Clause 61

Local Transport Bill [Lords] – in a Public Bill Committee at 6:15 pm on 6th May 2008.

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Revival of certain powers of PTEs

Photo of John Leech John Leech Shadow Minister (Transport)

I beg to move amendment No. 261, in clause 61, page 54, line 26, at end insert—

‘(2) After subsection (1)(vii) insert—

“(viia) to require operators of public passenger services (within the meaning of section 9A) to display within any vehicle or premises used for providing those  services information appropriate to enable users of those services to make representations (including complaints) about them to the Executive.

(viib) as a result of any representations (including complaints) it has received from users of public passenger services pursuant to subsection (1)(viia), to make and publish recommendations or representations in such manner and to such persons as the Executive sees fit.”’.

The amendment is fairly self-explanatory. It would require bus operators to display information in their vehicles and bus stations that detail how a customer can make a suggestion or a complaint about the services that they operate to the relevant passenger transport executive. It would also mean that the PTE could use the suggestions and complaints to inform any recommendations that it might wish to make about bus services. For example, it might want to inform the revamped Passenger Focus or the Secretary of State.

The problem is that much of the time people do not know to whom to make a complaint. Passengers get on buses and inevitably the person to whom they complain is the bus driver. I—and I am sure that this is the case for other hon. Members, too—have been told by numerous constituents who, having followed through their complaint or suggestion about the service to a bus driver, were told that the operator of the service knew nothing about it. That is mainly because the bus driver is too busy and forgets that a complaint or a suggestion was made or that such matters just never filter back to those who should handle such matters. The amendment would give people clear information about whom they can contact or speak to, and to whom they can make a complaint or suggestion. It is eminently sensible, and I hope that that the Government will take it on board.

Photo of Rosie Winterton Rosie Winterton Minister of State (Regional Affairs) (Yorkshire and the Humber), Minister of State (Department for Transport) 6:30 pm, 6th May 2008

I certainly agree that there should be clear information available to bus and coach passengers about how and to whom they can make comments or complaints about the service they are using. That issue came up time and again in consultation. In response to the debate on the matter in the other place, the Government amended the Bill on Report to insert what is now clause 70. That clause will give powers to the Secretary of State to make regulations to require certain persons to display particular information in appropriate places. That could go wider than just information about complaints. What we have in mind is local authorities, bus companies and scheduled coach operators being required to display on passenger vehicles, at bus stops and bus stations or in timetable leaflets the contact information for customer service and passenger representation. Those notices might also be used to raise awareness of the new bus passenger champion and to ensure that passengers have appropriate customer service contact details.

It is more appropriate to have the powers as laid out in clause 70 than to give powers to PTEs, which would be the effect of the amendment. First, the suggested powers would help only passengers who lived and travelled in PTE areas; they would not help to address issues in other parts of the country. Secondly, we want to ensure consistency throughout England in the information available to passengers. That will be more effectively achieved by the appropriate power being with the Secretary of State.

In a sense, the amendment would also address complaints against the operator, but there might be instances where passengers wish to complain about a local authority—for example, if it is not enforcing bus lanes properly. The powers in clause 70 will allow the appropriate information to be provided to passengers who want to make such complaints.

I hope that I have reassured the hon. Member for Manchester, Withington that I take the issue of information about complaints seriously. We feel that the amendments that we have made through clause 70 are a more appropriate way to deal with that. With that reassurance, I ask him to withdraw his amendment.

Photo of John Leech John Leech Shadow Minister (Transport)

We may return to the issue on Report, but with that reassurance I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

I beg to move amendment No. 128, in clause 61, page 55, line 2, after ‘under’, insert ‘section 10(1)(i) or’.

Photo of David Taylor David Taylor Labour, North West Leicestershire

With this it will be convenient to discuss the following amendments: No. 129, in clause 61, page 55, leave out line 8.

No. 130, in clause 61, page 55, line 10, at end insert—

‘(7) For subsection (1)(i) (power of PTE to carry passengers by road) substitute—

“(i) in the event that a quality contract is terminated or local services provided under it cease in whole or in part to be provided, to carry passengers by road within, to and from that area for the purpose of maintaining local services provided under the quality contract for so long as is required to procure another person to provide such services under the relevant quality contracts scheme;”’.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

The amendment was introduced and debated in the House of Lords, so I will not repeat everything that was said there, although the Government’s arguments for not accepting it were quite weak.

The amendment would allow passenger transport executives or integrated transport authorities to be the operator of last resort if a bus company decided to move its fleet out if it went bankrupt or for some other reason could no longer operate services. It may be that no other bus operators in the area could come in and immediately replace the existing operator. The Government’s argument against is that the PTE—the integrated transport authority—would have to comply with EU regulations, be competent in the PTE operational scheme, and have managerial competences and certification.

That is a lot of words, but when we consider some bus companies, which in effect are run by a couple of men and their dog—the purpose of the 1985 Act was to allow small bus companies to compete with large ones, among others—those words do not seem to carry much weight.

It is not expected that operator of last resort will be used on many occasions. In fact, it will probably be used very infrequently. Not for the first time in this debate, we can look for similar situations elsewhere.  With rail franchises, we find that Network Rail—previously Railtrack, I believe—has the power to be the operator of last resort. In fact, in the south-east, it became the operator of last resort for a time. In the London system, Transport for London has the authority to be the operator of last resort, although I think that London is probably one of the last places where that power would need to be taken up.

It seems slightly unreasonable not to have something in the Bill that may be used only occasionally—in an emergency. If it were used, it could be useful as a benchmarking exercise to see how a locally run, publicly initiated bus company operated against many of the private operators.

It is unlikely that this section of the Bill will be used, but we have the opportunity to include a measure that may be used occasionally, or hardly ever, and it seems unreasonable not to take it. At some future time, somewhere in the country, somebody might regret it if we do not do so.

Photo of Ian Stewart Ian Stewart Labour, Eccles

It is good to see you in the Chair, Mr. Taylor. Earlier today, I highlighted instances where I felt there would be the need to allow transport authorities to be the operator of last resort, and I hope that the Minister heard as well as listened. I know that she listened, but I hope that she heard the example that I gave of a quality contracts scheme being awarded and an operator walking away from an existing contract that it provides. In such circumstances, residents, passengers and workers would be left in an insecure situation.

Over the past 10 years, I have argued in the House that it would be sensible to allow passenger transport authorities to be an operator of last resort for all sorts of different reasons. If the Government were to accept that there will be unusual circumstances in which no provider is left, a local transport authority could make provision almost as a stop-gap until such time as a private operator was found to deliver the service.

Indeed, I would like to go further and say that that should be encouraged in a wider sense, so that transport authorities could provide a service but on a temporary basis. I hope that the Minister will listen and hear what hon. Members have said.

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

As my hon. Friends know, the main purpose of clause 61 is to put PTEs on equal footing with other local transport authorities. While those other authorities do not have a specific power to lease buses to operators, they do so by using their general well-being powers under local government legislation. The PTEs are in a different position—first, because they have no well-being powers and, secondly, their explicit power under the Transport Act 1968 to lease out buses was disapplied by secondary legislation following deregulation.

The Bill will give the renamed integrated transport authorities well-being powers, but those powers will still not allow them to do anything specifically prohibited under other legislation. The other disapplication of the appropriate legislation amounts to a prohibition on them leasing buses. Clause 61 will restore the power to do so, but only in specified circumstances consistent with their current statutory functions.

The amendments aim at a partial restoration of the power of PTEs to operate buses, which, as my hon. Friends said, was their primary function before the implementation of the 1985 Act. One problem with that suggestion is that I am not sure whether the Committee is aware of the commitment needed for a PTE to play the role of operator of last resort.

For such powers to be of any use, it would have to be possible for the PTE to exercise them at a moment’s notice. Otherwise, it might as well let an emergency contract, which it can do. The PTE would certainly need a public service vehicle operator’s licence, the necessary financial standing and a professionally competent transport manager available any time the emergency might arise. The requirements of the licensing system need to be satisfied at all times while the licence is in force, not just on the rare occasions when an emergency arises. The PTE would also need vehicles and drivers to operate the services. Arguably, those of the failed company would be available, but they would not necessarily fall into the PTE’s lap.

Similar problems arise with the operator-of-last-resort powers in rail franchising legislation, which my hon. Friend the Member for Manchester, Blackley referred to. There are few undertakings qualified to step in and run a railway at short notice, so there is no alternative to those powers. The letting of emergency bus contracts, however, is quite a commonplace occurrence, particularly with school bus services, for example. That seldom causes serious problems.

Photo of John Leech John Leech Shadow Minister (Transport)

Does the Minister accept that without those powers local authorities could be held to ransom by operators over quality contracts?

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

I will come to that. My point is that, taking the issue of quality contracts, local authorities already have powers to enter into emergency subsidy arrangements with an operator. We have a power in the Bill to disapply the usual tendering requirements in certain circumstances.

Photo of John Leech John Leech Shadow Minister (Transport)

In fairness, the Minister has just proved my point—it is all about subsidised services and operators making a fortune at the expense of the PTE.

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

I do not accept that. The hon. Gentleman has to balance what he is saying. A PTE could bring in a private operator under a contract to the local authority more quickly than an authority could get hold of enough drivers, vehicles and so on to operate a service of its own.

We understand that PTEs would be concerned about the consequences of a large operator suddenly pulling out or falling on hard times and being unable to carry out its contractual duties. It is also true that in those circumstance receivers or administrators would be called in to continue to run the company’s affairs as best they could until a buyer was found. In particular, they would want to keep services going, as they would bring in revenue.

Maintaining contractual obligations would take precedence over discretionary activities, so services outside quality contracts schemes—if we want to look  again at the quality contracts system—could be more at risk than those provided on a purely commercial basis. While I understand the point being made about being the operator of last resort, the problem for PTEs would be that requirements would have to be in place the whole time to fulfil that and we believe that the ability to allow emergency contracts, which we have powers to do, is available under existing legislation.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe 6:45 pm, 6th May 2008

May I put a possible scenario to my right hon. Friend? She is indicating that the clause gives new powers to PTEs to enable them to purchase vehicles that they can hire out to operators on a contractual basis, which may fit this particular requirement. Would it be possible for a local authority under its well-being powers to tender for such a contract?

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

As I understand it, that was disapplied under the Transport Act 1968. If I mistaken in that, I will write to the Committee. In terms of emergency powers, we believe that it is possible for local authorities to have adequate facilities in place to ensure that if a contractor failed the local authority could put the contract out very quickly and the usual tendering process would not have to be undergone. For that reason, we do not believe that it would be reasonable to expect PTEs to have some of the large operators’ licences that could be possible for 200 or 300 vehicles and be able to fall back on trying to get them up and running with drivers and people running them. Frankly, it is more likely that that would be more effectively achieved by actually going through the emergency tendering process that we have in place. With that reassurance and clarification, I hope that my hon. Friends will withdraw their amendments.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

I shall eventually withdraw the amendment, but in a way it will be in spite of my right hon. Friend’s arguments rather than because of them. There was one argument and one point that I do not think she dealt with, although she went through a number of scenarios. In a sense, I agree with her because, as both my hon. Friend the Member for Eccles and I have said, the provision would be used only in the most exceptional and potentially unforeseeable circumstances. The Minister has gone through all the alternatives—yes, there will be alternatives—but she did not say why the emergency powers are held in London and not the rest of England.

My second point has run through a lot of our arguments. Let me say clearly that some very decent people own and run bus companies. There are good bus companies that run services with integrity and that are good for passengers, but there are also absolute rascals out there who will use anything they can to get one over on the public sector and get subsidy. They threaten and they push. We have mentioned Brian Souter and Stagecoach. During the so-called bus wars in Manchester, that company did not behave reasonably but said, “We will close this city down. We will park buses on all the roads in the city centre if you don’t do what we want.” That part of the atmosphere in which towns such as Preston and cities such as Manchester have had to operate. To deny even relatively small powers such as the amendment proposes  is to give the rascals a benefit. The powers will not do down or harm the decent bus companies.

I hear what my right hon. Friend says. All the other available powers might well be able to deal with an emergency, but they might not. I have been in a number of situations in local government where companies have gone bankrupt or other things have happened, and the lawyers have searched through the law books to see what they can do. In such situations, it is important to have as many powers and alternatives as possible to deal with something damaging to the communities we represent.

We may come back to the amendment. It is not the most important amendment moved, but the Government’s case seems particularly weak.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 61 ordered to stand part of the Bill.

Clauses 62 to 65 ordered to stand part of the Bill.