RURAL BUS SERVICES

HC Deb 15 February 1971 vol 811 cc1373-402

11.59 p.m.

Mr. James Scott-Hopkins (Derbyshire, West)

May we turn now from the difficulties experienced overseas to matters much closer to home? The subject which I wish to raise concerns rural transport.

I will not pretend that this is the first time that we have discussed the matter. I have been present during four or five debates in past years when the lack of and inadequacy of rural transport has been the subject of discussion.

In many rural areas today, the situation is becoming quite desperate. Urgent steps have to be taken, if not by the Government, then by local councils and the bus companies. Basically, in many areas there are no public services of any type. The railways have gone and the bus services have been withdrawn.

Although we are a country of increasing prosperity, under whatever party happens to be in charge, and there are more and more motor cars on the roads, there are still many people without cars and unable to find other private means of transport to take them about their daily business and therefore relying on the public services. In some areas such services do not now exist. In Derbyshire there are 100 square miles of country in which there is no service of any type—no buses and no railways.

The House will be aware that when the Beeching axe started to fall and rail services began to be withdrawn, it was provided that rail lines in the country should not be closed until bus services were able to replace them. This applied in Derbyshire as in my old constituency of North Cornwall. The rail service between Matlock and Manchester was withdrawn, as was that between Plymouth and Launceston in Cornwall. In other places, too, additional services were introduced to cater for people without other means of transport to bring them into the centres where they could go about their daily business.

These services have been operating since the withdrawal of the rail services. Local people have frequently made representations about the timings of bus services and complained that they were inconvenient, saying that that was why they were not being patronised, but the fact is that the services have not paid their way. They have not been successful; they have been run at a loss. I cite a bus service in West Derbyshire running between Ashbourne and Buxton and losing £7,500 annually, a three-car service between the two towns, a distance of about 35 miles.

A company cannot be expected to continue with a loss like that, and the result has been that, after due notice, the services have been withdrawn. The bus services were once able to use the more profitable services in the urban areas to cross-subsidise and cross-fertilise those in the rural areas. This has happened in the Manchester, Derbyshire, Sheffield and Birmingham areas where the companies have been able to operate more successfully and profitably. It was also true in Cornwall where the bus companies were more profitable in Plymouth and Exeter and, to a certain extent, in Truro.

But this state of affairs is ceasing. Services in cities like Sheffield and Manchester are becoming less profitable, still profitable, but less than they were, and therefore less able to subsidise the rural services. Losses in country areas are increasing week by week, partly because of the wages paid to drivers, even though the total wage Bill has been cut by using only a driver on some routes instead of a driver and a conductor.

I must be slightly political and say that the Labour Party's Transport Act, 1968, added hugely to costs, particularly by compelling operators to ensure that drivers adhered to the stipulated hours. I shall not labour the lunacy and idiocy of these regulations which were introduced for reasons of safety which we all recognise, but which meant that a driver who went to an eisteddfod in Wales had to find someone to drive the vehicle back so that he did not infringe the regulations stipulating that he should drive for only 11 hours, including a rest, within the 24. This sort of thing is ludicrous. I suggest that my hon. Friend should look at this question of drivers' hours and, while not impinging on the safety margin, see whether there can be some relaxation.

Another difficulty is that in 1968 the National Bus Company was set up. I have never been an advocate of large-scale nationalisation or large-scale anything just for the sake of it. On the figures we have and from the chairman's report for 1969, the company has only just managed to make a £7 million profit. This year it will not be able to do so. This is hardly surprising because with a company of this size, split down into divisions of the old companies, there are all kinds of inefficiencies. It is not operating as efficiently as the old companies or with the same spirit. I prophesy that by the end of this year the National Bus Company will come to my hon. Friend and say, "We are broke, we want more money". We know from the figures that it must be making a thumping loss in the rural areas, not being covered by the urban profits. This company will say to my hon. Friend, "We cannot go on as we are." I say, "Good, let's pack it up and disperse this monstrosity once and for all and get back to reasonable, small, manageable sets of companies operating not only in the country but in the cities too."

Another difficulty are the Traffic Commissioners. I have no quarrel with them except that they are frustrating and to a certain extent restricting what should be the natural development when a big company has to withdraw its services. They are not allowing the smaller, newer company to go in and provide a service in the rural areas, as they can do under Section 30 of the 1968 Act, to a company wanting to operate a 12-seater. The trouble is that many say that the 12-seater is not big enough. Many of the smaller men want to start with a 22 or 24-seater. I have felt that the Traffic Commissioners in many cases are not alive, in my part of the world, to the need for flexibility. The procedure governing the Commissioners and their granting of licences is antiquated.

There is one particular case where the North Western Car Company is withdrawing many of its services in the area of Hatersage and Bradley and that part of Derbyshire bordering on the constituency of my hon. Friend the Member for The High Peak (Mr. Le Marchant). The difficulty is that another operator wants to come in with a small type of bus on a stage/fare service. The Commissioners have to deal with this. Objections will be heard and it seems certain that the existing company will object to this new service because it will say that the service will cream off the traffic in the area. That is not true. Nevertheless, I think the Traffic Commissioners will almost certainly, as in the past with similar cases, say that because there is an existing company operating there, they cannot go in. My hon. Friend should look at the rules under the 1968 Act governing the Traffic Commissioners, and change the powers and the ability of the Commissioners to frustrate what must be the last hope of getting private enterprise operators working in these areas.

Not everybody is rich; not everybody has a car; not everybody is a farmer with two cars or has a tractor to travel on, and there are old age pensioners wishing to go to draw their pension and children travelling to school. I do not want to elaborate the problems I have encountered at Bradley where parents are trying to provide their own school transport because fares are too high and are frustrated by the existing bus companies and are in difficulty because they have to apply to the Traffic Commissioners.

Many people will be discommoded by the fact that they cannot have a service in their area. One has to ask oneself what is needed. What will we do to get over this? There are people willing to have a go, perhaps with a minibus or a 24 seater, and they are prepared to run a service three or four times a week from areas of population on a winding route, picking up what traffic they can on the route. This should be encouraged. The big bus companies cannot cope with this and the small men in North Cornwall and Derbyshire should be encouraged.

There is another side to it: the power given in the 1968 Act for local councils to give a grant to local bus services if they think there is a social need for a service. That grant would be backed by a 50 per cent. contribution by the former Ministry of Transport, now the Department of the Environment. Over and above that is the rate support grant to councils which decide to give a subsidy or grant to their local bus company. In Derbyshire, the local councils in my constituency and in High Peak, Buxton and elsewhere have refused to do this because they have decided, in their wisdom—and I think they are wrong—that there is no social need for a bus service to be provided by the existing North Western Car Company.

This is not an isolated case and it happens elsewhere than in Derbyshire and Cornwall. I ask my hon. Friend to look at this carefully because I think local authorities do not quite appreciate what they can get from the Government and what an inestimable advantage it would be. It may well be that the reason councils turn down pleas for help from existing bus companies is that they consider that the North Western Car Company or the Trent Traction Company are inefficient, but they would give a subsidy or grant to some new company. It is my hon. Friend's duty to advise councils that they are not taking advantage of the Act and not understanding the fundamental needs of their areas. I hope that he will welcome the use of the powers in the 1968 Act which were given to local councils and will be more willing to give the 50 per cent. grant, provision for which is written into that Act, and underline the rate deficiency payment which can be made to councils. If that were done, perhaps there would be hope for parts of rural England such as mine which have been denuded of traffic.

We must not allow things to go on as they are. Villages in the depths of the country are completely cut off. That applies to areas, not only in my constituency, but in Wales. We do not want two separate Englands—the urban areas and the rural areas—with different standards of living and different prospects for the future. People in the country should be able to go about their daily business as they wish, and one of the necessities to enable them to do that is an adequate public transport system run, not at great cost to the State, but when the people require it. That was the purpose of the 1962 and 1968 Acts. The machinery is available; I do not believe that it is working properly. I ask my hon. Friend to help to make it work so that people in the country areas can enjoy the benefits which people in urban areas enjoy.

12.16 a.m.

Mr. Elystan Morgan (Cardigan)

I agree almost wholeheartedly with what the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) said about the facts of this problem. I almost totally disagree, however, with what he said about the events which led to the situation and the solution which he proposed.

No one who looks fairly and dispassionately at this crisis can say that it does not arise from the failure of private enterprise to provide a wholesome public service in many rural areas. It is a question of having, not less support but more support from central funds. Rather than argue a destructive case as against that put forward by the hon. Gentleman, I seek to put a reasoned argument to the Minister. I am glad that fortune has been bountiful to the hon. Gentleman and has given him a high place in the Ballot, for it enables me to say a few words on a matter which is of real and vivid concern to many of my constituents.

The history of modern development is the tale of the flow of human and material resources from country areas to urban localities. This is understandable, for the urban areas have such basic allurements that it is likely that such a flow will always be a natural phenomenon. But there is another factor. As the flow continues, so the income-producing capacity of the rural areas is greatly diminished, with the consequence that local rates and every other financial contribution tend to become a greater and more substantial impost on the people living in those areas. The direct result is that the provision of basic amenity services becomes more difficult and as the standard of those services falls in relation to the level which is generally acceptable by the rest of the country, the basic unattractiveness in the amenity sense of the rural areas vis-à-vis the urban areas becomes more considerable. Thus a vicious circle is created, and the power of this factor to destroy rural communities is very great. I know that no hon. or right hon. Member of this House will dispute the potency of such a process, and I merely state that as a background canvass of this problem.

When the Transport Act, 1968, was passed I was one of very many Members of this House who thought that the future of rural bus services had, to a large extent, been placed on a secure basis. At that time the losses made by the small private operators were not very considerable, and the bigger companies, those which were wholly or partially publicly owned, had, as the hon. Member for Derbyshire, West has said, this happy Robin Hoodery which allowed them from rather substantial profits which they made in urban areas to give a hefty cross-subsidy to the less profitable rural areas.

Within the last 12 months the situation has been completely blighted. Let me give an instance from the experience of my own constituency. The Crosville Motor Co., Ltd., a company which is owned by the National Bus Company, and which operates in Cheshire and North Wales and Mid-Wales, has, I understand, in the 12 months of 1970 suffered a loss of some 9 million fares. In December of last year that company told the local authorities of Cardiganshire that unless a grant of about £21,000 was forthcoming it would have to withdraw some four-fifths of its services in Cardiganshire by a date in March of this year. The other publicly-owned company operating in Cardiganshire, Western Welsh, Ltd., made a similar demand for a sum of £3,000. In addition to this a number of small privately-owned companies, which were also suffering substantial financial losses, also put in their claims. So the local authorities in Cardiganshire find themselves suddenly confronted with a bill of not less than £31,000 in order to save nearly the whole of the public bus transport system of the county.

It would mean, if these services were withdrawn, that there would be no comprehensive service at all for the area; there would be no through routes, only small groups of services. As I am sure every Member of this House appreciates, once such comprehensive services have been cut off from the vine it is obviously very difficult for them to attract again the good will of the public.

That was—and is—the threat. What of its significance in relation to the rural areas? It would mean that any attempt to bring growth and development into the country areas of my constituency would be frustrated at the very start. It would mean that some four-fifths of the persons employed by these companies would find themselves redundant within a matter of weeks or months. It would mean that young people and old people who, for one reason or another, could not resort to the use of private transport would have very little possibility of being able to move about freely within the area. It has meant that the locality as a whole, which might otherwise have had a growth potential, finds itself completely blighted.

The ultimate result of the development of such tendencies would be to make the area of Mid-Wales a playground for the large urban conurbations and a graveyard for the hopes of its young people. I know that the House appreciates that there is no more acute an instance of this in the whole of England and Wales of a region which loses about two-thirds of its young people by the time those young people reach the age of 25 years.

The heart and kernel of my case is that these areas deserve to live. They have an immense contribution to the life of the nations of the United Kingdom, and they still have a fine and substantial contribution to make.

As the hon. Member for Derbyshire, West said, the railway services have already largely disappeared. Indeed, if the attitude shown by the present Government to the renewal of the temporary grants is anything to go by, it would appear that they are carrying on where they left off in the autumn of 1964 when there was then the fervour to use the Beeching axe on as many of the railways of the United Kingdom as possible.

I suggest to the Minister that, in considering short-term answers—the use of the provisions of Section 34 of the Transport Act—there are at least four difficulties.

The first is that bus routes are no respecters of local authority boundaries. If a route which traverses a number of local authority areas is to be saved, there must be co-operation between the local authorities concerned. No doubt there is at the moment a more harmonious atmosphere prevailing among local authorities in Wales in facing common problems than has existed for a very long time. It may be that they are all moving towards some far off divine event when there will be a spirit of brotherhood between them and ancient rivalries and deep suspicions are cast aside. But that will not happen in a matter of months. The threat is such that some comprehensive system has to be devised in the very short term.

It is asking rather too much that. even with the most perfect animus, a complicated financial structure should be erected within weeks with all the complex contribution apportionments which such an agreement calls for between one local authority and another.

The second point is that there does not appear to be, for a local authority or group of local authorities which come to an agreement with a bus company, any security of tenure regarding routes. They may find that after the monies are paid they are still living from hand to mouth, knowing only that the route will be preserved for the next month or two.

I strongly urged the local authorities in my constituency, if they were so minded —I am glad that there was fairly general agreement that they should make these grants—to try to negotiate a package agreement with the bus companies concerned. Of the two publicly-owned companies, the smaller one was willing in principle to consider such an arrangement, but the bigger one was not.

Mr. Scott-Hopkins

Surely these agreements with the local authorities, be they a consortium of local authorities or a county council, are always for a year. If they are for a year, there are problems of getting the grant from what was the Ministry of Transport and, indeed, the rate support grant.

Mr. Morgan

I am not sure that the hon. Gentleman is right there. I was talking of a year or two, but the company concerned, which was not willing to come to such an agreement, would not contemplate anything longer than a few months. The hon. Gentleman may be confusing the situation over the railways, where the grant is of course over a stipulated period, up to a maximum of three years.

The third difficulty is that, at the moment, the amount of grant sought by the bus companies in some areas is fairly considerable, but not impossibly large, but there is the danger that, as the years go by, the begging bowl will get much bigger. If the pattern of losses suffered by these companies is projected for a year or two or three the amount of grant sought may soon be considerable. The local authorities therefore fear that they may be committing themselves to a pastern of escalating costs which will place them in an impossible situation in the short term.

The last and fourth difficulty is that, where a bus company feels that its gross takings will not cover its expenses, up to now it has had no alternative but to go to the Traffic Commissioners to seek a rise in fares. These tend to become more and more difficult to obtain. There is a lengthy technical argument, with all the parties properly represented by solicitors and counsel. Might it not be a great temptation to a bus company, rather than face the rigour of such public examination, to feel that there is a very much softer alternative—to point a pistol at the heads of the local authorities and say, "Unless you deliver a further £20,000 by X date, the services will be withdrawn"? There would be no question then of a quasi-judicial tribunal having to decide whether or not such a demand was reasonable and fares would not become more unattractive. It would be just a question of paying up or suffering the loss of the services.

I speak about Wales now because the problem there is much more acute than in the hon. Gentleman's constituency. I ask the Government to say two things. First, I should like to hear that they will live up to an undertaking given to the Welsh people eight or nine months ago, in the publication "Wales in the Seventies", freely circulated in Wales during the election campaign last year. written in grandiose English and grotesquely ungrammatical Welsh. On page 5, it says: Wherever in Wales we may live and whatever our job, let us resolve that, during the 1970s, we will make Wales a better place to live in for ourselves and for our children. Noble sentiments, but are they to be anything more than empty words? We ask the Minister to say whether the Government have the slightest intention of translating such promises as these words carry into concrete reality.

On 1st February last, in a supplementary question, I asked the Secretary of State for Wales whether in the light of swiftly changing circumstances, the maximum 50 per cent. grant which the central Government bore could be increased. The right hon. and learned Gentleman replied: I can say that there is no prospect of increasing the direct Government contribution above 50 per cent.".—[OFFICIAL REPORT, 1st February, 1971; Vol. 810, c. 1230.] I regret that the Secretary of State is not here tonight. It being well past midnight, no doubt it is proper that a respectable gentleman like the Chairman of the Conservative Party should be abed. On the other hand, it is a gross affrontery to the House for the right hon. and learned Gentleman so to absent himself.

Mr. Scott-Hopkins

Come off it.

Mr. Morgan

The Secretary of State knew that this debate had been drawn fourth in the list, that it affected almost the whole of the rural areas of the United Kingdom and that it had a particular significance in relation to Wales. There has, therefore, been a failure on the part of the right hon. and learned Gentleman to discharge his duties towards Wales. However, I am not concerned to make debating or party points on this matter, which, in Wales, assumes the dimensions of a national problem. It is against this background that I ask why the right hon. and learned Gentleman has not seen fit to attend this debate. He may have a good reason for not being here, and, if he has, I will gladly withdraw this charge. Unless he has a good reason, however, the charge is properly made.

I ask the Government to overrule the statement which the Secretary of State made on 1st February, to say that the situation has changed completely within the last 12 months and that it is by now necessary, in the interests of the rural areas concerned, that substantial financial reserves should be deployed to combat this problem. This is not a facile argument. I believe it to comprise a substantial case and I trust that the Minister, who I know to be an intelligent and compassionate man, will apply his mind conscientiously to it.

The 1968 Act allows railway lines to be subsidised in certain circumstances. It is true that hon. Gentleman opposite, when in opposition, voted unanimously against this legislation. It is equally true that scores of them then indulged in special pleading for railways in their own constituencies. They were objectors in the general but fervent supporters in the particular.

I am glad that the railways are subsidised in this way. Where a subsidy is paid to a railway, it is a 100 per cent. subsidy out of central funds. But for every one passenger carried by unremunerative and subsidised lines, there are seven or ten passengers carried by unremunerative bus services. It is, therefore, all the more necessary, in the interests of the future of the rural areas, that such a subsidy—and I plead for a grant of up to 100 per cent. to be paid.

12.40 a.m.

Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)

The problem caused by the contraction of rural bus services varies greatly from area to area, and the problems in my constituency are different in nature from those which the hon. Member for Cardigan (Mr. Elystan Morgan) has just been outlining. But one thing certain about the problem is that it will become increasingly acute as time passes, and the operation of bus services in remote rural areas will become increasingly uneconomic.

The circumstances in my constituency are different from those described by the hon. Member because there are available main feeder railway services and bus services running, I trust economically, on the main trunk routes; but these are of little consolation to those of my constituents who live in the villages 10 or 15 miles away, and who face in the immediate future the prospect of complete isolation from those public transport feeder services. We all sympathise greatly with the fact that it is the elderly, particularly, and the poorer members of the community who are most harshly affected by the circumstances which are developing.

With a problem like this we can only state the situation as we see it, and the solution, as we see it, and leave the Minister to sort out the right answer, but in the area I know well the time has come to abandon the concept of the scheduled service by the large-scale operator collecting passengers over a route of many miles. I live in the rural and more thinly populated part of my constituency. Past my house a bus service operates twice a week, and twice each way on those two days. It does not need the Under-Secretary or the Minister to do calculations to tell me that that service is grossly uneconomic at present, and will become more so as the months pass.

That type of service will be increasingly a devourer of subsidies, whether provided by the taxpayer or by the ratepayer. I believe that for at least a period we should have a flexible approach to the problem; a period of experiment. I know that there has been experiment in various parts, but the time has now come to extend the period of experiment, and to see whether we can find a new pattern of transport for these areas.

I should like briefly to put forward for the type of area I represent the advantages of the concept of the common carrier—and by "common carrier" I mean an independent operator working on a small scale; possibly an individual, and possibly operating on a part-time basis. In the circumstances of my constituency, I am sure that what is needed is a feeder service to the other services at the location or point of route where it can be operated economically.

When I think of the transport services running into areas of the sort I have in mind, I think at once of the national carriers—the nationalised parcels service —and I wince when someone sends me a parcel which needs an 18-mile journey for delivery. One almost feels that by using the service one is doing it a grave disservice—and one is. There is also the question of postal deliveries, and of the transport of school children and those who now use the bus services.

The concept of the common carrier giving a general transport service to a district will be economic, or approaching it, only if it is allowed to provide the full range of services. This is the key to the problem, and that is where we should apply our thinking and mathematics and allow experiment to take place. It is quite ridiculous today to operate, in effect, three, four or five separate transport services into small, remote communities, but if we are to provide the right to operate a common carrier service that permission should be dependent on the firm provision of certain essential elements which the community wants. For instance, I have in mind the transport of schoolchildren to the point where it becomes necessary to transfer them to a larger vehicle and economic to do so.

In addition—I hope that hon. Members opposite will accept that I am being in no way dogmatic or ideological—there is the advantage that the small-scale operator can use his knowledge of the local community to seize opportunities to make his service more rewarding than are available to the larger carrier.

Mr. Elystan Morgan

Does the hon. Gentleman accept that, when the local authorities in my constituency met all the bus operators to discuss this question and the small operators were asked whether they were willing and able to take up routes which were about to be discarded by Crosville and Western Welsh Omnibus Co., each of the small operators said that it could not make them pay? Does the hon. Gentleman accept, despite his fervency for the principle of laissez faire here, that it has been proved over and over again that small operators cannot make these routes pay?

Mr. Hall-Davis

It depends to a great extent on how much one expects the small operator to operate. We must get away from the concept of the scheduled service as we have known it. It must be a service adapted to the needs of a much smaller community. We must not merely ask a small operator to take on responsibility for the type of provision for which it has been clearly shown that there is not a reasonable demand. I am thinking smaller than the hon. Gentleman and I am thinking much more flexibly and my laissez faire goes further. I believe that it should be left to the individual and the community to develop what services it is reasonably economical to provide. Countryfolk are realists above all else, and they will be prepared to see totally uneconomic provision discontinued. Today we are trying to provide what is largely no longer needed in the most expensive way—by the timetable service on a scheduled route.

It is important that, if we are to provide subsidies—certainly in some areas, though I said that I do not want to be dogmatic; I am talking only about the type of area I know—the subsidy should go to the community or group of communities to be used as the community thinks best. It should not be a subsidy for a particular service. We must get away from the concept of subsidising a service. Let us either subsidise a collective carrier or make a sum available to a community to utilise as it sees best. A subsidy utilised under the control or on the advice of a parish council or group of parish councils will be used by people who know the real needs of their communities and they will get the best value for money when they apply that subsidy.

I am certain that flexibility is the key and that duplication is the enemy of any hope of providing a continuing service to this type of district.

12.49 a.m.

Mr. Spencer Le Marchant (The High Peak)

I cannot accept the assertion of the hon. Member for Cardigan (Mr. Elysian Morgan) that this is a failure of private enterprise. The 1968 Act was in no way an Act of private enterprise. Indeed the last year has been a serious blight.

I will state the reasons why I believe it happened. We lost this large number of passenger hours for two main reasons. The hon. Gentleman will agree that once a high number of passengers are lost they are never regained. The two reasons were the fewer number of working hours the crews were able to put in because of the 1968 Act and the restrictive practices that were operated by the bus companies employers during last year. I do not believe that the bus companies are pointing a pistol at the local authorities, nor do I believe that they want to do so. In my own county which my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins) and I represent, we have one of the most reputable firms of accountants looking into the accounts of our own carrier to see whether those accounts would stand up to what the local authorities want. We found that they would. So there is no question of the bus companies behaving in a way towards local authorities—

Mr. Elysian Morgan

May I intervene to put the record straight? I said that if, rather than go to the Traffic Commissioners for a rise, they went to the local authorities for an extra grant, in those circumstances they would be pointing a pistol.

Mr. Le Marchant

Hon. Members on both sides of the House clearly understand the difficulties of bus companies. I have received nothing but kindness when I have been to the North-West Car Company about the difficult rural areas which I represent, in its efforts to try to help me in connection with those services. It has been difficult, though, explaining to people throughout the constituency why city fares are different from rural fares, why they are much cheaper in Sheffield and in Manchester, why in some areas old people get concessionary fares and in other areas they do not. We know that local authorities can supplement fares for old-age pensioners.

The Chairman of the National Bus Company last year—my hon. Friend the Member for Derbyshire, West mentioned this point—pointed out the difficulties of local authorities collaborating with the bus companies. I feel, though, that this co-operation is happening very much more at the moment, and certainly, speaking for my own constituency, I know that they recognise that it is their responsibility to contribute towards bus services in rural areas.

However, one of the difficulties that they find is with the other authorities down the line. For instance, there is a bus service between Buxton and Hanley, Hanley is served by the Potteries Bus Company and Buxton by the North-West Car Company. At the moment there is no scheme to provide a subsidy for this service, unless all the authorities along the line agree to do so. I feel that we must look to an easing of licensing, and to the use of powers which the Minister has over the Traffic Commissioners. We must also look to those areas where private operators are working through the middle of the main licence's area.

The present situation, with regular six-monthly increases in fares, as my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) has said, drives people off the buses and it makes it even more difficult for those who really need to use the bus services. I can only agree with what my hon. Friend the Member for Morecambe and Lonsdale said, that we must use our resources to the maximum.

Every hon. Member who sees his local bus company is assured that 70 per cent. of its expenses is labour. We are told that if the companies are to put on minibuses, or do anything else that might help, more will be added to their labour costs. Therefore. I join my hon. Friend the Member for Morecambe and Lonsdale in asking whether we are using our resources in the right way. Is the right equipment being used in rural areas? Are we using our buses in the right way? Should they be carrying mail and newspapers?

Were we to look at these points we should be beginning to tackle the problem correctly.

12.54 a.m.

Mr. Caerwyn E. Roderick (Brecon and Radnor)

I do not wish to detain the House, but I must support my hon. Friend the Member for Cardigan (Mr. Elystan Morgan) and emphasise some of the points he made.

The problem of rural bus services is very urgent, and one that we ignore at our peril. We have a growth towns policy in Mid-Wales. It is a very fine policy, but the towns are some distance apart and some distance from the villages where people live. I wonder how the good people living in these beautiful rural communities can get to the growth towns. How are the wives to do their shopping, and how are people to visit relatives, who may be in hospital? How are the young people to meet?

To give some idea of the extent of the problem, I remind hon. Members that I represent two counties 1,200 square miles in extent, the County of Radnorshire, which has no buses and only one railway line, and the county of Brecon-shire, which has no railway lines and an inadequate bus service, which the county council now proposes to assist.

A Government Minister is reported in the Press this weekend to have had to resort to the use of a helicopter. Yesterday's Sunday Express said: It was quite an occasion for Llandrindod Wells, in Radnorshire, when the Welsh Minister of State … decided that he needed a helicopter to transport him from his home on 'Government business' … The Minister said: I live tucked away among the hills, on this occasion a helicopter came to pick me up from outside my home as it was an emergency and I had to get away quickly on Government business … I have always been a great protagonist for air travel because of the geography of Wales.… It is a very difficult country to get around quickly. Neighbours of the Minister cannot afford helicopters.

The Under-Secretary of State for the Environment (Mr Eldon Griffiths)

They are not on Government business.

Mr. Roderick

But they still have to get around the countryside, and the Minister of State acknowledges that it is a very difficult countryside.

The 1968 Transport Act was a good start in the right direction. It showed an awareness of the problem. I believed some time ago that a 100 per cent. Government grant was necessary due to the poverty of these rural areas, but differing slightly from my hon. Friend the Member for Cardigan, I now accept that they should contribute something to retain a local interest in the kind of service they are to have.

It would not be sufficient to under-write any service a bus undertaking would wish; it would be better that a local authority should have a say in planning and advising on routes and schedules. I am concerned about continually-rising fares, and I am convinced that many routes have been priced out of existence. So I want a stand-still on fares, with losses made good by a scheme similar to the present one, but with local authorities paying a small proportion.

Second, I want the terms of reference of the National Bus Company changed so that its main requirement would not be to make a profit but rather that it should fulfil a social need.

We have a vacuum in Radnorshire. An hon. Member opposite spoke about the small operators, but I should like to ask him why no small operators have entered this vacuum in Radnorshire which has existed for quite a long time. When the larger operators went, no small operator wished to take over. Another hon. Member spoke about changing the 1968 Act concerning drivers' hours. I understand that before the Act was passed, there was a great deal of research into drivers' hours. I suggest that no change should be made without adequate researches and thought.

I sincerely hope that the Minister will look earnestly at this problem because, as my hon. Friend the Member for Cardigan sad, valuable rural communities are at stake. I have come across youngsters galore leaving these areas. It is all very well for their parents. Father often has a job working for the county council, perhaps on the roads. The lorry comes to pick him up to go to work. This will not happen to his sons. They go to school many miles away and are taken by the school bus service. They all assure me that when they leave school, they will have to move. There is no question of their staying there, because they will not be able to get about.

People say that most of these good folk have cars these days. I challenge that statement, because the rural areas of which we are speaking are very low wage areas. Many people are forced to buy cars. I have been astonished at the low wages which some people earn and still run a car. How a man earning £15 a week can run a car beats me, but people are forced to do it.

Mr. Elystan Morgan

Will my hon. Friend accept that in my consituency there is the great irony of an area which has the lowest income per head in the whole of the United Kingdom and almost the highest percentage of private motor vehicles per thousand? It is not because the people can afford it, but because they have no alternative.

Mr. Roderick

I thank my hon. Friend for those remarks, but I think that Radnorshire would challenge him strongly on both counts. This is not a competition, but we are trying to emphasise the point.

I hope that the Minister will view this seriously. I wonder whether we have not already left it too late to do anything about it, because when the services have vanished it is difficult to reintroduce them. This has happened in many areas. We are anxious to protect what services are left.

I have spoken about the ability of people on such low wages to run cars. Even when there is a car in the family in some of these areas, the husband uses it to go to work. What does his wife do when he has gone out? What do the youngsters do in the evening? The one thing that could keep them is the mobility that they could have by being able to join their fellows. They are unable to do so, however, and they are anxious to leave these areas. It would be a great pity to force all these good people to live in overcrowded towns.

1.03 a.m.

The Under-Secretary of State for the Environment (Mr. Eldon Griffiths)

At a late hour, we have had a very good and wide-ranging debate. Not for the first time, my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins) has done a service to the House and to his constituents by raising this matter. My hon. Friend has a wide knowledge of the rural bus problem, because he represented North Cornwall before he went to Derbyshire and he speaks with authority. I accept at once that he has put his finger on a major problem that the country will have to face.

My hon. Friend highlighted a basic fact when he said that the bus climate is changing. As it does, the big rural bus, like some over-large and ill-adapted dinosaur, is in danger of becoming extinct. Much of the bus's business is being snatched away by the more nimble and flexible motor car. As a result, the bus industry is buffeted by the harsh winds of wage inflation, now accounting for more than two-thirds of bus operating costs, and the industry confronts a creeping financial crisis. This is true in the rural districts, where bus companies find it increasingly difficult to keep their conventional fleets on our rural roads. Consequently, country people are being hard hit. The rural bus had its heyday in the late 1940s and 1950s. Since then, there has been a reduction of close to one-third in passenger demand while, at the same time, there has been a fivefold increase in the numbers of cars on the roads. The result is that the bus industry is operating in quite different and very much more difficult conditions than those of 10 or even five years ago. It is having to drive up a hill that gets steadily steeper.

The factors operating against the bus industry have been spelled out by hon. Members. Perhaps I might name three. The first is that, because the number of bus passengers is falling, bus services have had to be scaled down. Consequently, their overhead costs have had to be spread over a very much smaller number of journeys, with the inevitable result that the fares have had to go up steeply for those who still travel on buses.

The second factor is rising costs. Of the costs of bus operation, more than two-thirds are wages, so here is an industry which is peculiarly vulnerable to the ravages of wage inflation. Reference has been made to the National Bus Company. It has had to face wage increases of 5 per cent. in September, 1969, 9 per cent. in March, 1970, and a further 10 per cent. already agreed to come in March of this year. The inevitable result is still higher fares. Those of the National Bus Company went up 11 per cent. last year, and I regret that further fare increases are already in the pipeline to contain the next pay increase already agreed. As always, these higher fares once again mean still more passenger loss.

The third problem is operational difficulties. More cars on the roads mean more traffic congestion. Buses, which have to stop and start, suffer badly from traffic delays, so bus services have become more irregular, later and less reliable for their customers. Staff shortages have added to the problem of reliability, and it has been made worse by the drivers' hours regulations introduced by the previous Government. These factors—the operational difficulties, the competition from the motor car, and the pressures of wage inflation—all interact.

Rear-Admiral Morgan-Giles (Winchester)

Will my hon. Friend also recognise that another of the troubles is the industrial training levy, which bears hard on some of the small rural companies?

Mr. Griffiths

That is a factor as well, and my hon. and gallant Friend will know that my right hon. Friend the Minister is looking into this one at the moment.

The hon. Member for Cardigan (Mr. Elystan Morgan) gave some examples from the Crosville Company in his constituency, and my hon. Friend the Member for Derbyshire, West spoke of the North Western Car Company. I take another example, that of the Midland Red Company, whose revenues in 1970 fell by more than £500,000 while its expenditure rose by £750,000 in the same period. There was a loss of income of £500,000, an increase in costs of £750,000, and an estimated operating surplus of £572,000 for 1970 became an actual loss of £669,000.

With Midland Red, as with all the other companies I have mentioned, the basic cause was declining passenger travel along the Midland Red routes, a drop of not less than 12 per cent. from July to the end of 1970. The further costs for this company for 1971 are estimated to rise by not less than £1¼ million, just under £900,000 representing increased wages. No company, private or public, can possibly go on at that rate, and so Midland Red, like the other bus companies which I have mentioned, has not only raised its fares, but cut its services.

Understandably, this produces both hardship and anger among bus passengers. My hon. Friend spoke eloquently of the concern of his constituents in Derbyshire. But it is time we faced reality. We cannot have five times more cars on the roads and still keep the same number of buses. We cannot pay huge wage increases and avoid increases in fares. In town and country alike, the hard facts of life are that it is difficult and perhaps impossible in some areas to go on providing the balanced network of bus services that most of us have been used to. Just as gas light has been pushed out by electricity and the Atlantic liner has largely been made obsolete by the jet aeroplane, so the big British bus, especially the rural bus is finding it hard to survive.

These, then, are some of the economic facts; they cannot be burked. Are there no social facts, too? The curtailment of bus services, especially in country areas like my own constituency, hits hardest at those who live in far off rural villages and who cannot afford, or who cannot drive, motor cars. These people are in danger of being completely marooned and isolated from their shopping and their social life in the market town, cut off in a bus desert. Often they are elderly and many are poor.

The question arises to what extent it is our duty as a nation to keep in being uneconomic bus services in order to meet the social needs of the isolated rural poor. How far should the taxpayer or the ratepayer be expected to shield these admittedly needy people from the fare increases which are brought about by cost inflation?

Until recently, the need to face up to the social and economic questions has been masked by the bus companies' practice which my hon. Friend the Member for Derbyshire, West, called cross-fertilising, which was meeting the cost of unremunerative services, mainly in the country districts, out of the profits of the more remunerative services, mainly in the towns. It was the practice of a network, and this made it possible to keep on many rural services, even if fares had been running at a loss.

But the general decline in the industry is now bringing us to the crunch. There is no longer anything like enough to be spared from the profitable parts of the bus network to keep the unprofitable bits in service, and the bus companies are therefore driven to review and often they seek to withdraw the loss-making services altogether. That is why we face what I think it is fair to describe as a near financial crisis in the bus industry in the rural areas.

The question which arises is what can be done to help. It is a question about which hon. Members on both sides of the House have worried tonight. The Government are already doing a good deal. First, there are the bus fuel grants. The stage bus operator benefits from a relief of 2s. 6d. per gallon off the petrol duty, and for the bus industry as a whole, this is worth the large sum of £21 million subsidy direct per year. Second. the bus grants themselves mean that the stage bus operator is eligible for a grant of 25 per cent. towards the cost of any new bus he buys. This grant is worth approximately £5 million a year to the industry.

In the country areas, there is also a Section 34 grant. The central Government reimburses 50 per cent. of the local authority's expenditure on such grants, and the remainder, the local authority's own share, qualifies for the Government's normal rate support grant. This means in many rural areas that the actual cost to the local ratepayer of helping his unremunerative rural bus service may in many cases be not much more than a quarter, and may be even less, of the real cost.

The initiative for helping in this way lies with the local authorities, which are in the best position to decide—who better?—what their local communities need. And the grant is not confined to buses. It can be used to assist mini-bus services or even taxis and private cars and vehicles designed for both goods and passengers, for example mail buses, are also eligible under the Act.

My hon. Friend referred to his constituency. I understand that arrangements have already been agreed between the local authorities and the bus company, the North-Western Road Car Company in respect of four routes. On Buxton-Glossop, grant has been agreed to be paid at £1,500 a year. On Chinley-Kettleshulme, grant has been agreed at £250. On Buxton-Ashbourne, the service has been withdrawn, but I am informed that there was little local opposition. In the case of Buxton-Bakewell there has been a severe curtailment of the service, but it has been replaced in addition by new services run by exactly the kind of independent operators mentioned by my hon. Friend the Member for Morecambe (Mr. Hall-Davis).

Discussions about another four routes in Derbyshire are now under way, and the bus company is reviewing, although it has not yet asked for assistance for, a number of other routes. I am also told that, in general, the county council is leaving it to the district councils to make the running here but it has given an undertaking to meet half of any local authority grant. So local councils have been given a great deal of flexibility here, but I wish that more would use it. The criteria for the Government's grant have been kept to a minimum and wherever these are met there is no need to seek Ministerial approval before local councils can go ahead. I would therefore urge all rural councils to study the Department's latest circular on this subject, of 17th November last year. No socially necessary rural bus service needs to be taken off without the local district councils at least giving thought as to whether or not that service might qualify for Section 34 help.

Another area of difficulty—

Mr. Scott-Hopkins

My hon. Friend said that, if a local authority goes ahead, it need not worry: the Government will always be behind it, if it uses Section 34. Yet Section 34(2) is only a permissive power, with the permission of the Treasury. Can he say with certainty that his Department will be behind any local authority which does this?

Mr. Griffiths

My hon. Friend would not expect me to offer a blank cheque in all conceivable circumstances. My Department is willing, and has said that it is willing, to provide its usual 50 per cent. share of the grant to any local authority which meets the conditions of the Act. We have made the conditions of Government grants flexible, simple and almost instantaneous. We have gone a long way in this area.

Mr. Elystan Morgan

Would the hon. Member tell the House that, if concrete evidence is given in future that the net share of this grant borne by local authorities is more than they can reasonably bear, he will look again at the proportion of 50 per cent.; that is, that he does not regard the 50 per cent. as immutable and that, if circumstances change, the Government would reconsider that?

Mr. Griffiths

The hon. Gentleman should know that the Government operate the Act as it stands. His Government established the grant as 50 per cent. and the Act is being administered exactly as hon. Members opposite voted for it.

Mr. Elystan Morgan

In 1968.

Mr. Griffiths

I am sorry that the hon. Gentleman should have got to his feet just now because it reminds me of his wholly gratuitous and unnecessary re- marks about my right hon. Friend the Secretary of State for Wales. I was surprised at his comment, in view of the total absence from his own Front Bench of any representative of his party. His only suggestion this evening—and his hon. Friend the Member for Brecon and Radnor (Mr. Roderick) picked him up on it—was that the grant should be, not 50 per cent., but 100 per cent. I have seldom heard anything more irresponsible than to suggest a grant of 100 per cent. for anything anyone cares to operate.

Mr. Elystan Morgan

I only said that I agreed that the railway grant should be reimbursed 100 per cent. from central funds and it was at least as reasonable to adopt the same principle for rural bus services which carried more passengers.

Mr. Griffiths

If the hon. Member cares so much, he should have limited the effect of S.E.T. and the petrol price increases and other burdens which did so much to damage the rural bus industry. I am sorry the hon. Member has provoked me, but he should not have made those unnecessary and unjustifiable slurs on my right hon. Friend the Secretary of State for Wales.

Another area of difficulty where the Government may be able to help concerns drivers' hours. These were introduced by the previous Administration and have imposed great difficulties on operators. Not only do they impede operators, by severely limiting the flexibility of their scheduling arrangements, but they can limit the income of bus drivers and are not popular with staff or management. The present Government intend to introduce substantial relaxations in drivers' hours restrictions. Details are being discussed with the two sides of the industry and my right hon. Friend hopes to make an announcement shortly.

Fuel grants and bus grants, local authority subsidies and relaxation of drivers' hours will all help the bus industry, but the fundamental problem is structural. On its present organisation, the rural bus industry as we have known it for the last half century cannot afford to stay in business, so if public transport is still essential in rural areas, as I believe it is, we must look at new ways of arranging it. It is quite likely that we shall have to change the whole shape of rural transport, the structure and pattern of bus services; type and size of vehicles and the stages they operate, the ways in which they are licensed and are allowed to calculate fares. We must also find answers to the question, how much is it worth to the whole community and not simply to those who use them to keep the buses on the roads?

Much of the evidence on which to base these answers is now being collected in two detailed rural bus studies—one in Devon and the other in Suffolk. My Department is undertaking these studies in an effort to discover in depth what the transport needs of rural people really are in the 1970s, how they are being met or not being met, and what will be the best way of meeting them for the future. Against the background of the bus industry's present problems, it is quite clear that in many areas there is no longer sufficient demand to justify running a bus service of the conventional sort. Where small numbers of people are involved, it makes no sense to use the contemporary big British bus to move a mere handful of people about the countryside.

Every morning and evening, in many rural areas, tens of thousands of seats are being carted round the countryside empty. In my County of Suffolk, where we have hundreds of small villages and thousands of isolated hamlets, one sees the problem each morning. If one had a colour radar scanner one could trace on a screen—and no doubt my hon. Friends could the same—a labyrinth of yellow movement lines for the school buses, of white lines for the medical transport carrying staff as well as patients to and from the hospitals, of red lines for the Post Office vans, assuming they are running, and a whole labyrinth of green and blue lines to mark the movements of private buses carrying men and women back and forth to work in factories and farms—all this on top of the regular stage buses operated by the public company.

A majority of these vehicles, which criss-cross one another's routes, make the return journey empty. In many villages, my own included, there may be three or four separate buses which pick up different categories of passengers—children, workers, and so on—within the same half hour in the morning, and some of them will probably stand idle for a large part of the working day.

I do not believe that there is any magic wand which overnight can rationalise all these varied services, and I am sceptical of those who suggest that some single control could, at a stroke, produce fewer but fuller buses more profitably. But I am sure that it is right and urgent to look for a more sensible use and distribution of our bus resources, and that is what we are seeking to do in our two rural studies. We hope to find out not only what scope there is for the conventiontal bus service, but what scope also there may be for other arrangements. This will involve a fresh look at the existing framework of the licensing system; the possibilities of using the existing operator services to much better purpose; the scope for mini-buses, postal buses and shared car arrangements; and the part that can be played by voluntary organisations.

In effect, we are in the process of making a fundamental reassessment of our rural transport policies. We are ready and willing to look at any useful idea.

Mr. Leslie Huckfield (Nuneaton)

I am grateful to the hon. Gentleman for giving way, particularly as I have not been here for the whole of the debate. Will he, in his Departmental study, take a very close look at the policy which is now operating in Northern Sweden where it has been found cheaper to subsidise charter taxi services rather than subsidise the conventional scheduled bus services? This is an idea of merit and it should receive some very serious study by the hon. Gentleman's Department.

Mr. Griffiths

The Government are willing to look at any suggestions, but we are anxious to make progress. I think that to make progress it will be important, among other things, to remove some of the present obstacles in the way of private enterprise coming to the aid of our limping public bus services.

I am therefore examining on behalf of the Minister for Transport Industries the present licensing system to see whether it is flexible enough for present day purposes. At the moment, any person may apply to the commissioners for permission to operate a service.

The Commissioners, before agreeing, are required to take account of the representations of existing operators, who, in many cases, provide a network of services with the profitable parts supporting the unprofitable. Such operators need—indeed, they deserve—a measure of protection. If their profitable routes are put in jeopardy by unfair competition they may be unable to continue their less economic services. Moreover, more, not fewer, rural areas could be cut off altogether. But where an established operator wishes to relinquish a service, or is withdrawing from an area altogether, I doubt whether this continuing protection needs to apply.

I believe that it is possible—I am sure it is desirable—to open wider the doors for private operators to offer alternative services. There are at the moment too many obstacles in the way of local enterprise. It is not legal, for example, for a car owner to offer lifts for payment without getting a licence to do so. But can we be sure that this system of protection is not discouraging new operators who may be able, on a small scale, perhaps, to run services which larger operators, with their heavier overheads, no longer are able or willing to continue?

I conclude by saying this, that none of us wants to see fly-by-night private operators creaming off the profitable services and, as a result, driving public companies even deeper into the red. Neither would we tolerate any loosening of the safety standards we require of those who carry passengers for hire. But there are these pressing needs: first to encourage private persons to organise services with small vehicles so as to make up for the inadequacy of the regular services; second, to allow people in rural areas much more freedom to organise what services they can with any size of vehicle. Reform of the licensing system may well be necessary if these objectives are to be achieved. County councils, and the new administrative units which will emerge from the re-organisation of the structure of local government, may also have a bigger part to play, and the same goes for small operator and multi-purpose vehicles carrying a wide variety of passengers and goods.

If we want to avoid, or at least to mitigate, on the one hand the progressive isolation of the rural poor, and, on the other hand, the inevitable choking of our market towns by ever more motor cars, some sort of rural bus service is going to be needed well into the '70s and '80s, but it cannot be provided without drastic changes in the present arrangements. That is why I assure the House that the present Government are ready, willing and able to look at any new ideas which will help to save our rural transport, and why, too, I believe we should be grateful to my hon. Friend for having raised this matter in the House tonight.