Bus Services

HL Deb 14 November 2003 vol 654 cc1743-64

Noon

Lord Bradshaw rose to ask Her Majesty's Government what proposals they have for stimulating growth in the numbers of passengers using bus services.

The noble Lord said: My Lords, we turn to the much neglected subject of buses. It seems to be a subject of little interest to Members of the House, members of the Government and, I suggest, to the department generally. However, buses account for more passenger journeys than any other form of transport. They are available and they require only modest capital investment—as modernisation of the London bus fleet, for example, has shown. Not only was that investment modest, it was made fairly rapidly. Railways and light rail present an opportunity for investment, but such investment is both very expensive and very slow. I am not saying that we should not invest in railways or light rail, but I hope to expose the case for greater investment in and more attention to buses.

Buses are used by the young, the poor and the elderly—three groups whom the new Labour Party says that it represents. Yet it does not do anything about it. We are not talking about a few people living in isolated rural areas; we are talking about the vast bulk of our urban and suburban populations. However, buses suffer from three major problems, the first of which is congestion. Secondly, the wage and insurance costs in the bus industry are escalating very much faster than the cost of inflation. The third problem is competition. I am sure that that is not an exhaustive list, but no doubt my noble friend Lady Scott of Needham Market will add a few more to the list when she speaks.

If a bus is delayed in congestion, it misses journeys and annoys passengers. It is an inefficient use of both vehicles and drivers. For example, in many cities, 14 or 15 buses are deployed on urban routes that should require only 12 buses simply in order to deal with the problem of traffic congestion.

On 16th January 2002, I asked the then Minister when camera enforcement of bus lanes outside London would be allowed. Since then, I have been strung along with a series of promises, half truths and all sorts of other things, but it has not happened. I have had the usual litany of "shortly", "the end of the year"—although another year goes by—and, now, "at the end of the year", although it is not clear whether that means this year or next year.

I occasionally use buses. Twice this week, in Oxford, I got off a bus and was hooted at—almost abused—by two drivers who should not have been in that lane. Local authorities have the means of taking the pictures and writing to those people. However, the means of fining them does not exist because the Government have not made the orders. Can the Minister say whether the new regulations relating to clear ways at bus stops have been published and will be actioned? We hear a great deal about the Disability Discrimination Act. We say that bus companies must buy new buses that have low floors and allow wheelchair access. However, if the bus cannot get alongside the kerb, passengers will have to get down on the road and cross over and get up the kerb again. Those are the fundamental issues that have to be addressed.

How can road congestion be reduced? This week, there was a very good article in Transit, the magazine of the transport industry. In it, Peter Huntley, a fairly expert person on such matters, suggests that teams of local authority people, police and bus operators could, in a 12-week programme, very quickly identify the source of congestion and what to do about it. It is essentially a local problem. I commend to the Minister this article which contains a great deal of common sense.

Local authorities, with some notable exceptions, do not help the situation. By providing a lot of car parking at less than cost, they subsidise the relatively well-heeled motorist at the expense of the relatively poor bus user— not all of whom qualify for concessionary fares. That is regressive taxation. When local authorities provide car parking, the charge should cover at least the cost including the estate cost of providing the land. It is quite wrong that car parking is provided at below cost, sometimes substantially below cost.

There is great reluctance to provide lanes or bus priority at traffic lights, particularly when small traders or the local press, who often are quite wrong, protest. The six-monthly report on congestion charging in London has shown that although there has been some diminution of business, it is due more to good summer weather and reduced Underground usage as a result of the terrorism threat. The diminution has very little to do with congestion charging. Small traders always tend to blame parking restrictions at places where they usually leave their own cars rather than the fact that they are selling the wrong goods at the wrong price or giving a thoroughly bad service.

If I may, I should like to make another suggestion, as this is not meant to be an unconstructive speech. Local transport plans should not be boastful shop windows published by local officials to impress the Department for Transport but action plans to deal with difficult problems. I suggest that local authorities with the bottle to take on the vested interests should be the ones that get the money. Instead, the Government tend to spread the jam thinly over everybody instead of concentrating their resources on local authorities that are prepared to do something about the problems. We also have to take account of the election cycle so that the politicians who do the work have some prospect that the improvements will be implemented before they have to face the electorate.

Local transport plans should contain a built-in criterion whereby every city has eight to 10 point-to-point journeys with a target speed between the points—which would be in a corridor established in a local plan that could be adopted over a number of years. If the current speed between two points was, for example, 12.3 miles per hour, the plan could be to increase it to 15.4 or 16.1 miles per hour. People could then see results for all the money they are putting in. I suggest that people do not see much happening at present. A lot of money is being spent with very little in return. The Government also need to give attention to the school run issue. They are doing so only very slowly.

I have already mentioned insurance, the cost of which is very high. There are only two suppliers in the market and a monopsony has been created. What are the Government's proposals to deal with that? Costs have been increased also by the claims culture and importation of the American no win, no fee contingent litigation system—which, with the desire to cut the legal aid budget, was so favoured by the previous occupant of the Woolsack.

Driving buses is an unsocial and stressful job. Drivers have to drive through traffic and put up with the congestion. Bus drivers spend a lot of time actually driving their bus and not much time in the mess room. Secretaries in the House of Commons, for example, and people in other jobs can manufacture time for a cup of tea and a chat. I am afraid that most bus drivers actually drive buses most of the time.

Drivers may have to put up with appalling abuse and behaviour from some road users and passengers. They get all the stick handed out about unreliability that is caused by congestion. They may also have to deal with late-night drunkenness, which the Government do little to curb. What are the Government doing really to encourage the use of Smartcards so that we can get rid of the inevitable hassle associated with the payment of fares? That would, of course, speed up boarding.

Almost all companies are short of drivers and wage rates and insurance costs are rising far quicker than inflation, yet public transport contracts do not make adequate allowance for that. The rise in national insurance was just one more burden, as is the requirement to make adequate provision for pensions. I do not deplore the fact that bus drivers get good pensions—if they live to enjoy them, good luck to them. However, it is a huge cost to the industry. I should like the Minister to acknowledge the problems and look for some remedies because otherwise the Government will preside over constant decline.

I turn to the Competition Act 1998 and the Transport Act 2000. These Acts pretend that the bus industry is highly competitive, which is only true at the margins. The real competitor is the private car. The worst kinds of competition could easily be dealt with by giving traffic commissioners or local authorities power to alter new bus service registrations by equalising the intervals between departures, thus preventing head running. Tough enforcement standards, which now unfortunately are too lax, would weed out the rogues in the industry.

The OFT seems to me to be obsessed with competition tests and so-called "block exemptions" that effectively make it difficult or expensive to secure joint fares, route sharing and other pooled arrangements which in our view would make the bus easier for passengers to use and encourage co-operation between operators. We do not seek to allow any sort of agreement but simply to allow operators to enter a defence of the public interest. If they are doing what the public want, that should be a sufficient defence in itself. What puzzles me is the Government's attitude. Are we simply going to go on treating small local bus services and marginal agreements as if we were dealing with multi-national companies involved in steel, cement or readi-mix concrete? Such big monopoly businesses need breaking up, but we are spending a lot of time fiddling about with agreements affecting small bus companies at local level.

Before I sit down I want to mention the rural question. I do not think that we can really afford to maintain any kind of network in rural areas. Even concessionary fares are very high and are rising sharply. We have now reached a point where the elasticity and demand in the bus industry are at unity. That means that if you put the fares up by 10 per cent, you lose 10 per cent of the passengers. It is very simple. Once you are in that position, there is no going back: if you put the fares up and the passengers drop away, eventually the service must collapse.

Unless a village lies on or close to a main road, the rural bus service is under severe threat. I wonder—this is a personal suggestion—whether the money would be better spent if it were targeted at those without the use of a car and if taxi provision were thoroughly reviewed. A few more tokens in the hands of the really isolated may be the answer. What is not the answer is cross-subsidy because there what you are doing is calling upon the vast bulk of users who live on urban estates to subsidise services to the leafy suburbs. You are in effect saying to the bulk of bus users, "You will have a worse service that will be more expensive so that someone living in a so-called 'leafy suburb' can have a subsidised occasional service". That is very bad.

The bus industry is, largely, a very good industry, which has the capacity to do a great deal more. Good vehicles are readily available but action is needed by government to realise the potential that is available. That is why we are having this debate. I hope that the Minister has come prepared with some answers.

12.15 p.m.

Lord Faulkner of Worcester

My Lords, I congratulate the noble Lord, Lord Bradshaw, on securing this debate today. I agree with him that it is a pity that there are not more Members of your Lordships' House taking part. It was a little unkind of him to say that noble Lords on this side of the House do not care about the matter. We have three speakers in the debate, which I believe is as many as the other two parties combined.

While it is certainly true that the bus is not the most glamorous form of transport—indeed, the noble Baroness, Lady Thatcher, was widely quoted as saying that anyone over 30 who used buses was a failure—it is none the less the most widely used form of public transport in Britain, and provides for many people not just the preferred way but the only way of getting about.

As the noble Lord, Lord Bradshaw, said, several sections of the community rely particularly heavily on the bus. Forty per cent more females of all ages take journeys by bus compared with males. According to the Confederation of Passenger Transport, they take an average of 71 trips per person per year compared with a figure of 51 for males. The largest age group using the buses comprises the 17 to 20 year-olds. Buses are particularly important for them.

In London—where the figures are even more interesting—women make up 58 per cent of all bus journeys, and here buses are particularly important for people from low income groups, from ethnic minorities, for those without access to cars and for older people.

The noble Lord, Lord Bradshaw, referred to the number of people who travel by bus compared with rail. Two-and-a-half times more people travel by bus than by rail, although because bus journeys tend to be shorter, the distance travelled by rail—47 billion passenger kilometres a year—is slightly greater than the buses' 46 billion.

There are loads of similar statistics which give the same message, and I shall not bore your Lordships by reciting them. However, here are just a couple more which I think are interesting. First, 57 per cent of people would support more bus lanes in town centres, with just 20 percent opposed. Secondly, if bus journey times were cut in half through bus priority measures, 26 per cent of car users say that they would be very likely to travel more by bus. That modal shift would be very much in line with what the Government say that they would like to see happen. Their policy document on buses, snappily entitled, From Workhorse to Thoroughbred: A better role for bus travel, published in March 1999, proposed a range of policy initiatives, mostly designed to make the provision of bus services more joined-up and integrated.

The 10-year plan for transport, published a year and a half ago. set a target for increasing bus use by 10 per cent by 2010. So against that background how have we done in meeting people's expectations, and have we got the right sort of structure for the bus industry? Taking that second question first, I well remember a presentation that I attended at the Liberal Party conference in, I think, 1985 given by Mr Robert Brook, then chief executive and later chairman of the National Bus Company, shortly before Nicholas Ridley's brave new world of bus deregulation started. Mr Brook, who had been in buses all his adult life, observed that they had been running buses in practice for 50 years. Now, thanks to Mr Ridley, they were about to run them in theory. He was not wrong. If bus deregulation was intended to increase passenger numbers, keep fares down and improve customer satisfaction, it has been a failure.

Putting to one side the bus wars of the late 1980s and early 1990s when rival companies stole each others' passengers by operating timetables which got their buses to the stop seconds before their competitors, and offered ludicrously cheap and even free travel in an attempt to drive competitors out of business, what has happened since is that market forces have produced just five big players who have more or less carved up the country between them. As a consequence, there is relatively little competition at the bus stop. I endorse entirely what the noble Lord said about the Office of Fair Trading and the competition issues involved. The Passenger Transport Executives' Group points out that fares have risen by a third since 1985, and bus use outside London has dropped by a third.

I am sorry that the noble Lord did not say more about London, because it is an example where there are positive bus policies at work. The picture there is very different. London has a different structure of control, because there is democratic control exercised by Transport for London and the Mayor over fares, timetables and routes. The operators are paid a flat fee to run each service, and then hand over the ticket receipts. There are around 300 contractors from the private sector, who provide the assets, employ the staff and manage the service.

The results have been startling. Transport for London told me yesterday that it has the highest number of passengers since 1969, and the fastest rate of passenger growth since 1945, 7.3 per cent for 2002-03. That is an extra 104 million passenger trips. There has been a 16 per cent growth in the number of night bus passengers for last year, and a 12 per cent growth in the number of Sunday passengers year on year. Transport for London is operating the highest number of kilometres since 1963, 397 million last year.

Half of additional journeys are made by Londoners who did not use the bus at all three years ago. Three in five Londoners have increased their bus usage over the past three years. They have indicated that they do so because buses are cheaper than alternatives. When asked, half of them say that bus improvements are the reason for that. Most of those improvements were carried out between autumn 2002 and February this year, to help prepare for the introduction of the congestion charging scheme. New routes and links, bigger buses or more buses were introduced to 75 services, providing 11,000 extra spaces during the busiest hour.

We have debated the congestion charge a number of times in your Lordships' House. I remember vividly the arguments that we had during the passage of the Transport Act 2000, and of the Greater London Authority Act. I recall the words that my noble friend Lord Whitty, then a Minister at the Department of the Environment, Transport and the Regions, used when talking about the congestion charge. He said then: The worse thing to do for the motorist in London is to leave things as they are. We need to develop a new instrument for guiding motorists in their choice of road and their choice of time for coming into the centre of London. Only about 13 per cent of the total number of people who work in central London go there by car. They cause all the pollution, congestion and economic loss for the rest of us. It is important that we use the price mechanism via road user charges to discourage some of that access to London. Other elements can contribute. Taxis can contribute and cycling can contribute. But at the end of the day we have to discourage the use of the car".— [Official Report, 20/5/99; col. 533.] He was absolutely right, and he and other Ministers who had the courage to support the congestion charge have been vindicated by the way in which it has operated.

So, too, has the Mayor of London. He is not the most popular man in your Lordships' House, but he deserves credit for introducing the charge, and for delivering the improvements in bus reliability and journey speed, which in turn have led to more public transport passengers being accommodated as a result of the increased bus capacity. The charging itself is delivering significant traffic benefits, with reduced traffic delays greater than expected. Drivers in the charging zone are spending less time queuing. Journey times across the charging zone have been reduced by 13 per cent, and journey time reliability has improved by an average of 30 per cent. The amount of time that drivers spend sitting stationary in their vehicles or travelling at less than eight miles an hour has reduced by about a quarter.

Congestion charging is not anti-motorist, and the sooner that Britain's other cities follow the lead set by London and Durham and introduce similar arrangements, the better. It might be an appropriate moment to say that I, for one, would be pleased if Mr Livingstone rejoined my party and became our candidate in the mayoral election next year. I have supported the congestion charge from the beginning, and it is right that its continuation and expansion westwards should be a central part of the Labour Party's election manifesto for London.

I express the hope that my noble friend Lord Bassam, when he replies to the debate, will say something about the possible re-regulation of buses outside the capital. We have seen in London how everyone can benefit from democratic control and accountability over bus services. The benefits spread far beyond just the people who travel on the buses.

Elsewhere, there is a democratic deficit. Yes, there are some good quality partnerships between councils and bus operators—my noble friend may say something about how well things work in his home city of Brighton and Hove—and there are good park and ride schemes in places such as Oxford and Cambridge. However, I believe that the people would be served better if councillors felt they had some ownership of the bus services in their area; that is, not legal ownership, but the sort of influence which the Commons' Transport Select Committee proposed in its report published last September. That committee calls for many more bus quality contracts, particularly those which allow for flexibility and innovation and give councillors a say over minimum service requirements and the co-ordination of services between operators and modes of transport.

At the very least, I shall be interested to hear from my noble friend whether the Government will look kindly on the suggestion contained in the report in yesterday's Guardian that there may be three trials for local authority regulation of bus services—one in a metropolitan area, one in an urban area, and one in a rural area. The bus is an important and often the only form of transport for millions of people, and we should be doing all that we can to encourage its use.

12.27 p.m.

Lord Berkeley

My Lords, noble Lords have heard two wonderful speeches from real bus enthusiasts. I would like to make a small contribution and join them. As both noble Lords said, the subject is terribly important for many people in this country.

I would like to start by quoting a report produced by Phil Goodwin, professor of transport policy at University College, London, for the All-Party Rail Group. Noble Lords may wonder why I want to quote that, but he starts with the argument that he is convinced that road-user charging will inevitably come in this country nationwide. I think that a number of noble Lords may be moving in that direction. He believes that road-user charging, in whatever way it comes, will have a significant consequence for public transport—bus as well as rail.

Phil Goodwin says that, we are now at the crux of a new stage in the transport policy debate, in which the role that public transport is called on to perform within transport strategy as a whole is greater than was assumed to be the case at the time of launching the Ten Year Plan". That is interesting. What he is actually saying is that if congestion charging or road-user charging, whatever we like to call it, causes even 5 percent of motorists not to take a journey, the imbalance between the number of car journeys and bus or train journeys will have a disproportionately high effect on increasing the number of public transport journeys. He suggests that demand for public transport could go up by something like 50 per cent. Those are very early figures, of course.

The report also says that very similar arguments could be put if there were not road-user charging and we just had more and more gridlock. Obviously, that is a generalisation across the country, but it is very interesting that Phil Goodwin is saying that demand will increase more than was expected in the 10-year plan. My noble friend Lord Faulkner gave the example of London and how, because of the way in which the buses have been properly managed, the figures have increased compared with the decline elsewhere in the country.

Perhaps it would be useful to consider different ways in which bus patronage could be increased, which I assume is still part of the Government's transport policy. I shall begin by considering the reasons why people do or do not use buses and list five issues: quality of service; information; reliability; price; and alternative modes.

Those factors vary dramatically around the country, between urban and rural areas and in and outside London. I shall not go into the quality-of-service debate too much as there is a shortage of bus drivers in many places. When one travels on a bus, sometimes it is driven well and sometimes one feels that the driver is doing his best to make sure that the old person with lots of shopping bags cannot stay vertical when the bus starts and stops and to make the ride as uncomfortable as possible. It would be nice to have bus shelters where one has to wait and nice to know when one can make connections.

That issue takes me on to information. The information in London is good, as it is in some PTE areas. In other areas, it can be poor. I received a briefing yesterday from the people at Merseytravel, which said that bus operators can change their route by giving just 56 days' notice and that they do so frequently. It is difficult to provide a co-ordinated information service to passengers, even to local people, when routes are changing every 56 days as they can outside London.

I am impressed by the reliability of some buses. Mersey Travel quotes 96 per cent of its buses as arriving within five minutes. That is a great deal better than the railways are achieving for passengers at the moment. It is about the same as freight, but we are not talking about that.

I am also interested in price. My noble friend Lord Faulkner spoke about the price of bus travel in London, but in Merseyside, the situation is even more interesting. Since 1986, motoring costs have risen by 40 per cent according to the AA; the RPI has risen by 80 per cent; the fares on Mersey Rail have risen by 160 per cent; and bus fares have risen by 250 per cent. It is even more interesting if one compares commercial and supported services: fares on commercial services have risen by 290 per cent and those on supported services by 210 per cent. The situation at privatisation that was described by my noble friend Lord Faulkner, when operators competed to win passengers, certainly stopped long ago. An increase of 290 per cent, set against one of 40 per cent for motoring, is hardly an incentive to people to leave their cars at home.

I turn to the issue of alternative modes: cars. How easy is it to use one's car instead, given congestion charging and so on? As was pointed out by the noble Lord, Lord Bradshaw, and my noble friend Lord Faulkner, bus priority is a key. London has good bus priority schemes and bus lanes in many areas, but in other cities, the situation is quite appalling. As the noble Lord, Lord Bradshaw, asked, where is the enforcement? As my noble friend Lord Faulkner stated, everybody wants it, so why do we not have it?

It is probably because we are all based in London that we take a great interest in it and that things are done properly. I was travelling down Constitution Hill this morning and saw police checking if drivers had paid the congestion charge. I counted 24 policemen stopping cars. I live in Oxford and it is impossible to conceive of 24 policemen there enforcing anything at all. There are probably not 24 policemen on duty in Oxford. It is wonderful to have so many in London, but why can we not have as many elsewhere? I hope that a lot of people are caught if they have not paid the charge. The police did not appear to have many customers, but that is a different matter.

The fifth factor is integrated transport. We have spoken often about integrated transport over the years. It is still a very good policy. If one cannot be certain about the complete journey that one is about to make, one will not make it. On the whole, the railways are improving integration; on the whole, bus-to-rail and bus-to-bus integration is awful, save for a few exceptions in London.

I shall not detain your Lordships by speaking about solutions. The two previous speakers have spoken about them at great length and I support the various suggestions that they have made. My own solution would be a little more radical, although it is not new.

Let us review the situation in London. There is franchised service there, which is well co-ordinated. Routes are well known and buses are given priority. Machines that sell tickets before one boards a bus have reduced driver times at stops. Traffic flows have increased as a result.

Elsewhere, the opposite is generally the case. Metropolitan areas have suffered. I have referred to the 56-day change notice. Mersey Travel has informed me that it has 38 different private operators in its area. How can it possibly co-ordinate them? The trend now is for commercial operators to de-register and to say, "We are not going to run this service any more unless you pay us a subsidy". When they receive that subsidy, they run the service, but the local authority or PTE has little control over what they do. The result is that traffic flows either remain stagnant or deteriorate.

The only solution is to give local authorities or PTEs the option to switch to the London system of franchising, which would include the control of fares. Surely the London example has given enough people confidence that that will work. Our rail fares are largely controlled, so why can we not have bus fares that are controlled? We have a policy of encouraging people to leave their cars. One cannot leave that entirely to the market.

I understand that the franchised operators in London are generally happy with their operations. That is important. If they are happy and enthusiastic, they will perform better. Since we now have happy customers and happy operators, I think that we can call the system a success. Why cannot we extend the same option to the rest of the country?

In conclusion, there is a problem of image for buses in this country. That of the famous London buses is good. However, it would be lovely to ask one day at Question Time in your Lordships' House how many of your Lordships have recently travelled on a bus. I know that I am not allowed to ask noble Lords to put up their hands, but it would still be interesting. There are not many of us here today, because it is Friday. We are here because we are enthusiastic about buses. One could ask the same question of Members of Parliament, who are opinion formers, and of local authority staff. As long as they have their car park at County Hall, they are all right.

How many of them use buses regularly? That is the key question. In 1997, just after my party had won the election, a discussion was held about the number of people in Greenwich, one of London's poorest boroughs, who did not have access to a car. That number was very high—more than 40 per cent. What are we doing about that situation?

Let us compare that with the situation on the Continent. I have often travelled by bus there. Most of the services, I believe, have some form of a franchise. They are clean, modern, reliable and, more importantly, one knows where and when they are going. Passengers generally have the same kind of confidence in them as they have in a railway timetable.

As previous speakers have pointed out, bus transport is a quick and cost-effective means of implementing the Government's transport policy. It is popular. However, it can be achieved only with some co-ordination. Franchising, on the London model, should have the opportunity to be tried nationwide. Traffic will then increase, as Phil Goodwin has said it will anyway, but it might move much more quickly and suffer less competition from cars. Local authorities and local elected representatives will then be able to deliver.

12.40 p.m.

Baroness Scott of Needham Market

My Lords, I thank my noble friend Lord Bradshaw for introducing this topic for debate today. I want to begin by declaring some interests and as this is a bus debate I shall declare all three at once. First, I am chair of the Local Government Association Transport Executive; secondly, I am a member of the Commission for Integrated Transport; and, thirdly, I am a member of First Great Eastern's advisory group.

In terms of debate in your Lordships' House, railways have recently had a fair crack at the whip, usually due to the dogged determination of the noble Lord, Lord Berkeley, but this is the first time since the Transport Act 2000 that we have had a real discussion about the bus industry. I welcome that, particularly bearing in mind that bus journeys account for some two thirds of all public transport journeys. Without doubt, they offer the greatest scope for making relatively quick and cheap improvements to public transport. The bus provides the best opportunity for people on low incomes. In many areas, the absence of good bus services is a major barrier to socially excluded groups.

Starting with the most simple of concepts, it is important to remember that buses play two different, although sometimes complementary, roles. First, they should be able to provide a viable alternative to the private car, offering choice, reducing congestion and helping with the quality of life and environment. Secondly, buses should be able to provide access to essential services for those who for various reasons do not have access to a car. Those two roles are often reflected in an urban/rural split; congestion is seldom a rural problem while accessibility is. That is hardly rocket science, but it is amazing how often we try to frame bus policy with those two different objectives and using all the same instruments. In that sense, we are doomed to fail.

The increased bus use in London and in certain specific areas such as Brighton, Oxford and Cambridge has masked a serious decline in bus use across the country as a whole. The most recent set of statistics issued by the Department for Transport have shown a 4 million passenger kilometre reduction in bus mileage across Great Britain as a whole in the past year, despite a 7 million passenger kilometre increase in London.

Why is that? Local authorities have identified a number of reasons for that, including the problems that face the bus industry and local authorities. Those have been well covered by my noble friend Lord Bradshaw and the noble Lord, Lord Berkeley.

On competition regulation, I make only one comment. At present, bus operators who may want to have discussions about shared ticketing or co-ordination of routes are precluded from that by competition regulation. One has only to ask: in whose interests are the competition authorities working? They are certainly doing nothing to help the consumers, which should be their overwhelming consideration.

There is a serious problem of costs. The cost of bus fares is rising way ahead of RPI and the cost of running a private car. That is because of the cost of labour and insurance. There is little scope for fare increase here. All those same issues come into play with local authority tendered services. Local authorities are, in the main, spending more than ever on tendered services but they are getting back much less for them. The irony is that because of the openness of our decision-making processes in local government, when local bus operators see that more money is being put into the public transport budget the first thing they do is put up their costs. The situation is extremely difficult.

The concessionary fares scheme, while almost certainly necessary, is something of a blunt instrument. It is highly expensive for the country as a whole and little targeting is involved. My personal bêtenoire is the fact that my 15 year-old son, who clearly is not going out to work, is required to pay adult fare in the area in which I live. I do not see that as being equitable and it certainly does nothing to encourage him in believing that it would not be a good idea to run a car the moment he is old enough to do so.

As regards congestion, a catch-22 situation is in place. There is the most scope for reducing congestion by bus use in the most congested areas, but in those areas it is hardest to create the necessary priority bus measures. While the noble Lord, Lord Faulkner, is right in saying that if you ask the public a general question, "Do you support bus lanes?", they of course say, "Yes, we do". Unfortunately, when you ask them if they want that particular bus lane in their particular town, the picture is quite different. I am not suggesting that most local authorities should cravenly give into public opinion and show no leadership, but it is important to remember that they are subject to pressure from the people whom they represent. It sometimes takes a great deal of courage to take on these interests. That is particularly the case when, having gone through the grief of taking such action, they have no mechanism to ensure that the bus company sticks to its side of the bargain and runs the bus service it promised. Furthermore, they have no real means of enforcing the bus priority provisions.

The Local Government Association is undertaking some work, which ought to be welcomed, to try to encourage best practice. It is looking at areas which have been bolder; for instance, Oxford, which for years had a set of policies leading to the closing off of the city centre and all that that entails. As a visitor to Oxford, I find it a much more pleasant experience.

As regards the regulatory framework, there is no doubt that deregulation caused problems, not least the famous "bus wars" of the 1980s. But in some areas there is now a virtual monopoly of provision and in others there is on-road competition, which can be wasteful and does not act in the interests of the passengers. Declining bus use, particularly the sharp decline in commercial operations in our major conurbations—those covered by the Passenger Transport Executive—has led local authorities seriously to question whether the regulatory framework is the right one.

The deregistration of commercial services has left many suburbs in our major conurbations with no services to city centres after seven o'clock, or on Sundays, unless the PTE steps in to sponsor the service. We should be clear that no responsible local authority representative is suggesting a return to dominant municipal state or local authority ownership and the old system of blank-cheque subsidies and poor service. However, there is a case for examining whether we can adapt our regime to the kind of system which operates across most of the rest of Europe where there is controlled competition and where baskets of local bus routes are franchised for premium or subsidy payments.

I do not believe that we have anything in particular to fear from examining that. We could not, for example, imagine a situation in which we had a deregulated waste collection system, where scores of bin men rush around towns picking up bins so that those in one street are emptied five times a week and a neighbouring street has no provision at all. Rather than having that system, we set the specification and then go out to tender. The competition is at the start of the process and does not continue, as is the case at the moment. Under that scenario, there would be no reason why local authorities could not set a minimum specification. If bus operators could see further areas for commercial gain, they would be free to operate the kind of services that they would like in those areas.

However, it is clear that there is no "one size fits all" policy. The Local Government Association strongly suggests that we should have a series of trials and that we would need to see the differences between a major urban conurbation, a large town and a rural area. I was pleased to read that the Government are giving thought to that and I would welcome the Minister's comments on it.

It is interesting how the Government's mood music on congestion charging has changed since the London scheme began. The noble Lord, Lord Faulkner, in his potted history missed out the bit in the middle when the Government went wobbly on road-user charging. That is fine, but because of what has happened in London we are all being encouraged to look again at road-user charging and congestion charging. I believe that many local authorities will go down that route. However, the point has been made that in London the Mayor was able to invest heavily in buses, ahead of the implementation of the charging scheme, which has been a major part of its success. Outside London, local authorities have no such powers. Many will be reluctant to use the stick of charging while they do not have the carrot of being able to guarantee improved public transport in its place. You would be politically barmy to take all the pain of congestion charging if you did not have some sense that you could guarantee an alternative.

We should remember that the costs of the London scheme are very high. It is estimated that the £500 million hole in the Mayor's budget for future years comes from increased bus contracts. That is not necessarily a bad thing; it is almost certainly a price worth paying, but nevertheless we must think carefully about how that works.

I wish to discuss briefly public transport as a social service. There is no reason why private operators should provide for what are essentially social needs. They do so now, but predominantly on a sponsored basis. As my noble friend Lord Bradshaw said, there is a traditional system of running large empty buses around rural areas and telling people that they can go to the doctor but only on Thursday afternoons, and if they are prepared to wait two hours for a bus and then remain in the nearest town for five hours until the bus returns. That is neither cost-effective nor responsive to passengers' needs. We must do much more about demand-responsive services, such as dial-a-ride. Although the demand in rural areas is numerically small, it is crucial to the individuals who need the service.

In the debate to come, it is important that people forget about dogma and getting hung up on words such as "re-regulation". The crucial needs are those of existing passengers, and, almost more importantly, those who ought to be bus passengers but currently are not.

12.52 p.m.

Lord Luke

My Lords, like all other speakers, I thank the noble Lord, Lord Bradshaw, for giving us the opportunity to debate the matter. I wish to reflect on the question asked by the noble Lord, Lord Faulkner: why do we not discuss the subject more often? It is clearly of great interest to quite a few noble Lords and many people in the country. Let us hope that we will debate it in future.

Stimulating growth in the take-up of bus services is a huge challenge, but there is much to gain from getting more people on to buses. It is important, not only in environmental terms as a means of cutting car emissions and managing congestion in British cities, but it is of huge significance to many remote rural communities. An effective public transport network in those areas is a vital element of achieving social inclusion. As nearly every noble Lord has said, buses, which carry nearly 70 per cent of all public transport passengers, are the keystone to good transport links.

Unfortunately, the Government have let down our rural communities yet again by failing to recognise that servicing those outside Britain's cities must be a strong priority. Small towns and villages can only watch in wonder as bus services in London are overhauled, with more than 300 hundred extra buses on the roads and passenger numbers at their highest since 1969. That is a matter for congratulation, but it is vital that it is matched by a similar commitment outside London, and so far there is little evidence of that. The focus so far has been very much city based. Far from improving the situation, the Government have overseen a decline in bus usage in all areas other than London, Birmingham and eastern England.

I am surprised that the double-length juggernauts that have recently become such a feature in London have not featured in the debate so far. Would it not be better to spend money on many more small, and hence more flexible, buses? Have any noble Lords come upon one of those extraordinary animals broken down at a roundabout? It results in complete gridlock in every direction, so let us hope that they do not break down very frequently.

Lord Berkeley

My Lords, I am sorry to intervene, but surely those buses are flexible by definition?

Lord Luke

My Lords, I agree that, in that sense, they are. The importance of rural bus services cannot be overestimated. For many, the existence of an affordable, reliable and regular bus route is essential to establish a decent quality of life and maintain contact with the wider community. That is particularly the case for the most vulnerable in society who have no car at all. But the problem spreads much wider—to the 30 per cent of rural people who do not have access to a car during the day.

The answer to providing the service, however, is not simply to replicate London in the regions, nor is it to throw money at the problem. The rural bus subsidy grant introduced by the Government in 1998 was, I am sure, well intentioned, but any new money was mainly fed into off-peak daytime trips, with little careful planning on what was really needed. More needs to be done than simply thoughtlessly adding new routes. There must be careful consideration of the accessibility needs of each local population, and measures must be taken such as linking bus services to other bus, coach and rail connections.

I feel compelled to flag up the issue of affordability. There has been an ever-widening gap between the cost of bus fares and the cost of motoring. That sends out the worst possible signal to the travelling public. That will be made even worse if the estimate of a further 20 per cent fall in the real cost of motoring over the next 10 years is right.

I ask the Minister for an update on the review of the fuel duty rebate currently being undertaken for operators of bus services. I hope that the ongoing review is not an indication of its imminent abolition. If the fuel duty rebate were abolished, bus companies would lose £300 million a year, which would be a severe blow to them and the public that relies upon those services. We are pleased that the Government took on board the Conservative proposal to extend the fuel tax rebate to community transport in 1999 and included it in their 10-year transport plan. It would be a shame to see that good measure go to waste if the rebate were abolished.

The Government's record of improving public services leaves much to be desired, but bus travel is an area where change and creating a better service can, and could, happen relatively quickly. I await keenly the Minister's response and am hopeful that he will share my concerns for rural services and offer convincing solutions.

12.58 p.m.

Lord Bassam of Brighton

My Lords, I have really enjoyed the debate on bus services. I congratulate the noble Lord, Lord Bradshaw, on introducing the debate with this Unstarred Question. The situation is a bit like the old number 49 buses in Brighton, which did not come very frequently but then all came at once: we now have five bus enthusiasts participating with a sixth enthusiast in one morning.

Buses provide the backbone of our public transport system. As many noble Lords have said, they are an essential part of the economic and social fabric of this country. To put that in perspective, buses account for two-thirds of journeys by public transport. That amounts to 4.3 billion journeys a year—more than twice as many as by rail and Tube together, as pointed out by the noble Lord, Lord Bradshaw, and my noble friend Lord Faulkner. But bus patronage is at half the level reached in 1970 and a quarter of the level attained in 1950, reflecting, in particular, the growth of car ownership and use. However, change and growth in public transport is probably easiest to achieve in the bus sector. It is, after all, the sector where innovation is at a premium and can be rewarded richly and most rapidly, with new fleets and new models bringing flexibility and new services where there is fresh demand.

Buses are an essential part of our drive to improve public transport. At their best, they provide the travelling public with flexible and attractive services, which they rightly expect. That is why we have a PSA target to improve local public transport, including an increase in patronage on buses and light rail of 12 per cent by 2010. We are moving towards that objective.

Achieving better and more widely used bus services is not an end in itself. It has an important role to play, not only in reducing congestion by providing an alternative to car use but also by improving the quality of our environment, with better air quality and enhanced liveability in many towns and cities around the country.

Buses also provide vital links for isolated rural communities, as mentioned by many noble Lords— particularly the noble Baroness, Lady Scott, who made a plea for rural services, based no doubt on her experiences in Suffolk. They also provide an important link for peripheral urban estates and more detached communities, especially for those who do not have access to a car. Many people without cars depend on buses to reach vital services, such as health and education as well as employment. Better bus services can help to improve social inclusion for people who might otherwise find it difficult to access those services. However, like everything else, bus services must establish themselves as an attractive option on which people choose to travel.

As people become wealthier, they are able to make more choices. Increasing car ownership is an example. And with increased choice, people expect to be offered travel choices that work for them. That is why providing attractive reliable services is the way to win more passengers. After many decades of declining bus travel, as many noble Lords said, it is now on the increase. The early figures for bus use last year suggest that the overall rate of increase in bus use is rising not only in London but nationally. Bus passenger numbers in England increased by 2 per cent in 2002-03 and by 1 per cent in the previous year. That is why we are on track to meet our 2010 target for growth.

My noble friend Lord Faulkner referred to London with an impressive array of statistics from Transport for London. As I said, growth is taking place not only in London; bus use is growing rapidly in many other conurbations. I am bound to say that it has increased in Brighton by 50 per cent in the past 10 years, but it has also increased in Oxford by 80 per cent since 1988 and in Cambridgeshire by 7 per cent in the last year alone. In 2001 -02, patronage increased by 7 percent in York, 4 per cent in Bolton, 3 per cent in Leeds and 3 per cent in Nottingham. I am told that, even after some years of a decline in patronage on the excellent Reading bus services, since the middle of this year, those services are also seeing a month-by-month increase of some 3 per cent. Therefore, in answer to the noble Lord, Lord Luke, it is not inevitable that the level of bus patronage will decline, and his picture of generalised decline in most places other than London and Birmingham is simply not true.

The common factor in places where things are working is operators and councils working together to provide a better service. Success depends on operators and councils making the commitment and working together to deliver those improved services. It is clear that success goes to those who are prepared to innovate and provide a good choice for passengers.

When operators are willing to take the initiative and bring flair to what they do, a committed operator can transform services in its locality. Some impressive achievements were celebrated at the Bus Industry Awards 2003 in November this year. Trent Barton buses won the Bus Operator of the Year award. Trent Barton gives its passengers exactly what they want. It has introduced discounted advance single tickets, with three extra tickets being provided when 10 are bought at once. That reduces costs for passengers and speeds up boarding times as people use the prepaid tickets. The company has employed mystery customers to rate drivers on their presentation, attitude, customer care and courtesy, with drivers being nominated as Driver of the Month and Driver of the Year. The Calverton Connection service has invested in new vehicles and decorated the inside of its buses with profiles of the drivers, reflecting the strong relationship between passengers and regular drivers on that route.

The council's role is vital, too. It needs to have a grip on what is happening in its area and ensure conditions that allow attractive bus services to operate, such as bus lanes or park-and-ride schemes. That calls for determination and drive, and it means facing up to difficult decisions. But it must be done, and the results show that it is worth it.

An example of that is to be found in Leicester, where bus lanes have been introduced to support the planned park-and-ride scheme. It has reduced peak journey times for buses by nearly a quarter. In Cambridgeshire, efforts to gain public understanding and acceptance of bus priority proposals have been recognised by a European Public Transport Award by the Council of European Municipalities and Regions. Radical steps were taken to improve the city centre environment and increase use of public transport.

In Crawley, the Fastway guided bus scheme, connecting the town to Gatwick Airport, has opened recently, including investment by local authorities in the new infrastructure and related bus priority measures, and the operator Metrobus has provided new vehicles for the new service.

Guided bus schemes have also been introduced by local authorities in Bradford, Leeds and Ipswich, including, in one case, contributions to the infrastructure as well as services from the operators, First and Arriva. Those schemes have delivered significant increases in patronage—for example, 6 per cent in the year to March 2002 on Leeds' guided bus services alone.

The Government are doing much to support and encourage that success and establish the right conditions for it to be repeated elsewhere. We spend more than £1 billion a year supporting bus services in England, and the Government are determined to get the most from what we spend. We shall do whatever it takes to achieve that. We have established the Bus Partnership Forum, bringing together operators and local authorities at national level to examine what works locally and to encourage the same success in other areas. So far, the forum's work has included a network stability code, encouraging operators to change their services only at a limited number of agreed times during the year so that passengers are not faced with the dilemmas to which the noble Lord, Lord Berkeley, referred during his important contribution and so that unpredictable changes in the services that they use are minimised.

The forum has also produced Bus Priority: The Way Ahead, a resource pack on implementing bus priority measures to help local authorities to deliver better and more effective bus priorities that help buses run faster and more reliably. It has pooled an array of market research and attitude surveys to produce a distilled report called Understanding customer needs, which is on the DfT website. Its aim is to help bus operators deliver what passengers want.

There has been some debate—no doubt there will be more in the future—about the wider legislative framework for buses. Most noble Lords who contributed to the debate made reference to that. We want to see more people travel by bus. For that to happen, there must be reliable, good quality services, designed to meet the needs of the travelling public. That needs councils and bus companies to work together in partnership. For us, what matters is what works. That is why we shall continue to keep the legislative framework, including that relating to regulation and deregulation, under review. However, we have made it clear that we must build on what works and not undermine it.

Thus, for example, we shall relax the regulations for tendered contracts. That will enable authorities to let up to 25 per cent of their bus subsidy budgets without tendering. That flexibility will help councils to obtain better use from their budgets.

If the law is getting in the way of increasing bus use, we agree that we should consider that and sort it out. But, often, it is not the law; it is down to councils and bus companies to work together. If Oxford can see patronage increase by 80 per cent and if Brighton can do it, one must ask why others cannot achieve similar figures.

In a couple of months' time we shall announce our decisions on funding for the kick-start schemes which have been developed by local authorities and bus operators that work together in partnership. These projects will pump-prime some new services with good long-term prospects, including the potential for significant passenger growth.

Let us face it; far more needs to be done to win people back to bus travel and the onus for that is on us all. If it is working we all need to ask how we can make it better. If it is not, we need to identify the blockages and to sort it out.

Another element that is vital to success is finding out what customers want and providing services that meet their needs. In the West Midlands the Passenger Transport Executive, Centro, has arranged with the Employment Service, for example, to put a member of staff into two job centres to help customers get access to job interviews and jobs. During the first five months of the scheme, May to October, Centro has issued some 209 day tickets to assist people to get to interviews; 147 first monthly travel passes to people getting into employment as a result of their interview and 46 monthly passes go to people in their second month of employment.

Centro also operates a company travel scheme, giving a 50 per cent reduction on the cost of an annual travel card to employees who are giving up an allocated car parking space to use public transport, and 189 people have taken advantage of that offer since it became available. Approximately 70 per cent of those people have then gone on to purchase another travel pass at the end of their 12-month discounted period.

I ask noble Lords to put themselves in the passenger's shoes and it is easy to see what matters. They want the journey to be straightforward and reliable. That means making the connections work; sensible ticketing, a comfortable journey, helpful drivers and accessible vehicles. Above all it means getting them where they want to be when they need to get there.

For example, some operators and authorities have recognised that we need to get away from the idea that the only sort of bus service is the conventional one with a fixed timetable. In areas where there is a limited service, increasing the number of services from once a day to two or three times is not going to attract many people to use the service. In those situations we need a more flexible approach to vary the route so that passengers can be picked up or dropped off where it is convenient to them, such as the Corlink scheme serving isolated areas near Plymouth; the U Call service in Newcastle, the "three into one will go" scheme in Suffolk or the demand responsive taxi bus running between Fife and Edinburgh.

All of that explains why later this year we shall announce changes to the rules that will make it easier to run services where the route and time vary to meet the passenger's needs and in doing that we shall extend the bus service operator's grant to three types of service.

It is no longer enough to provide just a good service. Operators need to sell it to their customers with imaginative bus marketing. They will not know that they can use the service if they do not know that it is there. Strong marketing and providing good quality information are essential; and they work. Again, operators and local authorities each have a role to play.

A number of questions were raised during the debate. I do not think I shall be able to cover them all. Important points were made by the noble Lord, Lord Bradshaw, on travel safety and the safety of staff. Our administration introduced the safer travel on buses and coaches panel which now works across the industry with local authorities and police to ensure that there is good advice on protecting bus crews and that drivers get regular and practical advice on measures to prevent incidents.

Questions were raised about the level of spend on the bus network. It is also the case that we know and recognise that there needs to be long-term and committed funding. For that reason we have to make up for decades of under investment. To do that we are committed to sustain high levels of funding over a long period, spending £180 billion of public and private money over the next 10 years. That means major investment in improvements to the reliability of the road network. It also means that we shall be able to provide new bus stations and public transport interchanges, mentioned by many noble Lords today.

To conclude, we shall invest in some 600 quality bus corridors, bus lanes and other bus priority measures, all of which noble Lords pressed for today. When people look at transport they tend to focus on cars and trains, but 4.3 billion journeys were made by bus in Britain last year. Buses are a critical part of our transport system and will remain so in the future. This Government are committed to the bus and we know that there is more we can do to achieve higher levels of usage in the future.

This debate has been valuable in ensuring that we focus on these important issues. I congratulate not only the noble Lord, Lord Bradshaw, on his contribution but also all noble Lords who have taken part on ensuring that this debate happens not only today but continues into the future.

House adjourned at a quarter past one o'clock.