Bill, or indeed any other. Any move to a franchising scheme will not come as a surprise to bus operators; the clear processes and consultation arrangements we have set out will give them sufficient warning and sufficient opportunity to express their views on the proposed scheme, as statutory consultees.

--- Later in debate ---

[Graham Stringer]

The Minister says that competition will continue, but does he accept the evidence that the Transport Committee took from the Competition Commission, which was that the commission was unable to find much evidence of any on-road competition?

[Andrew Jones]

My point is that competition will move, but it will not disappear from the market. Competition now takes place on the road; it will move from the roadside to the tender. I do not accept that competition disappears from the marketplace. I came to this place from a robust private sector background, where competition was the daily bread-and-butter activity, and I am sure that it can have a positive impact on customer service, innovation, price and so on.

[Robert Jenrick]

The Minister kindly met my constituent John Marshall, who in addition to running a medium-sized bus company chairs the east midlands passenger transport organisation that represents other small and medium-sized bus companies in the region. He tells me that for him and his members, the question of compensation remains unanswered by the Bill. For the sake of clarity for bus operators, will the Minister say whether the Government intend that in the event that franchises are lost, no compensation will be or should be paid to any bus company in the UK?

[Andrew Jones]

We do not think that it will be a requirement to pay compensation, but an authority that goes down the route of developing a franchising model will of course be free to offer payments as it sees fit. It is not Government policy that such compensation will be mandatory.

Amendments 16 to 23, which were tabled by my hon. Friend the Member for North West Norfolk would require a franchising authority to be satisfied of, rather than to consider, certain matters when making its assessment of a proposed franchising scheme. That is a significant distinction. The assessment as set out in the Bill does not require the authority to pass certain tests or to prove that franchising would achieve certain outcomes. Instead, it reflects the standard approach for public sector investment decisions of requiring a view to be taken on the overall merits of the scheme.

That is a deliberate move away from the quality contract scheme process, under which no local transport authority has established a franchising system. A requirement for a franchising authority to satisfy itself that franchising will deliver certain outcomes risks raising an impossible hurdle. It would be difficult for authorities to satisfy themselves with certainty, as their analysis, by its very nature, will be based on assumptions and projections about the future. The amendments therefore risk making the Bill unworkable in practice. We agreed to deliver as part of our devolution commitments franchising powers that would be more usable than the existing quality contract schemes, and that is what the Bill does. I hope that, on the basis of the explanations I have given, my hon. Friend the Member for North West Norfolk will not press amendments 16 to 24.

In addition to requiring a franchising authority to prepare an assessment, the Bill requires the authority to obtain a report from a qualified auditor. In relation to the consideration of affordability and value for money, the report must set out whether the authority has used information and conducted an analysis of sufficient quality. The authority must publish the auditor’s report as part of its consultation process. Amendments 2 and 3 make it absolutely clear that the auditor appointed for this purpose must be independent. It has always been our intention that the auditor should be independent, but we wanted to make that absolutely clear and put it beyond any doubt. Amendment 3 imposes duties on the Secretary of State to issue guidance on the matters that a franchising authority is to take into account when selecting an auditor and on the criteria to be taken into account by an auditor in reaching a view on the relevant aspects of the authority’s assessment. An authority or auditor must have regard to such guidance.

I am happy to say that I am in total agreement with my hon. Friend the Member for North West Norfolk on amendment 2. He may be surprised to hear that I also agree with the principle behind amendment 25, but the nuances of how independence from the authority can be demonstrated are better addressed through guidance rather than on the face of the Bill. That is the thinking behind amendment 3. For example, amendment 25 would require an auditor to have five years of independence from the authority, which could be difficult to deliver. For the combined authority of Manchester, for example, it would have to be demonstrated that none of the bigger accountancy firms had dealt with any of the constituent authorities on any issue over the past five years, which could be quite a challenge. However, the principle of independence has absolutely been in the Government’s thinking since the beginning. I support that principle, which is behind my hon. Friend’s amendment, and that is why I hope that he will feel able to withdraw amendment 25.

[Sir Henry Bellingham]

I am grateful to the Minister for his comments on amendment 25, but will it be possible to include the spirit of the amendment in the guidance that the Secretary of State will issue? If he can give an undertaking that that could happen, I would be prepared to withdraw amendment 25.

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[Andrew Jones]

I can give my hon. Friend that assurance. We will deal with independence in the guidance, and independence from the decision-making body will be a basic criterion for the auditor.

[Andy Burnham]

I am reassured by what the Minister said this afternoon in rejecting amendment 14 and other related amendments. I ask him to go a little further and commit to the House that the spirit of his remarks today will be carried into the guidance and regulations that will follow the Bill—the consultation on them closed sometime last week. Will he also work closely with Transport for Greater Manchester and other metropolitan transport authorities to ensure that the wording of the regulations and the guidance is consistent with what he has said today and what is in the Bill?

[Andrew Jones]

I can provide the right hon. Gentleman with that assurance. We are not seeking to stand in the way; we want to create a suite of powers for local authorities to make decisions about what is right for their area. In some cases, it will be a franchising model, but that will be at the margins and not what will happen in most parts of the country. However, some parts, such as Greater Manchester, have indicated much interest in that model. It is not one of our objectives to block local authorities from choosing what is right for their area. We want a thriving bus industry, with local authorities working with bus operators to deliver a better network with a better deal for passengers and more passengers on buses. That is our objective with this Bill.

Amendments 4 and 5 make clear the precise requirements that a person has to satisfy to be appointed as an auditor. We are proposing the changes in response to effective representations we have received from a number of Members and following meetings that the Secretary of State and I have had to discuss the practicality of existing provisions with potential auditors. I hope that the amendments will be broadly supported by Members across the House.

The aim of amendments 14 and 15, once again tabled by my hon. Friend the Member for North West Norfolk, is to prevent a franchising scheme from proceeding if the passenger benefits it is expected to deliver could be achieved by making a partnership scheme. I sympathise with much of my hon. Friend’s intentions. Indeed, my hon. Friends the Members for North West Norfolk and for Wimbledon (Stephen Hammond) have done a significant job in speaking up on behalf of bus passengers for a considerable time. I do not want to see franchising pursued for any reason other than passenger benefit, and certainly not for ideological reasons. Passenger benefit is a theme that runs throughout the Bill. We want to see passenger experiences improve.

As I have made clear, however, the Bill already requires a local transport authority to compare making a franchising scheme with one or more other options. I hope that my hon. Friend the Member for North West Norfolk will be reassured to know that that should be a proper consideration of the options available. Indeed, the draft guidance, on which we recently consulted, states:

“Identifying realistic options should not be a desk exercise… and authorities should engage with bus operators in the area”

to see whether there is “a realistic partnership proposition”. It also states that an

“authority should not dismiss realistic”

alternatives without detailed assessment. The decision-making arrangements for franchising in the Bill are appropriate. Following a consultation on its assessment of the options, which should include bus operators and passenger representatives, an authority that decides to implement franchising must have satisfied itself that franchising is the right option for its area. Importantly, it should have a clear rationale for that decision with passengers at its heart. I therefore hope that my hon. Friend the Member for North West Norfolk will feel able to withdraw amendments 14 and 15.

The final set of amendments relating to franchising decisions are also from my hon. Friend the Member for North West Norfolk. Amendments 26 and 27 aim to prevent an authority that has developed a franchising proposal, but not progressed it, from making another franchising scheme for a period of five years. Those amendments go against the spirit of devolution. Banning the introduction of a franchising scheme for an arbitrary time period would severely restrict the capacity of an elected mayor, or other franchising authority, to take local situations into account and to act accordingly. It could also undermine the democratic process by preventing a new mayor elected within the five-year period from developing a franchising scheme, even if he or she had had franchising in their manifesto. In practice, if an attempt to franchise were to fail, it is highly unlikely that an authority would seek to make another scheme without devoting a reasonable and significant period of time to learning lessons from the experience. Given that, I hope that my hon. Friend will withdraw the amendments.

I will now move on to consider how much freedom a mayor or local transport authority should have in implementing franchising and partnership schemes. Amendments 6 to 13 and new clause 4, tabled by the hon. Member for Gateshead, seek to limit that freedom in various ways. As I said in Committee, I do not believe that mandating the basis upon which contracts are procured by local transport authorities, or the contents of those contracts, is appropriate, but that is exactly what amendments 6 and 9 propose in relation to the terms and conditions of employees. I can assure the hon. Gentleman that the power to achieve the outcome that the amendments seek will already rest with the franchising authority that will be letting the contracts. Employees and their representative groups will have plenty of opportunities to raise such points during the consultation process for the respective schemes. Indeed, it may be appropriate to put the proposals to the mayoral candidates of each of our parties.

I am a little surprised that the amendments have been tabled, because we discussed the practical concerns about them in Committee. For example, it is not clear which terms and conditions would apply where people with different arrangements had previously transferred under TUPE, and the cost of the proposals could also prove sufficient to prevent some authorities from pursuing a franchising scheme.

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[Ian Mearns]

Does the Minister accept that injuries can also occur to passengers? As a regular bus user, I have witnessed such injuries on a number of occasions. This is not only about pedestrians and other road users. Bus passengers, often without the vehicle being involved in any sort of collision, can be injured when, for instance, the bus brakes abruptly. Surely the travelling public on buses—the customers of the bus operators—have a right to some Government protection.

[Andrew Jones]

I recognise the hon. Gentleman’s point. There is no doubt that passengers can be injured on a bus. I am also a regular bus user—not that that is particularly relevant—and all of us who travel on buses will have seen such injuries. He makes a reasonable point, but it does not necessarily mean that we need to mandate a reporting system in primary legislation.

Transport for London is the main example of confidential reporting by a bus operator, and it has featured in our debates in Committee. I understand that TfL pays the CIRAS subscription. When the London Underground and rail contract came up for renewal, the CIRAS contract was extended to cover buses at no extra cost to TfL. That prospect is different from mandating that every bus operator subscribes to such a system.

As I mentioned in response to an intervention by my right hon. Friend the Member for Basingstoke (Mrs Miller), there are 30 rail companies and 1,000-plus bus companies in this country. We also need to consider the evidence. I have not been made aware of any robust evidence to suggest that arrangements introduced in London have had a significant impact on safety. If a franchising authority wishes to stipulate a system such as CIRAS as part of its conditions of contract, it is of course free to do so—that is what TfL has done here in London. Authorities that negotiate partnerships could also include bus safety measures as part of such an arrangement, so I will explore through guidance how we could encourage operators and local transport authorities to consider the benefits of an independent confidential reporting system, but we will probably limit that only to a franchising or partnership scheme to start with.

I hope that, in the light of my comments, the hon. Member for Gateshead will feel able not to press amendments 6 to 13 and new clause 4.

I have been speaking for far too long, Mr Deputy Speaker. I am sure that you and Members on both sides of the House will be pleased to hear that I am coming to the end of my remarks.

Amendment 28, tabled by my hon. Friend the Member for North West Norfolk, addresses decision making in enhanced partnership schemes. It would prevent requirements on how tickets are purchased or fares paid, on how fares or ticketing arrangements are publicised and on the price of multi-operator tickets from being specified in such a scheme unless all parties agree. Ticketing is a key element of the Bill’s partnership proposals, and one of the key principles of the enhanced partnership regime is that it does not require consensus by all operators.

Instead, affected operators may object to the enhanced partnership proposals at key points in the process, and the authority cannot proceed with its proposals if more than a sufficient number of operators object. Details of what amounts to that sufficient number will be set out in the draft regulations, on which we have recently finished consulting.

Leaving aside the objection mechanism, there are further safeguards to ensure that individual operators are treated fairly when ticketing requirements are included in an enhanced partnership scheme. A key safeguard is the ability for any proposals relating to ticketing, or any other element of an enhanced partnership scheme, to be subject to scrutiny by the Competition and Markets Authority, which will be a statutory consultee on the proposals. Our draft guidance on enhanced partnerships also makes it clear that all documents should include a section on competition, and it provides clear advice on how individual operators can raise concerns with the CMA at any point during the development or implementation of a scheme.

Perhaps most importantly, I can reassure my hon. Friend that an authority making a scheme has to be satisfied that any restrictions on competition introduced by an enhanced partnership, such as setting the price of a multi-operator ticket, are balanced by the benefit to passengers. The effect on small and medium-sized bus operators should also be taken into account as part of that process, and we have built protection for small and medium-sized operators into the Bill by requiring them to be considered, whichever regulatory model is chosen locally.

I make it clear that the provisions are about fairness, and not about protecting the commercial interests of operators. Bus operators may well prefer their passengers to buy a ticket for use only on their buses, rather than one that can be used on any bus service. That is of course in a bus operator’s commercial interest, but it might not necessarily be in the interest of a bus passenger.

If my hon. Friend’s amendment were to be accepted, only one operator would need to put its commercial interests first to block an improvement to ticketing for passengers that might grow the entire market in its area. Overall, the safeguards I have outlined are enough to ensure that proposals relating to ticketing are fair and reasonable to bus operators while delivering improvements that benefit passengers. I hope he finds my explanation reassuring and will therefore not press his amendment.

I believe the Bill already has decision making right and is in the right place to get the best outcome for passengers. In doing so, it will deliver on our devolution commitments, and I trust the House will agree.

[Ian Mearns]

I would like to think that the Minister will provide within the guidance to the Bill, once it is enacted, a reference to the Confidential Incident Reporting and Analysis System as best practice in the industry. Notwithstanding that, I do not seek to press the new clause or amendments 6 to 13. I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.



Clause 4

Franchising schemes

Amendments made: 2, page 16, line 38, after “an” insert “independent”.

This amendment and amendment 4 make plain the status of the persons who may audit an assessment under section 123B produced by a franchising authority or authorities.

Amendment 3, page 17, line 2, at end insert—

“( ) The Secretary of State must issue guidance as to the matters to be taken into account by a franchising authority when selecting a person to act as an auditor.

( ) Franchising authorities must have regard to any such guidance.

( ) The Secretary of State must issue guidance concerning the matters to be taken into account by an auditor when forming an opinion as to whether the information relied on, and the analysis of that information, by an authority is of sufficient quality for the purposes of subsection (2).

( ) Auditors must have regard to any such guidance.”

This amendment imposes duties on the Secretary of State to issue guidance on the matters to be taken into account by a franchising authority when selecting a person to act as an auditor and to issue guidance on whether the information relied on, and the analysis of that information, by an authority is of sufficient quality. It also imposes duties on franchising authorities and auditors to have regard to any such guidance.

Amendment 4, page 17, leave out line 3 and insert

“For the purposes of this section an auditor is independent, in relation to an assessment of a proposed franchising scheme, if the person would not”.

See explanatory statement for amendment 2.

Amendment 5, page 17, line 8, leave out from “person” to end of line 9 and insert

“eligible for appointment as a local auditor by virtue of Chapter 2 of”.—(Andrew Jones.)

This amendment alters the definition of “auditor” so that it means an individual or firm eligible for appointment as a local auditor by virtue of Chapter 2 of Part 42 of the Companies Act 2006 as modified by the Local Audit and Accountability Act 2014.

Clause 22

Bus companies: limitation of powers of authorities in England

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[Lilian Greenwood]

I support amendment 1, and we had a long discussion on this issue in Committee. I spoke then and on Second Reading about the success of Nottingham’s municipal operator, and so, much as I love Nottingham City Transport, I will restrain myself and not repeat myself.

I continue to question the Government’s motivation for their determination to ban local transport authorities from establishing new municipal bus companies, as Ministers have simply not made the case for such a ban. The Transport Committee, chaired so ably by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), describes it as a “disproportionate response”. Clearly, this measure is anti-localism and it prevents councils from acting in the best interests of their residents. In Committee, the Minister said that there should be a split between the commissioning and the provision of bus services. I do not disagree on that, but this ban goes far beyond that. As was noted in Committee, local authorities with municipal operators have proved themselves very capable of managing just such a split when tendering for supported services.

In Committee, the Minister also suggested that the existence of municipal bus operators

“could easily deter investment from the private sector”.

When I asked him what evidence he was drawing on in making such an assertion, he admitted

“of course we do not have any evidence for it. I am just looking at what the risks may be.”––[Official Report, Bus Services Public Bill Committee, 14 March 2017; c. 67.]

The Minister’s risk aversion is simply unnecessary and can be shown to be such. Nottingham has an excellent municipal operator, but it does not deter private sector investment; as the hon. Member for Newark (Robert Jenrick) mentioned, we have excellent private sector operators in Nottinghamshire, such as trentbarton. I hope that even at this late stage the Government will rethink their commitment to what I can only describe as an ideological obsession, and take this opportunity to end their unreasonable position and accept amendment 1.

[Andrew Jones]

This amendment, tabled by the hon. Members for Cambridge (Daniel Zeichner) and for Middlesbrough (Andy McDonald), proposes to remove clause 22. We debated this at length in Committee and I wish to reiterate that the several existing municipal bus companies, including Nottingham City Transport and Blackpool Transport, which serves the area of the rail Minister—my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard)—deliver a high standard of service, and I will expect that to continue. Their ability to provide that is not affected in any way by this clause. The franchising and enhanced partnership tools in the Bill will provide authorities with more influence over bus services than they have now, and striking that right balance between local authority influence and the role that the private sector bus operator can play is important. Our view is that passengers will see the most benefit where the commissioning and provision of bus services is kept separate. As such, we do not think that authorities should be able to set up new bus companies.

We have seen encouraging innovations from the private sector—although not exclusively within that sector—such as the introduction of smartcards, the installation of wi-fi and increased accessibility in our bus network. Those improvements have all been delivered through private sector investment and they show overall that the industry is always innovating and delivering a good deal for its passengers.

[Ian Mearns]

The Minister will be aware that over the past six and a half years local authorities up and down the country have seen significant and ongoing reductions in their revenue support grant. Ministers from the Department for Communities and Local Government have always been encouraging local authorities to be entrepreneurial and enterprising, and to go out there and earn money to backfill where the RSG once existed. By this measure, the Minister is precluding local authorities from doing just that.

[Andrew Jones]

I recognise what the hon. Gentleman says, but it is also fair to say that no local authority has either set up a municipal bus company or approached me with a view to doing so. Therefore, this is in some ways a slightly notional or theoretical debate—[Interruption.] Making sure we get clarity is the entire point here.

This Bill seeks a balance between local authority influence—we are providing local authorities with a variety of tools to address local issues—and the role that private sector bus operators can play, in order to ensure that both are incentivised to deliver the very best services for passengers. This Bill is about local authorities and commercial bus operators working together to improve local bus services. It is about co-operation, all designed to improve the benefits for bus passengers. I hope that this has made the Government’s position clear and that the hon. Member for Cambridge will not press this amendment to a vote.

[Daniel Zeichner]

The Minister has finally let the cat out of the bag. If there has not been a queue of local authorities coming to him with requests to form companies, he does not really need to legislate to ban them from doing so. This is pure ideology. There has been a great deal of agreement on the Bill—we have found a lot of common ground—but on this issue, I assure the wider world that there is clear red water between the Opposition and Government Benches. We will press the amendment to a Division, and its effect will be achieved by a future Labour Government.

Question put, That the amendment be made.

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[Mr Speaker]

I can now inform the House of my decision about certification. For the purposes of Standing Order No. 83L(2), I have certified the following provisions of the Bus Services Bill [Lords] as relating exclusively to England and within devolved legislative competence: clauses 1, 3 to 7, 9 to 14, 16 and 18 to 22 of, and schedule 2 to, the Bill, as amended in the Public Bill Committee, and including amendments made on Report. Copies of my certificate are available in the Vote Office.

Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Does the Minister intend to move a consent motion?

[Andrew Jones]

I beg to move.

[Mr Speaker]

A simple nod of the head would suffice, but the Minister said it with eloquence and charm to which he is no stranger.

The House forthwith resolved itself into the Legislative Grand Committee (England) (Standing Order No. 83M).

[Mr Lindsay Hoyle in the Chair]

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[Andrew Jones]

I beg to move, That the Bill be now read the Third time.

I am grateful to all hon. Members who have engaged so constructively with the passage of the Bill, and demonstrated their shared commitment to improving bus services and increasing bus passenger numbers.

Buses are already England’s most used form of public transport, accounting for more than 4.5 billion passenger journeys a year. They are vital to the economy, connect our rural and urban communities to employment, schools, hospitals and leisure, and are used by people of all ages. That is why the Bill has bus passengers at its heart. It allows local authorities and operators to adopt measures to improve services and grow passenger numbers. This is, therefore, an enabling Bill that is fundamentally about improving bus services for passengers, and that recognises the need for local solutions to local transport problems.

By working together, local authorities and operators can tackle key transport issues, such as pollution and congestion. They can support local businesses and help to drive the local economy. The Bill introduces a range of tools that will achieve those aims. It builds upon the success of partnership working. Local authorities and operators can agree the standard of services in a particular area. This could include multi-operator tickets, better connections between transport modes and improved vehicle standards, all of which will drive an increase in bus usage and increase performance. I emphasise that this part of the Bill has been widely welcomed by local authorities, operators and hon. Members, although it is, of course, not the only opportunity that the Bill brings.

The Bill will bring the opportunity to refresh powers for local authorities to franchise, delivering on our devolution agenda. It is only right that many of our larger cities have the opportunity to make franchising a success, just as TfL has done in London. Of course, franchising is not for everyone, and authorities must have a compelling case to implement such a scheme. I am of the firm belief that the Bill, as amended by this House, will deliver a better standard of bus services. It reinstates automatic franchising powers to mayoral combined authorities, which will preserve a degree of commercial certainty and help to maintain the significant private sector investment that we have already witnessed in the bus market. In addition, the requirement of an independent auditor as part of the assessment for franchising schemes will ensure that a scheme is implemented only with proper scrutiny.

A necessity to buy separate tickets or to pay with cash when travelling by bus can be frustrating and costly. Authorities will, therefore, have improved advanced ticketing powers to create multi-operator ticketing schemes that cover not only buses but other modes of transport such as tram or light rail. They can also make use of emerging technologies such as contactless and Bluetooth ticketing. The Bill will make it easier for passengers to access information on timetables, fares and routes. App developers will be encouraged to develop innovative products that will make this information available to passengers. I firmly believe that these improvements will deliver significant benefits to passengers, and will therefore attract more people on to public transport.

The Bill will also deliver accessibility improvements. Indeed, the audio-visual provision introduced in the other place has attracted more public attention than any other part of the Bill. It has certainly dominated my inbox more than any other matter by a factor of many. The provision will ensure that bus services in England, Wales and Scotland are accessible to those with a hearing or sight loss disability and, at the same time, will provide valuable information to all passengers. I know from personal experience the importance of next-stop announcements in London and elsewhere. All passengers will benefit from this significant improvement.

I want to see the bus market thrive and encourage more people on to public transport. As I said at the beginning of this speech, the Bill will have significant benefits for the environment, congestion and the local economy. Ultimately, we seek to reverse a decline in bus usage and put passengers at the heart of bus services. I thank all hon. Members who have engaged and contributed to the Bill, especially those on the Bill Committee, as well as the Committee Clerks and parliamentary counsel for all their work. I particularly thank my team within the Department. A significant amount of hard work has got us to this point. We have a good Bill that has been welcomed widely and reflects the importance of buses in local communities. We want the bus industry to thrive, and that is what has driven the Bill. I commend it to the House.