EU Exit Preparations: Ferry Contracts

Julian Knight Excerpts

Tuesday 5th March 2019 Commons Chamber

[Chris Grayling]

We have been preparing for a no-deal exit for months and months. There was a particular reason, as I will set out in a moment, for this particular procurement at this particular time, but my Department has been working for months to prepare for the risk of no deal. That can be seen in the new international aviation agreements, in Kent, where we have put in alternative resilience systems to the deeply disruptive Operation Stack, and in many other things.

[Julian Knight (Solihull) (Con)]

It is not just here that we see the Opposition parties not acting in the national interest, because the same applies to statutory instruments. It is a constant refrain. Does my right hon. Friend agree that the only way of taking no deal off the table is by voting for the Prime Minister’s deal? It is time for the Opposition parties to put narrow party politics aside.

[Chris Grayling]

Absolutely. All that we have heard for months is, “Why are the Government getting this wrong?” but we have had no tangible or realistic plans from the Opposition. At every opportunity, they simply work to disrupt the Brexit process. Labour stood on a manifesto that respected the referendum result, but the party is doing anything but respecting the result. If it continues to disrupt the Brexit process, it will pay a heavy price in its heartlands, where people voted for Brexit.

Airports National Policy Statement

Julian Knight Excerpts

Tuesday 5th June 2018 Commons Chamber

[Chris Grayling]

I know that the hon. Gentleman has a particular view on this proposal, so I did not expect to find him supportive of it. We will work very hard to ensure that the areas affected by expansion are treated as decently as possible and supported by what will be a world-leading package of community support, which I hope will mitigate the impact of this project of national strategic importance.

[Julian Knight (Solihull) (Con)]

I support the statement and the Secretary of State’s careful, consultative approach. Birmingham airport, which is on the border of my constituency, currently runs well under capacity—by about 30% to 40%. Does he believe that this announcement will improve that situation over time, and if so, how?

[Chris Grayling]

There is capacity at a number of our regional airports, which continue to grow. Birmingham airport will continue to grow. If we expand Heathrow, there is no doubt Birmingham airport will face greater competitive pressure than many of our other airports, but that does not mean that it will cease to be a success story. Birmingham airport is already a great asset for the west midlands, and that will continue. It has attracted a number of important international routes in recent times, and I have no doubt that that will continue.

Transport Secretary: East Coast Franchise

Julian Knight Excerpts

Wednesday 23rd May 2018 Commons Chamber

[Lilian Greenwood]

rose—

[Julian Knight (Solihull) (Con)]

rose—

[Chris Grayling]

I will take two more brief interventions, but then I must make some progress.

[Chris Grayling]

I am grateful to the hon. Lady for confirming that the talk of a £2 billion bail-out that we keep hearing from Labour is absolute nonsense. The reality is that we will drive this business as hard as we can to keep the revenues as high as we can. But if this railway were going to deliver as much money as was forecast, none of this would have happened in the first place.

[Julian Knight]

I thank my right hon. Friend for giving way; he is being most generous. He is forensically taking apart the Opposition’s case. Was he struck, as I was, by the fact that the hon. Member for Middlesbrough (Andy McDonald) did not even mention the cost of renationalisation? Across the board, the renationalisation of the utilities and the railways would cost more than £170 billion, and that is money that we simply cannot afford to spend.

[Chris Grayling]

My hon. Friend makes a good point. The Opposition never cost in their renationalisation plans the value of the trains that are currently privately owned, for example. That amount would be billions and billions of pounds, unless they are planning to nationalise the railways but have no trains to run on them, which is also a possibility.

Haulage Permits and Trailer Registration Bill [ Lords ] (First sitting)

Julian Knight Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 22nd May 2018 Public Bill Committees

[Mr Goodwill]

I am afraid to say that that is yet another Brexit scare story. No one has suggested that leaving the European Union will be an excuse to lower this country’s standards. Indeed, we will have the freedom to impose tougher standards if we need to. We have seen trucks being replaced. Indeed, the best thing for clean air in this country is to have a strong, successful economy so that haulage companies can invest in new equipment that produces much cleaner emissions.

[Julian Knight (Solihull) (Con)]

My right hon. Friend is making a superb point. It is about the unintended consequences the amendments would have. Does he agree that the best way to deal with this issue effectively is to get clean diesel on the road as fast as possible—it is much better performing than petrol in environmental terms—and to stop the scare stories about diesel?

[Mr Goodwill]

Certainly, motor manufacturers need to answer questions about how their vehicles have been complying. It is not just Volkswagen that has been caught out over non-compliance with the rules. Other mechanisms have been used to ensure that cars can comply on the test cycle but perhaps not so much otherwise. Some motor manufacturers use a temperature get-out, but we are talking about trucks.

As I said at the beginning of my remarks, trucks do comply. They have not been getting away with the sorts of tricks that some motor manufacturers have been caught out over. The hon. Lady’s amendment would result in the law of unintended consequences. She suggests that to get a permit a truck has to be Euro 6 or better, but that would result in such trucks being used on cross-channel routes, with the dirty trucks back in the UK. Although I can understand everybody’s wish to have cleaner air and better vehicles operating on our roads, I believe the amendment would have the exact opposite effect.

Electric Vehicles and Bicycles

Julian Knight Excerpts

Wednesday 9th May 2018 Westminster Hall

[Andrew Selous (South West Bedfordshire) (Con)]

I beg to move,

That this House has considered take-up of electric vehicles and bicycles.

I am extremely grateful to Members across the House for their support for what I believe to be a very important debate. This is the third time that I have secured a debate in this Chamber on the take-up of electric vehicles. It is such an important issue for many reasons: electric vehicles will help us to reach our carbon commitments; they are the answer to low-cost, pollution-free motoring for our constituents; and, perhaps above all, it is essential for the United Kingdom to grasp global leadership of this key industry of the future, so that a new and up-and-coming industry’s jobs and investment will be here in the United Kingdom.

In the case of conventional vehicles, the UK is passing £5 billion from sales of conventional vehicles on to foreign economies. Partly because of how supply chains work, a country such as Germany has a significant advantage.

[Julian Knight (Solihull) (Con)]

Picking up on the point about those conventional vehicles, although I share my hon. Friend’s enthusiasm for electric vehicles and know the importance of reaching the 2040 target, we need to bear in mind the 170,000 jobs in car making in this country. In the medium term, clean diesel—which is less polluting than petrol—should be part of the strategy as we go forward.

[Andrew Selous]

If we get this strategy right, there will be more than enough jobs for everyone. I am absolutely with my hon. Friend in wanting enough good-quality jobs.

In 2016 a fifth of all electric vehicles sold in Europe were produced at the Nissan plant in Sunderland. Looking forward, the United Kingdom has a genuine opportunity to capture a significant part of the global market by 2030, which could be worth an estimated £95 billion to the UK economy—lots of jobs for lots of car workers by 2030.

--- Later in debate ---

[Andrew Selous]

With some of the new chargers, an electric vehicle range of 300 miles is entirely possible. At the moment, I agree with my right hon. Friend, but if we play this right it will not be long before he will be able to motor up to East Yorkshire in comfort in an electric vehicle.

Nissan claims that by 2030, widespread adoption of a vehicle-to-grid service could save consumers up to £2.4 billion in reduced electricity costs. I am impressed by some of what the Government have done so far, but the 2040 target is too far out. We need to be bolder. The target for Scotland is 2032; for China, it is 2030; for Germany, it is 2030; for India, it is 2030; for Austria, it is 2030; for the Netherlands, it is 2025; and for Norway, it is 2025. I want the United Kingdom to be a world leader. The Government need to signal their intent to be at the front of the pack and not a best of the rest person coming up the rear.

[Julian Knight]

Bringing forward the 2040 target will destroy the new car market, because no one will spend £50,000 on a Land Rover if they think it will be worth peanuts in five or eight years’ time. That is simple economics. I caution my hon. Friend that it is great to have the ambition, but setting an arbitrary date before 2040 would be a grave mistake.

[Andrew Selous]

I have to very respectfully disagree with my hon. Friend. I bow to no one in my defence of high-quality British jobs. I absolutely accept the anxiety, but we can sustain those conventional jobs. Very soon, there will be so much pent-up demand for electric vehicles that the car workers in his constituency, and that of the hon. Member for Coventry South (Mr Cunningham), will not be able to keep up with the demand for these new energy vehicles—as they are called in China—from our constituents when we reach that 2022 tipping point. It is the obvious thing for our constituents to do.

The transport sector is now the largest source of carbon dioxide in the country. Emissions in the transport sector went up in 2017. If we bring forward the 2040 date, that would address a large part of the gap to which the Committee on Climate Change has drawn our attention.

We need to make huge progress in the fleet sector, and we can do that now. There are about 25,000 central Government fleet vehicles in the UK. The Government say a quarter of those should be electric by 2022—that is a much less ambitious target than India and China have announced for their fleets. Let us go for a 100% Government electric vehicle fleet by 2022, including those run by local councils. We have a long way to go; only two of the Ministry of Justice’s 1,482 vehicles are electric. Let me praise Dundee City Council, which has 83 electric vehicles—the most of any UK local authority. It has also brought in a charging hub for the public and taxis, with four 50 kW and three 32 kW chargers. Well done, Dundee.

There is the serious issue of company car tax. There is a lunatic progression: at the moment, the rate of company car tax for zero-emission vehicles is 9%, which is due to rise to 16% before going down to 2%. Let us get it down to 2%; let us signal our intention, not make it worse for the area that we are trying to encourage.

We should be ambitious on sales targets. Let us go for 15% by 2022, 45% by 2025 and 85% by 2030 and get on with electric charging infrastructure.

Automated and Electric Vehicles Bill

Julian Knight Excerpts

2nd reading: House of Commons & Ways and Means resolution: House of Commons
Monday 23rd October 2017 Commons Chamber

[Julian Knight (Solihull) (Con)]

I refer Members to my entry in the Register of Members’ Financial Interests and my chairmanship of the all-party group on fair fuel for UK motorists and UK hauliers.

I was going to regale the House with talk about Jaguar Land Rover in Solihull and all the efforts it is making in this regard, but that can wait for another day. The Bill takes us part way, doing good groundwork and providing rolling regulatory reform, to ensuring that the necessary provisions are in place by the time the cars of the mid-21st century hit the market in the 2020s. For electric cars, we need not only a proper regulatory framework, but to ensure that the necessary physical infrastructure such as charge points is in place. I, along with my all-party group, outlined to the Chancellor recently in a letter that we have a long way to go to reach this goal.

We have 8,400 filling stations, each of which can fill five or six cars every five minutes, whereas there are fewer than 4,000 public charging points, only a quarter of which can fully charge a car in half an hour or less. We need to bring confidence to the market over time by reassuring motorists that there is no danger of their running out of juice on their way to the next appointment or to their urgent engagement. This is to say nothing of the major upgrades that will be needed to the national grid and our national power generation, or the technological progress necessary to feed back into the network from these new types of car.

I am pleased that the Government are taking steps to ensure that the challenges involved in insuring automated vehicles are resolved as soon as possible. The Bill will rightly ensure that insurers have a statutory right to recover costs from a manufacturer in the event of a crash caused by malfunctioning self-driving technology. That is absolutely vital to ensure that car users are not unfairly punished in the event of a collision they could not have prevented. Moreover, the provision to ensure that insurers retain the primary responsibility for settling claims means that victims will not need to wait for the outcomes of arcane and technical disputes.

Finally, I must emphasise how important it is that the public mood is prepared for self-driving cars. As chairman of the all-party group on fair fuel for motorists and hauliers, I have seen how millions of motorists bought diesel cars with the very best of intentions, urged on by politicians, only to face the potential for punitive taxes as official winds now blow in a new direction. I well understand why the public would be sceptical of politicians lauding a new game-changing technology, but we need to emphasise the huge potential to save thousands of lives by cutting the number of human error car accidents on our roads each year. We will fulfil that potential, though, only if automated vehicles are taken up widely. We all know how easy it can be to stick with what is comfortable and familiar. If public opinion does not keep pace with technology, the visions contained in the Bill will not go as far as they should. I welcome the Bill; it is definitely a step in the right direction.

[Madam Deputy Speaker (Dame Rosie Winterton)]

After my strictures, a lot of Members have obviously withdrawn from making their speeches, so we can move to Andy McDonald.

Air Travel Organisers’ Licensing Bill

Julian Knight Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 11th July 2017 Commons Chamber

[The Minister of State, Department for Transport (Mr John Hayes)]

I welcome the spirit in which the Opposition have gone about their business on these provisions. We have had measured and sensible exchanges, first when we started to explore the issues in the Vehicle Technology and Aviation Bill earlier this year, before the election, and subsequently in last week’s Second Reading debate on this Bill. There is a determination across the House to get these matters right and a recognition that the protections that these measures offer travellers are important. Furthermore, as the Opposition spokesman made clear a moment or two ago, there is a recognition that we need to maintain the fitness for purpose of these arrangements to take account of changing circumstances in the travel market.

We must remember the context in which we are considering the amendment. The whole House shares the view that it is right for ATOL to continue and to respond to changing market conditions, and that the Government must do their part by ensuring that the necessary framework is in place. In respect of the amendment, I can go even further.

[Julian Knight (Solihull) (Con)]

Will the Minister give way?

[Mr Hayes]

I will happily give way, after I have made this telling and interesting point. I said to Labour Members not long ago that I understand that it is now de rigeur for parties from across the House to work together. That has become immensely fashionable recently; frankly, however, it has been my practice forever. I feel as though the world is catching up with me, and that is a great place to be.

[Julian Knight]

The Labour spokesman suggested earlier that there might be some rowing back of holidaymakers’ rights after we leave the EU, but is that not quite wrong? The UK has led the charge in the EU for holidaymakers’ rights. Will the Minister reassure the House yet again that we will protect holidaymakers’ rights post Brexit?

[Mr Hayes]

Although I do not want my sermocination to be excessive, I will deal with those matters at greater length in my later remarks. My hon. Friend is right to say that Britain can be justly proud of our record in respect of ATOL. To be clear, the Labour party acknowledged that on Second Reading a few days ago. There is an acceptance across the House that Britain has done this well; that that is recognised in continental Europe; and that there is a desire to ensure that future arrangements are inspired by, and perhaps even emulate, the best practice exemplified by the United Kingdom.

I said that I could go further still in building a bridge across the House, and that is because I am sympathetic to the aims behind the amendment. It is crucial that we carefully craft our policy, and the regulatory framework is the key to good governance. To gubernate is to be prepared to listen and learn, and it is absolutely right that we do so in respect of the changes that the Bill will make. It would not be fair to set any of this in stone, which is why I accept the need to consider these matters, as the hon. Member for Kingston upon Hull East (Karl Turner) set out, in the context of future changes to our relationship with Europe.

As I have said repeatedly, I am open-minded about reviewing the effects of these changes, but let me explain a little more. The Bill introduces the ability for ATOL to protect sales by businesses established in the UK and in other member states. It will be for protection schemes in other member states to provide the protections for UK consumers to which the amendment refers. That is not our responsibility—we do not have the power that the amendment suggests we should have—so I am not sure that the amendment works on a technical level.

The amendment does, however, highlight an important point, which it is right for us to consider. It seems to me that the hon. Gentleman’s argument was twofold: first, that we need to understand the potential impact on UK consumers of purchasing from traders that are based overseas under different protection regimes; and, secondly, that we need to consider how Government should keep that element of protection under review. Let me deal with those points in turn.

--- Later in debate ---

[Mr Hayes]

In that punchy and pithy intervention, my hon. Friend made the point that I made when we debated these matters in the Committee considering the previous legislation of which this was originally a part. That is rather convoluted, but it makes the point. I said that the problem with an early review is that it would be too early and would not take account of the changing circumstances in exactly the way she suggests. But I am minded to go further. Given that we discussed the issue in Committee on the Vehicle Technology and Aviation Bill, I want to make two further points.

First, the Small Business, Enterprise and Employment Act 2015—I have a copy with me for the benefit of any hon. Member who may wish to look at the particular clauses—makes a review obligatory within five years of the passing of the legislation. That existing obligation would of course apply to ATOL. However, we can do better than that. I am proud of my Department’s reputation for producing robust analysis to underpin and inform policy decisions, including providing full regulatory impact assessments to assess the effect of significant changes to regulation. That is a principle to which we have adhered in recent years throughout the ATOL reform process. We have already reformed ATOL once, in 2012, as the hon. Member for Kingston upon Hull East knows. We went through a consultation exercise, which I also have with me, and it is important that we continue the process of consulting and publishing the kind of impact assessments I have described before any regulatory changes take place.

It is really important that, when we changed the Civil Aviation Act 1982 in 2012 better to reflect current market practice, the call for evidence on the long-term review of the ATOL scheme produced responses that both informed the changes we made then—as they certainly did—and any further changes.

[Julian Knight]

My right hon. Friend has been most generous in taking interventions. He mentioned that ATOL was last reformed in 2012. Is not the truth that the process will not end with Brexit or with the Bill? It is an ongoing process of reform and renewal.

[Mr Hayes]

That is true and in a sense it is more catalysed by the changing character of communications and the way in which people organise and book their holidays than it is by our relationship with the continental countries of Europe. It is affected by both, but my hon. Friend is right to say that even if we were not leaving the European Union—and, my goodness, I am glad we are —we would still need to reflect on and consider changes that take account of the changing patterns of the way in which people organise and book their holidays. Indeed, he is right that the process of reflection, consultation, impact assessment and review needs to be a continual one.

Last year we consulted on the changes to the Civil Aviation Act 1982 that we are discussing today. We are about to launch a series of consultations on the detailed regulations that will follow, including on this particular issue. Each stage of the work will be the subject of impact assessments and consultations, so we will both consult and publish impact assessments on each stage of the changes that I have described and which will be drawn to the House’s attention by various hon. Members—

--- Later in debate ---

I am sure—absolutely confident—that the committee is already minded to keep a close eye on the impact of the directive on UK consumers. However, in the light of this amendment, the brief debate we have enjoyed and the responsible stance taken by those on the Opposition Benches—

[Julian Knight]

Will my right hon. Friend give way?

[Mr Hayes]

I am moving to my exciting peroration, but I will give way.

[Julian Knight]

Is my right hon. Friend saying that the industry experts—the people who really know—are saying in effect that this amendment is superfluous and is unnecessary?

[Mr Hayes]

I do not want to disagree with any hon. Member unnecessarily, and certainly not with a Member on my side of the Chamber. However, it is true—as my hon. Friend will know as he is a student of these matters who has taken a keen interest in this Bill from its inception—that ABTA has produced a briefing for this debate, and in a moment I will go through it in some detail. While it is true that ABTA welcomes, as the Opposition have, the changes that we are making to ATOL, and there is a broad recommendation from it that we should be doing just that, it has given a detailed critique of the measures we are introducing and the amendments, and, at face value—that is something of an understatement—it seems rather sympathetic to the Opposition amendment. However, it will not have had the benefit of the further commitment I am about to give, which this Committee will be the first to know, for that is as it should be.

I am now going to catch the eye of the hon. Member for Kingston upon Hull East. I am sure that that independent committee, which was set up by a Labour Government for the very purpose of reviewing these matters regularly to ensure they are fit for purpose and with the mission of observing and making recommendations in the interests of consumers will doubtless want to consider the impact of the changes we are making, and will of course be aware of the contextual changes in our relationship with the European Union and the effect of the directive on other countries and their arrangements. Nevertheless, I am prepared to write to the committee reflecting the sentiments the hon. Gentleman has articulated persuasively enough—I was going to say “so persuasively,” but I do not want to overstate the case—to encourage me to make this commitment, and to ask it not only in its annual report to review the implementation of these changes, but also to take account of the other remarks he has made.

Air Travel Organisers’ Licensing Bill

Julian Knight Excerpts

2nd reading: House of Commons
Monday 3rd July 2017 Commons Chamber

[Robert Courts]

I am grateful for my hon. Friend’s timely intervention, as the next page of my notes deals with clause 1. Existing ATOL legislation applies only when the first leg of a relevant flight booking departs from a UK airport. The new legislation introduces a single-market approach to insolvency, whereby EU-established companies will be required to comply solely with the insolvency protection rules of the state in which they are established, as opposed to the place of sale, which is the current position. The legislation is therefore much wider, and the company will only have to be established.

[Julian Knight (Solihull) (Con)]

Does my hon. Friend agree with me and several consumer groups that £2.50 is a low price to pay for ATOL protection compared with the cost of standard travel insurance? In the longer term, we might see a decline in the cost of travel insurance as more holidays are covered by this enhanced ATOL protection.

[Robert Courts]

My hon. Friend makes an excellent point. He is right that the ATOL scheme is funded by a levy of approximately £2.50 per protected passenger and that it would be extremely unwise of any holidaymaker to go abroad without adequate travel insurance. I encourage everyone always to have such insurance, although it can sometimes be pricey, especially if someone is looking to protect themselves against some of the more routine failures that are easily covered in the ATOL scheme. However, more serious misfortunes can occur when people are on holiday, which is why travel insurance is, of course, still advisable. As my hon. Friend suggests, the cost of insurance may come down in time as a result of this enhanced package.

Clause 1 will allow travel companies established in the UK that sell flight-inclusive packages to use their ATOL membership and protection to cover all EU-wide sales without needing to comply with the insolvency protection rules of any other member state. Clause 2 deals with funding and qualifying trusts within the ATOL trust management structures. The Department for Transport is alive to the fact that because we have seen significant changes to the travel industry—not only since 1973, but since 2004, as well as more recently—it might be necessary to enter into separate trust arrangements for the greater business model, such as linked travel arrangements, to give greater transparency to businesses and consumers. It might be necessary to introduce a new form of qualifying trust to ensure that the ATOL trust will still protect consumers in the all-important area of flight accommodation. The Bill allows the flexibility under trust arrangements so that we can increase funding and ensure that ATOL is adequately funded as time goes on.

Clause 3 addresses a slightly different point: the ability of the CAA—the House will realise that the authority is responsible for running the ATOL scheme—to require and request information from airlines selling ATOL-registrable products within the UK and more widely. Under the Bill, an important change would apply to airlines that have an air service operator’s licence from another EU member state and therefore would not need any of the licences that have been granted by the Civil Aviation Act 1982.

The House will be delighted that this is a short Bill, containing only four clauses. I have needed to deal with only three, so I do not need to go through the other one—I am sure everyone is delighted. [Interruption.] The Bill is short in terms of clauses, as the House will realise.

Bus Services Bill [ Lords ] (Third sitting)

Julian Knight Excerpts

Thursday 16th March 2017 Public Bill Committees

[Daniel Zeichner]

I beg to move, That the clause be read a Second time.

The new clause would mandate that the Secretary of State for Transport must issue a national strategy for local bus services, setting out the objectives, targets and funding provisions for buses over the next 10 years. Subsection (2) would mandate that the national funding strategy must include consideration of a reduced concessionary fare scheme for young people aged 16 to 19.

We believe that the new clause is necessary and long overdue. The Government have published national investment strategies for road and rail, as well as a draft investment strategy for cycling and walking—the latter is proceeding at a snail’s pace, but I am sure it will be welcome when it arrives—so why not a strategy for buses? The way buses are funded in this country is not simple, as we have discovered during our discussions; it is a complicated mix that has developed over time with piecemeal changes. We might describe it as a very British approach; it sort of works—not well enough, in our view—but almost no one knows how.

What we do know is that almost half of bus industry funding comes from the public purse. Total public support for buses accounted for 41% of overall industry funding in 2014-15, and in 2010-11 that figure was even higher at 46.3%. We know that money goes towards funding socially necessary supported services on routes not served commercially by private operators through central Government’s general grant to local authorities and the reimbursement of bus operators for trips made by concessionary pass-holders, including the statutory older persons’ and disabled passengers’ scheme.

I spent some time during the early years of the concessionary fares scheme introduced by the Labour Government trying to find out how the funding flows worked, not least because many district authorities suddenly found themselves substantially out of pocket at that time. I would like to be able to say that the many hours I devoted to it were well spent, but I have to confess that, despite much help from officials, I never really got to the bottom of how reimbursement rates were calculated and, in some cases, negotiated. I suspect that the number of people in the country who fully understand it could comfortably fit in a small room—some of them may be in this one today.

Large amounts of public money are spent on concessionary fares and the scheme is so popular that subsequent Governments have been reluctant to touch it, yet there is no overall mechanism for assessing the impact on the bus sector. As I have remarked previously, there is not a lot of point in having a bus pass if there is no bus. Other questions are raised, often in areas where buses have disappeared, such as why community transport should not be available through the bus pass scheme.

On top of that complexity, we have the bus service operators grant—BSOG, to those of us who take part in the discussions—which was introduced back in 1965 as the fuel duty rebate. It is a rebate paid directly to operators and dates from a time when it was mainly an accounting transaction within the public sector. Of course, the world has changed considerably over that half-century —at times BSOG has changed with it. I suspect we will revisit that point later in our debate. I am informed by the Community Transport Association that in 2013, 21% of community transport schemes were completely reliant on BSOG, and 75% relied on it to some extent. There is a not insignificant amount of public money being spent.

The Government have argued, as I am sure they will this morning, that since the bus industry is a private one, a national investment strategy is inappropriate and unnecessary. However, where such large amounts of public money are being spent, even if the services are being delivered by private operators, we think it only right that there should be a proper planning strategy for how and why it is spent, as well as plans and objectives for future spending. Indeed, the Government themselves have said:

“Requiring operators to use their assets to provide a free service for a proportion of the population is a major market intervention”.

That is precisely why we need a proper strategy to be set out with clear objectives.

It is pretty clear—this is relevant to our earlier discussions on franchising—that there is scope to get better bang for the public buck. As my hon. Friends have several times said, the largest bus operators report significant profit margins. According to their annual reports, in 2014-15 Stagecoach’s operating profit margin on its regional bus routes was 13.5% and Go-Ahead’s was 13%. Yet those profits are not being shared with the public, despite the fact that large sums of public money are being invested in bus services.

[Julian Knight (Solihull) (Con)]

Surely the point is that profits are being shared with the public, through shareholder dividends.

[Daniel Zeichner]

Shareholder dividends may be shared with some members of the public, but not many of my constituents find such money coming into their pockets. I think they would rather have it more directly, in lower bus fares.

Rather than getting money from dividends, bus passengers pay the price for those substantial profits, because bus fares have been rising. According to the Department for Transport’s local bus fares index, fares in England, outside London, rose by more than 156% between 1995 and 2016, while the retail prices index rose by 77%. That shows that bus fares—and I think that this is virtually everyone’s personal experience—have risen much faster.

Equally, bus companies sometimes tell us that the rising fares are due to rising fuel prices, but a number of us have noticed that when fuel prices go down, fares rarely fall; they tend to remain static. We believe that there is a strong case for a bus investment strategy, and we hope that the Minister will reconsider his objections.

Subsection (2) of the new clause relates to the consideration of a reduced fares scheme for young people. It would simply require the Government to look at and consult on funding options to help young people with the cost of travel. Many young people have to take the bus to school or college, but the number of councils financially able to provide a discretionary young person’s pass has dropped from 29 to just 16 since 2010. With fares shooting up faster than inflation, the Government should look properly at introducing a statutory concessionary fare scheme for young people.

I appreciate that that would be a substantial commitment, but we ask the Government only to consider it and to do the preparatory work. I remember that, when I and others first suggested the older people’s concessionary fares scheme to a Labour Transport Secretary who later became Chancellor, his immediate response was less than encouraging, but popular measures have a habit of making their way into manifestos—and the rest is history.

We all know that for many young people, the cost of getting to college and job interviews, and just of getting out to have a life, is a key determinant of what lies ahead of them. That is why the Opposition thought that the education maintenance allowance was so precious and that it was a mistake to remove it. Agreeing to the new clause would be a first tentative step in repairing the damage to the prospects of many young people and families who might even be described as “just about managing”.

There is not a word about funding in the Bill, yet cuts to local authority budgets have meant that thousands of routes and services have had to be withdrawn since 2010. Young persons’ concessionary fare schemes have been cut, while large operators have experienced generous profit margins. The way buses are funded is not working well enough. We need a proper Government strategy to address the illogicalities of funding, and to bring buses into line with other modes of transport. The new clause would help to achieve that objective, and would send a strong message to young people that the Government understand what life is like for them.

Bus Services Bill [ Lords ] (First sitting)

Julian Knight Excerpts

Committee Debate: 1st sitting : House of Commons
Tuesday 14th March 2017 Public Bill Committees

[Andrew Jones]

The hon. Lady makes a point about the value of local bus services. I agree that many people rely on them. Some communities are connected only via buses in the world of public transport. We are talking about automatic access—franchising is a significant jump for an authority that wishes to go down that route. I am quite relaxed about who franchises. We have a suite of powers and the Government are neutral.

[Julian Knight (Solihull) (Con)]

I wonder whether the Minister is familiar with the experience of the future mayoralty in the west midlands. The Mayor will give accountability to the process and, effectively, big decisions will be made at that level. Local people can therefore have a better input into what happens across the whole region.

[Andrew Jones]

I was coming to the point my hon. Friend has made and made very well. Mayors will have access to significant budgets, which they can commit to bus services if they wish, and will be responsible and accountable for a decision to move to a franchising model. This is a question not of some areas having fewer rights than others, but of ensuring that the governance arrangements are in place when making that significant jump.

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[Daniel Zeichner]

My hon. Friend is absolutely right. That is why there is so much hope attached to the Bill and to the idea that we can go back to having a comprehensive local public transport system that delivers for people. The truth is that we have had a 30-year experiment with an unregulated market, the end result of which is exactly as my hon. Friends describe. This a chance to move forward. In some areas the Government are responding, but in many other parts of the country, it looks as if the hurdles will be too high.

The Minister talked about local decision making and accountability, saying that the Bill is about enabling new opportunities and giving local authorities new choices on how to improve their services. However, as has been said, taking the decision out of the hands of local communities and putting it squarely in the Secretary of State’s hands does not seem like localism to us. It seems particularly peculiar that a local authority must seek consent before taking even the preliminary step of preparing an assessment of a potential franchising scheme. How on earth can a local authority present a compelling case to the Secretary of State to gain approval if they are prohibited from even assessing a scheme?

We understand the Government’s point that strong governance and accountability are key to making franchising a success, along with a commitment to improving transport and to a coherent economic geography. However, we do not understand—my hon. Friends have made this point well—why the Government believe that those things can only be achieved with an elected Mayor. Why are Mayors seen to be more accountable than other elected local authority leaders?

I turn again to my personal experience, because for some reason Cambridgeshire seems to be at the heart of many of these issues. In my area in a few weeks, we will have elections on the same day for a Mayor of Cambridgeshire, who will have powers to franchise buses, and for a county council for Cambridgeshire, with a leader who does not have powers to franchise buses. A great irony is that the current county council leader put himself up for selection for Mayor and made the final shortlist. Therefore, in a few weeks’ time we could have had the same person being elected on the same day to two roles, one of which one would be deemed sufficiently accountable to franchise whereas the other would not. I am not going to tease the Minister by pressing for a reasonable explanation.

[Julian Knight]

The hon. Gentleman seems to suggest that all the power rests with the Mayor. In the West Midlands combined authority, the Mayor is effectively first among equals. The leaders of all the councils who make up the authority have a say in decision making.

[Daniel Zeichner]

Surely that is the case in other places as well. In my area the leader of the county council, who is a Conservative, has been elected and the choice will be made again in a few weeks’ time—however, we shall see what happens in the local elections. I think the local electorate are confused about the situation, based on my experience of what we are seeing on the doorstep, but I think the Minister can see the point. For many people it seems irrational to have so much invested in the mayoral issue.

In reality, we all know what is going on: franchising is being used as a bargaining chip to convince some combined authorities to accept a Mayor that they do not necessarily want as part of their devolution deal. Without going into the chequered history of those negotiations over the past year or two, one could say that they have not always been easy or straightforward. We think that the approach being taken is wrong, which is why we oppose it. Beyond that—this goes back to the points being made by my hon. Friends—the trouble is that what is happening denies bus passengers in many areas the prospect of better services.

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[Bridget Phillipson]

It is a pleasure to serve under your chairmanship, Mr Nuttall. Like my hon. Friend the Member for Cambridge, who speaks from the Front Bench, I welcome the Bill and the measures that it introduces. I have spent a lot of time in my seven years here campaigning on bus issues due to the local problems that we face. Any changes to the current system are to be welcomed. I wish areas well with the automatic powers, as they proceed in improving services for local people. Of course I want that for my community, too. Although I understand the Minister’s point that the steps that he described in the process are not intended to be hurdles too difficult to overcome, I hope that the Government will remain committed to delivering that.

Change has been a long time coming, and hopefully we are now getting there, but I hope that the Minister and his colleagues will see the measures through, particularly in areas such as the north-east. We have a combined authority covering seven local authority areas, with an integrated transport authority. We have Nexus, which the Minister will know has other powers, such as the operation of Tyne and Wear metro. We have an extensive network that in many senses works well. What we do not have is the powers we need to make sure that bus routes serve the needs of local people. That is not simply about making it easier for people to get around—although that would be wonderful, because it is not often very easy, frankly, to get around on local buses in my constituency—but if we are to thrive as a region and if we are to create the jobs and support the businesses and the growth that we all want to see, we need a transport network that allows that to happen. In too many parts of my constituency, where buses are the only means of transport, that is incredibly difficult.

To give one example, Doxford international business park in my constituency houses thousands of employees with many big international firms. I frequently visit businesses there, and employees, many of whom are shift workers, often tell me that it is incredibly difficult to get a bus after 8 or 9 o’clock. That holds back investment and makes it difficult to retain staff. Although the transport authority is looking at proposals to extend the Tyne and Wear metro, as I know my hon. Friend the Member for Cambridge is well aware, in the short term we need bus services that will allow people to get to work readily and inexpensively, which is not currently the situation.

On Second Reading, many of us talked widely about the failure of deregulation and the fact that it did not deliver on its promises. I will not dwell on that, other than to say that, in the case of the north-east, on every test that was set out for deregulation back in the 1980s, deregulation has been an unmitigated disaster and has had the reverse effect to the one intended. More than 30 years on from all we were promised about greater efficiency, lower fares and greater passenger numbers, the opposite has happened in the north-east. We have got less competitive services that are less efficient, more expensive and less convenient for the people I represent. Of course, it has given operators the freedom to do exactly what they like, when they like, at a time when we put tens of millions of pounds into local bus services.

Operators receive significant taxpayer subsidy with little accountability, and when things go wrong and operators cut routes arbitrarily with little notice, often affecting the most vulnerable in our community, there is no recourse. We can have dialogue with the operators—I meet them regularly to make the case—but ultimately it is an entirely commercial decision over which local people have no say. It is a source of real frustration that when minor changes to routes can result in local people being cut off from hospital services, GP appointments and the ability to get to local shopping facilities or schools, the operators can say, “We’ve heard what you had to say; unfortunately, we are pressing ahead regardless,” and there is no opportunity for local people to influence that in any meaningful sense.

We are talking not simply about routes that are unprofitable, but usually about the fact that they are not profitable enough. Outside London, big operators such as Stagecoach have made considerable profits, far greater than they make in London. I do not seek to deny operators the right to make a profit. My point is that they make a decent profit in areas such as London under a regulated service; they could do the same in the north-east. The profit margins would perhaps not be quite as high and would not be the double digits that they are used to—no one would seek to stop them running a competitive or profitable service—but if we are going to give them significant taxpayer money, the least we can expect is that they take on board the concerns of local people and use that wisely.

[Julian Knight]

The hon. Lady is making a very good speech and I sympathise in many respects about the lack of accountability when bus service routes are cut; my constituency has suffered in the same way. Does she agree, though, that this is almost an argument for combined authorities and Mayors, with their buying power, and the idea that they can bring these companies to heel, through their powers and through the threat, for example, of removing the franchises?

[Bridget Phillipson]

The inconsistency in the Government’s approach is the patchwork way in which they have brought about these different devolution deals. From what the Minister had to say earlier, I am still none the wiser, really, why Cornwall presents an exceptional case when an area such as the north-east does not. We have a combined authority; what we do not have is a Mayor. I believe there should be accountability and that can come in many different forms. In the west Midlands, it will come through the election of a Mayor; in the north-east, it was a widely held view that a Mayor would not offer that same accountability and there was not broad support for a Mayor covering such a big region. However, we do have a combined authority and an integrated transport authority, and we have the structures in place that will make franchising work and give local people the confidence that there will be accountability in the process. That will differ, but I have difficulty in understanding why different models are acceptable in different parts of the country, other than for the obvious political reasons that spring to mind.