Local Transport Bill [HL]

My noble friend Lord Rosser has raised some interesting points and some interesting points have been put to him during the debate. Perhaps I should make it plain that the Government cannot accept any of the amendments as they are, but they raise issues that we might want to explore further. I shall explain. The main purpose of Clause 57 was to put the PTEs on an equal footing with other local transport authorities. Those other authorities do not have a specific power to lease buses to operators, but can do so as a use of their general well-being powers under Section 2 of the Local Government Act 2000. That procedure has been used in relation to contracted services and approved by the Department for Transport and the authorities’ auditors. The PTEs are in a different position, partly because they do not currently have well-being powers, although if Clauses 86 and 87 of this Bill are enacted, their parent authorities will have them in future, but more importantly because the power they explicitly had under the Transport Act 1968 was taken away by orders made under the Transport Act 1985 and there is, therefore, doubt whether even the provision of well-being powers would be enough to authorise them to lease buses. That is because well-being powers are limited inasmuch as they cannot confer a power on an authority to do something which they would otherwise be unable to do because of a prohibition, restriction or limitation in other legislation. Therefore, Clause 57 is explicitly seeking to remove the implied prohibition in Section 10(1)(viii) of the Transport Act 1968 in particular circumstances. The revived power is expressed in narrow terms, linked to the operators providing services to the PTE under contract, either the normal subsidy contract or a quality contract. We are not in favour of giving them an unrestrained power to lease out buses, even for purely commercial operations. We believe that that could create distortions of competition between different operators. The next amendment concerns the PTEs’ power to acquire land by compulsory purchase. I shall reflect on what my noble friend has said, but the existing power is very broad and would be construed in relation to a PTE’s current statutory functions which, since the Transport Act 2000 came into force, have included, potentially, letting quality contracts. It is not immediately obvious, therefore, that the power needs extending in this way. Finally, and most intriguingly, there is the question of whether PTEs should get back not only some of their power to lease buses, but also some of their power to operate them. The Government have no intention of restoring the power in full and going back to the pre-1986 position. However, I am persuaded that Amendment No. 66A would not allow them that possibility and scope and could allow them to operate buses only in narrowly defined circumstances where they would indeed be operators of last resort. Noble Lords have pointed out that there are similar provisions on rail franchising and in London bus legislation. We should not simply dismiss the arrangement out of hand. It raises a number of issues, however. One is whether it is right to give the power to the PTEs themselves, rather than requiring them to set up operating subsidiaries which, as I understand it, is the practice elsewhere and was a requirement under the Transport Act 1985 when the original PTE power was removed. Another is that they would have to have a PSV operator’s licence under the Public Passenger Vehicles Act 1981, and if they were to be in a state of readiness to take over services at any time, they would have to get it from the traffic commissioners well in advance. This is not a formality, as any bus operator would explain. It would mean having a transport manager with a certificate of professional competence who, presumably, would have to be available to step in at any time even though he or she would not be needed to manage any transport for most of the time. This may not be a problem for PTEs at the moment, but I suspect it could be in the future, particularly if new European Commission proposals are adopted which would considerably tighten the rules on transport managers and professional competence. I shall certainly ask the Minister of State and officials to look again into some of these matters between now and Report, but I cannot agree to this set of amendments today. It would not be appropriate to do so, and I am not entirely confident that they would work, but it is worth our giving some further thought to some of the issues raised by the noble Lord, particularly in the last amendment in the group.