HC Deb 30 June 1976 vol 914 cc613-24

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

3.6 a.m.

Mr. Ian Gow (Eastbourne)

On 15th October 1974 Waterhouse Coaches Limited, of Polegate in my constituency, applied to the South-Eastern Area Traffic Commissioners for permission to operate holiday tours from Marine Parade, Eastbourne, to eight well-known resorts—Morecambe, Tenby, Torquay, Fort William, Ilfracombe, Llandudno, Cheltenham and Dollar. With the exception of those to Fort William and Dollar, which lasted 10 days, all the tours applied for were to last for eight days. There were to be pick-up points at Pole-gate and at Hailsham.

The application was considered by the traffic commissioners in Eastbourne at separate hearings on 7th January and 7th March 1975. On 27th March 1975 the three commissioners, a retired major-general, Councillor L. S. White, a member of the Hampshire County Council, and Councillor Norris, a member of the Eastleigh Borough Council, delivered their reserved judgment, from which I quote: The commissioners note that the applicant is a popular and successful operator…and the evidence he has adduced supports such operations. Having carefully considered the evidence of need for the facilities the applicant now seeks to be able to offer, the Commissioners have concluded it is insufficient to justify making any grant. Waterhouse appealed against that decision.

Eight months later, on 8th December 1975, Mr. John Finlay, a distinguished former civil servant, now in his sixty-eighth year, having been appointed by the Secretary of State as the inspector in this case, conducted a public inquiry at the Town Hall, Eastbourne. He wrote a 25-page report, which was received by the Secretary of State on 13th February 1976. That report recommended that the appeal should be dismissed. Twelve weeks later, on 6th May, the Secretary of State supported the decision of the traffic commissioners, whom he had appointed, and of the inspector, whom he had appointed, and dismissed the appeal. It is that decision by the Secretary of State which I challenge this morning.

It may be wondered why it was necessary to go through that protracted and costly exercise in nonsense in the first place, extending as it did over 19 months. The answer is that no one may operate a coach tour of the kind contemplated by Waterhouse without a licence. Unfortunately, the House denied me leave to bring in the Transport (Amendment) Bill on 2nd March this year. That Bill would have scrapped the whole licensing system apart from ensuring that crucial safety requirements were complied with. At the two hearings before the commissioners and at the public inquiry, Waterhouse's application was opposed by Southdown Motor Services Ltd., a wholly-owned subsidiary of the National Bus Company, the directors of which are appointed by the Secretary of State and all the shares in which are held by the Government.

Southdown opposed the application because it was afraid of competition from Waterhouse. In itself, that is a massive condemnation of Southdown's policy. Why was Southdown so frightened of Waterhouse? Had the directors been reading the story of David and Goliath? The analogy is not false. Southdown has a capital of £3.6 million. Behind it lie the massive resources of the State. Waterhouse is a small, family business which started as a taxi firm just after the war. The Waterhouse family toiled and prospered. Steadily it built up the business, yet its capital today is only £2,800.

Southdown owns 627 buses and 197 coaches. Waterhouse has 10 coaches and one minibus. Southdown employs 1,219 drivers, 253 mechanics and an administrative staff of 518. Waterhouse employs 10 drivers, two of whom are directors of the company, two mechanics, two apprentice mechanics and three office staff. The absurd procedures which we are debating now have cost this small company £3,000 already.

At the time that the company came to make the application in the autumn of 1974, 684 local people had made inquiries whether it would be possible for Waterhouse to run all-in package holiday tours. It was in response to those requests, mainly from retired people, that the application was made.

Let me read from a letter which I received in January this year from one of my constituents, Miss Lilian Trickey, who lives in Eastbourne and is 81. She said: I am disappointed to learn that Waterhouse Coaches have not, as yet, been able to obtain a licence to run coach holidays for the general public. For various reasons, mainly serious illness and death in my family, I had not had a holiday for years. I have in past years considered having a coach holiday with the Southdown Company, but it has always seemed to me too inconvenient, as they make such a very early start from Eastbourne. The Waterhouse coach is able to start about an hour later and, as only local people are involved, can get on the way much sooner. The whole holiday is much more personal and one can rely on getting returned to Eastbourne without undue delay. As you know, Eastbourne is full of elderly people, to whom arranged coach holidays make a definite appeal. I do hope that you will be able to make your influence felt in the appropriate quarter to help the Waterhouse people to get the licence they require. Their coaches are very satisfactory and they have been operating for years. In his letter of 6th May dismissing the appeal, the Minister acknowledged that the public wanted a wider choice and more competition", yet he chose to ignore the people. He has prevented the pensioners having the holiday they wanted and still want. They and I reject and resent the proposition that the man in Whitehall knows best.

The Minister has a discretion in cases of this kind. Those who wanted to go on these package tours are not the well-to-do. I dislike the phrase, but, to use the words which so often fall from the lips of the Chancellor of the Exchequer, those affected are ordinary working people. This decision is the unpleasant and unacceptable face of Socialism.

When the chronicle of these times is written, the story of Waterhouse Coaches will not receive so much as a footnote in the history books, yet in this story of the struggle of Waterhouse and the pensioners of Polegate against Southdown Motor Services and the Secretary of State we find re-enacted, admittedly on a mini scale, that battle for freedom which those sent to this House have long fought on behalf of their constituents.

The Minister has dismissed the appeal. He has found in favour of the big battalions—Southdown and the National Bus Company—and against the small man, Waterhouse. He has discriminated against free enterprise and in favour of a giant State-owned quasi-monopoly.

The Minister has said to the people of Polegate and Eastbourne who want to travel to Morecambe and Llandudno, to Tenby and Torquay, in Waterhouse coaches that they may not do so, that their wishes and freedom of choice are to be overriden, and that the ministerial veto, backed up by penalties of a fine and imprisonment, shall be used to prevent Waterhouse providing a service which it is well qualified to provide and which the people long to use.

That decision is bitterly resented by my constituents. It is a decision taken after procedures which reveal the bureaucracy as a costly and time-consuming enemy of the public interest. Above all, it is a decision which underlies the growing gulf between Government and the governed and the increasing arrogance and insensitivity of the Executive. This debate has a dual purpose. It exposes ministerial decision which is unjustified and unjustifiable, but it at least gives the Minister the chance to think again.

This week, the redoubtable and courageous small firm of Waterhouse has made application again to the traffic commissioners in Eastbourne, in terms identical to those rejected by the Minister, for permission to operate the eight coach tours. Predictably, the application is again being opposed by Southdown, which is fearful of seeing its monopoly eroded.

This time, however, the traffic commissioners, spurred on perhaps by this debate, may decide to put the public interest first. If they do not, if for the second time they refuse the application, the Minister will have another opportunity to do what he should have done already and allow Waterhouse to provide that choice, that service and that freedom which no Government ought to deny.

3.20 a.m.

The Under-Secretary of State for the Environment (Mr. Kenneth Marks)

I must congratulate the hon. Member for Eastbourne (Mr. Gow) on securing the opportunity to raise the case of a firm in his constituency, Waterhouse Coaches Ltd., and on the lucid manner in which he presented his case. He has shown a continuing interest in the circumstances surrounding the appeal and has been assiduous in pursuing the case. The House has expressed an opinion on his views on the existing system on one occasion, but I know that that will not deter the hon. Gentleman in the coming debate on transport policy. I have no doubt that he will continue his campaign throughout the numerous debates we shall have on licensing and associated matters in the coming years.

I am afraid that there is little I can say in reply to the hon. Gentleman's points on the appeal case itself. My right hon. Friend's reasons for reaching the decision he did on the merits of Mr. Waterhouse's case were set out in the decision letter, and I cannot enlarge upon them on this occasion. However, it might be helpful if I outline the background.

As I understand the position, it was Waterhouse Coaches' contention throughout that, even if the legality of the company's tour operations were accepted, the demand for the kind of centred holiday which the appellants sought in their application to provide was not satisfied in the Eastbourne, Polegate and Hailsham areas, either because of the limited availability of the licensed services or because of the nature or accessibility of the facilities offered.

Equally, the appellants were contending not that the existing facilities were inadequate but that what was needed was a wider choice and more competition. In his report the inspector confirmed that there was no difference between the characteristics of the National Bus Company's existing range of based tours and those for which Waterhouse was applying, save for a few minor amenities. He was of the view that to allow the application would be likely to lead to the abstraction of customers in varying degrees from the broadly comparable tours of the objector, Southdown Motor Services, which depended upon Eastbourne for many of its passengers.

The inspector was also critical of the evidence of need that was provided. This relied on the replies to the appellants' questionnaires and the evidence of four public witnesses. He felt that, apart from being suspect in that two of the four public witnesses admitted that they had given inaccurate replies, the distribution of the questionnaires focused too closely on Mr. Waterhouse's own appreciative customers to produce an objective picture of the wide public demand needed to support economically a further range of based tours on the comparatively large scale proposed.

The inspector concluded that the foreseeable degree of further need was unpredictable but likely to be small and of an order which could easily be absorbed by the existing facilities, at present operating some 30 per cent. under capacity. Therefore, in view of the small scale of further predictable public demand and the possibility of absorption, he considered that it would be unfair to superimpose new facilities on the existing under-used facilities. Further grant could lead to wasteful competition with harmful results economically. He accordingly recommended that the appeal be dismissed.

My right hon. Friend the Secretary of State accepted the conclusions of the inspector that the statutory criteria by which the traffic commissioners must judge applications were not satisfied in the case of Mr. Waterhouse's application, and his recommendation was that the appeal be dismissed. The question of the legal validity of the decision is now, I understand, about to form the subject of an appeal to the High Court, and in those circumstances I cannot discuss that aspect of the matter further.

Turning now to the question of the length of time between the initial application to the traffic commissioners in October 1974 and my right hon. Friend's decision on the appeal on 6th May 1976, I want first of all to point out that two separate consecutive processes were involved. The traffic commissioners' part in the story ended on 27th March 1975, when they gave their decision on the application. That decision was not a recommendation to my right hon. Friend but was a decision taken in its own right by a statutory body independent of the Government. In the vast majority of road service licence applications, the matter ends with the traffic commissioners' decision.

Mr. Gow

The Minister says that the traffic commissioners are independent of the Secretary of State, but are not the chairman of the traffic commissioners, as an individual, and all other traffic commissioners who are nominated by borough councils or county councils appointed by the Secretary of State?

Mr. Marks

They are appointed, but it is wrong to suggest that they are people from Whitehall. As the hon. Member has pointed out, in this case they included in the main local public representatives.

Waterhouse Coaches was, of course, fully entitled to appeal to my right hon. Friend, as it did on 7th May 1975. But we need to remember that this was a fresh step taken by the firm. One chapter in the story, the application to the commissioners, ended on 27th March 1975, and a separate chapter, the appeal to my right hon. Friend, started, at Mr. Waterhouse's initiative, on 7th May 1975. Until the appeal was lodged, my right hon. Friend had no standing in the matter.

The interval between the lodging of the appeal and the issue of the letter conveying my right hon. Friend's decision on the appeal was almost exactly one year. I am ready to accept that the interval between the lodging of the appeal, in May 1975, and the local inquiry, in December, was a long one, perhaps even unduly long. Having said that, however, I ought to explain that it is never very easy to find quickly a date on which an appropriately qualified inspector is available and which is convenient to both appellants and respondents. This is clearly illustrated by the history of this case. An inquiry was originally arranged for early in November, but was cancelled at quite short notice at the appellants' request because the date had become inconvenient to the appellants' counsel. This is the sort of problem which frequently crops up.

The Department is doing all that it can to reduce the interval between the lodging of these appeals and the holding of inquiries. On occasions this might even mean insisting on dates that are not entirely convenient to all the parties involved. We have speeded up the procedure by the discontinuance of the practice of awaiting the comments of the traffic commissioners on the grounds of appeal before going ahead with inquiry arrangements. In most cases this works satisfactorily, although there are occasions when, having received those comments, appellants sometimes decide not to proceed with their appeal. The abortive work involved in such cases obviously delays other cases to a greater or less degree, and it is clear that not all ideas have only beneficial effects on speeding up procedure.

In this particular case I have looked at the history and, as I said on 18th May in reply to a Question for Written Answer from the hon. Member, I am satisfied that there was no unreasonable delay in my Department between the date of the inquiry, 8th December 1975, and the date of the decision letter, 6th May 1976.

It is true that the inquiry itself took only one day, but the inspector had to assimilate and report upon not only those proceedings but the record of the earlier proceedings before the traffic commissioners and the documents associated with the original application. Having assimilated this material, he then had to prepare a comprehensive report. Once he had done that, the Department in turn had to review the evidence and the inspector's recommendation to my right hon. Friend.

All in all, this was a relatively straightforward case. Nevertheless, it involved nearly 150 pages of transcript of traffic court proceedings, an inspector's report of 25 pages, and 30 or so documents submitted by the parties to the traffic commissioners or to the inspector. I am satisfied that the Department, once it had the inspector's report and the other case papers to hand, gave this case an appropriately high priority amongst the other work in progress.

Here I must touch upon the question of staff resources. The hon. Member will appreciate that constraints of staff resources inevitably mean that when a particular piece of work comes forward it can seldom be given immediate attention. I know, and the Department knows, that to the individual his own case is the most important one, and any delay in handling it cannot be anything but unsatisfactory. The Department was particularly conscious that in this case the appellants would be anxious to have the position clarified before the holiday season got into full swing. Even so, this case had to be fitted in with the rest of the work which was in hand.

One appellant's priority is another appellant's delay, and the only way in which every case could be given immediate attention would be greatly to increase the allocation of staff to these appeals. In the present economic circumstances I do not consider that this would be justified or likely—and nor, I think, would the hon. Member when he considers the question in terms of public expenditure and the size of the Civil Service. We must do and are doing the best with what staff resources we have got. Having said that, I must add that of course I would like to see these cases settled more quickly. We have made the changes in procedures to which I have already referred, and we shall continue to do what we can to make further improvements.

The hon. Gentleman has also raised the question of the time involved in following through the necessary procedures involving an application to the traffic commissioners. In this case, Mr. Water-house's application was lodged in October 1974 and published in accordance with the regulations in November 1974. Various objections were received and a public sitting was arranged for 7th January 1975 to consider the application and the objections. The traffic commissioners expected that a single day's sitting would be enough. A second day's sitting, however, had to be arranged. This could not be done before 7th March because of the pressure of work on the commissioners and the need to reassemble the same panel of three. Two of the commissioners are part-timers drawn from a local panel. The commissioners reserved their decision at the public sitting and subsequently issued it in writing on 27th March.

That was a long time, but we must remember the statutory requirements for publication of applications, objection periods and the need for a careful and fair hearing for both sides designed to safeguard the rights of all interested parties. Looking at the timetable with these considerations in mind, I do not think there can be any real complaint about the interval between the lodging of the application and the decision.

The hon. Member's underlying point is that Mr. Waterhouse should not have had to apply to the traffic commissioners in the first place. I am aware that the hon. Member wishes to see alterations in the road service licensing system for buses and coaches. He has said that his constituents who want to go on the tours proposed by Mr. Waterhouse have been denied that opportunity by the decision the commissioners made and which my right hon. Friend has upheld at the inspector's recommendation. He has also suggested that the decision represents bias in favour of a nationalised undertaking against private enterprise.

The hon. Member will know that I disagree with his views on the wholesale dismantling of the licensing system. I would say that we should not be too hasty in dismantling a system which has stood the test of years and which both sides of the bus industry are anxious to see maintained. One of the underlying objectives of road service licensing as embodied in the Road Traffic Act is to see that the transport needs of an area are satisfied, but satisfied in such a way that companies which are already operating advertised services over fixed routes, or to fixed destinations, should get some degree of protection as long as they are giving good service to the public. This is reasonable when one remembers that those established operators are often running unprofitable but socially necessary stage carriage services. Their position would become even more financially precarious if other operators were given free rein to attack their more profitable business in a piecemeal way, leaving the unprofitable services well alone.

Without going too far into the merits of the particular decision, I cannot accept the suggestion that it represents bias in favour of a nationalised undertaking against private enterprise. I would point out that, besides the objections lodged by the National Bus Company subsidiaries, three private firms also objected to the application, and one of these three pursued the matter to the appeal stage. This demonstrates that the case was not one of public sector versus private sector. It also shows that there is not a monopoly situation for advertised tours for people in the Eastbourne area. There are three private firms in competition with the National Bus Company, though all admittedly in a relatively small way.

The objection to Mr. Waterhouse's application was not that his was a privately-owned business seeking to compete with a public sector company. The problem was that the market for tours of that sort from the Eastbourne area was already fully provided for by the existing operators, which happened in this case to come from both ends of the scale: three small-to-medium-size firms on the one hand and the National Bus Company on the other.

I should like to emphasise that there was never any suggestion that Mr. Water-house's company is not a thoroughly good and reputable undertaking. I have no doubt that he continues to do an excellent trade in the private hire field. I would suggest that any of the hon. Member's constituents who wish to use Mr. Waterhouse's services rather than those of the other operators in the area can do so by clubbing together to form private parties, as his continuing private hire trade demonstrates.

To return finally to the decision itself, we must remember that the case has been considered carefully three times and that on all three occasions the same conclusion was reached: by the traffic commissioners, by the independent inspector and by my hon. Friend.

The hon. Member mentioned a further application, but I am sure he will not expect me to anticipate what the independent traffic commissioners will do about that.

Question put and agreed to.

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