Clause 19
Local Transport Bill [Lords]
10:30 am

Quality contracts schemes

Photo of Graham Stringer

Graham Stringer (Manchester, Blackley, Labour)

I beg to move amendment No. 96, in clause 19, page 17, line 40, leave out ‘proposed’.

Photo of Ann Winterton

Ann Winterton (Congleton, Conservative)

With this it will be convenient to discuss the following amendments: No. 97, in clause 19, page 17, line 41, leave out ‘proposed’.

No. 98, in clause 19, page 17, line 43, leave out ‘proposed’.

No. 99, in clause 19, page 17, line 44, leave out ‘proposed’.

No. 100, in clause 19, page 17, line 46, leave out ‘proposed’.

No. 101, in clause 19, page 18, line 1, leave out ‘proposed’.

No. 102, in clause 19, page 18, line 4, leave out ‘proposed’.

No. 103, in clause 19, page 18, line 6, leave out ‘proposed’.

Photo of Graham Stringer

Graham Stringer (Manchester, Blackley, Labour)

Good morning, Lady Winterton. We now come to the kernel of the Bill, which seeks to make it easier to set up quality contracts than was the case under the Transport Act 2000. Although the Government’s intentions to make it easier to bring in quality contracts are welcome, I hope that the amendments will make the process even more effective. Before getting to the meat of the argument, it might be useful to explain that when I tabled the amendments to reduce a seven-stage process to a three-stage process I also tabled consequential amendments Nos. 104, 194, 106, 107, 112, 113, 114, 120, 121 and 125.

It is clear that the Clerks have seen a significant case—that if some of the other amendments were taken on their own they would vary the Bill in an interesting fashion. However, if they were taken separately, the changes that they would make remain opaque to me so I shall concentrate on the main argument for making the process of bringing in quality contracts even easier than set out in the Bill.

There is a clear difference in the thoughts of those on the Conservative Front Bench and the Liberal Democrats and the Labour party. When we considered related matters last week, Labour Members said that many Conservative councillors agreed with my right hon. Friend the Minister rather than with the Opposition, so I checked the position of Conservative councillors on my passenger transport authority. Before I excite the Opposition, I do not want to make the case that all Conservative councillors agree with the Labour party on the matter but, to put it simply, many of them, particularly those whose work is related to transport, agree with the Government and the series of amendments that I have tabled.

I do not know who should be more worried about this—Opposition Members or me—but in open debate, much to his surprise and mine, the Bolton Conservative member of the Greater Manchester passenger transport authority, having watched the Second Reading debate, said that he agreed more with me than with the hon. Members for Chipping Barnet (Mrs. Villiers) and for Wimbledon. The leader of the Conservatives on Greater Manchester passenger transport authority—I think that she has it right—said that she was taken by the case that there needs to be more regulation and more public accountability for the money that is going into buses.

The hon. Member for Wimbledon is making an ideological case that is removed from that of Conservative councillors who are actually looking at what is happening on the ground.

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Greg Knight (East Yorkshire, Conservative)

How many of the Conservative councillors the hon. Gentleman is alluding to are in opposition, and how many are in control? I suspect that the majority of them are in minority groups in opposition.

Photo of Graham Stringer

Graham Stringer (Manchester, Blackley, Labour)

The ones I was referring to are members of a passenger authority that is, in effect, hung; it has a Labour chair but there is no overall control. If the right hon. Gentleman checks with the Conservative chairman of West Midlands passenger transport authority, he will find that his views are not so different from those of the Conservative members of the Greater Manchester passenger transport authority. I hope that helps him to realise that Opposition Front-Bench Members are out on a limb on the matter, compared with the rest of the Conservative party.

The Conservative spokesman on Greater Manchester had it right, because we are talking about bringing a form of franchising regulation into what is called the commercial network. When I talk to people in business about commercial matters, they do not usually include in what is commercial, businesses that obtain so much public subsidy. On Second Reading, it was made clear that in the so-called commercial sector there is an average subsidy of £35,000 per bus per annum. On behalf of taxpayers, we have a right to ensure that there is public accountability for the use of that money, particularly as the subsidy has increased fivefold in cash terms over the lifetime of the Government.

I do not expect an immediate response from my right hon. Friend the Minister because she is currently consulting on what to do with the bus service operator grant, so I realise she is restricted in how she can answer my points. However, what lies behind the Government’s thinking on how to start quality contracts is that bus operators  do not like the scheme. They do not like it because it will stop them making three and four times the profit that they make in London. I am sure that by whatever process—judicial or legal—they will try to stifle the Government’s good intentions.

I ask my right hon. Friend to consider that some of the aggression from the bus companies might change if the BSOG was transferred to the integrated transport authorities. At present, there is an incentive for bus companies, whether on concessionary fares or the introduction of improvement and regulation of services, to go for bigger subsidies and to attack local democratic bodies. If those bodies, which we hope will be in charge of the networks, were also in charge of handing out a great deal of money and making that money work in favour of the environment and transport, there would be a change of attitude in some of the rather aggressive bus owners. It would offer a greater inducement for them to work with the integrated transport authorities than the long process currently in the Bill.

The Bill contains a seven-stage process, with the transport authority going out for consultation, then to an approval board, then a tribunal. The amendments, and the consequential ones, ask whether we need such a long process. Is it not right in principle for elected councillors to make the decision, rather than an approvals board and a tribunal? Those matters are of great local concern—the electorate and our constituents care about them. Is it not right that the electorate have a say about the people who make the decisions, and that the people who stand for election and campaign for better bus services, a new route or whatever, make the decision? That is the essence of the amendment—the integrated transport authority should make the decision.

Having listened to the Second Reading debate and had a number of discussions with my right hon. Friend the Minister, I recognise that there are a number of reasons why the Government have not come to the same conclusion that we have. They agree in principle that it is better—as in the rest of devolved democracy—that councillors make decisions and they recognise that there is a threat from bus companies, so they have tried to protect local authorities and the travelling public from judicial review by their proposed process. That is the principle. However, will it really protect the process, or will it just lengthen it? Will the provision stop judicial review?

What worries me most about the process, apart from the fact that local councillors will not take the decisions, is that economic viability will be part of the assessment made by the approvals board and the tribunal when they come to their decision—not the decision of the elected councillors who put the scheme out to work. Is what is proposed sensible? That is difficult to assess, unless it is tried out. Furthermore, saying whether something is economically viable is close to a policy decision. For example, in an area that I know well, south Manchester, putting out a tender in Wythenshawe for groups of minibuses rather than larger buses on the main routes is a serious policy matter in respect of council estates that were built without easy access to buses. That decision, as part of a tender, should be left to elected members, not to what would necessarily end up as an argument between professors of transport economics, who could get it wrong. One could say that they might be right in their argument, but that the process will protect us from  judicial review, because we will have been seen to be reasonable—the people putting the scheme out to tender would not make the decision.

Second-guessing the courts is always difficult, but when the nature of what is going on is to test the market to say which scheme the transport authority thinks is viable, how can professors of transport or economists be better at knowing the market than the tendering bus companies? They are the market. If the transport authority is wrong, it will be clear from the tenders coming back that the bus companies do not think the scheme viable. It would not be beyond the wit of integrated transport authorities to put variabilities—on fares and routes—in the tender, so that bus companies had a range of mix-and-match options. One would not expect a simple assessment that could be made in a day. Tenders for fixed-route tram systems, for instance, are complicated documents and such complicated tender documents would be better dealt with by competitive tender than by outside assessment.

A second, subsidiary argument is that if things are left to the market, it will somehow allow the bullies of the bus industry—the likes of Stagecoach, Arriva and First Group—to push out the smaller operators. I know that my hon. Friend the Member for Preston (Mr. Hendrick) has been greatly exercised by such problems in Preston, and he has set them out in Adjournment debates. However, I do not think the argument is a good one. If an integrated transport authority does not want a large company operating its scheme, it should package the tender to make it more attractive for a small operator, but if one of the large operators comes in with the best bid, it would be the duty of either the tribunal, the approvals board or—if the amendments go through—the integrated transport authority to take the decision on best value and the practicalities of operating the routes. In the current situation, the process of external decision making proposed by my right hon. Friend the Minister would not really be a protection against judicial review. Having the cash might be better protection.

When my right hon. Friend answers the debate, and between now and Report, I hope that she will reflect on those issues. Our proposals are workable; they would be quicker, and as long as a bus company did not win a judicial review, the process could go on.

There are other ways of protecting an integrated transport authority. One might be by having the approvals board as a statutory consultee, which is close to what the Liberal Democrats are proposing in their amendment. That is a sensible proposal that requires consideration and debate. Another way might be to stick with my right hon. Friend’s proposals and to restrict the two-stage process to dealing with procedure, not trying to second-guess the market and not taking policy decisions—however we define policy—but leaving them to the elected representatives. There is a lot of scope.

I shall deal with one other argument before I sit down. I know that my right hon. Friend is concerned not just that small bus companies may be pushed out but also that small districts may not be able to undertake the process as effectively. However, the integrated transport authorities will not be small shire districts, they will all be large in financial terms, with decent local facilities,  and will not be awed by a judicial review case that might cost £50,000 or £100,000. Even the smallest authority that is likely to become an integrated transport authority is likely to have a decent legal department. We are not talking about small shire districts whose turnover might be only between £12 million and £18 million; we are talking about much more substantial authorities. I hope my right hon. Friend will reflect on that, as many of my hon. Friends are concerned to make sure that the process works.

10:45 am
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Clive Betts (Sheffield, Attercliffe, Labour)

I support the amendments standing in the name of my hon. Friend the Member for Manchester, Blackley, and I support his argument that there is in general a need for a change. I challenge Conservative Front-Bench Members to explain to my constituents, and to many other people up and down the country who feel considerably disadvantaged by the current arrangements, why no change is needed.

The reality of the situation in South Yorkshire is that in what some would say were the halcyon days of the South Yorkshire transport system we had a cheap fares policy, lots of widely used bus services and, as a result, little congestion. Yes, there were failings, and no one would actually want to return to those precise arrangements, but our present free-for-all, with bus operators in effect determining most of the services that run—or that do not run, in many cases—is unacceptable.

For every three bus passengers in Sheffield at the time of deregulation, there is now only one, and a lot fewer buses to ride on. That is the scale of the fall in bus usage, which we have to do something to correct.

Of course, franchising is a possibility, and there are quality contract arrangements in the current transport legislation, but I think everyone has accepted that the status quo is not feasible for the simple reason that quality contracts have not been used in the form currently available. The “only practicable way” test is one that no authority will meet; indeed, no authority has met it. South Yorkshire began a process to try to meet it because the authority recognised the need to do something about ending the current free-for-all. Wherever we stand on the issue, it certainly cannot be to support the status quo in terms of a piece of legislation that has not yet been operated and is effectively defunct.

We have a choice: either to say that transport authorities, whatever their form, will never have any powers to challenge the current deregulated environment, or that they will have powers, which are effective and can be used where appropriate in their areas. No one on the Labour Benches is arguing that every transport authority in the country has to move to a quality contract situation; simply that an authority should have the right to do so if it is in the best interests of the population in their area. I find it very difficult to understand how there can be any argument against a transport authority with elected members being able to decide what is best for people in their area.

Surely that is a fundamental issue for people such as the hon. Member for Harwich, whose writings about new localism I was reading in The Daily Telegraph the other day; in effect, he was asking why the electorate should bother to go out and vote at local elections when local councils had so few powers, and saying that what we ought to be doing is looking at enhancing the powers of local authorities, so that they could really  relate to the electorate in their areas. It was very interesting. I did not agree with absolutely all of it, but the general thrust—that when people vote, they should actually be able to change things and elect a council that delivers the services they want—seems to run completely at odds with the support of Members on his Front Bench for the removal of franchising powers and not allowing elected members at local level to make those decisions. How can a new localism position be supported when a Member wants on the one hand to argue a case for more powers to local councils, and on the other hand, to vote in Parliament to take those powers away and not give them at all?

I am very much of the view that these are matters where the right should be with the local transport authority to have a quality contract situation in their area if they believe that it is best, and they can demonstrate that it is best, for delivering services to the people of their area. It is not just a question of the three-for-one passenger exchange; fares have gone up from the rather famous 10p that used to be paid in South Yorkshire to around £2 for the same journey. It is the constant changes that people cannot get their heads around. People plan their lives; they get a job and have to get there early in the morning so they work out the bus route, but at 42 days’ notice, the bus route changes. That is a fundamental problem.

A man and wife have many happy years of marriage, but one of them has to go into an old persons’ home—we have all talked to people who have had that experience. They find a home that the partner living at home, who does not drive, can reach easily by bus, but then the bus route changes and there is no comeback. They go to the local councillor and their Member of Parliament, who are powerless in those circumstances. That absolutely cannot be right.

I was talking to constituents on Westfield crescent the other day about Crystal Peak, a significant district shopping centre in my constituency where many women work because the hours suit their family lives. The problem is that although the working hours in the shops suit their family lives, they cannot actually get there on the bus because the bus services do not run early in the morning or late at night. Elected members at local level must be given powers to address such problems if they think that is the appropriate way forward.

How can we reach a situation where quality contracts can be put in place, if that is thought right at local level? In London, we clearly have a situation that works. Transport for London makes the decisions, puts the franchises out, private firms tender for them and bus passenger use has grown enormously, so that is a model we can look at. There have been rows about concessionary fare schemes in local authorities up and down the country, where concessionary fares are built on the back of a free market, deregulated environment. A complicated argument is made about operators not being any better or worse off as a result of a concessionary fare scheme. That argument disappears in the London environment because concessionary fares have become part of the tendering process, and all the firms tendering build the concessionary fare arrangements into their tendering process, so there is no administrative nightmare.

I shall try to reinforce some of the points that my hon. Friend the Member for Manchester, Blackley has already made. Clearly, the Transport Act 2000 did not get the issue of quality contracts right but now we have an opportunity to get it right, and not to replace one set of insuperable barriers with another. There is the democracy argument that the matter is for local decision makers on the transport authority, so we do not need an approvals board and tribunals. Why do we need the approvals board to second-guess and in some cases override or veto a decision? That is the fundamental problem that some of us face.

I respect and understand the Minister’s intention, as I see it, not to override local democracy. I know that she is committed to local councillors having powers and operating them in the best interests of their electorate. I also understand her desire to protect small operators and councils in particular, and to avoid a judicial review position in which courts decide matters, often on a technicality, rather than decisions being taken at local level by whatever process is appropriate. However, I still have worries about the approvals board and the tribunal coming together as part of an extended process; not merely about where power lies in that process, but about the timing.

I was talking to another constituent—I have been talking to quite a few recently because of the local elections—on Ribblesdale drive. She said, “I’ve got a small car, but I generally don’t really want to use it, I’d much sooner use the bus. The problem is on a Sunday there’s no bus service and I have to walk half a mile.” Sheffield has a few hills in it, so she is all right walking down the hill to the bus stop, but getting back, particularly when carrying shopping, is an impossibility. I told her, “I have good news for you. I’m sitting on a Committee next week and we’re going to look at how we can give powers back to local councils, if they wish to take them up, which would enable them to decide the framework and frequency of services.” She said, “Oh, that’s great, and when’s that going to happen?” I said, “Well, we might get the legislation through some time this year, and then the regulations are going to follow, and then, well perhaps another three years afterwards?” She said, “It’s not very quick, can’t we do it any quicker than that?” There will be a lot of public frustration when people understand how long the process could take.

The Minister has said that she wants to lay down maximum time limits for the various processes to be followed in the approvals board and the tribunal. It would be helpful if she indicated what she sees as the way forward. The Passenger Transport Executive Group has said that it could take 18 months for a transport authority to come to a view, after all the necessary consultations, that a quality contract is the right way forward and that it could then take up to another 14 months to go through the approvals board and the tribunal. Although all that is designed to stop judicial review, there is nothing to prevent an operator going for judicial review at the end of the approvals board and tribunal process, which could take up to another six months.

So, it could take three years from the legislation coming into effect to go through all those stages, which would cause an awful lot of frustration for people who  do not have access to a bus service, but who desperately need one for economic, social or personal reasons. It would be helpful if my right hon. Friend the Minister said what she sees as a maximum time limit for the process.

My view, as I said, is that local democracy should prevail. I hope that my right hon. Friend responds on the approvals board and what it will be able to do. Reading the Bill carefully, I cannot see any reference to the powers of the approvals board to change or veto a decision of a transport authority being limited in any way. I cannot see anything that limits in any way the powers of an approvals board to say no, or yes with conditions. I may have read the Bill wrongly, but I cannot see that. I worry, because it effectively says not that the approvals board has a view over the process—whether the right process has been followed, which might offer some protection against future judicial review—but that the board has a right to say whether a policy is right or wrong. That is undemocratic, and I find it difficult to support.

If the purpose of the approvals board is to protect authorities, particularly small authorities, from a judicial review process—I hope that we do not get there and that that time is not taken up—why are the powers of the approvals board not limited to looking at whether proper process has been followed by a transport authority, rather than the board having complete power to reverse or change a decision?

The Minister talked about an approvals board perhaps saying not yes or no, but, “Please can we look at some issues again?” It may then enter into a dialogue with the transport authority on the precise details of the scheme proposed—is it correct in every aspect? The board might say, “Yes, we think you have the right approach, but we need to discuss modifying or changing one or two aspects.” How will that be built into the time periods?

The Minister talked about an iterative process between the approvals board and the transport authority. Will that process be open-ended, or time-limited as well? If it is to be an iterative process, will the operators, who might be objecting to a scheme, be part of it? It is difficult to understand how we will be able to have an open public hearing by an approvals board on a quality contract proposal, with the operators presumably putting counter-evidence, but then exclude the operators if the approvals board comes to a view that it wants further discussions. That could get incredibly difficult and complicated.

I might be misreading the Bill, but we must be clear, or we could end up with a time-consuming and complicated process if the legislation is passed in its current form. If the intention is to ensure that the process is done correctly to avoid judicial review, why do we need an approvals board and a tribunal? Why two bodies instead of one? Why not simply have a tribunal, for example, which could look at whether process had been followed properly? I hope that, through such a mechanism, we might avoid the need for judicial review.

There has been some discussion about the economists working with traffic commissioners to test the viability of schemes, but I agree with my hon. Friend the Member for Manchester, Blackley that viability will be tested by the tendering process. That is what will happen. If an authority has to justify in public—through the approvals  board process and then an interim discussion—precisely what the viability of the scheme is deemed to be, will that not put into the public domain an awful lot of confidential information on the economics of the tendering process? It will undermine the authority’s position when it puts the scheme out to tender. I raise that issue because it is interesting to know the Government’s thinking on how the process will operate.

Finally, the approvals board could have another role. As my hon. Friend mentioned, that is perhaps down to the Liberal Democrat suggestion to which I referred earlier. If there is a need for expert external advice, the approvals board perhaps ought be able to give that while the transport authority is considering the adoption of a quality contract. It could feed in at that stage so that it would not add to the time period, but would inform the process without having a veto. For example, the Environment Agency is a statutory consultee on flooding matters. That proposal would not give a veto to a non-appointed body nor would it extend the time period, but it would achieve a better-informed decision that should strengthen the authority’s position if a judicial review challenge were to take place.

My position is clear. Given the general support across the House for devolving more powers and for giving a thrust to localism—supporting it to ensure that our constituents get a better deal and get the bus services that they need—it is right that we change the current process on quality contracts and give authorities the right to have them. We must also examine carefully whether the process laid down under the Bill is right one and whether we should make changes to it to allow local democracy to have much greater force and impact.

11:00 am
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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

In a useful contribution to the debate, the hon. Member for Manchester, Blackley began by saying that quality contracts schemes are the kernel of the Bill, and so they are. If we can get this right, we will hold out the prospect of increased bus patronage, the deficiencies of the current system being addressed and the problems of the Sunday service, which the hon. Member for Sheffield, Attercliffe referred to a moment ago, being corrected to the benefit of all. However, if we do not get it right, we will be in severe danger of repeating the mistakes of the 2000 Act. The best will in the world, which created that Act, will have created this Act, which will simply be filed on a shelf to gather dust while things carry on pretty much as normal, with local authorities trying to use the legislation, but probably not succeeding too well because of the hurdles that have been put in place.

When faced with a number of hurdles, the ITAs may well conclude that the game is not worth the candle and just not bother. That would be very sad, and not at all what the Minister and her team want. I readily accept that they have introduced the Bill to improve things.

The difference between the Minister and her colleagues—I align myself with her colleagues on this matter—is over whether the Bill will achieve the ends that she wishes or whether those ends are too onerous to be achieved. In that sense, there is a practical difference between the arguments that we are making now and the Conservative position, which is a separate issue. I want to dwell on that for a second. I hope that we hear from the hon. Member for Wimbledon in due course, as this is an important part of the Bill and we must test his party’s position.

I must reflect on the fact that the motion tabled by the hon. Member for Chipping Barnet on Second Reading on 26 March began:

“That this House declines to give a Second Reading to the Local Transport Bill [Lords] because it encourages the introduction of Quality Contract schemes to regulate bus networks, thus preventing free competition between bus operators”.

That is a different position from that outlined by those who have spoken this morning. Furthermore, the hon. Lady said:

“In future, we would certainly look to remove quality contracts altogether as an option outside London”.—[Official Report, 26 March 2008; Vol. 474, c. 204-09.]

If that philosophical position has been adopted, it is incumbent on Conservative members of the Committee to demonstrate how they would address the inefficiencies under the current system without resorting to quality contracts. In the debate, the hon. Member for Wimbledon put great stress on the use of partnerships generally.

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

On Second Reading and at last Thursday’s sitting, I said that partnerships are undoubtedly the best way forward and that we would prefer voluntary partnerships to work. Where they cannot work, we want to ensure that statutory partnerships work. That is our stated position.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

I am grateful for that intervention, which clarifies matters a little, but the question I put to the hon. Gentleman when he was summing up on Second Reading was, “What happens if partnerships are ineffective?” There are effective partnerships up and down the country—he has referred to some, I have referred to some and we all know where they are; Brighton and Hove, Cambridge and so on—but the question the Conservatives have not answered is, what happens where partnerships are ineffective and what recourse is there, or should we just leave that to fester, with poor service for many people across the country?

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

Is the hon. Gentleman joining the hon. Member for Manchester, Blackley in saying that he sees no future in statutory quality partnerships?

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

No, not at all. I am, I hope, joining the position that quality partnerships have a role to play, but there needs to be a further dimension of quality contracts for when quality partnerships have failed to achieve the desired result. That seems to me to be an entirely logical progression. Without that further option being available, quality partnerships would be less likely to work, in my judgment. If the hon. Gentleman wants quality partnerships to work, the existence of quality contracts will help to achieve that end. No doubt we will hear from him in due course.

There is one more aspect of the Conservative position that it would be helpful to clarify. If these arrangements need to be removed altogether as an option outside London, as the hon. Member for Chipping Barnet says, I fail to see what is so different about London that means that some sort of regulation works there despite it apparently being entirely inappropriate for the rest of the country. Frankly, that is an insult to people in Manchester, Birmingham and other big urban areas, as well as those in rural areas, across the country.

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

I do not think that the hon. Gentleman was here on Thursday afternoon—his colleague the hon. Member for Manchester, Withington was—when we went through a number of arguments about regulation and had a debate about where regulation is and is not working, or is viewed to be working or not. That is one point we can park. On the second point, he knows as well as I do that the Greater London Authority Act 1999 impacts on what we can do elsewhere, as does other devolved legislation. That, I am sure, is why my hon. Friend the Member for Chipping Barnet made the point about outside London.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

I am not sure that that justifies the philosophical difference, but let me leave it there. The Conservatives can make their own bed and lie in it in due course.

Across the country, we have seen a significant decline in bus usage over the last 30 to 40 years. Some of that is social, as people have gained access to private transport, but some of it is not. It is down to very poor bus services, which have driven people to use cars when they would not otherwise have done so.

The hon. Member for Sheffield, Attercliffe referred to the situation on Sundays, when people might be forced to use cars because of the lack of a bus service. I have referred previously to a constituent of mine who lives in the village of Ditchling and wanted to work in the nearby town of Burgess Hill. There was a bus service, which operated early in the morning and enabled that person to take a job offer. Shortly after taking the job, 42 days’ notice was given and the bus service was simply withdrawn. That person was left high and dry, with no way of getting to work, and had to leave the job.

We cannot treat people’s lives like that. We cannot say to people that the whim of the bus company means that you are out of work, which is what happened on that occasion. We need a better system than that. I think that the system laid down in the Bill is the right one, as I made clear on Second Reading. Is it going to work? That is the matter I want to take up with the Minister, rather than the philosophical difference with the Conservative party. I am not sure that it is; there are just too many hurdles.

I have had a conversation with the Minister, who made her position clear on Second Reading. I think she is well intentioned—if I did not, I would say so—and that she is genuinely trying to build in some protection for local councils and local authorities to ensure that there is not a successful challenge to the whole scheme. I understand that, but the difficulty is that the number of protections built in acts as a discouragement to local authorities taking the necessary action to improve local bus services. There is no guarantee that the existence of a number of protections will prevent a judicial review from the bus companies, if they wish to go down that road.

The bus companies will not ask, “Will we win at judicial review?” They may ask, “How much is it going to cost us to do this, how long can we string it out for and is the cost of the judicial review less than the sum of money we will make in the short term from thwarting the plans of the local transport executive or the ITA?” That is the financial calculation they will make.

I do not think that the Minister’s well-intentioned efforts to stop judicial review will work for that reason,  although I understand her point. That is not to say that we need a complete free-for-all with no legal recourse for bus companies. That would leave ITAs open to legal action, which would probably succeed. Therefore, the balance has to be struck.

I think that to have an external approvals board, which is unelected and which can effectively trump ITAs, and then a transport tribunal, and then a judicial review, is to have one level of approval too many. I do not think that to have those three levels is necessary for the Minister to meet her objectives in providing a robust scheme, which is proof against legal action.

Lady Winterton, there is a slight difficulty here because, as you will appreciate, some of the alternatives are referred to in subsequent groups of amendments, so it is perhaps rather difficult for us to structure this debate in a sensible way. For example, amendment No. 194 in the fourth group on the selection list is consequential, leading on to a very large group in clause 23, beginning with amendment No. 157, which covers many of the alternatives. I am not clear whether you think it sensible for us to go into the alternatives at some length now, thereby curtailing the debate on clause 23, or whether in fact the purpose of this group is to draw attention to the deficiencies of what is proposed in the Bill, thereby allowing the alternatives to be set out in the later parts of the debate. It would be helpful to have your view on that.

11:15 am
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Ann Winterton (Congleton, Conservative)

The latter case is the one which should be followed at present, so stick to the finite issues that we are debating.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

I am grateful for your guidance, Lady Winterton. In that case, I shall simply say to the Minister that there are alternatives, which I shall explore when we get to the relevant part in the Bill. One of them is indeed the idea which has been flagged up already, of having the approvals board as a sort of statutory consultee, perhaps to give advice like the Environment Agency, which is exactly the model I had in mind. The approvals board would not necessarily be able to compel the ITA to take its view, but the ITA would have to listen to it, otherwise it would be difficult for the ITA to defend its action subsequently in any legal action.

Another alternative might be to abandon the transport tribunal. Different approaches are possible. One might be to cancel the approvals board altogether, but I would not be in favour of that because having external validation from experts is a good thing. However, there are ways to make the Bill work. I ask the Minister, in the light of the comments that not only I but her hon. Friends have made, and in the light of the views expressed by local authorities up and down the country, of all three political persuasions, who all want the Bill to work and who all welcome its introduction, to find a way to make sure the Bill does work and does not end up gathering dust on the shelves like the Transport Act 2000 did.

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Angela Smith (PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury; Sheffield, Hillsborough, Labour)

I start by reiterating the support that I gave to the Bill on Second Reading, and in particular the provisions that will make it much easier for integrated transport authorities to develop quality contracts.

We have heard this morning about how quality partnerships could achieve much of what the quality contract promises, but the example we have in Sheffield does not fill me with confidence on that score. The process of adopting quality partnerships was started in Sheffield in 2002, when Labour was returned to power in the city; however, we did not achieve a quality partnership of any sort until 2007. We are grateful for what we have got—the Barnsley Road scheme, which serves one of the most deprived areas in the city, in the constituency of my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett)—but that leaves the rest of the city without a solid foundation for delivering the sorts of service that my hon. Friends and the hon. Member for Lewes have been talking about this morning. I doubt that quality partnerships are the answer for a big city like Sheffield or for the metropolitan areas generally.

My hon. Friend the Member for Sheffield, Attercliffe is right: if we believe in localism, we have to give the right to choose the appropriate option for the delivery of bus services to elected representatives at that level. The hon. Member for Chipping Barnet opposes Bill, so I found it interesting that last week she saw fit to visit Sheffield, Hillsborough and the adjoining constituency of Barnsley, West and Penistone. She issued an interesting press release that mentioned how much she was looking forward to improving public transport in Penistone and in Sheffield. I found that quite astounding given her opposition to the Bill, which promises to deliver the required improvements to villages and towns in the north of Sheffield and the west of Barnsley—areas which, when it comes to the delivery of bus services, are suffering as much as any inner-city area in Sheffield, Doncaster or Rotherham.

It is the remote, outlying areas of South Yorkshire that have suffered most from deregulation in the past 20 years. Surveys in Sheffield have repeatedly underlined that point. In 2002, the council conducted a huge citywide survey to establish whether there was a groundswell of support for bringing back some form of regulation of the bus services. Support for that option was overwhelming. My own surveys over the past year, which made use of the much-derided communications allowance, underlined that point. I have conducted surveys across my constituency and, to a person, every respondent has expressed support for the re-regulation of bus services and a return to the days when they could rely on the bus turning up on time and getting them to wherever they wanted to go.

That brings me to the key point about the provisions of the Bill: the importance to places such as Sheffield, Barnsley, Rotherham, Doncaster and Manchester of having a public transport network that can be relied on to get people to work. Services to a city centre are not the only important thing. In cities such as Sheffield or Rotherham, people work only in the city centre, but in the Don valley, Hillsborough and Attercliffe. There is a wide range of workplaces across the area, so we must have bus services that go not only into the centre, but across the city.

We must also recognise the importance of getting young people to college and university. In my constituency, we have a tram network that runs to Hillsborough further education college. However, large parts of my  constituency do not have access to the tram network and have a very poor bus service. For young people living in Burncross, Chapeltown or even Ecclesfield, getting to Hillsborough college for 9 o’clock in the morning is very difficult. Equally, someone on a vocational course must go to the city centre, where Castle college provides a range of courses. At the moment, it is difficult for people to ensure that they get to college on time if they come from one of the places that I have just mentioned.

Another problem is transport to hospital. One of the biggest responses that I got in my surveys of bus users was, “I cannot get to the Northern General.” Royal Hallamshire hospital is on the tram network, so to some extent it is easier to get to, but Northern General hospital is tucked away in Fir vale, which does not enjoy any access to the tram network, and where the No. 17 bus runs on a very ad hoc basis—there is something like one bus an hour—from Hillsborough. The difficulty of getting to the Northern General is immediately apparent. In the places that I mentioned, such as Burncross, Chapeltown and Ecclesfield, the problems are even greater.

From my perspective, meeting the needs of people who cannot afford to buy or run a car are paramount, so that they have access to hospitals, the workplace, college, university and opportunities for shopping and leisure. That is why my hon. Friends and I support the Bill. Deregulation has created a network that does not meet any of the above criteria in the way that the bus service used to in places such as Sheffield.

As an example of the irrationality of the current situation, I refer to what has happened in High Green in my constituency, which has 2,000 buses running through it each week. High Green is a village and all those 2,000 buses run on one road. Yet two miles down the road, in Burncross, there is provision that is commissioned and the route is heavily subsidised by the passenger transport authority because the operators will not serve the area on a commercial basis. How irrational is that? There are 2,000 buses in High Green and a patchy, inadequate provision in Burncross. That is why we need the Bill. At the moment we have a provision that does not work in the interests of everybody who needs to use a bus service and everybody who would rather use a bus service but cannot because they cannot rely on the bus service to get them to work, to hospital, to leisure opportunities or to college.

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Greg Knight (East Yorkshire, Conservative)

So that the Committee can be certain, is the hon. Lady saying that she sees the provisions of the Bill as a way of providing fewer buses, and that is why she supports it?

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Angela Smith (PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury; Sheffield, Hillsborough, Labour)

The right hon. Gentleman misunderstands my comments. I am saying that it is irrational that the bus services we have at the moment should leave one area with a provision that is barely adequate, with people unable to get to where they need to be, whereas another area only two miles down the road has 2,000 buses a week going through it because it is effectively the terminus for the service and not because it needs 2,000 buses a week. We need a more strategic overview of the network in areas such as Sheffield to ensure that everybody’s needs are properly served.

The changes are also needed because the current bus services are not reliable, as my hon. Friend the Member  for Sheffield, Attercliffe said. The biggest complaints that I receive are about routes that are changed at short notice, as the hon. Member for Lewes pointed out, and where buses do not turn up on time. Occasionally, we hear accusations that bus drivers have cut out parts of a route because they are running late and they need to get back on track. That often happens to areas such as Burncross, where the service is sorely needed.

We need to see a change in bus service provision. The economic and social case for that is irrefutable. I welcome the provisions that give integrated transport authorities the right to opt for franchising if it is right for the area. The debate is now about how we deliver quality contracts, not about whether we need them. On that point, the Conservatives have been left well behind by the views of the vast majority of the country. When the Bill has finally passed through Parliament and quality contracts are on the way to being developed across the country, we shall find that the Conservatives suffer quite badly when it is realised more widely that they opposed the improvements outlined in the Bill.

At the moment, we have a procedure for developing quality contracts that requires a referral to the approvals board and to a tribunal, as my hon. Friends have pointed out. I understand the Minister’s arguments on why we need that process. Equally, however, I ask her to understand my and my hon. Friends’ nervousness about whether the process outlined could end in lengthy delays and in attempts by the bus operators to undermine the new process in order to ensure that quality contracts never happen.

Given our experience over the past few years, it is critical that we air such issues and, if possible, arrive at a way forward. My concerns and those of my hon. Friends must be recognised in the outcome of the debate. In the end, there has to be a balance between the need to ensure that quality contracts go ahead and are successfully implemented, and the need to ensure that they are viable and recognised by bus operators as the inevitable way forward in areas such as South Yorkshire and Greater Manchester.

The crucial point for me is what the public interest can be deemed to be. My right hon. Friend the Minister pointed out that the public interest is about delivering a bus service that is used by more people, reduces congestion on the roads and serves the economic and social interests of a given area. The problem, bound up in the need to meet those clear criteria of the public interest, is the need to achieve a balance between the commercial routes, which bus operators will always be happy to deliver because they make money on them, and the commissioned and subsidised routes, which the PTA ensures are provided year after year. Ultimately, the argument within each quality contract will be about the balance between those two elements.

I would be interested to hear from my right hon. Friend how much the need to serve the interests of people living in those areas where routes are subsidised will be at the heart of the final process. Without that subsidy, bus operators would never run them. What about those areas that have no provision at all? What about bringing them into quality contracts to ensure that they get some form of bus service, allowing them to participate in the full life of their community?

I know that my right hon. Friend will listen to what is said this morning. I would like to hear her comments on the discussion needed to get the right process in the end—one that gives me and my hon. Friends the confidence to believe that we will get quality contracts in areas such as South Yorkshire and that they will work effectively.

The other key point was mentioned by my hon. Friend the Member for Sheffield, Attercliffe, who drew attention to the impatience in South Yorkshire for quality contracts and for getting them moving as quickly as possible. That is absolutely right. Just as my hon. Friend was saying, one of my great difficulties explaining on the doorstep that we have now tabled legislation that will, I hope, help to resolve the problems with public transport is then having to say, “But I am not quite sure when we are going to be able to deliver this—it may be two or three years, or longer.” Our constituents do not like that. They need to know when they can expect the improvements to take place.

I again plead with my right hon. Friend the Minister to listen to what has been said and to commit this morning to ongoing dialogue—not just on the process and how much confidence it gives us as to whether we will get quality contracts, but on us getting those quality contracts moving as quickly as possible.

I am looking for clear time limits on how long it can take from the moment the contract has been developed and the scheme consulted on to the moment it is approved by the approvals board and, if necessary, has gone through the appeals process. We need clear time limits in the Bill. An outcome of the legislative process cannot be an open-ended procedure for developing quality contracts. That is not acceptable, and I ask the Minister to respond.

11:30 am
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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

I shall try to follow your ruling on these amendments, Lady Winterton, and I suspect that some of the more detailed debate will come on the later amendments. The first set is consequential on some later amendments.

I shall open with some general remarks on points made by my hon. Friends and the hon. Member for Lewes about what happened on Second Reading. What has been said is right—this part of the Bill is welcomed by local authorities up and down the country, of all political hues. I know that last week poor Mr. Greaves was dismissed by the hon. Member for Wimbledon as some kind of throwback who did not really represent the views of any of his colleagues in the Conservative party. I think that Councillor Greaves was reflecting a lot of the feeling I have heard from Conservative councillors, which indicates, I am afraid, that Conservative spokespeople are out of touch with the general public.

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

I hope that we are not going to go through those arguments again. Mr Greaves is not the person who wrote the letter—let us be clear about that. Mr Greaves was copied in on the letter; he is not the man expressing its sentiments. He may have commented later, but the sentiments were those of Councillor King, who has subsequently spoken to my hon. Friend the Member for Chipping Barnet and other colleagues to say how disappointed he is that the Daily Mirror put that. [ Laughter. ] Only because that does not represent his views in total. It is a selective part of his views.

Unlike the hon. Member for Manchester, Blackley, I have had the good fortune to talk to the chairman of Centro-PTA since we last met and he expressed none of the views that the hon. Gentleman expected him to express. We should be careful about quoting selectively from newspapers that, after all, follow the Minister’s persuasion and can hardly be treated as impartial.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

I am afraid that that simply will not do, it really won’t. The hon. Gentleman must know in his heart of hearts that it is simply not the case. Presumably, we must now dismiss Councillor Greaves and Councillor King as irrelevant in Conservative party policy making. Frankly, I believe not only that councillors were horrified at the idea of opposing the principle of quality contracts, but that they were even more horrified at the thought of going even further and saying that they would abolish quality contracts if, by any misfortune, they were ever returned to power. For bus passengers, that must be a horrific concept.

Any quality contracts that were introduced would be abolished, so all the work local authorities had put in to improve bus services in their area would count for nowt. I think that they will find that totally unacceptable, as my hon. Friends have said. When people realise what is going on in the minds of Conservative Front-Bench spokespeople, they will be horrified.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

As I understand it, the Conservative policy is to abolish quality contracts except in London. Can the Minister help me to understand philosophically why it is right to abolish quality contracts outside London—where apparently they are no use—but to retain that option in London?

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

If I were a Londoner, benefiting from a very good transport system and a good system of franchising and tendering, I would be slightly worried about what the future might hold were a certain candidate—[ Interruption. ] If the hon. Member for Wimbledon says that voting for the hon. Member for Henley (Mr. Johnson) will somehow be good for public transport in London, he should look at what is being said about abolishing quality contracts. If all the quality contracts outside London are to be abolished, how will the Conservative party justify keeping them in London? That is the logic in question. If, in principle, it is so marvellous to have those contracts abolished for everybody outside London, surely all members of the Conservative party in London, the councillors and the Mayor will say, “If it’s good enough for them, why isn’t it good enough for us?” That is what I would be thinking about at this time.

As my hon. Friends and the hon. Member for Lewes have set out, there are good reasons why we must introduce and make more flexible this system of quality contracts schemes. The key aim of the Bill is to make quality contracts schemes a more realistic and practical option. Often, that will represent a major change to how bus services are provided in an area, and it will be extremely important to get the underpinning assumptions right before taking such a step. For that reason, for schemes in England, the Bill will give the approval role of the Secretary of State to a new independent approvals board, as we discussed this morning. That will be chaired  by a traffic commissioner, supported by two other experts in transport planning and transport economics.

This has not been mentioned, but I want to say at this stage why we think it important to remove that role from the Secretary of State. Within the Department, we would like the ability to work with local authorities that wish to look at improving their services. As part of that, they may wish to introduce a quality partnership scheme or a quality contract. We want to be able to advise, talk about best practice and work on guidance with them. It would be difficult to do that if the Secretary of State was the final source of appeal. Hon. Members should bear that important point in mind.

I also want to refer to the Transport Committee. As my hon. Friend the Member for Sheffield, Attercliffe said, I am certainly not in favour of second-guessing policy decisions made by local government. He referred to South Yorkshire and the 10p bus fare. My father was on South Yorkshire county council at the time and, as I have said many times, even though we are talking 30 years ago, people in my constituency still talk in hushed terms about the ability to get round South Yorkshire for 10p.

I absolutely understand and often make the point that if local councillors talked more about the improvements they want to make in public transport, people would realise what a great role they play in improving the quality of life of their constituents.

I certainly am not in favour of trying to second-guess policy decisions; I believe that local authorities should determine their own destiny. However, quality contract schemes create a unique situation and many complex issues need to be taken into account. It is also true to say, as was mentioned earlier, that the only redress for bus operators who felt that a local authority had erred in any part of the decision process would be through judicial review, both under the current model and if the changes proposed by my hon. Friend the Member for Manchester, Blackley were accepted.

We are trying to replace the current system with one that gives the ability not only to go through the process and to make representations, but to provide some protection from judicial review. I understand the point made by my hon. Friends and by the hon. Member for Lewes in particular, that the protection is still not there, but there is strong advice that if an appeals process is in place, it is much more difficult to get leave to go to judicial review. That is generally accepted. At the point of applying for judicial review, what will be taken into account is whether the first processes—the approvals board and Transport Tribunal—have been gone through. If those processes are still open, it will be difficult to get leave to go to judicial review. If an application is made after those processes have been gone through, it is more difficult to say what grounds there could be for judicial review, because, while allowing for an unreasonable decision, there is an endorsement at both levels for the decision taken by the local authority.

11:45 am
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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

This is an important point. I understand that if the ITA were to take a decision with no other external validation, of course the case for judicial review would be easier to make. However, even  in the scenario I outlined, which has been referred to this morning, there is still the Transport Tribunal. Does not the existence of the tribunal provide the appeal mechanism that makes judicial review less likely in any case?

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

It would provide some protection, but not the full protection that we are talking about. I reiterate that the point about having the approvals board and the Transport Tribunal is that it will be possible to go back to the local authority and talk about making modifications to a scheme, if necessary and recommended. Judicial review is not only incredibly time consuming and expensive; it is either in or out. An authority has to go right back to the beginning if a judicial review finds against them.

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

I am listening carefully to the Minister. I know that one of the many legal firms that advised the Government was Bircham Dyson Bell; that is what one of the senior partners of that firm told us. If that is the case, I wonder why another member of that firm says that the probability of a legal challenge to a scheme is high and sets out three grounds he sees for such a challenge. One is procedural, as the Minister said; one is substantive; and one is founded on the Human Rights Act 1998, which the Government introduced.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

I am not quite sure what point the hon. Gentleman is making. I am not quite sure that this person from Dyson Bell, or whatever it is called, was our legal adviser, as my officials are looking rather puzzled. I give way to the hon. Gentleman.

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

I am happy to correct the Minister. The senior partner of that firm told us that he was advising the Government on the Bill. Perhaps the Government chose to disregard his advice.

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Dave Watts (Government Whip (technically a Lords Commissioner, HM Treasury); St Helens North, Labour)

The wrong Bill.

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

Not the wrong Bill; absolutely this Bill. All I am saying is that, contrary to what the Minister is saying, someone else from that firm is saying that the probability of legal challenge is high.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

I am not sure that that takes us much further forward. I can only say that I do think that there is a general acceptance that an approvals board and a Transport Tribunal provide protection. I think that is all that experience has shown so far. I will give way to the hon. Gentleman.

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Greg Knight (East Yorkshire, Conservative)

This is a totally different point. The Minister has said that the appeal panel she referred to would have the benefit of two experts. Will they be full-time or part-time appointees, and will they have experience of the private sector?

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

Later in the Bill, there are powers taken to appoint a panel that the traffic commissioner could draw from when making a decision to establish  an appeals board. I suspect that they would have experience of the private sector. As I have said, one of the experts would be an expert in transport planning, and I guess transport planners can get their experience from a wide range of jobs. The other expert would be an economist.

I want to come on to the points made by my hon. Friend the Member for Sheffield, Attercliffe. The first is on the question of timing. In the process that we envisage, we are not talking about an approvals board being set up to veto the transport policies of local authorities. It is absolutely the case that those policies are a matter for local authorities in consultation with their electorate—a role that I value, as I have already said. The role of the approvals board would be to provide a robust check that a proposed scheme was consistent with that policy; that it gave value for money; that it satisfied the criteria prescribed in legislation; that it was in the wider public interest; and that due process had been observed.

It is important to remember that in its recommendations, the Select Committee on Transport said that

“the independent approvals board for quality contracts, as envisioned in the draft Bill, is the right approach.”

The Committee said that it was right to have that independent endorsement. However, the Committee also said that it had

“reservations, however, about the Senior Traffic Commissioner (STC) automatically chairing the approvals board”

That is why we have revised the Bill so that the approvals board would normally be chaired by the traffic commissioner who, in the senior traffic commissioner’s opinion, had the most relevant knowledge of the area concerned. The Committee also recommended that

“provision for a traffic commissioner not to chair the board where he or she feels that his or her ability to act impartially is compromised should be retained.”

We have retained that provision.

The Transport Committee also said that the

“The independent approvals board should not have the power or authority to substitute its judgement for that of elected councillors on transport authorities on matters of transport policy. It should base its decisions on whether or not the transport authority has followed the correct procedure and behaved in a reasonable way.”

As I said, we agree that transport policy is a matter for the local authority. I repeat, the approvals board would not opine on whether an authority’s transport policies were right; instead, it would look at whether due process had been followed and whether a proposed scheme was consistent with the authority’s proposals.

The Transport Committee also recommended that the Bill limit the time for the approval period, including appeal to the Transport Tribunal, to a maximum of six months. The Bill provides a power to specify in regulations a period in which an approvals board should normally reach its decisions. We will consult on that. It is important to have that in regulations, not on the face of the Bill, which would be far too inflexible. To be frank, there is a learning process to be gone through, which is why putting such things in a Bill is not realistic. However, I want to put it on the record that our initial view is that the approvals board stage of the process could take as little as six weeks—that is what we are looking for. In addition—again, we will  consult—under our proposals the approvals and appeals stages together might take around six months for a standard application, and less for a simpler one. Judicial review is less predictable and would take a lot longer, and it might well mean that the whole process had to start all over again, at big expense to the authorities.

To take up a point made by my hon. Friend the Member for Manchester, Blackley and others, the scheme will not be confined to ITAs. It will be possible for smaller county or unitary authorities to adopt quality contracts schemes. It is important to remember that, in such cases, smaller authorities might well be deterred by what could be an expensive and lengthy process of judicial review. We want to be able to give authorities in such circumstances greater certainty regarding the ability to undertake a scheme, perhaps with the Department giving advice on how to put together good schemes. It is important for them to have that certainty.

Before moving on to the other amendments, which deal in greater detail with the processes to be gone through, I want to answer the point made by my hon. Friend the Member for Manchester, Blackley about the tendering process and how that would sort out the economic viability of a scheme.

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Clive Betts (Sheffield, Attercliffe, Labour)

I want to go back to the powers of the approvals board. I am still a little mystified about precisely what they are. The Minister says that the approvals board’s job is not to second-guess a policy decision of an authority, but to test whether what an authority is proposing is consistent with its policies. That must, at least to a degree, be a subjective judgment, not a completely objective one. Once an approvals board has the power to determine whether a scheme is in the public interest, that surely opens the whole thing up to its reaching its own view on the matter, which could simply be a different view from that of the transport authority.

12:00 pm
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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

In our draft guidance, when we talk about the public interest test, we mean that the local transport authority will need to be able to demonstrate that the quality contracts proposal will ensure that passengers get a better deal from the scheme than under a deregulated market. My hon. Friends have raised problems in that respect. The quality contracts proposal should also be good value for money, with the overall benefits of the scheme exceeding the cost, taking into account all the impacts on a wider set of users, such as motorists, bus passengers, and operators, and the impact on public resources, the environment and the local economy. It should also be demonstrated that any other adverse impacts, including on congestion and on bus operators, are acceptable and proportionate to the benefits. The analysis of the quality contracts proposals needs to be focused on the impact on passengers, as well as considering the broader impacts on other objectives and groups.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

Will the Minister give way?

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

Let me finish the point about financial information. A point was made about the tendering process sorting out whether the scheme was viable or  not, but we want local transport authorities to provide a full assessment of the likely costs of introducing a quality contracts scheme and a statement of how any costs incurred under the scheme are to be defrayed. The costs included in that assessment might include—this important point relates to what will happen before a tendering process starts—the cost of service enhancements, such as additional routes, higher frequencies, improved quality, marketing or information, because those additional capital or operating costs are likely to be reflected in the tender itself. The assessment might also include the cost of new and better vehicles, particularly if they were to be purchased by the local transport authority itself and leased to a contracted operator, and the costs of new infrastructure and facilities, such as bus lanes, other priority bus measures and, potentially, any real-time information. It might also include the cost of depots, if it was felt more efficient for them to be owned by the local transport authority, particularly if that allowed new entry into the market and in some instances allowed more effective competition. If necessary, it should include detail of how those would be leased back to the successful bidder at a commercial rate to cover initial costs.

A range of matters would not be covered in the tendering process, but are important to making a good and effective quality contracts scheme. Obviously, those are the sort of matters that any assessment of the proposals will have to cover, to give certainty that the scheme overall provides good value for money. That is entirely separate from the tendering process. The analysis of my hon. Friend the Member for Manchester, Blackley is that if the scheme were not viable, nobody would tender for it. but that is so far down the line that if the tender process completely failed because the scheme was not viable and nobody tendered for it, it would mean going right back to the beginning. We are trying to provide a process that, unlike judicial review, allows for modification as it goes along, rather than having to go back to the beginning. However, the process should also provide some certainty.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

The Minister has gone on a bit so I wanted to pull her back to the answer that she gave to her hon. Friend the hon. Member for Sheffield, Attercliffe.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

That was some time ago.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

It was. The hon. Gentleman referred, as did the Minister, to the phrase “in the public interest”. There is an important point of principle here, and I would be grateful if the Minister clarified her views on it. It is surely right for the definition of what is in the public interest to be decided by those who are elected locally to represent local people, rather than by an approvals board consisting of three unelected members of the great and the good—no matter how experienced they are—who might reach a different conclusion. Is not the way to deal with that to ensure that the approvals board checks that the proposal is robust against the criteria—in the way set out by the Minister—but then reports back to members of the ITA or the unitary council so that they can make the final decision? They, not three unelected members of the great and the good, must be the ultimate arbiters of what is in the public interest.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

The hon. Gentleman slightly misses the point of my description of the approvals process. The local transport authority would have to demonstrate that the proposal was in the public interest. As I said, the proposal would have to stress that passengers would get a better deal under the scheme than they would under the present system and that it would be good value for money, with the overall benefits exceeding the costs. A range of elements make up the public interest. The role of the approvals board and the tribunal is intended to give protection against somebody saying, “We just don’t agree that this decision is in the public interest. It is unreasonable.” The approvals board cannot overturn the transport authority’s policy, but it can examine the scheme as part of an iterative process whereby it could say that a proposal, as put together, would bring greater benefits for passengers and provide value for money, which would give the local authority certainty.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

But the Minister’s scheme allows the approvals board to decide that a proposal is not in the public interest when the local authority or the ITA has decided that it is. That would allow unelected persons to veto the local authority’s definition of public interest, which would have consequences for the policy of that elected body; indeed, it might have to adjust its policy to reflect the comments of the approvals board.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

As I have said, the Bill sets out a very specific definition of the public interest in this context, and the board will assess whether the authority has met the criteria set out in legislation. That does not necessarily mean that the authority will have to go right back to the beginning; the board can, however, say that it believes that the public interest test will be met if certain modifications are made. It is highly unlikely that an approvals board would completely kick out a scheme, which is what could happen under judicial review. That is the point that we are trying to get to.

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Angela Smith (PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury; Sheffield, Hillsborough, Labour)

One reason why we are concerned about the issue of the public interest is that there is a real risk, if we do not get this right, that ITAs and other passenger transport authorities will scale down their ambitions to ensure that they do not fall foul of the approvals board and the tribunal later in the process. The proposals could induce a self-policing effect. Will my hon. Friend therefore shed more light on the criteria? I am most concerned that they should reflect not only the economic case, but the social case for ensuring that routes that are not profitable, or that operators do not run properly because they are not profitable, are a fully fledged part of any quality contract by right.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

That is why the public interest test is about ensuring that passengers get a better deal from the scheme than they do in the deregulated market. It is absolutely about identifying the difficulties with the current system and explaining why it would be better to have a quality contracts scheme. We certainly want quality contracts to bring those benefits with them, and that is why we believe that the public interest test is not about the previous system and the only practical means of delivery, but is about being able to say that the new approach will benefit passengers. In many cases, we do  not say that a certain increase in passenger numbers must be achieved; the result of what is done could be to halt the decline of bus services provision, which was referred to.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

Will the Minister give way?

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

Yes, but I think that I should bring to an end this part of my remarks before getting on to the meat of the other amendments.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

I intervene only because I think the point is an important one to nail down. Suppose that an ITA or local authority decides that electric or very low-emission vehicles or some other cutting-edge environmental features would be in the public interest. Would not it be open to the approvals board to decide that they were not in the public interest, because it took a different view and thought such features were uneconomic, and effectively to veto them?

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

No. We envisage the approvals board looking at the totality of the scheme and considering whether in its totality it would bring benefits to passengers and whether it was good value for money. To take a worst-case scenario that might apply to one part of a scheme, if, in the example I gave earlier where the local authority had decided to buy all the new low-emission vehicles and lease them back to the commercial operator, the local authority had not demonstrated that it had the money to do that, there would obviously be a discussion about where the money was to come from, because it had not been shown in the contract that it was possible to buy those vehicles. We would not want a scheme that depended, in order to function and to run any services, on the purchase of a new fleet of vehicles, if the local authority that was making the proposal had not demonstrated where the money would come from. That is where the discussion about how the different parts of the scheme fitted together would come.

It is important that we have a process in place that allows, if necessary, assistance and advice from the Department to facilitate matters. Therefore, we need the approvals board and Transport Tribunal process to be able to ensure that a lot of those operators are not open to judicial review.

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Clive Betts (Sheffield, Attercliffe, Labour)

I am still really concerned about the question of public interest, however it is defined, being decided by an appointed body that can override the wishes of an elected body. There is something not quite right about that, which needs further discussion.

To pick up also on the term “value for money”, the real problem surely is that if value for money means what costs more or less, and what we get for the money, which presumably it does, that can only be absolutely determined once the tender has taken place and we know how much the successful operator will want by way of subsidy for the service, or how much it is prepared to contribute to pay for the service. Until that point, all that there will be about value in the figures will be the best guesses of the economists at the transport authority or the approvals board, trying to decide what the ultimate tender arrangement is likely to be. Those two best guesses might be different. I think  that something enormously complicated is being proposed, which will cause a real problem when it is put into practice.

12:15 pm
Photo of Rosie Winterton

Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

Let me emphasise again that we have tried to make the public interest test quite clear in the Bill. Clause 19 states that

“the proposed scheme will result in an increase in the use of bus services...the proposed scheme will bring benefits to persons using local services...by improving the quality of those services...the proposed scheme will contribute to the implementation of the local transport policies of the authority or authorities...the proposed scheme will contribute to the implementation of those policies in a way which is economic, efficient and effective”.

Those are measurable outcomes that we would want to see in a public interest test. As I have said, it is not for approvals boards to overturn the policies of a transport authority. I suspect that we shall have a much fuller debate about the provisions as we move on to the next set of amendments, which is similar to this set. It would perhaps be more appropriate to have the fuller debate then. I hope that, with the promise of that fuller debate to come, I can persuade my hon. Friend the Member for Manchester, Blackley to withdraw the amendment.

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Graham Stringer (Manchester, Blackley, Labour)

I am grateful for my right hon. Friend’s full explanation, but it has left me less happy at the end of the debate than I was at the beginning. I suppose it has served the purpose of facilitating greater understanding of what is behind the Government’s proposals in the Bill. When I started the debate, I thought that we were dealing with a Conservative policy that was pretty blind to the objective facts of what was happening in most of the country. The Conservatives seem unable to recognise that there must be something fundamentally wrong with the deregulated system if private bus companies in Manchester are making three times the profit that they are making in London and their buses are older.

People may want to hold in their mind this image, which the Conservatives seem to think is absolutely all right: in effect, every year for every bus in the so-called commercial sector, a local government officer or a central Government officer puts a briefcase on the bus with £35,000 in it, and says, “There’s no accountability for that money. Run your bus wherever you want to go, bus operator. Even though we have collected that tax from taxpayers, you do whatever you like. We’re pleased to have you running the bus anywhere you want”. The Conservatives are defending that system. It is plain silly. They are pretending, for ideological reasons, that things are not like that. I look forward to any public debate in a general or local election in which the Conservatives try to defend that position. The point is relatively straightforward.

I thought at the start of the debate that Labour Members who have spoken were much closer to the Minister and the Government’s position, but I am less convinced about that at the end of the discussion. I shall try to go through the reasons why without repeating what has been said. A good place to start is probably the Select Committee report. The Minister referred to  the recommendations of the Transport Committee on page 19 of the report. She rightly said that the Select Committee, of which I was a member, was in favour of an approvals board, but if we look at the reasoning and the details of the logic, we see that there were two serious qualifications behind it. The first was that many of our witnesses at the time estimated that it would take five years to go through the process. When the Secretary of State came along, she estimated that the period would be between 14 and 20 months, so what looks like—as it was presented—support for the Government’s position was actually quite a radical position, because we said that the whole process, if it included an appeals board, should take six months.

It was also said—the Minister referred to this—that there should be no substitution of the views of the appeals body for the views of the members of the transport authority. It should be trying to protect, as is the Government’s position, an ITA or another authority going through the process, from judicial review. That was accepted, but as I and my hon. Friend the Member for Sheffield, Attercliffe said, on the basis that it was only on procedural matters. In fact, it was very different from what we found to be the Government’s position.

I was relaxed about the matter—I thought I understood it—when the Government said that they wanted to take the Secretary of State out of the process in order to help local authorities that were proposing quality contract schemes. I was slightly worried at that stage, because the Department for Transport’s dealings with local authorities have not always been an unalloyed pleasure—with officials saying exactly where a pelican crossing should be placed in a big city when they have little knowledge of the area, or exactly how a tender for a tram system should be put together, all of which can add to the costs. One or two small warning lights went on at the time.

When it was explained what “help” meant—this is at the heart of local democracy—it seemed to me that there would be a double lock on ITAs or local authorities using the scheme. One lock was the two processes of consideration and appeal; the second was that Department officials, in the name of the Secretary of State, would be looking into the details of the proposed scheme throughout the process—whether it gave value for money, whether it would produce more passengers and whether it would do this, that or the other. I did not understand why before this debate, but it will be a pathway to more central control, whereas I was hoping that it would be a pathway to more decentralised control.

I am willing to give way to any Member, whether in Committee or in the House, who thinks that somewhere out there in the real world, a local authority or a potential ITA—whether composed entirely of Labour, Conservative or Lib-Dem members, even Green party members or whoever—would propose a scheme that made things worse for passengers, albeit not intentionally, and that if they did the Government would be in a better position than they were. Those bodies are human; they make mistakes, and there might be unintended consequences. However, the idea that the man—it nearly always is a man from the Department for Transport in Whitehall—would know better whether a scheme would produce more passengers or better value for money is something about which I am very doubtful.

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Rosie Winterton (Minister of State, Department for Transport; Doncaster Central, Labour)

I want it to be absolutely clear that if there was a future role for the Department for Transport, it would simply be in an advisory capacity—if asked. We are not talking about schemes having to go through the Department. Taking the Secretary of State out of the role is meant to be entirely helpful and reassuring. It certainly is not about providing any kind of veto. I am not sure whether my hon. Friend is mixing up the Department with the approvals board. They are entirely separate.

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Graham Stringer (Manchester, Blackley, Labour)

I am grateful for that reassurance. I am definitely not mixing up the Department with the approvals board. I was simply worried about the process. My right hon. Friend has clearly read the Select Committee report on the Bill. Immediately before that report, the Committee produced a report on local transport plans with evidence from local authorities—of all political complexions—that when advice was given by the Department for Transport and officials but not taken, there was punishment in the form of grants not being awarded or permission for particular transport schemes not being given. The Transport Committee saw a lot of such evidence.

I am greatly reassured if my right hon. Friend is telling me that if South Yorkshire, Lincolnshire, Greater Manchester, the west midlands or wherever decide that they do not want the Department’s advice on those matters, they will not have to take it. I shall ask for that reassurance on the Floor of the House. It is important because my right hon. Friend is saying that in coming to qualitative decisions, the Department will have a view on viability and whether a plan is in the interests of passengers, but that those decisions are better made by local people.

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Greg Knight (East Yorkshire, Conservative)

The hon. Gentleman is clearly still unhappy about the position. As he has detained the Committee for nearly two hours on the amendments, will he today have the courage of his convictions and press the matter to a Division?

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Graham Stringer (Manchester, Blackley, Labour)

I hope that the right hon. Gentleman has enjoyed the debate—we have learned some things today, which is the purpose of my amendments. As I have explained, the amendments are probing; I have been trying to find out what is in the Government’s mind. On Report, some of the amendments could be put to a vote if Mr. Speaker selects them, but I am hoping that Labour members of the Committee can come to an agreement. My right hon. Friend the Minister’s point was helpful in reassuring me.

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Greg Knight (East Yorkshire, Conservative)

I cannot say that I have enjoyed the debate. I have found it interesting, but I am not sure that I would join you, Lady Winterton, in calling it a happy morning.

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Graham Stringer (Manchester, Blackley, Labour)

I am sorry for the sad right hon. Gentleman.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

It is certainly the case that the Conservatives have not detained the Committee this morning.

May I pursue the important point that the hon. Gentleman is making about the predilection of the Department for Transport to intervene in local councils’ affairs on occasion and certainly in local transport plans? What is the relationship between the process for  awarding quality contracts and that for local transport plans? Is there any overlap? If there is an overlap, there is indeed potential for interference.

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Graham Stringer (Manchester, Blackley, Labour)

The hon. Gentleman makes an astute point, but I am not sure that it is quite in line with what I am saying. Clearly, if an integrated transport authority had agreed a local transport plan, it would be perverse in the extreme if they produced a quality contract scheme that was not in line with it. If a local transport scheme completely differed from a quality contract scheme, an appeals board or court could find that an odd and challengeable decision had been made. The hon. Gentleman made the astute point that the Government are involved at that stage of the local transport plan process.

Following the reassurances of my right hon. Friend the Minister, I come back to the fundamental point. As the Select Committee said, it would be simpler to deal with procedure and leave policy to elected members, and simpler still to leave the matter to the ITA. Let us put the debate into the real context of aggressive bus operators who do not want to be slimmed down from their diet of huge amounts of public money.

When ensuring that the quality contract delivers value for money, is in line with the local transport plan and will try to attract more passengers—one of the Select Committee’s recommendations—most local authorities will be aware that some bus companies may challenge them. In a sense, that check is as strong as having several layers of bureaucracy above what is going on.

As I have explained to the right hon. Member for East Yorkshire, I will withdraw the amendment, but I have one last point, which my hon. Friend the Member for Sheffield, Attercliffe has also made on a number of occasions. I do not believe that a professor of transport, the Secretary of State for Transport or officials, can judge the viability of a scheme without testing the market and going out to tender. Until we know the actual costs of what is coming back, how can we judge the scheme? One very important part of the equation is missing, and on that point—with my apologies for not entertaining the right hon. Member for East Yorkshire; I will try harder—I beg to ask leave to withdraw the amendment.

12:30 pm

Hon. Members:

No.

Amendment negatived.

Photo of Stephen Hammond

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

I beg to move amendment No. 47, in clause 19, page 17, line 40, after ‘increase’, insert ‘of 10%’.

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Ann Winterton (Congleton, Conservative)

With this it will be convenient to discuss the following amendments:

No. 48, in clause 19, page 17, line 44, after ‘relates’, insert

‘, which are substantially greater than those that would pertain under a quality partnership scheme,’.

No. 49, in clause 19, page 17, line 47, after ‘authorities’, insert

‘substantially more than would a quality partnership scheme’.

No. 50, in clause 19, page 18, line 4, leave out from beginning to end of line 8 and insert—

‘(e) there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area to which the proposed scheme relates.’.

No. 51, in clause 19, page 18, line 8, at end insert—

‘(2A) In subsection (1)—

“economic” means that the cost of implementing the proposed scheme to the local authority will be no greater than implementing the same services under any other means;

“efficient” means that the proposed scheme will be no less efficient than if the same services were implemented under any other means;

“effective” means that the proposed scheme will be no less effective than if the same services were implemented under any other means.’.

No. 52, in clause 19, page 18, line 19, after ‘services’, insert ‘by 10%’.

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

You are obviously in a happy mood this morning, Lady Winterton, because you have been extremely lenient with the Committee as we wandered well beyond clause 19 in our debate. I am sure that we will return to the approvals board in considerable detail later on.

Amendments Nos. 47 to 52 are simple. Amendment No. 50 tests what the Government really mean when they talk about adverse effects. In amendment No. 51, the Government will not be surprised to see that I am trying to provide some definition of “economic”, “efficient” and “effective”—it is an argument that we have been through before. Amendment No. 52 is again a test, to insert “by 10%”.

I am sure that the amendments will appeal to the hon. Member for Sheffield, Attercliffe. In his contribution to the last group of amendments, he told us that he was concerned that quality contracts should demonstrate that they are the best, and better than quality partnerships. The amendments would ensure that quality contracts are seen as evidentially better than quality partnerships. That is important.

There have been many comments this morning about the Conservative position; the amendments will help to define it for the whole Committee. I have said several times—I am happy to reiterate it—that we prefer the partnership route, although we understand the need to have some backing for it. Last week, we supported the Minister after her qualifications and reassurances about statutory quality partnerships.

Just because people take a different view about the method of achieving an end, it ill becomes them to undermine the view that someone else can believe in the same end. That is what we have heard today. We do not think that quality partnerships will give the end that the Government want, and we are concerned about that. So far, we have heard the view that quality partnerships, turning the clock back to the 1980s, will represent re-regulation. Let us not forget that the period between the end of the second world war and the 1980s, before the Transport Act 1985, was when bus ridership fell fastest—a point that always seems to be conveniently forgotten by a number of people.

There seems to be surprise every time the Conservatives say we would like some evidence from the Government that quality partnerships will work. The Minister flies off and says there are a huge number of Conservative councillors out there—of course, there are a huge number of Conservative councillors and there will be even more after Thursday evening—who oppose what Front Benchers say. Equally, there are others who are very supportive of what we have said.

The Minister talked about the London situation. She knows full well that at present the London situation is covered by another Act, whose removal would need consequential legislation. The Minister talked about the Conservative candidate for Mayor, my hon. Friend the Member for Henley, and said that nobody in their right mind would vote for him because he would undermine public transport. Presumably she is saying that her colleague the hon. Member for Vauxhall (Kate Hoey), who said this morning that she is joining Team Boris, is out of her mind. Presumably she also thinks the Liberal Democrat candidate who said in The Times last week that he would work with Boris is out of his mind.

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Dave Watts (Government Whip (technically a Lords Commissioner, HM Treasury); St Helens North, Labour)

That’s right.

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

That may be so, but there we are. The Minister cannot have it all ways.

The point we have made time after time is that we support statutory quality partnerships, which we dealt with last week, and they offer the new ITAs and local transport authorities the chance to work in partnership to bring better services. There is nothing in the Bill at the moment that tells us evidentially that the imposition of quality contracts will necessarily do anything to increase ridership above what could be achieved through partnership, either voluntary or statutory.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

I understand the hon. Gentleman’s wish to go down the partnership route wherever possible—indeed, I think he said the voluntary partnership route wherever possible—but what is his answer if quality partnerships do not work and we do not see a transformation in bus patronage in areas where they either have not been tried or are not successful? What is his solution in those circumstances?

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

As we have not yet tried statutory quality partnerships in the depth that the Bill proposes, that is what we should be doing. We continue to support that idea and we think it should be tried first. Nothing that the hon. Gentleman can say today will give us an evidential view, rather than an assertion, that quality contracts will better the travelling experience of the customer.

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Angela Smith (PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury; Sheffield, Hillsborough, Labour)

The hon. Gentleman’s constituents enjoy regulated bus services, which evidentially are better than the bus services enjoyed by my constituents. What is good enough for his constituents is surely good enough for mine.

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

My constituents enjoy a good bus service. It has not yet been proved by anyone that regulation is the cause of a service being better. A huge  amount of public subsidy goes into those services and it is the size of the public subsidy that improves them, rather than regulation.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

If regulation is not the cause of the good bus services in London and it is only a matter of public subsidy, why does the hon. Gentleman not simply deregulate London?

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

We went through that argument in Committee last week when the hon. Gentleman was not present. As I said then, there are other regulated areas of the country but there is only one regulated area where bus ridership has declined in the past ten years. Regulation is evidentially not the cause.

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Angela Smith (PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury; Sheffield, Hillsborough, Labour)

The hon. Gentleman said something interesting. He suggested that heavy subsidy in London is the reason for the success of the city’s bus service. Is it the position of Conservative Front Benchers or of the hon. Member for Henley that the subsidy is unnecessary, and would it continue in London during the next period?

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

It is not our position that the subsidy is unnecessary. The question for us and for many organisations, including London First, is whether the amount of subsidy being used is providing the best bus service for London and whether reorganisation of the bus service in London might provide an even better service on core and support routes in the suburbs than the current Mayor’s bus network.

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Angela Smith (PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury; Sheffield, Hillsborough, Labour)

The hon. Gentleman is being extraordinarily generous in giving way. The position of the hon. Member for Henley, if I have read his comments correctly, is that subsidies to Transport for London will be cut if he becomes Mayor.

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

No. Nothing that my hon. Friend the Member for Henley or I have said implies that. It is a complete fabrication. This week’s 11 percentage point gain in the poll for my hon. Friend’s candidature shows that people in London do not believe the nonsense being said.

Several hon. Members rose

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Ann Winterton (Congleton, Conservative)

Order. Although there tremendous enthusiasm in the Committee, we are moving a little wide of the amendment. I ask Committee members to consider what they might ask Mr. Hammond, who has the floor.

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

Thank you, Lady Winterton. I give way to my right hon. Friend the Member for East Yorkshire.

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Greg Knight (East Yorkshire, Conservative)

Should not the hon. Member for Sheffield, Hillsborough support my hon. Friend’s amendment, which refers to 10 per cent? I thought that she had an affinity for 10 per cent.

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

I was surprised when the Minister talked about 10p, but there we are. I have listened to your stricture, Lady Winterton.

There is huge concern about what the Bill might do to restrict trade. Several Members have said a lot about greedy bus companies and their legal redress. The point made by several lawyers is that the most likely elements of redress include the public interest test. A gentleman in Transport Times who appears to be a transport lawyer happily suggests that the easiest line of attack for aggrieved operators would be through the public interest test. The other obvious line of attack is through the Human Rights Act 1998, which the Government introduced, so they are likely to face legal redress from bus operators under measures that they put in place.

My amendments are to clause 19, which would revise the criteria that local authorities must use to decide whether a quality contract is appropriate. Doing so would amend section 124 of the Transport Act 2000. The five criteria in the Act are that schemes must increase the use of bus services in the relevant area; improve the quality of those services, bringing benefits to local people; fit in with local authority transport policies and do so in an economic, efficient and effective manner; and they must not have adverse effects on operators that are greater than the improvements to the well-being of local people and bus services.

I judge those criteria problematic for several reasons. None of the criteria is perfect, and I hope that my amendments to clause 19 would address the imperfections. The first amendment deals with the criterion that in order to implement a quality contract, a local authority must be satisfied that the scheme will increase the use of bus services in the relevant area. I have said several times that I am in favour of the partnership route, so I have proposed that the authority must be satisfied that the scheme will increase the use of bus services by 10 per cent. I am prepared to concede that 10 per cent. is an arbitrary barrier, but under the current wording of the clause, a local authority could draw up a quality contract if they thought that patronage would increase by any amount. It could be an increase of only one person—who knows what that would save? We need to be clear, therefore, that when drawing up the quality contract, local authorities or ITAs are absolutely sure that the increase in bus services that will appertain will be of an order of magnitude that makes it worth doing.

12:45 pm
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Graham Stringer (Manchester, Blackley, Labour)

Paragraph 57 of the Select Committee report, which I am sure the hon. Gentleman recalls, considers that point in great detail. We followed his logic that bus patronage had been falling. The Select Committee therefore felt that the recommendation should be changed to an increase in predicted passengers, because a local authority might want to have a quality contract in an area with a difficult market to alleviate the decline. Does he agree that what is proposed in the amendment is much too tough a hurdle?

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

I want to be absolutely clear that the increase in passenger usage will, under quality contracts, be at a level that makes it worth having a quality contract, whether or not that is based on a  predicted increase. It is important that there is guidance for local authorities as to what either the predicted increase or the increase should be. The predicted increase could be whatever they think it is going to be.

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Kerry McCarthy (PPS (Rt Hon Douglas Alexander, Secretary of State), Department for International Development; Bristol East, Labour)

I am slightly confused because in an earlier contribution the hon. Gentleman said that the success of the London model was down to high subsidy. You are saying that quality contracts would be acceptable if the people introducing the scheme could predict that there would be an increase in passengers. On the basis of your previous argument, are you not really saying that it would need a heavy subsidy to make that work? Are you saying that quality contracts can work without subsidy or that they need subsidy?

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Ann Winterton (Congleton, Conservative)

Order. May I point out that I am making no statements about what will work?

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

As I pointed out, I am concerned to test the criteria that the Government have laid down in the Bill. It is important that we see not just a negligible increase due to quality contracts, but that there is a substantial increase in ridership. That is what amendment No. 47 would do.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

May I refer the hon. Gentleman to a later amendment that he has also tabled—amendment No. 55, which is germane to this issue? He is setting the hurdle rather higher than he is telling the Committee, because amendment No. 55 would require local authorities to provide clear evidence indicating that the 10 per cent. would be met, not simply to indicate a reason for believing that that increase would be met. That hurdle would be difficult for local authorities to jump, would it not?

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

I am not sure that it would be. The hon. Gentleman could make the assertion that his party’s candidate is likely to be the next Mayor of London, but the evidence for that is not there. I can make that assertion on behalf of my party because there is evidence for it. There should be evidence; we can all make assertions.

Earlier, I made the point that it is asserted that quality contracts will increase bus ridership, and I want to know that there is evidence that backs that assertion up. It seems to me not unreasonable that, either in my later amendment or in this one, I follow a line of logic that says that there must be a ridership increase that makes introducing quality contracts worthwhile.

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Angela Smith (PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury; Sheffield, Hillsborough, Labour)

I thank the hon. Gentleman for giving way yet again. Is not the process of encouraging car users back on to buses a confidence-building measure that could take some time, given the deterioration in the services over the last 20 years? Therefore, would not arbitrarily putting a percentage increase into a quality contract be very unhelpful? In fact, is this not a wrecking amendment?

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

I do not see how the hon. Lady can say that. I think she wants to say it because she does not want to address my argument. The Government have used the phrasing that there must be an increase in bus ridership. I am saying that, for the imposition of a  quality contract, there must be evidence that ridership will increase substantially. That is what the proposal would do.

If it could be shown that ridership would increase by, say, 10 per cent., it seems to me that there would be a valid argument that a quality contract might well be worth pursuing—indeed, would be worth pursuing. It would show that there would be substantially higher numbers of people prepared to ride the buses other than would do so under a voluntary or a statutory quality partnership. If that were the case, the hon. Lady could say that I was completely wrong. The point, therefore, is that we want to ensure that the imposition of the quality contract achieves significantly higher ridership than might have been possible under any other method. That is the thrust of amendment No. 47.

We could say—I guess the hon. Lady would—that 10 per cent. is too arbitrary and too high a test. We could easily have that argument, but such a number seems about right. My amendment No. 48 has the same intent as amendment No. 47. The second criteria, which would have to be satisfied before a quality contract could be introduced, is that it would

“bring benefits to persons using local services in the area to which the proposed scheme relates, by improving the quality of those services”.

Again, the point I want to emphasise is that, before quality contracts are considered, I want to be clear that all avenues of partnership have been explored. Why not look at the partnership as the route forward?

With that objective in mind, I am again suggesting the same sort of test—that the benefits of a quality contract should be substantially greater than those obtained under a quality partnership scheme. The line of logic seems to me to be absolutely clear. Partnership schemes can deliver benefits and improvements to bus services. That has been shown and proven. On top of that, there are local authorities and bus operators that work together to provide that common aim of increasing bus ridership. Only if the benefits to passengers can be shown to be substantially greater than under a quality partnership should we consider going down the quality contract route.

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Clive Betts (Sheffield, Attercliffe, Labour)

Some of us might be slightly suspicious that the hon. Gentleman is trying to legislate quality contracts out of existence, but would he like to define “substantially”?

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

If I take the Minister’s word, it is what is common parlance, or common sense. I thought that “substantially” might be 10 per cent., but others might disagree, as I tried to say in one of my answers. I was trying to be a little more generous here, rather than specifying an arbitrary number.

We have heard several times in Committee an argument that a definition should be put on a word; other times we have heard that we should not. That is another reason why, later on, I have defined for such purposes “economic, efficient and effective”.

It seems also that the third criteria that the Government state must be satisfied before a quality contract can be introduced is that the scheme

“will contribute to the implementation of the local transport policies of the authority or authorities”.

My amendment follows the same logic, using the words

“substantially more than would a quality partnership scheme”.

The aim of that amendment is simple. I say it again: I think that partnerships, voluntary or quality, are preferable to quality contracts. We should encourage partnerships. We should ensure that they are the first route.

The fourth criteria that must be satisfied before a quality contract can be brought in is that

“the proposed scheme will contribute to the implementation of those policies in a way which is economic, efficient and effective”.

We have had several debates on the real meaning of that provision; for the purposes of this part of the Bill, I believe that it would be useful to include some definitions.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

Unless I misheard, the hon. Gentleman seems to have skated over amendment No. 50, which says that there should be

“no adverse effects of the proposed scheme on operators”.

Will he explain what that means? Would it mean that a cut in profits ruled out such contracts? That is a black-and-white way to put things.

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

The hon. Gentleman is obviously enjoying my contribution, but he will have to wait for that little piece; I shall reach it in a moment. [ Interruption. ] Let me finish. It seems to me that if “effective, efficient and economic” is properly defined, the quality contract might be considered preferable to the partnership option. Again, I want to be clear that the benefits of a quality contract will be substantially greater than those that would appertain under a partnership arrangement.

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Ian Stewart (Eccles, Labour)

The Conservative spokesman advocates the partnership and voluntary approaches. He will understand that the Government are fully in favour of those approaches. Indeed, no Government could have done more in the last two Transport Bills to promote those concepts.

If the hon. Gentleman is arguing for that, and if he accepts and acknowledges that the Government have practised it over the last 10 years, will he say whether it has been completely successful and whether our constituents face any problems? If they face problems, and if the voluntary and partnership approaches alone have not been able to meet them, what would the Conservative party do instead?

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

I readily accept from members of the Committee that in some areas of the country the partnership approach is not working. I assume, therefore, that the hon. Gentleman wants to ensure that the Government’s proposals for quality partnerships are given the chance to work. That is where I want to go. The new proposals for quality partnerships from Labour Ministers are the way forward. I want to see clearly that those quality partnerships are given the chance to work for the benefit of passengers. That seems to be a perfectly fair way forward.

The fifth criterion that must be satisfied before a quality contract can be brought in is, as the hon. Member for Lewes says, that

“any adverse effects of the proposed scheme on operators will be proportionate to the improvement in the well-being of passengers living...in the area to which the proposed scheme relates”.

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Norman Baker (Shadow Secretary of State for Transport, Transport; Lewes, Liberal Democrat)

That is the Government’s wording, not the wording of the hon. Gentleman’s amendment.

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

I am explaining that that is what the criterion says. If the hon. Gentleman will wait a second, I am about to explain why my amendment is going there.

The problem with that definition is that there seems to be no definition of “adverse effects”. How, then, can we define “well-being” and “benefits” for local people? I assume that the Minister has worked out a formula for measuring personal utility on that basis. I presume that the Government intend that the effects on operators will be financial and that they believe that the benefits to local residents will be related to lifestyle, but that has not yet been defined. At the moment, it does not appear that we are combining like with like.

I ask the Minister, what is meant by “proportionate”? What proportion do the Government have in mind? Who will decide on that proportion and, again, where is it defined? The Government recognise that the potential consequences of a quality contract include not only an increase in bus ridership, but the fact that some bus operators may choose to—

It being One o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at Four o’clock.