Bus Services Bill [Lords]

Lilian Greenwood Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 27th March 2017 Commons Chamber

[John Pugh]

The right hon. Gentleman might be surprised to learn that EMA was mentioned in my notes, but for some reason I omitted to mention it just then. He has drawn attention to it, and I dare say it was a factor.

Another anomaly in the system—this is where new clause 2 comes into its own—is that while we all accord parity of esteem as between the academic route and the technical route, and the apprenticeship route is now being sold fervently by almost all Government Members, apprentices do not really get a look in: an apprentice aged 16 to 18 gets a bare £4 minimum wage. We want to make the apprenticeship route more attractive, and there is some evidence that where schemes are introduced, they are highly successful. Anecdotal evidence suggests that the MyTicket scheme in Liverpool city region improved attendance quite appreciably. Developing transport in line with the apprenticeship system is very much a part of the city region agenda, which the hon. Member for Blackley and Broughton (Graham Stringer) touched.

The aim of my new clauses is relatively modest. They would not change the character of the Bill, which I broadly support. Essentially, they oblige local authorities to take a broader view of the environmental and educational impacts of transport policy.

[Lilian Greenwood (Nottingham South) (Lab)]

Does the hon. Gentleman share my concern that while the Government make huge cuts to local authority funding, even where authorities want to provide concessionary fares they are in many cases being forced to withdraw them? We heard evidence to that effect from Nexus, which said that, as much as it would like to support young people, the point was being reached in the north-east where it would no longer be able to do so.

[John Pugh]

Desperate times call for desperate remedies, and the financial situation in most local authorities at this moment is desperate, as is evident from the Audit Commission’s recent study of local authorities’ financial sustainability. Whether the Government accept that point or not, I think they will accept that there is a case for joined-up policy. The Government need to link the apprenticeship opportunity agenda with real-time transport problems and impacts. That is where new clause 2 comes into its own, and if I am supported, I will happily press it to a vote unless the Minister can assure me that all these things are within his frame of reference for the moment.

--- Later in debate ---

[Andrew Jones]

Some of the grant is already devolved to bus operators, but the key reason not to devolve it further is that it goes direct to bus operators, which very frequently operate routes that cross council boundaries. Council boundaries and bus routes are not the same thing. Transport to work has nothing to do with a local authority’s geography, so it would potentially be a bureaucratic nightmare to change the system.

Having said that, we are considering how to reform the BSOG operation. The grant pays a flat 34.57p a litre in subsidy, which is why it used to be called the fuel duty rebate. We are considering how to incentivise better practice, rather than just rewarding bus operators for using fuel, which is not good practice.

[Lilian Greenwood]

It feels as if the Minister is trying to devolve all responsibility for the state of our bus services. It was announced in the 2015 local government settlement that core central Government funding to local authorities would fall by 24% in real terms, which is partly why local authority support for buses is falling. Does he not take any responsibility for the impact that is having on bus services and on people’s ability to use the buses?

[Andrew Jones]

Of course I recognise that the pressures on local government finance are quite acute. In fact, I was in charge of my local council’s financial affairs throughout the financial crash in 2008-09, so I am fully aware of that. At the same time, it does not change the requirement to recognise that buses are a local service and should be determined locally.

--- Later in debate ---

[Lilian Greenwood]

Does my hon. Friend agree that it would be helpful to have that national discussion, involving not only passengers but the industry and the local authorities, about the most sustainable way to fund buses? As local authorities develop different emissions standards as part of their own partnership and franchising schemes—the Campaign for Better Transport has said this—would a national strategy not provide some certainty for the UK’s bus vehicle manufacturers as well? There are many advantages to doing this, are there not?

[Daniel Zeichner]

As always, my hon. Friend is absolutely right. She has raised the important issue of air quality, which is clearly becoming more important in many of our cities across the country. I just suggest to the Government that having a national framework within which to discuss these things might be extremely helpful, for a whole range of reasons. I fear that we are not going resolve or agree on this issue, so we will press new clause 1 to a Division.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Sir Henry Bellingham]

I have a lot of time for the right hon. Gentleman. I remember asking him questions in past times, when he was a Minister and I was on the Opposition Benches, and we have engaged in debates in Committee. I assure him that I do not intend to do what he has suggested. I think that small and medium-sized enterprises and the smaller bus companies will support the amendments.

[Lilian Greenwood]

Will the hon. Gentleman not acknowledge that the very fact of having the opportunity to take franchising powers enables local authorities to put pressure on operators, not all of which are small and medium-sized companies—in fact, most of them are very large—in order to bring them into partnership arrangements? If a local authority does not have the potential to develop franchising schemes, many operators will not seriously enter into negotiations on either advanced quality or enhanced partnerships.

[Sir Henry Bellingham]

I was under the impression that authorities had those powers anyway, but the Minister will obviously have heard what the hon. Lady has said. It is up to the Minister to listen to what we have said, and then to make a decision.

I now want to say something about amendment 28. I will be brief, because I have already taken up a fair amount of the House’s time. The amendment would allow fares structures to be specified as part of an enhanced partnership scheme only if all the operators involved agreed. The key issue is the ability of commercial bus operators to set their own fares, which is an important feature of a deregulated market. Of course fares structures are set competitively. In the same way, a commercial enterprise looks at what its competitors are charging, and structures its own charges accordingly. The competition authorities have introduced important safeguards to ensure that bus companies do not collude to stitch up the market and set fares at levels that disadvantage passengers. There are checks and balances, and that is extremely important.

--- Later in debate ---

[Graham Stringer]

rose—

[Lilian Greenwood]

rose—

[Daniel Zeichner]

I will give way to my hon. Friend the Member for Blackley and Broughton (Graham Stringer) first.

--- Later in debate ---

[Daniel Zeichner]

I give way first to my hon. Friend the Member for Nottingham South (Lilian Greenwood).

[Lilian Greenwood]

Is not one reason that Ministers have given for objecting to municipal operations that they would prevent the market from operating effectively? When we look at the latest bus passenger survey, is it not interesting that Nottingham City Transport has the highest value for money of any single operator in the country?

[Daniel Zeichner]

My hon. Friend consistently makes the case for Nottingham. That is made far easier for her by the excellent local services she has. People from my city of Cambridge have gone to Nottingham to see how to do it. Part of the lesson is that a municipal can do it really well, but according to the Bill, that will not be possible.

--- Later in debate ---

[Mrs Ellman]

I rise to support amendment 1, for the reasons given by my hon. Friend the Member for Cambridge (Daniel Zeichner). This is all about devolution and local transport authorities deciding what is best for their areas. No good reason has been put forward for not permitting new municipal operators as an option. The Government have expressed concern about possible conflicts of interest, but that cannot be taken seriously. We need look no further than the experience in Nottingham, as cited by my hon. Friend the Member for Nottingham South (Lilian Greenwood), and in Reading to see that there is the perfect ability—this has already been done in those areas—for the proper distance to be established between the local authority as a local authority and the transport operator as an operator in terms of letting out franchises. The Bill is about giving more local choice, and it is entirely unjustifiable to remove from local authorities the option of having a municipal operator. The Department has found a way to put forward complex regulations on franchising and if it still has concerns about this topic, regulations could also be introduced on setting up municipal bus operations. I therefore urge the Government to think again.

[Lilian Greenwood]

I support amendment 1, and we had a long discussion on this issue in Committee. I spoke then and on Second Reading about the success of Nottingham’s municipal operator, and so, much as I love Nottingham City Transport, I will restrain myself and not repeat myself.

I continue to question the Government’s motivation for their determination to ban local transport authorities from establishing new municipal bus companies, as Ministers have simply not made the case for such a ban. The Transport Committee, chaired so ably by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), describes it as a “disproportionate response”. Clearly, this measure is anti-localism and it prevents councils from acting in the best interests of their residents. In Committee, the Minister said that there should be a split between the commissioning and the provision of bus services. I do not disagree on that, but this ban goes far beyond that. As was noted in Committee, local authorities with municipal operators have proved themselves very capable of managing just such a split when tendering for supported services.

In Committee, the Minister also suggested that the existence of municipal bus operators

“could easily deter investment from the private sector”.

When I asked him what evidence he was drawing on in making such an assertion, he admitted

“of course we do not have any evidence for it. I am just looking at what the risks may be.”––[Official Report, Bus Services Public Bill Committee, 14 March 2017; c. 67.]

The Minister’s risk aversion is simply unnecessary and can be shown to be such. Nottingham has an excellent municipal operator, but it does not deter private sector investment; as the hon. Member for Newark (Robert Jenrick) mentioned, we have excellent private sector operators in Nottinghamshire, such as trentbarton. I hope that even at this late stage the Government will rethink their commitment to what I can only describe as an ideological obsession, and take this opportunity to end their unreasonable position and accept amendment 1.

[Andrew Jones]

This amendment, tabled by the hon. Members for Cambridge (Daniel Zeichner) and for Middlesbrough (Andy McDonald), proposes to remove clause 22. We debated this at length in Committee and I wish to reiterate that the several existing municipal bus companies, including Nottingham City Transport and Blackpool Transport, which serves the area of the rail Minister—my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard)—deliver a high standard of service, and I will expect that to continue. Their ability to provide that is not affected in any way by this clause. The franchising and enhanced partnership tools in the Bill will provide authorities with more influence over bus services than they have now, and striking that right balance between local authority influence and the role that the private sector bus operator can play is important. Our view is that passengers will see the most benefit where the commissioning and provision of bus services is kept separate. As such, we do not think that authorities should be able to set up new bus companies.

We have seen encouraging innovations from the private sector—although not exclusively within that sector—such as the introduction of smartcards, the installation of wi-fi and increased accessibility in our bus network. Those improvements have all been delivered through private sector investment and they show overall that the industry is always innovating and delivering a good deal for its passengers.

--- Later in debate ---

[Andy Burnham]

Well, I will call it a partnership Bill, if that makes my hon. Friend feel a bit more at ease. It is certainly a rare example of common sense breaking out on both sides of the House.

I want to pay particular tribute to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman). As she said a moment ago, she has consistently spoken of the damaging effects of bus deregulation—the free-for-all, the decline in the quality of services and the increase in fares. She has been consistent, and she is vindicated tonight as the Bill finally goes through the House. So, too, is my hon. Friend the Member for Blackley and Broughton (Graham Stringer), who made the same argument throughout the years, including under the Labour Government, and who has waited a long time to see this Bill come to pass.

To be successful in the new role that I seek, I will seek to use the powers in the Bill for the benefit of the travelling public in Greater Manchester. For 32 years, we have had a bus service that has been run for private vested interests rather than in the public interest. Only last week, a whole new series of service alterations were announced that will decrease the quality and coverage of services across Greater Manchester, with no real ability for communities to challenge those decisions. Well, that way of running bus services is coming to an end.

[Lilian Greenwood]

I am very much enjoying my right hon. Friend’s speech. Does he agree that, contrary to what the right hon. Member for Chipping Barnet (Mrs Villiers) said, the Bill seeks to enhance competition and the role of the private sector by having really effective competition off the road? On-road competition has not delivered for passengers.

[Andy Burnham]

That is absolutely the point. If we construct a franchise process that really puts the public interest first, and we then ask the private sector to meet that public interest, that will be a much better system; indeed, it is the system the right hon. Lady’s constituents benefit from in London. The question I was going to ask her was, why, if she thinks that is okay for her constituents, is she seeking to deny it to ours? That is not an acceptable position for her to take.