Bus Industry: Privatisation (Hansard, 3 February 1997)

§ The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen)
My Lords, yes. The Government firmly believe that the travelling public and indeed the taxpayer have benefited substantially from the privatisation and deregulation of the bus industry. They have brought greater operating efficiency, introduced the benefits of competition and innovation in meeting passenger needs and given a reduction in the burden on the taxpayer of subsidising the industry.

§ Lord Clinton-Davis
My Lords, I thank the Minister for that extraordinary reply. Is he unaware of the fact that a government-appointed committee has in the past few days reported lower service quality, vehicles that are too old, unreliable services, loss of ticket 1434 interchangeability, lack of information for the travelling public and fares higher in real terms than before deregulation? How does he square that criticism with his response?

§ Viscount Goschen
My Lords, I do not believe that that is a fair summary of what the report says. We believe that it is a useful contribution to the debate on bus deregulation and on transport generally. What the noble Lord also failed to mention is that bus mileage has increased by around 25 per cent. outside London, bus operating costs per vehicle mile have decreased and there has been a total decrease of 58 per cent. since 1985 in terms of the subsidy to the bus industry. Deregulation and privatisation have worked. We do not say that there are no problems with the operators disseminating information, and so forth, and we are keen to work with the industry to help improve that.

§ Lord Berkeley
My Lords, is the Minister aware that the report from which he has just quoted states that the number of bus passenger journeys has fallen over the past 10 years by 29 per cent.? The report makes eight recommendations on how to improve ticketing and the cost of journeys as between road and rail. Do the Government have any plans to implement what is in the report?

§ Viscount Goschen
My Lords, the report has only recently been published. We shall certainly be looking at it very carefully. We think it is a contribution to the debate on the issue. The fact is that bus usage in terms of patronage of the buses has been declining certainly since the 1960s and possibly since before then. But we have seen a levelling off of that decline. As I said, we have seen a healthy increase in bus mileage driven as well as the innovative type of services—for instance, using small buses—that were not in existence before deregulation.

§ Lord Borrie
My Lords, does the Minister agree that one of the purposes of the privatisation of the industry was to increase competition; that the competition authorities have spent an inordinate amount of time trying to deal with takeover bids and other anti-competitive and predatory activities by bus companies; and that the Government have failed to implement the promises made as far back as 1989 to increase the investigative powers of the Office of Fair Trading and the sanctions available against anti-competitive practices and to enhance competition policy in this country?

§ Viscount Goschen
My Lords, competition is of key importance to the bus industry. Since deregulation and privatisation, we have seen an increase in competition, with all the benefits that has brought to passengers. I certainly have not heard any calls to renationalise the bus industry or indeed to reregulate it. But perhaps the Opposition can put me right if that is not the case.
As the noble Lord correctly said, the Government intend to bring forward legislation as soon as parliamentary time permits. Meanwhile, the Office of 1435 Fair Trading booklet, Restrictive Fair Trade Practices in the Bus Industry, explains the present need and procedures for registering agreements between parties. This is certainly an important area.

§ Baroness Thomas of Walliswood
My Lords, is the noble Viscount aware of the great problem of the non-availability of tickets across different companies, so that one cannot go in with one company and out with another? The problem is having a severe effect on the use of buses in other than urban areas. Can he confirm that the perceived cost of bus transport outside urban areas puts local authorities which are attempting to reduce the amount of travel by private motor car at a severe disadvantage?

§ Viscount Goschen
My Lords, the bus industry is key to the achievement of that aim. The noble Baroness may be interested to hear that 85 per cent. of services are currently run on a commercial basis. Subsidy is given to routes that are not run on a commercial basis. The question of ticketing and the co-operation, or otherwise, between bus companies are central issues and are ones which I understand the report considers. We shall want to respond in fuller detail to the report when we have had more opportunity to consider its recommendations.

§ Lord McIntosh of Haringey
My Lords, on the one hand the Minister acknowledges that bus "ridership" has declined dramatically and on the other hand boasts an increase in the number of bus miles run. Does that not indicate at the very least commercial incompetence, and surely, much more: a decline in the quality of service?

§ Viscount Goschen
No, my Lords, I do not agree. I do not agree that there is any contradiction in what I said. It is important that more bus mileage is run. The innovative services that have come forward have been a factor in the reduction of the rate of decline of bus usage, which, as I am sure the noble Lord will admit, has tailed off over the past year or two.

§ Lord Teviot
My Lords, I agree with my noble friend that, by and large, privatisation has been a success. However, as he has rightly said, after 10 years certain matters have to be looked at. Is he aware that this is far too large a subject to be dealt with by a Starred Question? Does he agree that it might be better to delay the discussion until my Unstarred Question is debated on 10th March when we can deal with things properly?

§ Viscount Goschen
My Lords, I am all for dealing with things properly. Indeed, I relish talking about the bus industry at the Dispatch Box. However, that is a matter for the usual channels.

§ Lord Stoddart of Swindon
My Lords, I am quite prepared to wait until March for the Unstarred Question debate. But, in the meantime, will the Minister go to Oxford to see how privatisation is working there? If he 1436 does, and manages to get through the air pollution and noise pollution, will he make inquiries to see whether the law of diminishing returns is operating in that city?

§ Viscount Goschen
My Lords, from time to time I go to Oxford, but I am sure that my colleagues in the department with direct responsibility for this area of policy are fully aware of developments there.

§ Lord Clinton-Davis
My Lords, perhaps I may recommend that, before 10th March, the Minister reads the report to which I referred earlier? Does he agree that it makes very serious criticisms? Therefore, what is being done to deal with them instead of doing so, as the Minister has done, in a somewhat complacent way?

§ Viscount Goschen
My Lords, the noble Lord may be interested to know that I have read the report. It was a major contribution to the enjoyment of the weekend to make sure that I had read it before coming to the Dispatch Box. It is an important subject. As the noble Lord will be aware, it is a very full report; no doubt he has also read every word of it. The fact is that, rather than coming to an instant conclusion on a first reading, it is better to digest the great amount of work that has gone into the report before arriving at our firm conclusions.

§ Lord Cledwyn of Penrhos
My Lords, will the noble Viscount take the trouble to travel by bus and train from North to South Wales? If he does, he will find himself back in 1850.

§ Viscount Goschen
My Lords, I have spent quite a good deal of time in Wales during the past year. I shall certainly wish to talk to my colleagues about bus travel in Wales. I shall seek to inform myself further on the subject.