Lilian Greenwood
Main Page: Lilian Greenwood (Labour - Nottingham South)Department Debates - View all Lilian Greenwood's debates with the Department for Transport
(11 years, 9 months ago)
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It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the members and staff of the Select Committee on Transport on securing this debate and on producing such a reasoned and timely report. I was especially pleased to listen to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who has chaired the Committee expertly throughout the inquiry and speaks with great authority in support of buses, which are the Cinderella of public transport and, as she says, provide a lifeline for millions of people across the country.
The Transport Committee’s report provides a much-needed critical analysis of the Competition Commission’s investigation. The commission shone a light on the bus industry, exposing serious market distortions and raising helpful suggestions for reform, but the investigation itself inspires questions about the proper balance between competition and regulation and about the future structure of the bus industry. The commission’s report, notwithstanding its considerable strengths, is limited by an assumption that direct, head-to-head competition is beneficial to passengers. Of course, the commission was only following its remit, but perhaps that remit could have been applied a little more widely.
The reality is that sustainable competition on the same route is rare, and most areas settle into a pattern of single-operator dominance, occasionally interrupted by short, intense and disruptive clashes between rival companies. The roots of the problem can be dated to the deregulation regime established by the Transport Act 1985. The then Government’s ambition for widespread competition proved unsustainable. The new market did not achieve balance, as deregulation’s architects had hoped. After the frenzied bus wars of the 1980s and 1990s, a new pattern of dominant operators emerged.
There are exceptions, of course. Thanks to strong campaigning, London was protected from the 1985 Act and was therefore able to build a planned, integrated network, with competitive tendering for routes. With that provision, combined with other factors unique to the capital, bus use has risen dramatically, in contrast to the national decline in patronage. In 1985, one in five British bus journeys took place in London; today, the figure is one in two. As my hon. Friend the Member for Blackley and Broughton (Graham Stringer) has said, that raises clear questions about how other towns and cities can make similar progress.
Where municipal operators have survived, they have proved that they can help to buck the national trend. Nottingham City Transport, which serves the city that I am proud to represent, was named operator of the year for 2012, and strong leadership from the local authority has helped to grow the local bus market. Some challenges are still being overcome, such as establishing an integrated multi-operator smartcard—my hon. Friend the Member for Bolton West (Julie Hilling) explained clearly why products such as the Oyster card, which Londoners probably now take for granted, are so valuable to passengers—but the point has been proved in Nottingham: determined local vision can help to reverse the wider pattern of decline.
For most passengers a lack of quality and choice—or geographic market segregation—is the norm. Some companies have, in effect, established private monopolies, with unfeasible hurdles for smaller competitors seeking to enter the market and without challenge from the biggest operators, which now account for 69% of the market. That is not a market solution; it is a model that has failed. My hon. Friends the Members for Bolton West and for Blackley and Broughton both described the experience in north Manchester, which will be familiar to many.
It is hard to disagree with the Campaign for Better Transport, which states that the Competition Commission’s focus on direct competition prevented it from fully considering alternatives. The Select Committee’s attention to the remaining barriers to quality contracts was welcome, and Labour is working to remove the uncertainty that is holding back some transport authorities. A number of witnesses said that they would like quality contract schemes to be introduced, but there remains, as the report discusses, the problem of who would be first across the line. We would offer genuine support for authorities seeking to develop quality contracts, just as we would for those developing voluntary and statutory partnership agreements.
As the hon. Member for Milton Keynes South (Iain Stewart) said, there is no one-size-fits-all solution. Each local market is different, and local authorities must have a genuine choice about what is right for their area. Specifically, Labour would introduce bus deregulation exemption zones as a mechanism to transfer the risk from local to national Government, giving transport authorities the certainty that they need to commit to quality contracts where that is right for their residents.
Far from seeking to remove the remaining barriers to tendering, the Government’s proposed changes to funding criteria will raise the hurdle still higher. Authorities that introduce a quality contract scheme will be disqualified from receiving better bus area funding. Transport authorities that want to develop future schemes will have the odds weighted against them. I hope that the Minister, who, when in opposition, put on record his support for quality contracts, will withdraw that proposal. Indeed, when the Local Transport Act 2008 was considered in Committee, he speculated that
“a future Government, perhaps of a different complexion,”
which was
“unsympathetic to the idea of quality contracts”
could
“seek to kill the measure slowly”.––[Official Report, Local Transport Bill Public Bill Committee, 29 April 2008; c. 205-6.]
That is precisely what is happening under this Government.
Although the withholding of better bus area funding is a proposal at this stage, it is undeniable that the threat is inhibiting the development of quality contracts. As my hon. Friend the Member for Liverpool, Riverside described, that sends a strong signal to local authorities not to go down that route. When the South Yorkshire integrated transport authority decided not to pursue a quality contract scheme, it was made clear that the Government’s stance on funding had been a major factor in the decision.
I know that the Minister will be studying carefully the responses to his consultation. I ask that he also listens to the recommendations of the Transport Committee and withdraws the proposals that punitively target authorities that choose to pursue tendering. Of course, the proposal to stack the deck against quality contracts comes after a round of swingeing cuts to local transport, including buses. Overall funding for local transport has been cut by 28% and the bus service operators’ grant has been cut by 20%.
Early predictions, optimistically repeated by the Government, that cuts of this magnitude could be absorbed without a substantial rise in fares have been discredited. Fares rose by more than double the rate of inflation last year, and supported bus services, which are often relied on by some of the most vulnerable members of society, were cut by 9.3% outside London. As Passenger Transport stated last week,
“the bus industry is in danger of being forced into another great cycle of decline, in which cost rises, funding cuts and consequent fare increases each give another vicious downward twist to patronage levels.”
Passenger Focus has collected a great deal of evidence on the human cost of the cuts. In some areas, buses have been reduced to mere skeleton services. One passenger told researchers:
“You feel imprisoned in your local area.”
Indeed, the Campaign for Better Transport identified one estate—Burbank in Hartlepool—where bus services have been cut completely. It does not have to be this way. The Government should be striving to achieve something more than the slow subsidised decline of bus services outside London. Despite failings in local markets, buses are still the most used mode of public transport. Travelling across the country and Europe, I have seen the enormous potential that buses hold. But Britain has to grasp the challenge and not see buses as an easy target for cuts. That is why Labour has set out which cuts we would reluctantly support, to protect public transport services.
Thanks to the work of Greener Journeys and others, we know more now than ever before about the economic and social benefits of buses. Jobs and growth and tackling social exclusion are two sides of the same coin. That is why the present reduction in funding is cutting so acutely. Democratically accountable local authorities are best placed to provide leadership, deliver service improvements and promote integration with other modes, including rail. This is what communities need. Real, accountable devolution of spending and decision making can help address market failings when they occur, and Labour is committed to devolution and protecting bus services.
With your permission, Mr Walker, I would like to close by paying tribute to the work of my hon. Friend the Member for Barrow and Furness (John Woodcock), who, unfortunately, has had to step down from his role in the shadow transport team following a serious injury. I am sure that all hon. Members will wish him a full and speedy recovery.
It is true that those no longer travelling would by definition be excluded, because they would not have been on the bus to be subject to questions. I suppose the same applies to rail services. However, if bus services were being abandoned because of poor quality, I would expect that to be highlighted by the people still on the bus, but who have not yet abandoned it, so I do not think that the hon. Gentleman’s point is necessarily true, if I may say so. It might be that bus passengers are no longer on the bus because they have decided to travel by a different mode—car or train—or because the bus is no longer there in the circumstances that suit their individual needs.
The second deal was Bus for Jobs, which helps jobseekers get back to work by offering free travel for the whole of this month of January. Those are exactly the sort of leadership examples that should be demonstrated by bus companies. I will continue to work with the companies, and cajole them if necessary, to ensure that they continue to put passengers’ long-term interests directly at the heart of their businesses. Of course it is in their commercial interest to do so, and therefore they ought to be doing that for themselves, as many of them are.
I have listened with great interest to what the Minister said about BUSFORUS and Bus for Jobs. Can he set out his assessment of how well those initiatives by the bus industry are meeting the needs of young and unemployed people, in particular given that Bus for Jobs only lasts for a single month?
The Bus for Jobs initiative is being assessed by the bus companies, and I spoke about it to a leading member of the bus industry yesterday. I will be keeping in touch with the industry, to see what the initial response is and whether there is a case for extending the initiative. That would be a matter for the bus companies, but we want to see the response first—us from the Government point of view and them from a commercial point of view. If the initiative is successful in persuading people who have not considered the bus before to take the bus and then to stay with the bus, it might be a sensible commercial proposition for the bus companies.
However, I have made no secret of my belief that the bus companies need to do more to help young people, and that has formed a key part of my speech on major set-piece occasions when I have addressed the bus industry. The industry has responded sensibly and well to that challenge, and the companies know that I will continue to engage with them formally and informally. The subject is always on the agenda of the Bus Partnership Forum, which I hold with the industry six-monthly and in which young people also participate.
Overall, commercial services, which represent about 80% of bus mileage, are holding up quite well, which is good news that we should all welcome. I understand the challenges of being in opposition, but I encourage Opposition Members not to talk down the bus industry, which is easy to do—I have been in opposition myself. They should recognise what is going well, as well as not so well. Commercial services are holding up, and we should take some comfort from that.
Although there is good news on that front, I recognise—I am the first to do so—that in some areas of the country the garden is not quite so rosy. Recent statistics show that the supported service network—only 20% of overall bus mileage, but important for many people—is not as healthy as the commercial sector. The picture is not uniform, as it inevitably will not be in an era of localism, such as the one we are moving into, because the decisions are made locally by elected councillors. Some councils, such as East Riding, have prioritised bus services in setting their budgets, while others, such as Surrey, have reduced their spending but have done so creatively and carefully so as not to translate cuts into significant service reductions.
Other councils, I am sorry to say, have made what appear to be arbitrary and swingeing cuts that fail to consider properly the needs of their local residents—I refer to North Yorkshire and Cambridgeshire—which can lead to people in isolated communities, particularly in rural locations, having restricted access to education, training, work, health care and other important services. We have heard about how those who use the bus tend to be at either end of the age spectrum, so young people and elderly people are especially affected if such cuts are made, because they rely more on public transport to get around.
The allocation of money to local councils and their predominant concerns are matters not for the Department for Transport, but for the Department for Communities and Local Government, which sets the allocation for local council funds. We do not control that, but allocate our own funds, which we are increasing through the green bus fund and the better bus areas and community transport. That is what our Department has been doing, but I am unable to answer the hon. Lady directly, because that is not my Department’s responsibility. I do not believe, however, that there is a direct correlation between the reductions in local funding from the DCLG and the cuts in bus funding.
Indeed, what is reflected—quite properly—is the exercise of local discretion. Some councils have decided to protect bus services and to make them a high priority, while others have not sought to do so, which is entirely up to them, because they consist of elected local people. I certainly encourage individual constituents in those areas where bus cuts have been significant to ask their local councils and councillors why they have decided to prioritise bus cuts, as opposed to anything else, while perhaps the councils next door have not done so. To be fair, I referred to non-Labour councils, North Yorkshire and Cambridgeshire, but I can also pick out Darlington, Stoke and such councils, which have reduced their budgets. Things are mixed throughout the country.
Overall, however, bus mileage remains broadly flat, with commercial services in many cases picking up the slack as bus companies continue to look for opportunities to grow their local markets.
May I take the Minister back to his response to my hon. Friend the Member for Bolton West? The Government are trying to have it both ways, taking credit for progress in the bus industry while blaming local authorities for cuts to services. He must take responsibility for inflicting front-loaded cuts, disproportionately hitting less affluent authorities and forcing councillors to make impossible decisions. The Government are using localism as a way to hide behind the effect of their own decisions.
That is not fair, and I have already listed some of the extra money that the Department for Transport has made available to help buses. In a moment, I will go on to what we are doing. Moreover, many councils are not making cuts, which demonstrates that there is flexibility. Some have chosen not to make cuts, although there have been reductions across the patch, not only in local councils but in Departments. I do not wish to rehearse the Budget position, but there was a general recognition that reductions in Government expenditure were necessary. Indeed, the hon. Lady’s party was also committed to a large swathe of cuts had it been returned to power in 2010. In the Department for Transport, we are doing what we can to protect bus services, and I hope that local councils have the same objective—some appear to be discharging it well, others less so.
We are doing our bit to help, and we remain committed to supporting local bus markets through direct operator subsidy, through DCLG funding of local government and through our targeted investment packages. That includes £70 million on better bus areas, which was a bolt out of the blue and a windfall that the bus industry was not expecting, with more to come for those places that successfully apply for full devolution of bus subsidy. That also includes around £200 million in capital funding for major projects in Manchester, Rochdale, Bristol and elsewhere, and many of the 96 projects made possible by the £600 million local sustainable transport fund, which is a brand-new Government initiative and provides a major increase in spending on sustainable transport compared with that of the previous Administration.
Many of the 96 projects include improvements related to bus services. In addition, I recently announced a further £20 million for a new, fourth round of the green bus fund, on top of the three previous rounds worth £75 million. Many of those buses will be built in Britain, helping British manufacturing and jobs as well reducing our carbon impact from buses. Such funding, therefore, is not insubstantial and not a bad deal for the bus industry. It comes in spite of the tough financial climate and the need to reduce the structural deficit.
As I have made clear before, however, with such significant amounts of public expenditure invested in the bus market, it was only right for us to consider whether it has been delivering the best service for bus passengers and best value for the taxpayer. That is why we are engaged in a series of reforms to facilitate competition and to increase local accountability for spending on bus services. We are reforming how bus services are subsidised, providing guidance on ticketing and tendering for contracts, and making regulatory changes to encourage more on-the-road competition where the market supports it.
On bus subsidy and the reform of BSOG, I am considering the response to last year’s consultation and will have final proposals before Easter. That will include the treatment of areas where quality contract schemes are planned, which is clearly and understandably of interest to the Committee. Guidance for local authorities that wish to apply for better bus area status will be out later this month.
That issue was raised at the Select Committee, to which I gave evidence, and it has been raised again today. Local councils want to understand the relationship between better bus areas and quality contracts; that is fully understood. I will not give a definitive answer today. The matter has been subject to consultation, as the hon. Lady knows. The responses to the consultation are being carefully considered, and I will discuss those matters with my ministerial colleagues in the Department for Transport, but I accept the need for clarity, and I intend to provide that so that everyone knows where they stand.
I am pleased to note that, by and large, the Committee’s key findings and recommendations complement and support the coalition Government’s policies that were set out last year in “Green Light for Better Buses”. I have a lot of time for the Chair of the Committee, but I thought she was uncharacteristically unfair when she said that there needed to be more to our policy than funding cuts. That was a gross distortion, and failed to note the direction of travel that is clearly set out in “Green Light for Better Buses” and our proposed changes to funding arrangements. That constitutes a policy that we believe will help to deliver better arrangements for our buses. Combined with our response to the Competition Commission, it sets out a clear policy. The hon. Lady may disagree with it, but it is a clear policy. In fact, the Committee’s findings suggest that she does not disagree with much of it.
We have made it clear that partnership is a highly effective way of delivering quality, affordable bus services, and I welcome the hon. Lady’s endorsement of partnerships as a good way forward. Our better bus area proposals are indicative of that. The purpose of such areas is to ensure that councils and operators work together, because that is more successful than a council wanting to drive forward policies, perhaps for good reasons, when the bus industry is not interested. Similarly, if the bus industry has good ideas, but a council is unresponsive, those ideas will not be delivered. The proposal to financially incentivise two groups of people to come together is entirely sensible, and can only work to the benefit of the public.
We will support the integration of services when that is in the public interest, and we will encourage the roll-out of smart, multi-operator ticketing. We will monitor local authorities as they develop their partnership agreements, liaising with the Office of Fair Trading when necessary—the Chair of the Committee made this point—to ensure that competition law does not become an insurmountable barrier to sensible service improvements.
Does the Minister share my concern that a false distinction is sometimes made between quality contracts and partnerships? We all want effective partnerships, and the Labour Government legislated to promote them. When I was in Copenhagen, I saw how tendering and partnerships between operators and transport authorities do not just co-exist; they are essential to policy success. It is artificial and misleading to present them as two completely different things. They can work together, and funding should follow.
The hon. Lady is tempting me to respond to the consultation exercise, which I will do with clarity in due course. A point about quality contracts that I made to the Select Committee in response to the hon. Member for Blackley and Broughton (Graham Stringer) was that they are there in law:
“They are there as part of the Local Transport Act 2008”—
I was a member of the Committee—
“They remain on the statute book.”
There is no intention of removing them from the statute book and I expect the law to be respected by all parties. I would take a dim view of any bus company or anyone else who sought to undermine the law of the land as it is on the statute book.
On resources for traffic commissioners, to which the Committee referred, the coalition Government has already given a commitment to review their role in the next financial year as part of a wider review of non-departmental public bodies. It is sensible to include a look at their public service vehicle work as part of that review.
I shall pick up individual points that hon. Members have raised this afternoon. The Chair of the Transport Committee referred to multi-operator ticketing and whether it would require new legislation. We have made it clear that we strongly support multi-operator ticketing. We believe it is important to deliver the sorts of outcomes that passengers want, and to avoid the situation to which the hon. Member for Bolton West (Julie Hilling) referred of passengers buying a ticket and then having to buy a further ticket to get home. That cannot be a sensible outcome for passengers, and cannot help public transport generally. We do not want that.
[Mr Peter Bone in the Chair]
We have made it clear to bus companies that we want multi-operator ticketing. We have also made it clear that we reserve the right to introduce legislation if that does not occur. We hope that it will occur—there is some evidence of that—not least because in Oxford where it is occurring, the bus companies have discovered that it is in their financial interest. I am confident that the bus industry has bought the idea of multi-operator ticketing, and that it will become increasingly common throughout the country. However, we reserve the right to take that forward in legislation if necessary.
We also believe that transparency is important. I welcome any figures that can be produced to help passengers and to give a wider perspective of how the industry is performing, and indeed how the Government is performing. Anyone who knows about my role in Parliament will know that I have been hugely committed to transparency in all sorts of areas throughout my time here. We must avoid placing huge extra burdens on industry for not much return, so we cannot require endless figures to be produced if they are of little value, but in principle we are certainly open to any suggestions for extra information that is genuinely valuable. If the Committee has particular issues in mind, I will be happy to consider them.
My hon. Friend the Member for Milton Keynes South (Iain Stewart) referred to door-to-door journeys. He called them end-to-end journeys. I have discussed with the rail and bus industry how to describe them, but I will not bore him with the nuances of that conversation. Suffice it to say that the general view was that we should call them door-to-door journeys, and that is what the Department is doing. It will shortly produce information on such journeys to aid the process. It will cover the bus and rail industries, and ensure that different modes of transport are joined up. In best practice they are, but sometimes they are not.
My hon. Friend was right to refer to the role of smart ticketing, which is key to delivering door-to-door journeys properly. He said that it is necessary for people to be confident that they will get the cheapest fare when they use a new ticket-purchasing method for their journey. I absolutely share that view. For the railways it is a key objective of the fare and ticketing review that people buy the ticket that is appropriate for their journey, and do not pay over the odds unnecessarily. Obtaining the best possible deal for rail and bus passengers, which also involves transparency, is to the fore of the Government’s thinking.
I always listen with interest to the hon. Member for Blackley and Broughton when he talks about transport, because for many years he has demonstrated a genuine commitment and great knowledge. He referred to London’s upside, but he will recognise that it also has its downside. There are pros and cons with the London arrangement, and I am familiar with both. In any assessment of what is best for one area it would be wise to consider the upside and downside in London when considering arrangements for buses.
The hon. Gentleman referred to concessionary fares. There will be no change in the arrangements during this Parliament. That is what the coalition Government has said, but what individual parties do in their manifestos will be a matter for them as we approach the next general election.
The hon. Member for Bolton West raised the interesting matter of—I suppose, though she did not frame it in this way—the purpose of bus travel. What is the objective that we, or local councils, are seeking to deliver and what are bus operators delivering by running buses? There are different reasons, it seems to me, why buses are run. One is to provide a regular means of transport at a high frequency along corridors such as Oxford road, which is effective, or can be effective, in securing modal shift from the motor car, and thereby, in theory, easing congestion, reducing carbon emissions, and providing a viable public transport alternative. As we have seen in London and elsewhere, there is no question but that when we have frequent services and people turn up without having to think about the timetable, it drives passenger numbers up, creating a virtuous circle where buses become more attractive and more buses can be run. We have that in many parts of our country—not all, but in many parts—including much of London. However, it could be argued—this is one of the downsides of London, I might say—that sometimes, and it is my view, there is an over-provision of buses, which run significantly empty on occasions, back to back all the way along the road. That is a particular problem on Oxford street, as opposed to Oxford road.
It seems to me that the second purpose of a bus is to provide a social function and a necessary connection between those who are without private transport but need a bus to get to a school, a hospital, or whatever it happens to be. The hon. Member for Bolton West suggested that the answer was route-bundling, which is a perfectly legitimate philosophical view. However, I would say that route-bundling may satisfy her need for buses that go round the houses, but what is the consequence for Oxford road, or buses along high-frequency corridors? I am not sure that we can have both—perhaps we can. If we reduce high-frequency corridors to provide buses round the houses, that may meet more social needs, but it may secure less modal shift from road. I raise that philosophically to point out that such things are not perhaps as straightforward as they are sometimes presented.
Let me muse on that matter for a moment—until I become inspired—and deal with the points made by the hon. Member for Nottingham South as part of my closing remarks. I have noted with interest her support—increased support, I might say—for quality contracts, and her proposal for bus deregulation exemption zones. The Opposition is of course entitled to produce its own policy and I look forward, with interest, to that evolving. Therefore, perhaps it would be churlish of me to point out that for 13 years, some of us were making such arguments and they were batted back and we were told that what we were proposing, which may not be terribly different from what she is now suggesting, was a load of old nonsense. It would, however, be churlish to make that point.
I do not think that it is true to say we are in a great cycle of decline. I say to the Opposition that there are issues about the bus industry that I have been happy to accept, including what some councils have done in terms of bus cuts and the real impact that has on individuals in those areas. However, I encourage her not to exaggerate the position. That “great cycle of decline”, as I mentioned yesterday, shows an increase in passenger journeys of 0.6% over the last 12 months. Even if we take out London, a decline of only 0.8% is shown. It is not a great cycle of decline, and we must not talk down the bus industry and the opportunities for users.
I want to clarify that they were not my words but those of Passenger Transport. Just this week, it expressed its concern about the impact of a number of things, including cost rises and funding cuts. It is not just me who has real concern about the future of the bus industry—that view is widely held—and I just wish the Minister would respond to it.
I have responded to it, and I have indicated that we are not into a great cycle of decline. I indicated that commercial services are holding up very well. The bus industry is responding with ingenuity and innovation. It is taking steps to take over some of the services that have been tendered and that were run by councils. Indeed, it is beginning to grow the market in places. The initiatives in Manchester and Sheffield, where fares have been cut, shows us a way to grow the market. I do not accept that we are into a great cycle of decline; nor do I think that it is helpful for anyone, whether the Opposition, Passenger Focus or anyone else—whoever the hon. Lady happens to be referring to —to talk about these matters in such apocalyptic terms.
The hon. Lady said that buses had been cut completely in Hartlepool and that it did not have to be that way. No, it does not. She should perhaps ask Hartlepool council why things are that way there, because they are not that way in other councils.
The hon. Lady said that local authorities are best placed to provide leadership, and we entirely agree, which is why we are pursuing a policy of localism. However, I hope she will accept, as we do, that that will produce a non-uniform picture across the country, as local authorities behave in different ways as a result of the freedom that they have been given.
The hon. Lady says that Labour is committed to devolution, and I am delighted to hear that, because I did not notice much of it in the 13 years of the previous Government. However, if she is now going along with our localism proposals, that is very welcome. That sends a message that there will, I hope, be no reversal of the localism that the Government has pursued, in the unlikely event that Labour forms the next Government. That will give local authorities some comfort that the direction of travel will not be changed.
On deregistration, the hon. Member for Blackley and Broughton will recognise that primary legislation would be required and is difficult to achieve slots for. Alongside every other Department, we have to make a case to be given spare time to pursue the matter, so we are not looking to legislate. We are exploring voluntary options, but, as with all things, we reserve the right to introduce legislation if necessary. I very much hope that it will not be, and we are certainly getting quite a long way down the track on a whole range of issues by taking a constructive, engaging, voluntary approach with local councils and the bus industry.
Let me end on a note of agreement. I share the views of the hon. Member for Nottingham South about the hon. Member for Barrow and Furness (John Woodcock). I very much understand why he has taken his decision, and we all wish him a full recovery and a speedy return to the Front Bench.