Buses (Deregulation)

I congratulate the hon. Member for Manchester, Blackley (Graham Stringer) on securing the debate and on an excellent contribution. I also commend the contributions made by other hon. Members; we have had a very good debate. I, too, send my best wishes to the Minister. I have been in the House only a short time, but I have always found her very courteous. Although we have not always agreed, we have at least had that dialogue, so I wish her well. The hon. Member for Manchester, Blackley represents an urban constituency, as I do. Some of the examples and statistics that he gave show why deregulation has been a disaster and why we need a change of policy. Buses are important, although they are often treated as the Cinderella of public transport. They are frequently the choice of the majority: 85 per cent. of all public transport journeys are, and will continue to be in the near future, made by bus. If we are to do something about congestion in urban areas, we must deal with some of the problems that hon. Members have raised. When the Transport Act 1985 was introduced, we saw the privatisation of the National Bus Company and the municipal bus companies—I am thinking of Greater Manchester Buses North and Greater Manchester Buses South—and what was then termed the freeing up of the market. We were promised more competition, better bus services and cheaper fares. However, we have had none of those benefits. Instead, there was a brief period of bus wars. I am sure that we all remember when buses were chasing each other for custom along the road—always along the most profitable routes, not on estates. Those services do not run at times when people without cars need them to run. That time has gone and what do we have? We have a private monopoly instead of a public monopoly. Although 80 per cent. of all services in PTE areas are commercial services and only 20 per cent. of those are subsidised, 65 per cent. of all bus services in 26 of the 36 metropolitan districts are operated by one bus company. In 17 areas, the figure is 75 per cent. In my constituency of Rochdale, 65 per cent. of all bus services are run by First. In Oldham, the figure is 84 per cent. In Stockport, with Stagecoach, the figure is 81 per cent. In Sefton, with Arriva, the figure is 78 per cent. In Birmingham, National Express has 86 per cent. A monopoly in itself is not a bad thing, but if we compare the services in PTE areas with what we have in London, we find that they are characterised by four things: frequent fare increases—four increases last year were mentioned—frequent changes in bus timetables, often with little notice; poor reliability and service; and services operated for the benefit of shareholders rather than customers. For example, when Arriva recently announced a fall in profits, primarily because it had lost the northern rail franchise, it said that the bus fares would have to go up. That is not improving the service. That is operating bus services, as has been said, as a cash cow. Many customer service surveys have shown what we all know: the main concerns of bus users are reliability, punctuality, driver attitudes and service stability. A bus does not turn up only once, and a passenger is lost. If there is to be a modal shift and if we are to meet the target of a 10 per cent. increase in bus use in areas outside London, there must be a change of image and in operation. As we know, that is not happening. We have seen a 19 per cent. fall in bus use in PTE areas; the figure was 3 per cent. last year. At the same time, we have seen a huge increase in bus fares: 86 per cent. between 1985 and 2005. That is not acceptable. Let us compare the rates of return in PTE areas with that in London. First Manchester's rate of return is 17.8 per cent. Arriva Manchester's is 15.1 per cent. Stagecoach Manchester's is 14.5 per cent. The margin in London is much lower: 8.7 per cent. The situation that I have described cannot continue. We cannot operate a service whereby bus services are changed and fares are increased not to bring about improvements in services but to ensure that profits are protected. If we are to get our city regions operating, we must consider a change in the system. The Secretary of State said in an answer to a written question from the hon. Member for Manchester, Blackley that we could not return to the 1985 situation. As has been said, none of us here wants that. However, we do want quality bus services reliably operated in areas where people need them and at times that will get people out of their cars. If the current system continues, that will not happen. Quality contracts were mentioned. In answers, the Secretary of State has said that that is the route that we have been going down, but, as has been said, those contracts are extremely difficult and time-consuming to operate. It is pertinent that, since the time to introduce those contracts was reduced last November from 24 to six months, not one contract has yet been applied for. That shows some of the difficulties. The contracts are too complicated; there are too many stipulations. We are told that competition will work, but clearly competition is not working. It is not providing regular public transport. PTEs need to be able to plan and develop an integrated transport policy. It was said that, with the introduction of congestion charging, that may be possible, but as the hon. Member for Manchester, Blackley and my hon. Friend the Member for Southport (Dr. Pugh) said, we have to consider what is happening. I am a member of the Greater Manchester passenger transport authority. We have not said that we would oppose such a move. However, we have always said that the public transport network has to be in place before charges are introduced. If not, we will not encourage local people back on to the buses. We need to consider changing the rules relating to quality contracts. Passenger transport authorities are working on the issue and are committed to introducing quality contracts, but operated as they are currently, they will not be a success. Liberal Democrats want more local decision making. We want PTAs to have the powers that they need to introduce the contracts as part of an integrated transport system. That means similar powers to what exists in London. That is not nationalisation. In 1985, the real difference was not about privatisation or nationalisation; it was about regulation, and that is what we do not have at the moment. We need regulation. Yes, there is the issue of cost. As the hon. Member for Manchester, Blackley said, the costs and subsidy for London are much higher. I am not arguing with that. However, if we consider the bus operators' grant that is paid directly to those companies, and some of the margins that they achieve—the profits of companies in the PTE areas are even more excessive than those made in London—we must be able to find a way of operating a similar service without massive Exchequer input. We must think about that, because we have to have a public transport system if our cities are not to be log-jammed with cars. The current system is not working. It has failed local people. I hope that, in her last few days in her post, the Minister will set in train a thorough review of the existing situation, which will show her that the private monopolies exist for their own benefit and not that of local people. I hope, too, that the Government will use the information from the review to give us a proper, integrated transport system.