Bus Services Bill [Lords]

Theresa Villiers Excerpts

2nd reading: House of Commons
Wednesday 1st March 2017 Commons Chamber

[Mrs Theresa Villiers (Chipping Barnet) (Con)]

I warmly welcome this opportunity to debate bus services in the Chamber; we too seldom have an opportunity to reflect on the importance of the bus network for millions of people and to acknowledge the crucial role bus services play in our public transport system.

As has been acknowledged already from both Front Benches, buses provide a crucially important lifeline for millions of people, including people who choose not to drive a car and those who cannot afford to drive a car. We should also recognise the importance of buses for the elderly, many of whom feel that they no longer want to deal with the risk of driving a car or can no longer afford to do so. For all sorts of reasons, therefore, we in this House need to do all we can to support our bus networks around the country. I pay tribute to all the people involved in delivering bus services and helping us get to where we need to be.

I am enthusiastic about much of this Bill, but I do have worries about clause 4 and the changes made to the Bill in the other place. I warmly support the provisions in clauses 7 and 8 to facilitate the delivery of smarter ticketing technologies, which, as has already been acknowledged, can do so much to make bus travel an easier and more convenient and attractive option.

I also welcome clauses 1 to 3 and 9 to 15 on partnerships. Partnership-working between local authorities and private sector bus operators can be a highly effective way to improve bus services for passengers. There is a long list of successful examples from around the country, including places such as Sheffield and Bristol. The extension of the statutory partnership structure beyond the provision of infrastructure to include general bus improvement measures makes sense, and is an important part of the Bill. It is also a welcome step forward to enable statutory partnerships more easily to cover larger areas and have a more joined-up approach between different operators.

It is also helpful to make the Competition and Markets Authority a statutory consultee. Its current status as a powerful but somewhat unpredictable presence outside the partnership process can be a barrier to ambitious measures that both the operator and the local authority might sincerely believe are the right way forward. Giving it a more formal role internal to the process can help generate the certainty needed to support investment in measures to improve bus services for passengers.

As I have said, I am worried about the effect of clause 4 and the proposals to grant local authorities the right to specify bus services. We have heard a lot about the comparison between London and the rest of England, and it is true that in London bus routes, timetables and fares are specified by Transport for London and then tendered out to the private sector bus companies for delivery under contract, but London has unique circumstances.

There is a range of factors in London that contribute to comparatively high levels of bus usage, which are simply not present in most of the rest of the country: the scale and density of the population; relatively low rates of car ownership compared with other areas; millions of visitors; very high costs for parking in central London; a pretty aggressive approach by successive Mayors to bus priority measures; and a congestion charge that generates very significant sums to support the bus network. So while I do not see any need to change the regulatory system that operates in London, I do not accept that expanding that system to other parts of England would deliver the same high levels of ridership in places where the circumstances are very different. Indeed, the regulated bus network in England before privatisation in ’86 was simply not delivering great quality services for the customer, nor a thriving a bus industry, and it would be a mistake to look back on it with too much nostalgia.

[Lilian Greenwood]

Is the right hon. Lady aware of the experience on the island of Jersey? It franchised its bus services to a social enterprise just two years ago, and has achieved savings of £800,000 a year, introduced new routes, and increased passenger numbers by a third. What does she think that shows about the opportunity for franchising to perhaps work in other places?

[Mrs Villiers]

I have not looked at the Jersey example, but my anxiety is that rolling back the clock, essentially, and renationalising and re-regulating the bus network could ultimately mean that we lose the investment we have received from the private sector into bus services over the last decades. My key worry here is that the effect of the provisions introduced by clause 4 would be to enable local authorities, who perhaps 30 years ago sold their bus operations at a commercial price, now effectively to confiscate those self-same businesses.

The inevitable impact of this clause is that companies large and small, who might have spent many years and a great deal of money, energy, effort and innovation building up their business, might be barred from operating in the event that they lose the franchise contest. They could see their operations in a particular town or city disappear overnight, leaving them with buses, staff, depots and equipment that they cannot use.

I am particularly worried about the impact on smaller bus operators, who provide important services in many parts of the country. Those with a successful business serving a relatively small area and small range of routes might find it very difficult to tender for a big local authority contract. They might also find the tender process for running services to be complex and expensive, and require costly professional advice. If the process is anything like rail franchising, complexity can be truly daunting.

[Andy Burnham]

I think that people would struggle to agree with the London-centric point that the right hon. Lady was making a moment ago, when she suggested that London was somehow completely different from the rest of the country. My constituents would not accept that. Nor would they accept the point about the poor companies that she is talking about. She is making an argument for them rather than for the travelling public. Does she not accept that, for the past 30 years, bus companies have made considerable, and in some cases excessive, profits at the same time as receiving a public subsidy?

[Mrs Villiers]

My goal is to improve services for passengers, and I believe that private sector investment in our bus networks has had a positive impact on passengers. I do not believe that reversing that would produce better outcomes for passengers. One has only to look back at the pre-1986 position to see that the ridership on buses before that date had plummeted. It is not the case that there was a golden era for bus services before 1986.

The trouble is that if we create a system in which we discourage private sector investment in the bus network, we will create uncertainty in the bus industry. Discouraging such investment will have a negative impact on passengers. That is what I am worried about.

[Steve Rotheram]

Will the right hon. Lady give way?

[Mrs Villiers]

No, I have already given way.

We need to bear it in mind that, in competing for bus contracts, local operators might be up against large transport groups owned by overseas Governments with deep pockets. I am particularly concerned that the amendment that was approved in the other place will mean that bus operators could even find themselves having to contest for contracts alongside a company owned by the franchising authority that is making the decision to award the contract, giving rise to an obvious and unacceptable conflict of interest. I fear that clause 4 would inevitably result in a number of bus companies going out of business, which would be bad for passengers. I am also concerned that local authorities that are keen to take over the provision of bus services will find that taking on revenue risk could be a very costly exercise that would deplete the funding available to support those crucial non-commercial routes that do not generate enough passengers to cover their costs.

No local authority has introduced a quality contract to re-regulate bus services, despite their having been on the statute book since the early years of this century. I acknowledge that there are different reasons for that, but one of them is that taking over bus operations is inevitably a very expensive project for local authorities. To those who think that passing greater financial responsibility for investing in the bus network from the private sector to local councils is a great idea, I would point out that it involves investment in buses and bus services having to compete with pressing priorities such as social care, libraries, waste collection and all the rest, and that that investment—and bus passengers—are likely to suffer as a result.

Ever since 1986, there has been a vigorous and lively debate about the effect of deregulating bus services outside London. It cannot be denied that many millions of pounds of investment have been made by private sector bus operators in the years since privatisation. That brings me to a key problem with the franchising proposals—namely, the uncertainty that they will cause. If bus operators are unsure about whether their businesses could end up being taken off the road, they will be reluctant to invest in new buses or to improve passenger facilities such as ticketing systems.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I have listened with some frustration to what the right hon. Lady is saying. I fail to grasp why something that works in London and no doubt delivers very well for the people she represents cannot be done in other parts of the country. The insecurity that she talks about could have the reverse effect in large parts of the north-east, where the insecurity at the moment rests with the travelling public, who do not know whether there will be a bus to get them to hospital on a regular basis.

[Mrs Villiers]

There seems to be an assumption that if the London model of regulation were to be applied everywhere else, it would suddenly deliver London standards of bus services, but a causal link between the two has not been established. A whole range of factors in London contributes to the high levels of ridership and the success of the bus network. Simply reproducing that regulatory system elsewhere would not deliver the same end result, not least because Londoners pay several million pounds in congestion charges every year that are recycled into bus services. That larger level of subsidy makes a difference to the quality of the services.

[Andy Burnham]

Will the right hon. Lady give way?

[Mrs Villiers]

No, I will not give way.

In my previous role as Secretary of State for Northern Ireland, I was contacted by Wrightbus of Ballymena. The company was concerned about the chilling effect that even the proposals leading to the Bill were having on orders for new buses from operators in England. Wrightbus is a hugely successful company that exports buses to many places around the world, as far afield as China. It delivers the highest quality engineering and provides training and opportunities for hundreds of young people. It is a great asset to Northern Ireland and to the UK as a whole. Its concerns demonstrate that the re-regulation of bus services outside London is not a step to be undertaken lightly. It is not a cost-free option. If we get this wrong, it will be the passenger who suffers. I therefore appeal to the Minister to table amendments that would remove clause 4. At the very least, it is important to amend the Bill to reverse the changes made in the other place, which extend franchising powers beyond mayoral combined authorities and which would allow all local authorities to set up their own bus companies.

[Rob Marris]

Will the right hon. Lady give way?

[Mrs Villiers]

No, I am just concluding my speech.

Reverting to the Bill’s original drafting would not deal with all the issues that I have highlighted today, but it would certainly mitigate the problems caused and the uncertainty that is likely to damage the interests of passengers by undermining the viability of bus operations and investment in those services. I therefore very much welcome the intention expressed by the Secretary of State to amend clause 4 as it stands, and I give the Government my support in their endeavour. As the Bill progresses, I hope that they will consider going a step further and remove clause 4 altogether.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I now have to announce the result of a Division deferred from a previous day. On the motion relating to unaccompanied children in Greece and Italy, the Ayes were 254 and the Noes were 1, so the Question was agreed to.

[The Division list is published at the end of today’s debates.]

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[Mrs Ellman]

My hon. Friend makes an extremely important point. She represents an area in which a successful municipal operator has been functioning very effectively for a long time, and gives us a clear example of how possible conflicts of interest can be addressed. Even at this late stage, I urge Ministers to look again at that issue.

Traffic management has not yet been mentioned. Buses are important not only for mobility, but in addressing environmental issues, and making transport around our cities and towns easier. Running buses cannot be dissociated from effective traffic management. While there are some relevant provisions in the Bill, I call on Ministers to consider activating the provisions in part 6 of the Traffic Management Act 2004 that would give local authorities powers to act on moving traffic offences. The Act is in statute, but the relevant section has not been activated. Local authorities repeatedly ask for it to be activated as it would be important in helping bus services.

[Mrs Villiers]

Does the hon. Lady agree about the importance of bus priority measures to make bus travel more reliable and therefore more attractive to passengers? Many local authorities are not prepared to make the quite courageous decisions required to deliver priority measures.

[Mrs Ellman]

The right hon. Lady makes an important point. Bus priority measures are indeed important; they are part of the range of measures available to local authorities when they are looking at how buses can be facilitated in their area and how to work with other traffic to make the best and most efficient use of road space.

The case for the Bill is clear, and the Select Committee welcomes it. We are pleased that it has come forward and very much welcome its comprehensive nature. Many of our communities suffer inadequate bus services. The existing regulatory framework is not fit for purpose, and previous efforts to restore it have not been comprehensive enough and have not been successful. The Bill makes important strides towards supporting bus networks throughout England, but more must be done to ensure that local communities and transport authorities have the information and powers that they need to provide effective bus services. This time, we must get it right. It is clear that we cannot afford another squandered opportunity for reform. I support the Bill, and it is supported by the Transport Committee.

--- Later in debate ---

[Andy Burnham]

The Minister shakes his head, but I want to see more reassurance than that. If he wants to intervene and say more about it now, he is more than welcome to do so. We cannot have such obstacles placed in our way that may actually limit our ability to use the welcome powers in the Bill.

I see that the right hon. Member for Chipping Barnet (Mrs Villiers) has retaken her seat, and I do not want to finish without making some reference to her speech. Frankly, I did find it quite difficult to listen to at times. She said that it was right for London to have the powers it gained by being exempted from the original deregulation measures because London is so different. I will tell her one way in which London is different: for every £1 in transport investment that we receive in the whole of the north of England, London gets £6. That inequality has existed for many decades. Consequently, people in London have several public transport options. They can use high-quality commuter trains, the tube network, the docklands light railway, regulated buses, and the bike scheme and dedicated cycle lanes. My constituents have no such choice. They are stuck with using the bus if they do not have a car. That is the difference. It is so wrong of the right hon. Lady to say that what is acceptable for her constituents is not right for Opposition Members’ constituents, who are stuck in their cars.

[Mrs Villiers]

I am a great supporter of investment in infrastructure in the north of England. It is vital to rebalancing our economy. My point was that re-regulating the bus industry outside London will not solve problems with bus services, but arguably make them worse.

[Andy Burnham]

Instead of deleting the clause that lets us try, why does she not let us be the judge of that? My hon. Friend the Member for Blackley and Broughton warned of the consequences when he was leader of Manchester City Council when deregulation was introduced. He has been proved right. If Government Members now believe in devolution, let them give us the chance to try. Then the right hon. Lady may be able to come back and say that it has not worked, but I believe that we will make it work. I am confident that we can make it work.