Bus Services Bill [HL] — House of Lords, 2016-06-08
Topic: Transportation
John Attlee (Conservative, Centre-right): My Lords, on this day last year your Lordships gave what is now the Cities and Local Government Devolution Act 2016 its Second Reading. That is the legislation that paved the way for the Bill before us today. My noble friend said that the overall aim of the Bill is to ensure that bus passengers get the best possible service. This Bill gives local authorities a few more tools in their arsenal to help in this regard, should they choose to use them The noble Lord, Lord Bradley, in his very clear speech, told us how franchising will make a very great difference in Greater Manchester, and I am sure that the whole House is very grateful for his contribution. The Government want a mosaic of arrangements up and down the country. There is no suggestion at all that the Government are looking to impose any one structure in any particular area. That is a good thing My noble friend the Minister and the noble Baroness, Lady Jones of Whitchurch, in her excellent Front-Bench speech—I hope to see her making them for many years to come—observed that bus patronage has declined since deregulation. However, noble Lords will recall that the rate of decline in patronage of bus services was arrested post-deregulation I urge my noble friend the Minister to anticipate the sense of the Committee when we come to discuss AV annunciators. These are for the benefit not just of the disabled. They have tremendous benefit to all passengers I welcome most of the provisions of the Bill. However, I will concentrate my remarks this evening on three specific issues. First, on the proposals in the Bill to give local authorities powers to franchise local bus services, bus operators told me that this has been the dominant issue in the industry ever since it was first announced by the Chancellor in November 2014. It has consumed much more time and energy than the industry would have liked. To the industry’s huge credit, it has not taken its collective eye off the ball and continued to deliver for its passengers Regulation certainly did not provide for a thriving bus industry prior to 1986 so why should it do so now? London, of course, is a very special case, particularly with regard to funding and the fact that buses are absolutely essential lifeblood to London—as in Greater Manchester. My noble friend the Minister observed that the annual Transport Focus passenger survey consistently gives bus services an overall satisfaction rate of around 90%. Allowing local authorities to introduce a system of franchising or contracting may be consistent with the Government’s devolution policies but runs contrary to established Conservative Party policy for at least the last 30 years. That is a big change Some bus operators described this franchising element of the Government’s policy as business confiscation. I can see their point. Large operating groups could see their operations disappear overnight and would then have to redeploy staff, vehicles, depots et cetera if they were not taken on by the successful bidder. There would be a wider impact on their corporate position that could affect their share price et cetera. However, I am sure they will survive, albeit a bit battered and bruised The same cannot be said for smaller operators. They will stand little chance of winning a contract against a large operator, one of the plcs or even an overseas firm that enjoys access to cheap capital from its national Government. There is a real possibility that a family business, built up through hard work and dedication possibly over several generations, could be allowed to disappear overnight as a direct consequence of government action I am sure that the bus industry has pressed the Government to ensure that any franchising proposal should be subject to fair and open public interest and financial tests. The noble Lord, Lord Shipley, talked about some of the risks there. I am sure he will return to that at a later stage. It was reassuring to see that the Bill sets some pretty tough hurdles that local authorities must negotiate before they can proceed with their franchise scheme Like my noble friend Lord Young of Cookham, I believe it is also extremely useful for local authorities to have to benchmark, for want of a better word, their proposed franchise scheme against the routes and ticketing arrangements that might be offered under enhanced partnership schemes. This is absolutely crucial and would, I suggest, make any local authorities swallow very hard indeed. Surely if the same offer to passengers can be made under partnership arrangements, why would a local authority want to pursue a franchise scheme with all the additional costs in both resources and money I am also worried about the issue of bus facilities and premises. As I understand it, there is nothing to stop a bus operator selling off his depot to recoup some of the money he invested in his company before he loses the business to the highest bidder. Unless the outgoing operator decided to sell or rent his premises to the company that won the franchise, that transport facility could be lost for ever to redevelopment. Securing premises would be a huge challenge for those bidding for franchises. This was the subject of some debate during the passage of the Local Transport Act 2008 I am sure that we will spend some time during Committee debating the finer points of the franchising proposals. My noble friend the Minister will have my full support in resisting any amendments that seek to dilute these very important tests which have to be satisfied before a franchising scheme can see the light of day The other issue on which I wish to comment is the proposal in the Bill to allow local authorities to delve into the business secrets of bus operators, requesting detailed and commercially sensitive information about employees, usage and revenue. At some point many business owners decide to sell up and realise the fruits of their labour. The value of a business will be composed of inter alia the stock, the assets and, most importantly, the good will. The kind of information that the Bill would allow local authorities to obtain free of charge and without compensation is part of the good will of the business. But, of course, unless you know what those data are, how can you say how much they are worth? It is hard to imagine any business sector that would welcome the right of a third party to look at the detail of its operations as a prelude to making a case to expropriate them. Businesses in all walks of life change hands at prices well in excess of their tangible assets. I include in this the price of the former passenger transport executive bus operating companies when they were sold off in the 1980s. Therefore, in essence, the Bill would allow local authorities to acquire for nothing something that they sold for millions in the past. This part of the Bill is deeply unwelcome for bus operators and I am sure that we will return to it during Committee. My question for my noble friend the Minister is this: does he think that these commercial data have a commercial value, or not?