[Mr Gary Streeter in the Chair] — Bus Industry

Part of the debate – in Westminster Hall at 9:30 am on 6th September 2011.

Alert me about debates like this

Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton 9:30 am, 6th September 2011

I am the wrong person to ask, but my view is that companies do not compete because then they can exploit the market using informal agreements or in nods and winks, by putting up fares in their own areas without the cost of competing. The statistical evidence in their profits and fare levels is that they are exploiting the market compared with what happens in the London market. That is voluntary. Companies are happier operating in their own areas. They say that they do not like the extra dead mileage if buses must be driven into areas where other companies operate from their depots, but that is a weak argument. They simply do not want to compete because it is more profitable for them not to.

The making of high profits was the first major finding in the Competition Commission’s interim report. The second was that many operators face little or no competition. It is welcome that the commission finally got around to writing the report, but it is flawed in many ways, as such reports tend to be because they look at statistics over the past five years, but the economic world is now different and more difficult. They estimate that anti-competitive behaviour costs £70 million, but they do not include the cost when people abandon buses; if that were included the real cost to the public would be much higher. In addition, they do not look at how the current bus system inhibits the use of simple integrated ticketing, which would drive up the number of passengers using buses.

I have a few requests for the Minister. First, when the Competition Commission’s report is published and he is considering what to do about buses, will bear in mind that there is a lot of information out there, but it has to be culled at great expense from surveys and other sources, because the bus companies keep much of their information private, despite receiving 50% subsidy? Good-quality information is vital for local transport authorities when planning their services.

My second request is for through-ticketing. We know what brings people back on to buses: a simple, low-fare structure with through-ticketing. It is estimated that if fares are cut by 20%, passenger numbers increase by 13%, with a further increase if the ticket structure is simplified with through-ticketing. What can the Minister do to help that?

My main question, which goes back to the beginning of my speech, is how can the Minister support and help to build on the powers and structures in the 2008 Act? I know that he understands the legislation thoroughly, because he and I served on the scrutiny Committee. There are many barriers facing South Yorkshire, West Yorkshire, and Tyne and Wear passenger transport authorities. They are considering moving back to a regulated system of quality contracts, because the buses, bus drivers and depots are in the hands of the bus companies, which have rubbished the Competition Commission’s interim report—well, they would—and are threatening a scorched earth policy for any passenger transport executive or authority that decides on re-regulation. What help can the Minister give to those transport authorities?

Everyone knows that we are dealing with a coalition Government. The Minister’s views are well known from the time before he was a Minister, as are the Secretary of State’s. The Secretary of State is more of a free marketeer, and the Minister believes in the instruments in the 2008 Act, but when the bus industry is declining, the balance between the two parts of the coalition, resulting in a watching brief and agnosticism on the industry’s future, is not satisfactory. I should be grateful if the Minister told us his view.

My final point is that the present Government and Governments for the past 25 years have not done enough for the quarter to one third of people who do not have access to a car and rely completely on buses. One of the most appalling sarcastic comments made by the last Prime Minister, made in response to a Birmingham Member who asked what he would do about the loss of a bus service in Birmingham, was that he would immediately call a Cabinet meeting. He said that sarcastically, but Cabinet Ministers should discuss bus services. They are vital for many millions of people in this country and they have been neglected or given too low a priority for long enough. I look forward to the Minister’s support in protecting and helping the bus industry at a time of inevitable cuts. That is possible.