At a late hour, we have had a very good and wide-ranging debate. Not for the first time, my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins) has done a service to the House and to his constituents by raising this matter. My hon. Friend has a wide knowledge of the rural bus problem, because he represented North Cornwall before he went to Derbyshire and he speaks with authority. I accept at once that he has put his finger on a major problem that the country will have to face.
My hon. Friend highlighted a basic fact when he said that the bus climate is changing. As it does, the big rural bus, like some over-large and ill-adapted dinosaur, is in danger of becoming extinct. Much of the bus's business is being snatched away by the more nimble and flexible motor car. As a result, the bus industry is buffeted by the harsh winds of wage inflation, now accounting for more than two-thirds of bus operating costs, and the industry confronts a creeping financial crisis. This is true in the rural districts, where bus companies find it increasingly difficult to keep their conventional fleets on our rural roads. Consequently, country people are being hard hit. The rural bus had its heyday in the late 1940s and 1950s. Since then, there has been a reduction of close to one-third in passenger demand while, at the same time, there has been a fivefold increase in the numbers of cars on the roads. The result is that the bus industry is operating in quite different and very much more difficult conditions than those of 10 or even five years ago. It is having to drive up a hill that gets steadily steeper.
The factors operating against the bus industry have been spelled out by hon. Members. Perhaps I might name three. The first is that, because the number of bus passengers is falling, bus services have had to be scaled down. Consequently, their overhead costs have had to be spread over a very much smaller number of journeys, with the inevitable result that the fares have had to go up steeply for those who still travel on buses.
The second factor is rising costs. Of the costs of bus operation, more than two-thirds are wages, so here is an industry which is peculiarly vulnerable to the ravages of wage inflation. Reference has been made to the National Bus Company. It has had to face wage increases of 5 per cent. in September, 1969, 9 per cent. in March, 1970, and a further 10 per cent. already agreed to come in March of this year. The inevitable result is still higher fares. Those of the National Bus Company went up 11 per cent. last year, and I regret that further fare increases are already in the pipeline to contain the next pay increase already agreed. As always, these higher fares once again mean still more passenger loss.
The third problem is operational difficulties. More cars on the roads mean more traffic congestion. Buses, which have to stop and start, suffer badly from traffic delays, so bus services have become more irregular, later and less reliable for their customers. Staff shortages have added to the problem of reliability, and it has been made worse by the drivers' hours regulations introduced by the previous Government. These factors—the operational difficulties, the competition from the motor car, and the pressures of wage inflation—all interact.