Local Bus Services
Debate between Graham Stringer and Andrew Gwynne(10 years ago)
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Andrew Gwynne
My hon. Friend will know that Greater Manchester Buses was split into two companies, one in the north and the other in the south of the conurbation. In his constituency, the buyer was First Bus and in my part of the conurbation it was Stagecoach. We now have, in effect, two private monopolies.
Graham Stringer
We do indeed, and I will deal with why the deregulated system does not work. Partly it is because on-road competition cannot work, as there simply is not enough space for the buses. When competition has been tried, it has led to massive congestion.
Let us look in detail at what has happened in the major metropolitan areas. The bus companies have gamed the system. They have not responded as one would expect in a competitive private sector area, by responding to what the customer wants; they have responded to where the subsidy is. So networks have contracted, as the companies could make a bigger profit on the major routes; and services have been withdrawn, so that the companies could get direct subsidy in franchised systems and larger amounts of money. It is a fact that every bus that goes out of a depot has a 50% subsidy attached to it, one way or another. This is not a private competitive market responding to customers; it is a private market responding to a subsidy regime.
So I am not surprised when Martin Griffiths, the Stagecoach chief executive, says something like the following, although his nose must have grown a great deal when he did so:
“The truth is that England’s city regions have significantly lower fares and higher customer satisfaction than London, as well as having access to frequent, integrated bus services and smart ticketing.”
I do not know what he was on when he said that; the bus fares are higher, and they have regularly increased by more than inflation and by more than increases in London. We know why Stagecoach is happy: it has been extraordinarily successful at gaining the subsidies.
I have no objection to business people making a profit for providing goods and services, and doing it well. The fact is that Brian Souter and his sister have made £1 billion. Does anybody think that has come from providing a better service and improving our bus services in the major metropolitan areas of this country? Of course it has not. It has come from knowing how to get to the subsidy and how to move the bus services in order to get there. That partly shows the answer to the point raised by the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) about where the money will come from. The capital return on investment in buses in the English regions is twice what it is in London. Why should the people I represent in north Manchester be giving Stagecoach and First Group twice the profit because they are operating in a deregulated system? If we put this out to proper competition in a franchised system that was open and fair, so that the more competitive bus company won, those profit levels would go down to a level similar to that in London, and with some of that money we would be able to improve the service. The only evidence we have of a franchise system within England, Wales and Scotland is the one in London, and it managed for the first 13 or 14 years after deregulation, when the companies were regulated, to run services with very low fare increases and maintain the number of passengers, whereas in the rest of England the numbers decreased by 50%. Those companies managed that without subsidy, so I think that in the metropolitan areas we, too, would have a better service and we would not be going to the Exchequer for more money.
I will finish with a plea. I was delighted with the Chancellor of the Exchequer’s announcement about Greater Manchester and what he was saying about re-regulating the buses. This is not an ideological battle and nor should it be one. The fact is there is a simple way of improving services in the major metropolitan areas, which is by making it easier to have a London-style system and allow franchises. That would help everybody.
Sunday Trading (London Olympic Games and Paralympic Games) Bill [Lords]
Debate between Graham Stringer and Andrew Gwynne
Graham Stringer (Blackley and Broughton) (Lab)
Unusually, but not uniquely, I did not support London’s bid for the Olympic games. I said so in the House during preparations for the bid, and I advised against it. I did so for two reasons, one of which is relevant to the debate. The first reason, which is not really relevant, is that no other UK city was allowed to compete with London for the right to represent the UK in the International Olympic Committee’s competition.
The second reason is that I simply did not believe the prospectus that London put out on the impact and cost of the games. Financially, that view has turned out to be right, as the cost of the games has increased by a factor of threefold or fourfold, the sustainability criteria have been thrown out of the plans for the Olympic games and the participation that was promised has not occurred. It has been repeated, as it was repeated during the bid, however, that the economic benefits of the Olympic games will be spread throughout the country.
I do not doubt—I am certain—that there will be economic benefits from the Olympic games. They will be felt in east London, in particular, and throughout the rest of London, but no Minister—from any party when in government—whom I have ever asked about the Blake report, which the previous Government commissioned, has answered my questions on it. The report showed that, although there would be benefits, there would also be a £4.5 billion disbenefit to the rest of the United Kingdom, meaning that the benefit to London would be even greater.
One can of course go to individual businesses and find that there will be a particular benefit. Steel will be provided for the Olympic games from Bolton, for instance, and one can go around the country and find such things, but the Blake report, which was produced at a time of economic growth, stated that overall there would be a disbenefit.
No Minister has contradicted the report, because it has been kept a great secret from them by officials or by more senior Ministers who know about it, but if one takes that analysis and places against it the Sunday trading proposals in the Bill, which will increase the Sunday trading of large stores, one sees that the impact is likely to be negative on many small stores and street traders throughout the rest of England.
I received a letter 10 days ago. It is not, as it happens, from a shop that will be affected by the legislation, but it shows the difficulties that small traders are currently experiencing—similar to many convenience stores on the street corners and high streets in our towns, cities and rural areas. The man in question runs an angling shop, which, when my 12-year-old son was into fishing, I used to visit fairly regularly. He wrote to me and—excuse the language, Mr Deputy Speaker, and the inaccurate constitutional position that my constituent took—said, “Will you sack that idiot in the Cabinet Office who has made people fill up all their cars with petrol. I used to employ four people in this shop, I am having the greatest difficulty making ends meet, I might be out of business within six weeks and trade was just beginning to increase in the spring. Now everybody’s gone and spent their money on their cars and nobody is coming into my shop.”
That shows how difficult small traders are finding things at present. If we take the fact that the Olympic games are going to have a negative impact, that overall there will be less money about throughout the regions and that people are going to go into Sainsbury’s, Tesco, Asda and Morrison’s at times when they could not previously go into them and spend money, we find that the Bill is going to put small businesses out of business. They will not exist, and the Bill will have a greater negative impact on them than probably anything else at present.
That is the prime reason why I oppose the Bill, but I also urge some caution on the figures that Government Front Benchers have provided, because they are not net figures. I do not doubt that 6 million people are likely to come into the country during the Olympic games period, if that is what we are told, but the experience of many host cities is that, although people go to watch the games and to enjoy the sporting and cultural experience, many people who would otherwise visit the city—to look at the Tower of London and London’s other great tourist experiences, for example—do not do so. Los Angeles’ lowest bed occupancy in more than a decade occurred in 1984, at the time of its Olympic games.
I have been fortunate enough to go to a number of Olympics, and had Members been in Atlanta in 1996 they would not have known that the games were taking place—unless they had been in the stadiums or nearby. As many people went to those games as went to any other Olympics, but other people left the city. Even according to the impact assessment—my hon. Friend the Member for Streatham (Mr Umunna) did a very good job of showing how inadequate it is—the impact is unlikely to be as impressive as it might seem.
It has been said several times that this will not be a precedent. I would advise people to go and look at a dictionary. Whatever anyone says, it is a precedent, because it has not happened before. Hon. Members are saying—I do not disbelieve them; they are honourable people—that they will not use it as a precedent, but other people might do so. Nothing can stop that, and it will be extremely bad for small shopkeepers and small businesses.
Andrew Gwynne
My hon. Friend is right to point to the concern that this may be used as a precedent. Was he as surprised as I was that the Secretary of State, in giving an example of this, could not cite another Olympic host city but had to cite the football World cup in Germany?
Graham Stringer
I was not surprised. I suspect that this is driven by lobbying by the very big stores, which want to open permanently in the long term—