Jerome Mayhew MP: speeches

Speeches

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Second sitting) · Hansard source

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  It is a pleasure to serve under you, Dr Allin-Khan. Clause 5 deals with the minimum period before provision of services can be changed. It is not a difficult clause, but it is worth going into some of the subsections in a bit more detail. Subsection (1) omits section 123H(4) of the 2000 Act, which set out that a franchising scheme “may not specify under subsection (2)(d) or (3)(c) a period of less than six months.” That meant that at least six months had to expire between the authority making a local service contract and the provision of the local service under that contract. Clause 5(2) sets out that the transition arrangements in subsection (3) apply where, before the clause comes into force, the franchising authority or authorities have published under section 123E(2) of the 2000 Act a consultation document relating to a scheme or variation of a scheme, but have not yet made the scheme or varied it. Clause 5(3) provides that when making or varying the franchising scheme pursuant to the consultation document, the franchising authority or authorities may specify a minimum period, under sections 123H(2)(d) or 123H(3)(c) of the 2000 Act, that is less than six months. Although I understand that the Minister and his Department want to smooth out some of the hindrances and streamline the system, and in principle I am supportive of that, the question that begs to be asked is: is there no de minimis period? It may be considered that a six-month period is too long, but what about a one-week period? Is that too short? As drafted, the clause does not provide a de minimis period. What would be the impact on franchise operators if there were an instantaneous change? That is a significant issue that needs to be considered, because we are dealing with operators that are commercial beasts. They have infrastructure, and drivers and staff that have to accommodate changes to these schemes, and yet the Government’s proposed changes would in theory allow there to be no notice at all. I would be grateful if the Minister could expand on the Department’s, or the Government’s, thinking on this matter. I accept that six months is itself an arbitrary time limit. Why is it not seven, or five? I accept the rationale, which is that we wish to streamline the provisions in order to make it easier for local transport authorities to undertake these changes and take advantage of some of the opportunities that the Bill provides, but it is important for it to be practical and not to have unintended consequences for bus operators and their commercial activities. Clause 6 amends sections 123E(4)(a), 123N(2)(a), 123Q(5)(a) and 123R(5)(a) of the 2000 Act. Before I go any further, it is worth reflecting that the reason why the clause is so complicated in its nomenclature is that there have been multiple amendments to the Transport Act. Although I have not researched it, some of that presumably came about through the deliberations of this House when the legislation was drafted, but there have subsequently been multiple alterations. It begs the question of our approach to legislation in this place when an Act is so often amended. It makes it very difficult, one imagines, for people and organisations—local transport authorities, in particular—to understand what their duties and legal responsibilities are. In many instances, these are not recommendations; they are mandatory requirements, with which failure to comply could lead to judicial review and the kind of lawfare that we as a society often rail against, because we feel that the Government—and by that, I also mean local transport authorities in this instance—cannot get anything done because they are being tripped up by incredibly complex legislation with poor drafting that requires multiple amendments. That is how we get to a “section 123Q(5)(a)”—but that was a slight aside. Clause 6 further amends the Transport Act by adding to all those subsections the words “which have one or more stopping places” after the references to “local services”. In itself, it is a wholly good amendment, and I am not seeking to criticise it. It clarifies that the references to “local services” incorporate any service that has a stopping place in the relevant area, including cross-boundary services operating pursuant to a service permit. However, I wonder whether this clarification was necessary in practice. I would be interested to know whether there have been any instances of local transport authorities being misled by the current drafting—I would be surprised if there had been—or any legal challenge to the current definitions that highlighted a need to clarify an ambiguity. Subject to that clarification from the Minister, I accept that there is nothing wrong with the amendment made by the clause. It is a useful clarification of the Transport Act 2000, to avoid doubt in interpretation, if, in fact, such doubt has ever existed.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Second sitting) · Hansard source

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  I fear that the hon. Member and I may agree more than he perhaps thinks. As I said, I accept that rural routes are unlikely to be profitable, but that does not mean they should not be provided. That is why I went on to talk about demand-sensitive transport, as well as to mention the suggestion from the hon. Member for North Norfolk about rural transport hubs. Those can be subsidised, either through an enhanced partnership or through a franchise process. I accept that they will not be part of a purely commercial result, but that is not what I was suggesting in the first place.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Second sitting) · Hansard source

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  The hon. Lady is right that there is a risk of challenges in some areas, but in other areas there is the opportunity to increase provision for new markets. The difficulty is that the clause as drafted says that “any adverse effect” will be sufficient to prevent the application. Amendment 47 would replace the word “may” with the word “must” in clause 7(2)—in reality, proposed new section 124Q(5A) of the Transport Act 2000—if a local transport authority is satisfied with the conditions of proposed new subsection (5A)(a) and (b). In such circumstances, why should the local transport authority be given discretion to refuse to grant a cross-boundary permit? It will have accepted that there are no adverse effects; nevertheless, it is given discretion. The clause says that it “may” grant the application, but why? If someone wants to provide an additional service and the local transport authority has satisfied itself that there is no adverse impact, why would it say no? That is the purpose behind amendment 47. If the applicant—it could be the municipal bus company, given that there is nothing to prevent it from doing this—has satisfied the local transport authority that there is no adverse impact, as set out in the conditions of proposed new subsection (5A)(a) and (b), why should the provider not, as a right, be able to create the service?

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Second sitting) · Hansard source

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  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.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Second sitting) · Hansard source

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  That is an interesting point, and the hon. Member is of course quite right. I did preface my comments by saying that competition is beneficial in most areas, but there are some areas where it is not. The counter-argument is that, in this instance, this is about a new operator, which does not have to be a private sector operator, suggesting an additional service. This is not about cutting services. This is about where, for whatever reason, an analysis has been done that there is additional demand—this is not about cutting a service, but about providing an additional service. The hon. Member is quite right to raise rural areas, as the hon. Member for North Norfolk has done through a number of his amendments. I represent a rural constituency myself in Norfolk. In bald terms, the rural service in Norfolk is not too bad as long as the destination is Norwich. We have a radial provision of bus services from outlying villages directly into Norwich. If someone wants to go across the county to anywhere other than Norwich on those lines, it is very difficult. The hon. Member for North West Leicestershire is right that if we look to only the passenger ride and the fare box to support usable and sufficiently frequent services, it is highly unlikely that a purely commercial approach will do it. That is why, in Norfolk and many other places, the innovation of an advanced partnership has worked so well.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Second sitting) · Hansard source

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  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.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Second sitting) · Hansard source

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  The hon. Member is absolutely right that there is a fundamental difference of philosophy here. She appears to back what I described as the cosy relationship—but let us not use pejorative language; let us call it the mechanism of state supply. She thinks that that is more important than improving the experience of passengers in that location and/or improving the economy, because that is the hurdle that would have to be crossed for the change made by amendment 49 to take effect. I accept, acknowledge and celebrate that difference. As a Conservative, I stand up for the consumer—for the resident—in my constituency, not for the supplier of services, even if it is the state supplier. Those are the people who I represent, those are the services that I am trying to improve, and that is what amendment 49 would do. The amendment would require the local authority to act in the wider interest of consumers, not that of its own suppliers. That is particularly important where the authority has skin in the game. If I am unsuccessful—as I have a sneaking suspicion that I might be—in persuading the majority of the members of the Committee to support amendment 49, we should at least expect transparency in any decision-making process where the decision taker, the local authority, is taking a decision that affects a municipal bus company owned by that authority. At the very least—as we will discuss in relation to other amendments—we should insist on absolute transparency in those commercial relationships, so that the disinfectant of sunlight can shine on the exact rationale for a commercial opportunity being refused. Amendment 50, my final one in this group, goes one stage further. It would get rid of the complex “balance of benefits” argument entirely and replace it with a simple assessment of the application: will the proposed service have benefits for the economy of the area or persons living in the area? If yes, the licence would be granted. The impact would be similar to that of amendment 48: it would simplify the process and give agency to the applicant. If they could prove that their service would deliver benefit, the local authority would grant a service permit.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  It is jolly nice to see you in the Chair, Sir Desmond. As I spoke to the amendment before lunch, it falls to me now only to press it to a vote. Question put, That the amendment be made.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  With your permission, Sir Desmond, I will deal with this in a slightly different order from that in which the Minister addressed it. I will deal with clause 14 in toto, and then look at Government amendment 6, which removes two subsections from the clause. Clause 14 amends the Transport Act 2000 by requiring local transport authorities to identify and list services in the enhanced partnership area that are “socially necessary local services”—we have already discussed this at some length this afternoon—and then to specify requirements that must be followed if a bus operator of those services wishes to vary or cancel them. Subsection (2) amends section 138A of the Transport Act 2000, which talks about enhanced partnership plans and schemes, and it requires local transport authorities to identify and list socially necessary local services within their enhanced partnership plans—so far, so sensible. The term is defined in subsection (2)(c), which inserts proposed new subsection (15) into section 138A and provides a definition of “socially necessary local service” as, “a local service which— (a) enables passengers to access— (i) essential goods and services, (ii) economic opportunities (including employment), or (iii) social activities, and (b) if cancelled, is likely to have a material adverse effect on the ability of passengers to access those goods, services, opportunities or activities.” That is not necessarily a problem, but it is worth noting that this definition is quite subjective in its application. It is not easily measurable what such a service is, nor is it standardised between local authorities. The Minister will say, “Devolution will allow a thousand blossoms to bloom,” and I conceptually agree. However, I wonder whether, if we have different interpretations of the same term—“essential goods and services”—in different parts of the country, that raises a question about how the provisions will be applied across the board. I understand the desire to devolve assessments to local need, but the determination does, after all, have commercial consequences for operators. As ever, where commercial opportunities are challenged or threatened, that brings with it a risk of legal challenge. That is why I raise the flag with the Minister—I am not going to do anything about it—that this is a potential future pitfall, where different local transport authorities apply the same definition differently. If the Minister recognises that the definition is subjective, is he concerned about the risk of challenge? The route to formal challenge within an enhanced partnership structure would typically be by judicial review. Is there another form of challenge that the Minister would recognise as part of this process? What guidance will be given to local transport authorities in the assessment process? He referred to some guidance in his earlier responses; I saw him glance towards his officials. I would be grateful for more detail. I think the issue can be dealt with through guidance, so it would be helpful to understand what form it will take for local transport authorities. Has that already been formulated? Either way, do we have an indication of when the guidance will be published? It is clearly an important document when looking to turn these concepts into practical policies. Clause 14(2)(a) inserts new paragraph (ba) into section 138A(3) of the Transport Act 2000, requiring local transport authorities to identify which local services in their area are socially necessary services and to list those services in the enhanced partnership plan. Clause 14(2)(b) inserts new paragraph (4A) into section 138A of the 2000 Act, requiring local transport authorities to keep the list of socially necessary services under review and amend it as necessary. The idea here is presumably to ensure that the list of socially necessary local services reflects any sudden network changes in an enhanced partnership area. So far, so good.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  Thank you for that indication, Sir Desmond, but exactly the same arguments that apply to the providers of bus services for a fee also apply to taxis. You can insert the word “bus” whenever I have said “taxis”; exactly the same argument applies for both providers. The additional cost of employing a part-time worker, such as a bus driver, in a bus company would be £1,303 per employee per annum, so we have a real problem. Bus providers—and others—are being swept up in the net of increased employer national insurance contributions. It is simply a fact that a large number of the school contracts will become unsustainable under the current format, yet no payments have been offered, either as part of this Bill or elsewhere, to compensate local transport authorities, county councils or whichever authorities are responsible for the provision of bus contracts for education and special education needs, even though the actions of this Government are making these contracts unsustainable. Thousands of these contracts around the country will need to be handed back to local education authorities. Staff will be made redundant, causing a further shortage of drivers for passengers, and thousands more schoolchildren will be left without transport unless there is movement on this. There needs to be movement of one form or another. In an ideal world, bus SEND provision would be excluded from employer national insurance contributions. However, in the absence of that, an alternative form of funding must be provided, if it is still the Government’s desire that provision be made by local authorities for bus services for SEND children. For this reason, subsection (6), which mandates a review of how the increase in national insurance contributions from 6 April will affect socially necessary bus services, including SEND transport services for children, is so important. The provision would mandate that the review be laid before Parliament within three months of Royal Assent. This is urgent. The negative impact has already started. We need movement from the Government, or there will be real problems that affect real people. Again, these are the most vulnerable in our society. I therefore oppose Government amendment 6, which inexplicably seeks to remove this necessary assessment from the Bill. Ordered, That the debate be now adjourned. —(Kate Dearden .)

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  I rise to speak briefly in support of Liberal Democrat amendment 66, which inserts a requirement for local transport authorities to review the adequacy of the existing network of local services—through proposed new subsection (4B)(a)—and the requirement to identify any gaps in provision, through proposed new subsection (4B)(b). Proposed new subsection (4B)(c) states that what further action the local transport authority intends to take to address the gaps identified must be set out. Proposed new subsection (4C) would require the authority to publish both the assessment and the resulting plan after the relevant consultation. It is clearly a good idea to identify the scale of opportunity in the local area as well as what is already available. Such good information would inform good future decisions, so I have no hesitation in supporting the amendment. Amendment 64, which was also tabled by the Liberal Democrats, would require the Secretary of State to provide Parliament with a statement every six months with information on socially necessary services across a county and the number of whole routes cancelled, as well as frequency and days of the week. I am not supportive of it. Although I understand the rationale behind the amendment, and it would be interesting to have that information on a regular basis, it would be truly onerous to require the Secretary of State to provide that every six months for services right across the country. As with all things, when we are trying to design effective government, we have to balance benefit and cost. In my respectful view, such a requirement tips into being simply too onerous. Assessments are, by their nature, local or regional, and I do not understand the practical utility of national reporting when the people who really need to know the information are in the local transport authority that would be providing the information in the first place. I therefore confirm my support for amendment 66 and my opposition to amendment 64.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  I will start with clause 10, to which explicit reference has not yet been made, and under which section 123D of the Transport Act 2000, which refers to auditing, is to be amended in accordance with subsections (2) to (8). Subsection (2) sets out that a franchising authority may not proceed with a proposed franchising scheme unless it has obtained a report from an “approved person” on the assessment of the proposed scheme. The approved person—this is important—will replace the requirement to obtain a report from an auditor. We read, under the new drafting, that the approved person must be independent, but based on that drafting we have no idea what other qualities the approved person may or may not have. Subsection (3)(c) requires the report to state whether the information relied on in the authority’s or authorities’ assessment is of sufficient quality for the purposes of the subsections, which I will not go into. Subsection (4) will replace section 123D(3); it states that the Secretary of State must issue guidance as to when it is appropriate to appoint an approved person and what the franchising authority needs to take into account when selecting an approved person, including in relation to whether a person is independent. Subsection (7) sets out that an approved person means a person specified in regulations by the Secretary of State. That raises the question whether the local transport authorities have the technical know-how and/or financial competence to create and then run these franchises. That is the big question that we have been debating backwards and forwards over the past few days. We know that they are expensive; we know that they are complex. I will not rehash arguments that I have made already, which we can take as read. We know that it is crucial that any plans be fully developed, properly costed, stress-tested for viability and generally fit for purpose before we press go on an entirely new system. The requirements of clause 10 are important in facilitating that stress testing. On the face of it, the clause appears to water down the independent oversight, particularly on financial management. One of the core risks of franchising, as we have discussed, is the transfer of commercial risk from the operator to the local authority. That is a very significant change—one of the most significant changes. Here we are, having a report on the plans: we no longer need an auditor who is financially qualified. Instead, we have an approved person. It could be an auditor, but we just do not know. The only qualification that we are told the approved person will have is their independence. That is a good thing, but subsection (7) writes a blank cheque to Ministers: “‘approved person’ means a person specified…in regulations made by the Secretary of State.” We have not seen those regulations; I assume that they have not yet even been drafted. Perhaps the Minister will clarify the point. What specifications will he seek to put into the regulations? If the Government want the Committee to vote in favour of substituting an approved person for an auditor, it behoves the Minister to tell us the kind of people who would qualify as an approved person, beyond their mere independence. I look forward to his detailed response, so that members of the Committee can feel satisfied that we are discharging their duty properly by understanding at least the direction of travel of the regulations. I want to know what qualities, qualifications or expertise will be required. I question why the term is not defined in the Bill, but instead left to future regulations. It cannot be beyond the wit of man to sit down now and decide what kind of person we wish an approved person to be. It is not dependent on future information becoming available. It seems to be slightly sloppy drafting to define a term in reference to a future regulation—that is no definition at all.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  That was absolutely not clear from the drafting, and I do not feel able to support such opaque drafting. It would not be right to slip in five words and change the whole meaning of the clause. Perhaps it would be better to draft a new clause; I suspect the hon. Lady has time to do so before the end of the Bill’s consideration.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  No answer to the questions?

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  No, I am pleased to say that I am not, Sir Desmond. Clause 14(6) makes specific reference to this. It was a requirement that was inserted into the Bill by the other place. I will read it to you: “The Secretary of State must undertake an assessment of the impact of the level of employers’ National Insurance contributions on the provision of socially necessary bus services, including transport services for children with special educational needs and disabilities…and lay it before both Houses of Parliament within 3 months of the day on which this Act is passed.” As such, this is fairly and squarely in the scope of not just the Bill, but this clause. Government new clause 6 would specifically remove that subsection, so I am setting the scene as to why that is a very bad idea. We understand the effect, which will be a 15.2% increase in employment costs. If an employee works 780 hours on the minimum wage, they earn around £8,923, which is currently below the minimum threshold. In that instance, following the increase, the employer’s national insurance contribution will go from £0 to £678. That is the additional cost of that employment. Who will pay for that in a SEND contract?

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  The Liberal Democrats’ amendment 54 would place a duty on local transport authorities to identify and then satisfy the need for all—and I stress “all”—socially necessary services, irrespective of supply, under an enhanced partnership. The amendment does not explain how the services would be supplied by the local authority—presumably, there would be a tender process—but it would require the authority to produce a report within six months. That report would identify the need, estimate the costs of provision and associated funding gaps, estimate the impact of a new service “on local accessibility and transport needs”, provide “a timeline for the operation of the service”, and specify local funding shortfalls. That measure, if adopted, would be a truly revolutionary departure for the identification of local need and subsequent funding, because it would hand demand assessment to the local authority, but the cost of provision to the Secretary of State. What could possibly go wrong? I genuinely look forward to the Minister supporting the amendment and explaining how he will fund that. The Liberal Democrats’ amendment 74 would require the Secretary of State to advance proposals within 12 months to “guarantee a service for socially necessary services”, where that service has been absent for six months and “the local transport authority is unable to run the service.” That is a second extraordinary proposal, because it would again place identification of need—according to the highly subjective definition of social necessity—in the hands of the local authority, but would give the Secretary of State a legal duty to supply that assessed need. It envisages the Department for Transport directly running individual routes that have escaped the design of the franchise network or the enhanced partnerships. Presumably, since the Department for Transport has to supply for that need, it will be liable for procuring, right across the country, individual routes that are not part of a wider contractual arrangement. There we have it: the Department of Transport directly running individual routes, spread across the country, independent of wider bus provision. It sounds to me like a recipe for disaster.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  Amendment 39 would add healthcare services, schools and educational facilities to the list of socially necessary local services. The hon. Lady is, of course, right that those are important destinations for bus services—so important that they would without doubt come under the services side of the definition. Since the clause as drafted refers to enabling “passengers to access…essential goods and services”, the amendment is otiose. I understand the political point that the hon. Lady is seeking to make through amendment 38 but, as drafted, nothing could be done with that information under the clause. In fact, the amendment would have a negative effect, because it would simply muddy the waters with historical data without being helpful in establishing the future direction of travel for local transport authorities.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  Clause 12 amends the Transport Act 2000 to set out the new process for varying a franchise scheme. In particular, subsection (2)(b) removes the minimum notice period of six months before a variation can come into effect. I will not seek to divide the Committee on this, but what assessment has been undertaken of the impact of a reduced notification period on service providers? What confidence can the Minister give current service providers that the impact will be minimised? What was the original rationale for the six-month delay, and what has changed to remove the need? Government amendments 7 to 10 are sensible clarifications to ensure that the requirement to consider policies under section 108(1)(a) of the Transport Act applies only where such policies are mandatory. I fully agree with them. Government amendments 11 to 16 tidy up the requirement for consultation with the devolved Administrations in Wales and Scotland, where a proposed franchising scheme under amendments 11 and 12, or a variation of an existing scheme under amendments 13 to 16, would affect the devolved area. Again, that is a sensible clarification that needs no further elaboration.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  I am so sorry—it is in the name of the hon. Member for Middlesbrough and Thornaby East (Andy McDonald). I will therefore address amendments 34 to 37, which would allow for a direct award to local government bus companies. I fully understand the rationale behind the Bill, but looking at clause 13, I do not think that that award is excluded by the current drafting, because the term of art is “operator”, and a public bus company could be an operator.

• 26 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (Third sitting) · Hansard source

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  Clause 13 amends the Public Service Obligations in Transport Regulations 2023 to allow franchising authorities to make a direct award for the first local service contract under a franchising scheme to the “incumbent operator”—that is the important phrasing. The intention, as I read it, is to allow for a smooth transfer of operations to the new scheme, where the qualifying conditions are met. Proposed new regulations 16A(1)(a) and (b) specify that the award must be of a local service contract within the franchising scheme and where no local services are currently provided. Proposed new regulation 16A(1)(c) sets out that the operator must have provided the same or similar services for at least three months prior to the new contract. I acknowledge the objectives of the clause, but I am concerned that it raises more issue than it addresses. The approach could look like a cosy agreement, which is a theme that I have addressed a couple of times today. Where we are awarding a further contract to an existing contractor, without going to market or tendering more widely, there is a perception, if not a reality, of a cosy agreement. It cuts out competition and favours one operator over the others, and it is not just for a short period; it is for a period of up to five years, as set out in clause 13(3). The likelihood of a challenge from other bus operators in the area, who are angry about being excluded, may well be quite high, yet proposed new regulation 16A(2) requires the local transport authority to publish information relating to the contract only within six months of granting the direct award. We therefore have a transfer that may look like a sweetheart deal between the local transport authority and the existing service provider, which may be the municipal bus company but could equally be a private provider, while the judicial review, which is the mechanism by which an external aggrieved party can challenge that decision, has an application deadline of three months—12 weeks. Under the clause, the requirement to publish the information on which that judicial review could be based falls fully three months after the judicial review deadline, so there is a problem with the timings set out in the Bill. What is the point of publishing the information in subsection (3) six months after the date of the award? Other operators cannot go to judicial review, because the deadline has already passed, so what use is it and to whom? I have a simple question for the Minister. What process should operators follow to challenge a sweetheart deal, as they obviously should be able to do? If the information is six months’ old, it cannot be through judicial review, because they will not have been provided with the information before the three-month deadline. What process do the Government recommend that operators should follow, and what information will be available to them? What is the reason for such a long delay in providing information? The information is there from day one, because the local authority and the existing provider will have signed a contract, so all that needs to be done is publish it. What governance provisions will be in place to guard against improper preference, because it may well feel like that has been involved to excluded competitors looking in from the outside? They need to have extra special confidence that there is sufficient governance in place to guard against that, especially if the provider is a municipal bus company, for the obvious reason that they have skin in the game—I will not rehearse that argument. Amendment 72, tabled by the Green party, would have an effect similar to amendments 34 to 37 by removing the ability to grant a contract to a private operator working outside a franchising scheme—for example, in an enhanced partnership.

• 26 Jun 2025 · Local Bus Services · Hansard source

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  I am grateful for that answer, and we have four hours of Bill Committee later today to rehearse the arguments yet again. In an earlier answer, the Minister said that he is providing £1 billion of support for buses in this financial year, but surely he knows that £700 million goes to help local authorities navigate the huge administrative burdens that come with franchising and the other schemes that the Government have in mind. That leaves just £255 million for actual bus services across the whole of England. That is only enough to satisfy Andy Burnham for a year, yet we have full fat being pursued by Liverpool and West Midlands. I ask again: where is the money to support those ambitions?

• 26 Jun 2025 · Local Bus Services · Hansard source

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  The Government know that bus franchising is commercially risky and very expensive for any local authority. We know that because Transport for London costs taxpayers £650 million a year in subsidy, and Andy Burnham’s Bee Network in Greater Manchester is currently on course for an annual deficit of £226 million, when its business plan was for a forecast profit. What is the point of giving risky franchising powers to every local authority in the country when the Government do not provide the money to support them?

• 24 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (First sitting) · Hansard source

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  I will tell you at the end of the day. The Opposition welcome the Bill in principle, which is why we did not divide the House on Second Reading. We welcome it because franchising was an innovation that the previous Government introduced in 2017. At that stage, it was limited to mayoral combined authorities, although any local authority could apply to the Secretary of State for agreement that franchising could be brought in. We are concerned, however, that the Bill does not deliver the goals of value for money and improvement of passenger services as it is currently drafted. It is therefore important that we use this opportunity to carefully consider the many amendments from the Government, official Opposition, the Liberal Democrats and the Greens; each of them has their various merits, and there are many good ideas to improve what every party agrees is currently an imperfect Bill. That brings me to clause 1—the purpose clause—which was proposed by the Earl of Effingham in the other place, and received substantial support. It ensures that the overarching aim of the Bill is to improve bus services, and that that remains at the heart of all decisions undertaken in its provisions. By explicitly requiring the Secretary of State to have regard to that purpose, the clause embeds into the legislation a commitment to improve bus services. That is not merely a formality; it is about setting a clear duty on the Secretary of State to put the improvement of bus services at the core of any decisions he or she makes under the legislation. The clause gives the Bill a necessary focus; it is the framework on which all the baubles of other clauses and requirements are hung. That is important when there is a change to structures, as the Bill anticipates, because it is easy for process to take over from the clear objectives of the Bill. In a purely commercial construct, where there is an operator driven by the profit motive—they need to drive fare box and have customers to get a return on their investment—it is obvious that the natural incentives focus on the customer. When we move to a franchise and the primacy of commercial incentives are removed, the risk is that the customer gets overlooked. In what is commonly described as full-fat franchising—rather like the Manchester example of the Bee Network, which I believe we will refer to quite frequently in Committee—the local authority takes full assumption of commercial risk within its remit and the operator is contracted merely to provide a service. That brings the temptation to mould services in favour of the supplier—particularly if the supplier is a municipal bus company, such as an in-house provider—as opposed to the passenger. With external providers, there are a couple of checks on that: first, the direct relationship between fare box and profitability, which I have already mentioned; and secondly, the local authority’s overseeing position to challenge operators and hold them to account, particularly when partnerships are the enhanced partnerships that we have in many local authorities around the country. That combination enforces the interests of the passenger, even when they are not directly consistent with commercial performance. Under wider franchising, there is a risk—albeit a manageable one—that that check will disappear, because local authorities may become both the judge and the jury. That makes the purpose clause even more important to ensure that the Secretary of State focuses on passengers in every decision. It makes it clear that the accountability for achieving that result lies firmly with the Secretary of State, and it is useful, as in any complex consideration, to have organisational clarity. Nothing in the Bill, other than here in clause 1, puts passengers front and centre—that is a notable omission from the Bill as currently drafted; all the rest deals with procedure. Placing an explicit duty on the Secretary of State provides a valuable guiding principle throughout the Bill’s implementation period, and ensures that every step taken under the Bill will be aligned with the objective of improving bus services for all those who rely on them. The Minister in his opening remarks said that the clause was not necessary, because it does not encompass “the full scope of the Government’s ambition.” Yet the clause says that the Bill will “improve the performance, accessibility and quality”. Surely “quality” encompasses safety, which was the Minister’s example as to why the clause was inadequate to describe the full scope of the Government’s ambitions. I push back on that, because quality does encompass safety in the ordinary sense of that word. Paragraph 1 of the Government’s explanatory notes for the Bill says: “The Bus Services (No. 2) Bill brings forward primary legislative measures intended to support the government’s commitment to deliver better buses.” Clause 1 honours that Government commitment to deliver better buses and should remain part of the Bill.

• 24 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (First sitting) · Hansard source

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  Clause 2 amends the Transport Act 2000 in relation to the availability of franchising schemes. It is essentially a facilitating clause to allow for one of the really important changes in the Bill, which is to remove the requirement for the Secretary of State to consent to any local authority other than mayoral combined authorities when deciding whether to embark on a franchising scheme.

• 24 Jun 2025 · Bus Services (No. 2) Bill [ Lords ] (First sitting) · Hansard source

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  There is a lot of to-ing and fro-ing about which system passengers prefer. The way to really judge that is through ridership—how many people take the buses. It is absolutely right that in Greater Manchester, under the Bee Network, there has been a post-pandemic increase in ridership of about 34%, from memory. However, does the Minister not accept that in Norfolk, where there is an enhanced partnership, ridership has increased by more than 40%, and in Essex, another enhanced partnership area, ridership has increased by more than 50%? The point is that it is not the scheme design that is fundamentally important, but the way in which it is approached. Does the Minister accept that we can have outcomes that are just as good—better outcomes, in fact—through enhanced partnerships as we can through franchising?