Local Bus Services

Bridget Phillipson Excerpts

Wednesday 5th November 2014 Commons Chamber

[Mr McLoughlin]

No. As I have just pointed out, the trend has been reversed—[Interruption]—in the last year for which figures were available, and not just inside London but outside it too.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Returning to the point made by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), will the Secretary of State now take this opportunity, very belatedly, to back the North East combined authority in the decision that has been taken to press ahead with the quality contract scheme in Tyne and Wear?

[Mr McLoughlin]

It has to go through a process that involves the traffic commissioners, and it would be wrong of me at this stage to take a view one way or the other. The process was set out in legislation introduced by the last Government.

As I was saying, we have started to see growth under this Government, because the services are better. Buses are becoming more accessible, so that everyone can use them: well over three quarters of the fleet is now fully accessible. Buses are also getting safer: there is CCTV on 82% of buses in England, an all-time high. Buses are getting easier to use, with smart card readers on 86% of English buses outside London, up from just 25% when the last Government were in power.

So when the hon. Member for Wakefield calls for Oyster-style ticketing, there is good news: we are making it happen, when the last Government did not. A lot of progress has been made. Those are the real facts: a growing industry, a popular industry, with high and rising passenger satisfaction levels. Investment is going into the industry—£1.4 billion of private capital over the last five years by the major operators alone. That means newer, cleaner, greener buses, better services and new information systems. The “Boris bus” in London is a world beater, and the pensioner pass has been protected. This year, we will fund spending on concessionary travel by nearly £1 billion.

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[Mr McLoughlin]

I do not think that reflects a change. I would like to have a mosaic of transport systems. What is applicable in certain areas will not be applicable in others, but I am willing to have discussions with leaders in other areas and with people who would put an alternative view of how we best approach these matters. It is important not to get obsessed with one-size-fits-all regulation; a common-sense approach is best for each community.

[Bridget Phillipson]

I am grateful to the Secretary of State for allowing me to intervene a second time. Does he not understand the apparent inconsistency in the argument being advanced here? On the one hand we are told that Greater Manchester should have these powers, but on the other hand his Department has failed over the past four years to back Tyne and Wear in its very similar approach to these matters. Is there not an inconsistency?

[Mr McLoughlin]

I do not think that there is inconsistency at all. What we have seen in Greater Manchester is a coming together that goes much wider than just the Manchester authorities, with a much more imaginative scheme that includes the powers of the police and crime commissioner and many services in the area. I think that it is bold and imaginative, and I am sorry that Opposition Members seem to be a bit upset about it—I can see Manchester Members nodding in vigorous agreement with what we are doing.

We must also recognise what great things have been done by the private sector. I want devolution to be a success, based on the best that the public and private sectors can do. The private sector brings ingenuity, creativity and innovation to transport, and that must continue. We have manufacturers in the UK at the cutting edge of technological innovation, and we have operators setting the benchmark for new customer services and investing massively in new vehicles. That includes over 800 new low-carbon buses, supported by Government funding. Through the Office for Low Emission Vehicles, we will be supporting the purchase of hundreds more. I was at the bus expo in Birmingham this morning, seeing for myself what the bus and coach industry has to offer. No one could fail to be impressed by the dynamism of hundreds of the exhibitors.

Of course, there are challenges ahead. We need to go back to good transport in rural areas, for instance. As a resident of rural Derbyshire, I know how important buses are to people in the countryside. For many isolated communities, buses can be a lifeline. The old model of services is changing, and we need to ensure that as it changes people retain access to good transport. We all need to work together to get it right. I want to pay tribute to the brilliant work done by community transport operators and their many volunteers. There are three such operators in my constituency: Bakewell and Eyam Community Transport, Ashbourne Community Transport and Amber Valley Community Transport. They do a fantastic job, as do other community transport operators across the rest of the country. I want to do more to help them, and very soon I will say more on how we can do that.

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[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I am grateful for the opportunity to speak in this important debate. With two thirds of all public transport journeys made by bus, we are right to talk more about the importance of local bus services, although the issue is often overshadowed by debate on rail and infrastructure. Unfortunately, my constituents do not enjoy the benefits of a rail or light rail service, and many are entirely reliant on local bus services. I hear from older residents who are left cut off and isolated, unable easily to access GP or hospital appointments, from shift workers who simply cannot get to work, and from employers who find it difficult to retain staff as a result. Families who are still struggling to make ends meet face above inflation fare rises year on year.

In 2010 I first began to campaign on the issue when local parents asked for my help to try to protect a route that had served the community for decades, but which was about to be cut, making it difficult for their children to get to school. Despite the fact that operators receive more than 40% of their income from the taxpayer, local people found that they had little to no say. The operator made it clear that although we could raise our concerns, it was under no legal obligation even to consult on changes.

The decision to deregulate local bus services in the 1980s is the primary reason for the poor state of bus services in Tyne and Wear and my constituency. The Transport Act 1985 did not deliver on its promise to increase the use of public transport, bring in lower fares, and lower the cost to the taxpayer. Instead, in the north-east a small number of operators cherry-pick the most profitable routes, and set the fare structure and bus timetables with little or no regard for integration or best value for the passenger and taxpayer. The 1985 Act marked the beginning of a great divide in our country between areas of regulated and deregulated local bus services. Since bus services were deregulated outside London, the two different systems have produced very different outcomes in passenger growth. Figures show that since deregulation passenger journeys on local bus services outside London have fallen by 37%, whereas in London bus patronage has increased by 105%. In Tyne and Wear, the position could not be clearer. Deregulation has failed: fares go up above inflation, pricing people off buses; routes are cut and needlessly changed; and whole areas are left cut off.

An investigation in 2011 by the Competition Commission was highly critical of deregulated bus services. It found limited competition between operators, which tended to result in higher fares and lower quality for passengers. The report also found that head-to-head competition for services was unlikely because of the dominance of a small number of operators. In fact, there was heavy criticism because some bus companies were accused of colluding to avoid direct competition altogether, resulting in geographic market segregation, including in my area.

Last month in Tyne and Wear, the north-east combined authority voted to press ahead with the quality contract scheme. This will create a level playing field and allow new entrants to break into the market. Part of the profits made will be reinvested into improving local services and reducing the subsidies paid by local taxpayers, while at the same time increasing passenger numbers. Over a decade, this will result in £272 million in economic benefits to the region. There will be a simple fare structure with Oyster-style integrated ticketing. Fare rises will be capped with extra help for families with children.

For three years the bus operators have been scaremongering about the prospect of a quality contract scheme in Tyne and Wear. Stagecoach’s Brian Souter claims that those of us who want a better local bus service are “unreconstructed Stalinists” and has threatened to pull out of the region altogether. Stagecoach is, however, happy to run services under London’s regulated system and there is no good reason why it could not do the same in Tyne and Wear. This is typical of the bluster and the negative campaign of scaremongering that has characterised its opposition to change. It has frequently threatened legal action in the hope that it could bully councillors into giving in. Its threats have so far failed, but it has not gone away. It is time the operators respected this democratic decision and contemplated exactly why it is that people are so dissatisfied and so angry with the service it offers.

Where Tyne and Wear is leading the way I want other areas and cities to follow. Even the Chancellor now appears to accept this case. Today, however, the Secretary of State has unfortunately refused to back the decision of the North East combined authority. In fact, in the past four years his Department has repeatedly failed to do so. What should the people in the north-east take from that? Surely if it is good enough for Greater Manchester it is good enough for us in Tyne and Wear too, where local councils have come together to work to deliver better value and a better system for the taxpayer? The quality contract scheme has been a long drawn out and complex process. I am pleased that the shadow Secretary of State has made it clear we should simplify the process and avoid vested interests being able to frustrate it.

The north-east has so much to offer but there are many challenges ahead, with the highest rate of unemployment and some of the lowest paid workers in the country. We have the capacity to make a greater contribution to the nation’s economy, but we need a transport network that supports businesses, growth and job creation. Today’s motion, and the quality contract scheme we are pressing ahead with in Tyne and Wear, is the change that our region needs to take that forward.

Oral Answers to Questions

Bridget Phillipson Excerpts

Thursday 23rd October 2014 Commons Chamber

[Claire Perry]

I enjoyed my meeting with the Ollerton economic forum. The advice and support of such bodies—as well as of local authorities—help us to pull together a business case to look further at such investment. I commend my hon. Friend and his constituents for their hard work on this line.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

11. What recent discussions he has had with his Department's quality contract board.

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

It is for the senior traffic commissioner to make arrangements for the constitution of a quality contract scheme board. No discussions have taken place between the Department and a quality contract scheme board, but I understand that the North East combined authority considered it on 21 October, and has decided to refer its draft quality contract scheme to the QCS board.

[Bridget Phillipson]

I am grateful to the Minister for his answer; as he indicates, discussions now need to take place. In Tyne and Wear this week we took a major step forward when the North East combined authority unanimously agreed to press ahead with plans for a quality contract scheme in the north-east. Will the Minister now respect the will of the people and ensure that the quality contract board has all the resources it needs to arrive at a speedy conclusion?

[Mr Goodwill]

The Government are committed to localism and to local people making decisions about their local services. Whether to adopt a London-style quality contract scheme is a matter for individual local authorities to determine. This is an independent process, with the scheme examined by the QCS board and chaired by a traffic commissioner. It would be inappropriate for the Government to comment or intervene, but if there are issues to do with resources for that board, we would be keen to consider them.

Transport in the North-East

Bridget Phillipson Excerpts

Wednesday 15th October 2014 Westminster Hall

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Caton, and I am grateful for having secured this debate.

The north-east is a wonderful place for us to live, work and do business. However, too many of our constituents are struggling, and central Government are not giving us the support that we need. On so many economic measures, we are falling behind the rest of the country. From May to July 2014, the north-east had the highest UK unemployment rate; it stood at 9.9%, compared with the average of 6.2%. The north-east has some of the lowest-paid workers in the country, and the average salary was nearly £3,000 below the UK average in 2013. We have seen the slowest percentage increase in wage growth of anywhere in the UK. Since 2010, wages in the north-east have fallen by over £1,200 a year in real terms.

This is not because the north-east has less to offer; quite the opposite. We are the only English region with a trade surplus. We have world-class universities and global links through air and sea. It is important, however, that the north-east gets its fair share of funding. The economic challenges we face are tough, and it is clear that we need additional support from Government in tackling them, yet our councils have seen disproportionate cuts to their budgets, with funding shifted to more affluent areas. Improving transport is an important way of addressing some of the problems that we face. Lord Adonis’s review cited the World Bank demonstrating that infrastructure, including transport, is a key element of an enabling environment for economic growth. We can support growth and job creation if we have an efficient public transport system. Jobseekers need to be able to get to interviews and to work, and should not have to spend hours or even their hourly wage doing so. The north-east has the capacity to make a greater contribution to our economic recovery, but we need Government to work with us. Improvement and investment in our transport systems will help to deliver that contribution.

The north-east is a wonderfully diverse place, and my constituency is made up of the urban and the semi-rural—of towns, villages and estates. Given that diversity, the transport needs of constituents differ widely. However, the north-east receives the lowest level of Government funding for transport. Every region deserves excellent transport services, but our needs in the north-east are not reflected in the funding that we receive. Government figures show that public expenditure on transport in the north-east has decreased year on year since 2010. In 2012-13, £554 million was spent on transport in the north-east, compared with over £4.5 billion in London, and 2.9% of overall UK spend is in the north-east, compared with 24% in London.

The 2011 census shows that both London and the north-east have the lowest number of car owners in the country. Both regions are clearly full of people who rely on local transport services to get around, yet both regions do not enjoy the same high level of service. One reason for that is disproportionate funding. The Scottish referendum campaign reinforced a point that many of us have argued for years. We need to ensure that all parts of the United Kingdom benefit from, and contribute to, our economic recovery. Economic growth and value must not depend on London and the south-east. It is right that we continue to push for further investment outside London to grow the economy in a balanced and sustainable way.

Funding is not the only explanation for the difference in services between London and the north-east, however. In London, an accountable transport authority is able to make important decisions on fares and routes and to ensure that the transport needs of passengers and communities are met in the capital. In my constituency, we do not enjoy the benefit of a rail link or light-rail link. Many people are entirely dependent on local bus services, which is why I have been campaigning on the issue since my election. I have heard from many local people that they are concerned about high bus fares, poor timetables, and infrequent services. Older residents tell me how difficult it can be to get to hospital, and that they are cut off and isolated in the evenings as they are unable to leave their homes. That situation simply cannot continue.

Next week, the North East combined authority will decide whether to introduce a quality contract scheme in Tyne and Wear. I am calling on its members to press ahead and make the change that we need. The new system would have routes set by the transport authority, with bus operators bidding to run services in an open competition. Not only would we see real competition for the first time, but we would have a simple fare system with Oyster-style ticketing, under which average annual fare increases would be no more than the retail prices index. I am not opposed to bus operators making a profit, but I do question the excessive profits made by companies such as Stagecoach in the region. I want some of that profit to be reinvested in the region, and to go on subsidising services and ensuring that my constituents can get to work, hospital and their places of training and education.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Lady on securing this important debate and endorse her comments about the bus contract. Does she agree that when the contract is negotiated, as it probably will be, it is important that it is not entirely focused on urban areas, and that the regional areas of County Durham and Northumberland are not affected, so that the citizens of west Northumberland or west County Durham have the rural bus services that they need?

[Bridget Phillipson]

I am grateful to the hon. Gentleman for raising an important point that I have sought assurance about. My constituency borders County Durham, and many services that run through it go to and from County Durham. I appreciate that it is an important area that does need addressing, but the benefits not only for Tyne and Wear, but for the wider region will be profound. I hope that the right decision is made.

[Mr Kevan Jones (North Durham) (Lab)]

I shall expand on this point if I am called to speak in the debate, but there is nothing in what is being proposed that guarantees or helps rural bus services in County Durham or Northumberland. The fact is that whether the leaders of Tyne and Wear or others like it or not, the profitable routes coming out of Tyne and Wear subsidise the rural bus networks in my constituency and that of the hon. Member for Hexham (Guy Opperman); those will be taken away if the proposal moves forward.

[Bridget Phillipson]

I understand my hon. Friend’s concern, but I do not share his conclusion. I am sure that he will make his case strongly to the leaders of the combined authority. I am confident that the proposal will secure the long-term future of our bus network in Tyne and Wear and in the wider region in the longer term. I understand my hon. Friend’s concerns and am sure that he will set them out in greater detail.

Profit cannot be the sole priority for a public bus service. Competition can be an important way to ensure low fares and improve services. However, the existing system of deregulated bus services is broken. An investigation in 2011 by the Competition Commission was highly critical of deregulated bus services. It found that there was limited competition between operators, which tended to result in higher prices and lower quality for passengers. The report also found that head-to-head competition for services was unlikely between dominant operators. There was heavy criticism because some bus companies were accused of colluding to avoid direct competition entirely, which resulted in geographic market segregation. As in the energy market, a small number of companies dominate the bus market in the region. A quality contract scheme would create a level playing field, allowing new entrants to break into the market. It would also deliver better value for taxpayers and passengers alike.

I constantly hear from local people who struggle to get to work easily, especially shift workers in places such as Doxford international business park, where many thousands are based. The recently announced Metro strategy 2030 set out ambitious plans to develop Tyne and Wear’s Metro system, with the potential to include Doxford park in the long term. Current predictions estimate 5.4 million passenger trips per annum by 2030 on the South Shields to Sunderland to Doxford line, but any extension would of course depend on government support. The plan recognises both the importance of the business hub to our local economy and the need for regular and high-quality transport links to and from work. The proposal forms part of a comprehensive plan to improve transport in our region. The Metro Strategy 2030 includes a proposal to bring part of the Leamside line back into use. The North East local enterprise partnership has commissioned a study into the business case for reopening the line, and has identified improving links within the region as one of its key priorities. Long-term investment is important, but next Tuesday one part of the solution to our transport needs is within our grasp.

I am grateful to EDF, based at Doxford, for recently conducting a staff survey on public transport. In the survey, 38% of respondents felt that services to Doxford park were either very poor or poor value for money, 40% felt that services had either very poor or poor frequency during the day, and a shocking 62% felt that frequency during the night was either very poor or poor. One respondent noted that bus prices were so high that it was cheaper to use a car, with another being forced to catch three buses to get home if their shift finished after 8 pm. I visited EE, which is also based at Doxford, and found that many of its staff face the same challenges. I heard that those whose shifts finish at 8 pm literally run out the door to catch the last bus, or face a long wait. Others must come to work far earlier than their shift start time, because unless they catch the hourly bus service, they risk the consequences of being late. Obviously, that risks impacting on staff retention. That is not good enough. Visitors and staff at Doxford Park make an important contribution to our local economy, and they should be able to expect a fair, reliable and efficient bus service.

In 2011, Government cuts meant that the 3½-mile Sunderland central route had to be scrapped. The scheme would have eased congestion and improved access to Rainton Bridge business park. The loss of the scheme was hugely disappointing, and was made all the worse by the lack of alternative transport options for the staff there. The scrapping of the route has had a significant effect on traffic in the surrounding area and on local residents who live nearby.

I have been continually disappointed by the bus companies’ attitude to improving services for their passengers. The voluntary agreement that the bus companies are supporting would result in severe cuts to publicly funded bus services and to support for non-statutory fares, therefore falling far short of what is necessary. Bus companies are refusing to listen to their customers’ concerns, choosing instead to redirect routes that customers rely on, make meaningless changes to route names and numbers and to bus branding, and embark on a systematic campaign of scaremongering. Bus companies appear more concerned with threatening legal action than dealing with cuts to services and rising fares.

Yesterday morning, I received an e-mail from Go North East seeking to acquaint me with what it sees as the facts on a quality contract scheme. Go North East claims that customer satisfaction, including with fares, is higher than in any of the metropolitan authorities, and higher than in London. However, it fails to address the declining use of buses. Between 2001 and 2011, the number of people using the bus to travel to work in Tyne and Wear fell by 13%; the number of adult fare-paying passengers has also declined. Furthermore, the survey used to support the claim does not take into account the view of people who no longer use the bus because there simply is not one to catch any more.

Go North East claims that the quality contract scheme aims to take funding out of the bus system. That is simply untrue. The quality contract scheme will avoid cuts to secured bus services and to support for discretionary concessionary fares. The voluntary agreement preferred by the bus companies, by contrast, will lead to significant cuts in secured services and discretionary concessions, even if local public support remains at the same level.

Go North East claims that the voluntary agreement can start two years earlier than the quality contract scheme can. Many aspects of the voluntary agreement, however, are unacceptable or incomplete as drafted. In addition, the main potential delay to introducing the quality contract scheme would be legal challenge by the bus operators. I hope that they decide to do the right thing: to prioritise customers and recognise the democratic decision of the combined authority.

There is an inherent conflict between the desire for the voluntary agreement to be certain, legally binding and enforceable, and the need for flexibility to avoid the arrangement breaking competition law. Therefore, the voluntary agreement relies on trusting each of the operators to abide by the spirit and the letter of the agreement. Even under the voluntary system, however, bus operators may make changes to services without approval of the partnership board. That does nothing to create stability in our local bus network. Services will continue to be assessed on their commercial returns, rather than on their usefulness to local communities.

Whatever operators might say, the voluntary agreement fails to deliver the Oyster-style ticketing system that is a major advantage of the quality contract scheme. It is clear from the persistent scaremongering, threats of legal action and negative campaigning that the bus operators are primarily concerned with protecting profit, rather than improving the service for passengers.

In a time of difficult decisions about spending, it is crucial that we get the best value for money. According to the House of Commons Library, the taxpayer subsidised bus services by approximately £2.3 billion in 2011-12. Those subsidies amounted to about 45% of all bus operator revenues. As we are all paying for bus services, it is time to ensure that the money that we invest goes back into our communities. Nexus estimates that the quality contract would provide £272 million in economic benefits to the region over a decade by reducing fares, providing better services and ensuring more bus passengers.

Similarly, the northern region TUC concluded that there was a strong business case for the quality contract. It will harness any revenue surplus for the benefit of passengers and communities, rather than for bus company shareholders. The proposal would provide a sustainable funding future for buses in our region to a greater extent than all other options.

Next Tuesday, the North East combined authority will decide whether to introduce a quality contract scheme. The process has been too long and drawn out. I am glad that we would legislate to give local authorities more powers to create better bus networks and to make it easier to implement quality contracts. At the core of the debate is local decisions to deliver a service that works, supporting businesses, growth and job creation. Local people must have the bus services that they deserve. Even the bus operators acknowledge that the status quo is no longer sustainable. This is our opportunity to lead the way, but it is an opportunity that will not come again.

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[Mr Jones]

No, I am sorry; my hon. Friend does not understand the system. [Interruption.] I am sorry, but she does not. If there are subsidised secured routes that are paid for by the taxpayer, the taxpayer can determine where they go. That is nothing to do with the bus company. My hon. Friend spoke of excessive profits, on those routes that are profitable, but there has to be money in the system; she should be aware, as I think many people are not, that under the current proposals Tyne and Wear council tax payers—I am not one—will underwrite its bus service system, with consequences for them if passenger numbers go up or more subsidy is needed.

I am not arguing for the old free-for-all, but that is not what we have. I remember the disastrous days of bus deregulation in 1986, with buses chasing buses, but we do not have that system now. A far better way forward for us would involve some type of regulation—and if the threat could be used as a bargaining chip with the bus companies I would totally agree with that. However, it is not a panacea for every issue. Quite a few hon. Members have talked about bus services being withdrawn, but a quality contract will not prevent that. They will be withdrawn unless more money is put into the system.

The hon. Member for Stockton South raised an interesting point, which is one that I make constantly to officers in County Durham. The problem is that in some of the areas in question buses are not the solution. We need to think of more creative ways to transport people from isolated communities, such as taxi-buses or alert-buses. I accept what my hon. Friend the Member for Sunderland Central (Julie Elliott) said: even in urban areas there can be isolated places. We need a system to feed the people who live in those places into the main, profitable system. That would be far better than to think that the solution is a bus. Quaking Houses is a nice rural village in my constituency, but there is not the demand for a double-decker bus on a Sunday. Reactive taxi services, for example, could take people to central hubs that would feed them into the network. That is how we need to think—not just focusing on buses, but more creatively.

[Bridget Phillipson]

I just want to point out that services are withdrawn not only because they are unprofitable per se. It can be because they are not profitable enough. Bus operators refuse to publish data on the profitability of routes. When there are big changes and routes are cut or withdrawn almost entirely—as happened in communities in my area such as Shiney Row, and Houghton and Hetton, which have big urban centres; a lot of people use the route—that is not about unprofitable services. It is just that the operators do not regard them as profitable enough. That is the distinction.

[Mr Jones]

I accept what my hon. Friend says, but under the current proposal those services will not be protected. The only way to do it would be to put more subsidy in. If the argument is that there is a bottomless pit of money from the taxpayers of Tyne and Wear to support them, that is fine; but in reality there is not.

To return to the cross-border issue, we might suppose it would have been thought about—and it has, but in a typically bureaucratic, council sort of way. The cross-boundary bus collaboration protocol is a fine document, from which I need to quote to show that the important people—the public and the people who provide the services—are being taken out of the equation. Paragraph 4.4 says:

“In the event that a Cross Boundary Service does have an adverse effect on the QCS Services the Combined Authority shall use reasonable endeavours to seek to agree amendments to the registration…of the relevant Cross Boundary Service”.

Therefore, there will be disputes, for which there is a great organisation called the cross-boundary officer group. It sends a shiver down my spine that it will be left to officers to deal with that. What clout will Durham have to protect services? None at all; because at paragraph 6.7 the document explains what will happen if

“the Council considers that the Draft Plan has an adverse impact on Service Users”

in Tyne and Wear:

“The Parties shall use reasonable endeavours to ensure that the Tyne and Wear Sub Committee considers such requests.

Where the Tyne and Wear Sub Committee makes such adjustments to the Draft Plan to accommodate requests made by the Council, the Draft Plan shall be deemed to be approved by the Council.”

It goes on:

“Where the Tyne and Wear Sub Committee does not consider it possible to make any such reasonably requested adjustments to minimise the…effect of the Draft Plan on the Council and its Service Users, the Combined Authority will seek to procure that the Tyne and Wear Sub Committee promptly responds to the Council in writing, providing reasons.”

If those involved fail to reach an agreement, it will go to a dispute resolution panel. That is fine, but what bureaucratic nonsense that system is. It will not help to solve cross-border disputes. We need to take a step back from the proposal, because it will be a problem for the likes of County Durham and Northumberland. I know that those plans have been in gestation for a long period of time, and that people perhaps think that because they have been sent a lot of work on it, “We’ve got to try and do something.” However, I would urge people to take a step back and think about it.

I want to raise two other issues. The first is airports, and I congratulate David Laws and the team at Newcastle airport, who have done a fantastic job. It is a gleaming example of where the private and public sectors can work together, not only to deliver great service to the travelling public in the north-east, but to be an important economic catalyst for the north-east economy, in terms of both passengers and freight.

I would like the Minister’s comments on one point, however. Under the new devolved arrangements for Scotland, will the airport passenger duty be devolved to the Scottish Government? If it is and we have two systems, undercutting will directly affect airports such as Newcastle, and their ability to compete on routes will be a problem. The Government are still out to consultation on another matter—the third runway at Heathrow—which is always seen as a London issue, but it is not. It is vital to Newcastle that that runway goes ahead.

I want briefly to touch on rail before I finish. In the north-east, there is an issue about the skills that we need to support existing and future rail infrastructure there. May I congratulate Newcastle college? I went to its new rail academy in Hebburn last week. It is a very forward-thinking project that is trying to ensure that people have the skills that they need, not only in terms of the hard-end engineering side of rail, but in terms of the softer, more customer-focused side. It will be a very good thing for a lot of young people to get access into an industry that has a future both in the north-east and in the rest of the country, and also has an international dimension that should be very important for them. With that, Mr Caton, I conclude my remarks.

Bus Services

Bridget Phillipson Excerpts

Tuesday 17th June 2014 Westminster Hall

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate my hon. Friend the Member for Corby (Andy Sawford) on securing this important debate. Our constituencies are in many ways different, being at opposite ends of the country, but we seem to share many of the same problems with local bus services.

My constituency is composed of both urban and semi-rural areas—towns, villages and estates spread out across the city of Sunderland—but what we have in common throughout the constituency is the fact that we do not enjoy the benefits of a rail or light rail connection. We entirely depend on local bus services, which is why I have campaigned on the issue since I was elected to Parliament.

For metropolitan areas such as Tyne and Wear, there is a solution: the introduction of a quality contract scheme—a mechanism that would allow the local transport authority to reregulate local bus services if certain criteria were met. That new system would have routes set by the transport authority, with bus operators bidding in an open competition to run services. I am proud that, despite fierce opposition from bus operators, and threats of legal action, the combined authority in Tyne and Wear continues to lead the way. I shall briefly outline why I believe such a scheme has the potential to benefit constituents in other areas, too.

I should perhaps at this point mention that, although my hon. Friend the Member for Corby and I share many problems with bus services, our views diverge when it comes to Stagecoach. I am pleased about its helpful, consensual approach in east Northamptonshire, and I hope it may take the same approach in Tyne and Wear as we press ahead with options for the future of local bus services. I am pleased at my hon. Friend’s experience and I hope that in the fullness of time I shall share that positive experience of co-operation from bus companies in trying to deliver the best to our constituents.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a powerful case for quality contracts, and I agree with her. The Souter family who own Stagecoach have become billionaires since buses were deregulated. Does my hon. Friend agree that that shows that privatising and deregulating bus services has not helped the travelling public, but has allowed people such as the Souter family to game the system and make bus services worse?

[Bridget Phillipson]

It is my view that deregulation has failed in my area. I am not opposed to bus operators making a profit, although I think the profits made by operators in my region, particularly Stagecoach, are excessive. I want some of that profit to be reinvested into the region and into subsidising services that my constituents depend on to get to hospital, school and other places. I have been disappointed by the approach taken by Stagecoach, but I appreciate that there is much at stake. As my hon. Friend the Member for Corby mentioned, many people are paying careful attention to see what Tyne and Wear will decide, and no doubt Stagecoach has been motivated in its approach by that clear factor. I hope that we will find a way forward.

An investigation in 2011 by the Competition Commission was highly critical of deregulated bus services. It found that there was limited competition between operators, which tended to result in higher prices and lower quality for passengers. The report also found that head-to-head competition for services was unlikely between dominant operators. There was heavy criticism because some bus companies were accused of colluding to avoid direct competition altogether, which resulted in geographic market segregation, including in my area. Just as in the energy market, a small number of companies dominate the bus market; we all know them. A quality contract scheme would create a level playing field, allowing new entrants to break into the market; it would open up competition and deliver better value for the taxpayer and passengers.

Such a scheme would also provide long-term security to bus operators, their staff and bus passengers. Too often, bus companies change or even scrap routes, which frustrates passengers and leaves people isolated and cut off from vital services. It also puts jobs at risk. A clear example of that can be found at the Doxford international business park in my constituency, which houses thousands of staff, many of whom are employed in contact centres. Businesses and staff have told me of their concerns that buses run infrequently after the main evening rush hour and that services do not fit with shift patterns. That leaves staff who work shifts with little choice but to travel by car or risk waiting for an infrequent bus service.

On Friday I visited EE, one of the major businesses that employs staff at Doxford, and heard at first hand what the situation means for staff: those who finish shifts at 8 pm run—literally—out of the door and catch the bus at five past 8. If they miss it, they face a lengthy wait for the next bus. Often staff must come to work far earlier than their shift start time, because unless they catch the hourly bus service they risk the consequences of being late for work. No doubt that affects staff retention as well as business growth and our ability to support the growth of jobs in the region. As we know, the north-east still faces big economic challenges and is the region of the country with the highest unemployment rate. We need to support business growth and job creation, but a public transport system that can support that is essential.

I agree with my hon. Friend the Member for Corby about the challenges for disabled passengers, and particularly those who are blind or partially sighted. I recently took part in a guided walk, which was facilitated by Guide Dogs, to get an understanding of how difficult and disorienting it can be for blind and partially-sighted passengers when they try to access bus services. I travelled on a Go-Ahead bus that was fitted with audiovisual information. I recognise the importance of extending that facility, which is quite unusual in my area. The bus was one of the express bus services that offers it, and although it was far from perfect it is a step in the right direction. Bus operators must do far more to recognise many passengers’ additional needs and make sure that public transport is accessible to everyone.

We have a long way to go on fares and ticketing. A benefit of a quality contract system would be the possibility of introducing a London-style Oyster scheme. Passengers would then have the best fare worked out for them automatically. At the moment there is a huge array of options, with a confusing price structure and different operators offering different fares and tickets that do not work across buses. That discourages people from using buses. Far more must be done to encourage people to use buses, but if that is to happen fares must be affordable and simple. Integrated ticketing is also vital.

Understandably, there is a national focus on our current rail infrastructure, and I agree with that. However, very little attention has been paid to what happens when commuters reach their final rail stop and are confronted with the reality of local bus services or, indeed, to what happens when there is no rail link, only buses, as in my area.

I believe deregulation has failed. Bus companies have a social responsibility to local communities, but, sadly, too many fail to deliver. They vehemently oppose solutions in my area that would give local people a greater say. Their negative campaigning, scaremongering and threats of legal action have gone far beyond rational opposition and are irresponsible. We need action now to help communities and to grow the economy. It is clear to me that that can best be achieved through a quality contract scheme and I hope that later this year Tyne and Wear will be the first area to proceed with one.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

It is a great pleasure to serve under your chairmanship, Ms Dorries. Thanks to the Members who made the excellent contributions that we have heard, we will finish by the time at which we hoped to finish.

I congratulate the hon. Member for Corby (Andy Sawford) on securing this debate on the availability of bus services. I will touch on many elements of his speech, and I will answer a couple of his questions directly. I now feel so much more knowledgeable about Corby bus services. He undoubtedly has weeks of press releases and leaflets planned, and I congratulate him on his speech. I also recognise the contribution of the hon. Member for Strangford (Jim Shannon), who rightly pointed out that a number of issues affect not only the mainland but his constituency. He made a long speech, and he accepts that some of the issues are not necessarily under this House’s jurisdiction.

The hon. Member for Houghton and Sunderland South (Bridget Phillipson) and I obviously differ on quality contracts; she will not be surprised about that. My view is that they are a race to the bottom—to poorer services and higher costs. She spoke about services being withdrawn, but any operator has to give 56 days’ notice before a service can be withdrawn. The overall thrust of the Competition Commission’s view, as she will want to recognise, is that the bus market is working well.

I recognise that buses play a vital role in our economy, as any look will show. In England, more than 2.2 billion journeys were made on local buses outside London last year. That number is broadly flat; it is down about 1% on the year before, which is absolutely in keeping with the trends that we have seen since 1997.

[Bridget Phillipson]

Notwithstanding what the Minister has just said about our difference of opinion on quality contracts, does he respect that local decision-making bodies should be able to introduce schemes that they think best serve the needs of local areas? Will the Government continue to offer support on that?

[Stephen Hammond]

I accept the proposition that locals know what is best for their area, if they wish to go down that line. The hon. Lady will not be surprised to hear that Ministers would probably express the view that that would be ill-advised. I will continue to express that view, but it is for local areas to make that decision.

If we look at ridership numbers since 1997, and indeed at the broad sweep since the second world war, we see declining ridership on buses, but more than 60% of all trips on public transport are still made on local buses. Some 49% of bus trips outside London are made by people who do not have access to a car. Buses are, of course, essential for many people to get to work, education, doctors and hospitals. The bus is a lifeline for many people, particularly in rural areas. Without the bus, those people would be unable to access essential services, go shopping or socialise.

Yet if one listens to the hon. Member for Blackpool South (Mr Marsden), one hears an attempt to portray a network that has fallen apart. Inconveniently, as I have just pointed out, some of the facts do not bear that out. As he will have wanted to acknowledge, the falls in ridership numbers were severe under a regulated regime. Between 1997 and today, the annual fall in ridership, as a percentage, has been almost the same every year. The idea that there has been a complete collapse in bus ridership since 2010 is simply false.

Combined with that is the fact that customer satisfaction with bus journeys is high. In all national surveys, 88% of passengers say that they are satisfied with the service. It is important to recognise, in looking at that number, that under-21s make up about a third of bus passengers, and use among the older generation has increased over the past few years, as the hon. Gentleman would want to acknowledge.

Oral Answers to Questions

Bridget Phillipson Excerpts

Thursday 20th March 2014 Commons Chamber

[Mr McLoughlin]

If my hon. Friend had not asked that question, I do not think that I would have done, but as he has, I will certainly look into it and write to him.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

When the Secretary of State next meets representatives from PTEG, they will no doubt tell him that bus fares are rising year on year and that routes are being cut. Should not operators such as Stagecoach, which make a huge profit off the back of the taxpayer subsidy, start behaving more responsibly, rather than threatening legal action at the prospect of a quality contract in Tyne and Wear?

[Mr McLoughlin]

We want to see good co-operation between the passenger transport executives, the combined local authorities and the bus operators that provide the services in their area. They need to work together to give the best services to local people. Bus services are incredibly important to people and are vital in enabling them to go about their daily business and to get to work and to their leisure activities.

Oral Answers to Questions

Bridget Phillipson Excerpts

Thursday 7th November 2013 Commons Chamber

[Mr Goodwill]

We continue to invest in third rail heating, to ensure the reliability of our rail services. Gatwick airport has the advantage over Heathrow, in that it has capacity to put snow ploughs on the runway without disrupting flights in the same way. As I said in my evidence to the Transport Committee only a week or so ago, we have good winter resilience, with more snow ploughs and more salt, and we are confident that the Highways Agency and local authorities can keep the roads clear.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

In Tyne and Wear, a consultation process is currently under way on introducing quality contracts for local bus services. Does the Minister agree that bus companies should be investing in local services rather than wasting vast sums on misleading and scaremongering attacks?

[Mr Goodwill]

We continue to keep the option of quality contracts open to local authorities. In the spirit of localism, it is their decision if they want to use them. I think that the better bus contract is a better model, but if local authorities want to follow the model that is used in London, they may do so.

Transport

Bridget Phillipson Excerpts

Monday 1st July 2013 Ministerial Corrections

Members: Correspondence

[Bridget Phillipson]

To ask the Secretary of State for Transport when he plans to reply to the letter from the hon. Member for Houghton and Sunderland South of 11 December 2012.

[Official Report, 24 June 2013, Vol. 565, c. 122W.]

Letter of correction from Norman Baker:

An error has been identified in the written answer given to the hon. Member for Houghton and Sunderland South (Bridget Phillipson) on 24 June 2013.

The full answer given was as follows:

[Norman Baker]

The Department for Transport does not have a record of receiving a letter from the hon. Member dated 11 December 2012, but we will be pleased to respond speedily if she could provide a copy.

The correct answer should have been:

Rising Cost of Transport

Bridget Phillipson Excerpts

Wednesday 9th January 2013 Commons Chamber

[Mr McLoughlin]

I will look at the hon. Lady’s point, but I hope she will make representations to the Welsh Assembly following the motion that the hon. Member for Garston and Halewood has tabled. Perhaps the hon. Member for Llanelli (Nia Griffith) will consider not voting for the motion in light of it being in direct competition to what the Welsh Assembly, which I understand is Labour controlled, is doing.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I am conscious that the Secretary of State has not yet referred to bus services. My constituents rely entirely on bus services, as they do not have the luxury of a rail link. Does he agree that it is entirely wrong for operators such as Stagecoach to scaremonger about the introduction of quality contracts in Tyne and Wear and to threaten to sack staff and pull out of the region? Should the Government not back up integrated transport authorities, such as mine, which are making decisions that are in the best interests of local people?

[Mr McLoughlin]

I am coming on to say something about bus companies, but I will not comment on individual contracts that are being negotiated, as it would be wholly wrong of me to do so.

I want passengers to get the best deal from a ticket system that is easy to understand, and that is why we have set up the fare and ticketing review. This is not about higher fares; it is about simpler fares. It is not about catching out passengers who have to travel when trains are busiest, but getting good deals for people when there are seats to spare. Taxpayers, whether they use trains or not, all contribute to the cost of running the railway. I know that when people face big bills and tough times they really feel the pressure of higher fares. That is why we are looking at ideas such as smart ticketing and more flexible season tickets, so that they only have to pay when they actually need to travel. The way we work is changing and it is right that tickets change too.

This Government are on the side of passengers, whether they use trains or buses. That is why we have protected free bus travel for pensioners and are putting in place a level playing field so that operators can compete to bring fares down. The basic truth, however, is that the cost of bus travel has risen, including during the decade to 2010 under the Labour Government, and that is mainly due to higher operator costs, such as fuel.

Transport (Investment)

Bridget Phillipson Excerpts

Tuesday 26th October 2010 Commons Chamber

[Mr Hammond]

I am afraid that that scheme is some way off at the moment. At a point in the future that we will define in due course we will reopen the programme entry system so that new proposals can be made by local authorities or by the Highways Agency for future consideration, but I repeat that I do not want to have hundreds of schemes with thousands of civil servants working on them and no realistic prospect of getting on site.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

The Sunderland strategic transport corridor, which includes the new bridge over the River Wear, will be crucial in bringing jobs to Sunderland and securing the economic regeneration of the region. What reassurance can the Secretary of State offer to the people of Sunderland that those important factors will be considered given that he accepts that the scheme offers value for money?

[Mr Hammond]

I can give the hon. Lady the assurance that the factors she mentions are indeed taken into account in the model. As I hope I made clear this afternoon, the whole aim of the Government in focusing on supporting infrastructure investment, and particularly transport investment, at a time when public expenditure is under extreme pressure, is to use transport infrastructure investment as a way of stimulating economic development and of coaxing it into areas that most need it. I recognise Sunderland’s claim, but as the hon. Lady will understand, this project is one of many in the development pool, so applicants will have to sharpen their pencil, think through their scheme and put their best proposal forward; then we will make a decision.