Clause 59

Local Transport Bill [Lords] – in a Public Bill Committee at 6:00 pm on 6 May 2008.

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Additional sanctions for failures by bus operators

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I beg to move amendment No. 247, in clause 59, page 53, line 5, leave out from ‘money’ to end of line 7.

The amendment deals with a very specific power of the traffic commissioner. I welcome and support the general thrust of clause 59, which states that, when an operator is fined by the traffic commissioner, the money must be invested either in the provision of local  services or used to compensate passengers on such services. That is clearly sensible and laudable. If passengers suffer as a result of poor services, it is only right that the fines should be used to improve the services or directly compensate passengers.

I can think of other areas of transport in which such an approach might be welcomed. When Network Rail was fined by the regulator for disruption to passengers over new year, the money went straight to the Exchequer and not back into rail improvements. Perhaps the Minister could impress it on her colleague the Under-Secretary of State for Transport, the hon. Member for Glasgow, South (Mr. Harris), that a similar approach in that field would be welcomed as well.

To return to my amendment and compensating bus passengers, the clause says that the compensation can take the form of payments of money or such form, including the provision of free travel or travel at a reduced price, as is specified. That raises a number of questions about whether or not the latter part is tightly defined or clear enough. For example, does it mean that only passengers previously affected by the poor provision of service will be offered free or reduced travel? Or does it mean that travel on the offending routes will be free or reduced for a period of time, which would benefit people who had not previously been caught up? Therefore, if an operator was obliged to offer the latter—the free or reduced travel for a period—it could result in some unintended consequences.

I am in favour of fining the operators if they fail to provide the right service and of reinvesting the money or giving it to those who need to be compensated. The best way for that to happen and to ensure that there is no ambiguity—unless the Minister wishes to add some other words to the clause—is to make a direct monetary payment to the passengers.

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

What we want to achieve is to give a traffic commissioner more choice in the sanctions that can be imposed against operators in such circumstances. The hon. Gentleman is right to say that a traffic commissioner can fine an operator up to £550 for every vehicle operated under the licence. That penalty is paid into the general fund. The problem is that that could worsen the position for passengers, because the operator may simply pass on the cost of that fine through higher fares without making any improvement to the services. When an operator provides a bad service, there should be a way in which sanctions can be used to bring direct benefit to those passengers who have been affected. Ideas, such as offering free or reduced travel, were developed in collective discussions in the Bus Partnership Forum, which is a collective of industry, local authorities and others, including the senior traffic commissioner.

By giving traffic commissioners a range of options, they will be able to assess what is right on a case-by-case basis, taking into account local circumstances. Sometimes, it might be appropriate to give some free or reduced fare travel. Having that flexibility can only add value to the work of the traffic commissioners. If the operator was not happy with the sanction that had been taken, it has the right to appeal to the Transport Tribunal. I hope that the Committee  will agree that these are sensible additions to the tools available to traffic commissioners and that the hon. Member for Wimbledon can be persuaded to withdraw his amendment.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport) 6:15, 6 May 2008

I am always open to persuasion if the argument is full of good reason. I am prepared to accept that the traffic commissioner should have a range of tools available to him, although I prefer the reinvestment in local bus services. I can see that he may wish to direct free travel or whatever, but the question remains that there may be an unintended consequence of people trying to use that free travel even though he did not intend them to do so. None the less, we will not go to the stake on this one. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I beg to move amendment No. 248, in clause 59, page 53, line 30, leave out from ‘to’ to ‘, and’ in line 31 and insert ‘the appropriate local authority’.

We have agreed the principle that the traffic commissioner should have the right to impose sanctions, and one of those sanctions is that the money from fines should be reinvested in the bus service in the area. Under the amendment, any fines payable under the clause would be payable to the local authority and not, as the clause is currently drafted, to the Secretary of State or Welsh Ministers. That is appropriate: it fits in with the nature of the bus industry, which is a very local industry. As we have stressed throughout proceedings on the Bill, the local authority should have a key role in determining the provision of bus services in the area. That function is carried out by local transport authorities and local operators, so having any proceeds of fines paid to national Government is an anomaly in comparison with the rest of the Bill. I strongly believe that the proceeds of fines should be reinvested in the bus services, and that that should be done by the appropriate local authority, not by moneys going to the Secretary of State or Welsh Ministers.

Photo of John Leech John Leech Shadow Minister (Transport)

I do not intend to say much on the amendment; I just want to support it strongly. It is very important that where services have been affected locally, the proceeds of fines go into improving local services. It is completely appropriate that, rather than going to the Secretary of State, the money should be reinvested locally.

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

I would not like to raise expectations unduly, but the amendment does raise some interesting points. I am not sure, however, that it would work. It does not, for example, talk about ring-fencing, and there are difficulties with the suggestion, but I am prepared to have a look at the points that the hon. Member for Wimbledon has made. As I said, there are difficulties. I am not sure whether the proposal fits in with other cases, as we would require local authorities to spend money on a particular area, which carries with it certain considerations. However, I am prepared to look further at whether there would be benefits for passengers. Discussion would be required with a  number of other Departments, particularly the Treasury, with regard to directing funds to a particular area. I cannot promise the hon. Gentleman that it will be possible to introduce an amendment, but I will certainly give the proposal careful consideration.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

After seven and a half sittings, that is probably as near as I am going to get in persuading the Minister to agree to one of my amendments. I hope that she will put the point to the Treasury carefully, stating that it is road user charges that are being reinvested and that this is not about hypothecation of tax. I am sure that the Treasury will see the wisdom of the amendment and that, on Report, the Minister will introduce something similar. Following her reassurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

I shall not detain the Committee long. However, I would like the Minister to confirm that her understanding of proposed new subsection (1A)(d) of section 155 of the Transport Act 2000 is the same as mine and that the power being given to the Secretary of State, in respect of England, and to Welsh Ministers, in respect of Wales, relates only to the range of sanctions available, and that it is not a power to intervene in any specific case.

Question put and agreed to.

Clause 59 ordered to stand part of the Bill.