Clause 29
Local Transport Bill [Lords]
11:15 am
Graham Stringer (Manchester, Blackley, Labour)
I welcome the increase in the length of the contract from five years to 10, although I would quibble with the phrase “removing a free market”. One kind of market is being changed to another where there is off-road rather than on-road competition. It is important that we continue to make that point. What I do not think my right hon. Friend the Minister really addressed—I am happy to give way now or wait until we consider this on Report—is the fact that the coincidence of the end of that period and the end of the scheme is bound to bring uncertainty and instability to the market. I would be grateful if my right hon. Friend reflected on that, either now or at a later stage. How could current operators and, potentially, new operators take decisions in their own companies to invest if they did not know what was going to happen? The coincidence of the end of the scheme and the end of the contract represents a serious point.
The second point is the length of the contract. As hon. Members on both sides of the Committee know, I am not the greatest advocate of EU regulation—by and large, I think we are better off without most of it—but I do not understand why in the rest of the country there should be less flexibility and less application of European laws, including the ability to extend those contracts by 50 per cent., than is the case in London and within the rail franchising system.
Regarding my right hon. Friend’s final point, on which I ask her to reflect, I completely understand that this is a new scheme. The London scheme changed slightly over the period after privatisation. There had been a publicly-owned system and there was a relatively smooth transition to a franchise system, whereas in this instance we are moving from a very lightly regulated system to a franchise system. That, I accept, is a much bigger change within the market. I also accept that it may need to be assessed. What I do not necessarily accept is that this needs to be assessed at the end of 10 years. Why cannot it be dealt with while the scheme is going on? If there are failures or if extensions are needed—as my right hon. Friend correctly points out, that might be the case—that might be dealt with in the local transport plans, which would be consulted upon.
I am happy to come back to those points on Report, but I think that there are real market issues. That is a different debate from the one about whether to accept quality contracts. If one accepts quality contracts, there is a real practical debate here about how to help the market to work to maximum effect.