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