"A Bus Strategy for London" (Hansard, 22 July 1991)

§ Mr. Rifkind

The Government published "A Bus Strategy for London" on 11 March. It asked for comments to be sent in by 7 May. To date, 205 responses have been received. The Government expect to receive further332W comments in the coming weeks and months, but conclude that it would be appropriate to make a statement, at this stage, setting out preliminary conclusions on some of the key issues raised in the consultation exercise. Most of those who responded shared the Government's assessment that buses are likely to have an increasing part to play in meeting London's transport needs. There is widespread agreement that promoting the use of buses is a desirable and important policy goal. Although the consultation exercise showed a marked divergence of view about how this goal should be achieved, there was very little disagreement that the goal was the right one.

The Government believe that deregulation will bring greater freedom of choice to both bus operator and passenger. Operators will have an incentive to provide the services the public wants. The operating environment will ensure that no one operator has an unfair advantage over another. The passenger will benefit from an increased number and variety of services. And there will be safeguards to ensure the provision of socially necessary services, and of adequate bus facilities. The Government's policy remains, as it has been since the Transport Act 1985 was introduced into Parliament, that the London bus market should be deregulated and privatised as soon as possible.

Although a proportion of respondents commented unfavourably on this policy, no new or persuasive arguments against deregulation emerged during the consultation exercise. The Government are not persuaded by the argument that bus operators will target their services on a few key profitable routes in central London. The assumption that central London routes are the most profitable is not necessarily true: although revenue returns are higher in central London, so are cost levels. In fact, this criticism bears no relation to the actual plans of bus operators. As for the related argument that some less central areas will be left with few or no bus services, the bus authority will be charged with providing services which it judges to be socially necessary but which the commercial network has not provided. This will ensure an adequate Londonwide network of buses.

Most of the responses received addressed the question what sort of body should be constituted as the bus authority for London. One option was to establish a passenger transport authority for London, whose responsibilities would cover bus, underground and rail services. The Government have already made it clear that they consider that it is not appropriate for nationalised industries such as BR and LT to be under local authority control. Moreover, the Government do not want London Transport to be distracted from the major challenges facing it in relation to London Underground and Docklands light railway. They have therefore ruled out this option. Of the other options discussed in the consultation paper, there was considerable support for vesting the responsibilities with London Transport, which has done so much already to improve the quality of service provided by buses in London. There was some support for creating a bus-only PTA or a new governmental agency to take on this role, but very little support for vesting responsibility in the individual London boroughs. In this matter, the Government have given particular weight to the views of bus operators, who expressed serious reservations about asking London Transport to take on this role. It was felt that an independent body, not distracted by the major challenges which London 333W Transport faces in expanding and renewing London's underground system, would be better placed to promote the provision of bus services in London.

The Government have decided, therefore, to create a London bus executive, with members appointed by the Secretary of State for Transport, which will concentrate exclusively on bus-related issues. The London bus executive will be responsible, in particular, for securing the provision of bus services on socially necessary but uneconomic routes. In discharging this responsibility, it will work closely with the London boroughs. It will also be responsible for ensuring the adequate provision of bus stops, shelters, stands and stations. And it will ensure that any gaps in the passenger information provided by bus operators are plugged. It will be funded mainly by Government grant. London Transport will remain responsible for the London Buses Ltd. subsidiaries until privatisation. Their experience and expertise will enable them to play a key role in helping to provide a smooth transition to the new regime.

Many respondents expressed concern about the future of concessionary travel in London. This concern was unfounded. The consultation paper made it clear that there is no question of deregulation or privatisation leading to the demise of concessionary travel in London. The Government's proposals on this matter are as follows. Responsibility for setting the terms of a Londonwide concessionary travel scheme will remain with the boroughs. They will be required to publish, by 31 December each year, the details of a scheme for the coming financial year and of the terms on which operators will be reimbursed for carrying holders of concessionary travel passes. If no new scheme is published, the previous year's travel concessions will automatically be rolled forward. The London boroughs will have the same discretion as local authorities elsewhere to vary the terms of their concessionary travel arrangements. However, they will continue to be required to operate a Londonwide concessionary travel scheme. Bus operators will have an automatic right to participate in any scheme in their area, and the boroughs will have a power to compel bus operators to participate in the Londonwide scheme. There will be provision for appeals on matters relating to participation in the scheme and the terms of reimbursement for doing so.

Concern was also expressed about the future of Travelcard in London. Experience elsewhere in the country suggests that commercially priced common-ticketing systems such as Travelcard fill a strongly felt market need, offering advantages to both operators and passengers. Travelcard schemes will be able to continue after deregulation. The Government will be working actively with operators in the coming months to encourage them to come up with their own proposals for such schemes after deregulation. It was therefore decided that it is neither necessary nor appropriate to legislate to secure the future of the present Travelcard scheme or to ensure that a suitable successor scheme is devised. The Government have also concluded, however, that it is appropriate to legislate to secure the right of operators to enter Travelcard schemes operating in London, thus helping safeguard the position of new, smaller operators wishing to enter the London bus market.

Some respondents criticised the absence of any reference in "A Bus Strategy for London" to the future of services, such as Dial-a-Ride and Taxicard, which are 334W provided specifically for elderly and disabled people with serious mobility problems. The reason for not mentioning these services is that it was never the Government's intention that they should be affected in any way by the deregulation and privatisation plans. LT's disabled passenger unit will remain intact, and the specialised services which it is responsible for providing will be unaffected by the proposed legislation. In addition, the London bus executive will be given a duty to have regard to the need of elderly and disabled people in the discharge of its responsibilities.

The Government looked again, in the light of comments received, at the question of the future of the London Regional Passengers Committee. The Government conclude that the LRPC should continue to deal only with questions relating to services provided by or on behalf of London Transport and British Rail. It will have no formal role in relation to bus issues. There is no other part of the United Kingdom where transport consumer bodies have such a statutory role. Open competition in a deregulated market is the best safeguard of consumer interests.

Many bus operators, including subsidiaries of London Buses Ltd., expressed concern about the timetable for deregulation and privatisation. There is no need for decisions on these points to be taken at this stage. However, the Government are sympathetic to the view that privatisation of the LBL subsidiaries should take place sooner, rather than later.

Many detailed comments were received on other issues and initiatives dealt with in the consultation paper. In particular, many responses made suggestions relating to the introduction of bus priority measures and to the powers of the traffic commissioner and highway authorities to deal with cases where the introduction of new bus services was found to aggravate congestion problems. The Government will be considering these points further in the months ahead. The Government will also want to have available to them the results of the research referred to in paragraphs 98 to 103 of the consultation paper, before taking final decisions on such matters.

As indicated in "A Bus Strategy for London", primary legislation will be needed to give effect to a number of these proposals. The Government intend to legislate on these points as soon as possible in a new Parliament.