Clause 18
Local Transport Bill [Lords]
3:00 pm

Regulations about schemes which specify frequencies, timings or fares

Photo of Stephen Hammond

Stephen Hammond (Shadow Minister, Transport; Wimbledon, Conservative)

I beg to move amendment No. 46, in clause 18, page 17, line 16, leave out paragraph (b).

I am still slightly perplexed by subsection (4)(b). A further element of the clause is that regulations may be made to ensure that quality partnership schemes include all sorts of provisions. We have gone through those requirements. The clause indicates provisions for the minimum and maximum time before the requirements can be reviewed. I can understand and support the case for a review. I can understand why a review should happen after a maximum period. However, I am slightly perplexed about why there needs to be a minimum period. Why can a quality partnership not be reviewed until a certain time has elapsed? I do not see the point of that.

I understand the need for stability and a degree of certainty for bus operators, bus passengers and local government planners—we went through that argument this morning—but we are talking about only a review, not a complete overhaul of the scheme. A review will not necessarily lead to change. I am questioning this. The Minister’s argument may be that the Government have included a minimum because they want the quality partnerships to bed down. However, circumstances change and an adjustment may be necessary in the light of any number of circumstances. I therefore think the provision slightly odd: if such circumstances could not be taken into account because the review period had not reached the minimum, that might have some impact on the services that passengers experience.

I look to the Minister to explain why she feels that a minimum period is absolutely necessary. The amendment is sensible and could have a helpful impact on the legislation. I hope she sees it in that spirit and either gives good reasons why I am wrong or indicates that she might be prepared to look at the matter again.

3:15 pm
Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

The intention of the hon. Gentleman’s amendment is to remove the power to specify in regulations a minimum interval between reviews of requirements in quality partnership schemes about frequencies, timings  or maximum fares. A provision in the draft Bill stipulated that if a quality partnership scheme included requirements as to maximum fares, it must also include in the scheme, among other things, provision for a minimum period between reviews of such fare levels. When making a scheme, authorities would have been under an obligation to stipulate that minimum demand. In response to the views of interested parties on the draft Bill we made a number of amendments to those provisions. One was to replace the requirement for operator agreement to the setting of maximum fares with a process whereby operators can object to, but not veto, requirements on frequencies and timings, as well as maximum fares.

Another change was to take a regulation-making power so that details about what must be included in a scheme can be prescribed in secondary legislation, to ensure that certain requirements are reviewed on a regular basis. We believe that provides a much more flexible approach to dealing with what are sensitive and difficult issues. The Bill now includes a power to make regulations on when and how requirements about frequencies, timings and fares should be reviewed. Among other things, it includes a power to specify in those regulations a minimum interval between such reviews.

We need to ensure that we strike the appropriate balance between enabling authorities to take an innovative approach to improving local bus services, while protecting the legitimate interests of bus operators. The intention is to ensure that appropriate powers are available to prevent operators from demanding frequent reviews for frivolous or vexatious reasons, which could seriously disrupt the effectiveness of the scheme and could erode the passenger benefits arising from it. In a sense, that addresses the point made by the hon. Member for Manchester, Withington.

Photo of Stephen Hammond

Stephen Hammond (Shadow Minister, Transport; Wimbledon, Conservative)

The Minister mentioned preventing operators from making frivolous and vexatious objections, but I understood from our earlier discussions that they were proscribed anyway, so operators could not make such objections.

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

The hon. Gentleman is talking about reviews and the point we are making is that although there will be reviews of the schemes, we do not want a system in which there would be constant reviews. The point about frivolous and vexatious objections to which I responded earlier related to the admissible objections procedure. We want to prevent operators from demanding frequent reviews for frivolous or vexatious reasons because that could seriously disrupt the effectiveness of the scheme.

It might be useful if I summarised what is in the draft regulations.

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Ian Stewart (Eccles, Labour)

I am glad that my right hon. Friend will explain that. She knows of my anxieties about some of this part of the Bill. If we are to have the proposed system, and the Government are taking action to ensure that no frivolous or vexatious objections get through for review, will there be any kind of mechanism, such as those in industrial tribunals, for pre-hearing assessments, so that any potential frivolous or vexatious attempts are stopped before they get into the process proper?

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

In the regulations, we are trying to make a system that prevents frivolous or vexatious reviews, so in a sense we are starting from the other end. In respect of maximum fares, for example, regulation 16 provides that the scheme must specify a maximum period of no more than 12 months between reviews of the requirements. The only exception is where the maximum fare is updated at least annually in accordance with a formula specified in the scheme. If the scheme said that fares would rise in line with whatever was defined as inflation, that would be fine and there would not necessarily need to be a review, but otherwise there would be.

For requirements on maximum fares and on frequencies and timings, a local authority may choose to start a review at any time and must also undertake a review where requested by three or more participating operators or, if fewer, at least 50 per cent. of participating operators.

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John Leech (Shadow Minister, Transport; Manchester, Withington, Liberal Democrat)

Is it not the case that having a minimum interval period could protect operators in certain circumstances, for example, where local authorities wanted to change the frequency of a service that the operator opposed?

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

We are trying to get the right balance between saying that it is a good idea to have reviews and, at the same time, that we do not want constant reviews, because that would disrupt the scheme.

Relevant operators can register objections to the outcome of a review. If the local authority concluded that the objection from the operator was not admissible, the operator could refer it to the traffic commissioner. However, the draft regulations do not at this stage specify minimum intervals between reviews. We will consult formally on the draft regulations later in the year and are willing to consider, at that stage, whether such a requirement is necessary. Although it is not included in the current draft regulations, I am firmly of the view that the power is needed in case we decide, in the light of consultation, that it would be appropriate to specify a minimum interval.

Photo of Stephen Hammond

Stephen Hammond (Shadow Minister, Transport; Wimbledon, Conservative)

Will the Minister say what time scale would apply to a minimum period?

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

That is exactly the sort of issue on which we wish to consult. Again, I would not like to dictate in Committee what the period would be, because it is particularly important to get the views of local authorities on that.

The draft regulations preserve flexibility for the future so that once we have seen a number of schemes in operation we can amend the requirements in the light of experience.

I hope that I have provided sufficient reassurance for the hon. Gentleman to withdraw his amendment.

Photo of Stephen Hammond

Stephen Hammond (Shadow Minister, Transport; Wimbledon, Conservative)

I thank the Minister for her detailed explanation, particularly the points about consultation and the commitment to consult on the minimum period. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 81, in clause 18, page 17, line 32, at end insert—

‘( ) The provision that may be made by virtue of subsection (3)(g) includes provision for and in connection with—

(a) the appointment of a person (“an adjudicator”) to make such a determination as is mentioned in that paragraph;

(b) the appointment of a person (“an assessor”) to assist an adjudicator in considering any question which appears to arise in relation to such a determination;

(c) the payment—

(i) by the Secretary of State to an adjudicator, or

(ii) by the Secretary of State or an adjudicator to an assessor,

of such remuneration as may be determined by or in accordance with the regulations.’.—[Ms Rosie Winterton.]

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John Leech (Shadow Minister, Transport; Manchester, Withington, Liberal Democrat)

I beg to move amendment No. 154, in clause 18, page 17, line 32, at end add—

‘(6) A statutory instrument containing regulations made under this section may not be made unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.’.

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

With this it will be convenient to discuss the following: Amendment No. 190, in clause 36, page 33, line 32, at end add—

‘(4) A statutory instrument containing regulations made under this section may not be made unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.’.

New clause 4—Regulations under the Transport Act 2000

‘(1) Section 160 of the TA 2000 (Part II: regulations and orders) is amended as follows.

(2) In subsection (2) at end insert ‘, save as provided in sections 122 and 133.’.

Photo of John Leech

John Leech (Shadow Minister, Transport; Manchester, Withington, Liberal Democrat)

Amendment No. 154 would mean that any regulations made by the Secretary of State relating to admissible objections, relevant operators and indeed the circumstances in which operators could object to statutory quality partnerships would be subject to the affirmative resolution procedure. Those aspects of the Bill are hugely important to the success of statutory quality partnerships. Making such regulations subject to the affirmative resolution procedure would ensure that even if the issues are not covered in the primary legislation they still receive adequate parliamentary scrutiny. To protect the interests of passengers, local authorities and bus operators, it is very important, for the many reasons already given, that we get the definitions of “admissible objection” and “relevant operator” right. If they are not correctly balanced and suitably clear, the Government risk the passage of yet another transport Bill that would fail to live up to what it set out to do, namely reversing declining bus patronage.

There is also an issue about regulations under other important parts of the Bill. For example, powers relating to the new, integrated transport authorities, those of the Secretary of State to direct under those sections, and the ability to confer additional powers on the rail passenger council, Passenger Focus, are all subject to the affirmative resolution procedure. The  regulations covering statutory quality partnerships and quality contracts are equally important, and should receive the same transparency and opportunity for debate. Amendment No. 190 would do the same for quality contracts, and would ensure that any order containing regulations governing quality contracts, would also be subject to the affirmative, rather than the negative, resolution procedure. That would ensure a debate and more parliamentary scrutiny on the issue—something I am sure that all members of the Committee would like.

New clause 4 consequentially amends part of the Transport Act 2000 to allow the above two amendments to have force. Specifically, it amends section 160 of the Transport Act 2000, so that an order under sections 122 and 133, which cover statutory quality partnerships and quality contracts, would no longer be subject to annulment as are other sections of part 2 of the Act, but would allow them instead to be exceptions, subject to the affirmative resolution procedure.

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

As the hon. Gentleman has explained, the group of amendments relates to powers for the Secretary of State, and indeed Welsh Ministers, to make regulations about quality partnership schemes and quality contract schemes. The 2000 Act already provides for regulations to be made about a variety of matters. To give a few examples, regulations may be made about the procedures to be followed by making a quality partnership scheme or quality contract schemes, or about services that may or must be excluded from such schemes. Regulations may also make further provision about the approval of quality contract schemes.

The existing regulation-making powers are already quite wide ranging. The 2000 Act provides for them to be subject to the negative resolution procedure. As the hon. Gentleman has outlined, the Bill specifies further matters that may be dealt with by regulation. He proposes that all such regulations should be subject to the affirmative procedure to give additional parliamentary scrutiny.

Lady Winterton, I take very seriously the roles of the House and the other place in scrutinising the Government’s legislative proposals. In these matters I attach great value to the views of the Delegated Powers and Regulatory Reform Committee in the other place, which carefully scrutinises Bills to ensure that they provide for an appropriate degree of parliamentary control. Indeed, in response to a recommendation of that Committee last November, I took the decision that the Bill should be amended in the other place to provide a greater degree of parliamentary scrutiny for certain matters covered by what is now clause 59.

In the case of the powers to make regulations about quality partnership schemes and quality contract schemes, the Committee did not consider the negative resolution procedure as proposed in the Bill to be inadequate. I would like to reassure the hon. Gentleman that the provisions have been looked at by the appropriate Committee, which feels that the approach we are taking is perfectly adequate in terms of parliamentary scrutiny. I would, therefore, ask him to withdraw his amendment.

3:30 pm
Photo of John Leech

John Leech (Shadow Minister, Transport; Manchester, Withington, Liberal Democrat)

In the light of the comments from the Minister, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause, as amended, stand part of the Bill.

Photo of Stephen Hammond

Stephen Hammond (Shadow Minister, Transport; Wimbledon, Conservative)

Obviously we are now finishing our proceedings on the provisions in part 3 that deal with quality partnerships. There is one aspect about which I want to be absolutely clear and this seems to be the time to raise it with the Minister.

I have said all along that I would prefer voluntary partnerships. The Government feel that in too many places such partnerships are not working, so they are bringing forward a series of regulations and Bills to ensure that quality partnerships work. At the base of my concern about partnership is the feeling that if a partnership is imposed, sometimes that is no partnership at all. That could be detrimental to passengers, but we will leave that aside.

When we were talking about the admissible objections, the review and other things, we discussed the fact that there is to be an assessor for review and for admissible objections. The implication of the Bill is that it is always the bus company that is wrong, it is always the bus company that is failing the partnership and it is always the bus company that has failed to provide. I want to be clear that when the assessor considers the admissible objections or items raised in a review there will be a proportionality test as well. Is it clear in the Government’s current guidelines, in terms of regulations, that there is a proportionality test on local authorities, so that they provide an amount equivalent to what they require the bus operators to put in? If not, the likely increase in bus patronage or the likely efficacy of the quality partnership will not be as high.

I understand that the Bill makes provision for local authorities to specify certain aspects of the quality partnership. Are we clear, therefore, that if an initial objection is raised, and it is because there is a view that the local authority is not acting proportionately, that will be taken into account by the assessor and the adjudicator?

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Ann Winterton (Congleton, Conservative)

The hon. Gentleman is right to say that the idea is not for partnerships to be imposed. Indeed, that is something that the Transport Select Committee talked about quite extensively—that there  needed to be a mechanism for finding agreement, which is why we introduced the idea of admissible objections.

The hon. Gentleman needs to be clear that, in the first instance, it is for the local authority to decide whether an objection is admissible and to consider it. It is at that stage that there would be an appeal to a traffic commissioner. We envisage that, most of all, it will be in the interests of passengers that a partnership is made, but it will also be in the interests of the local authority, which will be able to provide improved services, and to the advantage of operators as well. Partnership gives certainty, which is why we introduced registration restrictions. Because of the provisions that we made about competition law, an operator who signs up will be able to discuss fares, frequencies, timings and so on under the system. It will still be a partnership approach, but with added certainty on both sides that the partnership scheme can continue.

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Stephen Hammond (Shadow Minister, Transport; Wimbledon, Conservative)

I understand where the Minister is going, but I would like to bring her back to my question. Are we clear that if the matter has gone beyond that—if it has gone to the appeal process—there will be proportionality?

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

All functions of the local transport authority in making or varying a scheme are subject to the competition test in schedule 10, which includes a proportionality test. It would not apply to reviews, but an operator could refer the matter to the Office of Fair Trading if it thought that the test had not been satisfied. There is no formal test in regulations, but our guidance emphasises and explains why proportionality is important.

As I said, we feel strongly that in many instances there will be a partnership approach. It will be possible to reach agreement but also to have added certainty about operators and local authorities delivering and working in an atmosphere of partnership. There will be some certainty that, if it is necessary, it will be possible to prevent others from disrupting a scheme that is working to the benefit of passengers.

Question put and agreed to.

Clause 18, as amended, ordered to stand part of the Bill.

Further consideration adjourned.—[Mr. Watts.]

Adjourned accordingly at twenty-two minutes to Four o’clock till Tuesday 29 April at half-past Ten o’clock.