HC Deb 22 February 1971 vol 812 cc268-80

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hawkins.]

3.2 a.m.

Mr. Leslie Huckfield (Nuneaton)

I am glad to be able to raise this subject, which is of great importance to my constituents, although I sympathise with the Minister because this is the third Adjournment debate in a week which he has had to answer on the question of bus services and they have all, unfortunately, come at this time of the morning. However, I will try not to bore him by repeating the points raised in the last week, because some of mine are new.

In the four years that I have been a Member, complaints about the Midland Red Bus Company have outpaced complaints about any other subject in my constituency. I should like to give some background to the appeals which the Department has been receiving since this Government came to office and before. It was a recent Nuneaton Technical College rag magazine which had the little joke, "What is big and red and lies in the ditch?—a Midland Red bus." This is the kind of loss of regard in which Midland Red is held in my constituency.

The Minister will know from the appeals which his Department has been receiving that the death-knell for public transport is already being sounded in the West Midlands, and certainly in Nuneaton and Bedworth. We have now reached the stage, despite the appeals, and the decisions of the Minister for Transport Industries, at which many of my constituents are spending sometimes £2.50 and almost £3 to get to work using the kind of services which I propose to discuss tonight.

We have also reached the rather sad stage, despite these appeals and decisions, that many old-age pensioners, particularly those in Nuneaton, who do not enjoy concessionary fares, can hardly afford to travel at all. So it is a deplorable state of affairs that I want to refer to the Minister.

Since 1951 this bus company has applied for fares increases almost annually. There has been some four appeals since 1951. From the figures which I shall give, I would say that the whole conduct of this company, in its almost constant annual appeals to the traffic commissioners for fares increases, to me reeks of very bad planning and considerable inefficiency on the part of management.

Perhaps the Minister recalls the background to the last appeal which his right hon. Friend received. There were fares increase applications on 26th June, 1965; 3rd March, 1967; 27th September, 1968; 24th October 1969; 8th May, 1970; and 18th December, 1970. It is to the last two fares decisions of the West Midlands Traffic Commissioners that I want particularly to refer.

If the Under-Secretary of State takes the 1970 fares increase, which became effective on 1st July, 1970, he will recall that this was a fares decision by the traffic commissioners that allowed this company to increase its fares of up to 1s. by 25 per cent., and by 20 per cent. if the fares were previously over 1s. He does not need me to remind him that, as a result of the increase being granted, the number of passengers declined from 1st July last year by 12 per cent. This culminated, I am glad to say, in an appeal by several local authorities—or at least originally by several local authorities—to the Minister for Transport Industries. In fact, in the end only the Shrewsbury Borough Council was left in the running, and they appealed in writing —to save time—to the Minister for Transport Industries, who replied on 29th January that he thought that the fares increase just granted was "not unreasonable".

I suppose that the kernel of my case tonight can be summed up by my saying that if two sheets of teleprinted paper represent the only consideration that the Minister for Transport Industries has given to this very serious issue in the West Midlands, then the Minister for Transport Industries did not give this last appeal by Shrewsbury Council half enough attention. The only serious point which the Minister for Transport Industries made on the appeal—and I quote from page 2 of the document, which had to go by teleprinter because of the post strike—was that the Commissioners should take note of Shrewsbury's dissatisfaction in exchanges with the company with the repositioning of bus stages.

I wonder how many more local authorities had similar difficulties with Midland Red and how many more details the traffic commissioners ought to consider? Despite that, and despite many more serious issues raised in this last appeal by Shrewsbury Borough Council, two sheets of teleprinted paper were all the consideration that the Minister for Transport Industries gave.

May I take this further by saying that many local authorities in the Midlands have put to me a very serious technical point on which I hope that the Under-Secretary of State will be able to provide some illumination. The Minister for Transport Industries is under a duty to act as the appeal body under Section 134 of the Road Traffic Act, 1960, in considering whether these fare increases are reasonable; but, at the same time, under the Transport Act, 1968, he has an obligation to fix the profits target or surplus target of the National Bus Companies. How on earth can the Minister for Transport Industries act as an appeal body against himself? I hope that the Under-Secretary of State will cast some light on the point. Many local authorities, and even the traffic commissioners, seem to be puzzled, in the recent fares decisions, about how the Minister can act in the two capacities, which I would have thought were mutually exclusive.

Let me come to the background to the appeals which we had in the past year. I want to know whether the Minister's examination of the companies' applications goes far enough. For instance, in 1970 we were told that the company expected to make a surplus of £572,000. In fact, it made a loss of £669,000. The Minister himself gave the House the figures recently. That represents a shortfall of over £1¼ million or about 10 per cent. of the company's annual turnover. We were told that even with the last increase, which started yesterday, 22nd February, of one new penny in the peak period and a decrease of one new penny in the off-peak period, the company still claim that it will lose £27,000 this year. The company referred to a cost increase of, again, about £1¼ million, but it actually said to the Traffic Commissioners that it would save on maintenance and operating costs something like £896,000.

What staff has either the Department or the Traffic Commissioners to check figures of that kind? From what I know of the hon. Gentleman's Department—I do not mean to insult him personally—and from what I know of the Traffic Commissioners, I do not believe that either has the staff to check these figures when the bus company give them. In other words, his Department and the commissioners have very much to take them on trust. Thus, these appeals are considered by the Traffic Commissioners and by the Minister without any comparisons being made with other parts of the National Bus Company, simply taking the figures which the company gives.

Here are some other factors which the hon. Gentleman's right hon. Friend ought to have considered. Why was Midland Red able to claim at the recent hearing by the Traffic Commissioners that it had a surplus of drivers which cost it £10,000? In my constituency, until very recently, we had a staff shortage, and last summer we were almost 50 per cent. short of the target in Nuneaton. Can there really be such quick staff changes? Is it not the sort of thing which the Minister should investigate?

Why is it that, despite the fact that the drop in passenger mileage is only 4 per cent. annually for the whole industry, Midland Red had a 12 per cent. drop since last July?

As regards productivity, why is that in 1968 15 per cent, of Midland Red's operations were one-man operation and the estimated 1969 figure was 20 per cent., but in the Potteries Motor Traction Company, which is contiguous with Midland Red, there was an increase from 3 per cent. one-man operation in 1968 to an estimated 20 per cent. in 1969? The very poor showing in productivity by Midland Red ought to have been considered by the Minister.

Perhaps the most important point is that 45 per cent. of the Midland Red's garages are in the area of the West Midlands Passenger Transport Authority, and, as the hon. Gentleman knows from his recent visit, Midland Red provides just over 25 per cent. of the P.T.A. area services. Yet he knows also that the P.T.A. and the National Bus Company have to come to some kind of agreement over the fare levels to be operated within the P.T.A. area. It is proposed that, ultimately, the P.T.A. itself will be the Traffic Commissioners within the P.T.A. area. But how can the Minister satisfy himself, or the National Bus Company satisfy itself, that the P.T.A. will agree to fares increases or figures which will enable Midland Red and the N.B.C. to support rural services outside the P.T.A. area?

One of the serious points which the hon. Gentleman's right hon. Friend ought to have considered is the whole relationship of the West Midlands P.T.A. and Midland Red, when Midland Red has been set a target of £900,000 in the past as its contribution to the National Bus Company's overall surplus of £8 million.

I do not believe that the Minister for Transport Industries can give any kind of decision on these recent appeals without considering the whole relationship of the National Bus Company and the West Midlands Passenger Transport Authority. Unfortunately, the right hon. Gentleman did not think that it was worth doing that, so we had only the two pages of teleprinted paper to which I have referred.

I could say a lot more about the conduct of the local authorities in relation to Midland Red's rural services, and a lot more about the slow conduct of Midland Red and local authorities on the question of concessionary fare schemes, except for the excellent progress made in my constituency by Bedworth Urban District Council. I could mention, also, the attitude of some of the drivers and conductors, for whom I have nothing but praise tonight. I know that, particularly at the Leamington garage, they have done their best to explain to the public the deficiencies of Midland Red and have done their best to cultivate a climate of public opinion which could lead to improvement.

The whole of the Midlands this morning is waiting for the hon. Gentleman's reply. I know that in reply to my hon. Friend the Member for Dudley (Dr. Gilbert) last Friday morning he said that it was all inflation and all wage costs. I cannot accept that. I hope that he will give me serious answers to some of the technical points which I have raised.

I end as I began, by saying that my constituents are fed up with the Midland Red. In fact, the so-called friendly Midland Red has become one of the sickest jokes in the West Midlands. I send full sympathy from the House tonight to the platform staff, to the drivers and conductors who have to bear the brunt of the public's complaints about the bad management of this company. I cannot understand why a company has to keep going to the Traffic Commissioners persistently for fares increases. I cannot understand why a company such as this cannot plan ahead. Above all, I cannot understand why the Minister did not take account of some of these serious technical points which he should have considered in the appeals which have been made to him recently. I put these points before him. I believe that he owes it to my constituents in Nuneaton and Bedworth and the whole of the West Midlands to give serious consideration to these points in his reply, and I hope that he will.

3.16 a.m.

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

I am sure that the hon. Member for Nuneaton (Mr. Leslie Huckfield) will be the the first to appreciate the limitations of this Adjournment topic. He will know that the Traffic Commissioners' powers are laid down in Statutes to secure that the fares on licensed bus services "shall not be unreasonable". The Commissioners are statutory independent authorities. Their decisions are final, unless an objecting local authority or operator appeals against them to the Secretary of State, and if there is an appeal, he has to decide it judicially. So I cannot comment on the merits of any appeal, either at present or likely to come before my right hon. Friend.

There have been two appeals against fares decisions of the West Midlands and East Midlands Commissioners in the last five years. The first concerned Birmingham Corporation fares and was dismissed by the Minister of Transport of the day. I do not recall the hon. Member objecting to that, which is perhaps not surprising as the Minister in question was a Labour Minister. The second appeal was the more recent one by Shrewsbury Borough Council on the Midland Red fares increase of last summer which the hon. Member has been discussing.

My right hon. Friend gave this appeal careful consideration and when it was dismissed full reasons were given by the Secretary of State. His decision letter is a public document, and I hope that it will be considered by the public on its merits. The Commissioners gave a fully reasoned and fully documented decision which is available for all to see when granting the fares increase to Midland Red, which was effective from yesterday. The time limit for an appeal has still to run and so I must not enter into any discussion that might be held to prejudice the Secretary of State's appellate position, and the hon. Member will understand this.

If there is any feeling about the present case, it arises very largely because this is the third in a row. The first was in January, 1970, when Midland Red was granted a fares increase of 14 per cent.; no one appealed against that. Then in July, 1970, the company had to apply for a further increase of 16½ per cent. One local authority of the 29 in the event objected and put in its appeal. Now Midland Red has applied yet again after only another six months for a further 15 per cent. increase.

The hon. Member does not need to remind me of the concern that such increases cause, especially to a Government devoted, as the Government are, to getting on top of inflation. The sad fact is that this state of affairs of rising fares and diminishing services is not peculiar to Midland Red or traffic areas in the Midlands. It is repeated throughout the country, to the anxiety and even distress of bus passengers on the one hand and the bus industry on the other. The Government are deeply conscious of this concern and we are doing what we can to help by way of fuel grants, bus purchase grants and the generous approach of my Department's share of Section 34 grants and so on. But in fairness to the House and the bus industry the hon. Gentleman should have explained the reasons for the problem that he has highlighted eloquently tonight. He should know all about this problem, because the present financial crisis in the bus industry stems very largely from the burdens imposed upon it by his own party in Government

The Labour Government took over a large slice of private shareholding and management in the bus industry and then set up the National Bus Company to manage it. Then, as if determined to strangle their own child in its cradle, they proceeded to pile upon this new undertaking a series of quite unbearable burdens. They expected the N.B.C. to operate alongside the municipal bus companies and alongside the passenger transport authorities, which were also the Labour Government's creations, without the recourse to rate subsidy that is available to all these other bus undertakings. They also expected the National Bus Company and its affiliates to compete with these other undertakings in the labour market, but still to operate on a viable break-even basis, without subsidy. [Interruption.] I do not know how the hon. Gentleman would describe this, but I believe it to have been grossly unfair to the N.B.C. companies.

Adding to these problems, the previous Government piled on to the buses the restrictive drivers' hours legislation, which we expect to relax, corporation tax and the Road Transport Industrial Training Board levy. Every one of those forced up costs and, therefore, fares, but did the hon. Gentleman protest? On the contrary, he voted for them.

The worst of the previous Government's body blows to the bus industry was wage inflation—

Mr. Leslie Huckfield

rose—

Mr. Griffiths

The N.B.C. 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. to come in March this year. Did the hon. Gentleman on behalf of his constituents oppose those large increases? Of course he did not, and he must, therefore, accept his share of the responsibility for the cost increases that inevitably follow.

Mr. Huckfield

On a point of order, Mr. Deputy Speaker. The Minister is not answering any of the points I raised, despite the fact that I put very serious and very technical matters to him about the operation of the company. Surely, he owes it to me to give some explanation of some of the points I raised instead of trying to shift the whole of the blame, which I and my constituents cannot accept?

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. That is not a point of order. I am sure that the hon. Gentleman will understand that that is a matter for the Minister himself.

Mr. Griffiths

All of these impediments placed upon the National Bus Company would have been bad enough if the company and its various affiliates had been operating on a rising market, but the facts are precisely the opposite. The private car is making inroads into the bus's revenues. On Midland Red's routes I understand that the number of stage passenger journeys fell by 65 million in the five years from 1966 to 1970. All across the country, too, particularly in urban areas, the buses suffer from traffic congestion, so that their services in many places have become irregular and unreliable. The National Bus Company has had to face severe staff problems, and last autumn there were bans on overtime, bans on rest day working, bans on standing passengers and bans on one-man operation. Did the hon. Gentleman condemn this expensive industrial action, which again forces up costs and fares? Of course he did not, which is why I say again that he must face the consequences of his and his party's approach to the bus industry.

Mr. Huckfield

Will the hon. Gentleman answer my points?

Mr. Griffiths

It is because of all these factors that the industry's financial position has deteriorated so rapidly. The N.B.C. has, therefore, had to face a stark choice not of its own making, not of this Government's making, but of the making of the hon. Gentleman's Government. The choice before it was to raise fares and cut some of its losses or, in plain words, to go bust.

I do not know which alternative the hon. Member prefers—raising fares and cutting losses or suffering financial collapse. It is no use his calling for subsidies. His Government laid a duty on the company to run its business without loss. It also placed a statutory limit on what the company could borrow. This limit has been reached and my right hon. Friend has found it necessary to advance another £6 million of the taxpayers' money on loan.

I turn now to the hon. Gentleman's strictures on the Traffic Commissioners and on my own officials.

Mr. Huckfield

I am grateful.

Mr. Griffiths

The hon. Gentleman does not like this but he has been going round the Midlands making all kinds of undocumented charges which I propose to answer. One can easily get the impression from what he says that the Commissioners are either incapable of performing their duties properly or wilfully disregarding them. I reject both suggestions out of hand.

If the hon. Member will trouble to read the Commissioners' recent decision in the Midland Red case—a public document—he will be left in no doubt about the thoroughness with which they consider cases before reaching their decisions, however hard or complex those decisions may turn out to be. I will not comment on the merits of this case. I will state the facts as the Commissioners found them.

First, in 1970 Midland Red's actual revenue fell by £502,000 and expenditure rose by nearly £750,000 against the esti- mate made at the time the last fares increase was applied for. An estimated operating surplus of £572,000 for 1970 became an actual loss of £669,000. The basic causes of this were declining passenger travel and rising costs. Passenger travel went down by 12 per cent. between July and the end of the year. The Commissioners expect there to be further increases of costs in 1971, amounting in a full year to £1.2 million, of which £875,000 represents increased wages.

As a result of the foregoing and after allowing for economies, the Midland Red estimated an operating loss of £837,000 in 1971 if fares continued at the present level. As part of their decision, the Commissioners published a table comparing the company's operating expenses in 1969 with its forecast for a full year. It shows an overall increase of operating costs of £2.8 million, of which £2.1 million is attributable to increased salaries and wages, these representing 71 per cent. of the operating expenses. The Commissioners took note in their report of the measures which the company is taking to ease the situation and it was against this background of escalating costs, reductions in services, suggestions for a Section 34 subsidy and substantial operating economies, that the Commissioners reached their conclusion.

The essence of this is contained in the following words: The impact of this decision on the travelling public has not been ignored but the Commissioners could not close their eyes to the gravity of the financial situation of the Midland Red and the importance of keeping its transport facilities available to the public to the maximum extent possible. That, I emphasise, is the Commissioners' conclusion. It is not for me to express an opinion about it. But I have been prompted to explain at some length the exceptional care which they take to consider and decide impartially because of certain Press reports.

For example, Commercial Motor published an article on 29th January under the title: M.P. plans Midland Red 'filibuster'". The article quoted the hon. Gentleman as saying: I shall be attending the hearing and intend to use procedural tactics to try to get it adjourned. We have put up with a lot of procedural tactics in the House during recent weeks and I note with interest that the hon. Gentleman has been playing the same sort of game outside. But he has had rather shorter shrift outside the House than he would get inside it. On 5th February Motor Transport said that the Chairman of the West Midland Traffic Commissioners, after hearing the hon. Gentleman at some length, had said to him: We afford respect to an M.P. but the Commissioners are not going to allow you to filibuster with a view to delaying this hearing. I leave the House—

Mr. Huckfield

Will the Minister give way?

Mr. Griffiths

I will not—to form its own conclusions whether the hon. Member's activity there or here can be seen as a genuinely useful attempt to assist the Traffic Commissioners, to assist the bus companies, or their passengers, or anyone else.

Mr. Huckfield

The Minister has not answered my points.

Mr. Griffiths

At the outset of his speech the hon. Member referred to Midland Red as being big, red and in the ditch. I say to him that his own Government pushed it in the ditch and he is doing nothing to retrieve it. I would advise him, if he wishes to assist his constituents, that he would have done a little better in previous years to have resisted the imposts placed upon the bus company, and, indeed, others throughout the country, by that on petrol, by taxation of all kinds, and by drivers' hours. He should have done his best to resist the rampant wage inflation which his Government started and which is now damaging his constituents' interests, and which he has the temerity to come here and complain of.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Four o'clock a.m.