Local Bus Services

Bridget Phillipson Excerpts

Wednesday 5th November 2014 Commons Chamber

[Mr McLoughlin]

No. As I have just pointed out, the trend has been reversed—[Interruption]—in the last year for which figures were available, and not just inside London but outside it too.

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

Returning to the point made by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), will the Secretary of State now take this opportunity, very belatedly, to back the North East combined authority in the decision that has been taken to press ahead with the quality contract scheme in Tyne and Wear?

[Mr McLoughlin]

It has to go through a process that involves the traffic commissioners, and it would be wrong of me at this stage to take a view one way or the other. The process was set out in legislation introduced by the last Government.

As I was saying, we have started to see growth under this Government, because the services are better. Buses are becoming more accessible, so that everyone can use them: well over three quarters of the fleet is now fully accessible. Buses are also getting safer: there is CCTV on 82% of buses in England, an all-time high. Buses are getting easier to use, with smart card readers on 86% of English buses outside London, up from just 25% when the last Government were in power.

So when the hon. Member for Wakefield calls for Oyster-style ticketing, there is good news: we are making it happen, when the last Government did not. A lot of progress has been made. Those are the real facts: a growing industry, a popular industry, with high and rising passenger satisfaction levels. Investment is going into the industry—£1.4 billion of private capital over the last five years by the major operators alone. That means newer, cleaner, greener buses, better services and new information systems. The “Boris bus” in London is a world beater, and the pensioner pass has been protected. This year, we will fund spending on concessionary travel by nearly £1 billion.

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[Mr McLoughlin]

I do not think that reflects a change. I would like to have a mosaic of transport systems. What is applicable in certain areas will not be applicable in others, but I am willing to have discussions with leaders in other areas and with people who would put an alternative view of how we best approach these matters. It is important not to get obsessed with one-size-fits-all regulation; a common-sense approach is best for each community.

[Bridget Phillipson]

I am grateful to the Secretary of State for allowing me to intervene a second time. Does he not understand the apparent inconsistency in the argument being advanced here? On the one hand we are told that Greater Manchester should have these powers, but on the other hand his Department has failed over the past four years to back Tyne and Wear in its very similar approach to these matters. Is there not an inconsistency?

[Mr McLoughlin]

I do not think that there is inconsistency at all. What we have seen in Greater Manchester is a coming together that goes much wider than just the Manchester authorities, with a much more imaginative scheme that includes the powers of the police and crime commissioner and many services in the area. I think that it is bold and imaginative, and I am sorry that Opposition Members seem to be a bit upset about it—I can see Manchester Members nodding in vigorous agreement with what we are doing.

We must also recognise what great things have been done by the private sector. I want devolution to be a success, based on the best that the public and private sectors can do. The private sector brings ingenuity, creativity and innovation to transport, and that must continue. We have manufacturers in the UK at the cutting edge of technological innovation, and we have operators setting the benchmark for new customer services and investing massively in new vehicles. That includes over 800 new low-carbon buses, supported by Government funding. Through the Office for Low Emission Vehicles, we will be supporting the purchase of hundreds more. I was at the bus expo in Birmingham this morning, seeing for myself what the bus and coach industry has to offer. No one could fail to be impressed by the dynamism of hundreds of the exhibitors.

Of course, there are challenges ahead. We need to go back to good transport in rural areas, for instance. As a resident of rural Derbyshire, I know how important buses are to people in the countryside. For many isolated communities, buses can be a lifeline. The old model of services is changing, and we need to ensure that as it changes people retain access to good transport. We all need to work together to get it right. I want to pay tribute to the brilliant work done by community transport operators and their many volunteers. There are three such operators in my constituency: Bakewell and Eyam Community Transport, Ashbourne Community Transport and Amber Valley Community Transport. They do a fantastic job, as do other community transport operators across the rest of the country. I want to do more to help them, and very soon I will say more on how we can do that.

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

I am grateful for the opportunity to speak in this important debate. With two thirds of all public transport journeys made by bus, we are right to talk more about the importance of local bus services, although the issue is often overshadowed by debate on rail and infrastructure. Unfortunately, my constituents do not enjoy the benefits of a rail or light rail service, and many are entirely reliant on local bus services. I hear from older residents who are left cut off and isolated, unable easily to access GP or hospital appointments, from shift workers who simply cannot get to work, and from employers who find it difficult to retain staff as a result. Families who are still struggling to make ends meet face above inflation fare rises year on year.

In 2010 I first began to campaign on the issue when local parents asked for my help to try to protect a route that had served the community for decades, but which was about to be cut, making it difficult for their children to get to school. Despite the fact that operators receive more than 40% of their income from the taxpayer, local people found that they had little to no say. The operator made it clear that although we could raise our concerns, it was under no legal obligation even to consult on changes.

The decision to deregulate local bus services in the 1980s is the primary reason for the poor state of bus services in Tyne and Wear and my constituency. The Transport Act 1985 did not deliver on its promise to increase the use of public transport, bring in lower fares, and lower the cost to the taxpayer. Instead, in the north-east a small number of operators cherry-pick the most profitable routes, and set the fare structure and bus timetables with little or no regard for integration or best value for the passenger and taxpayer. The 1985 Act marked the beginning of a great divide in our country between areas of regulated and deregulated local bus services. Since bus services were deregulated outside London, the two different systems have produced very different outcomes in passenger growth. Figures show that since deregulation passenger journeys on local bus services outside London have fallen by 37%, whereas in London bus patronage has increased by 105%. In Tyne and Wear, the position could not be clearer. Deregulation has failed: fares go up above inflation, pricing people off buses; routes are cut and needlessly changed; and whole areas are left cut off.

An investigation in 2011 by the Competition Commission was highly critical of deregulated bus services. It found limited competition between operators, which tended to result in higher fares and lower quality for passengers. The report also found that head-to-head competition for services was unlikely because of the dominance of a small number of operators. In fact, there was heavy criticism because some bus companies were accused of colluding to avoid direct competition altogether, resulting in geographic market segregation, including in my area.

Last month in Tyne and Wear, the north-east combined authority voted to press ahead with the quality contract scheme. This will create a level playing field and allow new entrants to break into the market. Part of the profits made will be reinvested into improving local services and reducing the subsidies paid by local taxpayers, while at the same time increasing passenger numbers. Over a decade, this will result in £272 million in economic benefits to the region. There will be a simple fare structure with Oyster-style integrated ticketing. Fare rises will be capped with extra help for families with children.

For three years the bus operators have been scaremongering about the prospect of a quality contract scheme in Tyne and Wear. Stagecoach’s Brian Souter claims that those of us who want a better local bus service are “unreconstructed Stalinists” and has threatened to pull out of the region altogether. Stagecoach is, however, happy to run services under London’s regulated system and there is no good reason why it could not do the same in Tyne and Wear. This is typical of the bluster and the negative campaign of scaremongering that has characterised its opposition to change. It has frequently threatened legal action in the hope that it could bully councillors into giving in. Its threats have so far failed, but it has not gone away. It is time the operators respected this democratic decision and contemplated exactly why it is that people are so dissatisfied and so angry with the service it offers.

Where Tyne and Wear is leading the way I want other areas and cities to follow. Even the Chancellor now appears to accept this case. Today, however, the Secretary of State has unfortunately refused to back the decision of the North East combined authority. In fact, in the past four years his Department has repeatedly failed to do so. What should the people in the north-east take from that? Surely if it is good enough for Greater Manchester it is good enough for us in Tyne and Wear too, where local councils have come together to work to deliver better value and a better system for the taxpayer? The quality contract scheme has been a long drawn out and complex process. I am pleased that the shadow Secretary of State has made it clear we should simplify the process and avoid vested interests being able to frustrate it.

The north-east has so much to offer but there are many challenges ahead, with the highest rate of unemployment and some of the lowest paid workers in the country. We have the capacity to make a greater contribution to the nation’s economy, but we need a transport network that supports businesses, growth and job creation. Today’s motion, and the quality contract scheme we are pressing ahead with in Tyne and Wear, is the change that our region needs to take that forward.