Buses (Deregulation)

Before I get on to bus deregulation, I want to say I am sorry that my hon. Friend the Minister is retiring from the job. I wish her well in what she does in future. In the surprisingly long time—22 years—that I have been dealing with Transport Ministers, I have come across some, from both main parties, who were less than competent, and I am pleased to say that my hon. Friend is not like that. She has done a good job. Although I suspect that we shall not see eye to eye in this morning's debate, I am sorry to see her go and wish her well. The purpose of the debate is to explore why, in the part of the public transport system provided by buses, which account for 84 or 85 per cent. of journeys in the system, there is effectively an apartheid regime between London and the rest of the country. I should like to use our time to see whether there is any justification for maintaining one system in London, which works, produces good public transport and benefits passengers, and another system in the rest of the country that has the opposite impact. We have already convinced the vast majority of Members of Parliament outside London that their constituents would benefit from a regulated system. Last autumn, Communicate Research did a survey of all MPs and found that 84 per cent. of Labour MPs and a majority of Members of Parliament were in favour of extending to the rest of the country the regulated system found in London. The only thing to surprise me about that was that only 84 per cent. of Labour MPs responded in that way. I have never found one who did not want regulation in the passenger transport and shire areas of the country. The background is that, in London, bus use is increasing, and in every region in England it is in decline. The most dramatic decline is in south Yorkshire where, since deregulation, bus use has dropped by 62 per cent., which is extraordinary. It is not a matter of an even spread of usage—the people who use buses are among the poorest in the country. Nine out of 10 people who use buses are in the bottom income bracket, and 60 per cent. of bus users have no access to cars. Therefore, if something goes wrong with the bus system, we are allowing the mechanisms that increase social exclusion to continue to operate. I cannot talk about the regulated system in London as being more effective and producing better public transport without talking about the increasing funding gap. I shall mention it only once. Over the past seven years, in the north-west, although similar statistics will be found in every region, capital expenditure—not the revenue for buses—has risen from £157 million to £295 million, whereas in London it has risen from £226 million to £667 million. That is another background unfairness. Before I try to analyse the possible reasons for what has happened, I should like to give some statistics. I suspect that I could spend the whole hour and a half available to us giving out appalling statistics about transport usage, but I want to use the headline figures showing the changes that have happened, and to ask why they have been allowed and how we can stop the process going further. Fares in the English passenger transport executive areas have gone up 86 per cent. since deregulation. In London, they have gone up 36 per cent. Over the past five years, fares in the PTE areas have gone up 9 per cent. In London, they have gone down 4 per cent. Patronage since deregulation across all the PTE areas has gone down by about half. In London, it has gone up by just over half. In the past five years, patronage in the PTE areas has gone down 8 per cent. whereas it has gone up more than a third in London. We need to understand why there has been such a dramatic difference between London and the rest of the country. I do not believe that it is justifiable, but we should consider ministerial responses to the figures and some statements from officials. The Government have three responses to the shocking figures that I have mentioned. One is that we are not going back to pre-1985 days and re-regulation. That is a complete red herring. I have never heard anyone say, in the debate on this matter that has been going on as long as there has been deregulation, that they want buses brought back into public ownership and a return to the exact regulation that existed before 1985. What most of us want is a system similar to London's, or preferably a better one, because when a system is adopted it can be improved. Secondly, the Secretary of State for Transport regularly points out success stories. His favourites seem to be York, Oxford, Brighton and Cambridge. He asks why, if those towns or small cities can improve patronage on their buses, big areas such as Birmingham, Manchester, Liverpool and Newcastle cannot. There is one obvious reason. His examples are much smaller areas, dominated in nearly every case by one operator, with one centre, so that traffic restraint can work—people do not have much of a choice in those areas. That situation can be compared with what happens in a polycentric urban conurbation such as Manchester. The city of Manchester has the highest percentage bus usage of any of the metropolitan areas, but Bury, which my constituency borders, has one of the lowest in the country. It is necessary to take account of different circumstances when attempting to make like-with-like comparisons. The west midlands and Greater Manchester clearly have much more in common with the London conurbation than with York or Cambridge, which are much smaller. Do the people in those towns like what is happening? I suspect not. A letter to the York Evening Press from Chris Nelson, complaining bitterly about price increases that he had to pay in York, asked"““are these higher fares just because First is the only bus operator in York, and people such as the elderly, single parents, or others on low incomes have no other choice of transport?""Park and Ride fares in York are simply extortionate—no other way of putting it. You have to pay the equivalent of a day ticket just for a return fare.””" He goes on to say that the system in York does not work. It is, therefore, neither wonderful nor comparable, and it is not a good reason for saying that the same could happen in Greater Manchester. The third ministerial reason is that London is different, and it is—it is about two and a half times larger than Greater Manchester or the west midlands. In terms of buses, however, it was no different before regulation, and the real change is that there is now a regulated system in London and a deregulated system outside. Before deregulation, 48 per cent. of all public transport journeys were in the PTE areas and about 27 per cent. were in London. That situation has reversed, with nearly half of bus journeys in London and only 27 per cent. in the PTE areas. That is a dramatic switch round. Comparable areas, which had similar penetrations of bus usage, are now completely different. One reason for that is the regulated system, and the other is that there is three times more subsidy per passenger in London than in the rest of the country. Those, then, are the ministerial reasons. I advise hon. Members who want to understand some of the thinking of the Department for Transport to get hold of a transcript of the Public Accounts Committee's proceedings on 23 January. At that sitting, the Committee gently kebabed the permanent secretary at the Department. He is a good civil servant, and I make no criticism of him. Indeed, he is a man of integrity and intelligence, but he was trying to defend what is more or less indefensible. He did not quite plead the fifth amendment, but in many cases he pleaded ignorance of what is happening to transport in our major urban conurbations. Let me go through some of the reasons that he gave. First, the permanent secretary said that local authorities in PTE and passenger transport authority areas would begin to have a service similar to that in London if they would only restrain car use, but that is not really the case. Greater Manchester is spending about £50 million on quality bus corridors, and other urban conurbations are doing the same. However, because the system is deregulated, the bus companies are moving on to the radial routes to make bigger profits, and the network is contracting. Although passenger usage on the radial routes might increase, therefore, there will be a worse service for some of the poorest people in the country Incidentally, the Government are tough in assessing the benefits of investment in public transport systems such as Metrolink, but no real assessment is done of the usefulness of investment in quality bus corridors, or of whether such corridors improve public transport—the idea that they will bring about improvements is an article of faith in the deregulated, privatised system. In the light of the facts, however, that is not a belief that I share. One justification that Mr. Rowlands, the permanent secretary, uses is that quality bus corridors will help to get rid of congestion, and that is what has happened in London. However, the Department's answers to parliamentary questions show that two thirds of bus delays are caused not by congestion, but by the unreliability of private buses—they simply do not turn up. The permanent secretary also says that, although there might be concentrations of bus usage, there are almost guaranteed to be three bids for subsidised routes. However, that is completely wrong. Many of the subsidised routes that PTEs put out to tender are simply not bid for. In Greater Manchester and the other PTE areas, there is only one bidder for many routes. The cost of such tenders has gone up by about 20 per cent. Arriva, which is no different from the four other major bus companies that dominate the industry, makes no secret of what it is doing. In answer to questions at the Public Accounts Committee, the permanent secretary said that those bus companies were ““economically rational”” and ““passenger maximising””, but they are not. They are certainly profit maximising, but that is not the same thing. If they can concentrate their services along routes from which others have been cleared by means of bus priority measures, they will make their profits there and remove their buses from other areas. Although the permanent secretary seemed to be wilfully ignorant of that, Arriva's half-year report stated:"““Outside London our approach, to what is currently a mature market, is to focus on a twin-track strategy of targeting investment to deliver growth and eliminating low margin and loss-making routes.””" That means that companies will remove routes on which they make a certain amount of money. The 53 route in Manchester, which was there for 80 years and always had good patronage, has just gone. Instead, companies will run routes up and down the main radial routes, which is bad for public transport. Whichever way we look at the Department's analysis—that there will be more bids, that there is competition and that quality bus corridors will be the solution—it does not fit with the facts. Should not the permanent secretary understand that, in a market in which the private sector is exploiting the people I represent, bus companies make 50 per cent. of their profits on only 25 per cent. of their business? That should, at least, be cause for concern. The Department said that it did not understand that and that it was not aware of those figures, and I would be happy to give officials the references for all the sources of information in my speech at the end of the debate if the Department is willing to listen. On the subject of listening, I have tabled parliamentary questions to ask how many times the Department meets individual bus companies and officials and members of PTAs and PTEs. I have been told that meetings happen regularly, but I am rather interested in how often they take place, because there is evidence that Government policy is biased towards the private bus industry and against public officials from PTEs. I therefore ask the Minister whether officials will meet PTE members and whether detailed figures will be given out. We have reached an extraordinary situation. I have been in favour of buses all my political life because the people I have represented as a councillor and a Member of Parliament have needed them. However, the system that now operates in metropolitan areas means that being in favour of buses is not the same as being in favour of public transport—they can be quite different things. Bus priority measures can be introduced, but the public transport system will get worse. That is quite a shocking state of affairs. At the same time, the private companies are demanding more public money. Some £2 billion is going into the bus industry and the companies' profits are going up, but the service outside London is getting worse. Brian Souter of Stagecoach attacks all the PTEs because passenger numbers are going down, but, at the same time, he has his begging bowl out. Like most private sector bus company operators, he says, ““You're not doing anything, so please build us park-and-ride schemes with your own money.”” If the private-sector bus industry were really creative and innovative, it would find those resources itself, instead of making returns on capital in the PTE of more than 50 per cent.—another fact of which Mr. Rowlands was not aware. A number of other hon. Members want to speak, so I will finish by asking how we can justify a situation in which the travelling public in areas such as Greater Manchester and south Yorkshire have to face four fare increases a year. In London, they face one increase a year—or one fare adjustment, because sometimes the fares in London go down. How can it be good for public transport when in the past four years there have been 9,000 service changes in Greater Manchester? I assume that the figures are similar in other areas. Most people who want to increase bus patronage recognise that reliability and stability in the network are important factors. People need to know where the buses are going, but 9,000 service changes is instability of an extraordinary kind, which leads people to invest in cars and not go on buses. How can we justify not doing anything about a system in which punctuality in virtually all PTE areas is 76 per cent. and reliability is only 92 per cent.? Those shocking figures are mostly down to the companies, not conditions on the road. How can we justify investing £2 billion but not looking at how we target the operators' grant money? We just pay it out, but do not try to use the tiny levers that are left to get a public transport system. The money is paid out without any controls at all. How can we justify having underfunded, under-resourced traffic commissioners, while companies such as FirstGroup have failed and have had to have hearings and investigations into their failures? The system means that traffic commissioners have to take services off, which is not good for the travelling public, even if they were poor services. When services are taken off in the north of England, FirstGroup registers a subsidiary and carries on as before, with its unreliable, unsatisfactory services. I do not see how any of that is justifiable. Our public transport system is going in the wrong direction. Most of the evidence is that our urban areas compete effectively internationally if they have good public transport systems. The situation is a brake on what they are doing, and I am worried that we are going in the wrong direction. Last year, at the request and subsidy of Services Employees International Union, a north American trade union, I went to the States to see how FirstGroup and other bus companies operated, and I was quite shocked. The safety record of the bus companies in this country is not good—I think that 15 per cent. of buses that are stopped by the commissioners have to be taken off the road immediately for being unsafe—but what is happening in the United States is worse. I do not want us to go down that route. I have tabled questions and asked for guarantees that, if we go to a yellow bus service, we will not follow the route that FirstGroup has taken in the United States. I know that the Minister has a brief and is in the last days of being a Minister in the Department, but I ask her to accept that the situation is not justified. None of us wants to return to the 1984 system, which was not as responsive as it should have been, but we do want value for the £2 billion that is invested. We want local control, so that we can say to our constituents, ““This is a public transport system that will get you to work on time.”” Constituents of mine have lost their jobs or not got to hospital for important appointments because FirstGroup did not turn up, at the same time as its profits are increasing. That is simply unacceptable. I hope that the Minister will be as positive as she can be in response to those points.