Bus Services Bill [HL]

Lord Kennedy of Southwark Excerpts

Report: 1st sitting: House of Lords
Wednesday 12th October 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, I support the comments of the noble Lord, Lord Whitty, who I thought made an excellent case for Amendments 1 and 113 in his name and, in so doing, I should say that I am the vice-president of the Local Government Association. I simply add a little for the Minster to take away, because the noble Lord, Lord Whitty, talked a great deal about the importance of bus services for employment opportunities and for training purposes.

In the consultation that is talked about—a huge amount of consultation will take place on this Bill, not just in terms of this amendment—one type of organisation that should be automatically consulted is employers’ organisations. There can be huge problems for people who often are on a low income, live in remote places and have no access to a car and who, therefore, need to be able to get to employment and training opportunities, often at unsocial hours, by public transport. Therefore, it is important to consult those people. Proposed new subsection (4)(d)(iv) in Amendment 1 refers to,

“organisations, or types of organisation, specified by the Secretary of State in regulations made by statutory instrument”.

I hope very much that employers’ organisations and jobcentres will be included in that list.

[Lord Kennedy of Southwark (Lab)]

My Lords, as this is my first contribution to the discussion on Report of the Bus Services Bill, I refer noble Lords to my register of interests: I am an elected councillor in the London Borough of Lewisham and a vice-president of the Local Government Association. I should also say that, generally, we on these Benches welcome the provisions in the Bill.

Bus use in London has grown while outside it the picture has been very different. We are hopeful that when the Bill passes into law, it will help to halt the decline in bus use outside London, particularly in rural areas. The two amendments in this group are in the name of my noble friend Lord Whitty. As we have heard, Amendment 1 seeks to place a duty on county councils in non-metropolitan areas to consult on the needs for local bus services. It would require them to issue a consultation document and, following the consultation, to issue an assessment on the need for local bus services in the county and, further, to seek to secure the provision of bus services that address the needs identified that would otherwise not be met, as my noble friend outlined. The amendment is very focused and requires the Secretary of State to issue guidance to assist county councils in making sure that they have properly responded to the outcomes of the consultation. The amendment goes further in setting out what the consultation must address and who, at a minimum, must be consulted. I agree with my noble friend Lord Whitty and the noble Lord, Lord Shipley, about ensuring that employers’ organisations are properly consulted. However, the amendment gives considerable scope to the Secretary of State to set out and shape the consultation to be undertaken.

Amendment 113, also in the name of my noble friend Lord Whitty, would place a requirement on the Government and the Secretary of State to issue a national strategy document within 12 months of the Act coming into force. Noble Lords will recall that that was discussed in Committee. As we have heard, there is no need for the bus industry to be the poor relation of other transport services. I fully support this amendment’s objective of requiring a proper national strategy. As we have heard, this document will set out the objectives, targets, plans and funding mechanisms for the delivery of bus services over the next 10 years. That is a very welcome idea. We have heard and seen the decline in bus services outside London. The Bill is an attempt to halt that decline. It seems sensible for the Government to pull those things together into one document. I hope that the Minister will give a positive response.

[Baroness Scott of Bybrook (Con)]

My Lords, as my county was mentioned by the noble Lord, Lord Whitty, for which I thank him, I thought that I should respond. I do not think this amendment is necessary. Many counties such as Wiltshire already know exactly what is happening with bus services in their areas and the importance of them to their communities. Wiltshire has just finished a review which took place over the last six months. We have had nearly 12,000 responses, which is excellent for our county. We are looking at our bus services in response to those responses. As the noble Lord, Lord Whitty, said, bus services rightly need to be provided for vulnerable people and people trying to get to work but also for people in rural communities trying to access leisure facilities. We are doing that. It is interesting to note that we will save half a million pounds this year by not retaining the bus services that are not required by the people of Wiltshire.

However, a much more important aspect of this concerns the number of buses used by public services in our local authorities. Health, for example, spends as much money in Wiltshire on supporting transport in our county as we do. Therefore, it is important that we work together with other public services to ensure that we obtain the most efficient service for moving people around our areas as we possibly can.

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If I have one doubt about the amendments, and I hate to have it, it is that experience too often demonstrates that these things can become a pretty hollow formality; they have to be done by officials but they do not really put their heart into them. In supporting the Minister, we should do our best—I am not sure how much effect it will have—to bring home that this is a serious provision: you are providing a service, and it is absolutely essential that the people for whom you are claiming to provide that service have a real say in what they are experiencing and what should be done.

[Lord Kennedy of Southwark]

My Lords, these amendments concern mainly the consultation process and we support them. It is clear that the noble Lord, Lord Ahmad of Wimbledon, and his colleagues have listened to points raised by noble Lords at earlier stages of the Bill and we are grateful to them.

Amendments 9, 30, 40 and 68, proposed by the noble Baroness, Lady Randerson, and the noble Lord, Lord Bradshaw, would improve on the Government’s proposal, in that they would put “bus users” into the Bill. The Minister said that he was not prepared to accept the amendments, but I do not agree with him. The noble Baroness, Lady Randerson, correctly talked about the need for consistency in the proposed consultation and for bus users to be at the heart of it. I am sure that the Minister will explain further why he is not prepared to accept the amendments, but it would be quite simple to consult people—you could have adverts on the tops of buses, inside the buses and on the website, asking them to get back to you. That is how you consult bus users in addition to statutory organisations, and it would not be that difficult. Having bus users explicitly involved in the consultation process would be very welcome. I hope the Minister will set out further why he cannot accept the noble Lords’ amendments.

Having said that, I do not intend to delay the House further. We are genuinely grateful for the other amendments the Government have brought forward today.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords and in particular the noble Baroness for their amendments and contributions, and for their broad support for the government amendments. I assure noble Lords that the intent behind the government amendments, together with the guidance, is to put the customer, the passenger, at the heart of this Bill. We want that sentiment to be reflected in respect of all modes of transport. To provide perhaps further reassurance to noble Lords, I have made a note of the noble Baroness’s suggestions and will make sure that they are reflected in the further detailed guidance. The noble Lord, Lord Whitty, spoke of good practice on the part of some local authorities whereas others are perhaps not quite up to the mark. I hope that the Bill and the strengthened guidance, taking on board the comments I have heard during today’s short debate, will together ensure that passengers are truly at the heart of local bus services.

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[Lord Kennedy of Southwark]

My Lords, Amendment 3, moved by the noble Lord, Lord Bradshaw, has considerable merit and we on these Benches will support him if he wishes to test the opinion of the House. As we have heard in this short debate, the amendment seeks to enable the Secretary of State by order to confer powers upon a transport authority to enforce traffic offences where it has applied for them. The powers will enable authorities to deal more effectively with moving traffic offences, which in turn will help with reliability and punctuality issues for buses, as we have heard. It is not an automatic right: a case will have to be made for why the powers would be desirable in a particular area.

The Government should not in any way be concerned by this proposal as the power to grant, or not to grant, rests with the Secretary of State. The Local Government Association also has indicated its support for the amendment, although, as it points out, the Government already have the power to enable local authorities to enforce moving traffic offences. Ministers could announce from the Dispatch Box today that they will enable that power, which was referred to earlier. I will not detain the House any further on this but, for the benefit of the House, I state clearly again that if the noble Lord wishes to test the opinion of the House, we on these Benches will be with him in the Content Lobby.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have taken part in this debate on Amendment 3. In moving his amendment, the noble Lord, Lord Bradshaw, reiterated that it would give all areas where an advanced quality partnership scheme is in place the powers to enforce moving traffic offences. I agree with him that congestion can have a major impact on local bus services, as other noble Lords have said, but I would also stress that local authorities have many options to address it, from infrastructure measures and technological solutions to the enforcement of moving traffic offences in bus lanes.

For instance, local authorities can designate bus lanes to provide dedicated road space for buses, enabling them to bypass traffic queues. Buses can also be exempted from restrictions such as no-entry signs. This can allow buses to benefit from a shorter, more convenient route than other traffic, sometimes by bypassing locations where there are known congestion issues. These are exactly the sorts of measures that local authorities can bring to an advanced quality partnership as their side of the bargain. I also confirm that English local authorities outside London that can enforce parking violations already have the powers to enforce bus lane contraventions, including moving traffic violations in bus lanes. This means that over 90% of the 293 English local authorities outside London can already enforce bus lanes.

I recognise that the noble Lord’s amendment would broaden these powers further and allow the enforcement of moving traffic contraventions, such as at yellow box junctions. There are already provisions available, as noble Lords know, in Part 6 of the Traffic Management Act 2004 to permit enforcement of other moving traffic violations by English local authorities outside London. Although the Government have made no current decisions on whether to bring these powers forward, we discuss them regularly with the Local Government Association and other key organisations—as I am sure noble Lords recognise, since we have many a vice-chair of the LGA here. Given the existing powers available to local authorities and the existence of Part 6 of the Traffic Management Act, additional legislation in this context, particularly where it relates solely to the narrowest type of partnership, is not necessary.

A question was asked about why only franchised areas or mayoral combined authorities can get this power. First, the devolution orders for mayoral combined authorities provide a legal mechanism to grant these powers to enforce moving traffic offences to those authorities. The mechanism does not exist for all types of authority. I assure noble Lords that we will continue to consider the case to grant these powers to all local authorities. However, for the time being, I cannot accept this amendment. I hope my explanation and the reassurance I have provided will allow the noble Lord to withdraw his amendment.

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[Baroness Randerson]

My Lords, I very much welcome the fact that the Minister has taken on board the need for consultation with employees as well as with the passengers we referred to earlier. However, as the noble Lord, Lord Whitty, has just pointed out, the Bill is uneven from one part of it to another, and something taken for granted in one section is neglected in another. As I said in an earlier debate, it is as if the Bill had been written by several different people who had not got together to make sure that the same terminology was used from one part to another. We in our party—not a party run by the trade unions; far from it—believe in the trade unions. They are an important part of a stable industrial relations picture and it is important that they are referred to, where appropriate, in the Bill.

[Lord Kennedy of Southwark]

This group contains some very helpful government amendments following our deliberations in Committee and we are grateful to the Minister for putting them before us today. The Government have clearly listened to noble Lords on many of the points they made. I am particularly pleased with Amendments 11 and 36, where the Government responded to the eloquent points on national parks made by my noble friend Lord Judd in Committee. However, I support my noble friend Lord Whitty when he carefully set out the importance of a proper consultation with representative employees and trade unions and I am pleased that he has tabled his amendment today.

I was also pleased to see that the Passengers’ Council is included in the amendments before us. There are other important amendments here but when the noble Lord, Lord Ahmad, makes his contribution I would like him to explain how the government amendments cover the points made by my noble friend Lord Whitty in respect of his Amendment 35 and my Amendment 38 regarding consultation. I am, though, generally content with the thrust of the amendments that have come from the Government.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have participated in this short debate thus far. As they have acknowledged, in our constructive debates in Committee I talked of the importance of going back to look at consultation as far as franchising and partnership proposals are concerned. Noble Lords have already alluded to the amendments in my name which add the Passengers’ Council, the national parks authorities—on which I know the noble Lord, Lord Judd, was particularly focused—and the Broads Authority as statutory consultees in relation to partnership plan schemes and franchising schemes. It is also appropriate that representatives of employees of operators of local services in the area, or areas, to which the proposals relate should be consulted by the local authority on its franchising proposals.

The Passengers’ Council, which is the legal entity better known as Transport Focus, as noble Lords have said, has a duty to keep local bus services under review and to investigate such services if referred by passengers, passenger representative bodies or the Secretary of State. Adding them as a statutory consultee in relation to franchising and partnership consultation provisions in the Bill provides further demonstration of the Government’s commitment to ensuring the importance of consultation with passenger groups. I hope these amendments also address the concerns of the noble Lord, Lord Whitty, and that he will feel able not to press his Amendment 31.

On Second Reading and in Committee the noble Lord, Lord Judd, spoke passionately about the importance and value of our national parks. I appreciate the time that he took to come to see me with representatives to ensure that this important issue was also reflected in the amendments. I want to ensure that authorities that are considering implementing any of the new plans or schemes in the Bill will consult the relevant national park authority, or the Broads Authority, if they think that its area is to be affected. I also thank him for his Amendment 23, which would make national park authorities relevant authorities in proposed new Section 123B. This section deals with the business case and concerns primarily the authorities that will make a franchising scheme. As I said, although I take the role of the national parks seriously, I feel that it would not be appropriate to include them in this section. I hope that the noble Lord, Lord Judd, feels reassured by my earlier amendments and the amendments tabled by the Government and will not move his amendment.

I turn to Amendment 29. In response to the helpful words of the noble Lord, Lord Whitty, in Committee, I recognised that franchising proposals could have a material impact on employees in changes to service patterns and, potentially, operators of services. This amendment seeks to ensure that employees who may be affected in this way are consulted appropriately. It is similar in many ways to Amendments 32 and 35, tabled by the noble Lord, Lord Whitty, and to part of Amendment 38, tabled by the noble Lord, Lord Kennedy. I recognise that my approach perhaps does not go as far as Amendments 35 or 38 in defining exactly which employee groups an authority should consult—a point made by both noble Lords. I will tell them the reason why. We think that the franchising authority is best placed to determine precisely which organisations to consult, as is the case elsewhere in the Bill. I hope that that wider definition will allow them to reflect on this and that they will not press their amendments.

As we are debating consultation with employee representatives I should say that I see mandating this as a wholly appropriate measure under a franchising scenario that has significant impacts on employees. The Government do not believe that it is necessary when forming a partnership. I am therefore not in a position to support Amendments 9A and 10A, tabled by the noble Lord, Lord Whitty. Only in a very particular set of circumstances will an enhanced partnership lead to changes for employees that are similar to those arising from franchising, so it does not seem appropriate to mandate consultation, as the amendment tabled by the noble Lord, Lord Kennedy, would do.

Let me also briefly touch upon Amendments 57 and 59. They clarify which local authorities should be consulted when advanced ticketing schemes are made. At the same time, they add the national park authorities and the Broads Authority as statutory consultees. As I said earlier, consultation is important. As the Bill supports devolution principles, I believe that local authorities are best placed to set out how consultations should be conducted. They will know how long such a consultation should last to ensure that all those consulted have the ability to respond and what the best formats are for it in their area, addressing any specific needs which arise. Best practice guidance already exists for consultation and I encourage local authorities to take notice of it. I hope that the noble Lord, Lord Kennedy, will agree that Amendments 38 and 72 are therefore not necessary.

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[Baroness Randerson]

My Lords, the noble Earl is raising a legitimate concern but, as much of the Bill is in a skeleton form with guidance to follow, I would have expected the spoiling process that he is warning about to be addressed in those guidance notes.

I remain seriously concerned about the tone and content of the CMA letter about the Bill to the Department for Transport, to which I drew noble Lords’ attention in Committee. It sets what I regard as an impossibly high bar: franchising should be allowed only if it is the only way to improve services. That is effectively impossible to prove. It is reasonable to ask local authorities to demonstrate that franchising is designed to improve services or that services need improvement. However, it is not possible for them to prove that there is nothing else they could possibly do, other than franchising, that would provide that improvement.

The Department for Transport has responded to the CMA, saying that it accepts the recommendations of the CMA letter in full. I am anxious to hear from the Minister in some detail about what impact accepting the recommendations will have on the Bill and its subsequent guidance. The CMA view seems to run counter to the thrust of the core aspects of the Bill, rendering it in practice likely to become yet another overcomplex piece of legislation on buses—sadly, along with the two attempts made by the previous Labour Governments—to reverse the impact of deregulation. We support the Government’s intentions with the Bill and we think they are working very strongly on the right lines, but we are concerned that inadvertently, as a result of the CMA’s response, their approach might be undermined.

Our concern, expressed in these amendments, is that the CMA could be seen to be overpowerful in this context. Given that it is clearly at odds with the thinking of the Department for Transport in some respects, it is important that the CMA is not allowed to become judge and jury in these cases. If it is consulted beforehand, it should not be allowed to come back after decisions are made unless there are genuine causes for concern as to how the franchise is working.

[Lord Kennedy of Southwark]

My Lords, Amendments 12 and 13 bring back to your Lordships’ House an important issue that the noble Baroness, Lady Randerson, raised in Committee. I recall her bringing to the attention of the Committee a statement made by the CMA in July. Concern was expressed that, after being consulted, the CMA could come back again and again, which would deter a local authority from seeking arrangements, partnerships or franchises since it would view the arrangements as impossible hurdles to overcome.

The two amendments seek to set out some parameters for a CMA investigation in less than two years, and they arrive at a series of complaints or an adverse effect on competition. I think that is sensible, and I hope the Minister can address the issues raised by the amendments as it is important that we get the balance right here, rather than again making little progress, despite the Bill’s good intentions, due to other factors such as those highlighted in this short debate.

[Lord Ahmad of Wimbledon]

My Lords, I thank noble Lords for their contributions in this regard. The noble Lord, Lord Bradshaw, has proposed a number of amendments that aim to restrict the ability of the CMA to investigate franchising schemes for a period of two years unless it has received a complaint or it becomes aware of a significant adverse effect on competition. As noble Lords have already stated and will be aware, the CMA issued a letter on the Bill on 29 June that contained nine recommendations. Our response to those recommendations was issued on 10 October and is on the GOV.UK website. One of the recommendations was for the CMA to be listed as a statutory consultee in relation to consulting on franchising proposals. The Government have accepted that recommendation, so I am pleased to support Amendment 34.

I agreed that it would also be helpful for franchising authorities to work with the CMA as they develop their proposals. I am sure we are agreed that that should help to ensure that the CMA is made aware of the potential effects on competition and the benefits or impacts it could have on bus operators and local people. The CMA is responsible for conducting market studies and investigations in markets where there may be competition and consumer problems, and for investigating instances where there may be anti-competitive agreements or abuses of a dominant position. If an authority has consulted the CMA on its franchising proposals and taken account of any recommendations made by it, I do not believe that the CMA is likely to have further concerns.

I turn to a technical issue. Schedule 10 of the Transport Act 2000 does not give the CMA the power to investigate franchising schemes. If the authority had any concerns about the impact of the introduction of a franchising scheme, it would make its views known as part of the consultation and would have to consider whether it had any powers available to it under general competition law. Any restriction of powers available to the CMA would send the wrong message about the important role that it plays in protecting consumers.

The noble Baroness, Lady Randerson, raised the issue of the Government’s acceptance of the CMA’s recommendations, particularly regarding whether the LTA should assess or test partnerships before moving to franchising. I shall provide further detail at this juncture, if I may. Under the new Clause 123B of the Transport Act 2000 inserted by the Bill, authorities are already required to compare a franchising scheme to other options. These other options are highly likely to include partnerships and a do-nothing scenario, whatever the CMA has recommended. We have been clear in our response to the CMA’s recommendation that there will be circumstances where partnerships or the deregulated market simply cannot achieve the outcomes that elected politicians are working towards. A single fare structure across a wide geographical area and transport modes, as in London, is a good example of such an outcome. So we are not creating an overly high or impossible hurdle for franchising authorities or setting a particularly high bar.

I hope the assurances I have given have persuaded the noble Lord, Lord Bradshaw, that the CMA has an important role to play, as we all accept, and that local authorities should work with it as proposals are developed to ensure that local bus passengers get the best possible service. With those assurances, I hope the noble Lord is minded to withdraw his amendment.

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Moved by

[Lord Kennedy of Southwark]

14: Clause 4, page 14, leave out lines 36 and 37

[Lord Kennedy of Southwark]

My Lords, Amendment 14, in my name and that of my noble friend Lady Jones of Whitchurch, returns to a key part of the Bill raised both at Second Reading and in Committee. Under the Bill, only mayoral combined authorities can automatically opt for a franchise scheme if they believe that that is right for their area. All other categories of authority have to seek the permission of the Secretary of State to go down that route; that in turn would need to be approved by the affirmative procedure.

Our amendment, and Amendment 25 in the names of the noble Baroness, Lady Randerson, and the noble Lord, Lord Bradshaw, would put the whole question of franchising on a level playing field. We support the Bill in general, as I have said, and there are many good measures in it which we believe would improve bus services outside London. We have evidence that franchising works here in London and, where an authority thinks that that is the right model for it, we want it to be able to take it up, improving the number of passenger journeys and driving up standards.

With the change of government, I hope that there has been and continues to be a period of reflection on the whole question of mayors and the exclusivity of powers under the Bill that can come only when having a mayor. If an area wants a mayor, that is fine; if it does not, that is fine too. I hope that we can move away from effectively forcing authorities down a certain path if they want to have certain powers to a much more consensual approach, where it can be determined locally what is the best model for a locality and the full suite of powers be available, no matter what model is chosen.

Amendments 24, 26 and 27, also in my name in this group, are complementary, although in my opinion Amendment 25, in the name of the noble Baroness, Lady Randerson, works better. I beg to move.

[Lord Shipley]

I support this group of amendments. The issue is whether a distinction should be drawn between the powers of a mayoral combined authority and an ordinary combined authority, the difference between which is only whether an elected mayor chairs the authority’s meetings. A second issue is whether a distinction should be drawn between a mayoral combined authority and a county council or an integrated transport authority.

It is very difficult to see why the Government are drawing the distinction they are. It is also very difficult to see why other bodies with transport responsibilities are being excluded from an automatic right to propose a franchising scheme without the Secretary of State’s agreement. Devolution of power implies devolving that power and devolving responsibilities associated with it. I would be content with the right to propose franchises to be extended to authorities other than mayoral combined authorities.

My concern relates in part to a later amendment, Amendment 28, about the independence of the audit function. If we have a robust audit system in place to examine proposed franchising schemes, it is much easier to allow other authorities, beyond mayoral combined authorities, to propose the franchising route. If a local transport body feels that franchising is right for it, and if it is subject to that rigorous independent scrutiny, it should be allowed to proceed.

There is an issue about the future of elected mayors where some combined authorities have turned into mayoral combined authorities and others have not. There could well be a change of heart within the Government anyway about the application of elected mayors—whether they will be compulsory in areas with substantial devolved powers. We are writing now into legislation that the extra powers that go with the right to franchise can go only to mayoral combined authorities, when not all combined authorities may end up being mayoral.

I hope that the Minister will look carefully at this because there is a very strong case to extend the power to franchise to authorities other than just mayoral combined authorities.

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[Lord Ahmad of Wimbledon]

That is an important question. Parliamentary approval would be for the category, then it would subsequently be for the individual authority to apply to the Secretary of State and to ensure that it meets the criteria that I have illustrated. The noble Lord sought an important clarification and I trust that it is now clear.

I hope that in my detailed contribution, I have demonstrated to noble Lords that the Government’s approach to accessing franchising powers is sensible and practical, and that it ensures long-term investment decisions, putting passengers at the heart of those decisions and ensuring that they reflect the needs of passengers locally. It is, I believe, in the best interests of bus passengers, business, and employees in the sector.

I hope that noble Lords, including the noble Lord and noble Baroness who tabled these amendments, have been reassured by what I have outlined. I hope that what I promised in Committee about the criteria upon which the Secretary of State would make that decision and the sharing of that criteria has provided further reassurance.

I raise a final technicality: the noble Baroness, Lady Randerson, talked about grouping and treating these amendments as a package, but that is not how the Government view them. I hope, through the reassurances, clarity and extra information that I have provided between Committee stage and now—I am really pleased that the Bus Services Bill is attracting your Lordships’ interest and attention—that the noble Lord will be minded to withdraw his amendments.

[Lord Kennedy of Southwark]

My Lords, I thank the noble Lord for his response and all noble Lords who have spoken in this debate, which has gone on for a bit longer than I envisaged as well. I have to say that I am disappointed with the noble Lord’s response. He has been very accommodating through the whole passage of this Bill up to now; he and I have worked very well together, but I am disappointed.

I agree with many of the comments made around the House, particularly those of the noble Lord, Lord Horam. With all the doom and gloom about franchising, you would think that if it were that bad, the Government would be seeking to end it. This is more about an obsession with mayors. I hope that the Government will reflect on that and that some other point will deal with it. It is certainly wise to give powers to a wider group of authorities and I wish to test the opinion of the House.