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Private Bus Operators (Costs)

Oral Answers to Questions — Transport – in the House of Commons at 12:00 am on 10th December 1980.

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Photo of Mr Colin Shepherd Mr Colin Shepherd , Hereford 12:00 am, 10th December 1980

asked the Minister of Transport what representations he has received on the relative operating costs of private bus operators and the National Bus Company.

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport)

I have not received representations, but I have read with interest a report published last week by the Transport and Road Research Laboratory called "The Economics of Stage Carriage Operation by Private Bus and Coach Companies". It finds that the average fare on services run by private companies in two traffic areas was 25 per cent. less than that charged by the National Bus Company on its services.

Photo of Mr Colin Shepherd Mr Colin Shepherd , Hereford

Does my hon. and learned Friend agree that that reflects poorly on the National Bus Company and that it bodes ill for the future of the NBC if it fails to act to cut costs and improve efficiency? Is my hon. and learned Friend satisfied that the Transport Act, which gives new opportunities to private bus companies, will result in even lower relative fares for people travelling on buses?

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport)

My right hon. Friend has already set a tight financial limit for the National Bus Company, and he proposes to agree soon a financial target and performance standards. The Transport Act 1980 will enable any operator, public or private, who can provide an efficient service to the public to thrive and expand his services.

Photo of Mr Arthur Newens Mr Arthur Newens , Harlow

How can the NBC possibly achieve the low cost that is achieved by private operators, as long as it continues to provide many services on unremunerative routes? Is the hon. and learnt d Gentleman recommending that this social service by the National Bus Company should be cut?

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport)

The NBC received £37 million in 1979 for running unremunerative services. The comparison made by the TRRL was between services run by private companies receiving no subsidy and those run by the NBC receiving subsidy. Had the NBC not received any subsidy, its fares would have been about 40 per cent. higher.