Transport in the North-East

Lord Beamish Excerpts

Wednesday 15th October 2014 Westminster Hall

[Bridget Phillipson]

I am grateful to the hon. Gentleman for raising an important point that I have sought assurance about. My constituency borders County Durham, and many services that run through it go to and from County Durham. I appreciate that it is an important area that does need addressing, but the benefits not only for Tyne and Wear, but for the wider region will be profound. I hope that the right decision is made.

[Mr Kevan Jones (North Durham) (Lab)]

I shall expand on this point if I am called to speak in the debate, but there is nothing in what is being proposed that guarantees or helps rural bus services in County Durham or Northumberland. The fact is that whether the leaders of Tyne and Wear or others like it or not, the profitable routes coming out of Tyne and Wear subsidise the rural bus networks in my constituency and that of the hon. Member for Hexham (Guy Opperman); those will be taken away if the proposal moves forward.

[Bridget Phillipson]

I understand my hon. Friend’s concern, but I do not share his conclusion. I am sure that he will make his case strongly to the leaders of the combined authority. I am confident that the proposal will secure the long-term future of our bus network in Tyne and Wear and in the wider region in the longer term. I understand my hon. Friend’s concerns and am sure that he will set them out in greater detail.

Profit cannot be the sole priority for a public bus service. Competition can be an important way to ensure low fares and improve services. However, the existing system of deregulated bus services is broken. An investigation in 2011 by the Competition Commission was highly critical of deregulated bus services. It found that there was limited competition between operators, which tended to result in higher prices and lower quality for passengers. The report also found that head-to-head competition for services was unlikely between dominant operators. There was heavy criticism because some bus companies were accused of colluding to avoid direct competition entirely, which resulted in geographic market segregation. As in the energy market, a small number of companies dominate the bus market in the region. A quality contract scheme would create a level playing field, allowing new entrants to break into the market. It would also deliver better value for taxpayers and passengers alike.

I constantly hear from local people who struggle to get to work easily, especially shift workers in places such as Doxford international business park, where many thousands are based. The recently announced Metro strategy 2030 set out ambitious plans to develop Tyne and Wear’s Metro system, with the potential to include Doxford park in the long term. Current predictions estimate 5.4 million passenger trips per annum by 2030 on the South Shields to Sunderland to Doxford line, but any extension would of course depend on government support. The plan recognises both the importance of the business hub to our local economy and the need for regular and high-quality transport links to and from work. The proposal forms part of a comprehensive plan to improve transport in our region. The Metro Strategy 2030 includes a proposal to bring part of the Leamside line back into use. The North East local enterprise partnership has commissioned a study into the business case for reopening the line, and has identified improving links within the region as one of its key priorities. Long-term investment is important, but next Tuesday one part of the solution to our transport needs is within our grasp.

I am grateful to EDF, based at Doxford, for recently conducting a staff survey on public transport. In the survey, 38% of respondents felt that services to Doxford park were either very poor or poor value for money, 40% felt that services had either very poor or poor frequency during the day, and a shocking 62% felt that frequency during the night was either very poor or poor. One respondent noted that bus prices were so high that it was cheaper to use a car, with another being forced to catch three buses to get home if their shift finished after 8 pm. I visited EE, which is also based at Doxford, and found that many of its staff face the same challenges. I heard that those whose shifts finish at 8 pm literally run out the door to catch the last bus, or face a long wait. Others must come to work far earlier than their shift start time, because unless they catch the hourly bus service, they risk the consequences of being late. Obviously, that risks impacting on staff retention. That is not good enough. Visitors and staff at Doxford Park make an important contribution to our local economy, and they should be able to expect a fair, reliable and efficient bus service.

In 2011, Government cuts meant that the 3½-mile Sunderland central route had to be scrapped. The scheme would have eased congestion and improved access to Rainton Bridge business park. The loss of the scheme was hugely disappointing, and was made all the worse by the lack of alternative transport options for the staff there. The scrapping of the route has had a significant effect on traffic in the surrounding area and on local residents who live nearby.

I have been continually disappointed by the bus companies’ attitude to improving services for their passengers. The voluntary agreement that the bus companies are supporting would result in severe cuts to publicly funded bus services and to support for non-statutory fares, therefore falling far short of what is necessary. Bus companies are refusing to listen to their customers’ concerns, choosing instead to redirect routes that customers rely on, make meaningless changes to route names and numbers and to bus branding, and embark on a systematic campaign of scaremongering. Bus companies appear more concerned with threatening legal action than dealing with cuts to services and rising fares.

Yesterday morning, I received an e-mail from Go North East seeking to acquaint me with what it sees as the facts on a quality contract scheme. Go North East claims that customer satisfaction, including with fares, is higher than in any of the metropolitan authorities, and higher than in London. However, it fails to address the declining use of buses. Between 2001 and 2011, the number of people using the bus to travel to work in Tyne and Wear fell by 13%; the number of adult fare-paying passengers has also declined. Furthermore, the survey used to support the claim does not take into account the view of people who no longer use the bus because there simply is not one to catch any more.

Go North East claims that the quality contract scheme aims to take funding out of the bus system. That is simply untrue. The quality contract scheme will avoid cuts to secured bus services and to support for discretionary concessionary fares. The voluntary agreement preferred by the bus companies, by contrast, will lead to significant cuts in secured services and discretionary concessions, even if local public support remains at the same level.

Go North East claims that the voluntary agreement can start two years earlier than the quality contract scheme can. Many aspects of the voluntary agreement, however, are unacceptable or incomplete as drafted. In addition, the main potential delay to introducing the quality contract scheme would be legal challenge by the bus operators. I hope that they decide to do the right thing: to prioritise customers and recognise the democratic decision of the combined authority.

There is an inherent conflict between the desire for the voluntary agreement to be certain, legally binding and enforceable, and the need for flexibility to avoid the arrangement breaking competition law. Therefore, the voluntary agreement relies on trusting each of the operators to abide by the spirit and the letter of the agreement. Even under the voluntary system, however, bus operators may make changes to services without approval of the partnership board. That does nothing to create stability in our local bus network. Services will continue to be assessed on their commercial returns, rather than on their usefulness to local communities.

Whatever operators might say, the voluntary agreement fails to deliver the Oyster-style ticketing system that is a major advantage of the quality contract scheme. It is clear from the persistent scaremongering, threats of legal action and negative campaigning that the bus operators are primarily concerned with protecting profit, rather than improving the service for passengers.

In a time of difficult decisions about spending, it is crucial that we get the best value for money. According to the House of Commons Library, the taxpayer subsidised bus services by approximately £2.3 billion in 2011-12. Those subsidies amounted to about 45% of all bus operator revenues. As we are all paying for bus services, it is time to ensure that the money that we invest goes back into our communities. Nexus estimates that the quality contract would provide £272 million in economic benefits to the region over a decade by reducing fares, providing better services and ensuring more bus passengers.

Similarly, the northern region TUC concluded that there was a strong business case for the quality contract. It will harness any revenue surplus for the benefit of passengers and communities, rather than for bus company shareholders. The proposal would provide a sustainable funding future for buses in our region to a greater extent than all other options.

Next Tuesday, the North East combined authority will decide whether to introduce a quality contract scheme. The process has been too long and drawn out. I am glad that we would legislate to give local authorities more powers to create better bus networks and to make it easier to implement quality contracts. At the core of the debate is local decisions to deliver a service that works, supporting businesses, growth and job creation. Local people must have the bus services that they deserve. Even the bus operators acknowledge that the status quo is no longer sustainable. This is our opportunity to lead the way, but it is an opportunity that will not come again.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Member for Houghton and Sunderland South (Bridget Phillipson) on securing this important debate. I appreciate and accept that it is fundamentally about bus contracts; I understand that and take the point, but I must comment that what a passenger landing at Newcastle airport has to do to get across town is clearly wrong. They must take the Metro into town, then get across to the railway station; with no integrated transport system whatever, they need to get another ticket from the Newcastle station ticket office to go to Hexham or anywhere else, then attempt to move on from there. We all have to work four days a week in London, so we know the beauty of the Oyster card system. Clearly, longer term, such a system—

[Mr Kevan Jones]

I understand where the hon. Gentleman is coming from and I fully support the idea of an Oyster card system for the north-east, but I am sorry, the ticketing process is not as he says. I do not know how much he uses public transport in the north-east. Tyne and Wear has a very integrated ticket system, with transfers, and certainly in County Durham the bus companies work hard to ensure the interoperability of tickets and the lowest price.

[Guy Opperman]

Someone in Northumberland attempting to go from Hexham to the airport in effect has to change tickets three times. An integrated system with an Oyster card would unquestionably drive down prices.

The hon. Member for Houghton and Sunderland South and I are both concerned about the future of rural bus services. I take her point that customer satisfaction with buses is good at present, but my constituents are deeply unhappy with the quality of bus services west of Hexham. West Northumberland and areas north of Hexham have suffered tremendously from problems with the buses. I have spent a huge amount of time looking after constituents with genuine issues to do with the bus service in the western parts of Northumberland and in the northern reaches up towards Scotland. Without question, if I were to ask the citizens of Gilsland, Otterburn or places to the west whether they felt that the bus service could be improved, they would be robust in their view that it could be improved massively.

I take the point that the bus contract is a matter for the LA7—the seven local authorities—and surely that is entirely what the combined authority is about. For it to move on in such a way is a massive step forward, because it now has the ability to drive forward comprehensive changes that simply would not have been possible for individual authorities.

I want to touch briefly on trains. On 3 September, I raised the subject of transport infrastructure in Northumberland in a 30-minute Adjournment debate in the main Chamber. Many of the points that I made were set out in detail, so I will not repeat them today. One point that must be made, however, is that many of the things that we are discussing derive not only from the Adonis report but from the excellent “One North” report, which was a proposition for an interconnected north, published in July this year. I have a copy and I urge anyone who is interested in north-east transport infrastructure to read it in detail. “One North” talks about the way forward. The report is driven by the city leaders of our key cities, including Liverpool, Manchester, Sheffield and Newcastle. It certainly expresses strong views on the desirability of interconnectivity in rail and transport services.

I endorse earlier comments about the Leamside link, which clearly needs to be progressed. The reality of High Speed 2 is that without the Leamside link the prospects for us will be limited. I have no doubt that any Government post-2015 will make progress with that link. Indeed, Sir David Higgins, with whom we have had communications, said that it is inevitable that the Leamside link will be part of the development of HS2.

I refer to the speech given by the Chancellor on 5 August 2014 in Manchester to the city leaders who were the creators of the “One North” report. He gave the report a strong backing and set out the way forward. My only criticism of the report is that its diagram of interconnectivity in the north—I intend no disrespect—focuses on north-south links, with only one lateral movement between Liverpool, Manchester, Leeds and the Humber ports. I urge the Chancellor to consider the importance of an improved crosslink between Newcastle and Carlisle—I will certainly be making the case for that at the autumn statement. The A69 is dualled to Hexham, but thereafter it is effectively a single carriageway, which has a huge impact on business, transport, housing and the ability to commute, as well as on the train network. The Tyne Valley line has definitely improved; passenger numbers are up and improvements are being made by both Northern Rail and Network Rail. However, the two transport networks going from east to west, or west to east—however we look at it—have to be improved if the north as a whole is to be properly connected.

I do not dispute that this debate is about transport in the north-east, but the reality behind the “One North” argument—one that will have to be behind any Government’s consideration of northern infrastructure, skills and the like—is that in the past we have been too obsessed with the north-east and the north-west. Anybody can see that if we do not look at the north as a whole our ability to effect real change is limited—certainly I can see that, as my constituency is in the middle of the two regions, going to the border of the north-west, and indeed the border with Scotland. I urge the Minister to take the message to the Chancellor that connectivity has to be across the north and not just the north-east, north-west or Yorkshire. I believe that that point has got through, but my one criticism of the “One North” report and the northern powerhouse approach is that there is no east-west link at the top. That certainly needs to be considered.

I have a meeting planned with the electrification task force that has been set up by the Secretary of State for Transport to work on the electrification of the Tyne Valley line. The east coast and west coast lines are both electrified. The train network in northern England clearly needs to be improved.

I want to put on the record my support for Northumberland county council’s approach to the Ashington Blyth and Tyne railway. That is a clearly a big project that can be moved forward. My only plea is that the council needs to think not only of larger projects such as that one, but smaller projects such as the Gilsland station rebuild. Thinking again of connectivity, Gilsland is where the Pennine way meets Hadrian’s wall. There is a distinct lack of bus services—to give a nice Radio 2-style link back to the original theme of the debate—in the very west of the county. Gilsland station is where Cumbria starts and Northumberland ends.

I look forward to meeting the electrification task force to discuss the Tyne Valley line and to the meeting I have planned with the Highways Agency next month to discuss the A69. I urge Northumberland county council and the two local enterprise partnerships—not just the North East LEP but the Cumbria LEP for the north-west—to come together so that we have a genuinely connected transport system. That is something we can all get behind.

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[Mr Kevan Jones (North Durham) (Lab)]

I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this important debate. What has come out of it so far is that there is a degree of consensus on some of the issues, so I do not wish to sound like the little boy who says the emperor has no clothes, but I have serious concerns about the quality bus contract going before the combined authority on 22 October. I will also briefly touch on the issues of rail and air.

The quality contract proposals have been in gestation since 2011—longer than the pregnancy of an African elephant. If we look at what is proposed, we have to question whether we have a solution looking for a problem, rather than a problem looking for a solution. The quality contract legislation was rightly introduced to address market failure. I accept what hon. Members have said about bus services being withdrawn, and that is market failure in terms of the effects on our constituents. However, no one can argue that the bus market in the north-east is failing from an economic point of view.

I have grave concerns about the quality contract. The impact on my constituency, in County Durham, and on the areas represented by Members from Northumberland, will be quite pronounced. The proposal from the combined authority provides for an exclusive contract to run all bus services in Tyne and Wear, but we must understand that people’s transport movements do not recognise local authority boundaries—that is the problem with the proposal. The hon. Member for Stockton South (James Wharton) suggested a solution that looked at the entire north-east, and that would be a better solution.

The quality contract is also being sold on the basis that it is the only way we will get an Oyster-type system. No, it is not, because advances have already been made on that issue. I support those moves, as I think all elected Members from the north-east, from all political parties, would, because they will make travelling easier. However, I do not recognise the argument put forward by the hon. Member for Hexham (Guy Opperman) that the ticketing system at the moment is very complex. It is not. The Tyne and Wear ticket system is one of the most integrated anywhere in the country. Likewise there is an integrated system in County Durham, with moves by bus operators on shared ticketing and making sure that people get the lowest prices. Yes, there is a need for action to improve integration across the region, but I do not think that there is a need to go down the quality service contract route to achieve that.

My constituency borders Tyne and Wear and it is a commuter constituency these days. The days of large-scale employment in coal mines are gone. People commute northwards to Sunderland and Newcastle, and southwards to jobs in Teesside. Twenty-five per cent. of the cross-border bus traffic originates in Tyne and Wear, and that is part of the problem with quality contracts. Those are the bus companies’ most profitable routes. That profitability sustains the rest of the bus network in rural County Durham and infrastructure such as Stanley bus station, and the bus station in Chester-le-Street. If that profitability were to be taken away there would be serious problems. My fear about Tyne and Wear’s proposals is that without that profitability there would be a direct problem in County Durham—and not just with sustaining the existing bus network; the system would affect garages and local employment, because of closures. With the franchise, there will be only one winner—the bus company that wins the prize of running buses in Tyne and Wear. There are currently three operators in my constituency and two will be losers. That will have a direct effect on the funding of existing services. I am also concerned that with the knock-on effect of the through route to Teesside and other parts south of the county bus operators will find it difficult to make the necessary profit.

Many of the ideas for the bus quality contract have not been really thought through. It is not possible to detach, somehow, rural County Durham and Northumberland from Tyne and Wear, as is being proposed.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

My hon. Friend makes some interesting points about profitability, but do I understand him right? Is he arguing that the bus companies should be allowed to maintain excess profits on some routes so that they, the private sector, rather than our elected representatives, can decide how to subsidise rural routes?

[Mr Jones]

I am sorry; that is what actually happens in practice with bus operators. There is an argument that somehow it is nasty to make a profit; but there are profitable routes, and that is nothing to do with the bus companies. The main route from Chester-le-Street to Newcastle, for example, is a profitable route. Why? Because people use it. That is a matter of fact, and irrespective of what politicians say it will not change. People vote with their feet and use the route.

[Chi Onwurah]

I certainly was not arguing that making profits is in some sense wrong. I was arguing—and it is market economics—that making excess profits is wrong, and it should not be for the private sector to determine which routes to subsidise with, effectively, public money. It should be for democratically elected representatives.

[Mr Jones]

No, I am sorry; my hon. Friend does not understand the system. [Interruption.] I am sorry, but she does not. If there are subsidised secured routes that are paid for by the taxpayer, the taxpayer can determine where they go. That is nothing to do with the bus company. My hon. Friend spoke of excessive profits, on those routes that are profitable, but there has to be money in the system; she should be aware, as I think many people are not, that under the current proposals Tyne and Wear council tax payers—I am not one—will underwrite its bus service system, with consequences for them if passenger numbers go up or more subsidy is needed.

I am not arguing for the old free-for-all, but that is not what we have. I remember the disastrous days of bus deregulation in 1986, with buses chasing buses, but we do not have that system now. A far better way forward for us would involve some type of regulation—and if the threat could be used as a bargaining chip with the bus companies I would totally agree with that. However, it is not a panacea for every issue. Quite a few hon. Members have talked about bus services being withdrawn, but a quality contract will not prevent that. They will be withdrawn unless more money is put into the system.

The hon. Member for Stockton South raised an interesting point, which is one that I make constantly to officers in County Durham. The problem is that in some of the areas in question buses are not the solution. We need to think of more creative ways to transport people from isolated communities, such as taxi-buses or alert-buses. I accept what my hon. Friend the Member for Sunderland Central (Julie Elliott) said: even in urban areas there can be isolated places. We need a system to feed the people who live in those places into the main, profitable system. That would be far better than to think that the solution is a bus. Quaking Houses is a nice rural village in my constituency, but there is not the demand for a double-decker bus on a Sunday. Reactive taxi services, for example, could take people to central hubs that would feed them into the network. That is how we need to think—not just focusing on buses, but more creatively.

[Bridget Phillipson]

I just want to point out that services are withdrawn not only because they are unprofitable per se. It can be because they are not profitable enough. Bus operators refuse to publish data on the profitability of routes. When there are big changes and routes are cut or withdrawn almost entirely—as happened in communities in my area such as Shiney Row, and Houghton and Hetton, which have big urban centres; a lot of people use the route—that is not about unprofitable services. It is just that the operators do not regard them as profitable enough. That is the distinction.

[Mr Jones]

I accept what my hon. Friend says, but under the current proposal those services will not be protected. The only way to do it would be to put more subsidy in. If the argument is that there is a bottomless pit of money from the taxpayers of Tyne and Wear to support them, that is fine; but in reality there is not.

To return to the cross-border issue, we might suppose it would have been thought about—and it has, but in a typically bureaucratic, council sort of way. The cross-boundary bus collaboration protocol is a fine document, from which I need to quote to show that the important people—the public and the people who provide the services—are being taken out of the equation. Paragraph 4.4 says:

“In the event that a Cross Boundary Service does have an adverse effect on the QCS Services the Combined Authority shall use reasonable endeavours to seek to agree amendments to the registration…of the relevant Cross Boundary Service”.

Therefore, there will be disputes, for which there is a great organisation called the cross-boundary officer group. It sends a shiver down my spine that it will be left to officers to deal with that. What clout will Durham have to protect services? None at all; because at paragraph 6.7 the document explains what will happen if

“the Council considers that the Draft Plan has an adverse impact on Service Users”

in Tyne and Wear:

“The Parties shall use reasonable endeavours to ensure that the Tyne and Wear Sub Committee considers such requests.

Where the Tyne and Wear Sub Committee makes such adjustments to the Draft Plan to accommodate requests made by the Council, the Draft Plan shall be deemed to be approved by the Council.”

It goes on:

“Where the Tyne and Wear Sub Committee does not consider it possible to make any such reasonably requested adjustments to minimise the…effect of the Draft Plan on the Council and its Service Users, the Combined Authority will seek to procure that the Tyne and Wear Sub Committee promptly responds to the Council in writing, providing reasons.”

If those involved fail to reach an agreement, it will go to a dispute resolution panel. That is fine, but what bureaucratic nonsense that system is. It will not help to solve cross-border disputes. We need to take a step back from the proposal, because it will be a problem for the likes of County Durham and Northumberland. I know that those plans have been in gestation for a long period of time, and that people perhaps think that because they have been sent a lot of work on it, “We’ve got to try and do something.” However, I would urge people to take a step back and think about it.

I want to raise two other issues. The first is airports, and I congratulate David Laws and the team at Newcastle airport, who have done a fantastic job. It is a gleaming example of where the private and public sectors can work together, not only to deliver great service to the travelling public in the north-east, but to be an important economic catalyst for the north-east economy, in terms of both passengers and freight.

I would like the Minister’s comments on one point, however. Under the new devolved arrangements for Scotland, will the airport passenger duty be devolved to the Scottish Government? If it is and we have two systems, undercutting will directly affect airports such as Newcastle, and their ability to compete on routes will be a problem. The Government are still out to consultation on another matter—the third runway at Heathrow—which is always seen as a London issue, but it is not. It is vital to Newcastle that that runway goes ahead.

I want briefly to touch on rail before I finish. In the north-east, there is an issue about the skills that we need to support existing and future rail infrastructure there. May I congratulate Newcastle college? I went to its new rail academy in Hebburn last week. It is a very forward-thinking project that is trying to ensure that people have the skills that they need, not only in terms of the hard-end engineering side of rail, but in terms of the softer, more customer-focused side. It will be a very good thing for a lot of young people to get access into an industry that has a future both in the north-east and in the rest of the country, and also has an international dimension that should be very important for them. With that, Mr Caton, I conclude my remarks.

[Several hon. Members]

rose—

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[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this Westminster Hall debate, which is important for our region, as I am sure you can tell, Mr Caton, from the number of hon. Members who have turned up and want to take part.

All economies gravitate towards their centre, and ours is no exception. London and the south-east are a great powerhouse for the United Kingdom economy, but in our region we want to be part of that too. We are a net exporter, but crucial to our success as a region is connectivity with the rest of the world and, in particular, connectivity with the rest of our country. It is the function of Government to understand these economic laws and, where it is in the public interest, to push back against them. My criticism of the present Government is that they are just not taking regional policy seriously enough, and in no area of public activity is that more true than in transport.

We need only look at the funding figures. We receive a fraction of the transport funding that London receives. Per capita, funding in the north-east is £5; the same figure for London is £2,500. I put it to you, Mr Caton: is that fair? It clearly is not. If we are to have an integrated economy, bearing down on congestion in the south-east and dealing with the need for more economic development in the north-east, transport links are crucial and the funding formula should be more equitable.

In respect of national infrastructure spending, the north-east received 0.3% of the total, and we are 4% of the nation’s population, so we are not even getting a per capita share, but our needs are greater, so logically we should be a priority, not pushed to the back and out of the way. I hope that when the Minister sums up, he will address that point head-on. This is not just an argument about transport in the region, although that is vital; it is an argument about connectivity with the rest of the nation, of which we are a vibrant part. We should not be cut off from it because the transport links are not good enough.

I recently had the chance to visit one of the Government’s Work programme providers in the north-east. I asked what its biggest difficulties were in getting people into work, which is its function. Of course, it said that it was the lack of jobs. That is true, as all north-east Members of Parliament know; those who serve the Government nationally sometimes lose sight of that. However, the second biggest problem was getting people to work. When that was first said to me, I thought that it was the old business about youngsters not being able to get up in the morning, missing their buses and turning up late and all those other reprehensible things.

[Mr Kevan Jones]

And some older people.

[Mr Brown]

My hon. Friend helpfully says, “And some older people.” But no, it was not that. It was because the public transport links early in the morning, when people have to start work, are not good enough. Bus connectivity does not deliver in the way in which the pioneers of the Tyne and Wear integrated passenger transport network, of which we are all still proud, envisaged. Much has been said about whether the current bus services, and the relationship between the private operators and the public authorities, serve the region well. The present system clearly does not. Competition was a farce. I remember when it came in, and since its introduction the private sector has ganged up and monopolised certain routes and parts of the region. That is not private enterprise. A better solution needs to be found.

[Mr Gordon Marsden (Blackpool South) (Lab)]

It is a great delight to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this important debate, and I emphasise that she has fought consistently and doggedly for better bus services for her community. I am pleased to see the strong representation from MPs across the north-east, who have spoken about their support for better-run services that work in the interests of local people. As a north-west MP, I agree that co-operation between the north-east and the north-west is a key part of the process. I do not have time to go through all the points that colleagues have made, but there is clearly a strong consensus among the Opposition about the need to move forward in this area. As my hon. Friend has said, we must look at new mechanisms and new structures.

I understand the points made by my hon. Friend the Member for North Durham (Mr Jones), who is a doughty defender of his constituents’ interests, and I am sure that those points should be taken forward. It is worth remembering what Nexus has said about the problems with the partnership offer:

“Whilst partnership boards would undoubtedly improve the dialogue between local councils and bus operators, the final decision on routes, timetables and ticket prices would remain firmly in the hands of the bus operators. This creates significant doubt over whether the improvements and savings would be achieved in practice.”

I want to recognise the hard work that Nexus has done over the past four years in pursuit of a quality contract scheme. In many cases, it has innovated where no passenger transport executive has gone before, with, frankly, little support from Government. The final decision must, of course, rest with the locally elected councillors in the combined authority, but the work that Nexus has delivered to them in recommending the quality contract deserves to be received thoughtfully and carefully.

[Mr Kevan Jones]

Will my hon. Friend give way?

[Mr Marsden]

I am sorry, but I cannot give way because of the time. We need to develop franchising schemes that can help to protect our bus services and their key role in society. Buses are too often the neglected foundation of our communities. As the Institute for Public Policy Research pointed out recently, three times as many passengers use buses as use rail. The Passenger Transport Executive Group has established that in metropolitan areas the bus networks generate £2.5 billion in economic benefits, which is five times as much as the £500 million of public funding that they receive. Buses provide economic and social opportunities, linking passengers up with apprenticeships, skills and jobs, as my hon. Friend the Member for Bishop Auckland (Helen Goodman) and others have said—not just any jobs, but aspirational, career-building ones. In the north-east, in particular, those benefits are valuable to the more vulnerable in society, who have few other means of getting around: young people, people on low incomes or those who do not want to or cannot afford to get snagged up in environmentally unfriendly congestion.

Too often, government works in silos, and too often, this Government have done so. Ministers must be alive to the possibility that better-run bus services can help to deliver Government objectives. Bus services can be a key factor in reducing energy demands and carbon emissions. The PTEG has shown that the best-used bus services in urban centres can reduce carbon emissions from road transport by three quarters. To meet the Government’s goals, people must have the bus services that they deserve right across the country, not only in London; my hon. Friends have already pointed out the absurd inequality of the funding structures.

Quality contract-type powers have worked before. As someone who grew up in Greater Manchester during the Thatcherite deregulation in the 1980s, I know how the metropolitan county council’s strategic oversight acted as a valuable devolved economic unifier in those areas. The selling off of those companies was accompanied by severe under-investment, which required the incoming Labour Government in 1997 to save what was left of the decimated bus service by boosting support from less than £1 million in 1997 to £2.3 billion in 2012, the latest figure. The previous Labour Government introduced quality contract legislation as a way for properly equipped communities to wrest back some control over services, and we progressively made the process easier.

Although Nexus has embarked on a step change to try to improve its bus services, it has not been given much assistance by the Government. More fundamentally, the Government have completely failed to grasp the value of the bus. It is no exaggeration to say that passenger numbers have fallen in most parts of the country outside London, which is not surprising because the Government have consistently slashed funding. Levels of support will be £500 million lower by the end of the Parliament than they would have been if 2010 funding levels had been maintained. The bus service operators’ grant has been reduced by 20%. According to the Campaign for Better Transport, £56 million of the funding for vital supported bus services has been cut. Freedom of information requests have revealed that council spending on local buses has fallen as a result of local government cuts, with Conservative councils likely to cut the biggest proportion of their bus budget. That has been a disaster for local communities, especially in Tyne and Wear where there are semi-rural areas, which, as my hon. Friend the Member for Houghton and Sunderland South has said, lack the light rail connections enjoyed by some other regions. I hope that the Minister, who is aware of the difficulties that affect rural communities, understands that problem and recognises that in a place such as Northumberland, which has had to cut its supported services by 19%, things cannot move forward.

An incoming Labour Government in 2015 would support large cities and combined authorities if they wished to establish London-style bus services and structures. We would want to emulate positive approaches to pursuing franchise mechanisms, such as the case we are discussing. The benefits of franchising systems are numerous and vital in today’s circumstances. We need strategically planned bus services that help all our communities, and bus fares that are sensitive to the crisis in the cost of living under the current Government. People have a right to expect cheaper fares through multi-operator tickets, which will give them the lowest fares going, whatever mode of transport they take.

Franchising can offer more frequent and punctual services and build into contracts incentives on punctuality. Such incentives are sorely needed, because Ministers have instructed the Vehicle and Operator Services Agency to stop going out and checking punctuality, which is now left to companies to self-police. The whole passenger transport experience needs to improve, and a franchised approach can take us down that route. Franchising can enable the provision of real-time information on bus stops, stations and the internet, and allow local authorities such as Tyne and Wear to target particular groups of people—perhaps young people—for special concessions.

As my hon. Friend the Member for Hartlepool (Mr Wright) vividly pointed out, the deregulated system often promotes crude cartels or de facto monopolies; it can allow inefficient bunching on most-used routes, while little is done to expand usage on new ones; and it often results in the ineffective use of subsidy. It is not the way ahead. Franchising can bring together local authorities, passengers, operators and trade unions to plan and deliver the network. It can create a virtuous circle of co-operation that encourages the devolution of decision making across an over-centralised England. The Government have failed in this area because they have not grasped the elements of the problem. As my hon. Friend the Member for Houghton and Sunderland South has outlined, the North East combined authority wants to move boldly on behalf of its residents, and it has chosen to look at recommendations by Nexus for a quality contract.

The Government have not come up with any other alternatives, and they seem to have little vision in this area. Buses were barely mentioned—I think they were given three words—in the Transport Secretary’s speech to the Conservative party conference last month. We recognise the role of buses in the heart of local communities. We pledge that under the next Labour Government, those communities will receive our support to find an easier process if they, too, seek to reclaim control of their buses. Through a combination of their cuts to local government, the lack of an overall strategy and their cuts to the bus funding structure, the Government have reverted to an isolated, siloed vision of what buses can do, rather than the environmentally friendly, socially useful, economic driver that buses should be. From what we have heard today, and from what I know, nowhere in the country needs that thoughtful, integrated, community-driven approach more than the north-east.