Local Bus Services

Graham Stringer Excerpts

Wednesday 5th November 2014 Commons Chamber

[Mr McLoughlin]

The hon. Lady already has a meeting fixed up with my noble Friend, and I am sure she will certainly take on board the points the hon. Lady makes. Whenever these schemes are rolled out we want to ensure that they are the best possible for the areas concerned. Obviously, this scheme is being done in conjunction with the mayor and the local authorities, so I am interested to hear what she is saying about it. I would point out that most schemes are often controversial in their early days and it is only once they are up and running that people see the benefit. A number of cities that have had trams and tram links or other such schemes have found that they start off with some controversy but eventually the benefits are seen.

I was talking about the £70 million we had set aside for the better buses fund in 2012, which supported schemes in 24 local authorities. In Blackpool, a £1.5 million programme has seen investment in traffic management systems, bus lanes and bus shelters. Enhancing buses is a feature of 95% of the projects supported by the £600 million of local sustainable transport fund money. Passenger numbers are going up in Sheffield, thanks to the better bus area, backed by £18 million from the better bus area fund from my Department. Of course it is not just money that counts; we also need to back the ambition and vision. That is what my right hon. Friend the Chancellor did on Monday: a directly elected city region mayor with strong powers will be able to provide the strategic direction for the people and economy of Greater Manchester. It will mean more joined-up decision making in transport, housing and growth. This Government fundamentally believe that devolution and taking this decision will help make that a reality.

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

Like the leaders in Greater Manchester, I welcome the Chancellor of the Exchequer’s statement and, in particular, the powers that are going to be given to the mayor to introduce a franchising system for buses in Greater Manchester. Does that represent a sea change in the Government’s view of franchising, with franchising being seen as a superior way of creating on-road competition for buses?

[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.

--- Later in debate ---

[John Healey (Wentworth and Dearne) (Lab)]

It is good to follow the hon. Member for Cheltenham (Martin Horwood), but I have to tell him that people in our part of South Yorkshire simply will not recognise the picture he draws with selective facts and figures—and it is the same with the picture portrayed by the Secretary of State about bus services in our part of the world and most parts of the country.

Local buses are the main form of public transport in Rotherham. We have no tram, and we have two train stations in a borough with nearly 250,000 people. In Barnsley, we have no tram and a small handful of small stations to serve a borough with 220,000 people. Many people rely on buses—to get to work, to college, to hospitals, to shops and to see family and friends. Many older and disabled people are totally dependent on buses to get out and about and to avoid isolation. It is, of course, the poorest who require and need bus services most.

One of the things I am most proud of during 13 years of the Labour Government is playing a big part in the Treasury in the introduction of free bus travel for all pensioners. We did that in 2006-07, and last year it was worth £37 million to pensioners across South Yorkshire, although that was £3 million less than in the last year of the last Labour Government.

[Graham Stringer]

My right hon. Friend should be congratulated on introducing free bus passes and concessionary fares. Does he agree with me that the boasting we have heard from Government Members about the lack of decline in bus passengers over the last four or five years is mainly down to the introduction of the free pass?

[John Healey]

Indeed. My hon. Friend is something of an expert on transport matters. I know he immediately saw through —he told me as the Secretary of State was providing these figures—the bogus and partial picture that was painted by those statistics. Buses matter a great deal in areas such as ours. When routes are cut or changed, or services are cut and bus users complain and sometimes campaign to see the services restored.

It is always a battle in this deregulated system with the bus companies saying on the one hand that “this service is not commercially profitable”, with the local authorities or passenger transport authorities rightly saying on the other hand, “the money has been cut; we simply cannot afford to subsidise or support these services.” Too often, those with no other way of getting around—the youngest, the poorest, the oldest—lose out. I say “too often”, but not “always”.

I want to recognise how our regional director of Stagecoach, Paul Lynch, was ready to meet me to review some, although not all, of the decisions he took on the South Yorkshire routes. He was ready to change the route of the 229 in Wath and to supplement it with a rerunning of the 222 in response to a petition of 150 local residents and the campaigning of local Councillors Atkin and Gosling. He was willing to recognise that changes to the 109 and 108 were required for Rawmarsh and Manor Farm, because people were unable to get to the shops, school, the doctor’s or whatever. That service now runs again on its original route, not least because of the campaigning efforts of Christine Eyre and the Manor Farm tenants and residents association group, as well as those of Councillors Jane and Neil Hamilton.

I want to mention the regional director of FirstGroup, Mr Ben Gilligan who was good enough to meet me at the end of September about the removal of the regular service required between Ravenfield and Wickersley. He has promised to look at the case for restoring that route by flexing the other routes and timetables in the area. I urge him to be as good as his word and do just that. Residents in Ravenfield and I look forward to hearing from him shortly.

Public transport is in part a public service and it does require some public support and subsidy. My hon. Friend the Member for Wakefield (Mary Creagh) said that support for bus services had been cut by 17% in the last three years in real terms. No wonder 1,300 routes have gone as a result. The House of Commons Library gave me figures that showed that, in the last year we have figures for, the Government were prepared to give bus services only £810 million of support in total, not including concessionary travel—and £500 million of that goes to London. To put that into perspective, Mr Deputy Speaker, and you follow these things closely, this year the cost of the tax cut for top-rate taxpayers is £3.3 billion, over four times more than what the Government are prepared to spend to support bus services in England.

I pay tribute to Rotherham council, the bus companies and the passenger transport authority for their efforts to put together a quality partnership in Rotherham, but that cannot guarantee services, reward bus companies that run good services, penalise those that do not, bring in a simple, single through-ticket system such as the Oyster card in our area, or ensure that buses are fully integrated with other forms of public transport. I know the bus companies’ case and counter-argument, but I say to them and to the House that services in south Yorkshire are not good enough at present. That is why I back, for Rotherham and Barnsley, the plan that my hon. Friend the Member for Wakefield has announced to legislate for city regions such as South Yorkshire and county regions elsewhere to have greater control over local bus services, and powers to determine routes, to set fares and to integrate public transport properly. The motion says that London-style powers and a London-style service are required elsewhere. That is exactly what we need in South Yorkshire.

--- Later in debate ---

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

On 31 October, when the leader of the Labour party made a speech about buses, it was the first speech that a Labour leader had made on the subject that anyone could recall. I certainly cannot recall any such speech being made by a Conservative leader. Given the importance of buses to our communities, I do not think that anyone on either side of the House has had a great deal to be proud of over the past 30 years since deregulation. When Nick Ridley brought in the Transport Act 1985—the buses were deregulated in 1986—I think he genuinely believed that it would result in lower fares and competition on the roads. He had before him the example of the coach industry, whose recent deregulation had led to an improved service and lower fares.

Unfortunately, it quickly became evident that, for a number of reasons, bus deregulation had not worked, particularly in the major metropolitan areas. For example, Greater Manchester quickly found itself in a situation in which 96% of bus services were being provided by just two operators. Bus fares went up by dramatically more than the rate of inflation, and dramatically more than they did in London. In the first 20 years after deregulation, passenger numbers plummeted from 355 million journeys to 218 million, a fall of 137 million journeys. It was obvious at that point that deregulation was not working in the major metropolitan areas. I agree with the Secretary of State that we cannot have a one-size-fits-all solution. The bus services in Oxford, Cambridge and the other historic cities seem to work quite well, but in major metropolitan areas such as South Yorkshire, Tyne and Wear, Leeds and Birmingham, the system has not worked.

[Andrew Gwynne]

My hon. Friend will know that Greater Manchester Buses was split into two companies, one in the north and the other in the south of the conurbation. In his constituency, the buyer was First Bus and in my part of the conurbation it was Stagecoach. We now have, in effect, two private monopolies.

[Graham Stringer]

We do indeed, and I will deal with why the deregulated system does not work. Partly it is because on-road competition cannot work, as there simply is not enough space for the buses. When competition has been tried, it has led to massive congestion.

Let us look in detail at what has happened in the major metropolitan areas. The bus companies have gamed the system. They have not responded as one would expect in a competitive private sector area, by responding to what the customer wants; they have responded to where the subsidy is. So networks have contracted, as the companies could make a bigger profit on the major routes; and services have been withdrawn, so that the companies could get direct subsidy in franchised systems and larger amounts of money. It is a fact that every bus that goes out of a depot has a 50% subsidy attached to it, one way or another. This is not a private competitive market responding to customers; it is a private market responding to a subsidy regime.

So I am not surprised when Martin Griffiths, the Stagecoach chief executive, says something like the following, although his nose must have grown a great deal when he did so:

“The truth is that England’s city regions have significantly lower fares and higher customer satisfaction than London, as well as having access to frequent, integrated bus services and smart ticketing.”

I do not know what he was on when he said that; the bus fares are higher, and they have regularly increased by more than inflation and by more than increases in London. We know why Stagecoach is happy: it has been extraordinarily successful at gaining the subsidies.

I have no objection to business people making a profit for providing goods and services, and doing it well. The fact is that Brian Souter and his sister have made £1 billion. Does anybody think that has come from providing a better service and improving our bus services in the major metropolitan areas of this country? Of course it has not. It has come from knowing how to get to the subsidy and how to move the bus services in order to get there. That partly shows the answer to the point raised by the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) about where the money will come from. The capital return on investment in buses in the English regions is twice what it is in London. Why should the people I represent in north Manchester be giving Stagecoach and First Group twice the profit because they are operating in a deregulated system? If we put this out to proper competition in a franchised system that was open and fair, so that the more competitive bus company won, those profit levels would go down to a level similar to that in London, and with some of that money we would be able to improve the service. The only evidence we have of a franchise system within England, Wales and Scotland is the one in London, and it managed for the first 13 or 14 years after deregulation, when the companies were regulated, to run services with very low fare increases and maintain the number of passengers, whereas in the rest of England the numbers decreased by 50%. Those companies managed that without subsidy, so I think that in the metropolitan areas we, too, would have a better service and we would not be going to the Exchequer for more money.

I will finish with a plea. I was delighted with the Chancellor of the Exchequer’s announcement about Greater Manchester and what he was saying about re-regulating the buses. This is not an ideological battle and nor should it be one. The fact is there is a simple way of improving services in the major metropolitan areas, which is by making it easier to have a London-style system and allow franchises. That would help everybody.