Previous Section Back to Table of Contents Lords Hansard Home Page


Baroness Thomas of Walliswood: I am sure that all three people who put forward the amendment are equally delighted with the noble Lord's response. For the present, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bradshaw moved Amendment No. 196:



(" . After section 6 (registration of local services), insert--
"Variation in registration or alteration in timing of local services.
6A.--(1) The traffic commissioner may require the variation of the timing of the registration of a proposed bus service or alteration to the timing of an existing bus service where it appears to the commissioner that the primary aim of the proposed change is to disrupt the business of a competitor.
(2) In exercising his powers under subsection (1) the commissioner shall have regard to guidance issued by the Secretary of State.
(3) A person affected by a decision of the commissioner under subsection (1) may appeal against it to the Transport Tribunal."").

The noble Lord said: This amendment is similar to that proposed by my noble friends in Standing Committee in the House of Commons. We remain concerned that the opportunity still exists for people to make registrations of new bus services which are not in the public interest--indeed, which are almost against the public interest. They are made deliberately by registering the departure of a bus service a minute or two in front of that of a competitor with the aim of disrupting that competitor's business.

It is true that the new Competition Act provides better protection against abuse of dominant position and predatory practice. However, we are not convinced about the ability of the Office of Fair Trading to react to such registrations within the time-scales allowed in the Transport Act. It has never moved with speed previously, and often takes so long to act that a bus operator may have been forced off a route or driven out of business before anything is done.

Under the Competition Act, the penalties for abuse of dominant position are severe, and that might temper the actions of some parties. But it seems that it would be easy for the director-general to draw up some guidance--in the same way as he has attempted to do for ticketing schemes-- which could be used by the traffic commissioner as a guidance to him in the sort of registrations he should accept and which he might decide to defer for consideration.

Although there has been a lull in bus competition, I am advised that there is more to break out in one of our large cities. That is not in the interests of users who can end up with a very much worse service, often comprising old buses running at irregular intervals. To offer another piece of economic theory--which is always extremely dangerous late at night--the law of competition is that you must try to get your product as close as possible to that of a competitor; in this case, you do not spread the bus journeys out evenly, but try to get as close as possible to a competitor in a competitive situation. That is not in the interests of the customer.

10 Jul 2000 : Column 119

The purpose of the amendment is to attempt to bring some form of discipline into service registration. I do not say that our proposal is ideal. However, I believe that it should be possible under the new Competition Act for rules to be drawn up to which the traffic commissioner may refer. If he has doubts about whether a proposal is in accordance with the spirit of the Competition Act, he should be allowed to defer decisions on that registration until the situation has been clarified. Administratively, that would be much easier than taking cases by the Director-General of Fair Trading through the various processes laid down in the Competition Act. I beg to move.

Lord McIntosh of Haringey: I do not want to cross swords with an academic transport economist at this hour of night, but I wonder, when the noble Lord talks about the law of competition, whether he has ever heard of niche marketing. I should like to discuss the latter with him, but I shall not take up the time of the Committee at the moment.

It is true that operators are responsible for registering with traffic commissioners details of bus services 42 days before those services begin. That includes information about routes and timetables. Therefore, operators can be held properly accountable for running the services that they have said they will run and can be penalised if they fail to do so. After all, that is the role of the traffic commissioner. However, the commissioner does not have power to refuse a registration application if it is supported by the necessary information.

Amendment No. 196 would allow the traffic commissioner to vary the times of a service which was the subject of a registration application, or change the timings of an existing bus service, if he believed that the registration was intended to disrupt the business of another operator. That would require the commissioner to exercise a judgment about the motivation behind a registration and would be a significant extension of his task. It would be quite difficult for the commissioner, given his expertise, staffing and existing powers, to take on such an obligation. The commissioner has power to attach conditions to an operator's licence prohibiting him from providing a specific type of local service if there has been intentional interference--with the operation of a local service provided by another operator, or serious misconduct in relation to the operation of another operator's service. That is a matter of actual bad behaviour rather than a judgment of economic interest and intent of the kind implied by the noble Lord, Lord Bradshaw.

As the noble Lord rightly said, if there is a problem of unfair, anti-competitive behaviour, including one that involves timings that disrupt a competitor's service, that is a matter for the Office of Fair Trading, which has power to act. The Competition Act gives the OFT new powers to act quickly in cases of "abuse of a dominant position" (to use the technical phrase). It may be that the noble Lord remains to be convinced about its ability to act quickly, but it certainly has

10 Jul 2000 : Column 120

power to do so, which I believe is helpful. In any case, as we said in our consultation document on bus policy we shall amend the registration regulations to remove the current flexibility given to operators to vary timings by up to five minutes--the five-minute rule, as opposed to a gap of one or two minutes spoken to by the noble Lord--without giving any notice to the traffic commissioner or anybody else. It has been argued that the five-minute rule provides scope for anti-competitive activity by an operator. We shall remove that possibility by amending secondary legislation.

I turn next to Amendment No. 197 which concerns the registration of "on demand" bus services which have no fixed route timetables or stopping places. I am aware that there is increasing demand for more flexibly routed bus services, particularly in rural areas, where the travel needs of passengers and levels of patronage may sometimes be usefully met by relatively unconventional kinds of services. The current registration regulations give the traffic commissioner discretion to waive some of the service particulars that must normally be submitted as part of the registration, provided other details can be submitted which give a complete description of the service. I accept that the regulations would benefit from re-examination and greater provision for flexibility, or at least greater clarity about the flexibility that is already provided.

I do not believe that this amendment is quite what we need. It provides for "flexible" services to be registered only if they form part of a local authority bus strategy. One is not quite sure what it means--for example, whether a service must be specifically mentioned in a bus strategy--but in any case one can imagine bus services which are not part of a strategy but might benefit from greater flexibility in the regulations. I can assure the noble Lord that we are looking at the scope for amending the secondary legislation. We do not want to open up a loophole that weakens proper registration or the enforcement powers of the commissioner to be compromised. We must still have clear and enforceable commitments from operators on the services that they provide. None the less, it may well be that changes are appropriate and that the way to do it is by means of secondary legislation.

11.30 p.m.

Lord Bradshaw: I thank the Minister for his reply to Amendment No. 197. I am sure he is right that the words "bus strategy" are wrong. Some of the new services introduced with the help of the rural bus grant are subject to such variation of route that they stretch the traffic commissioner's existing powers to their limits. They would benefit considerably from some easement.

Even at this stage, I ask the Government to consider some discussions between the traffic commissioner and the Office of Fair Trading to ensure that, when bus services are registered which are part of what appears to be a "bus war" between two companies, there is the

10 Jul 2000 : Column 121

closest and earliest possible liaison between the two so that we do not reach the situation where the public suffer before the Office of Fair Trading acts.

Lord McIntosh of Haringey: That makes good sense to me.

Lord Bradshaw: With an assurance along those lines, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 197 and 198 not moved.]

10 Jul 2000 : Column 122

Schedule 11 agreed to.

Clause 161 agreed to.


Next Section Back to Table of Contents Lords Hansard Home Page