§ Lord GainfordMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what evidence they have of innovation in the provision of bus services as a result of deregulation.
§ The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)My Lords, as a result of deregulation about 200 new operators have entered the market. Over 150 towns and cities now have minibus services, and taxi operators are running some 55 local regular services. In addition, 56 innovative projects have been funded by the Development Commission under the rural transport development fund.
§ Lord GainfordMy Lords, I thank my noble friend for that Answer. What has been the result since 26th January when the transitional period ended and the public feared massive cuts? What will be the prospects in the future now that competition is going ahead?
§ Lord Brabazon of TaraMy Lords, at the end of the transitional period in January, there were over 50 additional services registered, so the fears of those who thought that there would be massive cuts were quite wrong. As regards new competition, particularly in the minibus sector, there are several examples. For instance, in Manchester, following the introduction by a private company of a new minibus service with 200 vehicles, the established local operator was stimulated into responding with his own minibus service. Therefore, there are clear signs of the success of competition.
§ Lord Dean of BeswickMy Lords, is the Minister not aware that bus users in the metropolitan areas are of the opinion that there has been a deterioration in services since deregulation? While it does well for him to quote additional buses and companies, will he tell your Lordships' House of any material gain to the consumer and the traveller as opposed to the bus operator?
§ Lord Brabazon of TaraCertainly, my Lords. The figures that I gave in the original Answer show that competition is working to promote new services which are there at the response of the customer. Therefore, for the first time in many years the market is responding to the needs of the customer rather than to those of the bus operator.
§ The Earl of LauderdaleMy Lords, does not my noble friend agree that the minibuses in London have been of great benefit to many people? However, will he say something about the situation in Glasgow and Edinburgh?
§ Lord Brabazon of TaraMy Lords, I thank my noble friend for his question. I do not have specific information about minibus services in Glasgow or Edinburgh. However, I am aware that in Glasgow there has been keen competition among the operators which has resulted after a certain amount of difficulty initially in an increased service all round.
§ Lord Taylor of BlackburnMy Lords, may I invite the Minister to go to Lancashire to see how the operators are discontinuing the half-fare services for children? They are now charging children the full price rather than the half-fare that they enjoyed previously.
§ Lord Brabazon of TaraMy Lords, whether or not I accept the noble Lord's invitation to go to Lancashire, it is a fact that local authorities have saved over £40 million in subsidy since the deregulation of bus services. It is for local authorities to decide how to spend their money. If this has happened in the noble Lord's area, it is a matter that should be taken up with the local authority. It certainly has the money to spend.
§ Lord Boyd-CarpenterMy Lords, apart from the saving in subsidy, will my noble friend say what has been the saving to public funds from the standing down of much of the licensing system?
§ Lord Brabazon of TaraMy Lords, I cannot do so without notice. I have already quoted the saving to local authorities in the form of subsidies. However, despite the savings, we have increased the amounts made available for safety checks by 22 per cent.
§ Lord HoosonMy Lords, has the Minister any figures for the services lost in the country nationwide, and has he any figures to show whether the average fares have dropped?
§ Lord Brabazon of TaraMy Lords, I have no figures, but in general terms the average fares are broadly unchanged. As regards services, there has been a considerable change round as markets adapt to take care of the needs of the customer.
§ Lord BeloffMy Lords, is the Minister aware that both the frequency and reliability of Brighton bus services have much improved since deregulation? I now feel thoroughly justified in the time that I spent on the Bill deregulating them.
§ Lord Brabazon of TaraMy Lords, I can only agree with my noble friend. I am sure that the experience is shared in many other parts of the country.
§ Lord TeviotMy Lords, in regard to innovation, which is what this Question is about, is my noble friend aware that the exclusion of buses with fewer than 12 seats from the benefit of value added tax zero-rating is a restraint on innovation? Is he also aware that 789 projects like Lincoln Limousines, which Ministers have described as being a very good example, are suffering from having to put their fares up by 15 per cent? Does he agree that it would be a good idea for all local bus services to be zero-rated?
§ Lord Brabazon of TaraMy Lords, I agree that it may seem anomalous for larger coaches and buses to be zero-rated while a local service operating with a vehicle carrying fewer than 12 passengers, such as mentioned by my noble friend, must bear VAT. However, VAT does not lend itself to fine tuning, and the present dividing line has the advantage of being simple and clear in its applications. To replace it by some more sensitive definition of socially valuable services would, I fear, result in a far more bureaucratic system.
Baroness SharpiesMy Lords, can my noble friend say how many minibuses have facilities for the disabled?
§ Lord Brabazon of TaraNo, my Lords, not without notice.
§ Lord Carmichael of KelvingroveMy Lords, I am sure that the Minister will agree that it is still early to make final decisions on the efficiency or otherwise of the Bill. The Minister must also be aware hat a great deal of shaking down has still to be done. He suggested that the situation concerning Strathclyde, for instance, had now settled down. However, this morning's Glasgow Herald states that there will be yet more alterations to services as from next Sunday, and that more than 200 routes have already been abandoned or changed by some nine operators since the bus war began. I hope that the Minister will in time give a full report to the House as regards the bus situation so that we can debate the matter fully. A great many problems still arise—
§ Lord Carmichael of KelvingroveMy Lords, is the Minister aware that the work for local authorities as regards tendering for new services is becoming very time-consuming and expensive? That is where at least part of the £40 million of which he spoke so happily is going.
§ Lord Brabazon of TaraMy Lords, I still think that there will be considerable net savings. If the local authorities must spend more on the tendering proposals in the initial period, they will have plenty of money to spend later. Regarding a report of progress so far, your Lordships will be aware that a preliminary report has been published and a copy was placed in the Library a little while ago. A further report following the ending of the transitional period is expected to be published in the summer.