HL Deb 10 July 2000 vol 615 cc114-22

  1. .—(1) The Secretary of State may make regulations to authorise public airport companies or any of them—
    1. (a) to engage in a type of activity, specified in the regulations, in which the controlling authority have no power to engage, or
    2. (b) to permit any subsidiary of the company to engage in any such type of activity,
    and section 17(4) of the Airports Act 1986 shall not apply to any activity authorised by regulations under this section.
  2. (2) In considering whether to make regulations under this section, the Secretary of State may take into consideration transport policy, the business of the airport as a commercial undertaking and the potential benefit to the economy of the implementation of the powers to be authorised by the regulations.
  3. (3) In this section, the expressions "controlling authority" and "public airport company" have the meanings given by section 16 of the Airports Act 1986.").

The noble Lord said: In moving this amendment I declare an interest as a local authority-appointed unpaid director of Manchester Airport plc. At this time of night I shall try to ensure that brevity is my watchword and that I do not test much further the stamina of Members of the Committee. I hope to use the amendment to outline the potential problems for public airport companies such as Manchester with the continued expansion of aviation. Airports like to maximise their involvement in commercial opportunities. They do so because of the obvious benefits for those airports but also in the interests of the regional economies which they serve. They do so in order to expand both jobs and inward investment, to help develop the ground transportation links—my noble friend Lord Whitty will have seen that at Manchester—to make sure that airports grow as sustainably as possible and to relieve the pressure in the south east part of the country where airports are most congested.

The future of transport, which is at the heart of the Bill, lies in mutually beneficial partnerships. The airports feel they are not able to partake of such partnerships. Manchester Airport and other airports have been in correspondence with Ministers and have had meetings with them. They feel that the current constraints of vires which affect airport companies like Manchester are too inflexible for us to create the partnerships which are necessary to enable us to expand as we would like to do. The amendment seeks to give the Secretary of State discretion to allow for greater freedom to pursue those commercial activities which will be beneficial to airports, transportation policy and local economies. I await my noble friend's response. I beg to move.

Lord Macdonald of Tradeston

As my noble friend has explained, Amendment No. 194 seeks to widen the range of activities which local authority-owned airport companies have powers to carry out. In other words, it seeks to extend the vires of local authority airport companies. At present, under Section 17(4) of the Airports Act 1986, the local authority shareholders must control the company in such a way as to ensure that the company does not engage in activities in which the shareholders themselves have no power to engage. Under my noble friend's new clause, the Secretary of State would have power by regulations to authorise all or any of the public airport companies to engage in a specified type of activity in which their shareholders have no power to engage. That would disapply the duty on the shareholders to the extent covered by the regulations.

My noble friend described the effect of the present limitations on the powers of local authority airport companies. He particularly mentioned the effect on Manchester Airport, which is the largest of the local authority airport companies. We have told Manchester Airport in correspondence that we are sympathetic to the principle of much of what the airport company is seeking to achieve through this clause. However, we have difficulty with the new clause. In the first place, we must have regard to the pressure on parliamentary time, both in this House and in another place, when considering whether to add to the Bill a provision which is not related to the main issues with which the Bill deals.

In addition, we are concerned about the possible extent of the clause. More specifically, we have made it clear to Manchester Airport that we have reservations about public sector airports carrying out investment overseas. We consider that it is too remote from their core businesses and that it would be difficult for the companies themselves and for their shareholders to exercise the same degree of supervision and control as they can exercise over activities within the United Kingdom. This same concern lay behind one of the conditions which my right honourable friend the Secretary of State placed on his relaxation last year of the borrowing controls on Manchester and three other local authority airport companies. He made it clear that the relaxation of borrowing controls was to be used for airport-related investment in the United Kingdom.

I understand that the Manchester Airport company board stated earlier this year its view that the company should concentrate on the exploitation of its business within the United Kingdom. In addition, I recognise that it would be for the Secretary of State to decide whether or not to authorise local authority airport companies to engage in any particular activity. However, if we were to give the Secretary of State a new power, it would be necessary to ensure that its territorial extent was limited to the United Kingdom.

Our final concern with this new clause is that airport companies might inadvertently put their local authority shareholders into a situation where they could be accused of subsidising non-airport commercial activities, thereby breaching EU rules on state aids.

We have listened carefully to the debate on this new clause. We shall consider whether we can deal with the subject of local authority and the airport company powers in a future DETR Bill, but I regret that, in view of the constraints on the time available in the remainder of the Session, we are not able to take it into the present Bill. I invite my noble friend to withdraw his new clause.

Lord Smith of Leigh

Perhaps I may thank my noble friend for his full and sympathetic response to this proposed new clause. The airport representatives will read his response in Hansard with care, but I am willing to withdraw the amendment.

Amendment, by leave, withdrawn.

11.15 p.m.

Schedule 11 [Minor and consequential amendments about local transport]:

Baroness Thomas of Walliswood moved Amendment No. 195: Page 216. line 24, at end insert— (" . In section 63 (power of authorities to provide stands and racks for bicycles) for the words "and racks for bicycles" there is substituted "or racks for, or devices for securing, bicycles or motor cycles". . In section 136(4) (meaning of "motor cycle") for "section 57" there is substituted "sections 57 and 63".").

The noble Baroness said: I am much incapacitated by the absence from our Front Bench of that notable exponent of the art of motorcycling, my noble friend Lord Falkland. However, the amendment is so straightforward as barely to need explanation. Schedule 11 deals with amendments to legislation. The legislation which Amendment No. 195 seeks to amend is the Road Traffic Regulation Act 1984. The proposed amendment would enable local authorities to provide stands and racks not only for bicycles, but also for motorcycles. I beg to move.

Viscount Craigavon

I thank the noble Baroness, Lady Thomas, for moving the amendment and lament with her the absence of the noble Viscount, Lord Falkland. I hope that with this amendment we are pushing on an open door. For that reason, I shall be very brief.

The recovery rate of stolen motorcycles is only around 16 per cent. This affects not only the most powerful and expensive machines, but also, since we have seen such a big uptake of desirable and attractive little mopeds, those machines have acquired an extremely high value on the villains' market, so to speak. This is a serious problem and I hope that the amendment will provide a degree of solution to it.

As the noble Baroness, Lady Thomas, implied, this is an enabling amendment to allow local authorities to act as they wish. We should also give credit to the noble Lord, Lord Rotherwick, who in April 1999 introduced a Bill which failed through lack of parliamentary time. I shall end my contribution by quoting the noble Lord, Lord Whitty, speaking on the proposed measure. He stated that, if the Bill introduced by the noble Lord, Lord Rotherwick, should fall, the Government's commitment to ensure that legislation along similar lines will be pursued".—[Official Report, 28/4/99; col. 401.] I hope that the Government will now be able to redeem that commitment.

Lord McIntosh of Haringey

It states in the briefing that I am very sympathetic to the aim of this amendment. The truth of the matter is that I am scared stiff of bikers and I would not wish to do anything to offend them. I recall when I was chairman of the central area board of the GLC knowing that if we did anything to offend the drivers of black taxis, they would drive round and round County Hall or Parliament Square until London came to a halt.

We are indeed sympathetic to an amendment which would give local authorities powers to provide secure parking provisions for motorcycles. We shall need to take away and consider the wording of the amendment, not least because it does not cover the situation after devolution. The Transport (Scotland) Bill contains a provision which applies this amendment to Scotland. We shall certainly take the proposal away and think about it. I invite the noble Baroness to withdraw the amendment.

Baroness Thomas of Walliswood

I am sure that all three people who put forward the amendment are equally delighted with the noble Lord's response. For the present, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bradshaw moved Amendment No. 196: Page 216. line 26, at end insert— (" . After section 6 (registration of local services), insert—

"Variation in registration or alteration in timing of local services.

  1. 6A.—(1) The traffic commissioner may require the variation of the timing of the registration of a proposed bus service or alteration to the timing of an existing bus service where it appears to the commissioner that the primary aim of the proposed change is to disrupt the business of a competitor.
  2. (2) In exercising his powers under subsection (1) the commissioner shall have regard to guidance issued by the Secretary of State.
  3. (3) A person affected by a decision of the commissioner under subsection (1) may appeal against it to the Transport Tribunal."").

The noble Lord said: This amendment is similar to that proposed by my noble friends in Standing Committee in the House of Commons. We remain concerned that the opportunity still exists for people to make registrations of new bus services which are not in the public interest—indeed, which are almost against the public interest. They are made deliberately by registering the departure of a bus service a minute or two in front of that of a competitor with the aim of disrupting that competitor's business.

It is true that the new Competition Act provides better protection against abuse of dominant position and predatory practice. However, we are not convinced about the ability of the Office of Fair Trading to react to such registrations within the time-scales allowed in the Transport Act. It has never moved with speed previously, and often takes so long to act that a bus operator may have been forced off a route or driven out of business before anything is done.

Under the Competition Act, the penalties for abuse of dominant position are severe, and that might temper the actions of some parties. But it seems that it would be easy for the director-general to draw up some guidance—in the same way as he has attempted to do for ticketing schemes— which could be used by th e traffic commissioner as a guidance to him in the sort of registrations he should accept and which he might decide to defer for consideration.

Although there has been a lull in bus competition, I am advised that there is more to break out in one of our large cities. That is not in the interests of users who can end up with a very much worse service, often comprising old buses running at irregular intervals. To offer another piece of economic theory—which is always extremely dangerous late at night—the law of competition is that you must try to get your product as close as possible to that of a competitor; in this case, you do not spread the bus journeys out evenly, but try to get as close as possible to a competitor in a competitive situation. That is not in the interests of the customer.

The purpose of the amendment is to attempt to bring some form of discipline into service registration. I do not say that our proposal is ideal. However, I believe that it should be possible under the new Competition Act for rules to be drawn up to which the traffic commissioner may refer. If he has doubts about whether a proposal is in accordance with the spirit of the Competition Act, he should be allowed to defer decisions on that registration until the situation has been clarified. Administratively, that would be much easier than taking cases by the Director-General of Fair Trading through the various processes laid down in the Competition Act. I beg to move.

Lord McIntosh of Haringey

I do not want to cross swords with an academic transport economist at this hour of night, but I wonder, when the noble Lord talks about the law of competition, whether he has ever heard of niche marketing. I should like to discuss the latter with him, but I shall not take up the time of the Committee at the moment.

It is true that operators are responsible for registering with traffic commissioners details of bus services 42 days before those services begin. That includes information about routes and timetables. Therefore, operators can be held properly accountable for running the services that they have said they will run and can be penalised if they fail to do so. After all, that is the role of the traffic commissioner. However, the commissioner does not have power to refuse a registration application if it is supported by the necessary information.

Amendment No. 196 would allow the traffic commissioner to vary the times of a service which was the subject of a registration application, or change the timings of an existing bus service, if he believed that the registration was intended to disrupt the business of another operator. That would require the commissioner to exercise a judgment about the motivation behind a registration and would be a significant extension of his task. It would be quite difficult for the commissioner, given his expertise, staffing and existing powers, to take on such an obligation. The commissioner has power to attach conditions to an operator's licence prohibiting him from providing a specific type of local service if there has been intentional interference—with the operation of a local service provided by another operator, or serious misconduct in relation to the operation of another operator's service. That is a matter of actual bad behaviour rather than a judgment of economic interest and intent of the kind implied by the noble Lord, Lord Bradshaw.

As the noble Lord rightly said, if there is a problem of unfair, anti-competitive behaviour, including one that involves timings that disrupt a competitor's service, that is a matter for the Office of Fair Trading, which has power to act. The Competition Act gives the OFT new powers to act quickly in cases of "abuse of a dominant position" (to use the technical phrase). It may be that the noble Lord remains to be convinced about its ability to act quickly, but it certainly has power to do so, which I believe is helpful. In any case, as we said in our consultation document on bus policy we shall amend the registration regulations to remove the current flexibility given to operators to vary timings by up to five minutes—the five-minute rule, as opposed to a gap of one or two minutes spoken to by the noble Lord—without giving any notice to the traffic commissioner or anybody else. It has been argued that the five-minute rule provides scope for anti-competitive activity by an operator. We shall remove that possibility by amending secondary legislation.

I turn next to Amendment No. 197 which concerns the registration of "on demand" bus services which have no fixed route timetables or stopping places. I am aware that there is increasing demand for more flexibly routed bus services, particularly in rural areas, where the travel needs of passengers and levels of patronage may sometimes be usefully met by relatively unconventional kinds of services. The current registration regulations give the traffic commissioner discretion to waive some of the service particulars that must normally be submitted as part of the registration, provided other details can be submitted which give a complete description of the service. I accept that the regulations would benefit from re-examination and greater provision for flexibility, or at least greater clarity about the flexibility that is already provided.

I do not believe that this amendment is quite what we need. It provides for "flexible" services to be registered only if they form part of a local authority bus strategy. One is not quite sure what it means—for example, whether a service must be specifically mentioned in a bus strategy—but in any case one can imagine bus services which are not part of a strategy but might benefit from greater flexibility in the regulations. I can assure the noble Lord that we are looking at the scope for amending the secondary legislation. We do not want to open up a loophole that weakens proper registration or the enforcement powers of the commissioner to be compromised. We must still have clear and enforceable commitments from operators on the services that they provide. None the less, it may well be that changes are appropriate and that the way to do it is by means of secondary legislation.

11.30 p.m.

Lord Bradshaw

I thank the Minister for his reply to Amendment No. 197. I am sure he is right that the words "bus strategy" are wrong. Some of the new services introduced with the help of the rural bus grant are subject to such variation of route that they stretch the traffic commissioner's existing powers to their limits. They would benefit considerably from some easement.

Even at this stage, I ask the Government to consider some discussions between the traffic commissioner and the Office of Fair Trading to ensure that, when bus services are registered which are part of what appears to be a "bus war" between two companies, there is the closest and earliest possible liaison between the two so that we do not reach the situation where the public suffer before the Office of Fair Trading acts.

Lord McIntosh of Haringey

That makes good sense to me.

Lord Bradshaw

With an assurance along those lines, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 197 and 198 not moved.]

Schedule 11 agreed to.

Clause 161 agreed to.

Baroness Farrington of Ribbleton

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at twenty-eight minutes before midnight.