Clause 19

Local Transport Bill [ Lords ] – in a Public Bill Committee on 29th April 2008.

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Quality contracts schemes

Amendment moved [this day]: No. 47, in clause 19, page 17, line 40, after ‘increase’, insert ‘of 10%’.—[Stephen Hammond.]

Photo of David Taylor David Taylor Labour, North West Leicestershire

I remind the Committee that with this we are discussing the following amendments: No. 48, in clause 19, page 17, line 44, after ‘relates’, insert

‘, which are substantially greater than those that would pertain under a quality partnership scheme,’.

No. 49, in clause 19, page 17, line 47, after ‘authorities’, insert

‘substantially more than would a quality partnership scheme’.

No. 50, in clause 19, page 18, line 4, leave out from beginning to end of line 8 and insert—

‘(e) there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area to which the proposed scheme relates.’.

No. 51, in clause 19, page 18, line 8, at end insert—

‘(2A) In subsection (1)—

“economic” means that the cost of implementing the proposed scheme to the local authority will be no greater than implementing the same services under any other means;

“efficient” means that the proposed scheme will be no less efficient than if the same services were implemented under any other means;

“effective” means that the proposed scheme will be no less effective than if the same services were implemented under any other means.’.

No. 52, in clause 19, page 18, line 19, after ‘services’, insert ‘by 10%’.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport) 4:00 pm, 29th April 2008

Good afternoon, Mr. Taylor. At our previous sitting, Lady Winterton said that it was going to be a happy morning, and I am sure that this will be a happy afternoon.

Before lunch, I was going through the last of my amendments—No. 50—in which we ask the Minister for an indication of what she regards as proportionate. What proportion do the Government have in mind? Who decides what it will be? Where is the definition? If a service is withdrawn as a result of a quality contracts tendering process, people will lose out, so I want the Government to tell us exactly how they will measure what appears to be a potential financial loss on one side and a lifestyle benefit on the other.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

On the hon. Gentleman’s theme of how he will kill off quality contracts before they begin, let me take up the point that the hon. Member for Lewes was trying to make before lunch. Amendment No. 50 removes proportionality and instead uses the words

“there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area”.

That must mean that if any person or operator experiences an adverse effect, it will rule out a quality contract and any of the benefits to any other person or operator—one adverse effect experienced by one person or operator would rule out the whole scheme.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I am trying to probe exactly what the Minister means by proportionate.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I do not know what proportionate means. If it means what the hon. Gentleman suggests, then yes, but someone must tell me what it means. We phrased the amendment as we did so that we could ask the Minister exactly why her initial criteria are phrased in such a way.

To return to my starting point, the five criteria set out in my amendments explore and define the quality contracts criteria. On that basis, I look forward to the Minister’s response.

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

Good afternoon, Mr. Taylor. I shall try to be brief, given the time that we took this morning. It is unfair of the Government Whip to accuse Labour Back Benchers of filibustering—they raised some serious points this morning, and it is only right to pay due tribute to them for doing so.

Photo of David Taylor David Taylor Labour, North West Leicestershire

Order. We are wasting time this afternoon. Will the hon. Gentleman proceed?

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

I do not blame the hon. Member for Wimbledon for tabling his amendments, in the sense that it is perfectly proper to test the wording of the clause. If they were implemented, however, the amendments would wreck the quality contracts system, intentionally or otherwise. The word “substantially” in amendment No. 49 suggests that the hurdle would be set at 10 per cent., which would be a very high hurdle indeed. Similarly, as the hon. Member for Sheffield, Attercliffe said a second ago, and as I said before lunch, amendment No. 50 would give operators a veto, allowing any scheme to be ruled out if there were any adverse effects whatever. That is the absolute definition of a wrecking amendment, and I cannot believe that it is what the hon. Member for Wimbledon wanted—but perhaps it was.

This morning, the hon. Gentleman criticised the use of the words

“any adverse effects of the proposed scheme” in clause 19(2)(e). He went on to ask how the Government would define adverse effects, but he uses the same words in his amendment. If he wanted to demonstrate that there would be no adverse effects, he would presumably have to define the phrase as used in his amendment.

To conclude, the amendments do not stack up, other than as a means of wrecking the quality contracts scheme in total.

Photo of Rosie Winterton Rosie Winterton Minister of State (Regional Affairs) (Yorkshire and the Humber), Minister of State (Department for Transport)

Good afternoon, Mr. Taylor. It is nice to see you back in Committee.

As hon. Members have spotted, the amendments raise hurdles that local authorities would have to get over before they could introduce a quality contracts scheme. They would increase the burden of proof to such an extent that it would be practically impossible to meet. I shall say a few words about how the Bill amends the requirements of proof that local authorities have to meet before taking forward a quality contracts scheme.

As I said, there are circumstances when the public interest may be best served by a quality contracts scheme; for example, partnership may be failing to deliver the improvements needed, or local authorities may want to be able to guarantee a particular set of improvements to the bus network. The Government’s objective in the Bill is to make quality contracts schemes a more realistic option for local authorities, where they believe it the right thing to do in their area. We have listened to concerns that the existing legislation is too restrictive. The Bill will put that right.

The effect of the amendments proposed by the hon. Member for Wimbledon, however, would be to raise the burden of proof that the local authority has to meet to such an extent as to make it almost impossible to meet. The amendment proposing that there must be no adverse effects at all on any bus operators or any person living or working within the area of the scheme is particularly unrealistic.

I want to address the issue of proportionality, which we introduced following representations made by local authorities and others over the draft Bill. They preferred the criterion introduced to be a proportionality test, rather than a competition test. Local authorities are experienced at that, particularly in the context of other transport schemes—getting the balance right between what the financial benefits and costs of a scheme would be, and the lifestyle gain. Local authorities are used to assessing through proportionality the eventual benefits of a scheme.

I accept that in many cases quality contracts schemes may not be the answer to everyone’s problems, but as a Government we believe that they should be a realistic option for communities that want them. The amendments would take that option further away from local authorities and, for that reason, we cannot accept them.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I am disappointed in the Minister’s response.

I am interested in the right hon. Lady’s argument on proportionality. Will she be helpful and send us some correspondence that defines exactly what it is? She says that local authorities are well versed in proportionality, but some examples of where it has been used before, or what the Government guidelines to local authorities are, would be helpful. Can the Minister help us on that point?

Photo of Rosie Winterton Rosie Winterton Minister of State (Regional Affairs) (Yorkshire and the Humber), Minister of State (Department for Transport)

We have said that we want to respond positively to the points made to us by local authorities. One of the suggestions of the Passenger Transport Executive Group, for example, was for the competition test to be made a more general proportionality test, as part of the proposed public interest test. Under that test, the quality contracts scheme promoter would be required to demonstrate that the effect on bus operators  was justified by the public interest legitimate purpose in introducing a quality partnership scheme—a fair, balanced test. That would assist in demonstrating compliance with human rights legislation and is what we responded to. Of course, any guidance we issue will address and build on the work that local authorities already undertake when they draw up particular transport schemes. We will look at proportionality testing then. I hope it reassures the hon. Gentleman when I say that, through guidance, we will assist local authorities with bringing about that test.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I am grateful for the Minister’s comments. I shall look closely at the guidance on proportionality. Obviously, she has told us what PTEG would prefer. I have been trying to obtain a definition of what proportional is and although we do not have it yet, I am happy to accept that the Minister says there will be guidance on it. I do not, therefore, intend to press amendment No. 50 to a vote, as I indicated that I might wish to do.

Returning to my point, we are in favour of voluntary or statutory quality partnerships, but it must be shown that a quality contract provides a substantially greater benefit than could have been achieved under a quality partnership, so I would like to test the will of the Committee on amendments Nos. 47 and 48.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 11.

Division number 10 Nimrod Review — Statement — Clause 19

Aye: 4 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Amendment proposed: No. 48, in clause 19, page 17, line 44, after ‘relates’, insert:

“, which are substantially greater than those that would pertain under a quality partnership scheme,”.—[Stephen Hammond.]

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 11.

Division number 11 Nimrod Review — Statement — Clause 19

Aye: 4 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

I beg to move amendment No. 155, in clause 19, page 18, line 2, after ‘efficient’, insert ‘, environmentally sustainable’.

I shall truncate my comments to be helpful to the Committee—not because I feel that this is not an important amendment, but because we have already had a similar argument on an earlier amendment. Clause 19(2)(d) sets criteria that have to be met, and refers to the three E’s: economic, efficient and effective. It does not mention the fourth E, which relates to the environment. My amendment would add the words “environmentally sustainable” to the requirement placed upon local transport authorities that are drawing up quality contracts schemes. With the Climate Change Bill going through Parliament and when tackling climate change is one of the greatest priorities, it is bizarre—to say the least—that the environment is not even mentioned in the key criteria that are to be addressed.

I hope and anticipate that when the Bill is enacted, local authorities and others will seek to use powers under it relatively soon, and that they will take decisions, for example, to source particular vehicles. If they are not guided toward making sound environmental choices at an early stage, there is a real danger that the wrong choice will be made at an early stage, and we could end up with less sustainable vehicles and other environmental downsides. The amendment would prevent that.

Photo of Greg Knight Greg Knight Chair, Procedure Committee 4:15 pm, 29th April 2008

I can see the hon. Gentleman’s point, but does he accept to some extent the criticism that the amendment would be otiose, and that no vehicle manufacturer in the world is making new vehicles that are more polluting than a previous generation of vehicles? Every vehicle manufacturer is reducing pollution. It could be argued that if the amendment were accepted, any vehicle could be seen as environmentally unsustainable. He could be lifting the hurdle that he accused my hon. Friend the Member for Wimbledon of lifting when we debated a previous group of amendments.

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

That is a novel argument. Of course modern vehicles are less polluting—that is a good direction of travel—but some vehicles are less polluting than others. For example, electric vehicles operate in some places. I went to see some extremely efficient and good public service vehicles being produced by a company called Modec. There is a difference between vehicles that are less polluting and vehicles that are still less polluting. I wish to encourage the latter. It is not only about vehicles. It might also be about information points at bus stops, for example, which could be powered by solar cells. Other aspects of environmental performance could be affected by how local authorities address their duties under the clause.

We discussed the approvals board this morning and what power it might have to overturn decisions by local transport executives—ITAs, councils or whatever they are called in the circumstances. If a duty is not written in to the Bill to deal seriously with the environment, what is to stop an approvals board saying, “You are wrong to put all these conditions about the environment into a plan; they are not in the criteria in the Act, and we therefore think that they are not in the public  interest”? If the approvals board interprets local councils’ plans, we ought to ensure that local councils have protection in the Bill. It would be sensible and far-sighted to include some reference to the environment in the key criteria in the clause.

Photo of Rosie Winterton Rosie Winterton Minister of State (Regional Affairs) (Yorkshire and the Humber), Minister of State (Department for Transport)

I understand the hon. Gentleman’s concern and his desire to ensure that the Bill is environmentally sustainable. I wholeheartedly agree that that should be a key objective of local authorities’ policy and plans. He has probably anticipated my remarks, but for two reasons I do not think that adding his words to the criteria that must be satisfied before making the quality contracts scheme would be the best way of achieving that objective.

First, as we have discussed, the Bill includes general provisions to ensure that environmental issues are high on the agenda of local transport authorities. As I said when we discussed amendments to clause 8, we place certain duties on local transport authorities when developing and implementing transport policies, which include taking into account Government policies and guidance on the protection or improvement of the environment. An authority seeking to make a quality contracts scheme must, among other things, show that the scheme will contribute to the implementation of its transport policies in a way that is economic, efficient and effective. An authority working up proposals for a scheme would need to do so in such a way as to ensure that the scheme was consistent with those policies. It will be under a duty with regard to environmental issues in developing the policies, so such issues will be an important consideration in the development of the scheme.

Secondly, specific consideration of the environmental impact of quality contracts schemes should be included in supporting guidance, rather than in the Bill. I give an assurance that that will be the case. Environmental sustainability is a complex subject and the guidance provides a better vehicle, if I may use that phrase, for a more detailed discussion of the issues that authorities might need to consider.

A draft version of the quality contracts guidance, which is before the Committee, was issued in December. That draft already says that the scheme should take account of wider impacts on the environment. Environmental benefits such as reductions in carbon emissions and noise can be quantified as part of the economic appraisal required for a quality contracts scheme.

As I have said, we will publish revised guidance for consultation later this year, alongside draft regulations setting out the new procedures for quality contracts schemes. I assure the hon. Gentleman that we will consider in that context what more we can say regarding consideration of the environment when developing quality contracts schemes. I hope that that reassures him and that he will therefore withdraw the amendment.

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

One day a Minister will accept one of my amendments. It has been 11 years and I am still waiting for the first one to be accepted—this is a very good one, as a matter of fact. I am grateful for the Minister’s comments as far as they go. I appreciate that she recognises the importance of the environment. The  difference between us is that I regard it as a first-tier responsibility that should rank alongside “economic, efficient and effective”, rather than a second-tier responsibility that is subject to guidance, which is how I perceive it to be classed. However, I made my point under a previous amendment on clause 8 and I divided the Committee then. I do not feel the need to do so again, although my reasons have not changed, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of David Taylor David Taylor Labour, North West Leicestershire

I call Mr. Stringer to move amendment No. 104, with which it will be convenient to consider amendment No. 194.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

I am satisfied that the area that the amendment covers was debated this morning, so I am happy not to move it.

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

On a point of order, Mr. Taylor. What is the position of amendment No. 194, which is in this group?

Photo of David Taylor David Taylor Labour, North West Leicestershire

Does the hon. Gentleman wish to move amendment No. 194?

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

I should like to make one or two brief comments on it. I will move it for the purpose of then withdrawing it. All I wanted to be clear on was that the issues, because of the grouping—

Photo of David Taylor David Taylor Labour, North West Leicestershire

Order. For the avoidance of doubt, I am very happy for the hon. Gentleman to speak to amendment No. 194.

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

Thank you, Mr. Taylor. The only point that I wanted to make was this. As a result of the complicated grouping of the amendments, there are issues relating to amendment No. 194 that I should like to refer to, but I think that it is more appropriate that I refer to them under clause 23 and amendment No. 157. I wanted to give you notice that I intend to do so. If there is no objection to that, I shall discuss amendment No. 194 at that point. I have no wish to press it to a vote.

Photo of David Taylor David Taylor Labour, North West Leicestershire

For the convenience of the Committee, could the hon. Gentleman say whether he intends to speak to amendment No. 194 or not?

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

Having made those comments, I am happy not to speak to it, Mr. Taylor.

Clause 19 ordered to stand part of the Bill.