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This amendment would remove that veto, restore the position to the Government’s own thinking in the draft Bill, and mean that the public sector—including local transport authorities, which provide a significant part of bus-operator income through concessionary fares, tendered services and fuel rebate—would be able to have a real influence over the level and frequency of services that its money is supporting. I beg to move.
Earl Attlee: My Lords, I support these amendments, which seek to remove the admissible objections operator veto from quality partnerships. We have had much discussion on this point and it seems that the Bill would be improved were these words removed. The Government published, immediately prior to the first Committee session, draft guidance on what an admissible objection might constitute. The provision in the guidance that allows operators to make an objection based on operators being unable to provide services to the standards specified on a commercial basis has raised several questions already.
We agree that local transport authorities are unlikely to devise a quality partnership with unreasonable requirements, as operators would not sign up—a point made by the noble Lord, Lord Rosser. Our earlier amendment on the idea of producing a bus partnership scheme as part of the local transport plan would assist
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Lord Snape: My Lords, I listened carefully to the debate on the amendment, which originates from the Passenger Transport Executive Group; this debate pretty much follows our debate in Committee. I am astonished that the Conservative Front Bench support this amendment. After all, the original legislation was the 1986 Act, which was introduced by the Conservative Government. They had quite a number of years following 1986 when, if they had wanted what the amendment seeks, they could have had it. I realise that there is not a great deal of support behind what the noble Earl has just said, but the fact that the Conservative Party feels that the legislation needs changing in this way is significant and a little unexpected.
4.45 pm
Before I discuss the amendment further, I declare my interest as a consultant to FirstGroup PLC and a former chair of the National Express Group’s major bus subsidiary. Some of the fears of the PTEs, as expressed by the noble Lord, Lord Rosser, are unfounded. If we are to discuss partnerships, bus operators, who have a considerable investment in these matters, are surely entitled to have their voice heard. Partnership must be just that; it cannot be an ultimatum laid down by one side in the supposed partnership. To suggest that operators should not have the right to make admissible objections to a statutory quality partnership is unfair. It allows one side in a debate to make a final decision and to have, as the noble Lord, Lord Rosser, put it, “the right of veto” over the views of the other side in a supposed partnership.
The Minister said consistently throughout Committee that operators must be able to protect their legitimate interests. I suggest that, without an admissible objection power, such ability would be put at serious risk. Let us switch the argument around. Perhaps the noble Lord, Lord Rosser, could give us a guarantee that local transport authorities and PTEs will not seek to impose unreasonable terms on fares, frequencies and timings. These are the three matters about which they are most exercised and are subject of later amendments. I repeat that if one side of a supposed partnership wishes to insist that its view should prevail regardless of the other, we should be given proper reasons. The noble Lord, Lord Rosser, said that local authorities are democratically elected. I accept that point, but I hope that he in turn would accept that partnerships, statutory or otherwise, have worked well in various parts of the country where proper good will has been behind them.
The Minister will be aware that, as recently as Monday this week, his right honourable friend the Transport Minister was in Birmingham. Her visit was noted in an article in the Birmingham Post, under the headline “Bus firm tries to lure passengers with luxury fleet”, a copy of which I have in front of me. Describing an example of a partnership that will work well under the existing legislation, it states:
“A fleet of luxury buses complete with air-conditioning, leather seats and tinted windows designed to get people back on
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This is not an investment lightly made by the company which I used to chair—although I had no input into that decision. The article continues:
“The £1.4 million investment by bus operator Travel West Midlands aims to turn round a negative image held by many of bus travel ... Geoff Inskip, chief executive of Centro, which is responsible for promoting public transport in the region, said: ‘What I would say to people is those who can get on the 997, 993 and 934”—
they are the three routes to which the article refers—
- “give them a try and let us have your feed back ... We believe the high standards of service can persuade them”—
I have one more brief extract from this article to illustrate how well the existing legislation can work. Referring to TWM and the Passenger Transport Authority, Mr Phil Tonks of Bus Users UK said:
“They are taking away the stereotype most people have of buses as dirty, smelly and never on time. This kind of thing will make a difference but we need the city council to invest in the idea of more bus priority”.
My noble friend Lord Rosser advocates on behalf of the Passenger Transport Executive Group a world in which, to hear him, elected members at the local level are passionately concerned to bring better public transport to their area. I do not wish to repeat too many times in your Lordships’ House that that is not the case in many parts of the country—I notice the noble Lord, Lord Bradshaw, nodding in agreement—and certainly not in Birmingham. The Conservative-Liberal alliance there shows no signs of wishing to give buses the priority that those of us who speak regularly on these matters wish to see.
I hope that the Minister will resist the amendment. I hope that he will bear in mind that he himself has said, as have his colleagues in the department, that the operators must be able to protect their legitimate interests. They will not be able to do so if this amendment is accepted, and from that point of view I hope that it will be resisted.
Lord Bradshaw: My Lords, I agree with much of what the noble Lord, Lord Snape, has said. The big enemy of bus operation in the country is road congestion. Many local authorities are not, for various reasons, addressing road congestion and seek to put all the blame for bad services on the bus operators. There are some bad bus operators and they have poor standards. Where there is a real attempt to clear congestion, generally the bus operators respond with considerable extra investment and training.
My second point is rather procedural. I raised this at Second Reading. The Minister said then:
“The intention is not to make it difficult to establish a quality partnership scheme; the intention is to ensure that local authorities cannot impose requirements on bus operators that are unrealistic or unreasonable in relation to frequencies, timings or ... fares”.—[Official Report, 20/11/07; col. 799.]
I was also given the assurance, although it is not recorded here, that the traffic commissioner would not sit by himself. He would have two people with him,
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Lord Berkeley: My Lords, I will not delay the House too much, but there was a reception in the House of Commons last night, hosted by Centro, I think, and I discussed the amendments with some of the people who promote and lead Centro. I asked them whether they thought the amendments were a good idea and they all said yes. That is not to say that they liked the new buses described by my noble friend Lord Snape. There are an awful lot of other buses in the Birmingham area besides those on the three routes. It seems reasonable that the local authorities, which, as both noble Lords have said, are required to invest in bus lanes and shelters and so on, should have a role too. I think that the amendment is important and I support it. I would still like to hear from the Minister why policy has changed since the draft Bill was published.
Lord Low of Dalston: My Lords, as I have already said this afternoon, I am grateful to the Minister for broadening the duty that already exists to have regard to the transport needs of elderly people and people with mobility difficulties so that local transport authorities will now have to have regard to the transport needs of all disabled persons. The Minister has assured us of this. This means that even when admissible objections are raised by transport operators, the local transport authority will have to have regard to the needs of disabled people before taking them on board. The Bill is disability-proofed so far as the impact of admissible objections is concerned.
However, there are a couple of other points that I would like to raise about the way the ability to raise admissible objections might work. I would be grateful to hear the Minister’s comment on these. I raise these points with some diffidence because, unlike other noble Lords who have spoken, I am by no means an expert on the way local transport services work.
First, in the draft guidance, the department suggests that one of the things that might make an objection admissible would be if the likely demand for services would not be sufficient to enable operators to provide the services on a commercial basis. Other noble Lords have referred to that element in the guidance. Can the Minister clarify whether that condition would be met if just one operator could not provide the specified services profitably or whether the test would be that no relevant operator could provide the services profitably? Admissible objections should not be used to prop up uncompetitive businesses. A quality partnership scheme should not be thwarted just because one operator would not be able to operate the services profitably.
Secondly, there is nothing about quality partnership schemes which can force an operator to run unprofitable services. If they cannot run the services profitably, they just will not use the facilities afforded by the quality partnership scheme: that is the veto they already have. Presumably this is why the Minister said in
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Lord Bassam of Brighton: My Lords, I am grateful to all noble Lords who have contributed to this discussion. The dichotomy of views expressed has made it very interesting. I am impressed by the persistence of the noble Lord, Lord Rosser, in moving these amendments and I welcome the intervention of the noble Lord, Lord Snape, with his breath of realism on how the bus industry works. Those are the extents of the input into this discussion.
As often happens with these sorts of issues, a balance must be struck between the legitimate and understandable expectations of local transport authorities and the public on whose behalf they are acting and the legitimate interests of operators who are trying to run a business and make a fair profit. The balance needs to be struck in the spirit of partnership to produce schemes in which both authorities and operators can feel fully committed. If the noble Lord, Lord Rosser, detected a change of direction by the Government, it was in an attempt to secure that balance and try to preserve and underline the value of local partnership to deliver good quality local bus services.
5 pm
It may interest noble Lords to learn that the Department for Transport has had representations, not just from the bus industry but from local authorities, passenger transport executives and others, about the whole issue of admissible objections. The bus industry is still concerned that the provisions will not give their members sufficient protection. If we are being criticised from both sides in equal measure, it is probably right to conclude that we have got the balance in this argument in the right place.
As I said in Committee, if we had no provision of this kind, operators would have little protection against a local authority imposing conditions on their operation that might be quite impossible for them to meet on a commercial basis, which could have the perverse effect that they would simply withdraw from the scheme altogether and leave the yawning gap in service provision that the noble Lord, Lord Low of Dalston, is rightly concerned about. That is in no one’s interest, and any sensible local authority would conduct a great deal of preliminary discussion and undertake negotiations with operators before initiating the public consultation process. However, operators are more inclined to participate if they at least have the comfort that, if really impossible terms are imposed on them, they can make an admissible objection to the particular provision they find hard to sustain and completely commercially untenable.
The crucial thing to bear in mind is that the precise terms of who is a relevant operator and what is an admissible objection will be defined in regulations—in
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In an ideal world, it would be best if we had draft regulations ready so that people could see the quality of the drafting and make some comment on them. We have made good progress on the Bill, however, and we have not had time to perfect those draft regulations. I suspect that colleagues in another place will have that opportunity. However, we have given an indication of our intentions in the draft guidance, subject, no doubt, to more detailed consultation. I paraphrased those proposals in Committee, but perhaps I should also have read out the text in the draft guidance document immediately preceding them. I shall now do so because it helps to illuminate some of our discussions:
that is, “admissible objection” and “relevant operator”—
- “to be defined, and for other relevant provisions to be made, in regulations. We will be working closely with interested parties, including through the Bus Partnership Forum, as we develop these regulations. Our aim in this is to prevent ill-conceived, vexatious or frivolous objections, while protecting the legitimate interests of operators involved in the provision of local services in the area affected. Box 1 below is an example of a possible way of meeting those objectives. We are willing to consider alternative ways of doing so”.
I remind your Lordships of the contents of “Box 1”, mentioned in the above quotation. For an objection to be admissible, first, it should be made in writing within a specified time by an operator of services directly affected by the proposals; secondly, it should be made on the grounds either that it would not be reasonably practicable for operators to meet the standards of service specified at the time that they would come into effect, or that the likely demand for the services would not be sufficient to enable operators to provide services on a commercial basis to the standard specified; and, thirdly, the traffic commissioner must certify that the evidence submitted by the relevant operator is sufficient to substantiate the objection.
I stress again that these are not tablets of stone, and that the guidance itself is still a draft, which will be further refined in light of the comments we receive. That shows that we are committed, first, to consultation; secondly, to getting these matters right; and, thirdly, to striking a balance at all times. The noble Lord, Lord Rosser, described our current position as an operator veto. I do not recognise that in the terms in which the noble Lord made the point, though I understand why he set it in that way. The draft Bill would have required operator agreement to requirements on fares. The admissible objections proposal provides a better balance between local transport authorities with a desire to include such requirements in the scheme, and the commercial interests of operators. That is probably the most constructive way of dealing with the issue.
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The noble Lord, Lord Rosser, also made the point that a wide variety of operators can veto for a wide variety of reasons. We do not agree with that. The basis that we have proposed in the draft guidance is rather narrower than that. For that reason, I drew particular attention to the second of those boxed bullet points about the grounds on which admissible objections can be made.
The noble Lord, Lord Bradshaw, made a point about traffic commissioners and the fact that they would be accompanied by others when considering admissible objections. The noble Lord might have been confusing two issues: that of the approvals board and that of traffic commissioners plus two others. That, of course, works for quality contract schemes, not quality partnerships. Another issue raised by the noble Lord, Lord Bradshaw, was that of traffic commissioners considering admissible objections. In drafting the regulations, we will need to consider whether the traffic commissioners should make decisions alone. We will consult on that before making regulations. No doubt noble Lords will express a view on that, as they have throughout the passage of this Bill.
I turn, finally, to a point made by the noble Lord, Lord Low of Dalston, relating to draft guidance and the possible problem of insufficient demand being used as an admissible objection. The noble Lord asked if the test would also cover the issue of the single or any operator. The test we propose in the guidance is whether the bus industry as a whole can viably run the schemes. That is an important point, but we will need to consult on the detail. I made a note of the noble Lord’s second point, but I would like to reflect on it further before making observations on it. I will have to write to the noble Lord. It raises an interesting issue.
For all those reasons, I cannot agree to the amendment of the noble Lord, Lord Rosser. We have tried to strike a balance here. We have published guidance, which seeks to underline that balance, and we recognise the importance of considering commercial interests. There is great value for local transport authorities in expressing their realistic, and quite legitimate, expectations in terms of defining quality services in the context of this particular aspect of public transport provision.
Lord Smith of Leigh: My Lords, before my noble friend sits down, would he consider this? One of the concerns that local authorities have, expressed by the noble Lord, Lord Rosser, is that at the end of the process by which they are trying to get a voluntary agreement on partnership, bus operators may come to the traffic commissioner with a load of objections that they think legitimate, and which may or may not be so. Perhaps we could confirm in the draft guidance that any objections need to be raised with the relevant local transport authority prior to them being raised with the traffic commissioner. The local authority may have tried to reach agreement, and may have thought that agreement had been reached, but the bus operator may then have come up with a load of objections.
My noble friend Lord Snape said that local authorities cannot expect bus operators not to operate in a commercial world. But what we do not want is for these objections to come in at the end and extend the process. They
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Lord Bassam of Brighton: My Lords, one of the things that I learnt from my time in local government was that there is great value in getting points in early so that local authorities can take them on board and respond—that there is interaction. So there is no great difficulty with what the noble Lord is suggesting. It would make a lot of sense. Hopefully some of those issues can be resolved because at the end of it we want to provide decent quality services. The local authority wants that. It is not in the operators’ interest to fail to provide decent quality services. In fact, my noble friend Lord Snape gave a very good example of where important investment comes in. Bus operators can see that there is a market to be tapped, and that it has a commercial benefit for them. Yes, of course we would want to see that take place.
Lord Snape: My Lords, before my noble friend sits down, perhaps I may take the matter a little further. While agreeing wholeheartedly with what my noble friend Lord Smith has just said, that objections should not be last-minute ones, there is always the problem that the passenger transport authorities are not themselves responsible for the highway works on which many of these voluntary agreements depend.
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