HC Deb 18 March 1985 vol 75 cc623-5
12. Mr. Waller

asked the Secretary of State for Transport when he expects to publish a response to the report by the Transport Committee on the financing of public transport services, the buses White Paper.

Mr. Ridley

The Select Committee report acknowledged the serious state of the bus industry and suggested as an alternative policy competitive tendering for all services. This is a much more restrictive system even than the present one; and will not secure the gains in productivity, and—more important—the concentration on the needs of the passenger, which deregulation will provide. We shall reply to the report as soon as possible.

Mr. Waller

My right hon. Friend has already referred to the Select Committee's main recommendation, but, as it has gained some support since the report's publication, why is he opposed to it?

Mr. Ridley

The system of competitive tendering for franchises on all routes would mean that once a franchise had been let, an unbreakable monopoly would exist on that route for the period of the contract. Consequently, passengers could be exploited, and the productivity gains and improvements in efficiency which we should be able to obtain could not be achieved. I am sure my hon. Friend will agree that if a major operator lost a franchise, it would be extremely difficult and wasteful if hundreds of buses and drivers were suddenly without occupation. The consequences for redundancy of a franchising system on that scale must be borne in mind.

Mr. Madden

Is not the main thrust of the Select Committee's report highly critical of the Government's policy and of the main provisions of the Transport Bill? In view of that, why on earth are the Government and the Secretary of State pursuing such crazy policies?

Mr. Ridley

The hon. Gentleman may not know that the Select Committee was split four-four on whether to approve the report. However, I do not think that the Select Committee will find that the system of franchising that it advocates is by any means popular with large sections of the bus industry.

Mr. Nicholas Winterton

Bearing in mind what my right hon. Friend has said, will he give an assurance about the position in rural areas, given the substantial increase in the price of fuel that has occurred in the past few months and the increase that may sadly result from tomorrow's announcement in the House? Is he aware that where bus services do not now exist the abolition of the current regulation will not result in any more public transport? In addition, people may not be able to afford to run their cars. Will he consider the problems that will face rural areas as a result of that policy, and perhaps give some assurances to the House?

Mr. Ridley

My hon. Friend will know that buses receive a fuel duty rebate. In addition, it is proposed to give a rural bus grant of £20 million in the first year, which will be added to that rebate to make the costs of running buses in rural areas that much lower. That represents an improvement for rural services. When he adds to that the powers of county councils to call for tenders to subsidise uneconomic routes in such areas, he will see that our proposals are likely to lead to an improvement in the quality and quantity of rural bus services.

Mr. Roy Hughes

Has the Secretary of State's attention been drawn to the article in The Observer on 10 March which shows that the Hereford experiment has been a complete failure? Since that experiment was the launching pad for the Secretary of State's proposals, what other evidence does he need to show that his policy is based upon a misconception?

Mr. Ridley

One of the astonishing omissions of the article was that it neglected to ask any of the passengers. When passengers in the Hereford area are asked what they think about the experiment, they will be seen to be opposed to any change in the system there. Those who seek to knock the experiment in Hereford and Worcester have ulterior motives based upon vested interests. What we can learn from that experiment is useful in designing a bus policy, but it is by no means the only basis upon which that policy is founded.

Mr. Foster

If the Secretary of State's proposals are so self-evidently supported, why are the Association of County Councils, the Association of District Councils and the National Association of Local Councils so much against them? Why is it that at a meeting in Teesdale on Friday night not one member of the right hon. Gentleman's party could be found to support them?

Mr. Ridley

The hon. Gentleman is misinformed. The Association of County Councils supported the principle of the Bill, although it had some qualifications about some of the details. The Association of District Councils and many of the municipal and metropolitan counties are interested parties because they run bus companies themselves. That is why they are opposed to the policy.

Mr. Chope

Will my right hon. Friend arrange for the widest possible distribution of his Department's excellent paper setting out the problems associated with franchising?

Mr. Ridley

I recommend that paper to all hon. Members. If they believe that a system of competitive franchising might work, they should study the report to which my hon. Friend refers. They will find that there is severe objection to the course set out by the Select Committee.

Mr. Stott

Is the Secretary of State aware that he should not try to mislead the House about the Select Committee's report? Is he not aware that out of 44 Divisions the Chairman had to use his casting vote in only four and that when the report was presented to the House no vote was taken on it? Is the Secretary of State aware that the Committee found that there was no evidence that regulation had been an inhibiting factor to progress in the bus industry? However, the Secretary of State took no notice of that. May I ask the Secretary of State not to preempt the debate in Committee on competitive tendering? Will he keep an open mind so that we can fashion a better Bill in Committee?

Mr. Ridley

The vote of which the hon. Gentleman must take account is that on Second Reading. The Bill was given a Second Reading by a substantial majority in the House. All hon. Members had the right to participate in that vote. Only eight members of the Select Committee voted on the issue. The vote that matters is that in the House of Commons.