Bus Services Bill [Lords]

Graham Stringer Excerpts

2nd reading: House of Commons
Wednesday 1st March 2017 Commons Chamber

[Chris Grayling]

I do not believe it was a major mistake, because we have seen substantial investment from the private sector that would not otherwise have happened. The interesting test for the right hon. Gentleman if he is successful in his mayoral bid in Greater Manchester—I say “if” because he has issues to deal with, such as the reputation of his party leader and the strength of other candidates—is whether he manages to use those powers to deliver the better bus services for which he argues. I will watch with interest if he is successful.

[Graham Stringer (Blackley and Broughton) (Lab)]

I welcome the Bill, but the Secretary of State is on a very thin point when he justifies what has happened over the past 31 years with investment in new buses. Does he realise that that investment has come from the extreme exploitation of bus passengers, particularly in metropolitan areas, where bus companies exploiting monopoly positions have been able to get a rate of return on capital that is much higher than they would get from real competition, and much higher than companies get in the franchised London area?

[Chris Grayling]

In a sense, the hon. Gentleman argues against himself. He complains about competition in those areas, but at the same time says that bus companies have been able to exploit monopoly positions. That is inconsistent. We will see whether the next Mayor of Manchester manages to demonstrate that he or she can do a better job than the private sector. That is the test. Let us see whether they can deliver that. If the right hon. Member for Leigh (Andy Burnham) is successful in his campaign, we will watch with interest.

This is not just about mayoral authorities but about authorities elsewhere. I want to be clear that, while we are open to plans from other authorities to take franchising powers, we will give them only if they can demonstrate that they can do a better job than the current one. A compelling case needs to be made before any other authority receives consent. The key point is that we have the point of accountability with the Mayor, who will have a legal duty to demonstrate an enhanced service, or a point of accountability in the Government, who likewise will judge whether a proposal will deliver that enhanced service.

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[Graham Stringer (Blackley and Broughton) (Lab)]

It is worth going through a little history to put the Bill into perspective. Although I support this Bill, there is one real sense in which I, as Labour MP, think it is not necessary. The fact is that since the Transport Act 1985 was implemented in 1986, virtually every Labour Member has seen it as a catastrophic failure for people who use buses. It saddens me that a Labour Government did not bring forward a better Act than the Bill before us now. However, the Government have brought this Bill before us, and it is worth supporting.

Given what the Secretary of State said about reversing the Lords amendments, it is worth remembering why we have this Bill at all. It came about because the then Chancellor, the right hon. Member for Tatton (Mr Osborne), had discussions with the chief executive of Manchester City Council, Sir Howard Bernstein, who retires this month and to whom we should all pay tribute for progressing this item, which will undoubtedly improve buses. The then Chancellor recognised what many of us had been saying for some time—that this country would be much better off economically if we made our major cities work, rather than depriving them of resources and of allowing them to run their transport system in favour of the economy and people who live in the area. Sir Howard Bernstein and Sir Richard Leese persuaded the then Chancellor, and we now have this Bill before us.

It was always an ideological position of the Conservative party, as we heard from the right hon. Member for Chipping Norton, that it wanted a complete free-market approach to buses. However, the Government conceded that they would allow reregulation if combined local authorities agreed to have an elected mayor. That negotiation was entered into and agreed. One has to bear that in mind when the Government say that they will reverse the Lords amendments. I agree with that in principle, but I would not like to lose the Bill, given that a negotiation happened and an agreement was put in place between local authorities and the Government that will improve life for many people I represent and for many in mayoral combined authority areas.

I will go through two major issues. First, the right hon. Member for Chipping Norton gave the argument for the exceptionalism of London or, to put it another way, “It’s okay for us in London. You lot can get on with it.” [Hon. Members: “ Chipping Barnet.”] I am sorry; if the right hon. Member for Chipping Barnet (Mrs Villiers) were in her place, I would apologise to her. She put forward three arguments as to why London should have something that the rest of us cannot. One was that it would bring uncertainty to the bus companies. Well, there would probably be a bit of uncertainty for the bus companies, as they will have to compete in a different way to run services, but my prime interest and concern is for the passengers who, for the past 31 years under the deregulation Act, have only had six weeks’ notice—in practice, sometimes less—of bus services being withdrawn. Part of the Bill takes some of that uncertainty away from passengers, so that argument does not stand up, particularly if our priority is the passengers.

To be completely straightforward, I did not understand the right hon. Lady’s second point, which was about the renationalisation of the buses. The Bill is not about renationalising the buses. It is primarily about reregulation in metropolitan areas. Although I accept the deal, and allowing local authorities to set up municipal bus companies was not part of that deal, I do not think it would do any harm for local authorities that saw the need for it to have the right to set up municipal bus companies, particularly if the private sector moves out, as it has threatened to do on a number of occasions if the Bill goes through.

The right hon. Lady’s third point was about the finance that goes into London from the congestion charge. The really important thing is that there was a period between 1986 and 2000, when Ken Livingstone won the London mayoralty, when there was effectively no subsidy. There was certainly no congestion charge for there to have been subsidy. There was no loss of bus passengers in Greater London over that period, whereas the number of bus passengers plummeted in the west midlands, Merseyside, Tyne and Wear, and Bristol. The figures fell by two thirds in South Yorkshire and by half in Manchester, but without the subsidy from the congestion charge, the passenger figures in London remained the same. The arguments of the right hon. Member for Chipping Barnet against this Bill do not stack up.

It is worth taking a deeper look at how the deregulation has worked, why it does not work and the flaw in the arguments in support of it, for those who still support deregulation. When the legislation was introduced—incidentally, I have sadly been around long enough to have campaigned against the introduction of the 1985 Act—the argument was that competition would improve the bus services because bus services were run by municipal authorities that had monopolies and were not providing the best possible service. I do not believe, as the Opposition have been accused of believing, that that was a completely utopian, golden age. It was not; there were flaws. Many bus routes in South Yorkshire, which my hon. Friend the Member for Sheffield South East (Mr Betts) talked about, and in Greater Manchester and Merseyside, were still running on the schedules and timetables of the old tram system. They did not respond quickly enough to the changes in population after slum clearance. There were faults, but there were night services, people could get across the conurbations to see their parents on Saturdays and Sundays because there were bus services, and people could get to work early in the morning or home late at night after shifts. All that has disappeared. So, no, it was not a golden age, but it was a much better service than is being provided by the private sector.

It is important to understand why the competition that was supposed to deliver has not worked, and it has not worked for two reasons. Where there was severe competition, as there was in south Manchester, Preston, Edinburgh and other places, bus companies went head to head and really had a go at trying to run the other bus company off the road. Those places got not a better service, but terrible congestion. City centres were blocked up. The system did not work where there was severe competition, but that was very rare. The Competition Commission did a study in 2011, finding that there was virtually no on-the-road competition. Supplementary evidence shows that there was very little competition because companies in the London system—as much as the bus companies’ accounts can be understood—were getting a much lower rate of return on their capital than companies elsewhere, although it still enabled them to invest in new buses.

[John Pugh]

Does the hon. Gentleman agree that there is also a myth about deregulation meaning the introduction of the private sector? There were many splendid private sector operators in Liverpool prior to deregulation, such as Crosville and Ribble, which existed alongside the municipal sector.

[Graham Stringer]

The hon. Gentleman is quite right about Merseyside. In Manchester, Mayne Coaches ran a service in the private sector, but it was regulated; it could not just—as happens under the deregulated system—decide to run a bus service one day and take it off six weeks later, or vice versa. So the issue is not privatisation but the lack of regulation.

The point I was getting to is that there is supplementary evidence that competition did not work. The rate of return in London was much lower, and FirstGroup moved out of the London market because it could make a much higher return in South Yorkshire and Greater Manchester.

[Rob Marris]

My hon. Friend may be aware that, of the major metropolitan urban areas outside London, the west midlands had the least competition, with over 85% of services run by Travel West Midlands and then by National Express. The ridership dropped less in the urban west midlands than in any other metropolitan areas, but, literally, at a price, with some of the highest fares and some of the highest returns on capital. So the competition was not there, and we had the high prices, but at least we had the continued ridership.

[Graham Stringer]

Indeed. It was often the change that led to the loss of ridership. When companies such as FirstGroup and Stagecoach operated their services, they were certainly, whether by tacit agreement or not—I doubt whether there was a written agreement—operating semi-monopolies, which enabled them to charge much higher fares. It is not only that the ridership has gone down, but fares have gone up by about 43%.

The question I was coming to in terms of supplementary evidence is this: in terms of the way the legislation has worked so far, does anybody think that we, as the taxpayer, have had our return from Brian Souter and his sister, who have become billionaires out of this—I do not mind people being creative, being entrepreneurs and making money—pocketing money by gaming the system, running semi-monopolies and putting buses out, when every single bus that goes out of the depot has, on average, a 50% public subsidy? Certainly, Brian Souter and his sister have made money out of gaming the way the subsidy works. The system has not worked; it has not been competitive. Moving to a system where there is competition, not on the road, but by tender by private bus companies, will be better for the travelling public. I agree with competition by and large, because monopolies tend towards inefficiency, but the competition is better off the road, not on it.

I have one question about reliability, which my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) asked about. We are often told that congestion makes the buses unreliable, and it does. However, when the Transport Committee took evidence, we found that, in the majority of cases where buses did not turn up, that was not because of congestion, but because of mechanical failures in the buses, which had not been properly maintained, or because drivers had not turned up. That is an important point to bear in mind.

Finally, I would like to ask the Minister, who is in his place, the same question my hon. Friend asked: is saying that mayoral combined authorities have to have a compelling case before they re-regulate the buses trying to bring back the very high hurdle—the very high benchmark—that was in the Transport Act 2000, which effectively prevented those authorities that wanted to re-regulate the buses from doing so? Is it there to undermine what is essentially a good Bill? I hope the Minister will answer that in summing up.

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[Chris Green]

It is also incumbent on the new mayors and the new systems that we have in place locally not just to allow that to happen but to encourage it to happen.

The Conservative party has often led the way on public transport. In Greater Manchester, we need only look back to our reintroduction of the tram network in the early ’90s after an absence of decades, and only this week we have seen the completion of the latest expansion of Greater Manchester’s Metrolink. We need a better integrated and thought through service on buses, as we have on our trams. These improvements to Greater Manchester’s public transport network have not always, unfortunately, been matched with great ideas from Labour, which wanted to impose a congestion charge on people travelling in Greater Manchester—a burden that would have disproportionately affected people in the Bolton, Wigan, Bury, Oldham, Rochdale, Salford, Stockport Tameside and Trafford boroughs.

[Graham Stringer]

And Manchester.

[Chris Green]

Absolutely—and parts of Manchester outside the two rings. I am pleased to say that Labour bowed to pressure to have a referendum on the damaging congestion charge proposals, and the people of Greater Manchester in all 10 boroughs rejected that idea.

Currently across Greater Manchester, bus services are not fulfilling their potential in a desired integrated transport system. This Bill provides the tools to achieve that, and we must ensure that it does so. We have to think about buses large and small—not just the larger and double-decker buses but the increasingly used smaller buses—in getting this increased connectivity. Buses must be linked together with all the other forms of transport—with trams and rail, and with car drivers by having more park-and-rides. I will do all I can as a Member of Parliament to ensure that the new Mayor and administration take advantage of every opportunity given by this Government.

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[Andy Burnham (Leigh) (Lab)]

I have heard lots of mention made of mayoral elections in this debate, so I should probably declare my interest in saying that I am a candidate in one of those races and will indeed seek to use the powers in this Bill should they become available to me. The comments I wish to make today are born out of 16 years as the Member of Parliament for Leigh and the issues I have dealt with relating to bus services in my constituency, which frankly, in my view, have never been good enough in that time.

To put the debate into its proper context, I want, like my hon. Friend the Member for Blackley and Broughton (Graham Stringer), to go back to the 1985 legislation. Let me read out the words of the then Transport Secretary, Nicholas Ridley, when he introduced the Second Reading of the Bill that became the Transport Act 1985:

“The Bill is about competition...We want to see competition providing an incentive to be efficient and to offer passengers a better quality of service. The customers…want greater efficiency, lower fares, smaller buses going into residential estates, greater comfort or a more polite and helpful driver. Competition is the key to these improvements. It is the key to increasing patronage.”—[Official Report, 12 February 1985; Vol. 73, c. 192.]

Having listened to the current Transport Secretary today, I can only say that he put the bravest face that he could on the situation and glossed over some of the real problems that we have seen in bus services ever since that flawed legislation was introduced. He tried to point to all the investment that the private sector had made and said that there had been service improvements, but I am afraid that that is not how the travelling public see it.

It is certainly not how I saw it when I was growing up. I was of an age where those changes directly affected me. I was 16 when the legislation came into being, and then saw it affect me in my teenage years and as I moved towards work. The Secretary of State is fond of reminding people, as he did today, that I was born down the M62 in Liverpool, but he needs to know that when I was one, my dad got a job in Manchester and we moved halfway between, so I was a regular user of the orange and white buses from Leigh bus station—the 26 and the 39—into Manchester; it used to cost us 10p. The minute the 1985 legislation was put in place, the price shot up, the services all changed, and nobody knew where they were. I could not get to work at my first job on the Middleton Guardian using the bus, because it was an unpaid job as a trainee reporter and I could not afford it. Those experiences live with people.

Anybody who has used the buses in Greater Manchester over the past 32 years since the changes came in would say the same. As my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) said, bus usage has gone down from 355 million journeys in 1986 to 210 million journeys now. The picture has been the same in South Yorkshire and other metropolitan areas that have been mentioned—a huge decline that is very much linked to the cost and quality of the services.

[Graham Stringer]

I am listening with interest to my right hon. Friend as he refers back to Nick Ridley’s speech. Was he aware that when asked the then Secretary of State could give only one example in the whole world of a deregulated system such as the one he was going to impose on everybody in the rest of the country apart from London, and that was Kuala Lumpur?

[Andy Burnham]

It is interesting, is it not? I read the Second Reading debate and that point was put to the then Secretary of State many times, and, Kuala Lumpur notwithstanding, there was no other evidence to support the major changes. I seem to remember that there are plenty of rickshaws in Kuala Lumpur, but I do not know whether he was including that in his argument.

That Secretary of State and his Government inflicted an ideological experiment on the country without evidence to support it. The facts show that it has been an unmitigated disaster for the travelling public. Today, Members on both sides of the House should at least agree to call time on it and give the various parts of the country the powers they need to correct it.

I want to say something about coverage and quality of services. I know, as my hon. Friend the Member for Manchester, Withington (Jeff Smith) said in his excellent speech—I wish I could have been in that café with him while Eric Cantona played chess; it was a great image—that in parts of his constituency, particularly as it goes into the centre of town, buses are nose to tail. Particularly as they get towards Oxford Road in Manchester, people can see that the bus congestion is just ridiculous. I was with the vice-chancellor of Manchester University last week and she told me that the record number of buses that students had counted along Oxford Road was 34 continuously nose to tail. Of course, that has a terrible effect on traffic congestion in the city centre and it simply does not work.

We have saturation on the lucrative routes, as the bus companies see them, but, as we have heard today, they abandon more isolated areas that do not make a profit for them. The Higherfold estate in my constituency, which is in an isolated area, has constantly had problems with services being unilaterally withdrawn. Then there is an attempt to hold the passenger transport authority to account by saying, “Give us a subsidy or there is no service at all.” That leads to large subsidies for the bus companies that operate in such a way.

A year ago, a Mrs Healy wrote to me to say that the withdrawal of the 12 and 15 services from Leigh meant that her son could no longer get to work in Little Hulton and he had lost his job. No notice was given of the withdrawal of that service. This has a real impact on people’s lives and, as my hon. Friend the Member for Wythenshawe and Sale East said, because many people in this Chamber do not use buses they might not understand how detrimental poor bus services can be to some people.

My hon. Friend the Member for Manchester, Withington mentioned the Arrowfield estate. I recently went there to meet the Arrowfield and Hough End residents group, who told me about the withdrawal of the 84 service, which he mentioned and which, I think, served Withington hospital. The group said that that service had been withdrawn without any formal consultation with the community and the new service that was meant to replace it stopped at 5.30 in the evening, meaning that people could not get home from work. It is not acceptable for the public to be treated in this way.

Then, of course, there is the cost. In London between 1995 and 2016, fares rose in real terms by 36%, but in metropolitan areas, particularly Greater Manchester, fares rose by 60%. As we have heard today, the fare for a single journey can often cost more than £3. Because of the free-for-all, because operators are all running different ticketing systems and because of the chaos, we cannot have an integrated Oyster-style system, so, again, the public lose out.

During a consultation with young people in Bury a few months ago, I asked about the issues facing them, and the cost of transport came up again and again. I asked them whether they travelled on buses and whether they could afford it—this goes back to a point made by my hon. Friend the Member for Wythenshawe and Sale East—and the answer was that it was cheaper to get an Uber. If there are four of them, they can get an Uber together and it is cheaper than the bus.

Is it any wonder that the roads of Greater Manchester are becoming more and more congested as every year goes by? As the quality and the coverage of our bus service has gone down and the cost has gone up during the past 30 years, congestion has got worse and worse. That is affecting the air quality in Greater Manchester, and it means that Greater Manchester is in breach of the standards—the legal limits—for nitrogen dioxide. This simply cannot carry on, and I welcome the focus in the Bill on air quality.

I hope that the Government will go further and give Greater Manchester the powers to introduce a clean air zone. I ask the Minister: what reason can there be for the Government to exclude Greater Manchester from the list of places that they have allowed to introduce clean air zones, other than cost? Cost is not a good enough reason. It is not good enough that children are breathing in polluted air on the way to school. We look forward to his and the Government’s help in solving that problem.

If all of this were not bad enough in the experience of the travelling public, we are paying through the nose for it as well. A £100 million subsidy has been given to the bus companies annually, while at the same time they have been paying out large dividends to their shareholders. This system really does not work for the public in any meaningful way. As I say, it is time to call time on what is a failed ideological experiment.

I give credit to Sir Howard Bernstein, who has been mentioned, and Sir Richard Leese and Lord Peter Smith, as well as other leaders of Greater Manchester, who in my view were right to insist that the Bill should be part of the devolution deal that was done with Greater Manchester. I pay tribute to the former Chancellor, the right hon. Member for Tatton (Mr Osborne), for agreeing to that request, and indeed to the current Minister and the Secretary of State for sticking by the deal and making sure that the Bill was put before the House.

However, I want to press the Minister and the Government on a number of concerns. An issue that several colleagues have raised today is the decision to reintroduce the clause that will restrict municipal ownership of bus companies. As my hon. Friend the Member for Nottingham South (Lilian Greenwood) said, why restrict people, because we could at least have that as an option? From my point of view, as someone who might consider using the franchising powers, to have the fall-back option of a publicly owned company being able to come in and provide the service if there were no bidders on the terms sought would provide leverage, would it not? It would do so if they knew they could run a service because they had such an option up their sleeve. I say to the Minister that nobody wants anything to happen to the Bill that might disrupt its passage, but the Government should surely give people such flexibility so that they can make full use of the powers proposed in it.

Another issue I want to mention is the one raised by my hon. Friend the Member for Blackley and Broughton. He talked about the regulations that have been published very recently—within the past couple of days—relating to the Bill. They state that the powers in the Bill can be given to a metropolitan mayoral area only if a “compelling case” is presented—not just a viable case, but a compelling one. In his winding-up speech, the Minister needs to spell out precisely what that means. Is he erecting a high hurdle to prevent metropolitan mayors from using the powers in the Bill?

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[Andy Burnham]

I agree, because there are benefits from linking HS2 and HS3. I would like a parkway station in my constituency—Leigh would be the place where the preferred HS3 route crosses HS2. The benefits in terms of taking traffic off the M6 and the East Lancs are enormous. That is why they should be planned as a single scheme. I drive a lot around Greater Manchester and the north of England. Congestion is getting worse. Anybody travelling on the M62 today between Manchester and west Yorkshire, or between Manchester and Liverpool, or over to Sheffield, which is even worse, will know that the congestion is not sustainable. We are trying to attract people to invest in the northern powerhouse, but congestion could be the factor that deters them. The Government need to give us certainty about northern powerhouse rail so that we can begin to reassure people that the north will move, and that it will be the powerhouse that the Government have spoken about.

[Graham Stringer]

My right hon. Friend makes profound good sense about linking HS2 and HS3. Does he agree that the critical decision in getting both HS2 phase 2 and HS3 is the schedule in Parliament for the hybrid Bill? If the hybrid Bill for Crossrail 2 gets in front of that, we will not finish HS2 in most of our political lifetimes, and we will certainly will not integrate it with HS3.

[Andy Burnham]

I could not agree more with my hon. Friend. The Government need to be honest about their intentions. It would be a gross unfairness if they put Crossrail 2 ahead of HS3 or northern powerhouse rail, or even HS2, in the legislative or Treasury queue. I cannot see how that could possibly be allowed to happen. If they commit now to HS3, the investment potential that would be unlocked immediately would be enormous. I hope the Government listen carefully to that argument—I see the Minister nod. I am speaking not only for businesses in Greater Manchester, but for businesses across the north of England, which see the poor quality of transport as the biggest threat to our future economic prosperity.

If elected in two months’ time, I intend to use the powers provided by the Bill to bring fares down in Greater Manchester, particularly for young people, as I have said. I intend to use the powers in the Bill to improve the quality and coverage of services, and to ensure that those isolated areas and more deprived parts of Greater Manchester have a reliable and regular service. I want to improve the travelling environment for all the public, but particularly for disabled people and visually impaired people. I want to do all of those things.

For the last 30 years, the public in Greater Manchester have had to put up with buses run in the private interest rather than the public interest. It is time to take our buses back and put people before profits.