Bus Services Bill [HL]

Earl Attlee Excerpts

Wednesday 8th June 2016 Lords Chamber

[Earl Attlee (Con)]

My Lords, on this day last year your Lordships gave what is now the Cities and Local Government Devolution Act 2016 its Second Reading. That is the legislation that paved the way for the Bill before us today. My noble friend said that the overall aim of the Bill is to ensure that bus passengers get the best possible service. This Bill gives local authorities a few more tools in their arsenal to help in this regard, should they choose to use them.

The noble Lord, Lord Bradley, in his very clear speech, told us how franchising will make a very great difference in Greater Manchester, and I am sure that the whole House is very grateful for his contribution. The Government want a mosaic of arrangements up and down the country. There is no suggestion at all that the Government are looking to impose any one structure in any particular area. That is a good thing.

My noble friend the Minister and the noble Baroness, Lady Jones of Whitchurch, in her excellent Front-Bench speech—I hope to see her making them for many years to come—observed that bus patronage has declined since deregulation. However, noble Lords will recall that the rate of decline in patronage of bus services was arrested post-deregulation.

I urge my noble friend the Minister to anticipate the sense of the Committee when we come to discuss AV annunciators. These are for the benefit not just of the disabled. They have tremendous benefit to all passengers.

I welcome most of the provisions of the Bill. However, I will concentrate my remarks this evening on three specific issues. First, on the proposals in the Bill to give local authorities powers to franchise local bus services, bus operators told me that this has been the dominant issue in the industry ever since it was first announced by the Chancellor in November 2014. It has consumed much more time and energy than the industry would have liked. To the industry’s huge credit, it has not taken its collective eye off the ball and continued to deliver for its passengers.

Regulation certainly did not provide for a thriving bus industry prior to 1986 so why should it do so now? London, of course, is a very special case, particularly with regard to funding and the fact that buses are absolutely essential lifeblood to London—as in Greater Manchester. My noble friend the Minister observed that the annual Transport Focus passenger survey consistently gives bus services an overall satisfaction rate of around 90%. Allowing local authorities to introduce a system of franchising or contracting may be consistent with the Government’s devolution policies but runs contrary to established Conservative Party policy for at least the last 30 years. That is a big change.

Some bus operators described this franchising element of the Government’s policy as business confiscation. I can see their point. Large operating groups could see their operations disappear overnight and would then have to redeploy staff, vehicles, depots et cetera if they were not taken on by the successful bidder. There would be a wider impact on their corporate position that could affect their share price et cetera. However, I am sure they will survive, albeit a bit battered and bruised.

The same cannot be said for smaller operators. They will stand little chance of winning a contract against a large operator, one of the plcs or even an overseas firm that enjoys access to cheap capital from its national Government. There is a real possibility that a family business, built up through hard work and dedication possibly over several generations, could be allowed to disappear overnight as a direct consequence of government action.

I am sure that the bus industry has pressed the Government to ensure that any franchising proposal should be subject to fair and open public interest and financial tests. The noble Lord, Lord Shipley, talked about some of the risks there. I am sure he will return to that at a later stage. It was reassuring to see that the Bill sets some pretty tough hurdles that local authorities must negotiate before they can proceed with their franchise scheme.

Like my noble friend Lord Young of Cookham, I believe it is also extremely useful for local authorities to have to benchmark, for want of a better word, their proposed franchise scheme against the routes and ticketing arrangements that might be offered under enhanced partnership schemes. This is absolutely crucial and would, I suggest, make any local authorities swallow very hard indeed. Surely if the same offer to passengers can be made under partnership arrangements, why would a local authority want to pursue a franchise scheme with all the additional costs in both resources and money?

I am also worried about the issue of bus facilities and premises. As I understand it, there is nothing to stop a bus operator selling off his depot to recoup some of the money he invested in his company before he loses the business to the highest bidder. Unless the outgoing operator decided to sell or rent his premises to the company that won the franchise, that transport facility could be lost for ever to redevelopment. Securing premises would be a huge challenge for those bidding for franchises. This was the subject of some debate during the passage of the Local Transport Act 2008.

I am sure that we will spend some time during Committee debating the finer points of the franchising proposals. My noble friend the Minister will have my full support in resisting any amendments that seek to dilute these very important tests which have to be satisfied before a franchising scheme can see the light of day.

The other issue on which I wish to comment is the proposal in the Bill to allow local authorities to delve into the business secrets of bus operators, requesting detailed and commercially sensitive information about employees, usage and revenue. At some point many business owners decide to sell up and realise the fruits of their labour. The value of a business will be composed of inter alia the stock, the assets and, most importantly, the good will. The kind of information that the Bill would allow local authorities to obtain free of charge and without compensation is part of the good will of the business. But, of course, unless you know what those data are, how can you say how much they are worth? It is hard to imagine any business sector that would welcome the right of a third party to look at the detail of its operations as a prelude to making a case to expropriate them. Businesses in all walks of life change hands at prices well in excess of their tangible assets. I include in this the price of the former passenger transport executive bus operating companies when they were sold off in the 1980s. Therefore, in essence, the Bill would allow local authorities to acquire for nothing something that they sold for millions in the past. This part of the Bill is deeply unwelcome for bus operators and I am sure that we will return to it during Committee. My question for my noble friend the Minister is this: does he think that these commercial data have a commercial value, or not?

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[Lord Kennedy of Southwark (Lab)]

My Lords, I first refer Members to my declaration of interests and declare that I am an elected councillor in the London Borough of Lewisham.

As other noble Lords have said, the Bill is generally welcome and we want it to boost the bus industry outside London when it reaches the statute book, although it is disappointing that we have no regulations. If this is to be another Bill where regulations will not be available until after the legislation has passed, that will be most regrettable. I hope that the Minister can give us some assurances that that will not be the case, as I think noble Lords will be very unhappy at that. It will hamper the progress of the Bill through this House if we cannot see the regulations. The regulations connected with the 2000 and 2008 transport Acts have proved too difficult to enable anyone to introduce bus franchising. We must avoid the same happening here and the welcome intentions in the Bill being lost in consequence.

The bus is an essential mode of public transport, reducing congestion and giving people access to jobs, education and leisure pursuits. Buses are also the quickest way of providing additional public transport. As my noble friend Lord Whitty said, the number of bus journeys taken within the bus industry outside London has declined. That can be pinpointed back to the Transport Act 1985, which deregulated the bus industry outside London and allowed anyone, subject to minimum safety and operating standards, to set up a bus company. I also agree with my noble friend about the effects of the cuts in funding on bus services outside London. We have heard how different things are in London, where bus use has doubled, the industry was not deregulated and a two-tier system operates, with TfL specifying in detail what bus services are to be provided and private companies then delivering those bus services.

The Bill seeks to do a number of things, nearly all of which I support. One part of the Bill that we are unhappy about is Clause 21, which prohibits municipal bus companies being formed in the future. Some of the best bus services in the country are run by municipal operators: look at Nottingham City Transport, which has been UK bus operator of the year three times, the last time in 2014. Nottingham is a city I know very well and which my noble friend Lady Jones of Whitchurch also mentioned. Reading Buses and Ipswich Buses, to name just three in all, also provide an excellent service, but this specific model is prevented from being replicated elsewhere. Why?

Moving on to the more positive aspects of the Bill, we support the franchising of bus networks for mayoral combined authorities. The Bill will allow these authorities to provide bus services as they are provided in London, with the public sector specifying the services and the private sector competing for the contracts. This will enable effective action to be taken to improve services for passengers and halt the decline. We support this although, as many noble Lords have said, we would have wished that there was no insistence on having a mayor to get these powers, with other authorities being allowed only to ask for these powers. We shall explore this further during the next stages of the Bill, as it passes through your Lordships’ House.

There are two other forms of deregulated partnerships in the Bill: advanced quality partnerships and enhanced partnerships. Under the advanced quality partnerships, a local transport authority will commit to bringing in measures that will benefit bus services, such as priority bus schemes. In return, the bus operator must meet set standards for the services which benefit from those facilities. Enhanced partnerships go further, with the local transport authority and the bus operators working to manage the local bus market and seeking to get better outcomes for passengers. But there is, in effect, a veto for the bus companies if they do not agree to the proposal. When it comes to things such as vehicle specifications, ticketing structures and timetabling, this type of scheme could be a very useful tool for improving the services locally, although again the regulations here will also be important, so that what is proposed in the end does not become too difficult to deliver.

We also welcome the section of the Bill that introduces advanced ticketing schemes to enable multi-operator ticketing schemes to be broadened and built on. The sooner we can move on to smart ticketing schemes everywhere, the better. Making data available on bus fares, routes, timetables, tickets and bus company performances on all routes is very welcome and should give passengers, campaigners and transport planners very useful information. However, it needs to be made clear who will be entitled to access what data—I assume that will come with the regulations. I do not see that making the data available will cause the problems the noble Earl, Lord Attlee, spoke about. It will be a good way of helping consumers and the general public, and maybe the noble Lord, Lord Ahmad, can clarify that further when he replies.

[Earl Attlee]

My Lords, I was not referring to the real-time data—I think that would be highly desirable. My problem is with the data on historical passenger demand and so on.

[Lord Kennedy of Southwark]

I thank the noble Earl for that clarification. We will explore these things further as the Bill goes through the House. As I said, the provision and use of data will be vital in improving services for passengers.

We are very supportive of the campaign by the Guide Dogs association for audio-visual systems to be a requirement on all new buses. The noble Lord, Lord Low of Dalston, made a compelling case for the funds to be found quickly to ensure all buses are equipped with this facility. The noble Baroness, Lady Grey-Thompson, rightly spoke about the barriers disabled people face and how practical solutions to the problems are needed. Generally, we want to see disability provision on buses further improved and will explore measures to do that during the further stages of the Bill. I very much agree with the comments of the noble Baroness, Lady Campbell of Surbiton, regarding improved access to buses for people with disabilities.

Ensuring that buses run on the greenest fuel possible will help reduce greenhouse gas emission and generally improve air quality. New powers in the Bill to enable local transport authorities to specify emission standards to be met by local bus services are very welcome, although with the enhanced partnership scheme, there has to be sufficient support again from the bus operators.

As other noble Lords have said, the Bill hardly mentions passengers. We think that is wrong, as bus services should be all about passengers. I want to see an enhanced role for Passenger Focus and possibly something in the Bill concerning how passengers can be more fully involved and consulted locally about the services they rely on.

In conclusion, generally we welcome the Bill, but it can go further and can be improved. We look forward to working with the Government and noble Lords on all sides of the House to improve the Bill, to clarify and probe the intention of the Government, and to see it on the statute book making a real difference to people and communities locally by improving the bus services they rely on.