Bus Services Bill [HL]

Lord Bradshaw Excerpts

3rd reading (Hansard): House of Lords
Wednesday 23rd November 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)]

My Lords, in moving Amendment 1, I shall speak also to Amendments 4 and 5 in the name of the noble Lord, Lord Bradshaw, who has tabled a number of amendments that aim to restrict the ability of the Competition and Markets Authority to investigate franchising schemes for a period of two years unless it has received a complaint, or has become aware of a significant adverse effect on competition.

Let me start with government Amendment 1. As noble Lords will recall, the Competition and Markets Authority issued a letter on the Bill on 29 June which contained nine recommendations. Our response to these recommendations was issued on 10 October and is now on the GOV.UK website. One of these recommendations was for the CMA to be listed as a statutory consultee in relation to consulting on franchising proposals. The Government accepted this recommendation and tabled Amendment 1.

The CMA is already a statutory consultee in relation to advanced quality partnership, advanced ticketing and enhanced partnership schemes. I take the view that it would be helpful for franchising authorities to engage with the CMA as they develop their proposals. This should help ensure that the authority developing its franchising proposals is made aware of any potential effects on competition, and the benefits or impacts this could have for bus operators and local people.

I now turn to Amendments 4 and 5 in the name of the noble Lord, Lord Bradshaw. As I mentioned on Report, the CMA will not have any specific powers to block bus franchising schemes. However, it is important to remember that their role is to conduct market studies and investigations in markets where there may be competition and consumer problems, with the aim of improving the situation for passengers. We believe that any restriction of the powers available to the CMA would send the wrong message about its important role in protecting consumers. As such, I urge the noble Lord not to move his amendment.

In addition, as the noble Lord may be aware, Schedule 10 to the Transport Act 2000, which the noble Lord seeks to amend, does not give the CMA the power to investigate franchising schemes. The schedule provides a competition framework in which partnership schemes should operate. As such, the noble Lord’s amendment does not appear in the relevant section of the Bill.

I hope that this explanation and the assurances I have given—we have met in this regard as well—have persuaded the noble Lord, Lord Bradshaw. I know he recognises the important role that the CMA has to play, and that local authorities should look to work with it as proposals are developed to ensure local bus passengers get the best possible services. However, I do not feel that the amendments are necessary as the CMA is not being given any specific powers to block bus franchising schemes. I trust that has reassured the noble Lord to the extent that he is minded not to press his amendments. I beg to move.

[Lord Bradshaw (LD)]

I thank the noble Lord for what I regard as a minimal response to the inquiries I have made. The Competition and Markets Authority seeks to interfere in the proper conduct of business. Can the Minister reflect on the extent to which the authority is working in the public interest or whether it is in the interest of the people employed by the Competition and Markets Authority, to give themselves work? The Minister will be aware of the enormous ongoing inquiry into the Northern Rail franchise, and the effect on Arriva buses. A long time and a lot of expenditure—both public expenditure and that of Arriva—has resulted in a settlement that could probably have been achieved without anything being done by the Competition and Markets Authority. There is very little overlap between the services of Arriva as a bus operator and the services of Arriva as a train operator—and, of course, it won the franchise for a train operation and went ahead without realising that this would be raised. It has been raised and it has cost a lot of money, and a Government who are so anxious to save unnecessary public expenditure should seriously consider what these people are doing.

The future of bus franchises has been covered by what the Minister has said, but when future rail franchises are let—a number are coming along—it would be just as well if the Competition and Markets Authority was, in this case, put into a position where it was a statutory consultee. It should also be told, however, once the franchise had been let and the franchisee is trying to establish services—which takes a long time, because you need rolling stock or buses to run a new franchise—that it should keep out of the way for a time, unless there is a significant public complaint. I am not aware, although I may not be very well informed about it, of a groundswell of opinion in the north of England about the issues that the CMA has raised.

[Lord Snape (Lab)]

Could the noble Lord assist me? He was forthright in his condemnation of the CMA, although he appears to believe that it has a part to play in rail franchising. I do not want to take noble Lords down that road because I would be out of order in doing so. However, it is a slight contradiction in terms, though no more so than in my own party, which is in favour of franchising for buses but against it for trains. I think that is the right way around, but I am not quite sure; perhaps my noble friends could advise me on that.

To stick strictly to the CMA and the Bill, the CMA made nine eminently sensible recommendations, including the one that, somewhat belatedly, the Minister has now decided to accept. Given the noble Lord’s condemnation of the CMA, which of those recommendations does he feel are unnecessary with regard to the Bill?

[Lord Bradshaw]

I am perfectly satisfied with what the Minister has said in so far as it concerns bus franchising, but the bus and rail industries are very much linked together. I am trying to bring to his attention the fact that the work of the CMA in the latest case has probably been fruitless. It has been very expensive and, in future, rail franchising should be subject to the same discipline now proposed for bus services. With that, I should like to withdraw the amendment.

[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

It may be for the convenience of noble Lords if I remind the House that we are debating government Amendment 1, and the noble Lord, Lord Bradshaw, has been speaking to Amendments 4 and 5, which are grouped with that amendment.