Local Transport Bill [HL]

I am grateful to all noble Lords who have contributed to the debate. A vast range of subjects has been raised and I shall not be able to answer all the points this afternoon, but I may in the end reach a position that noble Lords may think is more helpful than it was when we started thinking about these issues. The TUPE regulations, and the Acquired Rights Directive which they implement, deal with straightforward cases where a workforce employed on a particular public function, such as waste collection, is transferred to do the same work under a new contractor. As noble Lords have pointed out, the position when a quality contracts scheme is set up is more complex because the starting point is different. Before the scheme is introduced, employees are working for the provider of bus services, in most cases, on a commercial basis by a private sector operator. When the scheme comes into force, those services are instead to be provided under contract to the local authority, either by the same operator or by a different one, depending on who wins the contract following a competitive tender. The end state is very similar to that of a refuse collector employed by a contractor of the local authority, but the workforce is not being transferred from the local authority or from another contractor doing the same work on behalf of that authority. The transfer of work will not necessarily involve the transfer of physical assets, such as vehicles or depots, although in some cases it may, as we have discussed. The pattern of services to be delivered under quality contracts may differ considerably from what the operators provided under deregulation. Indeed, one of the main reasons for making a quality contracts scheme may be that the authority wants a different, and better, network. Often, too, there will not be a one-for-one correspondence between the old employer and the new one, and some personnel will not have to transfer at all because particular routes will not transfer. Duty rosters may have to be redesigned and staff moved from one depot to another. It is not a straightforward transfer—or at least it will not be in all cases. Let us assume that the local market is divided by two or three large employers and a handful of small ones. Under quality contracts, the market may be carved up in a very different way, but some of the changes may balance out. So it may be easier for an employer to keep the same drivers and allocate them to different routes than to transfer them to another operator who has taken over the routes that those drivers originally worked on and get some different ones back in exchange. That might also be a great deal easier for the drivers themselves. I am not saying that will happen everywhere, but we need to make allowance for it. Clause 38 says, in effect, that any employee who is transferred to the holder of a quality contract will be transferred on TUPE terms. It does not require all the contractors to take over all the workforce, but it will apply TUPE to a number of transfers that would not fall under the regulations but for this clause. Even if I had not been aware before, I was certainly made aware today that the trade unions and some local transport authorities—and possibly even some operators—would like the Bill to go further and require all contractors to take on all their allocated drivers on TUPE terms. This would be in keeping with the general principles of TUPE, but it does beg the question of who would allocate the drivers if their current job is split between two or more contractors and their current shift patterns would simply not fit into the new service patterns of any of the contractors that subsequently undertake the service. This may be more a matter of practicalities than of principle, but whatever we do here, it is important that we make a provision that will work equally well across the board in respect of a range of different types of quality contracts scheme. We need to ensure that the provision works where all the existing services provided by one incumbent operator transfer en bloc to another single operator, but equally we need to ensure that it would work where services operated by one incumbent operator are split across a number of new operators, perhaps with new routes previously not provided at all. We need to do so in a way that would not overburden operators and unreasonably escalate the costs of a quality contracts scheme. That said, I am happy to take this point away and discuss it further with the Minister of State. At this stage I cannot say more than that, but we are prepared to have more discussions on it to see whether we can perfect what we have. The amendment tabled by the noble Lord, Lord Hanningfield, as well that of the noble Lord, Lord Rosser, deals with pensions. Like employment rights, pensions are a very complex issue and I do not want to get into that labyrinth without a reliable guide. I am not an expert in those matters, but they are being considered by Ministers and officials in other relevant departments. We want the provisions in this Bill to be as consistent as is reasonably possible with the legislation applying elsewhere. We do not want to go further than that, but again I am happy to go away and ask my ministerial colleagues to give this further thought. I cannot promise that we shall come up with the perfect solution on Report, but our minds are not entirely closed on the issues that have been raised. I would like to reflect further on the points that noble Lords have raised and I expect to be able to say more on Report. These are complex issues and I have listened carefully to what noble Lords have said. If they would be obliging enough not to press their amendments, I can give a commitment to think some more about the issues raised in them.