My Lords, I agree with those who have spoken in support of the removal of Clause 21 from the Bill. The Bill is 83 pages long and the relevant paragraph is two lines long. It says simply, in a clause headed “Bus companies: limitation of powers of authorities in England”:
“A relevant authority may not, in exercise of any of its powers, form a company for the purpose of providing a local service”.
The Minister needs to explain to the House—I agree with my noble friend Lady Randerson that he did not do so satisfactorily in Committee—why this clause needs to be in the Bill, what its purpose is and what problem it seeks to solve or prevent. The noble Earl, Lord Attlee, gave us one reason. He forecast wholesale competition through the franchising route from local authorities; I remind the House of my vice-presidency of the Local Government Association. He was good enough to say that local authorities run bus services extremely well in the limited number of cases where that occurs.
I hope the Minister might explain what the problem actually is that the Government are trying to solve, because five years ago, the Localism Act 2011 increased the powers given to councils alongside their general power of competence, and they have a right to undertake new duties and introduce new policies that are not excluded by existing legislation. Of course, that explains why these two lines are in the Bill; otherwise, councils would have the power to form those companies to provide a local service.
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My concern—my reason for supporting the deletion of this clause—is that there might be circumstances in which it becomes essential for a local authority to take action. That would be as a consequence of market
failure, where a bus service should be run but nobody is able to run it. In that situation, why should a local authority be prevented by the statutory requirement in the Bill that it will never be able to form a company to provide a local service? I think that is wrong.
The Government have had a very good record on devolution over the past six years. However, to be successful, devolution means giving power away to others to make decisions on their behalf. I see this not really as an issue of competition between local authorities and bus companies but as a means of addressing market failure where it might occur. I hope, therefore, that the Minister will look very carefully at this, because we have tried, in recent stages of the Bill, to challenge the Government’s thinking on this point; and that, even at this late stage, the Minister might be willing to indicate that the Government will have a change of heart.