Local Transport Bill [HL]

This has been a very stimulating and interesting debate, and I congratulate my noble friend Lord Rosser on tabling amendments that have provoked such a debate. Usually as a Minister you get the amendments listed in your notes, but there were so many amendments in this group that the top of the paper simply reads, ““and a group of approximately 30 related amendments””. I congratulate him on doing so. I have been listening to what has been said over the past half hour or so, thinking that this goes back to issues that were raised as a by-product of what I viewed back at the time, in the mid-1980s, as a rather crazy bus privatisation and bus deregulation Bill put through by the then Conservative Government. That legislation heralded in a time when I thought that we would simply see a continued acceleration of what officials said to me in my local authority was going to be managed decline. Year on year, it seemed that there would be fewer people on our local municipal buses and fewer people on the old green buses run by Southdown. There would be greater irritation as the fares seemed to get larger and larger as a proportion of people’s incomes. I do not think that there were many people who would ever have argued the case for the 1985 legislation in the longer term. Some imaginative bus operators, whose work came about as a result of the shakedown in the structure of companies that took over services, clearly did see a business opportunity, and I speak as one who lives in an area where it has worked. But it has not worked for the reasons that were set out at the time of the passing of the legislation under Nicholas Ridley. It has worked because in some areas there was a strong desire to see effective, co-operative and partnership working. This legislation and the 2000 legislation seek to build on that concept of partnership to try to improve the quality, standard and variety of services on offer. That is in essence what we are trying to do here. There has been a lot of criticism this afternoon that the legislation is going in the wrong direction and people have said that the 2000 legislation was a failure. I do not accept that it was a failure in the terms that have been set out before the Committee, because it has played its part in forcing the process of partnership, and we have seen the development of many successful voluntary partnerships. That is to the good, and we should work from that experience and seek to improve on it. No one is saying that voluntary partnership is a bad thing; most people are saying that it is a good thing but that there are circumstances where we need to give it more of a framework and more of a body and encourage and do more to stimulate the bus market. As we know, there is a tremendous amount of capacity in the bus industry, with much greater capacity to move passengers around, and it has tremendous potential for growth. Those are the issues that we should be wrestling with. The amendments tabled by my noble friend Lord Rosser stimulate some debate about the best way to go. I am aware that, for instance, the question raised on the Approvals Board is an issue that has caused many strongly voiced opinions during consultation. Many are in favour of Approvals Boards and there are also people who are opposed. We have tried to strike a reasonable balance between those competing interests. My noble friend Lord Rosser has opposed the Approvals Board on two grounds. First, he says that it is undemocratic, and, secondly, he says that it will cause delays in what is bound to be a lengthy process to set up a quality contracts scheme. The Transport Committee in another place was fully aware of those arguments, yet it recommended not that the whole idea of a board should be scrapped but that it should simply be modified to amend those concerns as far as possible. That is what we have sought to do. Let us remember that if Section 126 of the 2000 Act is not amended, a local transport authority in England will still be unable to make a quality contracts scheme without any independent scrutiny; it would need to submit an application to the Secretary of State for approval. That will continue to be the case in Wales, because Approvals Boards would exist only in England. An authority wishing to make a scheme in Wales would, as now, go to the Welsh Ministers for approval. However, Amendment No. 45 in this group would remove Section 126 of the Transport Act 2000 altogether, removing the approval role of the Welsh Ministers as well as the Approvals Board for England. I do not know whether that was the noble Lord’s intention or whether he has taken any views from our colleagues in Wales on this issue. Our view in England is that giving the approval role to the Secretary of State placed Ministers and officials at the Department for Transport in a very difficult position, because if they so much as discussed a proposal with the local transport authority, there was a risk that it might be seen as a potential fettering of the discretion of the Secretary of State, and thus prejudicial to the Secretary of State’s ability to make an independent and impartial decision about the application. In such circumstances, an aggrieved party would be more likely to mount a legal challenge, which could in turn lead to a costly and even more time-consuming judicial review of the decision. That was why, in England, the Government decided that any scheme should in future be approved by an independent body rather than by a Minister of the Crown. The local authority that is proposing to make the scheme cannot, by the nature of things, be an impartial judge. It will obviously support the scheme and be keen to get it implemented as soon as possible. The Government therefore believe that the Approvals Board, which would be able to provide the necessary objectivity in weighing up the issues, would be better placed to make such decisions. It is not the Government’s intention that the Approvals Board will quibble with a local authority on questions of policy. That is rightly a matter for local decision by the democratic process. The notions of manifestos and commitments kick in. The policy issues should be thrashed out in the local authority. The board’s job is to certify that a quality contracts scheme is a reasonable and effective way of implementing that policy and fully satisfies the criteria set out in the new Section 124(1) of the Transport Act 2000 that would be inserted by Clause 18. That is rather more than simply looking at process, but it is a good deal less than interfering in policy matters. I hope that the Committee is reassured on that. The Government regard it as highly important that the legislation is fully compatible with the European Convention on Human Rights. There is a potential tension here over quality contracts schemes because of the right of natural and legal persons, including bus companies, to peaceful enjoyment of their possessions. Of course, the convention right includes a balancing test that enables the state to make laws as considered necessary to control the use of property where that is in the public interest. In this Bill, particularly Clause 18, we have taken care to define the criteria for quality contracts schemes in a way that will ensure that any scheme is in the public interest, and that any interference with the peaceful enjoyment of property is not disproportionate to achieving those public interest objectives. But a local authority that is, understandably, intent on getting a better bus service out of operators may not give as much weight as it rightly should to the proportionality of the scheme’s effect on existing operators. In sum, the local authority cannot be expected to be totally impartial in this matter, and if challenged it might find difficulty in proving that it was impartial, to the satisfaction of a court of law. That is why the Government consider that these sensitive matters should be decided, not by the local authority alone, certainly not by the operators, but by an independent third party with the right expertise who can make decisions with an impartial and open mind. This would not be a traffic commissioner alone, but a commissioner sitting with two other appointees. Although not specified in the Bill, we have it in mind that one would be an expert on transport planning, and the other an expert on transport economics. There may be occasions when, because of the nature of the scheme, other forms of expertise are more important. That is why Clause 21 leaves open the precise constitution of the board, so that each Approvals Board can be set up to include the most appropriate people for the particular case in hand. The second objection about the Approvals Board is that it will cause unnecessary delay in the making of a quality contracts scheme. As no proposed quality contracts schemes have to date been submitted to the Secretary of State or a Welsh Minister for approval, we do not have an easy point of comparison. But it is fair to say that a board that is constituted for one specific purpose is more likely to take a quick decision than a Minister or a government department that always has a host of conflicting priorities coming across its desk at any one time. We accept the very legitimate comments made by the Transport Committee in another place and others that decisions should be made within a reasonable time. That is why we have made provision in the Bill for the Secretary of State to specify in regulations the period within which the board would be expected to take its decisions. The board would be under an obligation to take all reasonable steps to reach a decision within that specified time. If it failed to do so, the chair of the board would have to write to the Secretary of State and the authority making the application setting out the reasons for the delay. That is all set out in new Section 126B of the Transport Act 2000, which would be inserted by Clause 22. We have not specified the time limit in the Bill. That might need to be revised in the light of experience, because we simply do not know how complex the decisions are likely to be. But we have in mind something perhaps as short as six weeks as the maximum time between the referral of a case to a board and the delivery of its decisions. That would be shorter than the period normally allowed for consultation, and a great deal shorter than the best estimate of the time it would take to tender for contracts after the scheme has been approved. This group of amendments goes even further, proposing to dispense not only with an approval mechanism, but with an appeals procedure of any kind. The local transport authority then really would be judge, jury and, I guess, executioner in a way that is totally unacceptable in a modern democratic society. When we are granting powers which have the potential to interfere with private rights to this extent—and whatever some noble Lords may think of bus operators, they do have rights—there has to be some reasonably accessible form of legal redress, for we are talking about the rights not only of the big five transport groups, but of smaller operators. Removing the Transport Tribunal would not be at all satisfactory from the authority’s point of view either, because there would still be a possibility—we think it is a very strong likelihood—of a bus operator seeking a judicial review of any decision to make a scheme. The judicial review procedure would probably be beyond the means of a small operator, but it would certainly not be beyond the means of a major transport group. The impact on a local transport authority of an expensive and possibly protracted judicial review procedure could be far greater than the impact of an operator appealing—