Taxis and Private Hire Vehicles

Mike Weatherley Excerpts

Tuesday 29th April 2014 Westminster Hall

[Grahame M. Morris]

I do. The hon. Gentleman has made a couple of really good points. The other aspect that I thought of when considering the arguments is that, to the best of my knowledge, the licensing budget is ring-fenced on the basis of fees and charges. Therefore, if a local authority is ring-fencing a budget based on a licensing and inspection regime on an annual or two-yearly basis and that is then changed to three and five years, there will be a commensurate drop in income. If that is how the enforcement officers are paid, that must impact on their ability to take enforcement action. That is a good point. There are a number of implications to extending the licensing period and it is not all good news, as some of the operators would have us believe. Consequently, it is good that local authorities have some discretion.

One of my principal concerns relates to the Government’s amendment to the Deregulation Bill that allows private hire vehicle operators to subcontract and book an operator licensed in a different licensing area. When I was reading Hansard, I saw that the Minister said that that will give customers more choice and that it may be advantageous in that passengers could ring up their local provider if they did not know who to call. However, passengers may well not want to use the subcontractor sent to their door.

[Mike Weatherley (Hove) (Con)]

Does the hon. Gentleman agree that one of the good things about our taxis in this country is the local knowledge that people need to have? That sets us aside from many other countries in which we are suspicious of taxi drivers and where they are taking us on their meters. I am grateful to the Brighton Sudanese Taxi Forum for alerting me to this issue. Does he agree that deregulation that leads to subcontracting to a taxi company outside a city is fraught with danger in terms of local knowledge?

[Grahame M. Morris]

Again, I completely agree. It is very unusual for me to agree with Government Members—[Interruption.]. Apart from Guy. That is an excellent point and I hope that the Minister will take that into account.

Quality is an issue, and in some cases the name of a company is important. People may book on that basis and choose not to book others on the same basis. The customer may have experienced many problems with one operator. If a member of the public calls a specific operator because they feel that it is reliable and safe to travel with—I am thinking here in particular about women who are out late at night who may have a preferred operator because they know that they will be transported safely—surely they should have the comfort and knowledge that that company will take them home. There is a risk in passing jobs from one company to another; it is not the wonderful panacea that some of the advocates of deregulation would have us believe. We should think about some of the consequences.

The Transport Committee recommended that the Government engage with the trade unions, local authorities, licensing authorities and users about future legislation and commit to reform in this Parliament. Ministers should be working collaboratively with the industry, drivers and passengers, rather than just rushing contentious clauses through Parliament. The new clauses are evidently contentious and 10 days’ notice before the Public Bill Committee was completely inadequate to allow for any meaningful consultation.

The consequences of the new clauses have not been considered sufficiently. It seems to me that there is a mad, ideological rush to deregulate on occasions. We would not do that if we were talking about firearms regulations, would we? I hope that we would not, anyway. The idea appears to be that we must cut red tape without considering all of the consequences, even though we have set in train the Law Commission, which is engaging in the process. Many stakeholders feel—rightly, in my opinion—that they have been ignored and passenger safety and the enforcement of private hire vehicle registration could be undermined. I respectfully urge the Minister to remove the clauses added to the Deregulation Bill in Committee—he can do that on Report—for the safety and confidence of the travelling public and, indeed, for the reputation and livelihoods of the taxi and private vehicle hire trade.

Cycling

Mike Weatherley Excerpts

Thursday 23rd February 2012 Westminster Hall

[Mr Bradshaw]

Absolutely, although contrary to most people’s prejudices, I have one of the most urban seats in the country. It is surrounded by beautiful countryside, where many of my constituents go cycling. They feel safer in the city of Exeter than they do on country lanes, largely because of the absolutely intolerable speeds that people drive at on many country lanes. I feel much safer cycling in my constituency, in urban areas and in London than I do in the country, specifically because of the speeding problems; I know that horse riders face similar danger and nervousness.

If the Government go down the route of raising the speed limit on our motorways to 80 mph, I hope that as a quid pro quo, they will introduce 20 mph speed limits in our urban areas. That would be a huge step forward to improve cycling safety. We all know the statistics about how likely it is that someone will survive or die if they are hit at 30 mph or 20 mph. It would make a big difference.

[Mike Weatherley (Hove) (Con)]

In Brighton and Hove, we have very successful routes on the seafront with shared pedestrian access. Does the right hon. Gentleman agree that we should be encouraging Brighton and Hove council to mark that space in bright colours? The safety of cyclists is about not only roads, but where we have shared access on pavements.

[Mr Bradshaw]

We have already addressed some of the challenges faced when cyclists and pedestrians are put together. My preference is to separate them if at all possible. Sometimes it is not possible. Where it is not possible, there should be clear demarcation, because we do not want the matter to become an argument between cyclists and pedestrians. They are both vulnerable road users and are much more vulnerable than people who are surrounded by metal. I absolutely agree with the hon. Gentleman. I wish the Minister well. I hope that he takes on board the points I have raised—this is about political leadership and working together—as he will then succeed.

Network Rail

Mike Weatherley Excerpts

Thursday 2nd February 2012 Westminster Hall

[Mr Binley]

The hon. Gentleman talks some truth. I have never known a business man say that he wants an end product, only to ignore the supplier and say, “I’m not bothered about what you tell me is the efficient way to do it. This is how we are going to do it, because we know best.” But we do not know best—that is the reason why I would get a supplier in the first place.

[Mike Weatherley (Hove) (Con)]

Does my hon. Friend agree that part of the problem is the blame culture that has developed at various points in Network Rail’s history?

[Mr Binley]

I do not know about that, but I have been interested in running efficient businesses all my life and I know that this is not efficient. That is what I am bothered about, and that is why I say to the Government that it is their job to make sure that it is efficient. If there are bad practices of this kind, it is the Government’s job to change things. The Minister represents all the consumers. They look to him as a kindly father who looks after their interests, and I am sure that he will do so.

I restate my full and enthusiastic support for high-speed rail. It is not about speed, and the nonsense about getting to Birmingham 20 minutes sooner is not the reason why it is important either. Of course, if we are to build a new railway, it must be the best that it can possibly be. Therefore, it must be the quickest and most efficient that it can possibly be. The real reason why high-speed rail is important, however, is capacity. My good friend the hon. Member for Luton North will tell us that we can only get so many trains on a line in a given hour. High-speed rail is about slots on the line and capacity. Rail will be oversubscribed by 2024—some people believe sooner—which is why high-speed rail is so vital.

Let us not have facile arguments about whether it is worth paying more to get to Birmingham sooner. That is not the point. The point is whether we get to Birmingham at all. Let that be a lesson to those who oppose High Speed 2. I know people who live in Manchester, Leeds and other such areas who know that there is a blockage in Birmingham. They know that it is increasingly difficult to go by rail through Birmingham and down to London and the south-east and then to the continent. They are looking to this Government to ensure that their part of HS2 is completed. I repeat that it is a massively important investment for the country in economic and social terms, and in ensuring that our children and grandchildren are employed on a good salary. I recommend that the Minister bring it forward to 2024. That is a target to set and, if he accomplishes that task, he will deserve a knighthood.

Bus Industry

Mike Weatherley Excerpts

Tuesday 6th September 2011 Westminster Hall

[Graham Stringer (Blackley and Broughton) (Lab)]

It is a pleasure to serve under your chairmanship again, Mr Streeter. It is now 25 years, a quarter of a century, since buses outside London were deregulated following the Transport Act 1985. We have a great deal of experience of what the implementation of the Act meant. By and large, it has been a very poor experience. It is sensible to call it a disaster for the bus-travelling public. In Greater Manchester, in the past 20 years, approximately 30% of the number of people who travelled by bus no longer do so. Bus deregulation has meant higher fares in real terms, a reduction in the networks and less reliability. It is not surprising, therefore, that the number of passengers has reduced.

I will not say that everything about bus deregulation has been awful—most of it has been. If I had to put a figure on it, it would be approximately 80%. A great deal of it has been bad. Bus deregulation has been successful on radial routes in major urban conurbations, where the service in peak times is often better than it was. The old transport authorities and county councils were guilty of having inflexible bus routes and of sending buses to where people lived 30, 40 or 50 years previously, before areas were demolished and rebuilt elsewhere. The commercial flexibility of the deregulated system has had some benefits, but overall the impact has been negative.

How does one disaggregate that from the natural trends in bus ridership in the past 25 years or so? Well, that is fairly easy because we have a precise comparison. When bus services were deregulated in the rest of England and Wales, they were not deregulated in London. Between 1986 and when the office of the Mayor of London was introduced in 1998, the regulated franchise system in London retained its passengers with very little subsidy. From the time of the election of Ken Livingstone in 1998, the number of bus passengers in London increased and the network became more extensive because a considerable increase in subsidy was put into the system. The period after 1998 does not offer an exact comparison, but the period between 1986 and 1998 offers a very good comparison. Bus passengers were retained in this city, but they were not retained elsewhere. The simple conclusion is that that is because of bus deregulation.

Behind all the statistics that I will use in my speech, there are real people. If people want to get a sense of the damage that has been done to individual lives by the loss of bus services—it affects family life and the ability to get into employment—I suggest that they read the recent Transport Committee report, “Bus Services after the Spending Review”. That report has example after example of people’s lives being blighted, their ability to obtain employment diminished and their ability to see their families reduced because bus services have disappeared.

I thank the officials at the Passenger Transport Executive Group, Sir Howard Bernstein, chief executive of Manchester city council, and his officials at Transport for Greater Manchester. They provided a lot of the statistics in this speech about transport in Manchester and transport nationally. Two thirds of all public journeys take place by bus, even after the reduction in numbers following deregulation. We are therefore talking about something that is important to many people’s lives, often the poorest people in our communities, and something that is vital to the economy.

My main point in this speech is that there will be cuts to an already reduced system. I do not want a sterile debate in which the Government say that it is all the fault of the previous Government that they are making cuts, and we on this side of the Chamber say that the cuts are too fast and too deep. Both those points have their place. What is interesting is that, because we are dealing with cuts to a deregulated system, it is possible to diminish the impact of those cuts by looking carefully at what are likely to be the recommendations of the Competition Commission, and by trying to use more effectively and directly the facilities in the Local Transport Act 2008. That is what I want to concentrate on.

To get some sense of the size of the impact of the cuts that are likely to happen, I will go through what the bus system is faced with. First, there is the 28% reduction in local authority grants, which will affect buses. Then there are changes in the formula for concessionary travel. Estimates on the impact that that will have on the bus system vary between £50 million and £100 million. The best estimate is approximately £77 million. From 1 April 2012, there will be a 20% reduction in the bus service operator grant. In passing, I say to the Minister that BSOG is not used in the most effective way. As a general grant to the bus industry it is fine—it helps. However, it would be better if it were given to transport authorities and passenger transport executives so that they could direct it to environmental improvements or particular enhancements to transport, rather than it just being given generally to bus companies.

Those are the three big areas where there will be cuts, but there is also the abolition of the rural bus grant and the 50% reduction for small and medium-sized public transport schemes from the integrated transport block. There will, therefore, be major changes and reductions in bus services in the coming years. PTEG has tried to estimate what will happen and its conclusions are pretty stark and frightening. It estimates that by 2014 fares will have gone up by 24%—nearly a quarter—in real terms, there will be a decline in service levels of 19%, which is nearly a fifth, and patronage will be down by about a fifth. That is in metropolitan areas, which is what is covered by PTEG.

According to the Transport Committee report, 70% of local authorities in non-urban areas have already cut their grants for buses and transport. My hon. Friend the Member for Hartlepool (Mr Wright) is present and I look forward to listening to his contribution later, but in Hartlepool 100% of the bus services subsidy has been removed, as is the case in Cambridgeshire, although I understand that that is currently subject to legal challenge. In Somerset, North Yorkshire, Shropshire and Northamptonshire, there have also been significant cuts, while in Luton and Peterborough there have been no cuts. The situation around the country is varied but, overall, it looks pretty bleak, given the PTEG projections for urban areas and the known cuts identified in non-urban areas by the Transport Committee.

Transport is a function devolved to local transport authorities but, I ask the Minister as the Transport Committee did, surely central Government have a responsibility, not to make local decisions but to know what is happening in every area, so that when the Government make decisions about their grants and where they spend their money, they can do so as accurately and effectively as possible, and that requires knowledge.

The Office of Fair Trading decided that it would refer the bus industry to the Competition Commission. There was already a great deal of evidence from Greater Manchester and other places that monopoly behaviour was effectively taking place. It has taken the competition authorities a long time to get around to looking into it. More than 10 years ago I wrote to the competition authorities and asked them to investigate—I was not the only person who did that—and they said, “Please produce written documentation of unlawful agreements between different bus operators.” Of course I could not do that—those documents would not be available to a Member of Parliament or anyone else, if indeed they existed—but by looking statistically at what is happening, we can see all the signs of real monopoly behaviour, and that is what the Competition Commission has found.

I will go through some statistics for Greater Manchester. In Oldham, for instance, 85% of the services are provided by First. In my own constituency the figure is about 67%, in Salford 77% and in the whole of north Manchester 70%. In south Manchester, we can see a mirror image of those figures, with Stagecoach monopolising: in Stockport it provides 82% of services, and in the whole of south Manchester about 74%.

My constituents suffer a real disadvantage in fare levels. I was told when I put my case to First that not many people buy the one-off fare, but that people buy weekly tickets. Even the weekly tickets bought from First by people in north Manchester are 47% higher—£17, compared with £11.50—than the price people pay in parts of south Manchester, where the average income is about £10,000 higher than for my constituents. So if they need to use buses, they are paying twice the percentage of their income on fares. Frankly, there is little on-road competition, which is what was originally intended to be the driver of better, more effective and more responsive services under bus deregulation.

Another indication of monopoly or anti-competitive behaviour is what in the system is called gaming the market, where bus companies use the fact that two different transport systems are in operation—the deregulated system, under which anyone can operate a bus service having given a small length of notice, and the subsidised, tendered services. In designed deregistration, the bus company is really saying, “We can make more money from this service, because it is an important service for the public, if we deregister it and then get the transport authority to tender it out.” Then, if it loses the tender, and a tendered service is running, the company reregisters the services, or parts of them, to undermine the subsidised service. An awful lot of such anti-competitive behaviour goes on.

As I said, the competition authorities were slow to get off the mark and to look at the area, but they have got off the mark, and credit to them for that. They have found that profits are much higher in the deregulated area than in London. In the past 24 hours Go-Ahead, for its out-of-London services, has just announced record profit levels of up to 10.4%.

[Mike Weatherley (Hove) (Con)]

The hon. Gentleman mentioned that anyone may enter the bus market, but does he agree that one of the faults of deregulation was that it did not create a perfect market? There are significant barriers to entry, even if one does not go through the subsidised route but sets up an independent service.

[Graham Stringer]

The hon. Gentleman makes a perfectly sound point, which I will come to in my conclusions. The large operators own the garages and can afford to subsidise competition if there are new entrants to the market—it is a long way from being perfect competition.

I was talking about the profits of Go-Ahead but the profits of Stagecoach are truly staggering, especially when the economy is flatlining and we have been in recession. They are up to £153 million from £126 million, which is an increase from 14.4% to 17.1%. In the friendly debates I have with Brian Souter of Stagecoach, he once called Gwyneth Dunwoody and me “dinosaurs” because we believe in going back to a sane system of regulated buses—he even set up little models of dinosaurs. I do not know how many people in the Chamber remember the film made of the James Clavell book, “King Rat”. When the Japanese prisoner-of-war camp in Singapore was liberated by allied forces, there was one very fat prisoner among all the other prisoners, whose ribs were showing—they were starving to death. At a time of austerity and the economy not doing well, Brian Souter and Stagecoach are the King Rats of the British economy, doing enormously well out of public subsidy when everyone else is struggling to get to work and make a living. They are, in effect, subsidy junkies.

The figures in the Transport Committee’s report show that the bus industry outside London receives from the fare pot about £1.8 billion in a total income of £3.4 billion, so 47% of the bus industry’s income comes from taxpayers. It is as simple as that. Whenever a bus leaves a depot, an average of 50% of its costs are paid by taxpayers. Given what has happened with deregulation, is that sensible use of taxpayers’ money? Are we receiving the best possible value?

--- Later in debate ---

[Mike Weatherley (Hove) (Con)]

I congratulate the hon. Member for Blackley and Broughton (Graham Stringer) on securing this debate. Although passenger numbers are on the decline throughout the country, I understand that buses remain the most popular form of public transport. Usage is on the increase in Brighton and Hove, which bucks the national trend.

In the city of Brighton and Hove, which includes my constituency of Hove and Portslade, we are fortunate to have a good bus service. We benefit from a network of many routes, frequent buses, and well-maintained bus shelters. I pay tribute to the managing director of Brighton and Hove Bus and Coach Company, Roger French, for his excellent management of the network in previous years. Increasingly, the company has been able to make use of new technology, such as real-time information screens at bus stops and smartcard readers on buses. While that is great news for residents of Brighton and Hove, I would argue that more competition is needed to protect the interests of bus passengers in future.

The Brighton and Hove Bus and Coach Company is owned by Go-Ahead, one of the five biggest bus service providers that together account for 69% of the country’s bus services. In areas such as my constituency, where one company operates over 95% of the public bus services, not much can be done when fare rises are proposed, as will happen later this month. Passengers cannot go elsewhere to get a cheaper ticket.

More competition would go some way towards maintaining best value for consumers and continuing to keep pressure on efficiencies. As the situation stands, however, the many barriers faced by new companies that are setting up bus services effectively restrict competition. Although in theory schemes are open to all companies that wish to take part, the costs of doing so are so prohibitively high that in practice they are open only to large companies that can afford to take part. A case in point is the real-time information system. Electronic display boards are now located on most bus stops in the centres of Brighton and Hove and provide real-time information about bus times. I have witnessed at first hand the system in operation at the Brighton and Hove Bus and Coach Company’s operational centre, and it is very impressive. The system is open to all bus operators, but only if they pay substantial costs for the on-bus radio system, transponders and any necessary back-office equipment.

Some charges levied on transport companies are implemented in a way that penalises small companies. Although some charges vary according to the number of vehicles a company operates, meaning that larger companies pay more, other charges are fixed irrespective of size. Such fixed charges mean that small companies effectively end up paying a higher proportion of their income than larger ones. Charges for the registration of a public service, for example, or an application for an operating licence or a transport manager’s certificate of professional competence, are the same regardless of the size of the company or the number of routes and buses involved, meaning that larger companies can absorb the cost more easily.

In my constituency, there is a small bus company called The Big Lemon that runs its buses on waste cooking oil from local restaurants. It has been beset by problems as a result of being a smaller company, to the extent that, as I understand, it has had to submit evidence to the Competition Commission and the Office of Fair Trading in order to protect its interests and, ultimately, to prevent it from being forced to cease operations. Fare increases have recently been announced by the Brighton and Hove Bus and Coach Company, and much has been made locally of the scale of those increases. In some places, fares will rise by as much as 20% and on most routes a return fare will cost as much as £4. However, on routes where The Big Lemon is in direct competition with the Brighton and Hove Bus and Coach Company, the fare will be only £2.50. That means that passengers in some parts of the city will pay 60% more than in other areas where competition has forced competitive pricing.

The Brighton and Hove Bus and Coach Company has stated that the fare increases are being introduced to reflect the rising price of fuel. However, as the managing director of The Big Lemon, Tom Druitt, pointed out, fuel does not cost more on different routes, and the difference in price seems designed to stamp out the competition represented by the smaller company. The Big Lemon also encountered a barrier to extending competition in the city when it attempted to join the quality bus partnership. As I understand it, that partnership is an informal agreement between the Brighton and Hove Bus and Coach Company and the council, and is not open to other companies or routes at present. The Big Lemon has also encountered difficulties in publicising information and timetables. It found that priority for such matters was given to the Brighton and Hove Bus and Coach Company, with the main information about fares and timetables on the council’s website referring to services provided by the larger company. Smaller providers are mentioned and a link to their websites is provided, but the main emphasis is on the Brighton and Hove Bus and Coach Company. That situation could easily be rectified at no cost to the taxpayer, and it would encourage competition.

The attitudes and actions that I have mentioned are obstacles to increasing competition. If one small company has encountered such difficulties, how many more companies are experiencing problems around the country? Bus companies that benefit from large Government subsidies naturally have an advantage that small start-up companies do not have. In my constituency and across the city, the Brighton and Hove Bus and Coach Company receives a large subsidy from the city council—money that would make a huge difference to small operators such as The Big Lemon. There is a compelling argument that we should encourage the distribution of subsidies on so-called loss-making routes towards new, smaller, innovative companies, thereby increasing competition and benefiting passenger choice and transport quality in Brighton and Hove and beyond. As councils do not have direct control over the fares levied by bus companies, that is one way in which greater competition in bus services could be encouraged.

As mentioned earlier, there are other ways in which the council could assist in making the market more competitive such as providing fair website information and the quality bus partnership scheme. In summary, I would like to see measures implemented that are focused on delivering sensible competition and a code of practice that would put new operators on a level playing field, thereby reducing barriers to entry in the market.