HL Deb 25 June 1992 vol 538 cc573-84

4.50 p.m.

Baroness Hamwee rose to ask Her Majesty's Government whether they will take action to secure the future of the river bus operating on the Thames between Chelsea, central London and Docklands.

The noble Baroness said: My Lords, there are many long-term issues surrounding the river bus but today's debate is essentially a short-term question and I am grateful for the opportunity to raise it at short notice because it is a matter of urgency.

The river bus service which runs now from Docklands to central London and Chelsea is provided by the RiverBus Partnership and one of the two partners is Olympia & York Neptune Limited. Olympia & York has provided funding for the service since 1989 but is now in administration. Although the services have continued, further subsidies are necessary to enable the partnership to trade beyond the end of this month.

Negotiations have started with other parties and contributions are sought from various potential partners. However, I have tabled this Question to ask the Government to assist and—I suppose literally— tide over the service to give a reasonable opportunity for negotiations to succeed. I am aware that the Government have been involved in some talks and I hope that the Minister will be able to give us some comfort by telling us that they are prepared to facilitate the continuation of those discussions.

I understand that some £300,000 would be required to cover projected losses for the next three months and during that time the river bus management should be able to determine whether a buyer can be found for the service.

I should not wish it to be thought that I am entirely unconscious of the broader issues. Perhaps I may mention them briefly. The use of the river as a mode of transport is one of which those of us who have to cope with London's traffic are well aware. It is an excellent and underused mode to ease congestion in London. River services are reliable. They are not affected by other modes of transport. To put it in less technical language, once you get on a boat it is able to keep to a timetable and is not, as is a bus or a car, liable to be held up by the traffic.

River transport is extremely responsive to demand. New piers can be provided within about six months or traffic can be directed to other piers. That is a much shorter period of time than is required to build a new station or to provide a new railway line.

It is entirely a good thing if the modes of transport available in London can be diversified and coordinated with other modes. Many people to whom I have spoken about the river bus service over the past few years, with no thought of ever mentioning it in this House, have told me how helpful it would be if its ticketing arrangements were co-ordinated with Capital Cards and, more recently, with the Docklands Light Railway. While I know that those matters are for London Transport and the other service providers, that is an area in which the Government can at least provide encouragement.

There is of course—and this is a subject which we discussed in a broader sense—a need for considerable subsidy in transport in our capital city. We must have less public transport in our capital than almost any other capital city.

There is one major long-term consideration on which it is worth dwelling for a few moments; that is, the expectations of those who are now, and who will shortly be, working in the Docklands. They have been encouraged to move there very largely because of the promises—and they have understood them to be promises—by the Government as to the facilities that will be provided. That is not a point which I make entirely from my own imagination. It was put to me in just that way by the chairman of one of the major tenants. He said that he took the decision to move his company to Docklands on two major bases: first, the developers' promises about the quality of the environment; and, secondly, the Government's promises about the energy and effort that they would put into Docklands. He compared Docklands with La Defense in France and with Frankfurt. He felt that tenants had not received the support from the Government that is available in other countries. Of course, as an employer the Government will wish to know that their own civil servants, if they move there, will have the facilities that other tenants have expected.

The implications for the area of the loss of the river bus are considerable and my noble friend Lord Tordoff will speak in particular about the implications for the London City Airport. This is not a question of bailing out Canary Wharf. It is a question of recognising the needs of tenants, and perhaps a belated recognition of the need for infrastructure, for such a major development to succeed.

The same businessman told me that 120 of his 400 staff daily used the river bus service. They use it because of the inadequacy of other systems, particularly if they come in by train to Waterloo or Charing Cross and then need to go on to Docklands. He said that if the river bus is lost, his company will lose staff. I taxed him on that because it seemed to me that in a recession that was a fairly extreme comment to make. However, he told me that he was quite certain that it would be so and that staff would not be able to cope with the travelling and, therefore, his company and the individuals would suffer. He told me also that in surveys of staff of prospective tenants the river bus has proved an important factor in the willingness of staff to move to the area.

The river bus service has improved hugely since its early days. It provides a punctual and reliable service and a safe environment for passengers. I have been struck by comments about how women are glad to have the service because it means that they do not have to cope with the nasty changes, particularly at Waterloo. It has extremely efficient ticketing and operating practices. It is responsive to passenger demand and has modern passenger information and control systems. Much has been invested to achieve that. The data track system which is used reads to me as though it is real state-of-the-art computerised stuff. I understand that each vessel transmits its speed, position and direction every 54 seconds. That is not done just for the sake of it. That information is linked with screens at the piers so that passengers know the arrival time of not just the next vessel but the next three vessels.

There are three main markets for the service: commuter and business travel, access to and from the London City Airport, and tourists. During 1991 there were more than 400,000 passengers. Assuming that the service continues, this year it is anticipated that there will be 800,000 passengers; in other words, in the period January to May 1992 there has been an 89 per cent. increase over the same period in 1991.

I said that I am raising only a short-term matter today. I should like to see the river bus service continue. However, access to Docklands by other means will shortly improve. The new management of DLR will provide improvements and there will soon be new signalling arrangements which will enable the number of services to be increased. The Beckton Link has a target date for opening of next May and the same date is the target for the Limehouse Link for road access.

In the meantime, the continuation of the river bus is important in real terms. If it goes into liquidation, it is likely to be dead forever.

4.58 p.m.

Lord Teviot

My Lords, it is a pleasure to follow the noble Baroness, Lady Hamwee, on this extremely important subject; namely, the river bus. I hope that the Minister will give some encouragement as regards its continuation. It should not continue as a service which is regarded as something of an Aunt Sally but it should be a service which has teeth.

The noble Baroness, Lady Hamwee, mentioned the Travelcard. I have been in contact with London Transport. There have been exchanges between the operator and London Transport but difficulties were encountered as regards Section 12 of the London Regional Transport Act 1984 which provides that no subsidies should be given by outside bodies unless it is a commercial service. Perhaps my noble friend will clarify that point. I tried to contact British Rail. However, I left it much too late. I was hanging on awaiting a reply and I have not yet received an answer. I am sure that British Rail could help. Many of us travel in to London from the country. We are thinking of off-peak rather than on-peak services. The peak services are well patronised; it is the off-peak services which cause anxiety. Perhaps British Rail could help by providing a service similar to that offered to Greenwich, and other places. That would help enormously.

Since including my name to speak in the debate I have spoken to various noble Lords—I do not see them present—who said that they use the service, particularly from Chelsea, and hoped to be here to say how good it is. However, that is not enough. I do not criticise my noble friend, but transport must be made attractive and must be well packaged. We may all complain of British Rail at times but its marketing policy is excellent. Its ThamesLink service has exceeded all expectations and its off-peak travel schemes are extremely good.

Perhaps there is some way in which the operators or the Government could encourage people to travel. That would assist not just in the short term—as the noble Baroness said—but would help in the long term also. That is what we must look at.

I hope that we are not in a "Wimbledon" situation —the final set five games to love, 40 love down. That would be a great pity and the staff must be extremely worried. Such situations have been reversed in the past, as we would find if we looked in the annals of sport and other areas. For the sake of the public and all the people who use the service, I hope that it will continue.

5.3 p.m.

Lord Boyd-Carpenter

My Lords, my name is not included on the list of speakers but perhaps I can intervene before the party representatives make their contributions. The noble Baroness, Lady Hamwee, has done the House and London Transport a good turn in raising the matter.

I have found the water bus an agreeable and expeditious method of travel. It would be a pity if, having made a promising start, it were to pack up. I am always hesitant in urging government support for activities, not least because—as some noble Lords may recall—I spent a good deal of my ministerial life rejecting such applications. However, I feel that the noble Baroness has made out a case for trying to ensure that the service does not collapse in the short term and to give it another chance to succeed.

The river bus is a good method of travel. It is efficient. It is fascinating to reflect that centuries ago the river was used far more as a means of transport through London. In the Middle Ages and later most people of substance owned a boat and proceeded to this Palace, to the Tower, or to various other points which could be reached easily by boat. It seems to me that in recent years we have made remarkably little use of the river.

I would regret the service being discontinued. I hope that my noble friend the Minister—I appreciate the restrictions under which no doubt he is operating —will not slam any doors.

5.4 p.m.

Lord Tordoff

My Lords, I was delighted to hear that intervention from the noble Lord, Lord Boyd-Carpenter. I am almost inclined to suggest that I and the noble Lord, Lord Clinton-Davis, should not speak while those words are ringing in the Minister's ears. Coming from the noble Lord, Lord Boyd-Carpenter, it was a powerful intervention.

However, I should like to deal with one specific area —the impact of the possible loss of the river bus on the London City Airport. I have long been a supporter of the City airport because anything that spreads the load of air traffic in the Greater London area is to be welcomed.

The City airport provides a specific service to people working in the City who, in theory, are able to travel to the airport and on to the Continent comfortably and quickly. The number of people using the airport has been growing steadily over recent years. The airport is becoming viable; more aircraft are coming in and more companies are beginning to base their activities there. In 1988 the throughput of passengers was around 133,000; it is now up to 200,000 and expected to reach 500,000 by 1994.

At the moment the means of reaching the airport are inadequate. My noble friend said in her excellent introduction that action is afoot for improving the Docklands Light Railway, extending the Beckton link and installing the road link through Limehouse which is due in May next year. They are not in place yet. The result is that the river bus at the present time is an extremely important link. It carries up to 27 per cent. of the passengers travelling through the City airport. That is a large number of people.

A number of letters passed to me speak for the airlines better than I can. With your Lordships' permission I shall read from one or two. The first, from Flexair, states: one of the airlines that has made a substantial investment in developing routes between The Netherlands and London City Airport, we are concerned about any diminution in the present ground transportation facilities from Canary Wharf into the centre of London and any retardation of the development of the Dockland Light Railway and the Jubilee Line. The Jubilee line has not been mentioned today, but the whole question of that line is now in some doubt. It is my belief that it must and will be built in some way or other. But it places another question mark over that whole area. The letter continues: Certainly, our immediate worry is the fate of the RiverBus service … which many of our passengers from large multinational companies have found to be a most convenient means of getting from London City Airport to their London offices within one half hour … It would be extremely damaging to us and the airport if this service should be reduced or cease to operate". A letter from Air France says much the same thing.

It reads: As you may be aware a substantial proportion of the passengers using the London City Airport now use the River Bus which provides a fast and efficient way of reaching the airport. In view of the difficulties there have been with the development of conventional means of access to the airport I feel sure you will agree that it is vital for the continued expansion and viability of London City Airport … that the River Bus continues to operate". A letter from Crossair states: As the first jet operator into London City Airport I write with concern at the threatened stoppage of the River Bus service … Crossair passengers who have been using the services from Lugano and Zurich since 31 March are reporting total satisfaction with the River Bus service. Indeed some 57 per cent. of our passengers are using the river as their> transport to the City, a far higher percentage than we originally envisioned … Crossair is concerned that the cessation of River Bus services may have a detrimental effect on our services and indeed on the future of London City airport". Those are unsolicited testimonials from airlines which are slowly building up the credibility of the airport and their own services and which I fear will be severely damaged should the service cease. It needs only one of those services to decide that numbers of passengers are declining and to pull out to see the potential collapse of the whole of the London City Airport experiment. That would be extremely sad.

In addition to what my noble friend and the noble Lords, Lord Teviot and Lord Boyd-Carpenter, said, I ask the Minister to convey to his honourable and right honourable friends the fact that it is not just a subsidy for the sake of subsidy; it is not simply a way of keeping in being a rather quaint means of transport as compared with the usual means of transport in London. It is a vital element in building up a tremendous asset for the City of London; namely, the City of London airport.

5.9 p.m.

Lord Clinton-Davis

My Lords, the House is indebted to the noble Baroness, Lady Hamwee, for raising this important issue, which is important in the terms that have just been described by the noble Lord, Lord Tordoff, and as reflected in the characteristically incisive contribution from the noble Lord, Lord Boyd-Carpenter. I fear that I shall disobey the injunction of the noble Lord, Lord Tordoff, that I should shut up, especially since he declined to obey his own injunction himself.

This subject is but one part of the far wider transport issues affecting London, among which the Government have had but one major success: they have concealed their policy objectives and philosophy with remarkable success. However, as we are considering the very real crisis facing the river bus service, I shall not go further into that matter, tempted though I am.

The fact is that we are faced with the closure of this service—perhaps next week. Perhaps the Minister will let us know whether the Government can confirm that the end of the month means the end of the river bus service. The service is widely used and, as the noble Lord, Lord Boyd-Carpenter, has said, it is convenient. It is also an environmentally friendly way of travelling, especially when one considers how our streets in London are so desperately congested. It cannot be that we should easily allow the situation to develop in this way.

I should like to ask therefore whether, as the Financial Times reported, a potential bidder is on the scene. I believe that the bidder is called White Horse Ferries. Has that body actually made a bid for the service; and, if so, are the Government inclined to take the offer seriously? How would the Government propose to assist in that? It is quite clear that the river bus service has made extensive losses over a long period of time—since the mid-1980s, and I do not believe that it was helped adequately by the property developer concerned, Olympia & York.

Although this is not an immediate matter, it is nonetheless significant so, if the Government are proposing to transfer civil servants to Docklands—most of them against their will, I suspect—how are they proposing to deal with their obvious transport requirements? Perhaps I may add in parenthesis that the best thing might be to ensure that Ministers accompany the civil servants—because then something would really be done to ensure that the infrastructure requirements are fulfilled.

It is as well to contemplate this point: in many ways, this case represents a test of the Government's transport and environmental credentials. People will say, "If the Government are not disposed to help in this regard, it does not say much for the possibility of maximising the use of one of London's greatest potential assets for transport—or so it used to be in the old days—the river Thames." The river is a potential asset for commerce and leisure, as well as for transport purposes.

Having raised this important point, the noble Baroness, Lady Hamwee, also raised a significant incidental point. I say "incidental" without in any way seeking to diminish its significance. I refer to the question of integrating the ticket system, which was also raised by the noble Lord, Lord Teviot, in order to allow the river bus to join the Travelcard system.

The Government should not adopt a hands-off attitude here. All these matters relate to the Government's responsibility for handling an important aspect of London's transport system. We now have a Minister who is responsible for transport in London, and he has expressed interest in using the river. Therefore, there is an obligation on the part of the Government to ensure that those sentiments are matched with appropriate action. There can be no doubt at all that, although it would not be a disaster, it would be a setback for London if we were to be deprived of this service. As I have said, it has assumed a greater significance because of the Government's own proposals to transfer civil servants from some of the Government buildings here to Docklands.

The points that were raised by the noble Lord, Lord Tordoff, about London City Airport are matters of considerable significance to us from an international point of view. I happen to be a supporter of the City Airport. What I like about it is not very helpful to the airport—I like its emptiness, but we want to change all that. That characteristic is unknown to me when visiting any other airport in Europe. I believe that the airport has great potential but that that potential would be negated if the river bus service disappeared.

The noble Lord, Lord Tordoff, cited a number of representations that had been made to him and, I hope, to the Government also. Although I was not the recipient of such prolific correspondence as the noble Lord, Lord Tordoff, Mowlem, which played a considerable part in developing City Airport and therefore has a vested interest in this matter, has raised a significant point with me. It stated: While we can all understand that the Government should not be seen to be bailing out the O&Y creditors, the fact that Canary Wharf tenants would benefit should not prevent the use of public funds to subsidise a transport service important to Docklands as a whole until such time as the infrastructure being provided by the Government is in place". In my view, that is a very powerful argument.

It is incumbent upon the Government tonight to answer the host of points that have been raised in this short but nevertheless extremely important debate in which I am very happy to have participated.

5.17 p.m.

Viscount Astor

My Lords, the noble Baroness, Lady Hamwee, has raised an important issue today and we are all grateful to her for doing so.

The river bus is a transport service owned and operated by companies in the private sector. It is in difficulties now because one of those companies has gone into administration and may no longer be in a position after the end of this month to subsidise the services to the extent that it has in the past. However, I understand that several approaches have been made to the RiverBus Partnership and its owners with a view to maintaining the services. The London Docklands Development Corporation is using its good offices to bring the various parties together, and I very much hope that they will be successful in facilitating an outcome which will secure the future of the river bus services.

I understand the important worries that are felt by those who make use of the river bus service at present, and those that have been raised by your Lordships today. The river bus provides a pleasant and convenient means of travelling from Chelsea to Westminster and the City, and from central London to Docklands. Perhaps it would be helpful if I set out some of the background to the river bus operation and explain the Government's initial reaction to the suggestion that the service should be maintained by public subsidy.

In 1989, Thamesline, the predecessor to the river bus, was in financial difficulties, but was rescued principally by Olympia & York and P&O in partnership. The rescue package amounted to £2.5 million, of which the Department of Transport provided £0.5 million in grant. The latter was a one-off payment, not an operating subsidy. Since then River Bus has operated as a private sector public transport service, subsidised, I understand, by Olympia & York to the tune of £3 million or more per year. Now that the administrators have been called in to deal with the problems of Olympia & York, there is concern that the River Bus service might cease to operate. At present the administrators are maintaining a subsidy but that may not continue for very much longer.

River Bus, then, has been subsidised by development companies. It has been used by Olympia & York and P&O as one of the ways in which they can make their developments more attractive to potential customers. They have no doubt weighed up the benefits of there being a service available to those needing to travel to and from Chelsea and Canary Wharf and have decided that those benefits outweigh the costs of subsidising the River Bus service. That decision has been a commercial one. It suited their book as developers to subsidise the service.

Because River Bus is now apparently in danger of losing that subsidy, various interests have suggested that the Government—in reality the taxpayer— should take the developers' place. The Secretary of State for Transport received the first approaches. He was asked whether public money could be made available in order that River Bus might continue to operate. Government must, of course, look at matters like this from the point of view of value for money. When River Bus is viewed solely as a transport service to convey people from A to B, the case for subsidy is difficult to justify. The total number of passenger journeys on River Bus last year was no more than 400,000. Of those, only 180,000, or about 400 journeys on each working day, were for business travel. Thus, less than half the total number of River Bus journeys were used for commuting to Docklands. This is in sharp contrast to patronage of the Docklands Light Railway which carried more than 7.5 million passengers in 1991.

The River Bus is very popular with tourists. The growth in patronage of River Bus, which seems likely to reduce the level of subsidy from the £7.50 per journey which was needed in 1991, is largely as a result of the increase in tourist traffic. There can be no case for Government subsidising travel facilities for tourists whose needs can of course be met by other craft and by other means. We have concluded that, in simple transport terms, direct subsidy of River Bus would not represent good value for money for the Government.

The London City Airport's owners and management are arguing that the airport's future is linked to the future of River Bus. But, as the noble Lord, Lord Tordoff, reminded us, only about a quarter of airport users travelled there by River Bus last year. The River Bus does not operate direct to the airport but to a pier at Canary Wharf from where there is at present a courtesy bus service to the airport. The Docklands Light Railway also has a station at Canary Wharf. The Government have invested more than £450 million in the Docklands Light Railway and are continuing to devote resources to enlarge the network and improve its reliability. The Docklands Light Railway is an integral part of the public transport network serving London. It has a direct line to the City; it is included in the Travelcard scheme; and, as I have already said, it is the means by which most people travel to Docklands. We believe that the airport case is not sufficient to tip the balance. However, I appreciate the points made by the noble Lord, Lord Tordoff, about the use of the airport.

The private sector partners in River Bus clearly considered that a relatively high level of subsidy was worth paying. If River Bus was important to Olympia & York, perhaps it will prove as important to the administrators and they will continue the subsidy. Olympia & York will either survive or be succeeded by new owners with an interest in the success of their investment in Docklands; they might well consider it worthwhile continuing the subsidy. There is a good case for arguing that the private sector should organise itself to secure the continuation of a service from which it is the prime beneficiary. There are signs of that happening. As I said earlier, the London Docklands Development Corporation is working to organise immediate support from interested parties. The Government are aware that, for the longer term, there are potential buyers interested in acquiring and operating River Bus. I can tell my noble friend Lord Boyd-Carpenter that Steven Norris, the Minister with responsibility for transport in London, will be considering the use of the river for our transport needs. He will be looking at the matter very carefully.

It has also been suggested that the River Bus should come under the control of the London Docklands Development Corporation, as did the Docklands Light Railway in April this year. But as I have said, there is a difference between the two operations. The Docklands Light Railway is a mass people mover, used by the majority of commuters into Docklands. The River Bus is used by only 8 per cent. of Docklands employees. It is, however, true that the LDDC is above all concerned with the success of Docklands and it is for that reason that it has been using its good offices to try to arrange for the service to continue for a further short period while discussions are continued with potential purchasers. I am sure that your Lordships welcome that helpful initiative by the LDDC and others concerned to see River Bus stay afloat and in service. We hope that they will be successful. But let me emphasise—the long term future of River Bus is as a commercial service operated by the private sector to serve the interests of the property owners and tenants of developments along its route as well as tourists visiting Docklands. It would be too easy an option to put responsibility for River Bus on the taxpayer.

Lord Clinton-Davis

My Lords, before the noble Viscount completes what he has to say, he conceded that 25 per cent. of passengers using the airport utilise the River Bus. Does he not recognise that the remarkable experiment that City Airport represents could be struck a dire blow as a result of the loss of so great a percentage of the travelling public using the airport? What does he propose to do about that?

Viscount Astor

My Lords, I have given my answer to the noble Lord. He was quite right about the 25 per cent. I have also pointed out that there are many other ways of getting to the airport. The River Bus is certainly not the only way and it is not the most crucial way to get to the airport. It is not the way that most people use.

My noble friend Lord Teviot asked me about the Travelcard scheme. The Travelcard is operated on a voluntary basis by London Transport and Network SouthEast. They have considered the case for including River Bus in the scheme and have concluded that because it makes a substantial loss they would end up subsidising the service. That would be outside their powers. As I said earlier, we must await the outcome of the present discussions.

Baroness Hamwee

My Lords, before the Minister sits down, can he confirm whether the concern about the subsidy being withdrawn or not continued beyond the end of this month is justified? If that is so, in the context of the encouraging words he has given—directed perhaps beyond us to the LDDC—perhaps he would at least pass on to his right honourable friend the Secretary of State and indeed to the Minister with responsibility for transport in London the words that have come from all sides of the House, not with regard to long-term subsidy but with regard to assisting the service to continue until its funding is more secure.

Viscount Astor

My Lords, I take very much to heart the points raised by the noble Baroness. We hope that the present discussions will be successful. They are continuing at the moment and I can say no more at this stage.

House adjourned at twenty-nine minutes past five o'clock.