Clause 44

Local Transport Bill [Lords] – in a Public Bill Committee at 4:15 pm on 6th May 2008.

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Applications for registration where quality contracts scheme in force

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I beg to move amendment No. 239, in clause 44, page 40, line 20, leave out subsection (3).

Photo of David Taylor David Taylor Labour, North West Leicestershire

With this it will be convenient to discuss the following amendments No. 240, in clause 44, page 40, line 23, at end insert

‘and the appropriate approval authority’.

No. 241, in clause 44, page 40, line 24, leave out subsections (5) and (6) and insert—

‘(5) The traffic commissioner shall decide whether to accept or reject the application.’.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

Under the Transport Act 2000, operators are prohibited from registering additional services in an area where there is a quality contract scheme in operation, subject to certain qualifications. Clause 44 re-examines the issue and makes some modifications to the rules that govern the registration of services in areas where a quality contract scheme is operational.

My belief that the clause requires some change stems from a number of concerns. That will be no surprise to the Committee. First, is it right to restrict free competition, let alone in an area with a quality contract? Should other operators not be able to run services alongside the quality contract if they see a demand? Last week, the Minister put it on record that if a service was not detrimental to the quality contract she would regard it as acceptable. The services provided under a quality contract may or may not suffice in providing the services that locals require. It is possible that the network of services could be improved.

Secondly—I return to my fear that the traffic commissioners will end up being micro-managed—the provisions of the Bill and of previous legislation are designed to ensure that traffic commissioners are given certain functions and that they have the appropriate proficiency, resources and independence to carry out those functions. Beyond that, it should not be necessary to interfere in their work. One of the most important functions of traffic commissioners is the registration of buses. They receive the registration application and, having weighed all the pros and cons, they have to decide whether to accept or reject it. Under the clause, they will be told who to consult and how to reach that decision, but that calls into question the very independence of the traffic commissioner.

The clause removes from the traffic commissioner the function of accepting registrations It does so by placing an obligation on the traffic commissioner to invite representations from the relevant local authority. If he receives a clearance certificate, he has no choice but to accept the application. If he does not receive a clearance certificate he has no choice but to reject the application. All he is at that point is a thoroughly pointless middleman who does nothing but pass the application on to the local authority to be approved, or not. I am not sure that that was what the Government intended the traffic commissioner to do at that point. One wonders why he becomes just a pointless middleman.

My amendment would work in two ways. First, it would put an obligation on the traffic commissioner to consult not only the local authority running the quality contract scheme but the approvals board that approved it. That is important, as the board will consist of independent, qualified individuals with an intimate knowledge of the arrangements of the quality contract scheme and its impact on the registration of additional services. Secondly, the amendment would remove from the clause the subsections that require the traffic commissioner to comply with the issuance or non-issuance of a clearance certificate. A traffic commissioner should not need to be told by anyone how to do his job. His job is to decide on the registration of bus services, but the clause takes that away.

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

As the hon. Gentleman said, the amendments would place decisions as to whether  additional services could be operated in an area covered by a quality contracts scheme with the traffic commissioner, rather than the local authority that made the scheme. Perhaps I could briefly explain the purpose behind the clause. It provides an exception to the general rule that in an area where a quality contracts scheme is in place, all services must be provided under quality contracts. That means that no other services can be registered with the traffic commissioner to operate in the area. There is already a power for the authority to exclude certain services or types of service from the scheme, and they may be registered with the traffic commissioner in the usual way. For example, long-distance services with only one or two stops in the scheme area might be excluded, or services for a niche market such as tour buses or works buses.

A need or demand may arise, however, during the lifetime of a scheme for services that were not anticipated when the scheme was developed, and which might be advantageous, or further niche services might be identified that would not particularly affect the viability of the scheme one way or another. It would be very unsatisfactory if there were no way of allowing those services to be provided other than by formally amending the scheme. The clause would give the local transport authority the discretion to allow operators to run additional services that were not detrimental to the scheme, and those services would be registered with the traffic commissioner in the normal way.

In normal circumstances, traffic commissioners do not have the power to reject applications to register, provided the operator is licensed. It is right that the local transport authority that made the scheme in the first place should decide whether a proposed new service is compatible with the quality contracts scheme. The amendments would take that function away from the local authority and give it to the traffic commissioner. He would apparently have total discretion as to what to allow and what to reject. Although the local transport authority would be consulted, the decision would be entirely out of its hands. That would make it possible, for example, for an operator to register a service that would compete with one provided under a quality contract, possibly undermining the financial basis of the contract.

The aim of providing flexibility is to allow the local authority to say that it accepts that a particular service will not undermine the quality contracts scheme, and that it is happy for it to go ahead and for it to be registered with the traffic commissioner. We believe that the local authority that made the scheme should have the discretion to do so, and we do not believe that the decision should be handed over to the traffic commissioner. I hope that that explanation is useful and that the hon. Member for Wimbledon will withdraw his amendment.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

That was helpful in some ways, but not entirely. I was trying to explore why the traffic commissioner becomes just a middleman at this point. What is his function if he simply passes round pieces of paper? It is right that the local authority should be consulted, but ultimately the traffic commissioner should have the chance to look at the application.

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

It would just mean that a service would be registered with the traffic commissioner in the  normal way. As I have said, in normal circumstances, if an operator is licensed, it simply registers with the traffic commissioner. The point is that that would happen during a quality contracts scheme. In normal circumstances, it would not be allowed to register, but if the local authority agrees that it can do so, it would register in the normal way.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

Again, I was listening carefully to the Minister, and I am somewhat reassured by what she said, although I might like to test this point again on Report, if given the opportunity. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 44 ordered to stand part of the Bill.