Bus Services (No. 2) Bill [ Lords ] (Second sitting)

Debate between Joe Robertson and Jerome Mayhew

Committee stage
Thursday 26th June 2025 Public Bill Committees

[Joe Robertson (Isle of Wight East) (Con)]

On my hon. Friend’s point about rural areas such as his constituency and my constituency on the Isle of Wight, it is difficult to move between towns. On the Isle of Wight, we have a radial system that makes it easy to get in and out of Newport, which sits in the middle of the island, but it is less easy to go anywhere else. I am at a slight loss as to how we get over that fundamental issue in bus franchising—this is geography, and the market for moving between villages is clearly smaller. I am concerned that the entire franchising model and, indeed, this clause are overselling a solution to a fundamental problem. If we are to get over that hurdle, it would ultimately require a lot of public money.

[Jerome Mayhew]

My hon. Friend is absolutely right; there is no commercial case for large-scale, frequent bus services to every small rural community. I have certainly not come across such a case, even if one does exist. The solution—if there is a solution—will be one of a number of things. Under a franchising scheme, it would be open to a local transport authority to invest in and design a scheme that provides for frequent bus services to every rural community. It would be possible to do that, but it would be phenomenally expensive.

Already, one of the key criticisms of the Bill is that it has no money attached to it, so we are going to spend the next two and a half weeks virtue signalling about how wonderful franchising could be. It is not mandatory, and no one is actually going to do it—outside of the big mayoral authorities that are doing it anyway under the Bus Services Act 2017—because there is no money supporting the Bill. It would be incredibly expensive.

There is an alternative, hybrid solution: a combination of scheduled bus services on the key arterial routes from big villages into their major towns, such as from Norfolk going into Norwich, a rural hub-and-spoke system for the more remote villages, as suggested by the hon. Member for North Norfolk, and demand-responsive public provision.

On Tuesday, I described this as the “Uberfication” of public transport. It still is unlikely to make sense on a purely commercial basis, but it is the kind of focused provision of public sector transport that could work in a highly rural area where the aggregate cost would be less than the blind provision on frequent, full bus services to every community, which would be monumentally expensive.

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[Jerome Mayhew]

The hon. Lady is bending over backwards to think of hypothetical instances in which it is possible that something like that could exist. The fact remains that we must ask—this comes down to the philosophical difference between us, perhaps—whether we are looking after the passenger or the supplier. From my perspective, the Bill should have services for passengers squarely in its sights. If passengers will benefit from a new service, the local transport authority should allow it. After all, the aim of the Bill is to maximise general utility for the wider bus service. Amendment 47 would therefore prevent local authorities from sitting on their hands, as the hon. Lady suggests they might.

Amendment 48 goes one step further. If the previous two amendments were red meat to some members of this Committee, this one will send them over the top. It would scrap entirely the convoluted assessments about balancing benefits and adverse effects in proposed new subsections (5A)(a) and (b). The authority would simply take a view on the benefits for persons making journeys on the proposed service—what is wrong with that? If the service has benefits for customers, why should we not just go for it? It is a straightforward process where applicants are in the driving seat. The amendment would provide higher certainty for applicants and therefore encourage additional service providers.

I anticipate that hon. Members may say, “What about the web—the franchise service—that the local transport authority may be trying to design?” But I seek to remind them about the incentives of providers. Again, I speak as a former businessman. We sometimes forget something in this place. We make lots of rules and we deal with processes ad infinitum, and we think that everyone will be incredibly logical. We say, “Oh yes, they have to go through this process, then that process and the other one, and then the local authority may decide to help them or not.” That ignores the basic maxim of private enterprise, which is that time kills deals. If a process is convoluted by design, it is also, by design, time consuming, and therefore expensive and uncertain in its outcome.

Let us think of a potential service provider looking through these provisions. They would say, “I’ve jumped through the hoops of proposed new subsection (5A)(a) and (b), and I’ve demonstrated the evidential basis for this application,” but then there is the discretion at the end where the local authority may, for whatever reason, choose not to award the deal based on some plan for some date in the future that we have not even heard about. Is the provider even going to bother doing it in the first place? This is an important issue of practicality. Commercial organisations respond to incentives, and if we make something long-winded, expensive and complex, they are much less likely to bother doing it. They will employ their capital, their time and their creative energies elsewhere.

[Joe Robertson]

The more I hear the shadow Minister unpicking all these issues, the more it transpires that the whole franchising model that the Bill offers to local authorities is really rather unattractive. Particularly for smaller local authorities, it is complicated, and there is a huge risk that when the new service is implemented, despite the best of intentions, it will not run in the way that the local authority or commercial provider thought it would. All the while, the local authority—I am thinking in my case of the Isle of Wight council or the potential combined mayoral authority with Hampshire—is taking on that risk of things going wrong. The shadow Minister is getting to the heart of a fundamental problem with the Bill: it will not sort out bus services country-wide, particularly in rural areas. It is really just a model for the big cities.

[Jerome Mayhew]

My hon. Friend is right. In broad terms, the Bill facilitates additional opportunities for local transport authorities, which is a good thing. As I have said, allowing franchising is in fact a Conservative concept. It goes back to the days of Mrs Thatcher, but more recently, the 2017 changes allowed franchising without consent for mayoral combined authorities. In fact, any local transport authority was allowed to apply for franchising operations, but with the safeguard that it required the consent of the Secretary of State for Transport, because of the huge commercial risks associated with franchising for local transport authorities, particularly smaller ones. That was an eminently sensible safeguard that I have spoken about previously, so now we have that risk.

Even if the local transport authority is capable of managing that risk, of developing the expertise to design these complex systems in-house, as is anticipated, and of starting a municipal bus company on top of designing the franchise operation, we cannot get away from the conclusion that is expensive. Whichever way it is designed, if it is going to improve services, it will be expensive.