The Bus Industry

HL Deb 12 July 1984 vol 454 cc1065-73

4.55 p.m.

Lord Lucas of Chilworth

My Lords, it may be for the convenience of the House if, with permission, I now repeat a Statement which has just been made in another place by my right honourable friend the Secretary of State for Transport on the subject of public road transport. The Statement is as follows:

"The Government have now completed the review of the bus industry of which I informed the House on 14th February. Bus passengers and taxpayers are not being well served. Over 10 years, the cost of local bus services have risen by up to 30 per cent. in real terms. Fares have gone up by over 30 per cent. in real terms. Subsidies have risen while services and usage have declined. Rural bus services are causing serious concern. The discipline of competition in the market place can bring great increases in efficiency, and cuts in fares. This has been shown by the deregulation of coach services in 1980. If new ideas and new services are allowed to flourish, then the total public transport market can expand, with advantage to operators, workers, and, above all, passengers. It is the users of buses who should come first, and they are the less-well-off members of our society. The Government's proposals are set out in a White Paper published today in the names of myself and my right honourable friends the Secretaries of State for Scotland and Wales. Copies are now available in the Vote Office.

"We propose to introduce legislation at the earliest opportunity to remove restrictions on competition in local bus services. We shall abolish road service licensing throughout Great Britain, except for the time being in London where new arrangements have just been introduced. We attach the highest priority to maintaining standards of safety, and quality—supervision of operators will continue to be tightened, with more resources devoted to the purpose.

"Local authorities will be responsible for providing subsidy to socially necessary services which are not otherwise viable in a free system. They will let contracts on the basis of competitive tenders. Support for these services will thus be made specific and transparent. Concessionary fare schemes for the elderly and disabled will continue but must be open to all operators on an equitable basis of costing.

"These policies will benefit rural communities, for whom public transport links are vital. Rural passengers will benefit from competition, more flexibility and new ideas. In addition, we shall take two special measures to aid rural transport. The first is a transitional grant, paid to operators of rural services. This will last four years reducing in equal steps from a starting level of up to £20 million. The second is a special fund of up to £1 million a year to finance innovation in rural transport. I am glad to say that this will be administered by the Development Commission in England. Similar arrangements will be made in Wales and Scotland. We shall explore ways for making wider use of services run by education, health and social service authorities and the Post Office, and will simplify the law on voluntary operation of minibuses.

"The structure of the bus industry must be changed to remove the dominance of very large public-sector operators and to allow competitors an opportunity to enter the market. Passenger transport executives will be required to break down their operations into smaller units as separate companies. The National Bus Company will be reorganised into smaller free-standing parts which will be transferred to the private sector. District councils which own bus operations will be required to put them at arm's length into companies, which they will still own, but to which subsidy will be provided only through tenders and made transparent. Agreements between bus operators will be made subject to the Restrictive Trade Practices Act. We will widen the opportunities for taxis and licensed hire cars, by introducing new rules enabling them to carry several passengers at separate fares in certain circumstances.

"We shall issue consultation papers on the detailed implementation of a number of these proposals.

"These changes reverse a policy of protection which has lasted for over 50 years. This straitjacket is now producing high cost and inadequate services. The Government"s proposals will give the opportunity for the many able managers in the bus industry and for others, with enterprise and initiative, to offer better services to the public, at less cost."

My Lords, that concludes the Statement.

Lord Underhill

My Lords, I wish to thank the noble Lord the Minister for repeating this Statement made by his right honourable friend in the other House. I also wish to thank the Government Whips for letting me have a copy of the White Paper at 3.50 p.m., which I have not read because I anticipated that the Statement might be read soon after then. Frankly, 79 pages cannot be dealt with in answer to a Statement. Is it correct that the press had a briefing with a copy of the White Paper at 11 o'clock this morning? If so, should not that facility also have been made available to Members of the House?

This is an appalling Statement. It reflects a polemical stance rather than one concerned with transport considerations, and will be disastrous for the future of a nationwide bus network. General praise has been given from time to time to the National Bus Company. Why, then, is it now proposed to fragment the National Bus Company and to sell off the separate units? How many small units will there be? What will happen if one unit, because it is in a national network, is unprofitable and cannot be sold? Do the Government understand the principles of cross-subsidisation? Do the Government recognise that a free-for-all will mean that the private sector, which is obviously there for business purposes, will be interested only in the profitable routes at the most remunerative times? This must naturally be to the detriment of the network, particularly in the rural areas.

As the list of Ministers presenting the Statement includes the Secretary of State for Scotland, and as there is no reference to the Scottish Transport Group, will the Minister confirm that there is to be no interference with the Scottish Transport Group set-up? Are the Government relying upon what has happened in the three trial areas, even though these are untypical areas? Where is the report on those trial areas? We were promised a Transport Road Research Laboratory evaluation of the trial areas. We have not seen it. Is the Minister aware that, based on the Secretary of State's recent speeches, which seemed to forecast these proposals, the Association of County Councils declared its opposition to any free-for-all deregulation and stated that, in its view, this would have a damaging effect on transport in the counties? Has not the Association of Metropolitan Authorities, of which I have the honour to be the president, also declared its concern at the Minister's forecasts and declared its complete opposition? In addition to the opposition voiced by these two important local authority associations, is it not the case that the professional bus men have also opposed these projected proposals as advanced in the speeches of the Secretary of State?

Has not the Coach and Bus Council, which represents more than 90 per cent. of all the operators—public, local authority and independent—voiced its warning at deregulation and free-for-all proposals? Does not the report of the National Bus Council, although rather restrained, also make it quite clear that in their view the proposals will be disastrous for a national bus network? Is the White Paper a consultation paper, or is there to be consultation only on how to carry the proposals into effect? If it is for consultation, if all professional bus men and the local authority associations oppose the White Paper proposals, will the Government not proceed with their projected legislation?

The Statement refers to the maintenance of standards of safety by independent operators. Why is there no reference in the Statement to no less favourable working conditions, pension schemes and training? If there is to be fair competition, surely those must be maintained as well: yet there is no reference to them in the Statement. A consultative letter to the local authority associations and the GLC, issued only on 6th July, stated that, transport supplementary grants for 1985–86 will be paid only on capital highways expenditure". Does that statement, together with the references in today's Statement, herald an attack on subsidies to transport as a public service?

Reference is made to the setting up of district council transport companies. What is really meant by the words, subsidy will be provided only through tenders"? Does the Minister recognise that local authority bus undertakings take into consideration social benefits? Does he further recognise that it would be disastrous if those are obliterated in the interests of purely private sector profit operations? Is not the attack on the Passenger Transport Executive structure in total conflict with the successful transport policies which have been brought to the metropolitan conurbations?

These are only a few of the questions which arise from the Statement. I am certain that there will be very many more when we have had time to read the White Paper. As professional men oppose these proposals and as local authority associations oppose them, I must ask that before there is any suggestion of legislation on the lines of the Statement there should be a full debate on the White Paper proposals, which I am certain no one other than the Minister has read.

Lord Tordoff

My Lords, we, too, are grateful for the courtesy of the Government in repeating this Statement in this House. It is extremely difficult for us to review even the Statement at such short notice. It is certainly not my intention to embark upon a Second Reading speech at this moment. I must say that I am greatly impressed by the grasp of the noble Lord, Lord Underhill, of the whole subject, but I do not believe that now is the time to go into the sort of detail which he has raised with the Minister. It seems to me that there are likely to be many other matters contained in the White Paper which relate to the Statement and to the questions that he has asked. If I may, I shall confine myself to making one or two general remarks rather than asking detailed questions.

There are things in the Statement with which one can concur. The statement that rural bus services are causing serious concern is something on which no-one would cast doubt. The question of how that should be put right is a matter which we must debate at much greater length later on. The statement that it is the users of buses who should come first and that they are the less well-off members of our society is also true. It seems to me, though, that one of the ways forward in public transport is to encourage some of the better-off members of our society to use public transport by making public transport more efficient and more attractive to the population at large.

It is a dramatic Statement in many ways, and what it says about the abolition of road service licensing throughout Great Britain is something which we will have to consider with the greatest care. It is a major step in the reorganisation of buses in this country, and I certainly would not want to go into detailed comment on that at this stage. Then there is the statement that rural passengers will benefit from competition. I must beg leave to question that in at least one respect.

I think the possibility of introducing new forms of public transport in rural areas is greatly to be encouraged, and one looks to the White Paper to see what ideas are proposed. But I must say that, if it is going to be just a market economy in rural transport, then I fear that rural passengers will suffer, because in many of these cases the private sector simply will not pick up the rural services which are unprofitable and the rural communities may well suffer because of that.

There are suggestions that there are to be various degrees of funding. The £1 million a year to finance innovation in rural transport is an interesting thought. I just wonder whether £1 million a year is not so small as to have very little impact on a complex problem.

The National Bus Company's reorganisation was something which I think many of us expected. When a number of amendments that I put down to the London Regional Transport Bill were so firmly rejected by the Government; and, when they refused to consider any possible integration of London Country Bus Services into the London Transport system, one felt that this was a straw in the wind and that one was going to see the break-up of the National Bus Company. Basically, I think that is to be regretted. The National Bus Company has done a very good job in a number of difficult areas over recent years and I feel that it will lead to the disintegration of that very worthy organisation and possibly the loss of a useful contribution to the whole matrix of transport.

The item on taxis seems to me not to go far enough, but again one must look at the White Paper to see precisely what is meant by that. Certainly the use of private hire vehicles and taxis in rural areas to pick up services which rural bus services no longer cater for is an area that we should be prepared to explore.

Let me say in conclusion from these Benches that we do not object to increased competition provided that that competition is fair. We recognise that an element of competition may well, in certain instances, improve the efficiency and the services, and it is greater efficiency that we want to see. But what we worry about is the fragmentation of public transport and the loss of services in difficult areas, particularly in rural areas but also in urban areas.

All I can say at the moment is that we shall need to debate this White Paper when we have had a chance to study it and, as a very minor tributary of the "usual channels", I shall certainly use what efforts I can to ensure that your Lordships are able to debate this matter at an early stage. I do not believe that we should let the summer go by without having at least a preliminary look at this before the legislation is put before us and the whole thing is being hurried through in the next Session. However, I am grateful to the noble Lord for his Statement.

5.12 p.m.

Lord Lucas of Chilworth

My Lords, it is customary to thank noble Lords on each of the main Opposition Benches for their response to a Statement. I very much regret that this afternoon I am not able to do that, because I find that the response of the noble Lord, Lord Underhill, was singularly hostile, which demonstrates to me the inability of the Opposition to meet challenge with change. Quite to the contrary, of course, the noble Lord, Lord Tordoff, while recognising that the Statement and the proposals, so far as he has been able to see them, are dramatic, accepts some of the fundamental principles underlying the White Paper; and I am grateful to him.

Perhaps I may just pick up one or two points because, as both noble Lords have said, we cannot have a debate this afternoon and, in so far as a debate is required, both noble Lords, and indeed your Lordships, will recognise that it is not within my grant to accept or not to accept that suggestion. No doubt the usual channels will meet in due course.

The noble Lord, Lord Underhill, asked a number of questions, and I will try to answer as many as I can within the constraints of time. He asked me particularly about the Scottish Transport Group. If he turns to page 7 of the White Paper—and of course I accept that he has not had time to go through all the pages: it is not usual in any event—he will see there is no suggestion that the Scottish Transport Group is to be disbanded.

He asked me whether the trial areas experiment was the basis of the suggestions contained in the White Paper. No, my Lords: the trial areas are not the whole basis for the policy, but they have provided important evidence about the likely effects of deregulations, particularly in rural areas. In particular, they have shown that there is considerable room for subsidy saving. There was 38 per cent. saved in Hereford and £65,000 from education budgets on the cost of school seasons. But, contrary to the fears of critics of some two or three years ago, there has been no collapse of services, and indeed our information is that the service standard is better in many respects.

The noble Lord suggested that there was going to be a "free-for-all". Again, he will see that the responsibilities of the traffic commissioners are to be extended, support for their services is to be improved and there should be no (I use inverted commas) "free-for-all", because that is not what a free competitive society is about.

The noble Lord suggested that the professional bus men, and in particular the BCC, were wholly opposed to what was suggested in the White Paper. That is not so, though it may be his interpretation of what he has learned from recent meetings between professional bus men in the independent sector and from the Bus and Coach Council, both of which had meetings with my right honourable friend the Secretary of State for Transport only a few days ago. It is certainly my department's impression and my right honourable friend's impression that they were fairly enthusiastic about the principles underlying the White Paper. In that context, perhaps I may use the expression that the White Paper, while setting down the Government's policy in this matter and the principles that are to be employed in executing that policy, is, frankly, tinged with a little green, in that many of the details of the implementation of that policy are open to consultation.

The noble Lord, Lord Tordoff, if I may say so with very great respect, took a rather more rational view of my right honourable friend's Statement. He reserves his comment until he has further studied the White Paper. He asked particularly about the rural area and expressed some doubts; but perhaps I may just say to him that we believe the policies outlined in the White Paper will lead to opportunities for smaller operators to enter the field of rural transport without the bureaucracy and regulation that have hitherto prevented them from doing so.

There is, as I repeated in the Statement, a sum of £20 million, certainly in the first year, and a descending scale of additional grant over four years, which should help to "lift off- rural transport services. The innovation grant, while the noble Lord questioned the sum of £1 million, will certainly help to tackle the long-standing problems of service cuts and high fares in rural communities, particularly by encouraging voluntary, or indeed commercial services, which need an injection of what I may call "pump-priming money", and this will be provided by that grant. I think that answers his implied question when he asked whether the rural areas are to be motivated merely by a market economy. The answer is no. The Government are very well aware of the need for the provision of bus services in rural areas, particularly where motor car ownership per household tends to be lower than in the cities and where, for social, business, health and a wide variety of other reasons, there is a need for people to go into the towns and the cities. So I cannot accept that these proposals should lead in any way to a loss of services.

The noble Lord mentioned Amos, but I think he will probably appreciate that when Amos made their two applications to the licensing authorities there were a number of unanswered questions which left the commissioners with no alternative but to refuse the applications. The noble Lord spoke about taxis, and again I think that, if he looks carefully at the earlier pages, although the White Paper is 79 pages long, he will find that nearly all that noble Lords need to concern themselves with is in pages 6 to 9. I think I have answered the questions which both noble Lords have asked me on this matter.

Lord Boyd-Carpenter

My Lords, is my noble friend aware of the fact that the comments of the noble Lord, Lord Underhill, have a strange similarity to those to which I was exposed nearly 29 years ago when I was able to secure some modification of the rigidity of road service licensing? Is he aware that to many of us the Statement made today is not only of the greatest importance but is the culmination of efforts made over many years to relax the elaborate and bureaucratic controls upon bus transport which have had so much to do with both its cost and its inadequacy?

Is he aware, therefore, that the liberation and liberalisation of bus transport will make a major contribution, particularly in the rural areas, where it will give an opportunity for the small operator who is discouraged by all the bureaucratic paraphernalia at the moment to come in and offer locally very valuable services? Therefore, is my noble friend aware that many of us regard his Statement this afternoon as a historic one of major importance?

Lord Peyton of Yeovil

My Lords, while I would not ask my noble friend—

Lord Lucas of Chilworth

My Lords, I wonder whether my noble friend will allow me, first, to answer my noble friend Lord Boyd-Carpenter. I am most grateful to my noble friend for his contribution. Of course, noble Lords will recall that my noble friend Lord Boyd-Carpenter made such a distinguished contribution in the field of transport and of public transport not so very many years ago, and the impact still remains. I am aware of very many of the points which my noble friend made, and, of course, I concur with him. He is quite right in saying that this is an historic occasion. This sets a new pattern, a new train, so to speak (although we are talking about road transport) in a system that has remained unaltered for 50 years, and it is to be welcomed. Since many of those in the road transport industry have great innovative and entrepreneurial skills, I have little doubt that the rewards which we seek by the White Paper will be achieved.

Lord Peyton of Yeovil

My Lords, while it is certainly not my intention to invite my noble friend to take another deep dive into the detail of this matter, I should like to ask him whether he was particularly struck by the old world detachment from reality shown by the noble Lord, Lord Underhill, in his long catechism of questions, the underlying gist of which—that all is at present well with the bus industry—is something which is far from the case.

Lord Lucas of Chilworth

My Lords, again I am grateful to my noble friend Lord Peyton. He, too, had a distinguished career as a Minister in the Department of Transport, and I accept what he says. I can only underline what I said in my first response to the noble Lord, Lord Underhill. He appears to be staying 50 years behind, and I am very surprised and disappointed.

Lord Teviot

My Lords, is my noble friend aware that quite a lot of us have been rather loquacious on this subject this afternoon? However, is my noble friend aware that the noble Lord, Lord Underhill, got his White Paper at 3.50 p.m. and I did not get mine until 4.30 p.m.? They were dutifully sitting on the windowsill in the Printed Paper Office, bound but not open at that time. So the noble Lord was privileged. The noble Lord was able to ask a lot of very important questions which my noble friend has answered. However, my questions to my noble friend are much more trite.

I wish to know, first, that Government policy is that the essential needs of the travelling public for public transport will be paramount; secondly, that the quality of service that we now enjoy in public road passenger transport will be maintained; and, finally—a rather different subject—I should like to know about the withdrawal of bus services. My noble friend will be aware that this bus policy document is not entirely to do with the fragmentation of the National Bus Company; it contains a lot of other important points. My noble friend will be aware that whenever there is a withdrawal of permanent rail services there is always an outcry. I should like to know what policy the Government will pursue if bus services are to be withdrawn for one reason or another.

Lord Lucas of Chilworth

My Lords, I think my noble friend has asked me four questions, and I can deal with them quite shortly. The user is particularly paramount in our consideration of bus policy, and, as he no doubt studies the White Paper over the weekend or over the next weeks, he will see that that is so. It is the user, then the operator and so on. My noble friend asked whether there will be a maintenance of the quality of public transport services which we now enjoy. I have to say to him that many do not enjoy it, because they find it inadequate; but I can see no reason why that minimal standard should not be maintained. The whole object of the proposals in the White Paper is, to improve the quality of the service which users enjoy.

My noble friend also asked me about the withdrawal of services. I think that that will depend very much on the conditions which occasion a withdrawal. But he will notice in the White Paper that it is necessary for operators to register their service with the traffic commissioners—what I might call the timetable and the fare structure. Before being granted a licence, they will have to accept as a condition of licensing and registration a period in which it will not be possible to withdraw a service. In the unhappy event of the withdrawal of a service, it will be for the local authority to determine the method by which that service should be replaced.