Bus Services Bill [HL]

Earl Attlee Excerpts

Monday 4th July 2016 Lords Chamber

Moved by

[Earl Attlee]

59: Clause 4, page 19, line 46, after “postponed)” insert “or cancelled”

[Earl Attlee (Con)]

My Lords, I shall also speak to my Amendment 60. My two amendments would make a rather significant change to new Section 123I of the Transport Act 2000: they would prevent a franchising authority from revisiting a failed franchise proposal for a period of five years.

One of the things that any business dreads is uncertainty. Consider the current situation in the UK: it adversely affects investment plans, recruitment decisions and the conduct of everyday activities. Bus operators are understandably concerned that through the measures in the Bill they could find their businesses under threat and, in the worst-case scenario, eliminated.

I will avoid rehearsing the arguments against franchising. My amendments seek to ensure that if a franchise proposal fails, for whatever reason, or if the franchising authority decides not to progress its plans—again, for whatever reason—the franchising authority must wait for five years before revisiting the issue and seeking to bring forward a new scheme. I am not necessarily wedded to the five-year period but the point I am making is that there must be a sensible gap before the process can start again, and five years seemed as appropriate a period as any other, particularly when the kind of investment decisions and long-term planning that transport providers make is taken into account. Most authorities do not change their political complexion very regularly but, in those areas that do, it is important that bus operators’ commercial decisions are not adversely affected.

The amendments would give some certainty to bus operators, and would allow them to continue to develop and improve their services, invest in new technology, innovate and react to changing and growing passenger needs. While quality contracts have been possible for the best part of 16 years, the process for bringing forward a franchise will be less onerous, and we know that these powers could be used as soon as they are brought into operation. So the threat would be very real and would be a constant dark cloud hovering above operators’ heads, even if a proposal had just been found to be unviable.

It may also be that authorities in scope might secretly welcome the amendments. The burden on local authorities grows and they are under huge pressure to deliver an enormous range of local services, from bin collection to care for the elderly to keeping the street lights on, with ever-dwindling financial resources. Having spent considerable time, energy and money on a franchise scheme that in the end was not progressed, authorities may value a legal reason that they can offer for why they cannot revisit the issue despite pressure to do so. I beg to move.

[Lord Bradley (Lab)]

I rise to speak to Amendment 61A in my name and to Amendment 66 in my name and that of my noble friend Lord Berkeley. On Amendment 61A, although the franchising authority should seek to enforce breaches of registration requirements by reference to the traffic commissioner, there are circumstances where that will not provide a swift, effective remedy. The right to request a court to exercise its discretion to grant an injunction is a more appropriate and proportionate measure for use in urgent cases to prevent serious breaches of the registration requirements.

The amendment is based on a similar provision in the Town and Country Planning Act 1990. A reference to the traffic commissioner would result in an investigation, followed by the possible imposition of sanctions, including a financial penalty and compensation. However, the process might require weeks to complete, during which an operator could continue to run services in breach of the registration requirements. The ability to apply for injunctive relief would allow the franchising authority to safeguard the franchise scheme in critical circumstances. It is anticipated that it would be used only in rare and specific circumstances, but it would give the franchise extra protection.

The purpose of Amendment 66 is to ensure that the franchising authority should not be obliged to issue a service permit where it would have an adverse effect on the financial and economic viability of the wider bus franchising scheme. It should not have to provide one if, for example, it would adversely affect tram, light rail or heavy rail services within the area. The service permit regime in the Bill is the way in which, first, cross-boundary services can be provided—in other words, services that go in and out of a franchised area—and, secondly, services can be provided where no service has been provided for in the franchise contract. The franchising authority has to grant permission for such permits, but the Bill prevents operators using these provisions to cherry pick and, in doing so, to undermine the wider franchise by enabling the franchise authority to refuse a permit where it would have an adverse effect on any service provided in the franchise.

Amendment 66 would extend the safeguard explicitly to include consideration of any impacts on the wider economic and financial viability of the bus franchise scheme. It would also enable consideration of wider public transport services. There would otherwise be a loophole whereby an operator could undermine other forms of public transport by, for example, running a bus service in parallel with and in competition with a bus rapid transit system or a light rail system, both of which currently operate within the Greater Manchester footprint. This could undermine the wider integrated public transport network, of which the bus franchise forms a part, by undermining its economic position and its fully integrated nature. I look forward to hearing the Minister’s views on these points.

--- Later in debate ---

I hope that my comments have reassured noble Lords that I understand many of their concerns and that they will therefore choose not to press their amendments.

[Earl Attlee]

My Lords, I am grateful for all contributions from noble Lords. I said that I was not wedded to the five-year period, but noble Lords may have drafted their comments before they had heard what I had to say. Amendment 59 might be defective, but it was intended as a precursor to Amendment 60. I can understand the concerns of the noble Baroness, Lady Jones, but the five-year period—or whatever period it was—would encourage local authorities considering franchising to make sure that they got it right first time rather than have a half-hearted attempt at it.

I am grateful for the positive response of the Minister both to my amendments and to those from other noble Lords. I beg leave to withdraw the amendment, subject to the usual caveats.

Amendment 59 withdrawn.

--- Later in debate ---

[Earl Attlee]

My Lords, I have tabled Amendments 71 and 72 in this group. Amendment 71 is fairly simple but none the less deals with an important matter. Its purpose is to ensure that local authorities which have acquired what will doubtless be highly sensitive company information for the purposes of preparing a franchise scheme may use that information only for the sole purpose for which it was provided. At Second Reading I expressed my concerns about the provision of this type of information to local authorities. I am not convinced that it is right that bus operators should be under a legal obligation to provide what could be highly sensitive information about such things as revenue received from the running of a particular service, employment, staff details and so on. It is quite a list.

I am certain that it is important that, having been given the information, local authorities be restricted from using it for any purpose other than that for which it was intended. They should not be able to use it willy-nilly. They should not be able to dip in and out or, even more important, to pass that information on to a third party. In that case, who knows where the information would end up? It is not inconceivable that it could end up in the hands of a competitor, and that simply cannot be allowed to happen. This is a serious issue and my amendment is intended to give some assurance to bus operators that, having provided the information, it will be protected and used for one purpose only.

The purpose of Amendment 72 is to require local authorities to pay local bus operators for the information that they must provide to assist in the assessment of a franchise scheme. This follows up on a point I made at Second Reading. I find it unacceptable that bus operators should be under a legal obligation to provide what could be highly sensitive information absolutely free of charge. Information of the type sought is part of the good will of the company, and anyone in business knows that good will is built up over many years and is hard fought for. Operators work extremely hard to develop their services and to provide the best possible journey experience for their passengers. That is what they do and it is why they are in business: to provide a decent product that people want and that they will buy. It is the same with a bus service. So to expect operators to hand over all the operating details to the very organisation that is looking to take the business off them—thank you very much—seems quite odd. It simply would not happen in any other business transaction.

[Lord Berkeley]

The noble Earl is asking that bidders be paid by the franchising authority for submitting information in preparing a bid. Is that what happens with London buses? Does TfL pay bidders in order for them to produce a decent bid? I am asking the question because I do not know the answer.

[Earl Attlee]

The noble Lord will know that London bus operations have been regulated for some time, so the issue does not arise in London. It is a new situation.

Under any other circumstances this practice would be prohibited under the provisions of the Competition Act, so why is it okay in this case?

I remind the Committee that when the passenger transport executives sold their bus operations after deregulation in the mid-1980s, such data were a huge factor in the price they sold those businesses for in the private sector. That slightly answers the point of the noble Lord, Lord Berkeley. However, 30 years on, such data appear to have no value and local authorities can get back for nothing what they originally sold for rather a lot of money, with operators providing the means to determine their own execution.

My amendment does not put a monetary value on the data simply because they will be different in each case; I am suggesting that operators and the authority should come to an agreement on their worth. I am under no illusion—such agreement is not likely to be easy and may not actually be achievable at all. In that vein, I hope that my noble friend the Minister does not regard this as a wrecking amendment. That is certainly not my intention and I will not be seeking to test the views of noble Lords on this point at any stage. However, I hope that he will be able to give some words of comfort to bus operators. Intellectual property must surely have a value, as does good will.

[Baroness Randerson]

My Lords, I rise to speak to Amendment 74 tabled in my name. Before I address it specifically, I will say that we are supportive of Amendment 70. It deals with air quality data, which I have addressed on several occasions in discussions on previous amendments. However, we would certainly not be supportive of the noble Earl’s Amendment 72. For a start, it is about information that any reasonably good operator will have at their fingertips. We are not asking operators to do a great deal of work to find these data; they are all easily available. Secondly, the noble Earl states that this is a reasonable request but this information is publicly available as regards the railways, for example, and there is no reason why we should have this level of information about the railways but not about bus services.

[Earl Attlee]

Does the noble Baroness agree that if, without the benefit of the legislation, one operator shared this information with another operator, it would be in serious difficulties with the competition authorities?

[Baroness Randerson]

That is a separate issue. The issue here is enabling local authorities to make a reasonable judgment in order to produce a good franchising scheme. I accept that there are separate issues to be addressed in relation to competition.

I turn to Amendment 74, on the power to obtain information about local services and franchising, and the handling of that information. This is purely a probing amendment designed to investigate the unevenness within the Bill. I have referred to the uneven approach to the three types of schemes and simply wish to point out to the Minister that on page 58 of the Bill appear identical words to those in my amendment, which set out the circumstances in which information could be disclosed in the case of enhanced partnerships. However, in the case of franchising, on page 33 there are no such caveats or restrictions on the use of the information. I am interested to find out from the Minister the legal reason behind this—or is it just chance that there is a long list of things that one can and cannot do with that information in the case of enhanced partnerships, but which are not included in the list on franchising?

--- Later in debate ---

I thank all noble Lords for their contributions to this debate. I hope that the detail I have outlined has addressed most of the concerns which noble Lords have raised and therefore that the noble Lord will be willing to withdraw the amendment.

[Earl Attlee]

My Lords, I am grateful to the Minister for his response to my Amendment 71, which he obviously understands. I admit that Amendment 72 was slightly tongue in cheek. I said that I would never press it to a vote. However, it is important that the Committee understands that operators will be giving valuable commercial information to the authority.

[Lord Berkeley]

My Lords, I am grateful to the Minister for his reply to Amendment 69A and the other amendments in my name. I recall that he said that he would write to my noble friend Lord Bradley in connection with Amendment 69. Given that Amendments 69A, 72A, 72B, 73 and 74 all have time-related issues, I wonder whether he could extend his letter to cover those as well. On that basis, I beg leave to withdraw the amendment.