Local Transport Bill [HL]

I do not wish to detain the Committee by having a Second Reading debate on quality contracts and their necessity, but I ask the Minister what consideration has been given by the department to the question of compensation raised by the noble Lord, Lord Hanningfield, if companies themselves lose certain routes, or parts of routes, because of a franchising scheme which would be the natural outcome of Clause 18. What consultation, if any, has taken place with shareholders in bus companies? Despite the generally held myth, they are not all Montecristo-smoking fat capitalists. Indeed, many of those working in the bus industry are shareholders in the company for which they work. I have already drawn your Lordships’ attention to my entry in the Register of Members’ Interests, and do so again. Certainly, the two bus companies for which I have worked both have a considerable number of their employees as shareholders. In the National Express Group, accepting shares was actually a condition of employment. Obviously, any diminution of earnings for those companies arising from this clause about quality contracts will impinge on those shareholders and the employees as well, as many of them are one and the same. Will the Minister therefore address the point about compensation for shareholders and the impact of the franchising system in the clause on local bus services? Again, although it might sound superficially attractive to some to say that there should be a franchising system in a particular area, one cannot imagine that the losing applicant, if that is the right way to put it—the person or the company that already operates the services—will be prepared to walk away, handing in the keys to garages and passing over their assets, without seeking some compensation. I have no idea what the likely outcome of such an approach is—I am glad to say that I am not a lawyer—but one can envisage a fairly protracted and difficult situation arising in the circumstances that I have just outlined. I therefore hope that the Minister will spend some time on this point when he replies. Lastly, aside from my own interests in these matters, I believe that a partnership is a far superior method of operating bus services than a quality contract is. However, I appreciate that other people might have different views. Does the Minister agree that a quality contract, in most circumstances if not in all, really should be the court of last resort, and that, if all else fails, it is an avenue that should be explored if other aspects of bus operation have not been tried? I have no wish to repeat points that I made earlier in this debate, but your Lordships will be aware that I mentioned cases in which I have been involved when local authorities, for various reasons, were not prepared to participate wholeheartedly in the successful operation of quality partnerships. That is why, whether the blame lies with operators or with local authorities, I would be grateful if the Minister underlined the fact that, in his opinion and, I hope, that of the Government, the clause really will be the last resort and that everything else has been tried before quality contracts are applied in any area.