Transport Bill

Part of the debate – in the House of Lords at 6:46 pm on 5 June 2000.

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Photo of Lord Hogg of Cumbernauld Lord Hogg of Cumbernauld Labour 6:46, 5 June 2000

My Lords, I am pleased to be able to contribute to this important debate. Transport has been an interest of mine for a long time and throughout my parliamentary life. At one stage I was chairman of the all-party Road Passenger Transport Group. Therefore I am delighted that transport is such a high priority of the Government.

An efficient transport system is vital not only for the economy but it is essential also for the environment. That is why I am pleased that the Government have introduced the Bill that is before the House. It is the right Bill at the right time.

The Bill is a comprehensive measure. That fact alone has attracted criticism, but not criticism that I feel able to echo. If we are to create a fully integrated transport system across the UK, that objective is bound to be reflected in the enabling legislation; hence a large Bill.

I wish to concentrate on a single area of the Bill, that which deals with buses. Here I must declare an interest. I have just been appointed chairman of the Bus Appeals Body. That is the independent body set up by the bus industry in conjunction with bus passengers to arbitrate on passenger complaints. It is a good example of the increasing customer focus of today's bus industry. I pay tribute to the noble Lord, Lord Bradshaw, who preceded me in that office and served the body with great distinction.

A key element of the Government's transport strategy is to give people more choice. No one needs to be persuaded of the benefits of more people choosing to leave their cars at home and use public transport. But people cannot be forced to do that. People must make that choice because public transport is a better option. It has to be reliable. They must choose it because it will not get caught in congestion; because highway authorities have given it priority road space; because it is clean; because it is accessible; and because you do not have to park your car at the other end--in short, because it is in every way convenient. In towns and cities across the UK the bus is uniquely positioned to provide the service I have just described. The message I hear from bus operators is: "Give me the operating conditions and I will invest and deliver a high quality service".

The 1985 Transport Act brought about significant changes in bus operations in the UK. Not surprisingly, the results were mixed. The aim of this legislation should be to build upon the positive results of that legislation. There are many positive results, not least in record levels of investment in new vehicles. This Bill seeks to remove only the negative results of the 1985 Act. The Government have got that right.

The Bill will put in place measures which ensure that bus operators and local authorities work together on a formal basis using their respective expertise to the best effect. In the first instance, local authorities are required to produce bus strategies as part of their local transport plans--a sensible measure in my view. But I have two pleas to make.

First, the Government's guidance must be strong. The Bill as it stands allows for the imposition of a quality contract where a local authority feels that it is the only practical way to meet its bus strategy. Many interested parties--not least passenger groups through the National Federation of Bus Users--along with the industry itself, feel that bus services would suffer as a result of these contracts. Some local authorities have made it plain that they are keen to go straight to contracts, which is a clear departure from government policy. It is vital therefore that firm, clear guidance is given to guard against quality contracts introduced by the back-door.

My second plea relates to consultation. The Bill compels local authorities to consult when developing their strategies. This is a welcome move. Bus operators in particular have built up great expertise over the years in providing services--a positive aspect of deregulation. They have also shown innovation in the services provided.

While the Bill compels consultation, it does not compel local authorities to heed that consultation. No doubt my noble friend the Minister will say that this is implicit in the clauses, but I should value his reassurance from the Front Bench when he responds to the debate.

This brings me to quality partnerships. The Government have stated that the quality partnership approach will be the corner-stone of their proposals for bus service provision. This is something else that I welcome. Voluntary quality partnerships operating throughout the country have shown impressive increases in passenger numbers. Placing these partnerships on a statutory footing is the next logical step. This will allow local authorities to invest in highway schemes secure in the knowledge that bus operators will provide quality services to run on them. Similarly, bus operators will be able to invest in new, high-quality vehicles that they can run reliably in a congestion-free environment.

These partnerships must not be too prescriptive. They must be flexible enough to meet differing needs in different areas. A rural quality partnership will be different from one in an urban area.

They must be partnerships in the true sense of the word. Quality partnerships are a marriage of different areas of expertise, including road planning, service provision and enforcement. Care must be taken to ensure that local authorities do not become too prescriptive in the conditions that they set. It is unlikely that bus operators would be willing to continue their present high levels of investment if control of their assets lay elsewhere. Conversely, it would be quite wrong for bus operators to take the lead on infrastructure planning. Consultation and partnership must be the bywords for a successful quality partnership.

I have followed the remarks of Ministers in another place during the passage of this Bill, and I fully agree that voluntary agreements on service provisions such as frequencies should run alongside statutory provisions. This will guarantee partnerships in the true sense.

I know that anxieties have been expressed about the effect of the Competition Act on partnership arrangements. It has been said that this Act legislates against integration and co-operation. Ministers will need to ensure that this does not prove to be the case. I welcome therefore the new schedule added to the Bill by the Government. This sets a firm competition test for the statutory aspects of quality partnerships. I note what the Government said on the need to consult the OFT on the non-statutory aspects of quality partnership arrangements. I hope that my noble friend can join me in urging the OFT to do everything that it can to facilitate agreements, both voluntary and statutory, which are made in the public interest.

I must tell my noble friend that I have some difficulties with quality contracts. I have studied the proposals carefully and share the views expressed by the Confederation of Passenger Transport and the National Federation of Bus Users. Quality contracts will not provide passengers with the best services. I have looked at the report of NERA (the National Economic Research Associates) into the franchising of bus services--and franchising seems to me to be the effect of quality contracts. NERA believes that franchising would result in more public expense, less investment and less flexibility. I have some sympathy with that point of view.

The imposition of a quality contract would be most unfair on the bus operators, large and small alike. They would lose business as a result. As I say, the large operator would see his ability to invest diminish, and there are serious implications for the workforce. The problems would be worse for the many small, family-run businesses. For this group, losing out on a franchise would mean relocation--an impractical solution. Going out of business seems much more likely. There would be no compensation, and the Government may like to address that issue when we come to the Committee stage of the Bill.

I understand why proposals for quality contracts have been included in the Bill; they are intended as a safety net. However, they should never be a last resort. I hope that I shall receive some assurances about this when the Minister responds to the debate.

I do not wish to end on a negative note. I am a strong supporter of this Bill. A high quality, fully integrated public transport system, backed up by strong investment, is vital for the United Kingdom in the 21st century. I believe that this Bill will go a very long way towards achieving that for our people.