Bus Services (No. 2) Bill [HL] Debate
Full Debate: Read Full DebateEarl of Effingham
Main Page: Earl of Effingham (Conservative - Excepted Hereditary)Department Debates - View all Earl of Effingham's debates with the Department for Transport
(6 days, 19 hours ago)
Grand CommitteeMy Lords, this group is full of sensible amendments. I will speak to the two in my name, Amendments 77 and 79. Amendment 72 is about the concessionary travel scheme—the £2 fare cap—which has been an immense success. In the village where I live in Dorset, it has changed people’s lives. All sorts of people now do not use their cars, which saves them an awful lot of money that they can spend on things such as heating. They do not need to use their cars, they do not need to pay for parking, and they do not need the maintenance of their cars. It has made a huge difference, and many of those people are not looking forward to it going up at the end of the year to £3. It definitely increases usership. It was interesting to read Amendment 63 from the noble Earl, Lord Effingham, and the noble Lord, Lord Moylan, presumably in support of the £2 fare cap, which I think is wonderful.
Amendment 79 is about a slightly different issue. It is about encouraging children to start using buses. Most children in the area I live in have to use buses to get to school if their parents cannot afford a car or cannot afford to drive them. I think it is very good practice to get children on the buses early and encourage them to understand that it is something that everybody can do. Also, to some extent, it is a little bit of independence for them. As a Green, I struggle slightly with the idea that any travel should be cheaper than walking and cycling. However, in this instance I think it is sensible to make bus travel free for children, simply because there are so many other accumulated costs on their parents. I think this would be a very good move.
My Lords, I rise to speak to Amendment 63 standing in my name. We are fully aware that fares must contribute to funding our public transport system, particularly when it comes to meeting essential social needs. However, we must also acknowledge the significant impact that fare levels have on passenger demand. This is especially relevant given His Majesty’s Government’s recent decision to raise the bus fare cap by 50%.
We are proud of our own record, particularly in extending the £2 bus fare cap throughout 2024. That policy, as we have just heard from the noble Baroness, Lady Jones, provided crucial support to passengers across the country, especially in low-income areas where bus services are a lifeline for many. It is therefore imperative that we fully understand the impact of increasing fares on those who rely most on these services.
This amendment seeks to ensure that the Government carry out and publish a comprehensive impact assessment on the economic and social consequences of removing the £2 bus fare cap. This assessment must include, but not be limited to, the potential impact on passenger numbers; the financial implications for local transport authorities; the effect on accessibility for those who depend on bus fares for essential travel; and the impact on passengers’ ability to reach socially necessary services, as defined in Clause 12.
We do not believe that His Majesty’s Government conducted such a detailed assessment before announcing the increase to the fare cap. However, they still have the opportunity to do so now. By undertaking that assessment, the Government can ensure that future decisions are based on sound evidence and a clear understanding of the impact on those who depend on public transport the most. For those reasons, I urge the Minister to consider this amendment and commit to a full and transparent assessment of the impact of increasing the bus fare cap.
My Lords, I do not think I will offend too many people if I say that no one could object to this amendment. Fares play an important role, but I do not think we should overemphasise the role they play. Travel West Midlands, a company with which I was involved for some years, did regular passenger surveys—largely a tick-box exercise, for obvious reasons, handed out by the driver or staff at bus stops. Funnily enough, fares never topped the list of complaints; reliability, congestion and safety all came before fares for passengers in the West Midlands. That is not to play down the impact of fares on passenger carrying, but it should be kept in perspective.
As for the contribution from the noble Earl, Lord Effingham, I kept count at Second Reading, and that is 11 different reviews, reports and committees that the Conservative Party has so far advanced in the debates on this legislation. I hope that management time—or ministerial time, for that matter—can perhaps concentrate more on running effective services and less on producing reports to the demand of the Conservative Party, largely about matters that its period in office considerably worsened for the bus industry.
My Lords, I rise to speak to Amendment 64 in my name. This amendment places a responsibility on local transport authorities to ensure that bus services remain accessible, not just through affordability but through the diversity of payment methods available. The reality is that different passengers have different preferences on how they want to pay. If we take rural areas, for example, we know that public transport services are often limited in these regions, and buses may be the only form of transport available. For many elderly residents in rural areas, cash is their preferred method of payment. If we remove cash payment options from bus services, we could unintentionally exclude a significant portion of the population, especially in rural and isolated areas where public transport is already sparse. This would not just inconvenience elderly passengers but severely restrict their ability to access essential services such as medical appointments, local shops and social support in the community. For these passengers, financial inclusion is about the ability to pay for their travel in a way that works for them. This amendment is not about one-size-fits-all solutions; it is about recognising that different passengers need different options. The elderly, the digitally excluded and those on lower incomes should be catered for in our transport policies. By ensuring that cash payments remain an option and that services remain affordable for all, we are creating a system that truly works for everyone, not just those who have the latest technology. I beg to move.
My Lords, I rise to speak to my Amendments 71 and 72 in this group, with a slightly different angle on this interesting topic of payment, which has been raised by my noble friend Lord Effingham. Normally, I like to give the Government a good roasting, criticise them and explain why it is that I am so much further ahead in my ideas than they are. On this occasion, since I have tabled these amendments and made further inquiries, I am glad to say that this will be an easy ride for the Government because they are doing quite a lot on this already and things are going generally in the right direction.
My first amendment relates to the payment by concessionary fare holders, and the second relates to contactless payment. The two may seem to be roughly the same, but they are very distinct. Contactless payment using a bank card, debit card or credit card cannot be used by those who have concessionary rights to travel on the buses because, obviously, if you are going to use a card, that right has to be evidenced by some identifier.
Let me give an example: those who have a national bus pass will have a photo card of a distinctive style, with an English rose on it; I remember that that was an important feature when it was designed. It is a card of a distinctive style with your face on it, and you need it in order to demonstrate your right both to the bus driver, who probably takes no notice of what is on the card, and, certainly, to a revenue protection officer were they to board the bus and check. This cannot be done with a bank card. One therefore needs two types of technology involved, which I want to deal with separately.
In London, the system that was developed for concessionary fare holders was originally the system used for all contactless payment. This was the Oyster card technology, which is still used for concessionary card holders. That includes not just the elderly—the national bus pass people—but also those with freedom passes and young people who have free travel as well. That technology is used.
However, when the national bus pass was introduced—by Gordon Brown’s Government, as I recall—that technology was not used and the DfT preferred its own technology, which goes under the name of ITSO. TfL regarded it as rather clunky, but the fact is that TfL then had to fit all of its bus card readers with equipment that could read two separate technologies in order to read what is going on. This was a very foolish way of going about things. The purpose of Amendment 71 is to suggest that, as this matter develops, there should be a single system that is applicable to concessionary card holders.
Amendment 72 relates to contactless payment. Contactless payment is widely used in London and was promoted by TfL in collaboration with the banks. In fact, it is quite likely that the banks would never have taken the risk of introducing contactless payment into the country if it had not been for TfL turning up and saying, “We have 4 million transactions a day; if we were to get together, maybe we could make contactless work. It will de-risk it for the banks, to some extent, and will give us something even cheaper than the Oyster card system”. I mentioned it being cheaper.
We should bear in mind that the driver of this, from the bus operators’ perspective, is the cost of collection. The point I would make—I would never disagree with what my noble friend Lord Effingham says—is that inclusion is very important, but one has to remember that cash is expensive to collect. It is much less for electronic payments. Of course, you have to pay the banks, but TfL was quite lucky because it had a proposition for the banks, which meant, I think, that it could negotiate a very good deal with them in terms of what it paid per transaction. Certainly, it is much less than the cost of cash collection, or even of Oyster card operation. If you are an ordinary passenger on TfL services nowadays—not a concessionary fare holder—you must notice that all the advertising encourages you to use contactless and not to get an Oyster card at all. That is the direction in which everything is going.
Outside London, however, contactless payment is still rare. The reasons for this are partly that the different bus companies all have different back offices, and the system needs to work in such a way that it will work with all the different back offices. I am perhaps pre-empting what the Minister will say, but I am delighted to be able to say that I have had some very interesting and valuable conversations with Midlands Connect, which is the non-statutory transport body for the West Midlands and the east Midlands. On behalf of the Government, it is carrying out work to develop a system that would work with all the different back offices of the various different bus companies so that it is possible that, over time, we could have contactless payment on buses throughout the rest of the country. That would be very welcome. It would be useful if the Minister could say in his reply what the timetable for that is; how much resource the Government are putting into it; what level of priority they regard it as having; and how they will now work with the multiple LTAs up and down the country, which will be running the buses, to make sure that this is adopted in a coherent way.
I thank the noble Earl, Lord Effingham, and the noble Lord, Lord Moylan, for their amendments; I also thank the noble Lord, Lord Burns, for his remarks just now. The Government know how important affordable and reliable bus services are in enabling people to access education, work and vital services. We also know that buses are particularly important for people in the lowest-income households, who make nearly twice as many bus trips as the average, and for younger people, who are much more likely to use buses than other age groups.
The Government also understand the importance of making payment methods on buses accessible and available to all. This is why we have provided guidance to local transport authorities and bus operators on developing their bus service improvement plans, which encourages both parties to work in partnership on improving the provision of fares and ticketing to ensure that the needs of all local bus users are taken into account. To this end, local transport authorities are also encouraged to capture local information about cash usage and electronic payments to inform the development of their bus service improvement plans. The bus franchising powers in the Bill will also give local authorities greater control over fares and ticketing while, through their enhanced partnership arrangements, they can work closely with bus operators to ensure that fares and ticketing policies are inclusive for passengers.
I should just add that, from my own experience as the person who was at the time responsible for the removal of cash payments from buses in London, contrary to the belief of the then mayor that it was the poorest people in London who habitually paid cash, it was completely the reverse: the poorest people in London had already worked out the value of Oyster cards and of daily, weekly and monthly ticketing. In fact, it was the ABC1 males who insisted on trying to pay the enhanced cash fare. When we withdrew it, they immediately moved to Oyster cards themselves. We have already discussed better ticketing once this afternoon, of course.
Amendment 71 looks to have integrated ticketing across the bus network; I note that the noble Lord, Lord Moylan, largely took Amendments 71 and 72 together. His sentiments are right: it is good for passengers, as well as for the bus network, its operators and franchising authorities, to have the most modern methods of payment with the lowest possible transaction costs. I completely agree with him.
What we do not want is to try to force people to do things that they cannot currently do while the work in progress that the noble Earl described is going on, to make payment methods as easy as possible. He asked me for a timetable, which I am not sure I can give him, but the multiplicity of back offices across the bus and railway networks in Britain needs to be untangled, and substantial work is going on within the department to enable multimodal ticketing, particularly in Manchester and the West Midlands, outside London. The consequence of that will be—I hope in time, and as quickly as possible—to allow the back office, in the way that he wants and as the noble Lord, Lord Burns, described, to provide seamless ticketing across bus networks. That work continues, and will take some time. He is, of course, right that in London the volume of transactions was so great that the credit card companies were willing to come to the table very easily. Outside London, it is a bit different, but the department is working very hard to do it.
Since the noble Lord, Lord Moylan, rightly says that the Government are moving quite well in that direction—and he also observes, as I can confirm from observation just now, that the English national concessionary pass has the English rose on it, because mine has it on—I submit, on his own assurance that the Government are moving quite fast, that neither amendment is necessary.
I thank my noble friend Lord Moylan, the noble Lord, Lord Burns, and the Minister, who have all contributed to this short debate. It really is critical that we ensure financial inclusion for everyone. Based on what the Minister has just said, we will look at this issue further, but for now I beg leave to withdraw my amendment.
I shall speak to all the amendments in this group standing in my name.
We must support our most vulnerable people, and we believe that His Majesty’s Government should prioritise SEND pupils when considering school bus services. Amendment 65 would place a vital obligation on local transport authorities to have due regard to the needs of pupils with special educational needs and disabilities when planning, commissioning or providing home-to-school bus services. We often speak in your Lordships’ House of our duty to ensure that every child has access to education, yet for many SEND pupils the journey to school is fraught with obstacles. Transport is not merely a logistical issue; it is a fundamental enabler of equality. Without suitable and reliable transport, education itself becomes inaccessible.
This amendment acknowledges a simple but often overlooked reality: that children with SEND require transport that is adapted to their needs, ensuring safety, accessibility and dignity. It is not enough to assume that standard transport provisions will be sufficient. Many of these pupils require accessible vehicles, safe and structured travel arrangements and, in some cases, specialist support during transit. Without these measures, their journey to school can be distressing, unsafe, or even impossible. Flexibility is key. The needs of SEND pupils vary widely. Some require physical adaptations, while others need assistance due to sensory sensitivities or cognitive challenges. A rigid, one-size-fits-all approach will not work. Local transport authorities must recognise the diversity of needs and build flexibility into their transport planning, ensuring that no child is left behind.
This amendment also speaks to the broader issue of inclusion. If we are to uphold the principle that SEND pupils have a right to mainstream education on an equal basis with their peers, we must ensure that they can physically access their schools. The provision of suitable transport is not an additional benefit—it is a necessity. This is not about adding burdens to local authorities; it is about embedding fairness and inclusion in our transport system. It is about ensuring that SEND pupils are a priority in our transport planning.
With Amendment 66, we must ensure that pupils attending schools outside their local transport authority’s boundary are not disadvantaged. This amendment requires LTAs to work collaboratively with neighbouring authorities to co-ordinate travel arrangements that are reasonable and accessible. Given the potential impact of franchising in certain areas, there is concern that changes to bus routes may inadvertently disrupt essential school transport services. This amendment ensures that LTAs take this issue into account when making transport decisions.
It is crucial that the Secretary of State provides guidance on co-ordinating cross-authority travel and evaluates its effectiveness at regular intervals. This will help to address any barriers preventing pupils, particularly those with SEND, accessing their education due to inadequate transport links.
Amendment 67 also comes in the context of a wider concern, which is His Majesty’s Government’s VAT on private school fees. The implementation of VAT on private school fees has caused financial strain on many families, but particularly those with SEND children. The Telegraph has reported that inconsistencies between Treasury and HMRC guidelines have resulted in some private schools having to add VAT to fees for essentials such as school lunches. Furthermore, the decision to push through the VAT levy during the academic year, without providing schools adequate time to adjust, has placed additional burdens on families. Not all SEND pupils have education, health and care plans. This means that many parents have been forced to pay transport fees out of pocket to ensure that their children’s needs are met.
We are simply asking for a review by the Secretary of State and consideration of an exemption on bus services for SEND pupils. As I said earlier, this is not about adding burdens to local authorities; it is about ensuring that SEND pupils and those who travel across authority boundaries are a priority. The Government have said they want to ensure that all children have the best chance in life to succeed—and that is, of course, absolutely correct. Fairness should extend to all pupils, particularly those with SEND, regardless of where they receive their education.
On Amendment 68, please let me highlight the critical issue raised in this amendment, which seeks to review the impact of national insurance contribution increases on transport services for those children with special educational needs and disabilities. The proposed increase in employer national insurance contributions will create a serious financial strain on private bus operators that provide SEND transport services. Many of those providers already work within narrow financial margins, and the increase in employment costs will likely make it financially unsustainable for some of them to continue offering their essential services.
The Confederation of Passenger Transport has estimated that this will cost the bus industry a total of £100 million. For a bus driver earning £30,000 per annum, the additional cost will be approximately £800 per year. This is a significant burden for small and medium-sized private operators, many of which already struggle to remain profitable in an industry with tight margins. If these private providers can no longer afford to maintain SEND bus services, local councils will be forced to step in, which means they will need to retender thousands of contracts—an administrative process that could take months. Delays in retendering would cause disruption to transport services, leaving vulnerable children without the critical support that they need to attend school. Such delays could also affect the quality of services, as new providers may not be able to offer the same level of expertise or flexibility that the private operators previously provided.
I thank the noble Lord for his intervention. I was referring to support to local authorities for home-to-school transport schemes. I will take that away and come back to him with the clarification that he seeks in this respect. I can say that the Government do not expect the changes to national insurance to have a significant impact on home-to-school travel for children with special educational needs, so it would not be proportionate to conduct the assessment as the amendment suggests. I do not think that it is required.
My Lords, I thank the noble Baroness, Lady Pidgeon, my noble friend Lord Moylan, and the Minister for their contributions in this debate. We have heard so much in the Chamber about how SEND pupils may be adversely affected by various new government policies, so we feel that a review, or an impact assessment as per these assessments, is a fair and reasonable request. For now, I beg leave to withdraw the amendment in my name.
Well, that is a very serious rebuke on the part of the noble Lord, Lord Goddard. I nearly wilted and decided to curtail my speech as a result of that intervention, but I have found the strength to continue. I remind the noble Lord that there is no question of time being spun out here. We are in day three of a four-day Committee, and we are very likely to finish the Committee today. We are going at rapid speed, and any suggestion that any member of this Committee has been using the time to spin out the debate is preposterous and is denied by the facts, so I will return to what I was saying.
This was the purpose of the traffic commissioners; they were set up for that purpose. So we come to 1985. I do not know whether the noble Lord, Lord Goddard, considers 1985 an historical date or one that is part of the modern and contemporary world; for me, it is fairly contemporary, but I would not want to comment on the noble Lord’s age or experience of these matters. Of course, in 1985, all those functions in relation to buses were taken away from the traffic commissioners. By then—this is important—they had acquired functions in relation to the freight industry, as well as certain safety functions on top of that, so there was a reason for continuing the traffic commissioners then.
The noble Lord, Lord Goddard, will have noted, in his careful scrutiny of my amendment, as will have other noble Lords, that it refers only to the bus functions of the traffic commissioners. There is nothing here that would abolish them entirely. That is a pity, in my view, but I was advised by the Public Bill Office that an attempt to abolish them entirely would be outside the scope of the Bill.
The commissioners survived 1985, although there was really very little need for them. The Government are returning to a sort of 1920s view of how buses should be run in the Bill before us, but not giving the same functions back to the traffic commissioners. The decisions about where the routes should run, who should have a special licence and what the fares should be will in effect fall to the local transport authority, not the traffic commissioners, but they are to continue. Their functions include enforcement on safety matters, yet their budget for that is derisory and, effectively, there is very little enforcement. A lot of that work is done, in relation to freight at least, by the DVSA and not by the traffic commissioners.
Generally, it would be a good time to have a bit of a clear out of the bureaucracy that encrusts our modern society. I would like to see the traffic commissioners go entirely and what functions they have transferred to the Department for Transport, but the proposal today, for scope reasons, as I said, is slightly more modest. I do not expect the Minister to accept it, but it is a proposal that those of us here in Committee with a slightly more revolutionary spirit—I am sorry that does not include the noble Lord, Lord Goddard, or maybe it does; we shall hear when he comes to speak—should embrace to see some real change, at last, at the seat of government.
My Lords, perhaps I might briefly address one of the suggestions of the noble Lord, Lord Goddard. I was present in the Chamber, as I frequently am, during the Football Governance Bill. I appreciate that he might not be that interested in the difference between the crests and the arms, but the College of Arms is run by my noble kinsman His Grace the Duke of Norfolk, and I can tell him that the argument put forward as between crest and arms is relevant and has implications. It is important to realise that. He may well want to look into it; I am happy to explain to him why it is important, if he is interested.
My Lords, the imminence of the recess suggests to me that I should not challenge the noble Lord, Lord Moylan, in his knowledge of the history of the traffic commissioners, but I will do that over a drink some time. I am less interested in the development of the Road Traffic Act 1930, or indeed the Transport Act 1985, than I am in the future of the bus service in the 2020s.
Traffic commissioners play an important and strategic role in the transport sector and, these days—principally but not wholly—in road use safety. I certainly refute completely any suggestion that there is an absence of enforcement; the Driver and Vehicle Standards Agency does that. Traffic commissioners are an admirably economic and cost-effective way of dispensing justice to bus operators and bus drivers—those who are licensed to provide these important and, indeed, safe services—in a way that is widely celebrated in the industry and regarded as far more effective than any other solution. Indeed, the independent review of the traffic commissioner function undertaken by the Ministry of Justice, published in May 2023, found that
“the Traffic Commissioner function generally operates effectively”
and noted a strong level of support from the industry for functions continuing to sit with the traffic commissioner. The truth is that for a regulatory arrangement to be so widely celebrated by the industry it regulates is something to be celebrated, rather than abolished.
My Lords, I am aware that we have already discussed various aspects of this amendment in the debates, so I will be brief. Before we move forward with significant changes to our bus services, we think it very important to pause and ask: what will this mean for rural communities? That is precisely why this amendment is so important. It would ensure that before Clauses 1 to 15 of the Bill take effect, the Secretary of State must publish a report assessing the impact on rural areas.
This report is not about delaying progress; it is about ensuring informed progress. We need to understand whether these reforms will improve rural connectivity or unintentionally make services even harder to access. Will funding be allocated fairly? Will small operators that serve rural routes still be viable? Will local authorities have the powers and resources needed to support these services? These are critical questions that must be answered before the Bill comes into force. I beg to move.
I thank the noble Earl, Lord Effingham, for his remarks on Amendment 82. I also thank him, the noble Lord, Lord Moylan, and all other noble Lords for the issues they have raised in Committee. I have found the exchanges useful in discussing the purpose of the Bill and considering issues raised across your Lordships’ Committee. The Bill reflects how important it is to improve local buses for passengers across the country, including those who are woefully underserved in rural areas. Throughout this process, the needs of people living and working in and visiting rural areas have been integral to policy development.
Government officials have worked hard to publish a thorough and comprehensive impact assessment that has been rated green by the independent Regulatory Policy Committee. The assessment covers every one of the Bill’s measures in detail, including in the context of rural areas, so I am afraid I would struggle to justify why a further duplicate assessment is required. Although the noble Earl says this is not about delay, the amendment would have the potential to delay progress on the Bill and therefore to delay its introduction in areas that need its provisions.
It is important to remember that the freedoms allowed by the Bill to franchise and set up a local authority bus company are entirely optional. These powers simply give local transport authorities more choices in how their bus networks are operated. If a rural authority decides to establish a local authority bus company, it will have the flexibility to scale the company to match the needs of its local passengers, its ambitions for the network and the available funding. Additionally, it is important to highlight that the Government have allocated funding to build LTA capacity and capability on buses, including, but not limited to, the Bus Centre of Excellence. They also plan to pilot different franchising models that may be particularly suited to rural areas.
I conclude my remarks there, and once again thank all noble Lords for the excellent debates across the days we have shared in Grand Committee. I look forward to further debate on Report.
My Lords, I thank the Minister for his response. I also thank the noble Baronesses, Lady Pidgeon and Lady Grey-Thompson, and the noble Lords, Lord Hampton and Lord Berkeley, whose amendments in the first group were relevant to my amendment. I do not think we need to discuss further and, on that note, I beg leave to withdraw my amendment.