Bus Services Bill [Lords]

Daniel Zeichner Excerpts

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

[Daniel Zeichner (Cambridge) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 2—Report on the provision of concessionary bus travel to apprentices aged 16 to 18—

‘(1) The Secretary of State must, within 12 months of the day on which this Act is passed, lay a report before each House of Parliament setting out possible steps to support local transport authorities in providing concessionary bus travel to persons aged 16 to 18 who are participating in statutory apprenticeships.

(2) Any report under subsection (1) shall include, but will not be limited to, an evaluation of whether section 93(7) of the Transport Act 1985 should be amended to enable local transport authorities to provide concessionary bus travel to persons aged 16 to 18 who are participating in statutory apprenticeships on the same terms as that which may be provided to persons aged 16 to 18 receiving full-time education.

(3) In this section—

(a) “local transport authorities” has the meaning given in section 108(4) of the Transport Act 2000; and

(b) “statutory apprenticeships” has the meaning given in section A11 of the Apprenticeships, Skills, Children and Learning Act 2009.’

This new clause would require the Secretary of State to publish a report setting out possible steps to support local transport authorities to provide concessionary bus travel to apprentices aged 16 to 18.

New clause 3—Assessment of possible concessionary travel schemes: impact on use of bus services—

‘(1) A local transport authority that does not provide travel concessions under a scheme established under section 93 of the Transport Act 1985 to persons specified in subsection (7)(c) of that section shall be required to prepare an assessment of the impact of establishing such a scheme on the use of bus services by persons specified in that subsection.

(2) Any assessment under subsection (1) shall consider, but will not be limited to, the impact of establishing such a scheme on—

(a) the ability of persons aged 16 to 18 to attend schools and further education institutions by means of bus travel,

(b) the cost of bus travel to persons aged 16 to 18 receiving full-time education, and

(c) traffic congestion and emissions at peak times in the local transport authority’s area.

(3) In this section—

(a) “travel concessions” has the meaning given in section 112 (1)(f) of the Transport Act 1985; and

(b) “local transport authority” has the meaning given in section 108(4) of the Transport Act 2000.’

This new clause would require local transport authorities to assess how creating an authority-wide travel concession scheme for 16 to 18-year-olds in full-time education would affect how these students use bus services.

[Daniel Zeichner]

New clause 1 stands in my name and those of my hon. Friends the Members for Middlesbrough (Andy McDonald), for Birmingham, Northfield (Richard Burden) and for North West Durham (Pat Glass). It would require that the Secretary of State for Transport publish a national strategy for local bus services within 12 months of the day on which the Act is passed, setting out the objectives, targets and funding provisions for buses over the next 10 years. It would also require that the national funding strategy include a consideration of a reduced fare concessionary scheme for young people aged 16 to 19.

New clauses 2 and 3, in the name of the hon. Member for Southport (John Pugh), also relate to bus funding generally, and to young people’s concessionary fares specifically. New clause 2 would require the Secretary of State to lay a report before Parliament setting out possible steps to support local transport authorities in providing concessionary bus travel to apprentices aged 16 to 18, and new clause 3 would require local transport authorities to assess how creating an authority-wide travel concession scheme for 16 to 18-year-olds in full-time education would affect the way in which students use bus services.

It is clear that a long-term national discussion from central Government on the funding of the bus industry is long overdue. Since the bus market in England outside London was disastrously deregulated in the 1980s by a Conservative Government, public support for bus services has been provided in a far from transparent way. The effects of deregulation have been stark.

[Judith Cummins (Bradford South) (Lab)]

Does my hon. Friend agree that the drop of more than half in passenger journey numbers in Yorkshire and Humber since 1985 is no coincidence—it is down to deregulation?

[Daniel Zeichner]

I very much agree with my hon. Friend, and I will return to other examples of the failure of deregulation in a moment. It is not just about the number of services. Fares have risen faster than inflation, and patronage overall has fallen by more than a third. Bus market monopolies have become the norm in far too many places.

Back in October, we noted the 30th anniversary of bus deregulation, but it was far from a cause for celebration. It meant 30 years of bus users being ripped off by a handful of big bus operators, which have carved the market into chunks and which go largely unchallenged in their own territories.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my hon. Friend agree that for people on low incomes in rural areas, and in some urban areas as well, it is almost impossible to job hunt without a decent bus service?

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[Daniel Zeichner]

Once again, I agree with my hon. Friend. In too many parts of the country, it has become very difficult for people to get to and from work. Throughout the 30 years since deregulation, fares have shot up even at times when fuel prices have been falling. For 30 years, while patronage in the still-regulated capital increased, passenger numbers declined in the rest of England.

This month, the Campaign for Better Transport published its latest “Buses in Crisis” report. The organisation made more than 100 freedom of information requests to local councils to get a full picture of recent bus cuts, and it found that funding for buses across England and Wales has been cut by 33% since 2010, and by nearly £30 million in just the last year. Last week I was in Somerset, where support from the county council will fall by another 19% next year. Across the country, more than 500 routes were reduced or completely withdrawn in 2016-17.

Despite the seemingly endless rounds of bus cuts, the Government seem reluctant to look at whether anything can be done in the round to improve the current system of bus funding. The Government’s argument is well rehearsed: the bus industry is a private industry and thus has nothing to do with central Government or central Government’s money. But that is just not the case. Around half of bus industry funding comes from the public purse. In 2014-15, total public support for buses accounted for 41% of overall industry funding. In the past, the figure has been higher; in 2010-11 it was more than 46%.

I do not think that asking the Government to publish their strategy regarding such funding for buses in a single document is really asking that much. We just want a little clarity in a system that has become convoluted and confusing. The strategy would set out the plan and objectives for the public money that goes towards local authority-supported bus services, the reimbursement of bus operators for trips made by concessionary pass-holders and the payment of the bus service operators grant to bus operators. Public money is being spent on buses, but the Government lack a strategy regarding how that money is spent. We believe that that needs to change.

I have previously raised the fact that operators are being reimbursed by public money for trips made by concessionary pass holders, but those operators can cut services and routes; the public have no say. That leads to the bizarre situation in which someone may have a concessionary bus pass, but no bus on which to use it. That is not a good deal for anybody.

We already have national strategies for roads and rail, and we are told that the cycling and walking investment strategy is imminent. Buses are being singled out within the transport family. Our new clause 1 would redress that imbalance and bring buses into line with other modes of transport.

We believe the Government need to do far more to help young people to afford the cost of bus travel. That is why we are asking the Government to include consideration of a young person’s concessionary fare scheme in the national bus strategy. Young people rightly have to stay in school, further education or training until they are 18, and many of them use the bus to get there. It is quite right that the Government should look at how they can reduce the financial burden on young people who are only trying to get to their school, job or apprenticeship.

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[Andy Burnham (Leigh) (Lab)]

Young people in Greater Manchester have told me that it is sometimes cheaper for four of them to get a Uber than to travel on buses in Greater Manchester. How on earth can that possibly make sense, and how on earth can that lead to anything other than complete gridlock on our roads?

[Daniel Zeichner]

My right hon. Friend is absolutely right. On Second Reading, we heard a number of cases from across the country about the excessive costs of travelling locally, particularly for families. Such a cost is bad for congestion, it is certainly bad for employment and it is bad for social justice.

The way in which buses are funded in this country is clearly not working. We need a proper governmental strategy to address these funding issues and enable the country to have the national conversation about buses that is long overdue and much needed. I therefore urge the Government to accept our new clause 1. It may help the House if I suggest that we will press it to a Division.

[Mrs Maria Miller (Basingstoke) (Con)]

New clause 1 calls for a national strategy that sets out various targets and objectives. I feel sure that the Opposition spokesman, the hon. Member for Cambridge (Daniel Zeichner), sees one of the targets as the need to have accessibility for all who use the buses. I understand that the Government have already considered that issue after it was raised in Committee, and that they have very valid reasons for not going forward with a national strategy. However, by tabling the new clause, the hon. Gentleman has raised several important issues, and I want to mention some of them briefly.

In particular, there is a need for consistency. I welcome the change the Government have made with regards to information for bus passengers, which will help all our constituents. Some of my constituents have contacted me about the importance of having information available on the routes that they are taking. That is important not only for partially sighted or blind passengers, but for one constituent with autism and special needs who contacted me. This will help that individual, as well as a broader group.

As my noble Friend Baroness Campbell pointed out in the other place, other issues of national importance for people who use buses would fall within the national strategy proposed by the hon. Gentleman, such as wheelchair priority and access policies more generally. The Minister’s comments in Committee on wheelchair priority are very heartening. Following the Paulley case, it is important that an advisory committee will be set up. I hope that the Minister will confirm that he has given further thought to the composition of the group’s membership. Does he intend to involve the Equality and Human Rights Commission and the Disabled Persons Transport Advisory Committee? He should consider that carefully. The Minister did not touch on that detail in Committee—perhaps it had not been all worked through at that stage—but perhaps he could take this opportunity to assure the House that, subsequent to our debate in Committee, the discussions as part of that advisory group will be acted on quickly and that all relevant people will be involved.

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[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.

[Lilian Greenwood]

Does my hon. Friend agree that it would be helpful to have that national discussion, involving not only passengers but the industry and the local authorities, about the most sustainable way to fund buses? As local authorities develop different emissions standards as part of their own partnership and franchising schemes—the Campaign for Better Transport has said this—would a national strategy not provide some certainty for the UK’s bus vehicle manufacturers as well? There are many advantages to doing this, are there not?

[Daniel Zeichner]

As always, my hon. Friend is absolutely right. She has raised the important issue of air quality, which is clearly becoming more important in many of our cities across the country. I just suggest to the Government that having a national framework within which to discuss these things might be extremely helpful, for a whole range of reasons. I fear that we are not going resolve or agree on this issue, so we will press new clause 1 to a Division.

Question put, That the clause be read a Second time.

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[Graham Stringer]

The hon. Gentleman makes a fair point, and I will come on to it. He is right to be concerned about that, but I want to develop the logic of the argument that I am making as to why these are not sensible amendments. In large parts of the country, where most bus passengers are, we do not have competition. The basis of the Transport Act 1985 was that there would be on-the-road competition and that would provide good services, and if bus companies lost out because of on-the-road competition, they lost out as in any other capitalist-competitive market situation. That has not happened, however; we have moved to monopoly.

Incidentally, when the 1985 Act was implemented in 1986 no compensation was paid to those bus companies—of which there were a number—running on regulated routes. Mayne in east Manchester, for instance, had run for many years in that area; when it had to compete, it did not get compensation.

We are now moving—through principled objectives, in a different way—to a competitive system, in those areas that choose that, because there will be choices for Norfolk, Greater Manchester and other areas at some stage. As with rail franchising, in a competitive situation, when a company loses out, it loses its business, even if it has invested in it previously. In fact, one of the difficulties with franchising is that we end up with investment up front and a lack of investment at the end; that is just the nature of franchising.

On the point made by the hon. Member for Newark (Robert Jenrick) about medium-sized bus companies, that can of course be taken into account in the way that franchises are set up, by local choice. Areas can set them up in as many different ways as they wish, so medium-sized companies could be given the right to tender for routes that fit the size of the company if that was what the franchising authority wanted to do.

That brings me to a point I made in Committee, and which was rejected. Rather than the amendments we have here, I would have preferred the Bill to say that the regulations should not be overly burdensome and that they should reflect local conditions. If they were reflecting local conditions, they could take into account those small and medium-sized companies. There is a large point here, however, and, as my right hon. Friend the Member for Leigh said, the large companies would be more pleased than the small bus companies if these amendments were passed.

There is not a single quality contract in this country, and that is because when they were brought in under the Transport Act 2000, it contained a clause that is very similar to measures here, saying that they are the only practical way of delivering a better bus service. That is an incredibly high hurdle to jump, which is why there are no such contracts. Quality partnerships were referred to; I asked the Minister in Committee how many of them there were in the country, and, after a little help from the officials, we discovered that there were 10. So even quality partnerships are not abundant on the ground in this country. We do not need overly burdensome regulations. We want to make this work because it will improve the service for passengers, be more competitive and lead to better services.

We are not discussing them now, but there are huge guidance notes associated with this Bill, which I think tend to be overly prescriptive. I prefer to rely on the good sense of local councillors; they will make some good decisions and some bad decisions, but there are many bus companies with vested interests who are opposed to this, and if local authorities behave in an unreasonable way, they have the right to apply the Wednesbury principle and go for judicial review.

Rather than having lots of prescriptions, and putting ever more hurdles in the way of locally elected people making decisions, we should rely on their good sense. Sometimes they will get it wrong, as sometimes national politicians in Governments and Cabinets get things wrong, but we can rely on them and the common law, which will ensure that if bus companies feel that they are being unfairly treated and that transport authorities are behaving in an unreasonable way, they can take that to court.

So I hope the Minister will reject these amendments. We have held in the balance throughout our discussions the question of what is central and what is going to help local authorities, transport authorities and elected mayors to make these decisions, and these amendments do not help move us towards having a better local transport system.

[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.

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[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

[Daniel Zeichner]

I beg to move amendment 1,  page 78, line 4, leave out clause 22.

This amendment would remove Clause 22.

Amendment 1, which appears in my name and those of my hon. Friends the Members for Middlesbrough (Andy McDonald), for Birmingham, Northfield (Richard Burden) and for North West Durham (Pat Glass), would remove the clause that bans 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. In short, we seek to overturn the Government’s ban on municipal bus companies.

This clause is a piece of ideological dogma that has no place in an otherwise agreeable piece of legislation. We visited this issue in Committee and I fear that the Government are not minded to budge, but I and many others found the Government’s arguments there extremely unconvincing. In Committee, the Minister said:

“Our view is that passengers will see the most benefit where the commissioning and provision of bus services are kept separate…as such we do not think authorities should be able to set up new bus companies.”––[Official Report, Bus Services Public Bill Committee, 14 March 2017; c. 57.]

The Opposition also want passengers to see benefits; we simply do not agree that municipal bus companies cannot be a part of achieving those benefits.

The latest annual Transport Focus bus passenger survey, which was published just last week, demonstrates once again that municipal bus companies provide some of the best services in the country. Nottingham City Transport and Reading Buses—municipal bus companies —had higher overall satisfaction results than the big five private national bus operators. The Government’s attempted ban on new municipals therefore flies in the face of all the evidence.

The ban also flies in the face of the Government’s purported commitment to the spirit of localism and devolution, which they claim the Bill encapsulates. Although they say that the Bill will provide local authorities with a range of options and tools, and that local authorities are best placed to make a decision about how local bus services are organised and run, they are imposing an arbitrary ban on one of those options—and not just any option, but one that has been shown to work very well for passengers.

Of course, many of us suspect that the clause is about pacifying some private bus operators, which the Minister once said

“are already on a journey here”.

Without wishing to rehash every fine point from the Committee, we do not see municipalisation and competition as necessarily antithetical. In fact, it is the Government who are undermining their long-held admiration for competition by imposing barriers to the market to stop municipal bus companies competing with private bus companies. Are the Government really afraid that local authority-run bus companies might just be better? The Competition Commission has reported that it has seen no evidence that municipal operators distort competition in the bus market.

[Ian Mearns]

Ministers have short memories about how an awful lot of the big bus franchise companies came about in the first place. Some of them were based on old municipal bus companies, which were sold off at a pittance with their entire estates of bus depots, bus parks and vehicles, only to be floated on the market a matter of months later for 10, 15 or 20 times the price at which they were bought in the first place.

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[Daniel Zeichner]

My hon. Friend is absolutely right. Some of the people who worked on the buses in that period still feel very aggrieved by the process that was gone through 30 years ago, which left so much of our country with services far poorer than the universal coverage that was available at the time.

The Competition Commission suggested that municipal companies might be minded to run services and routes that make less sense for economic reasons—perhaps those unprofitable routes and services that bus operators have been cutting left, right and centre. The Institute for Public Policy Research has also described municipal bus companies as an innovative transport solution that demonstrates that

“conventional commercial operations are not the only option.”

Sadly, they soon will be if the Government have their way with this measure.

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[Lilian Greenwood]

rose—

[Daniel Zeichner]

I will give way to my hon. Friend the Member for Blackley and Broughton (Graham Stringer) first.

[Graham Stringer]

Two have come at once! Does my hon. Friend agree that, aside from the reasons given by the Competition Commission, municipal bus companies can provide a benchmark? In a rational debate, we should be able to get from the Government a reason why, when municipal bus companies have performed in an excellent way, they are not allowed to compete. Does he agree that that reason was not forthcoming in Committee?

[Daniel Zeichner]

I very much agree with my hon. Friend. The point about keeping the market honest is important. When I was first elected as a local councillor, the housing officer told me that one of the roles of an in-house operation was to keep the market honest. That is an important role.

[Andy Burnham]

Will my hon. Friend give way?

[Daniel Zeichner]

I give way first to my hon. Friend the Member for Nottingham South (Lilian Greenwood).

[Lilian Greenwood]

Is not one reason that Ministers have given for objecting to municipal operations that they would prevent the market from operating effectively? When we look at the latest bus passenger survey, is it not interesting that Nottingham City Transport has the highest value for money of any single operator in the country?

[Daniel Zeichner]

My hon. Friend consistently makes the case for Nottingham. That is made far easier for her by the excellent local services she has. People from my city of Cambridge have gone to Nottingham to see how to do it. Part of the lesson is that a municipal can do it really well, but according to the Bill, that will not be possible.

[Andy Burnham]

The Minister stressed the importance of vigorous competition. Is it not the case that if a franchising process were used, the existence of the municipally owned option would enable those doing the franchising to drive an even harder bargain on behalf of the public, because there would be that fall-back option if the private sector could not come up with the goods? Therefore, would it not enhance competition and enable the passenger transport authority to get an even better deal for the public?

[Daniel Zeichner]

My right hon. Friend is correct yet again. Interestingly, much of the discussion in Committee was about moving competition from on the road to off the road. I think we agree that in areas where there has not been competition, franchising would be far from a less competitive system. People in London talk about just how competitive the system is, so no Government Member should be worried about a lack of competition. My fear—this is why it is so important that we have protection for the workforce—is that if we are not careful, competition can bring the risk of a race to the bottom. That is why we believe that we should have the provisions that we have just debated. I think the evidence is clear that the franchising system would benefit from having municipals as an alternative.

The conclusion of the Opposition is that banning local authorities from running their own bus companies is slightly unworthy of the spirit behind the Bill. The evidence is clear that they work for bus passengers and are able to put social values at the heart of what they do. This measure has drawn the attention of the public more strongly than other parts of the Bill. It has rightly brought a strong reaction from local councils across the country. They do not understand why they should be prevented from doing something that they strongly believe is in the interests of their local constituents. Some trade unionists feel strongly about this measure, as do passengers, and I pay particular tribute to the organisation We Own It, which has campaigned strongly against it. We believe that this is a petty measure that sits uneasily with the rest of the Bill, and I urge the Government to look at it again and accept our amendment today.

[Sir Henry Bellingham]

I just wish to say that I am grateful to the Minister for his response to my amendments in the previous group. I was not quick enough on my feet to catch your eye at the time, Mr Deputy Speaker, but I have been in this place long enough to know that one should quit when in front. I am grateful to the Minister for saying that my amendment 25 is going to be incorporated in the guidance and for the useful reassurances he has given me on amendments 15, 26, 27 and 28. I was disappointed on the issue of compensation, but, as he pointed out, there can indeed be scope for the authorities to compensate if need be. On that basis, I will not seek to press those amendments to a vote, although I say so a touch belatedly.

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[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.