Local Transport Bill [HL]

My Lords, I am grateful to all noble Lords who have contributed to this discussion. The dichotomy of views expressed has made it very interesting. I am impressed by the persistence of the noble Lord, Lord Rosser, in moving these amendments and I welcome the intervention of the noble Lord, Lord Snape, with his breath of realism on how the bus industry works. Those are the extents of the input into this discussion. As often happens with these sorts of issues, a balance must be struck between the legitimate and understandable expectations of local transport authorities and the public on whose behalf they are acting and the legitimate interests of operators who are trying to run a business and make a fair profit. The balance needs to be struck in the spirit of partnership to produce schemes in which both authorities and operators can feel fully committed. If the noble Lord, Lord Rosser, detected a change of direction by the Government, it was in an attempt to secure that balance and try to preserve and underline the value of local partnership to deliver good quality local bus services. It may interest noble Lords to learn that the Department for Transport has had representations, not just from the bus industry but from local authorities, passenger transport executives and others, about the whole issue of admissible objections. The bus industry is still concerned that the provisions will not give their members sufficient protection. If we are being criticised from both sides in equal measure, it is probably right to conclude that we have got the balance in this argument in the right place. As I said in Committee, if we had no provision of this kind, operators would have little protection against a local authority imposing conditions on their operation that might be quite impossible for them to meet on a commercial basis, which could have the perverse effect that they would simply withdraw from the scheme altogether and leave the yawning gap in service provision that the noble Lord, Lord Low of Dalston, is rightly concerned about. That is in no one’s interest, and any sensible local authority would conduct a great deal of preliminary discussion and undertake negotiations with operators before initiating the public consultation process. However, operators are more inclined to participate if they at least have the comfort that, if really impossible terms are imposed on them, they can make an admissible objection to the particular provision they find hard to sustain and completely commercially untenable. The crucial thing to bear in mind is that the precise terms of who is a relevant operator and what is an admissible objection will be defined in regulations—in the provisions that would be deleted by the third amendment in this group. I understand that this is frustrating, because your Lordships would probably like more certainty about how the provision would operate, but at the same time it should be reassuring that we have some flexibility. We shall need to consult fully on the regulations, and it will be easier to put things right if we get some of the detail wrong, rather than if we were to set out all these issues in primary legislation. In an ideal world, it would be best if we had draft regulations ready so that people could see the quality of the drafting and make some comment on them. We have made good progress on the Bill, however, and we have not had time to perfect those draft regulations. I suspect that colleagues in another place will have that opportunity. However, we have given an indication of our intentions in the draft guidance, subject, no doubt, to more detailed consultation. I paraphrased those proposals in Committee, but perhaps I should also have read out the text in the draft guidance document immediately preceding them. I shall now do so because it helps to illuminate some of our discussions: "““The Local Transport Bill allows for these two terms””—" that is, ““admissible objection”” and ““relevant operator””— "““to be defined, and for other relevant provisions to be made, in regulations. We will be working closely with interested parties, including through the Bus Partnership Forum, as we develop these regulations. Our aim in this is to prevent ill-conceived, vexatious or frivolous objections, while protecting the legitimate interests of operators involved in the provision of local services in the area affected. Box 1 below is an example of a possible way of meeting those objectives. We are willing to consider alternative ways of doing so””." I remind your Lordships of the contents of ““Box 1””, mentioned in the above quotation. For an objection to be admissible, first, it should be made in writing within a specified time by an operator of services directly affected by the proposals; secondly, it should be made on the grounds either that it would not be reasonably practicable for operators to meet the standards of service specified at the time that they would come into effect, or that the likely demand for the services would not be sufficient to enable operators to provide services on a commercial basis to the standard specified; and, thirdly, the traffic commissioner must certify that the evidence submitted by the relevant operator is sufficient to substantiate the objection. I stress again that these are not tablets of stone, and that the guidance itself is still a draft, which will be further refined in light of the comments we receive. That shows that we are committed, first, to consultation; secondly, to getting these matters right; and, thirdly, to striking a balance at all times. The noble Lord, Lord Rosser, described our current position as an operator veto. I do not recognise that in the terms in which the noble Lord made the point, though I understand why he set it in that way. The draft Bill would have required operator agreement to requirements on fares. The admissible objections proposal provides a better balance between local transport authorities with a desire to include such requirements in the scheme, and the commercial interests of operators. That is probably the most constructive way of dealing with the issue. The noble Lord, Lord Rosser, also made the point that a wide variety of operators can veto for a wide variety of reasons. We do not agree with that. The basis that we have proposed in the draft guidance is rather narrower than that. For that reason, I drew particular attention to the second of those boxed bullet points about the grounds on which admissible objections can be made. The noble Lord, Lord Bradshaw, made a point about traffic commissioners and the fact that they would be accompanied by others when considering admissible objections. The noble Lord might have been confusing two issues: that of the approvals board and that of traffic commissioners plus two others. That, of course, works for quality contract schemes, not quality partnerships. Another issue raised by the noble Lord, Lord Bradshaw, was that of traffic commissioners considering admissible objections. In drafting the regulations, we will need to consider whether the traffic commissioners should make decisions alone. We will consult on that before making regulations. No doubt noble Lords will express a view on that, as they have throughout the passage of this Bill. I turn, finally, to a point made by the noble Lord, Lord Low of Dalston, relating to draft guidance and the possible problem of insufficient demand being used as an admissible objection. The noble Lord asked if the test would also cover the issue of the single or any operator. The test we propose in the guidance is whether the bus industry as a whole can viably run the schemes. That is an important point, but we will need to consult on the detail. I made a note of the noble Lord’s second point, but I would like to reflect on it further before making observations on it. I will have to write to the noble Lord. It raises an interesting issue. For all those reasons, I cannot agree to the amendment of the noble Lord, Lord Rosser. We have tried to strike a balance here. We have published guidance, which seeks to underline that balance, and we recognise the importance of considering commercial interests. There is great value for local transport authorities in expressing their realistic, and quite legitimate, expectations in terms of defining quality services in the context of this particular aspect of public transport provision.