Bus Services (No. 2) Bill [HL]

Lord Moylan Excerpts

Committee stage
Thursday 13th February 2025 Grand Committee

[Baroness Pinnock (LD)]

As far as I have heard on this third day in Committee and at Second Reading, there has been a majority consensus for the Government’s proposals. What we are trying to do is to draw out those issues that we hope the Government will be able to address. One, as we have heard this afternoon, is rural bus services—and, indeed, access for island services. Equally, we understand that that will probably mean more funding. We had a debate on that on an earlier day in Committee. This is not about criticism or blame; it is about pulling out the issues.

[Lord Moylan (Con)]

I wonder if I could interrupt the noble Baroness to say that I hope that she realises that this Bill does not give the Government powers to run bus services. The whole point of this Bill is to give powers to local government to run bus services. When she says, “We want the Government to address these issues”, it is unclear to me to what she is referring. If she says that she wants the Government to provide funding to address these issues, that is fine, but if the funding is to be specific and hypothecated to particular purposes—say, to the crossing of bodies of water or certain rural services—then what is the point of giving the powers to local government? They should be making those decisions, wherever the funding comes from. I find the Liberal Democrat position on these provisions very difficult to follow.

[Lord Snape (Lab)]

I am not sure who is giving way to whom at the present time. I will come to the noble Lord, Lord Moylan, in a moment or two, because I would be fascinated to hear his summing up of this matter—I wait with bated breath. Having gorged on those subsidies when he worked for TfL, while his party denuded the rest of the country of bus services, his response will be absolutely fascinating.

I ask the noble Baroness—I hope without causing too much offence—that if these proposals are to be properly implemented, who will provide the finance? It has to be either local or central government. The reality of these matters is that, in the short term, there will not be a massive improvement in rural bus services once this Bill becomes law. I only wish that the opposite were true. Perhaps my noble friend the Minister can reassure me that it will be true. However, until we know exactly how funds will be allocated and how great those funds are, I must say to the noble Baroness, Lady Pidgeon, that, as ably as she moved this amendment, it is, as far as I can see, rather typical of the Liberal Democrats—all motherhood and apple pie.

[Lord Burns (CB)]

My Lords, I mentioned at Second Reading that I had been chairman of the North Wales Transport Commission in 2023-24. I spent a lot of time in north Wales looking at the performance of the bus services there. I am wholly persuaded of the merits of a franchising system in rural areas as well as in more urban areas, because we all know the problems that the existing system has created. However, I should point out—this follows the previous intervention—that doing this work and deciding which routes need to be run and where people wish to go is a time-consuming business. It will take a significant period to monitor where the car journeys are presently being taken and what kind of network is best going to meet the needs of people. I find the notion that there should be review of this within six months or even two years very ambitious, because in the work that I was engaged in it was time-consuming to get anywhere near a feel of how to create an integrated network rather than just a set of buses that were serving individual parts of the of the area.

[Lord Moylan (Con)]

My Lords I am grateful to everyone who has spoken in this debate. We on our side are supportive of the importance of taking into account the needs of people dwelling in rural areas. Indeed, we have our own amendment to a very similar effect in a later group, which could have been disposed of here. Our proposal to the Liberal Democrats was that it be wrapped up with their proposals, but that was rejected, so now it is going to be debated as a separate group, somewhat repetitiously, towards the end of the list. So we generally support this.

A lot of what I wanted to say has been anticipated. I know that he does not like the fact that he and I agree on quite a lot of things, but the noble Lord, Lord Snape, has brought a dose of sensible realism to the debate, for the first time, perhaps, in our Committee. He was supported in that endeavour by the noble Lord, Lord Burns, with his practical knowledge of having examined the bus routes, the lack of bus routes and the potential bus routes in north Wales.

The noble Baroness, Lady Pinnock, said that this Bill will transform bus services. As shorthand for an aspiration, that is fair enough, but the Bill in itself is not going to transform bus services at all, although that might be the aim. What it is going to do is transform the governance of bus services in two ways, both of them subject to the provision of very large amounts of money, which can come only from central Government and which is not apparent at the moment, although we are all aware that a spending review is in hand. Who knows what will happen? You stick in your thumb and pull out a plum. Who knows what is going to arrive for bus services or rural bus services when the Chancellor has completed her work? At the moment, we cannot say. We can say only that a large amount of money will be needed.

The two respects in which the governance will be changed to which I wish to draw attention are, first, that operational decisions about the running of buses are going to be transferred fundamentally from managers of bus service companies, who have a great deal of experience, to committees of councillors with very much less experience. They will take advice, no doubt, and the Government have said that they are going to offer them the advice of the Bus Centre of Excellence to do the sorts of things that the noble Lord, Lord Burns, referred to. They include, particularly, route planning, but these councillors will also be responsible for fare setting, and fares and ticketing is a great skill and art. We might all think that it is terribly easy to decide on a bus fare, but the whole business of fares and ticketing is a professional and skilled business. There is a great deal that they are going to have to do which they will now be responsible for, which previously they were not, with very little skills support because the Bus Centre of Excellence is a relatively small operation.

The other way in which the governance is going to be transformed—and this is what relates to my three amendments in this group, which I will dispose of briefly in a moment—is that for the first time, effectively, the Secretary of State is going to be issuing guidance that will shape the provision of bus services in a way that simply is not the case when bus services are provided privately. As far as I am aware, that is not the case in Manchester, let us say, where there is no great guidance coming from the Government. Manchester has adopted franchising powers already. But there will be guidance and the local transport authorities, in providing bus services, are going to be subject to it.

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[Lord Snape (Lab)]

My Lords, I do not think I will offend too many people if I say that no one could object to this amendment. Fares play an important role, but I do not think we should overemphasise the role they play. Travel West Midlands, a company with which I was involved for some years, did regular passenger surveys—largely a tick-box exercise, for obvious reasons, handed out by the driver or staff at bus stops. Funnily enough, fares never topped the list of complaints; reliability, congestion and safety all came before fares for passengers in the West Midlands. That is not to play down the impact of fares on passenger carrying, but it should be kept in perspective.

As for the contribution from the noble Earl, Lord Effingham, I kept count at Second Reading, and that is 11 different reviews, reports and committees that the Conservative Party has so far advanced in the debates on this legislation. I hope that management time—or ministerial time, for that matter—can perhaps concentrate more on running effective services and less on producing reports to the demand of the Conservative Party, largely about matters that its period in office considerably worsened for the bus industry.

[Lord Moylan (Con)]

My Lords, I am again very grateful to all noble Lords who spoke. I am surprised that I have to help the noble Lord, Lord Snape, understand that very frequently in Committee, as a way in which to provoke some sort of debate or to probe the Government’s intentions, it might be appropriate to ask for a report without necessarily wanting to amend the Bill in that direction when we come to Report—ill named, perhaps. I am sure he realises that his jibe against the Conservative Party has fallen flat.

I was rather pleased to hear the noble Baroness, Lady Pidgeon, say that she would welcome opening things up to the private sector to develop interesting, innovative and technological apps and ways of paying. I think that is the first thing we have heard said in favour of the private sector in Committee so far.

The noble Baroness, Lady Jones of Moulsecoomb, and, in a sense, the noble Lord, Lord Snape—what he was saying was to some extent a response to what the noble Baroness had been saying—bring us to the heart of a debate that most politicians try to run away from: how bus services and other public transport are to be paid for. What is the role of fares in paying for them?

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[Lord Hendy of Richmond Hill (Lab)]

My Lords, Amendment 51 tabled by the noble Baroness, Lady Pidgeon, would require local transport authorities to review the impact of bus fares on patronage. Where a local transport authority has delivered fare interventions to encourage patronage, such as Cornwall’s bus fares pilot and the West Yorkshire Combined Authority Mayor’s fare intervention, they have already commissioned independent evaluation reports to measure their success. Bus service improvement plans already in place also include measures addressing bus fares to encourage greater use of buses. We must recognise that changes to fares are usually delivered at the same time as other transport interventions that support and improve bus services. It would therefore be challenging to attribute any change in patronage solely to a change in the fare charged to passengers.

Your Lordships will have noted that the Government are in the process of negotiating the outcomes for which local transport authorities will be held accountable in respect of buses, as part of their recent respective comprehensive funding settlements. In addition to outcome monitoring at a local level, we will continue to monitor fare impacts at a national level to inform future fare cap decisions.

In passing, I note the noble Baroness’s observations about whether Shropshire adopted the £2 fare cap. I am informed that all except six bus services in Shropshire were covered, although I would not say that the bus network in Shropshire was either adequate or satisfactory. One of the effects of the Bill, when it becomes an Act, will be to enable local transport authorities to do better by the various means embraced within it. I therefore submit that the amendment from the noble Baroness, Lady Pidgeon, is unnecessary because of the actions already taking place.

I thank the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, for Amendment 63, which seeks to examine the impact of ending the £2 national bus fare cap. The department has prepared a full monitoring and evaluation report of the £2 national bus fare cap, which has just been published. The report is available to read and I will make sure that noble Lords present have the link to it. It suggests that urban populations are more likely to have used the scheme, where of course journeys are shorter and fares are more likely to be £2 or less. In fact, the average fare payable on buses prior to the scheme’s introduction was between £2 and £3. The Government’s adoption of a £3 cap, and the added safeguard of increases above £2 being limited to the rate of inflation, do a great deal, at the cost of £150 million, to continue to ensure that millions can access better opportunities and get greater bus use.

[Lord Moylan (Con)]

A study of the effect of the £2 bus cap would be very valuable—let us remember that the noble Baroness, Lady Jones of Moulsecoomb, said that in her rural part of Dorset it was transformative; I think that was the word she used about it having a significant effect in that part of the world—and we look forward to reading it. But my noble friend Lord Effingham was also asking for a study of what the effect of increasing it would be when that is introduced, which would be equally valuable and show the other part of the equation, if noble Lords see what I mean. I press the Minister because I do not want him to miss the point inadvertently. Is a similar study of the effect of increasing the cap to £3 after an appropriate period—six months or a year—something to which he can commit himself today to illuminate that picture for us?

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for that. I will certainly think about whether, and at what stage, the department would look at that further. I am certainly not going to commit to it today, because we are looking at wide-ranging legislation about bus services in general, but I wanted to inform the Committee that the work on the £2 bus fare cap is now published.

Amendments 74 and 80 from the noble Baroness, Lady Pidgeon, also concern the £2 bus fare cap, which I have just addressed. They are clearly intended to seek its reintroduction. Bearing in mind what the average bus fare is, that the Government are proposing to continue with a £3 cap and that fares between £2 and £3 will go up only by the rate of inflation, I hope she will agree that those amendments are unnecessary. However, the noble Baroness referred to the wider retailing of bus tickets, which is obviously a good idea; from time to time, I find myself agreeing with the noble Lord, Lord Moylan. Access to bus services should be widely available, and not understanding the fare structure or being able to buy a bus ticket are the worst reasons for not using the service.

In my view, and in the Government’s view, the provisions in this Bill that allow local transport authorities a choice of enhanced partnerships or franchising, or even their own bus companies, will enable local transport authorities to look at wider retailing. Of course, the ultimate aim is not to sell bus tickets at all but for people to use credit cards or bank cards directly as means of payment. We want the bus industry and bus services to move towards that, and I believe that this Bill will facilitate it.

Amendment 77 in the name of the noble Baroness, Lady Jones, looks for a review of the English national concessionary travel scheme. The Government want everybody who needs it to have access to public transport and are committed to improving the system. The English national concessionary travel scheme costs about £700 million annually, and any changes to the statutory obligations, such as the hours in which the pass can be used being extended, would need to be carefully considered. As I said to the noble Lord, Lord Moylan, on a previous occasion in the Chamber, the Government are not considering changes to the scheme at the moment.

However, local authorities in England already have the power to offer concessions in addition to their statutory obligations. We see this in London, where individuals aged 60 and over are eligible for the 60+ Oyster card, and similar schemes already exist in other parts of the country, where local authorities have chosen to provide specific support to their communities through offers that go beyond their statutory obligation. That ability for local transport authorities will continue, and no part of this Bill will restrict it. A review into the English national concessionary travel scheme concluded in 2024, and my department is currently considering the next steps.

Amendment 79 in the name of the noble Baroness, Lady Jones, would require the Secretary of State to review the impact of making buses free for children. The Government remain committed to exploring targeted solutions that deliver value for money to taxpayers while ensuring affordable bus travel for those who need it most, particularly young people. Bus operators can choose to offer concessions to children and young people. In fact, youth concessions are currently offered by at least one commercial bus operator in 73 out of the 85 local authority areas in England outside London. Local authorities also have powers to introduce concessions or discounts for young people. Since buses are local and the Government are committed to devolution, that is where we believe that such choices should be made in respect of free and reduced-rate travel for children.

Finally, I note the observations by the noble Lord, Lord Moylan, about demanding or wanting reports following my noble friend Lord Snape’s helpful intervention. This Bill has been carefully thought through. The first requirement when it becomes an Act of Parliament will be that it works for local authorities, communities and bus passengers. No doubt there will be reports in due course but, frankly, I am not looking for any of them to be carried out now or in the immediate future because, as my noble friend observed, our efforts ought to be concentrated on running the bus service better rather than writing reports about why it does not work.

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[Baroness Pidgeon (LD)]

This group of amendments is really important, because training is an essential part of this new move to different models for providing bus services across the country. I particularly wanted to highlight the important amendment from my noble friend Lady Pinnock, because local transport authorities will be taking on significant new powers. We must not underestimate that, and it will be vital that their staff, stakeholders and members who sit on the authorities have a comprehensive training package, so they understand the legislation, framework and landscape—and accessibility and what that truly means, as the noble Baroness, Lady Grey-Thompson, rightly highlighted. I liken this to thinking about planning and licensing requirements and what has transformed local government over the last couple of decades in terms of training and the quality of decision-making in that space: we need to look at this in a similar way. I really hope the Minister will respond positively to these amendments.

[Lord Moylan (Con)]

My Lords, I am grateful to those who have spoken in this short debate. I have great sympathy with what the noble Baroness, Lady Grey-Thompson, said, as she knows. We will support her in her continuing campaign, and that of the noble Baroness, Lady Brinton, and my noble friend Lord Holmes of Richmond, to put the case on behalf of disabled people for proper consideration in relation to public transport services.

I was mildly tickled by the proposal from the noble Baroness, Lady Pinnock. One of my deep concerns, which I have tried to express in as gentle a way as possible throughout this Committee, has been the adequacy and competence of local councillors to take on the role envisaged for them by this Bill. I had not imagined that a vice-chairman of the LGA should give such ringing endorsement to my concerns, to the point where she actually said that training should be mandated by statute for those who will take part in making those decisions. We are at one on this in our concern.

None the less, I am not entirely sure—here I suspect that I will sound a bit like the Minister, and I speak as a former local councillor—that the idea of a statutory training programme in this area would be appropriate. There is a false analogy with training for the exercise of planning and licensing functions, because those are almost invariably what are referred to as quasi-judicial functions that relate to individuals making applications relating to their property, business, premises or whatever. They need to be taken in an appropriate legal framework, rather than a political framework. It is appropriate that councillors are given training in that legal background where they are called on to make those decisions.

The sort of decisions that will be made here are not in that category, so I wonder whether this approach is necessary. In fact, even it were appropriate to have statutory training, I would not have training on the provisions of this Bill, which is what the amendment calls for but, rather, training of the sort that perhaps the noble Lord, Lord Snape, could provide: training in how to run a bus company and make the hard, crunchy decisions that you will be confronted with about how to manage your resources in a way that maximises your revenue while allowing you to provide as many, but not necessarily all, of the socially important services that you would like to provide. Those are the hard, crunchy things that people will need to be trained in, rather than understanding the legal background provided by this Bill.

In a way, I am delighted to find myself holding hands with the noble Baroness, Lady Pinnock, on this topic, but I am not sure that I can support her on the wording of this amendment.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I will address Amendments 54 and 55 together. I listened carefully, as I hope that I always do, to the noble Baroness, Lady Grey-Thompson, who talked about her real experience of travelling by bus. Anything less than 100% accessibility is unacceptable, and I completely agree with her.

The Government are determined that power over local bus services is put back in the hands of local leaders across England. That is why the department recently allocated over £700 million of bus grant for local transport authorities in 2025-26 by formula. Funding for bus services is also provided through the local government finance settlement. In fact, specifically, the 2025-26 funding included money for additional officer capability, for either additional officers or help equivalent to additional officers, to help each local transport authority in the choices that this Bill will give them.

The Government have also established the Bus Centre of Excellence, which I am sure we will continue to return to. Work is also under way to provide even more active support to local transport authorities that wish to explore franchising. I take this opportunity to make noble Lords aware of the Government’s plans to pilot different franchising models particularly suited to more rural areas. This funding, along with potential local transport authority bus funding in future financial years, is available to support implementation of the Bill’s measures.

It is, of course, wholly reasonable to expect the people who deliver policies and support services that help disabled people to understand their legal rights, needs and expectations. This afternoon, we will come on to the primary training needs of bus drivers, who are the visible front line of the bus service. The Government are clearly committed to helping authorities deliver the service improvements that we all want to see, whether it is through tailored assistance, the additional funding to which I have referred or the Bus Centre of Excellence.

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[Lord Moylan (Con)]

My Lords, with his amendments, the noble Lord, Lord Hampton, has opened up one of the most important and least discussed areas to do with bus operations in a way that presents many of us who have experience of responsibility, one way or another, for bus services—in my case, a non-executive responsibility for a number of years—with real challenges and difficulty. The question we must ask ourselves is whether bus operators have the right mentality about safety. I say that in the light of what has been achieved in the construction industry, for example, over the past 20 years, where a focus on zero accidents and injuries has transformed the way of working. Of course, zero is never quite achieved, but very close to zero is now achieved on construction sites. A deliberate programme and a deliberate change in mentality has brought that about. On the railways, there is a strong focus on that mentality, and I wonder whether it exists on the buses: are we, in fact, way out of date in our attitudes towards safety?

I want to mention that I have just become an officer of the newly reconstituted APPG on Women in Transport. The relevance is that many of these issues to do with safety are women’s issues. There is the obvious question of violence against women and girls on buses; the APPG will look at that, but there is the broader issue of safety in general. I do not have up-to-date statistics, but it used to be the case, admittedly some years ago, that a very large percentage of women over the age of 65 presenting at A&E were there because they had suffered an injury inside a bus—not from a bus collision but inside a bus, very often because of aggressive or inappropriate braking on modern buses, which have very sharp brakes. The safety regulators, of course, think, “Yes, we must have the sharpest and most modern brakes, just as for a motor car”, but in a motor car you are sitting down and strapped in, whereas on a bus you are frequently standing up, because buses are designed to carry standing passengers. Sharp braking results in people falling over. Very often, proportionally, it is elderly women who are falling over and being injured. Do we take proper account of that? Are we recording it? Are we thinking actively about what we should do about it? The situation has not improved in the 20 years or so that I have been making this point about elderly women inside buses.

Then there is the question, which is very pertinent to the Bill, of the way in which franchise contracts operate. My experience is somewhat out of date, but it is a London-based experience where franchising is used, and to some extent the London model is the basis for the Bill and is being rolled out elsewhere. The emphasis in the contracts is on keeping to the timetable, and that is very difficult in urban areas because of congestion and unpredictable events, including roadworks and so forth. Very often, drivers are under pressure—they have a clock and are in direct communication with their control—to make up time because gaps in the service have arisen, and they can do that only by going faster and braking more sharply. Quite apart from the potential effects on passengers inside the bus, which I have already mentioned, the risk of knocking into something, often with very serious effect if that something happens to be a human body walking in the street, is increased.

We are all here saying how wonderful it is—not all of us are saying it with the same level of enthusiasm, admittedly, but there are people in the Room saying how wonderful it is—that we are extending a franchise model, but the structure of the contract on which those franchises will be based needs to be looked at carefully in the light of safety considerations. We should all be very grateful to the noble Lord, Lord Hampton, for bringing up this issue.

In relation to Amendment 60, I am not persuaded that we should have a new and separate statutory provision about working time in the Bill, when we already have quite extensive and elaborate working time legislation elsewhere. There is a lot to be said in favour of Amendments 58 and 59. I have a suspicion that they will reappear on Report; if they do, they will deserve very serious consideration indeed.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord, Lord Hampton, and the noble Baronesses, Lady Jones of Moulsecoomb and Lady Pidgeon, for Amendment 58. It seeks to require local authorities to ensure that bus operators provide their drivers with access to the Confidential Incident Reporting and Analysis System, which I will refer to as CIRAS.

The Government are always concerned, as they should be, about any safety incidents in the bus sector, or indeed any other public transport sector. That is why a number of official routes exist to allow anyone to provide confidential, anonymous reporting on safety and standards in the sector, backed up by enforcement. Anyone may anonymously report a lack of safety or conformation to standards in the bus sector to the DVSA intelligence unit, which may use this information to investigate the situation, including by working with other government departments and agencies, as well as police forces.

Comprehensive standards bridge all aspects of bus operation, across the roadworthiness of vehicles, operation of services and driver standards. As I said, they are enforced by a number of organisations, principally the DVSA. The operators of the vehicles are licensed by the traffic commissioners, who consider non-compliance issues seriously and ensure that operators are effectively regulated. The judicial process of the traffic commissioners can and does result in depriving people of operators’ licences and depriving managers of their certificate to run bus operations.

CIRAS provides another route for employees to report concerns. Both Transport for London and Transport for Greater Manchester are members of CIRAS. Being able to report such concerns in a confidential manner is clearly important, and I would encourage employees of member organisations to consider using this service where appropriate. But CIRAS is a third-party service, and it would not be appropriate to include it within the scope of the Bill.

However, I did a bit of personal research on this, and I will say that if we are asking people to report bus safety issues to the DVSA intelligence unit, it would make a lot of sense for access to it to be freely available. When I looked at it, it was quite difficult to find, which is really unhelpful, so I commit that we will see what needs to be done to make sure that the route to report directly to the government agency responsible for safety on buses is as efficient and easy as possible.

I thank the noble Lord, Lord Hampton, and the noble Baroness, Lady Jones of Moulsecoomb, for bringing forward Amendment 59. Road safety is a priority for the Government, of course, and we expect bus operators, as I hope I have just said, to adhere to the highest standards of safety. Buses are one of the safest modes of road transport in Great Britain, and my department remains committed to improving safety with appropriate vehicle construction standards and ensuring the safe operation of vehicles. As we have heard, franchising authorities report safety in detail, and I expect that a consequence of this Bill, as it enables other franchising authorities to be established, will be to enable them to report safety in a similar way to how London and Manchester already do. In effect, the franchising authority is taking responsibility for procuring and delivering a bus service.

In respect of operations that are not part of franchise bus services, we have heard this afternoon that this is carried out through the STATS19 framework, which relies on reports from the police. These reports are based on locations identified by geographical co-ordinates. This is a role that cannot be delegated to local transport authorities and ought to stay with the Driver & Vehicle Standards Agency because it relates to PSV operator licensing requirements. However, I note the remarks of the noble Lord, Lord Hampton, in respect of accidents away from public roads, which I will go away and have a close look at. I am not familiar with that nuance, but it is clearly important. Trying to divide any sorts of accidents into fault and no fault is fraught with difficulty. In fact, it must be subjective, and therefore I am not sure that we would want to go down that road. I understand his point about recording accidents on public service vehicles wherever they occur, and I will go away and see what can be done about that.

Amendment 60 from the noble Lord, Lord Hampton, seeks to change long-established rules about daily driving time on regular bus services. There are two sorts of driving time rules: one for services that do not go beyond 50 kilometres and one for services that do. These daily limits are well and long established, and I think the gist of my conversation with the noble Lord was that he was looking for an ability for people to report scheduling requirements on bus drivers that make drivers feel that they are not safe. That is a matter that could well be drawn to the attention of the DVSA because it goes to the heart of the repute of the operator. I understand that there may well be drivers who feel that what they are being asked to do is potentially or actually unsafe. That goes back to the process that I have referred to and the ability to report it to either CIRAS, if the people responsible for the operation are members of it, or the DVSA if they are not. I note what he said about this amendment seeking to draw to our attention this important matter.

The noble Lords, Lord Hampton and Lord Moylan, talked about the timetable. No bus timetable in Britain should have any requirement for people to drive unsafely or exceed the speed limit. As a seasoned operator with some background in this, I say to them that very often, certainly in urban areas, what you are in fact looking for is not the timetable to be operated but the reliability of the bus service to be as good as it can be. My experience is that drivers should not feel under pressure to return to the timetable. In many cases, any substantial delay makes that impossible. The training given to bus drivers is about driving safely, having absolute regard to the safety of passengers and, in practice, maintaining the regularity of the service rather than the timetable.

If there are cases where drivers feel that they are being asked to drive unsafely, either by schedule or in practice, it is the reporting mechanism that we need to address because there are people trained in this stuff who can address those issues.

[Lord Moylan (Con)]

With the Minister’s permission, I do not think that we are disagreeing and, therefore, I do not think that what he just said about timetables is quite the answer to my point. It may be my fault for expressing it in the way I did. I am sure that I talked about adhering to the timetable—I will look back at it—but he has cast it differently. He said that reliability—that is, the frequency between buses arriving—is what operators seek to maintain, but that is precisely what can lead to the sort of pressure on drivers where a controller says, “Hurry up because the gap between you and the bus ahead has got too large”. That is really what I was talking about and what I meant to express, although I used the language of timetabling.

The key question that the Minister will need to address is to what extent does the contract reward that behaviour? To what extent is reliability rewarded in the contract? In many cases, companies and people behave according to financial incentives. If your narrow margins as a bus operator or a franchise depend on maintaining certain levels of reliability and certain gaps between buses along the service, that is what you will be pushing your staff to do. It comes back to this question of what the contract says and what it rewards.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his intervention. Before I got to the railway, I spent most of my adult life trying to encourage people who control bus services not to rely on the timetable but to adhere to a regular frequency. Of course, the truth is that in most urban areas, once you have lost time, the chances of ever regaining it are, frankly, pretty small, and they are even smaller with the increasing use of speed limits of 20 miles per hour. I take the noble Lord’s point but, in the end, this is about people either being required to drive unsafely or believing that they are required to do so. It is certainly possible, and I have seen it done to encourage people to attempt to make time up but, in my experience over the 50 years I have been driving buses—now and again, more recently—it is very difficult to do so.

Let us go back to the safety aspect of this. Where the noble Lord, Lord Hampton, is going rightly concerns finding a way for bus drivers to express that they are being either expected to drive unsafely or encouraged to do it. I take his point about that very clearly. As I said before, there are all these requirements on franchised authorities, which will report on safety because they are procuring the service. CIRAS is available, where people have chosen to join that third-party organisation, but, where they have not done so, it is about making the route to complaining clearer and more available. I very much hope that that answers the noble Lord’s points. I will leave it there.

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[The Earl of Effingham (Con)]

My Lords, I rise to speak to Amendment 64 in my name. This amendment places a responsibility on local transport authorities to ensure that bus services remain accessible, not just through affordability but through the diversity of payment methods available. The reality is that different passengers have different preferences on how they want to pay. If we take rural areas, for example, we know that public transport services are often limited in these regions, and buses may be the only form of transport available. For many elderly residents in rural areas, cash is their preferred method of payment. If we remove cash payment options from bus services, we could unintentionally exclude a significant portion of the population, especially in rural and isolated areas where public transport is already sparse. This would not just inconvenience elderly passengers but severely restrict their ability to access essential services such as medical appointments, local shops and social support in the community. For these passengers, financial inclusion is about the ability to pay for their travel in a way that works for them. This amendment is not about one-size-fits-all solutions; it is about recognising that different passengers need different options. The elderly, the digitally excluded and those on lower incomes should be catered for in our transport policies. By ensuring that cash payments remain an option and that services remain affordable for all, we are creating a system that truly works for everyone, not just those who have the latest technology. I beg to move.

[Lord Moylan (Con)]

My Lords, I rise to speak to my Amendments 71 and 72 in this group, with a slightly different angle on this interesting topic of payment, which has been raised by my noble friend Lord Effingham. Normally, I like to give the Government a good roasting, criticise them and explain why it is that I am so much further ahead in my ideas than they are. On this occasion, since I have tabled these amendments and made further inquiries, I am glad to say that this will be an easy ride for the Government because they are doing quite a lot on this already and things are going generally in the right direction.

My first amendment relates to the payment by concessionary fare holders, and the second relates to contactless payment. The two may seem to be roughly the same, but they are very distinct. Contactless payment using a bank card, debit card or credit card cannot be used by those who have concessionary rights to travel on the buses because, obviously, if you are going to use a card, that right has to be evidenced by some identifier.

Let me give an example: those who have a national bus pass will have a photo card of a distinctive style, with an English rose on it; I remember that that was an important feature when it was designed. It is a card of a distinctive style with your face on it, and you need it in order to demonstrate your right both to the bus driver, who probably takes no notice of what is on the card, and, certainly, to a revenue protection officer were they to board the bus and check. This cannot be done with a bank card. One therefore needs two types of technology involved, which I want to deal with separately.

In London, the system that was developed for concessionary fare holders was originally the system used for all contactless payment. This was the Oyster card technology, which is still used for concessionary card holders. That includes not just the elderly—the national bus pass people—but also those with freedom passes and young people who have free travel as well. That technology is used.

However, when the national bus pass was introduced—by Gordon Brown’s Government, as I recall—that technology was not used and the DfT preferred its own technology, which goes under the name of ITSO. TfL regarded it as rather clunky, but the fact is that TfL then had to fit all of its bus card readers with equipment that could read two separate technologies in order to read what is going on. This was a very foolish way of going about things. The purpose of Amendment 71 is to suggest that, as this matter develops, there should be a single system that is applicable to concessionary card holders.

Amendment 72 relates to contactless payment. Contactless payment is widely used in London and was promoted by TfL in collaboration with the banks. In fact, it is quite likely that the banks would never have taken the risk of introducing contactless payment into the country if it had not been for TfL turning up and saying, “We have 4 million transactions a day; if we were to get together, maybe we could make contactless work. It will de-risk it for the banks, to some extent, and will give us something even cheaper than the Oyster card system”. I mentioned it being cheaper.

We should bear in mind that the driver of this, from the bus operators’ perspective, is the cost of collection. The point I would make—I would never disagree with what my noble friend Lord Effingham says—is that inclusion is very important, but one has to remember that cash is expensive to collect. It is much less for electronic payments. Of course, you have to pay the banks, but TfL was quite lucky because it had a proposition for the banks, which meant, I think, that it could negotiate a very good deal with them in terms of what it paid per transaction. Certainly, it is much less than the cost of cash collection, or even of Oyster card operation. If you are an ordinary passenger on TfL services nowadays—not a concessionary fare holder—you must notice that all the advertising encourages you to use contactless and not to get an Oyster card at all. That is the direction in which everything is going.

Outside London, however, contactless payment is still rare. The reasons for this are partly that the different bus companies all have different back offices, and the system needs to work in such a way that it will work with all the different back offices. I am perhaps pre-empting what the Minister will say, but I am delighted to be able to say that I have had some very interesting and valuable conversations with Midlands Connect, which is the non-statutory transport body for the West Midlands and the east Midlands. On behalf of the Government, it is carrying out work to develop a system that would work with all the different back offices of the various different bus companies so that it is possible that, over time, we could have contactless payment on buses throughout the rest of the country. That would be very welcome. It would be useful if the Minister could say in his reply what the timetable for that is; how much resource the Government are putting into it; what level of priority they regard it as having; and how they will now work with the multiple LTAs up and down the country, which will be running the buses, to make sure that this is adopted in a coherent way.

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[Baroness Pidgeon (LD)]

The noble Earl, Lord Effingham, has raised some serious concerns and this group of amendments picks up a point raised at Second Reading by my noble friend Lady Harris of Richmond. She described the ongoing situation with school bus services and pupils with special educational needs in North Yorkshire, and the terrible impact it is having on families and children. It is vital that bus services support children attending school and college, whether within their local authority area or further away, which is often the case with specialist education provision. This is an area of much concern. I hope the Minister is able to provide some assurance in response to this group of amendments.

[Lord Moylan (Con)]

My Lords, I heartily endorse the comments made by my noble friend Lord Effingham and the support given by the noble Baroness, Lady Pidgeon. To be crystal clear, the fundamental issue is not the increase in national insurance rates as such, but the reduction in the threshold at which national insurance becomes payable.

Many of the people who drive special educational needs buses are part-time semi-volunteers. They may be working a few hours in the morning and a few hours in the afternoon, and their overall salary, as things currently stand, brings them in below the level at which national insurance contributions are payable. That is approximately £10,000 a year; I am using a very rough figure there, as I do not have the actual figures at hand. The Government’s proposal is a reduction to £5,000 a year of the point at which national insurance contributions become payable—again, an approximate figure. It is that reduction which brings these people within scope of national insurance contributions, which is potentially fatal to the operation of many of these services. They will simply not continue. The best that can be hoped for would be a more expensive service, after a lengthy period of retendering and disruption, in which maybe the same or maybe different operators are providing a more expensive service to the local education authority in many cases.

Separately, there is also the question of private schools and putting VAT on the bus services they provide, which would be bizarre because no other form of transport is subject to VAT, as far as I am aware. It is one of the consequences of the Government’s vindictive action against private schools. But the SEND issue is not simply about private schools; it is about the whole range of schools, and it is crucial that it is resolved soon.

[Lord Hendy of Richmond Hill (Lab)]

Before I address the amendments in this group in turn, I wish to say that I am grateful to the noble Lord, Lord Moylan, the noble Earl, Lord Effingham, and the noble Baronesses, Lady Pidgeon and Lady Harris of Richmond—who raised her concerns at Second Reading—for raising the importance of home-to-school travel for children with special educational needs. Although this is not directly within my department, my officials continue to work with the Department for Education to understand the issues and how they are best addressed. No child should struggle to get to school because of a lack of suitable transport.

Your Lordships may already be aware that the Government are clear that the system for educating children with special educational needs and disability—SEND—requires reform. The Department for Education will work with families, schools, local authorities and other partners to deliver improvements so that children and young people can access the support that they deserve. It acknowledges that challenges in the SEND system extend to the arrangements for home-to-school travel and has committed to ensuring that more children can receive the support they need in a local mainstream school. This will mean fewer children needing to rely on long and complex journeys to access education.

Turning to Amendment 65, home-to-school transport is the responsibility of local authorities with education functions, not local transport authorities. For example, Transport for Greater Manchester is the local transport authority for the Greater Manchester region but responsibility for home-to-school travel rests with the 10 local councils within the region. The Education Act 1996 places a statutory duty on local authorities to arrange free home-to-school travel for eligible children. A child is eligible if they are of compulsory school age, attend their nearest suitable school and would not be able to walk there because of the distance, their special educational needs, a disability, a mobility problem, or because the route is not safe.

It is for local authorities to decide what travel arrangements they make for eligible children. For example, they might provide them with a pass for free travel on public transport or arrange a dedicated bus, minibus or taxi. However, to meet their duty, the travel that they arrange must be suitable for the needs of the child concerned. The Department for Education provides comprehensive statutory guidance to help local authorities meet this duty.

The Government already expect local transport authorities to take account of the needs of all people travelling, including children travelling to school. Effective collaboration between local transport authorities and local authorities delivering home-to-school transport may bring benefits, but it would not be appropriate to place a duty relating to home-to-school transport on local transport authorities when statutory responsibility for that service rests elsewhere. For these reasons, Amendment 65 is unnecessary.

Amendment 66 relates to children travelling outside their local authority boundary to access a suitable school place. The statutory duty that requires local authorities with education functions to arrange free travel for all eligible children applies regardless of whether a child’s school is outside the council’s boundary. Where a child with special educational needs has an education, health and care plan, the school named in that plan will almost always be considered to be their nearest suitable school for the purposes of assessing their eligibility for free travel. It is already commonplace for local authorities to arrange free travel. For this reason, this amendment is unnecessary.

Amendment 67 concerns the application of VAT to transport for pupils with special educational needs who attend private schools. These services may already be exempt from VAT; for example, passenger transport in a vehicle with 10 or more seats does not pay any VAT, and operating a vehicle that has been constructed or modified to cater for the special needs of people with disabilities may also not pay any VAT. The Government’s ambition is a state-funded school place for every child who wants one, whether they have special educational needs or not. The Department for Education’s reforms, which I have already mentioned, will deliver an inclusive mainstream system that meets the needs of as many children and young people as possible in their local community.

I also draw the noble Lord’s attention to the consultation on the national insurance contributions Bill, which says at paragraph 2.13:

“The policy intention is to only capture education services and vocational training supplied by a private school, or a ‘closely connected person’, and closely related boarding services. The government recognises that other goods and services ‘closely related’ to education, such as school meals, transport, and books and stationery, are integral to children accessing education. As a result, other ‘closely related’ goods and services other than boarding (i.e. goods and services that are provided by a private school for the direct use of their pupils and that are necessary for delivering the education to their pupils) will remain exempt from VAT”.


I therefore consider this amendment unnecessary.

Finally, Amendment 68 concerns the impact that the increase in employer national insurance contributions will have on bus services for children with special educational needs. The Government recognise that the increase to employer national insurance contribution will have a varying impact across sectors but had to make difficult decisions to help restore economic stability.

As I have remarked already, local authorities are responsible for arranging home-to-school travel and deliver this through a range of providers. Department for Education officials engage regularly with local authorities to understand the challenges that they face and will continue to monitor this situation. It is expected that private sector organisations that contract with local authorities will take the impact of national insurance changes into account, along with other changes to their cost base, in the usual way through contract negotiations.

My noble friend Lord Livermore, at Second Reading of the NIC Bill on 6 January, said in response to a question about NICs and special educational needs transport:

“The right reverend Prelate also asked about SEN transport. In the Budget, the Government announced £2 billion of new grant funding for local government in 2025-26. This includes £515 million to support councils with the increase in employer national insurance contributions, which covers special educational needs home-to-school transport schemes”.—[Official Report, 6/1/25; col. 601.]

[Lord Moylan (Con)]

My Lords, does the noble Lord accept that that is true for special educational transport needs provided directly by local education authorities using their own employees but not for contracted services, which are very widely used?

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his intervention. I was referring to support to local authorities for home-to-school transport schemes. I will take that away and come back to him with the clarification that he seeks in this respect. I can say that the Government do not expect the changes to national insurance to have a significant impact on home-to-school travel for children with special educational needs, so it would not be proportionate to conduct the assessment as the amendment suggests. I do not think that it is required.

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Moved by

[Lord Moylan]

70: After Clause 27, insert the following new Clause—
“Transfer of functions of Traffic Commissioners to the Department for Transport(1) The functions of the Traffic Commissioners established under the Public Passenger Vehicles Act 1981, in so far as they relate to buses, are transferred to the Secretary of State for Transport.(2) The Secretary of State may establish a dedicated division within the Department for Transport to carry out functions previously exercised by the Traffic Commissioners and transferred by subsection (1). (3) All references to the Traffic Commissioners in any relevant legislation, regulations, or guidance, in so far as they relate to buses, are to be construed as references to the Secretary of State or the dedicated division established under subsection (2).(4) The Secretary of State must, within 12 months of the commencement of this provision, publish a report outlining the structure, roles, and responsibilities of any division established under subsection (2).”Member’s explanatory statement
This amendment abolishes the role of Traffic Commissioners in so far as they relate to buses and transfers their functions to the Department for Transport. The Secretary of State will be responsible for implementing these functions through a dedicated division, ensuring streamlined and consistent governance.

[Lord Moylan (Con)]

My Lords, I suppose you could say that this is a modestly frivolous proposal because I do not suppose for a moment that the Minister will agree to it, but I thought it would give us an opportunity to take a little excursion into the history and byways of English bus history and to consider how it is that institutions, once established, can take root in a fashion that means they are almost impossible to abolish. Indeed, they can even engender a degree of affection that means they become almost inbred in the national consciousness, not that there are many people outside the transport industry who are conscious of the traffic commissioners. It is worth bearing in mind that they arose in the bad old days of corporate capitalism and monopoly capitalism, which prevailed particularly in the 1920s when what Americans called trusts were thought of as the rational way of delivering goods and services in the private sector. We adopted that idea, creating monopolies wherever we possibly could in the private sector, unregulated monopolies in many cases, and encouraging them.

So it came to be that the thought that capitalism unbridled would produce reckless and wasteful competition arose in the bus industry nationally—or among those observing the bus industry—that it needed to be properly organised on a rational basis and that the way to do this would be to appoint an authority that would be able to decide who could run a bus, where they could run the bus and what fares they could charge. As this was a gentle form of English socialism, it was not a national authority but rather 12—I think it was 12— regional authorities in the shape of a traffic commissioner, whose job it was to do all this work and decide who could run a bus and where.

[Lord Goddard of Stockport (LD)]

I have seen the amendment. The noble Lord, Lord Moylan, is not addressing it; he is giving us a history lesson. We had this in the football debate where we had 25 minutes of someone describing the difference between a badge and a crest. It was an excellent presentation on the fleur-de-lis and the history of football crests, but it served no purpose whatever towards the football Bill and, at the end, the amendment was withdrawn. I think that sometimes Members need to be mindful of the time and effort that other Members put into sitting in these Committees and should perhaps use a bit less frivolous description just to prolong the meeting. It is absolutely contrary to the spirit of how these Committees are supposed to work. To probe the Government is fair, but to go into a history lesson on the role of traffic commissioners is unacceptable.

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[Lord Moylan (Con)]

Well, that is a very serious rebuke on the part of the noble Lord, Lord Goddard. I nearly wilted and decided to curtail my speech as a result of that intervention, but I have found the strength to continue. I remind the noble Lord that there is no question of time being spun out here. We are in day three of a four-day Committee, and we are very likely to finish the Committee today. We are going at rapid speed, and any suggestion that any member of this Committee has been using the time to spin out the debate is preposterous and is denied by the facts, so I will return to what I was saying.

This was the purpose of the traffic commissioners; they were set up for that purpose. So we come to 1985. I do not know whether the noble Lord, Lord Goddard, considers 1985 an historical date or one that is part of the modern and contemporary world; for me, it is fairly contemporary, but I would not want to comment on the noble Lord’s age or experience of these matters. Of course, in 1985, all those functions in relation to buses were taken away from the traffic commissioners. By then—this is important—they had acquired functions in relation to the freight industry, as well as certain safety functions on top of that, so there was a reason for continuing the traffic commissioners then.

The noble Lord, Lord Goddard, will have noted, in his careful scrutiny of my amendment, as will have other noble Lords, that it refers only to the bus functions of the traffic commissioners. There is nothing here that would abolish them entirely. That is a pity, in my view, but I was advised by the Public Bill Office that an attempt to abolish them entirely would be outside the scope of the Bill.

The commissioners survived 1985, although there was really very little need for them. The Government are returning to a sort of 1920s view of how buses should be run in the Bill before us, but not giving the same functions back to the traffic commissioners. The decisions about where the routes should run, who should have a special licence and what the fares should be will in effect fall to the local transport authority, not the traffic commissioners, but they are to continue. Their functions include enforcement on safety matters, yet their budget for that is derisory and, effectively, there is very little enforcement. A lot of that work is done, in relation to freight at least, by the DVSA and not by the traffic commissioners.

Generally, it would be a good time to have a bit of a clear out of the bureaucracy that encrusts our modern society. I would like to see the traffic commissioners go entirely and what functions they have transferred to the Department for Transport, but the proposal today, for scope reasons, as I said, is slightly more modest. I do not expect the Minister to accept it, but it is a proposal that those of us here in Committee with a slightly more revolutionary spirit—I am sorry that does not include the noble Lord, Lord Goddard, or maybe it does; we shall hear when he comes to speak—should embrace to see some real change, at last, at the seat of government.

[The Earl of Effingham (Con)]

My Lords, perhaps I might briefly address one of the suggestions of the noble Lord, Lord Goddard. I was present in the Chamber, as I frequently am, during the Football Governance Bill. I appreciate that he might not be that interested in the difference between the crests and the arms, but the College of Arms is run by my noble kinsman His Grace the Duke of Norfolk, and I can tell him that the argument put forward as between crest and arms is relevant and has implications. It is important to realise that. He may well want to look into it; I am happy to explain to him why it is important, if he is interested.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, the imminence of the recess suggests to me that I should not challenge the noble Lord, Lord Moylan, in his knowledge of the history of the traffic commissioners, but I will do that over a drink some time. I am less interested in the development of the Road Traffic Act 1930, or indeed the Transport Act 1985, than I am in the future of the bus service in the 2020s.

Traffic commissioners play an important and strategic role in the transport sector and, these days—principally but not wholly—in road use safety. I certainly refute completely any suggestion that there is an absence of enforcement; the Driver and Vehicle Standards Agency does that. Traffic commissioners are an admirably economic and cost-effective way of dispensing justice to bus operators and bus drivers—those who are licensed to provide these important and, indeed, safe services—in a way that is widely celebrated in the industry and regarded as far more effective than any other solution. Indeed, the independent review of the traffic commissioner function undertaken by the Ministry of Justice, published in May 2023, found that

“the Traffic Commissioner function generally operates effectively”

and noted a strong level of support from the industry for functions continuing to sit with the traffic commissioner. The truth is that for a regulatory arrangement to be so widely celebrated by the industry it regulates is something to be celebrated, rather than abolished.

[Lord Moylan (Con)]

My Lords, is the Minister not rather concerned that the regulator is so widely celebrated by the industry it regulates?

[Lord Hendy of Richmond Hill (Lab)]

One of the reasons why is because it is not in the industry’s interest to have poor-quality operations competing with it; that is true in respect of both the goods sector and the passenger transport sector. When the traffic commissioners take enforcement action, including depriving drivers or operators of their licences or curtailing them, it is widely celebrated by those operators who do take account of the law and operate safely. That is what is important.

On our earlier discussion about the safety of bus operations and bus drivers, finding a mechanism that is effective for disciplining those drivers and operators who transgress the law—sometimes with no intention of complying with it—is very effective. I encourage noble Lords to consider the alternative mechanism of taking taxi drivers in front of magistrates’ courts, which are often found by everybody looking at the actions of the magistrates to be excessively lenient and persuaded by drivers’ explanations of their behaviour that would never pass muster with the traffic commissioner. It is a very important judicial function, and the commissioners need to be supported.

Returning to the Bill, your Lordships will have noticed that some limited changes are proposed to the functions of the commissioners. These include changes to services operating under service permits with enfranchised areas and powers to act against bus operators who breach the mandatory training requirement. The Bill is about empowering local leaders to take decisions on how best to run bus services in their areas. The presence of traffic commissioners across the regions of England—and, for that matter, Scotland and Wales—is complementary to this Bill’s objectives. They are well placed to use local knowledge to take the decisions they do in the execution of their powers, and I certainly do not believe that the noble Lord has made any case for change in the way that this amendment suggests.

[Lord Moylan (Con)]

My Lords, I beg leave to withdraw.

Amendment 70 withdrawn.