Local Transport Bill [Lords]

Public Bill Committee, 29 April 2008.

Ann Winterton (Conservative, Congleton)

I greet members of the Committee on this happy morning when we shall be spending two and a half hours together.

Clause 19

Graham Stringer (Labour, Manchester, Blackley)

I beg to move amendment No. 96, in clause 19, page 17, line 40, leave out ‘proposed’.

Ann Winterton (Conservative, Congleton)

With this it will be convenient to discuss the following amendments: No. 97, in clause 19, page 17, line 41, leave out ‘proposed’.

No. 98, in clause 19, page 17, line 43, leave out ‘proposed’.

No. 99, in clause 19, page 17, line 44, leave out ‘proposed’.

No. 100, in clause 19, page 17, line 46, leave out ‘proposed’.

No. 101, in clause 19, page 18, line 1, leave out ‘proposed’.

No. 102, in clause 19, page 18, line 4, leave out ‘proposed’.

No. 103, in clause 19, page 18, line 6, leave out ‘proposed’.

Graham Stringer (Labour, Manchester, Blackley)

Good morning, Lady Winterton. We now come to the kernel of the Bill, which seeks to make it easier to set up quality contracts than was the case under the Transport Act 2000. Although the Government’s intentions to make it easier to bring in quality contracts are welcome, I hope that the amendments will make the process even more effective. Before getting to the meat of the argument, it might be useful to explain that when I tabled the amendments to reduce a seven-stage process to a three-stage process I also tabled consequential amendments Nos. 104, 194, 106, 107, 112, 113, 114, 120, 121 and 125.

It is clear that the Clerks have seen a significant case—that if some of the other amendments were taken on their own they would vary the Bill in an interesting fashion. However, if they were taken separately, the changes that they would make remain opaque to me so I shall concentrate on the main argument for making the process of bringing in quality contracts even easier than set out in the Bill.

There is a clear difference in the thoughts of those on the Conservative Front Bench and the Liberal Democrats and the Labour party. When we considered related matters last week, Labour Members said that many Conservative councillors agreed with my right hon. Friend the Minister rather than with the Opposition, so I checked the position of Conservative councillors on my passenger transport authority. Before I excite the Opposition, I do not want to make the case that all Conservative councillors agree with the Labour party on the matter but, to put it simply, many of them, particularly those whose work is related to transport, agree with the Government and the series of amendments that I have tabled.

I do not know who should be more worried about this—Opposition Members or me—but in open debate, much to his surprise and mine, the Bolton Conservative member of the Greater Manchester passenger transport authority, having watched the Second Reading debate, said that he agreed more with me than with the hon. Members for Chipping Barnet (Mrs. Villiers) and for Wimbledon. The leader of the Conservatives on Greater Manchester passenger transport authority—I think that she has it right—said that she was taken by the case that there needs to be more regulation and more public accountability for the money that is going into buses.

The hon. Member for Wimbledon is making an ideological case that is removed from that of Conservative councillors who are actually looking at what is happening on the ground.

Greg Knight (Conservative, East Yorkshire)

How many of the Conservative councillors the hon. Gentleman is alluding to are in opposition, and how many are in control? I suspect that the majority of them are in minority groups in opposition.

Graham Stringer (Labour, Manchester, Blackley)

The ones I was referring to are members of a passenger authority that is, in effect, hung; it has a Labour chair but there is no overall control. If the right hon. Gentleman checks with the Conservative chairman of West Midlands passenger transport authority, he will find that his views are not so different from those of the Conservative members of the Greater Manchester passenger transport authority. I hope that helps him to realise that Opposition Front-Bench Members are out on a limb on the matter, compared with the rest of the Conservative party.

The Conservative spokesman on Greater Manchester had it right, because we are talking about bringing a form of franchising regulation into what is called the commercial network. When I talk to people in business about commercial matters, they do not usually include in what is commercial, businesses that obtain so much public subsidy. On Second Reading, it was made clear that in the so-called commercial sector there is an average subsidy of £35,000 per bus per annum. On behalf of taxpayers, we have a right to ensure that there is public accountability for the use of that money, particularly as the subsidy has increased fivefold in cash terms over the lifetime of the Government.

I do not expect an immediate response from my right hon. Friend the Minister because she is currently consulting on what to do with the bus service operator grant, so I realise she is restricted in how she can answer my points. However, what lies behind the Government’s thinking on how to start quality contracts is that bus operators do not like the scheme. They do not like it because it will stop them making three and four times the profit that they make in London. I am sure that by whatever process—judicial or legal—they will try to stifle the Government’s good intentions.

I ask my right hon. Friend to consider that some of the aggression from the bus companies might change if the BSOG was transferred to the integrated transport authorities. At present, there is an incentive for bus companies, whether on concessionary fares or the introduction of improvement and regulation of services, to go for bigger subsidies and to attack local democratic bodies. If those bodies, which we hope will be in charge of the networks, were also in charge of handing out a great deal of money and making that money work in favour of the environment and transport, there would be a change of attitude in some of the rather aggressive bus owners. It would offer a greater inducement for them to work with the integrated transport authorities than the long process currently in the Bill.

The Bill contains a seven-stage process, with the transport authority going out for consultation, then to an approval board, then a tribunal. The amendments, and the consequential ones, ask whether we need such a long process. Is it not right in principle for elected councillors to make the decision, rather than an approvals board and a tribunal? Those matters are of great local concern—the electorate and our constituents care about them. Is it not right that the electorate have a say about the people who make the decisions, and that the people who stand for election and campaign for better bus services, a new route or whatever, make the decision? That is the essence of the amendment—the integrated transport authority should make the decision.

Having listened to the Second Reading debate and had a number of discussions with my right hon. Friend the Minister, I recognise that there are a number of reasons why the Government have not come to the same conclusion that we have. They agree in principle that it is better—as in the rest of devolved democracy—that councillors make decisions and they recognise that there is a threat from bus companies, so they have tried to protect local authorities and the travelling public from judicial review by their proposed process. That is the principle. However, will it really protect the process, or will it just lengthen it? Will the provision stop judicial review?

What worries me most about the process, apart from the fact that local councillors will not take the decisions, is that economic viability will be part of the assessment made by the approvals board and the tribunal when they come to their decision—not the decision of the elected councillors who put the scheme out to work. Is what is proposed sensible? That is difficult to assess, unless it is tried out. Furthermore, saying whether something is economically viable is close to a policy decision. For example, in an area that I know well, south Manchester, putting out a tender in Wythenshawe for groups of minibuses rather than larger buses on the main routes is a serious policy matter in respect of council estates that were built without easy access to buses. That decision, as part of a tender, should be left to elected members, not to what would necessarily end up as an argument between professors of transport economics, who could get it wrong. One could say that they might be right in their argument, but that the process will protect us from judicial review, because we will have been seen to be reasonable—the people putting the scheme out to tender would not make the decision.

Second-guessing the courts is always difficult, but when the nature of what is going on is to test the market to say which scheme the transport authority thinks is viable, how can professors of transport or economists be better at knowing the market than the tendering bus companies? They are the market. If the transport authority is wrong, it will be clear from the tenders coming back that the bus companies do not think the scheme viable. It would not be beyond the wit of integrated transport authorities to put variabilities—on fares and routes—in the tender, so that bus companies had a range of mix-and-match options. One would not expect a simple assessment that could be made in a day. Tenders for fixed-route tram systems, for instance, are complicated documents and such complicated tender documents would be better dealt with by competitive tender than by outside assessment.

A second, subsidiary argument is that if things are left to the market, it will somehow allow the bullies of the bus industry—the likes of Stagecoach, Arriva and First Group—to push out the smaller operators. I know that my hon. Friend the Member for Preston (Mr. Hendrick) has been greatly exercised by such problems in Preston, and he has set them out in Adjournment debates. However, I do not think the argument is a good one. If an integrated transport authority does not want a large company operating its scheme, it should package the tender to make it more attractive for a small operator, but if one of the large operators comes in with the best bid, it would be the duty of either the tribunal, the approvals board or—if the amendments go through—the integrated transport authority to take the decision on best value and the practicalities of operating the routes. In the current situation, the process of external decision making proposed by my right hon. Friend the Minister would not really be a protection against judicial review. Having the cash might be better protection.

When my right hon. Friend answers the debate, and between now and Report, I hope that she will reflect on those issues. Our proposals are workable; they would be quicker, and as long as a bus company did not win a judicial review, the process could go on.

There are other ways of protecting an integrated transport authority. One might be by having the approvals board as a statutory consultee, which is close to what the Liberal Democrats are proposing in their amendment. That is a sensible proposal that requires consideration and debate. Another way might be to stick with my right hon. Friend’s proposals and to restrict the two-stage process to dealing with procedure, not trying to second-guess the market and not taking policy decisions—however we define policy—but leaving them to the elected representatives. There is a lot of scope.

I shall deal with one other argument before I sit down. I know that my right hon. Friend is concerned not just that small bus companies may be pushed out but also that small districts may not be able to undertake the process as effectively. However, the integrated transport authorities will not be small shire districts, they will all be large in financial terms, with decent local facilities, and will not be awed by a judicial review case that might cost £50,000 or £100,000. Even the smallest authority that is likely to become an integrated transport authority is likely to have a decent legal department. We are not talking about small shire districts whose turnover might be only between £12 million and £18 million; we are talking about much more substantial authorities. I hope my right hon. Friend will reflect on that, as many of my hon. Friends are concerned to make sure that the process works.

Clive Betts (Labour, Sheffield, Attercliffe)

I support the amendments standing in the name of my hon. Friend the Member for Manchester, Blackley, and I support his argument that there is in general a need for a change. I challenge Conservative Front-Bench Members to explain to my constituents, and to many other people up and down the country who feel considerably disadvantaged by the current arrangements, why no change is needed.

The reality of the situation in South Yorkshire is that in what some would say were the halcyon days of the South Yorkshire transport system we had a cheap fares policy, lots of widely used bus services and, as a result, little congestion. Yes, there were failings, and no one would actually want to return to those precise arrangements, but our present free-for-all, with bus operators in effect determining most of the services that run—or that do not run, in many cases—is unacceptable.

For every three bus passengers in Sheffield at the time of deregulation, there is now only one, and a lot fewer buses to ride on. That is the scale of the fall in bus usage, which we have to do something to correct.

Of course, franchising is a possibility, and there are quality contract arrangements in the current transport legislation, but I think everyone has accepted that the status quo is not feasible for the simple reason that quality contracts have not been used in the form currently available. The “only practicable way” test is one that no authority will meet; indeed, no authority has met it. South Yorkshire began a process to try to meet it because the authority recognised the need to do something about ending the current free-for-all. Wherever we stand on the issue, it certainly cannot be to support the status quo in terms of a piece of legislation that has not yet been operated and is effectively defunct.

We have a choice: either to say that transport authorities, whatever their form, will never have any powers to challenge the current deregulated environment, or that they will have powers, which are effective and can be used where appropriate in their areas. No one on the Labour Benches is arguing that every transport authority in the country has to move to a quality contract situation; simply that an authority should have the right to do so if it is in the best interests of the population in their area. I find it very difficult to understand how there can be any argument against a transport authority with elected members being able to decide what is best for people in their area.

Surely that is a fundamental issue for people such as the hon. Member for Harwich, whose writings about new localism I was reading in The Daily Telegraph the other day; in effect, he was asking why the electorate should bother to go out and vote at local elections when local councils had so few powers, and saying that what we ought to be doing is looking at enhancing the powers of local authorities, so that they could really relate to the electorate in their areas. It was very interesting. I did not agree with absolutely all of it, but the general thrust—that when people vote, they should actually be able to change things and elect a council that delivers the services they want—seems to run completely at odds with the support of Members on his Front Bench for the removal of franchising powers and not allowing elected members at local level to make those decisions. How can a new localism position be supported when a Member wants on the one hand to argue a case for more powers to local councils, and on the other hand, to vote in Parliament to take those powers away and not give them at all?

I am very much of the view that these are matters where the right should be with the local transport authority to have a quality contract situation in their area if they believe that it is best, and they can demonstrate that it is best, for delivering services to the people of their area. It is not just a question of the three-for-one passenger exchange; fares have gone up from the rather famous 10p that used to be paid in South Yorkshire to around £2 for the same journey. It is the constant changes that people cannot get their heads around. People plan their lives; they get a job and have to get there early in the morning so they work out the bus route, but at 42 days’ notice, the bus route changes. That is a fundamental problem.

A man and wife have many happy years of marriage, but one of them has to go into an old persons’ home—we have all talked to people who have had that experience. They find a home that the partner living at home, who does not drive, can reach easily by bus, but then the bus route changes and there is no comeback. They go to the local councillor and their Member of Parliament, who are powerless in those circumstances. That absolutely cannot be right.

I was talking to constituents on Westfield crescent the other day about Crystal Peak, a significant district shopping centre in my constituency where many women work because the hours suit their family lives. The problem is that although the working hours in the shops suit their family lives, they cannot actually get there on the bus because the bus services do not run early in the morning or late at night. Elected members at local level must be given powers to address such problems if they think that is the appropriate way forward.

How can we reach a situation where quality contracts can be put in place, if that is thought right at local level? In London, we clearly have a situation that works. Transport for London makes the decisions, puts the franchises out, private firms tender for them and bus passenger use has grown enormously, so that is a model we can look at. There have been rows about concessionary fare schemes in local authorities up and down the country, where concessionary fares are built on the back of a free market, deregulated environment. A complicated argument is made about operators not being any better or worse off as a result of a concessionary fare scheme. That argument disappears in the London environment because concessionary fares have become part of the tendering process, and all the firms tendering build the concessionary fare arrangements into their tendering process, so there is no administrative nightmare.

I shall try to reinforce some of the points that my hon. Friend the Member for Manchester, Blackley has already made. Clearly, the Transport Act 2000 did not get the issue of quality contracts right but now we have an opportunity to get it right, and not to replace one set of insuperable barriers with another. There is the democracy argument that the matter is for local decision makers on the transport authority, so we do not need an approvals board and tribunals. Why do we need the approvals board to second-guess and in some cases override or veto a decision? That is the fundamental problem that some of us face.

I respect and understand the Minister’s intention, as I see it, not to override local democracy. I know that she is committed to local councillors having powers and operating them in the best interests of their electorate. I also understand her desire to protect small operators and councils in particular, and to avoid a judicial review position in which courts decide matters, often on a technicality, rather than decisions being taken at local level by whatever process is appropriate. However, I still have worries about the approvals board and the tribunal coming together as part of an extended process; not merely about where power lies in that process, but about the timing.

I was talking to another constituent—I have been talking to quite a few recently because of the local elections—on Ribblesdale drive. She said, “I’ve got a small car, but I generally don’t really want to use it, I’d much sooner use the bus. The problem is on a Sunday there’s no bus service and I have to walk half a mile.” Sheffield has a few hills in it, so she is all right walking down the hill to the bus stop, but getting back, particularly when carrying shopping, is an impossibility. I told her, “I have good news for you. I’m sitting on a Committee next week and we’re going to look at how we can give powers back to local councils, if they wish to take them up, which would enable them to decide the framework and frequency of services.” She said, “Oh, that’s great, and when’s that going to happen?” I said, “Well, we might get the legislation through some time this year, and then the regulations are going to follow, and then, well perhaps another three years afterwards?” She said, “It’s not very quick, can’t we do it any quicker than that?” There will be a lot of public frustration when people understand how long the process could take.

The Minister has said that she wants to lay down maximum time limits for the various processes to be followed in the approvals board and the tribunal. It would be helpful if she indicated what she sees as the way forward. The Passenger Transport Executive Group has said that it could take 18 months for a transport authority to come to a view, after all the necessary consultations, that a quality contract is the right way forward and that it could then take up to another 14 months to go through the approvals board and the tribunal. Although all that is designed to stop judicial review, there is nothing to prevent an operator going for judicial review at the end of the approvals board and tribunal process, which could take up to another six months.

So, it could take three years from the legislation coming into effect to go through all those stages, which would cause an awful lot of frustration for people who do not have access to a bus service, but who desperately need one for economic, social or personal reasons. It would be helpful if my right hon. Friend the Minister said what she sees as a maximum time limit for the process.

My view, as I said, is that local democracy should prevail. I hope that my right hon. Friend responds on the approvals board and what it will be able to do. Reading the Bill carefully, I cannot see any reference to the powers of the approvals board to change or veto a decision of a transport authority being limited in any way. I cannot see anything that limits in any way the powers of an approvals board to say no, or yes with conditions. I may have read the Bill wrongly, but I cannot see that. I worry, because it effectively says not that the approvals board has a view over the process—whether the right process has been followed, which might offer some protection against future judicial review—but that the board has a right to say whether a policy is right or wrong. That is undemocratic, and I find it difficult to support.

If the purpose of the approvals board is to protect authorities, particularly small authorities, from a judicial review process—I hope that we do not get there and that that time is not taken up—why are the powers of the approvals board not limited to looking at whether proper process has been followed by a transport authority, rather than the board having complete power to reverse or change a decision?

The Minister talked about an approvals board perhaps saying not yes or no, but, “Please can we look at some issues again?” It may then enter into a dialogue with the transport authority on the precise details of the scheme proposed—is it correct in every aspect? The board might say, “Yes, we think you have the right approach, but we need to discuss modifying or changing one or two aspects.” How will that be built into the time periods?

The Minister talked about an iterative process between the approvals board and the transport authority. Will that process be open-ended, or time-limited as well? If it is to be an iterative process, will the operators, who might be objecting to a scheme, be part of it? It is difficult to understand how we will be able to have an open public hearing by an approvals board on a quality contract proposal, with the operators presumably putting counter-evidence, but then exclude the operators if the approvals board comes to a view that it wants further discussions. That could get incredibly difficult and complicated.

I might be misreading the Bill, but we must be clear, or we could end up with a time-consuming and complicated process if the legislation is passed in its current form. If the intention is to ensure that the process is done correctly to avoid judicial review, why do we need an approvals board and a tribunal? Why two bodies instead of one? Why not simply have a tribunal, for example, which could look at whether process had been followed properly? I hope that, through such a mechanism, we might avoid the need for judicial review.

There has been some discussion about the economists working with traffic commissioners to test the viability of schemes, but I agree with my hon. Friend the Member for Manchester, Blackley that viability will be tested by the tendering process. That is what will happen. If an authority has to justify in public—through the approvals board process and then an interim discussion—precisely what the viability of the scheme is deemed to be, will that not put into the public domain an awful lot of confidential information on the economics of the tendering process? It will undermine the authority’s position when it puts the scheme out to tender. I raise that issue because it is interesting to know the Government’s thinking on how the process will operate.

Finally, the approvals board could have another role. As my hon. Friend mentioned, that is perhaps down to the Liberal Democrat suggestion to which I referred earlier. If there is a need for expert external advice, the approvals board perhaps ought be able to give that while the transport authority is considering the adoption of a quality contract. It could feed in at that stage so that it would not add to the time period, but would inform the process without having a veto. For example, the Environment Agency is a statutory consultee on flooding matters. That proposal would not give a veto to a non-appointed body nor would it extend the time period, but it would achieve a better-informed decision that should strengthen the authority’s position if a judicial review challenge were to take place.

My position is clear. Given the general support across the House for devolving more powers and for giving a thrust to localism—supporting it to ensure that our constituents get a better deal and get the bus services that they need—it is right that we change the current process on quality contracts and give authorities the right to have them. We must also examine carefully whether the process laid down under the Bill is right one and whether we should make changes to it to allow local democracy to have much greater force and impact.

Norman Baker (Liberal Democrat, Lewes)

In a useful contribution to the debate, the hon. Member for Manchester, Blackley began by saying that quality contracts schemes are the kernel of the Bill, and so they are. If we can get this right, we will hold out the prospect of increased bus patronage, the deficiencies of the current system being addressed and the problems of the Sunday service, which the hon. Member for Sheffield, Attercliffe referred to a moment ago, being corrected to the benefit of all. However, if we do not get it right, we will be in severe danger of repeating the mistakes of the 2000 Act. The best will in the world, which created that Act, will have created this Act, which will simply be filed on a shelf to gather dust while things carry on pretty much as normal, with local authorities trying to use the legislation, but probably not succeeding too well because of the hurdles that have been put in place.

When faced with a number of hurdles, the ITAs may well conclude that the game is not worth the candle and just not bother. That would be very sad, and not at all what the Minister and her team want. I readily accept that they have introduced the Bill to improve things.

The difference between the Minister and her colleagues—I align myself with her colleagues on this matter—is over whether the Bill will achieve the ends that she wishes or whether those ends are too onerous to be achieved. In that sense, there is a practical difference between the arguments that we are making now and the Conservative position, which is a separate issue. I want to dwell on that for a second. I hope that we hear from the hon. Member for Wimbledon in due course, as this is an important part of the Bill and we must test his party’s position.

I must reflect on the fact that the motion tabled by the hon. Member for Chipping Barnet on Second Reading on 26 March began:

“That this House declines to give a Second Reading to the Local Transport Bill [Lords] because it encourages the introduction of Quality Contract schemes to regulate bus networks, thus preventing free competition between bus operators”.

That is a different position from that outlined by those who have spoken this morning. Furthermore, the hon. Lady said:

“In future, we would certainly look to remove quality contracts altogether as an option outside London”.—[Official Report, 26 March 2008; Vol. 474, c. 204-09.]

If that philosophical position has been adopted, it is incumbent on Conservative members of the Committee to demonstrate how they would address the inefficiencies under the current system without resorting to quality contracts. In the debate, the hon. Member for Wimbledon put great stress on the use of partnerships generally.

Stephen Hammond (Conservative, Wimbledon)

On Second Reading and at last Thursday’s sitting, I said that partnerships are undoubtedly the best way forward and that we would prefer voluntary partnerships to work. Where they cannot work, we want to ensure that statutory partnerships work. That is our stated position.

Norman Baker (Liberal Democrat, Lewes)

I am grateful for that intervention, which clarifies matters a little, but the question I put to the hon. Gentleman when he was summing up on Second Reading was, “What happens if partnerships are ineffective?” There are effective partnerships up and down the country—he has referred to some, I have referred to some and we all know where they are; Brighton and Hove, Cambridge and so on—but the question the Conservatives have not answered is, what happens where partnerships are ineffective and what recourse is there, or should we just leave that to fester, with poor service for many people across the country?

Stephen Hammond (Conservative, Wimbledon)

Is the hon. Gentleman joining the hon. Member for Manchester, Blackley in saying that he sees no future in statutory quality partnerships?

Norman Baker (Liberal Democrat, Lewes)

No, not at all. I am, I hope, joining the position that quality partnerships have a role to play, but there needs to be a further dimension of quality contracts for when quality partnerships have failed to achieve the desired result. That seems to me to be an entirely logical progression. Without that further option being available, quality partnerships would be less likely to work, in my judgment. If the hon. Gentleman wants quality partnerships to work, the existence of quality contracts will help to achieve that end. No doubt we will hear from him in due course.

There is one more aspect of the Conservative position that it would be helpful to clarify. If these arrangements need to be removed altogether as an option outside London, as the hon. Member for Chipping Barnet says, I fail to see what is so different about London that means that some sort of regulation works there despite it apparently being entirely inappropriate for the rest of the country. Frankly, that is an insult to people in Manchester, Birmingham and other big urban areas, as well as those in rural areas, across the country.

Stephen Hammond (Conservative, Wimbledon)

I do not think that the hon. Gentleman was here on Thursday afternoon—his colleague the hon. Member for Manchester, Withington was—when we went through a number of arguments about regulation and had a debate about where regulation is and is not working, or is viewed to be working or not. That is one point we can park. On the second point, he knows as well as I do that the Greater London Authority Act 1999 impacts on what we can do elsewhere, as does other devolved legislation. That, I am sure, is why my hon. Friend the Member for Chipping Barnet made the point about outside London.

Norman Baker (Liberal Democrat, Lewes)

I am not sure that that justifies the philosophical difference, but let me leave it there. The Conservatives can make their own bed and lie in it in due course.

Across the country, we have seen a significant decline in bus usage over the last 30 to 40 years. Some of that is social, as people have gained access to private transport, but some of it is not. It is down to very poor bus services, which have driven people to use cars when they would not otherwise have done so.

The hon. Member for Sheffield, Attercliffe referred to the situation on Sundays, when people might be forced to use cars because of the lack of a bus service. I have referred previously to a constituent of mine who lives in the village of Ditchling and wanted to work in the nearby town of Burgess Hill. There was a bus service, which operated early in the morning and enabled that person to take a job offer. Shortly after taking the job, 42 days’ notice was given and the bus service was simply withdrawn. That person was left high and dry, with no way of getting to work, and had to leave the job.

We cannot treat people’s lives like that. We cannot say to people that the whim of the bus company means that you are out of work, which is what happened on that occasion. We need a better system than that. I think that the system laid down in the Bill is the right one, as I made clear on Second Reading. Is it going to work? That is the matter I want to take up with the Minister, rather than the philosophical difference with the Conservative party. I am not sure that it is; there are just too many hurdles.

I have had a conversation with the Minister, who made her position clear on Second Reading. I think she is well intentioned—if I did not, I would say so—and that she is genuinely trying to build in some protection for local councils and local authorities to ensure that there is not a successful challenge to the whole scheme. I understand that, but the difficulty is that the number of protections built in acts as a discouragement to local authorities taking the necessary action to improve local bus services. There is no guarantee that the existence of a number of protections will prevent a judicial review from the bus companies, if they wish to go down that road.

The bus companies will not ask, “Will we win at judicial review?” They may ask, “How much is it going to cost us to do this, how long can we string it out for and is the cost of the judicial review less than the sum of money we will make in the short term from thwarting the plans of the local transport executive or the ITA?” That is the financial calculation they will make.

I do not think that the Minister’s well-intentioned efforts to stop judicial review will work for that reason, although I understand her point. That is not to say that we need a complete free-for-all with no legal recourse for bus companies. That would leave ITAs open to legal action, which would probably succeed. Therefore, the balance has to be struck.

I think that to have an external approvals board, which is unelected and which can effectively trump ITAs, and then a transport tribunal, and then a judicial review, is to have one level of approval too many. I do not think that to have those three levels is necessary for the Minister to meet her objectives in providing a robust scheme, which is proof against legal action.

Lady Winterton, there is a slight difficulty here because, as you will appreciate, some of the alternatives are referred to in subsequent groups of amendments, so it is perhaps rather difficult for us to structure this debate in a sensible way. For example, amendment No. 194 in the fourth group on the selection list is consequential, leading on to a very large group in clause 23, beginning with amendment No. 157, which covers many of the alternatives. I am not clear whether you think it sensible for us to go into the alternatives at some length now, thereby curtailing the debate on clause 23, or whether in fact the purpose of this group is to draw attention to the deficiencies of what is proposed in the Bill, thereby allowing the alternatives to be set out in the later parts of the debate. It would be helpful to have your view on that.

Ann Winterton (Conservative, Congleton)

The latter case is the one which should be followed at present, so stick to the finite issues that we are debating.

Norman Baker (Liberal Democrat, Lewes)

I am grateful for your guidance, Lady Winterton. In that case, I shall simply say to the Minister that there are alternatives, which I shall explore when we get to the relevant part in the Bill. One of them is indeed the idea which has been flagged up already, of having the approvals board as a sort of statutory consultee, perhaps to give advice like the Environment Agency, which is exactly the model I had in mind. The approvals board would not necessarily be able to compel the ITA to take its view, but the ITA would have to listen to it, otherwise it would be difficult for the ITA to defend its action subsequently in any legal action.

Another alternative might be to abandon the transport tribunal. Different approaches are possible. One might be to cancel the approvals board altogether, but I would not be in favour of that because having external validation from experts is a good thing. However, there are ways to make the Bill work. I ask the Minister, in the light of the comments that not only I but her hon. Friends have made, and in the light of the views expressed by local authorities up and down the country, of all three political persuasions, who all want the Bill to work and who all welcome its introduction, to find a way to make sure the Bill does work and does not end up gathering dust on the shelves like the Transport Act 2000 did.

Angela Smith (Labour, Sheffield, Hillsborough)

I start by reiterating the support that I gave to the Bill on Second Reading, and in particular the provisions that will make it much easier for integrated transport authorities to develop quality contracts.

We have heard this morning about how quality partnerships could achieve much of what the quality contract promises, but the example we have in Sheffield does not fill me with confidence on that score. The process of adopting quality partnerships was started in Sheffield in 2002, when Labour was returned to power in the city; however, we did not achieve a quality partnership of any sort until 2007. We are grateful for what we have got—the Barnsley Road scheme, which serves one of the most deprived areas in the city, in the constituency of my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett)—but that leaves the rest of the city without a solid foundation for delivering the sorts of service that my hon. Friends and the hon. Member for Lewes have been talking about this morning. I doubt that quality partnerships are the answer for a big city like Sheffield or for the metropolitan areas generally.

My hon. Friend the Member for Sheffield, Attercliffe is right: if we believe in localism, we have to give the right to choose the appropriate option for the delivery of bus services to elected representatives at that level. The hon. Member for Chipping Barnet opposes Bill, so I found it interesting that last week she saw fit to visit Sheffield, Hillsborough and the adjoining constituency of Barnsley, West and Penistone. She issued an interesting press release that mentioned how much she was looking forward to improving public transport in Penistone and in Sheffield. I found that quite astounding given her opposition to the Bill, which promises to deliver the required improvements to villages and towns in the north of Sheffield and the west of Barnsley—areas which, when it comes to the delivery of bus services, are suffering as much as any inner-city area in Sheffield, Doncaster or Rotherham.

It is the remote, outlying areas of South Yorkshire that have suffered most from deregulation in the past 20 years. Surveys in Sheffield have repeatedly underlined that point. In 2002, the council conducted a huge citywide survey to establish whether there was a groundswell of support for bringing back some form of regulation of the bus services. Support for that option was overwhelming. My own surveys over the past year, which made use of the much-derided communications allowance, underlined that point. I have conducted surveys across my constituency and, to a person, every respondent has expressed support for the re-regulation of bus services and a return to the days when they could rely on the bus turning up on time and getting them to wherever they wanted to go.

That brings me to the key point about the provisions of the Bill: the importance to places such as Sheffield, Barnsley, Rotherham, Doncaster and Manchester of having a public transport network that can be relied on to get people to work. Services to a city centre are not the only important thing. In cities such as Sheffield or Rotherham, people work only in the city centre, but in the Don valley, Hillsborough and Attercliffe. There is a wide range of workplaces across the area, so we must have bus services that go not only into the centre, but across the city.

We must also recognise the importance of getting young people to college and university. In my constituency, we have a tram network that runs to Hillsborough further education college. However, large parts of my constituency do not have access to the tram network and have a very poor bus service. For young people living in Burncross, Chapeltown or even Ecclesfield, getting to Hillsborough college for 9 o’clock in the morning is very difficult. Equally, someone on a vocational course must go to the city centre, where Castle college provides a range of courses. At the moment, it is difficult for people to ensure that they get to college on time if they come from one of the places that I have just mentioned.

Another problem is transport to hospital. One of the biggest responses that I got in my surveys of bus users was, “I cannot get to the Northern General.” Royal Hallamshire hospital is on the tram network, so to some extent it is easier to get to, but Northern General hospital is tucked away in Fir vale, which does not enjoy any access to the tram network, and where the No. 17 bus runs on a very ad hoc basis—there is something like one bus an hour—from Hillsborough. The difficulty of getting to the Northern General is immediately apparent. In the places that I mentioned, such as Burncross, Chapeltown and Ecclesfield, the problems are even greater.

From my perspective, meeting the needs of people who cannot afford to buy or run a car are paramount, so that they have access to hospitals, the workplace, college, university and opportunities for shopping and leisure. That is why my hon. Friends and I support the Bill. Deregulation has created a network that does not meet any of the above criteria in the way that the bus service used to in places such as Sheffield.

As an example of the irrationality of the current situation, I refer to what has happened in High Green in my constituency, which has 2,000 buses running through it each week. High Green is a village and all those 2,000 buses run on one road. Yet two miles down the road, in Burncross, there is provision that is commissioned and the route is heavily subsidised by the passenger transport authority because the operators will not serve the area on a commercial basis. How irrational is that? There are 2,000 buses in High Green and a patchy, inadequate provision in Burncross. That is why we need the Bill. At the moment we have a provision that does not work in the interests of everybody who needs to use a bus service and everybody who would rather use a bus service but cannot because they cannot rely on the bus service to get them to work, to hospital, to leisure opportunities or to college.

Greg Knight (Conservative, East Yorkshire)

So that the Committee can be certain, is the hon. Lady saying that she sees the provisions of the Bill as a way of providing fewer buses, and that is why she supports it?

Angela Smith (Labour, Sheffield, Hillsborough)

The right hon. Gentleman misunderstands my comments. I am saying that it is irrational that the bus services we have at the moment should leave one area with a provision that is barely adequate, with people unable to get to where they need to be, whereas another area only two miles down the road has 2,000 buses a week going through it because it is effectively the terminus for the service and not because it needs 2,000 buses a week. We need a more strategic overview of the network in areas such as Sheffield to ensure that everybody’s needs are properly served.

The changes are also needed because the current bus services are not reliable, as my hon. Friend the Member for Sheffield, Attercliffe said. The biggest complaints that I receive are about routes that are changed at short notice, as the hon. Member for Lewes pointed out, and where buses do not turn up on time. Occasionally, we hear accusations that bus drivers have cut out parts of a route because they are running late and they need to get back on track. That often happens to areas such as Burncross, where the service is sorely needed.

We need to see a change in bus service provision. The economic and social case for that is irrefutable. I welcome the provisions that give integrated transport authorities the right to opt for franchising if it is right for the area. The debate is now about how we deliver quality contracts, not about whether we need them. On that point, the Conservatives have been left well behind by the views of the vast majority of the country. When the Bill has finally passed through Parliament and quality contracts are on the way to being developed across the country, we shall find that the Conservatives suffer quite badly when it is realised more widely that they opposed the improvements outlined in the Bill.

At the moment, we have a procedure for developing quality contracts that requires a referral to the approvals board and to a tribunal, as my hon. Friends have pointed out. I understand the Minister’s arguments on why we need that process. Equally, however, I ask her to understand my and my hon. Friends’ nervousness about whether the process outlined could end in lengthy delays and in attempts by the bus operators to undermine the new process in order to ensure that quality contracts never happen.

Given our experience over the past few years, it is critical that we air such issues and, if possible, arrive at a way forward. My concerns and those of my hon. Friends must be recognised in the outcome of the debate. In the end, there has to be a balance between the need to ensure that quality contracts go ahead and are successfully implemented, and the need to ensure that they are viable and recognised by bus operators as the inevitable way forward in areas such as South Yorkshire and Greater Manchester.

The crucial point for me is what the public interest can be deemed to be. My right hon. Friend the Minister pointed out that the public interest is about delivering a bus service that is used by more people, reduces congestion on the roads and serves the economic and social interests of a given area. The problem, bound up in the need to meet those clear criteria of the public interest, is the need to achieve a balance between the commercial routes, which bus operators will always be happy to deliver because they make money on them, and the commissioned and subsidised routes, which the PTA ensures are provided year after year. Ultimately, the argument within each quality contract will be about the balance between those two elements.

I would be interested to hear from my right hon. Friend how much the need to serve the interests of people living in those areas where routes are subsidised will be at the heart of the final process. Without that subsidy, bus operators would never run them. What about those areas that have no provision at all? What about bringing them into quality contracts to ensure that they get some form of bus service, allowing them to participate in the full life of their community?

I know that my right hon. Friend will listen to what is said this morning. I would like to hear her comments on the discussion needed to get the right process in the end—one that gives me and my hon. Friends the confidence to believe that we will get quality contracts in areas such as South Yorkshire and that they will work effectively.

The other key point was mentioned by my hon. Friend the Member for Sheffield, Attercliffe, who drew attention to the impatience in South Yorkshire for quality contracts and for getting them moving as quickly as possible. That is absolutely right. Just as my hon. Friend was saying, one of my great difficulties explaining on the doorstep that we have now tabled legislation that will, I hope, help to resolve the problems with public transport is then having to say, “But I am not quite sure when we are going to be able to deliver this—it may be two or three years, or longer.” Our constituents do not like that. They need to know when they can expect the improvements to take place.

I again plead with my right hon. Friend the Minister to listen to what has been said and to commit this morning to ongoing dialogue—not just on the process and how much confidence it gives us as to whether we will get quality contracts, but on us getting those quality contracts moving as quickly as possible.

I am looking for clear time limits on how long it can take from the moment the contract has been developed and the scheme consulted on to the moment it is approved by the approvals board and, if necessary, has gone through the appeals process. We need clear time limits in the Bill. An outcome of the legislative process cannot be an open-ended procedure for developing quality contracts. That is not acceptable, and I ask the Minister to respond.

Rosie Winterton (Labour, Doncaster Central)

I shall try to follow your ruling on these amendments, Lady Winterton, and I suspect that some of the more detailed debate will come on the later amendments. The first set is consequential on some later amendments.

I shall open with some general remarks on points made by my hon. Friends and the hon. Member for Lewes about what happened on Second Reading. What has been said is right—this part of the Bill is welcomed by local authorities up and down the country, of all political hues. I know that last week poor Mr. Greaves was dismissed by the hon. Member for Wimbledon as some kind of throwback who did not really represent the views of any of his colleagues in the Conservative party. I think that Councillor Greaves was reflecting a lot of the feeling I have heard from Conservative councillors, which indicates, I am afraid, that Conservative spokespeople are out of touch with the general public.

Stephen Hammond (Conservative, Wimbledon)

I hope that we are not going to go through those arguments again. Mr Greaves is not the person who wrote the letter—let us be clear about that. Mr Greaves was copied in on the letter; he is not the man expressing its sentiments. He may have commented later, but the sentiments were those of Councillor King, who has subsequently spoken to my hon. Friend the Member for Chipping Barnet and other colleagues to say how disappointed he is that the Daily Mirror put that. [ Laughter. ] Only because that does not represent his views in total. It is a selective part of his views.

Unlike the hon. Member for Manchester, Blackley, I have had the good fortune to talk to the chairman of Centro-PTA since we last met and he expressed none of the views that the hon. Gentleman expected him to express. We should be careful about quoting selectively from newspapers that, after all, follow the Minister’s persuasion and can hardly be treated as impartial.

Rosie Winterton (Labour, Doncaster Central)

I am afraid that that simply will not do, it really won’t. The hon. Gentleman must know in his heart of hearts that it is simply not the case. Presumably, we must now dismiss Councillor Greaves and Councillor King as irrelevant in Conservative party policy making. Frankly, I believe not only that councillors were horrified at the idea of opposing the principle of quality contracts, but that they were even more horrified at the thought of going even further and saying that they would abolish quality contracts if, by any misfortune, they were ever returned to power. For bus passengers, that must be a horrific concept.

Any quality contracts that were introduced would be abolished, so all the work local authorities had put in to improve bus services in their area would count for nowt. I think that they will find that totally unacceptable, as my hon. Friends have said. When people realise what is going on in the minds of Conservative Front-Bench spokespeople, they will be horrified.

Norman Baker (Liberal Democrat, Lewes)

As I understand it, the Conservative policy is to abolish quality contracts except in London. Can the Minister help me to understand philosophically why it is right to abolish quality contracts outside London—where apparently they are no use—but to retain that option in London?

Rosie Winterton (Labour, Doncaster Central)

If I were a Londoner, benefiting from a very good transport system and a good system of franchising and tendering, I would be slightly worried about what the future might hold were a certain candidate—[ Interruption. ] If the hon. Member for Wimbledon says that voting for the hon. Member for Henley (Mr. Johnson) will somehow be good for public transport in London, he should look at what is being said about abolishing quality contracts. If all the quality contracts outside London are to be abolished, how will the Conservative party justify keeping them in London? That is the logic in question. If, in principle, it is so marvellous to have those contracts abolished for everybody outside London, surely all members of the Conservative party in London, the councillors and the Mayor will say, “If it’s good enough for them, why isn’t it good enough for us?” That is what I would be thinking about at this time.

As my hon. Friends and the hon. Member for Lewes have set out, there are good reasons why we must introduce and make more flexible this system of quality contracts schemes. The key aim of the Bill is to make quality contracts schemes a more realistic and practical option. Often, that will represent a major change to how bus services are provided in an area, and it will be extremely important to get the underpinning assumptions right before taking such a step. For that reason, for schemes in England, the Bill will give the approval role of the Secretary of State to a new independent approvals board, as we discussed this morning. That will be chaired by a traffic commissioner, supported by two other experts in transport planning and transport economics.

This has not been mentioned, but I want to say at this stage why we think it important to remove that role from the Secretary of State. Within the Department, we would like the ability to work with local authorities that wish to look at improving their services. As part of that, they may wish to introduce a quality partnership scheme or a quality contract. We want to be able to advise, talk about best practice and work on guidance with them. It would be difficult to do that if the Secretary of State was the final source of appeal. Hon. Members should bear that important point in mind.

I also want to refer to the Transport Committee. As my hon. Friend the Member for Sheffield, Attercliffe said, I am certainly not in favour of second-guessing policy decisions made by local government. He referred to South Yorkshire and the 10p bus fare. My father was on South Yorkshire county council at the time and, as I have said many times, even though we are talking 30 years ago, people in my constituency still talk in hushed terms about the ability to get round South Yorkshire for 10p.

I absolutely understand and often make the point that if local councillors talked more about the improvements they want to make in public transport, people would realise what a great role they play in improving the quality of life of their constituents.

I certainly am not in favour of trying to second-guess policy decisions; I believe that local authorities should determine their own destiny. However, quality contract schemes create a unique situation and many complex issues need to be taken into account. It is also true to say, as was mentioned earlier, that the only redress for bus operators who felt that a local authority had erred in any part of the decision process would be through judicial review, both under the current model and if the changes proposed by my hon. Friend the Member for Manchester, Blackley were accepted.

We are trying to replace the current system with one that gives the ability not only to go through the process and to make representations, but to provide some protection from judicial review. I understand the point made by my hon. Friends and by the hon. Member for Lewes in particular, that the protection is still not there, but there is strong advice that if an appeals process is in place, it is much more difficult to get leave to go to judicial review. That is generally accepted. At the point of applying for judicial review, what will be taken into account is whether the first processes—the approvals board and Transport Tribunal—have been gone through. If those processes are still open, it will be difficult to get leave to go to judicial review. If an application is made after those processes have been gone through, it is more difficult to say what grounds there could be for judicial review, because, while allowing for an unreasonable decision, there is an endorsement at both levels for the decision taken by the local authority.

Norman Baker (Liberal Democrat, Lewes)

This is an important point. I understand that if the ITA were to take a decision with no other external validation, of course the case for judicial review would be easier to make. However, even in the scenario I outlined, which has been referred to this morning, there is still the Transport Tribunal. Does not the existence of the tribunal provide the appeal mechanism that makes judicial review less likely in any case?

Rosie Winterton (Labour, Doncaster Central)

It would provide some protection, but not the full protection that we are talking about. I reiterate that the point about having the approvals board and the Transport Tribunal is that it will be possible to go back to the local authority and talk about making modifications to a scheme, if necessary and recommended. Judicial review is not only incredibly time consuming and expensive; it is either in or out. An authority has to go right back to the beginning if a judicial review finds against them.

Stephen Hammond (Conservative, Wimbledon)

I am listening carefully to the Minister. I know that one of the many legal firms that advised the Government was Bircham Dyson Bell; that is what one of the senior partners of that firm told us. If that is the case, I wonder why another member of that firm says that the probability of a legal challenge to a scheme is high and sets out three grounds he sees for such a challenge. One is procedural, as the Minister said; one is substantive; and one is founded on the Human Rights Act 1998, which the Government introduced.

Rosie Winterton (Labour, Doncaster Central)

I am not quite sure what point the hon. Gentleman is making. I am not quite sure that this person from Dyson Bell, or whatever it is called, was our legal adviser, as my officials are looking rather puzzled. I give way to the hon. Gentleman.

Stephen Hammond (Conservative, Wimbledon)

I am happy to correct the Minister. The senior partner of that firm told us that he was advising the Government on the Bill. Perhaps the Government chose to disregard his advice.

Dave Watts (Labour, St Helens North)

The wrong Bill.

Stephen Hammond (Conservative, Wimbledon)

Not the wrong Bill; absolutely this Bill. All I am saying is that, contrary to what the Minister is saying, someone else from that firm is saying that the probability of legal challenge is high.

Rosie Winterton (Labour, Doncaster Central)

I am not sure that that takes us much further forward. I can only say that I do think that there is a general acceptance that an approvals board and a Transport Tribunal provide protection. I think that is all that experience has shown so far. I will give way to the hon. Gentleman.

Greg Knight (Conservative, East Yorkshire)

This is a totally different point. The Minister has said that the appeal panel she referred to would have the benefit of two experts. Will they be full-time or part-time appointees, and will they have experience of the private sector?

Rosie Winterton (Labour, Doncaster Central)

Later in the Bill, there are powers taken to appoint a panel that the traffic commissioner could draw from when making a decision to establish an appeals board. I suspect that they would have experience of the private sector. As I have said, one of the experts would be an expert in transport planning, and I guess transport planners can get their experience from a wide range of jobs. The other expert would be an economist.

I want to come on to the points made by my hon. Friend the Member for Sheffield, Attercliffe. The first is on the question of timing. In the process that we envisage, we are not talking about an approvals board being set up to veto the transport policies of local authorities. It is absolutely the case that those policies are a matter for local authorities in consultation with their electorate—a role that I value, as I have already said. The role of the approvals board would be to provide a robust check that a proposed scheme was consistent with that policy; that it gave value for money; that it satisfied the criteria prescribed in legislation; that it was in the wider public interest; and that due process had been observed.

It is important to remember that in its recommendations, the Select Committee on Transport said that

“the independent approvals board for quality contracts, as envisioned in the draft Bill, is the right approach.”

The Committee said that it was right to have that independent endorsement. However, the Committee also said that it had

“reservations, however, about the Senior Traffic Commissioner (STC) automatically chairing the approvals board”

That is why we have revised the Bill so that the approvals board would normally be chaired by the traffic commissioner who, in the senior traffic commissioner’s opinion, had the most relevant knowledge of the area concerned. The Committee also recommended that

“provision for a traffic commissioner not to chair the board where he or she feels that his or her ability to act impartially is compromised should be retained.”

We have retained that provision.

The Transport Committee also said that the

“The independent approvals board should not have the power or authority to substitute its judgement for that of elected councillors on transport authorities on matters of transport policy. It should base its decisions on whether or not the transport authority has followed the correct procedure and behaved in a reasonable way.”

As I said, we agree that transport policy is a matter for the local authority. I repeat, the approvals board would not opine on whether an authority’s transport policies were right; instead, it would look at whether due process had been followed and whether a proposed scheme was consistent with the authority’s proposals.

The Transport Committee also recommended that the Bill limit the time for the approval period, including appeal to the Transport Tribunal, to a maximum of six months. The Bill provides a power to specify in regulations a period in which an approvals board should normally reach its decisions. We will consult on that. It is important to have that in regulations, not on the face of the Bill, which would be far too inflexible. To be frank, there is a learning process to be gone through, which is why putting such things in a Bill is not realistic. However, I want to put it on the record that our initial view is that the approvals board stage of the process could take as little as six weeks—that is what we are looking for. In addition—again, we will consult—under our proposals the approvals and appeals stages together might take around six months for a standard application, and less for a simpler one. Judicial review is less predictable and would take a lot longer, and it might well mean that the whole process had to start all over again, at big expense to the authorities.

To take up a point made by my hon. Friend the Member for Manchester, Blackley and others, the scheme will not be confined to ITAs. It will be possible for smaller county or unitary authorities to adopt quality contracts schemes. It is important to remember that, in such cases, smaller authorities might well be deterred by what could be an expensive and lengthy process of judicial review. We want to be able to give authorities in such circumstances greater certainty regarding the ability to undertake a scheme, perhaps with the Department giving advice on how to put together good schemes. It is important for them to have that certainty.

Before moving on to the other amendments, which deal in greater detail with the processes to be gone through, I want to answer the point made by my hon. Friend the Member for Manchester, Blackley about the tendering process and how that would sort out the economic viability of a scheme.

Clive Betts (Labour, Sheffield, Attercliffe)

I want to go back to the powers of the approvals board. I am still a little mystified about precisely what they are. The Minister says that the approvals board’s job is not to second-guess a policy decision of an authority, but to test whether what an authority is proposing is consistent with its policies. That must, at least to a degree, be a subjective judgment, not a completely objective one. Once an approvals board has the power to determine whether a scheme is in the public interest, that surely opens the whole thing up to its reaching its own view on the matter, which could simply be a different view from that of the transport authority.

Rosie Winterton (Labour, Doncaster Central)

In our draft guidance, when we talk about the public interest test, we mean that the local transport authority will need to be able to demonstrate that the quality contracts proposal will ensure that passengers get a better deal from the scheme than under a deregulated market. My hon. Friends have raised problems in that respect. The quality contracts proposal should also be good value for money, with the overall benefits of the scheme exceeding the cost, taking into account all the impacts on a wider set of users, such as motorists, bus passengers, and operators, and the impact on public resources, the environment and the local economy. It should also be demonstrated that any other adverse impacts, including on congestion and on bus operators, are acceptable and proportionate to the benefits. The analysis of the quality contracts proposals needs to be focused on the impact on passengers, as well as considering the broader impacts on other objectives and groups.

Norman Baker (Liberal Democrat, Lewes)

Will the Minister give way?

Rosie Winterton (Labour, Doncaster Central)

Let me finish the point about financial information. A point was made about the tendering process sorting out whether the scheme was viable or not, but we want local transport authorities to provide a full assessment of the likely costs of introducing a quality contracts scheme and a statement of how any costs incurred under the scheme are to be defrayed. The costs included in that assessment might include—this important point relates to what will happen before a tendering process starts—the cost of service enhancements, such as additional routes, higher frequencies, improved quality, marketing or information, because those additional capital or operating costs are likely to be reflected in the tender itself. The assessment might also include the cost of new and better vehicles, particularly if they were to be purchased by the local transport authority itself and leased to a contracted operator, and the costs of new infrastructure and facilities, such as bus lanes, other priority bus measures and, potentially, any real-time information. It might also include the cost of depots, if it was felt more efficient for them to be owned by the local transport authority, particularly if that allowed new entry into the market and in some instances allowed more effective competition. If necessary, it should include detail of how those would be leased back to the successful bidder at a commercial rate to cover initial costs.

A range of matters would not be covered in the tendering process, but are important to making a good and effective quality contracts scheme. Obviously, those are the sort of matters that any assessment of the proposals will have to cover, to give certainty that the scheme overall provides good value for money. That is entirely separate from the tendering process. The analysis of my hon. Friend the Member for Manchester, Blackley is that if the scheme were not viable, nobody would tender for it. but that is so far down the line that if the tender process completely failed because the scheme was not viable and nobody tendered for it, it would mean going right back to the beginning. We are trying to provide a process that, unlike judicial review, allows for modification as it goes along, rather than having to go back to the beginning. However, the process should also provide some certainty.

Norman Baker (Liberal Democrat, Lewes)

The Minister has gone on a bit so I wanted to pull her back to the answer that she gave to her hon. Friend the hon. Member for Sheffield, Attercliffe.

Rosie Winterton (Labour, Doncaster Central)

That was some time ago.

Norman Baker (Liberal Democrat, Lewes)

It was. The hon. Gentleman referred, as did the Minister, to the phrase “in the public interest”. There is an important point of principle here, and I would be grateful if the Minister clarified her views on it. It is surely right for the definition of what is in the public interest to be decided by those who are elected locally to represent local people, rather than by an approvals board consisting of three unelected members of the great and the good—no matter how experienced they are—who might reach a different conclusion. Is not the way to deal with that to ensure that the approvals board checks that the proposal is robust against the criteria—in the way set out by the Minister—but then reports back to members of the ITA or the unitary council so that they can make the final decision? They, not three unelected members of the great and the good, must be the ultimate arbiters of what is in the public interest.

Rosie Winterton (Labour, Doncaster Central)

The hon. Gentleman slightly misses the point of my description of the approvals process. The local transport authority would have to demonstrate that the proposal was in the public interest. As I said, the proposal would have to stress that passengers would get a better deal under the scheme than they would under the present system and that it would be good value for money, with the overall benefits exceeding the costs. A range of elements make up the public interest. The role of the approvals board and the tribunal is intended to give protection against somebody saying, “We just don’t agree that this decision is in the public interest. It is unreasonable.” The approvals board cannot overturn the transport authority’s policy, but it can examine the scheme as part of an iterative process whereby it could say that a proposal, as put together, would bring greater benefits for passengers and provide value for money, which would give the local authority certainty.

Norman Baker (Liberal Democrat, Lewes)

But the Minister’s scheme allows the approvals board to decide that a proposal is not in the public interest when the local authority or the ITA has decided that it is. That would allow unelected persons to veto the local authority’s definition of public interest, which would have consequences for the policy of that elected body; indeed, it might have to adjust its policy to reflect the comments of the approvals board.

Rosie Winterton (Labour, Doncaster Central)

As I have said, the Bill sets out a very specific definition of the public interest in this context, and the board will assess whether the authority has met the criteria set out in legislation. That does not necessarily mean that the authority will have to go right back to the beginning; the board can, however, say that it believes that the public interest test will be met if certain modifications are made. It is highly unlikely that an approvals board would completely kick out a scheme, which is what could happen under judicial review. That is the point that we are trying to get to.

Angela Smith (Labour, Sheffield, Hillsborough)

One reason why we are concerned about the issue of the public interest is that there is a real risk, if we do not get this right, that ITAs and other passenger transport authorities will scale down their ambitions to ensure that they do not fall foul of the approvals board and the tribunal later in the process. The proposals could induce a self-policing effect. Will my hon. Friend therefore shed more light on the criteria? I am most concerned that they should reflect not only the economic case, but the social case for ensuring that routes that are not profitable, or that operators do not run properly because they are not profitable, are a fully fledged part of any quality contract by right.

Rosie Winterton (Labour, Doncaster Central)

That is why the public interest test is about ensuring that passengers get a better deal from the scheme than they do in the deregulated market. It is absolutely about identifying the difficulties with the current system and explaining why it would be better to have a quality contracts scheme. We certainly want quality contracts to bring those benefits with them, and that is why we believe that the public interest test is not about the previous system and the only practical means of delivery, but is about being able to say that the new approach will benefit passengers. In many cases, we do not say that a certain increase in passenger numbers must be achieved; the result of what is done could be to halt the decline of bus services provision, which was referred to.

Norman Baker (Liberal Democrat, Lewes)

Will the Minister give way?

Rosie Winterton (Labour, Doncaster Central)

Yes, but I think that I should bring to an end this part of my remarks before getting on to the meat of the other amendments.

Norman Baker (Liberal Democrat, Lewes)

I intervene only because I think the point is an important one to nail down. Suppose that an ITA or local authority decides that electric or very low-emission vehicles or some other cutting-edge environmental features would be in the public interest. Would not it be open to the approvals board to decide that they were not in the public interest, because it took a different view and thought such features were uneconomic, and effectively to veto them?

Rosie Winterton (Labour, Doncaster Central)

No. We envisage the approvals board looking at the totality of the scheme and considering whether in its totality it would bring benefits to passengers and whether it was good value for money. To take a worst-case scenario that might apply to one part of a scheme, if, in the example I gave earlier where the local authority had decided to buy all the new low-emission vehicles and lease them back to the commercial operator, the local authority had not demonstrated that it had the money to do that, there would obviously be a discussion about where the money was to come from, because it had not been shown in the contract that it was possible to buy those vehicles. We would not want a scheme that depended, in order to function and to run any services, on the purchase of a new fleet of vehicles, if the local authority that was making the proposal had not demonstrated where the money would come from. That is where the discussion about how the different parts of the scheme fitted together would come.

It is important that we have a process in place that allows, if necessary, assistance and advice from the Department to facilitate matters. Therefore, we need the approvals board and Transport Tribunal process to be able to ensure that a lot of those operators are not open to judicial review.

Clive Betts (Labour, Sheffield, Attercliffe)

I am still really concerned about the question of public interest, however it is defined, being decided by an appointed body that can override the wishes of an elected body. There is something not quite right about that, which needs further discussion.

To pick up also on the term “value for money”, the real problem surely is that if value for money means what costs more or less, and what we get for the money, which presumably it does, that can only be absolutely determined once the tender has taken place and we know how much the successful operator will want by way of subsidy for the service, or how much it is prepared to contribute to pay for the service. Until that point, all that there will be about value in the figures will be the best guesses of the economists at the transport authority or the approvals board, trying to decide what the ultimate tender arrangement is likely to be. Those two best guesses might be different. I think that something enormously complicated is being proposed, which will cause a real problem when it is put into practice.

Rosie Winterton (Labour, Doncaster Central)

Let me emphasise again that we have tried to make the public interest test quite clear in the Bill. Clause 19 states that

“the proposed scheme will result in an increase in the use of bus services...the proposed scheme will bring benefits to persons using local services...by improving the quality of those services...the proposed scheme will contribute to the implementation of the local transport policies of the authority or authorities...the proposed scheme will contribute to the implementation of those policies in a way which is economic, efficient and effective”.

Those are measurable outcomes that we would want to see in a public interest test. As I have said, it is not for approvals boards to overturn the policies of a transport authority. I suspect that we shall have a much fuller debate about the provisions as we move on to the next set of amendments, which is similar to this set. It would perhaps be more appropriate to have the fuller debate then. I hope that, with the promise of that fuller debate to come, I can persuade my hon. Friend the Member for Manchester, Blackley to withdraw the amendment.

Graham Stringer (Labour, Manchester, Blackley)

I am grateful for my right hon. Friend’s full explanation, but it has left me less happy at the end of the debate than I was at the beginning. I suppose it has served the purpose of facilitating greater understanding of what is behind the Government’s proposals in the Bill. When I started the debate, I thought that we were dealing with a Conservative policy that was pretty blind to the objective facts of what was happening in most of the country. The Conservatives seem unable to recognise that there must be something fundamentally wrong with the deregulated system if private bus companies in Manchester are making three times the profit that they are making in London and their buses are older.

People may want to hold in their mind this image, which the Conservatives seem to think is absolutely all right: in effect, every year for every bus in the so-called commercial sector, a local government officer or a central Government officer puts a briefcase on the bus with £35,000 in it, and says, “There’s no accountability for that money. Run your bus wherever you want to go, bus operator. Even though we have collected that tax from taxpayers, you do whatever you like. We’re pleased to have you running the bus anywhere you want”. The Conservatives are defending that system. It is plain silly. They are pretending, for ideological reasons, that things are not like that. I look forward to any public debate in a general or local election in which the Conservatives try to defend that position. The point is relatively straightforward.

I thought at the start of the debate that Labour Members who have spoken were much closer to the Minister and the Government’s position, but I am less convinced about that at the end of the discussion. I shall try to go through the reasons why without repeating what has been said. A good place to start is probably the Select Committee report. The Minister referred to the recommendations of the Transport Committee on page 19 of the report. She rightly said that the Select Committee, of which I was a member, was in favour of an approvals board, but if we look at the reasoning and the details of the logic, we see that there were two serious qualifications behind it. The first was that many of our witnesses at the time estimated that it would take five years to go through the process. When the Secretary of State came along, she estimated that the period would be between 14 and 20 months, so what looks like—as it was presented—support for the Government’s position was actually quite a radical position, because we said that the whole process, if it included an appeals board, should take six months.

It was also said—the Minister referred to this—that there should be no substitution of the views of the appeals body for the views of the members of the transport authority. It should be trying to protect, as is the Government’s position, an ITA or another authority going through the process, from judicial review. That was accepted, but as I and my hon. Friend the Member for Sheffield, Attercliffe said, on the basis that it was only on procedural matters. In fact, it was very different from what we found to be the Government’s position.

I was relaxed about the matter—I thought I understood it—when the Government said that they wanted to take the Secretary of State out of the process in order to help local authorities that were proposing quality contract schemes. I was slightly worried at that stage, because the Department for Transport’s dealings with local authorities have not always been an unalloyed pleasure—with officials saying exactly where a pelican crossing should be placed in a big city when they have little knowledge of the area, or exactly how a tender for a tram system should be put together, all of which can add to the costs. One or two small warning lights went on at the time.

When it was explained what “help” meant—this is at the heart of local democracy—it seemed to me that there would be a double lock on ITAs or local authorities using the scheme. One lock was the two processes of consideration and appeal; the second was that Department officials, in the name of the Secretary of State, would be looking into the details of the proposed scheme throughout the process—whether it gave value for money, whether it would produce more passengers and whether it would do this, that or the other. I did not understand why before this debate, but it will be a pathway to more central control, whereas I was hoping that it would be a pathway to more decentralised control.

I am willing to give way to any Member, whether in Committee or in the House, who thinks that somewhere out there in the real world, a local authority or a potential ITA—whether composed entirely of Labour, Conservative or Lib-Dem members, even Green party members or whoever—would propose a scheme that made things worse for passengers, albeit not intentionally, and that if they did the Government would be in a better position than they were. Those bodies are human; they make mistakes, and there might be unintended consequences. However, the idea that the man—it nearly always is a man from the Department for Transport in Whitehall—would know better whether a scheme would produce more passengers or better value for money is something about which I am very doubtful.

Rosie Winterton (Labour, Doncaster Central)

I want it to be absolutely clear that if there was a future role for the Department for Transport, it would simply be in an advisory capacity—if asked. We are not talking about schemes having to go through the Department. Taking the Secretary of State out of the role is meant to be entirely helpful and reassuring. It certainly is not about providing any kind of veto. I am not sure whether my hon. Friend is mixing up the Department with the approvals board. They are entirely separate.

Graham Stringer (Labour, Manchester, Blackley)

I am grateful for that reassurance. I am definitely not mixing up the Department with the approvals board. I was simply worried about the process. My right hon. Friend has clearly read the Select Committee report on the Bill. Immediately before that report, the Committee produced a report on local transport plans with evidence from local authorities—of all political complexions—that when advice was given by the Department for Transport and officials but not taken, there was punishment in the form of grants not being awarded or permission for particular transport schemes not being given. The Transport Committee saw a lot of such evidence.

I am greatly reassured if my right hon. Friend is telling me that if South Yorkshire, Lincolnshire, Greater Manchester, the west midlands or wherever decide that they do not want the Department’s advice on those matters, they will not have to take it. I shall ask for that reassurance on the Floor of the House. It is important because my right hon. Friend is saying that in coming to qualitative decisions, the Department will have a view on viability and whether a plan is in the interests of passengers, but that those decisions are better made by local people.

Greg Knight (Conservative, East Yorkshire)

The hon. Gentleman is clearly still unhappy about the position. As he has detained the Committee for nearly two hours on the amendments, will he today have the courage of his convictions and press the matter to a Division?

Graham Stringer (Labour, Manchester, Blackley)

I hope that the right hon. Gentleman has enjoyed the debate—we have learned some things today, which is the purpose of my amendments. As I have explained, the amendments are probing; I have been trying to find out what is in the Government’s mind. On Report, some of the amendments could be put to a vote if Mr. Speaker selects them, but I am hoping that Labour members of the Committee can come to an agreement. My right hon. Friend the Minister’s point was helpful in reassuring me.

Greg Knight (Conservative, East Yorkshire)

I cannot say that I have enjoyed the debate. I have found it interesting, but I am not sure that I would join you, Lady Winterton, in calling it a happy morning.

Graham Stringer (Labour, Manchester, Blackley)

I am sorry for the sad right hon. Gentleman.

Norman Baker (Liberal Democrat, Lewes)

It is certainly the case that the Conservatives have not detained the Committee this morning.

May I pursue the important point that the hon. Gentleman is making about the predilection of the Department for Transport to intervene in local councils’ affairs on occasion and certainly in local transport plans? What is the relationship between the process for awarding quality contracts and that for local transport plans? Is there any overlap? If there is an overlap, there is indeed potential for interference.

Graham Stringer (Labour, Manchester, Blackley)

The hon. Gentleman makes an astute point, but I am not sure that it is quite in line with what I am saying. Clearly, if an integrated transport authority had agreed a local transport plan, it would be perverse in the extreme if they produced a quality contract scheme that was not in line with it. If a local transport scheme completely differed from a quality contract scheme, an appeals board or court could find that an odd and challengeable decision had been made. The hon. Gentleman made the astute point that the Government are involved at that stage of the local transport plan process.

Following the reassurances of my right hon. Friend the Minister, I come back to the fundamental point. As the Select Committee said, it would be simpler to deal with procedure and leave policy to elected members, and simpler still to leave the matter to the ITA. Let us put the debate into the real context of aggressive bus operators who do not want to be slimmed down from their diet of huge amounts of public money.

When ensuring that the quality contract delivers value for money, is in line with the local transport plan and will try to attract more passengers—one of the Select Committee’s recommendations—most local authorities will be aware that some bus companies may challenge them. In a sense, that check is as strong as having several layers of bureaucracy above what is going on.

As I have explained to the right hon. Member for East Yorkshire, I will withdraw the amendment, but I have one last point, which my hon. Friend the Member for Sheffield, Attercliffe has also made on a number of occasions. I do not believe that a professor of transport, the Secretary of State for Transport or officials, can judge the viability of a scheme without testing the market and going out to tender. Until we know the actual costs of what is coming back, how can we judge the scheme? One very important part of the equation is missing, and on that point—with my apologies for not entertaining the right hon. Member for East Yorkshire; I will try harder—I beg to ask leave to withdraw the amendment.

Stephen Hammond (Conservative, Wimbledon)

I beg to move amendment No. 47, in clause 19, page 17, line 40, after ‘increase’, insert ‘of 10%’.

Ann Winterton (Conservative, Congleton)

With this it will be convenient to discuss the following amendments:

No. 48, in clause 19, page 17, line 44, after ‘relates’, insert

‘, which are substantially greater than those that would pertain under a quality partnership scheme,’.

No. 49, in clause 19, page 17, line 47, after ‘authorities’, insert

‘substantially more than would a quality partnership scheme’.

No. 50, in clause 19, page 18, line 4, leave out from beginning to end of line 8 and insert—

‘(e) there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area to which the proposed scheme relates.’.

No. 51, in clause 19, page 18, line 8, at end insert—

‘(2A) In subsection (1)—

“economic” means that the cost of implementing the proposed scheme to the local authority will be no greater than implementing the same services under any other means;

“efficient” means that the proposed scheme will be no less efficient than if the same services were implemented under any other means;

“effective” means that the proposed scheme will be no less effective than if the same services were implemented under any other means.’.

No. 52, in clause 19, page 18, line 19, after ‘services’, insert ‘by 10%’.

Stephen Hammond (Conservative, Wimbledon)

You are obviously in a happy mood this morning, Lady Winterton, because you have been extremely lenient with the Committee as we wandered well beyond clause 19 in our debate. I am sure that we will return to the approvals board in considerable detail later on.

Amendments Nos. 47 to 52 are simple. Amendment No. 50 tests what the Government really mean when they talk about adverse effects. In amendment No. 51, the Government will not be surprised to see that I am trying to provide some definition of “economic”, “efficient” and “effective”—it is an argument that we have been through before. Amendment No. 52 is again a test, to insert “by 10%”.

I am sure that the amendments will appeal to the hon. Member for Sheffield, Attercliffe. In his contribution to the last group of amendments, he told us that he was concerned that quality contracts should demonstrate that they are the best, and better than quality partnerships. The amendments would ensure that quality contracts are seen as evidentially better than quality partnerships. That is important.

There have been many comments this morning about the Conservative position; the amendments will help to define it for the whole Committee. I have said several times—I am happy to reiterate it—that we prefer the partnership route, although we understand the need to have some backing for it. Last week, we supported the Minister after her qualifications and reassurances about statutory quality partnerships.

Just because people take a different view about the method of achieving an end, it ill becomes them to undermine the view that someone else can believe in the same end. That is what we have heard today. We do not think that quality partnerships will give the end that the Government want, and we are concerned about that. So far, we have heard the view that quality partnerships, turning the clock back to the 1980s, will represent re-regulation. Let us not forget that the period between the end of the second world war and the 1980s, before the Transport Act 1985, was when bus ridership fell fastest—a point that always seems to be conveniently forgotten by a number of people.

There seems to be surprise every time the Conservatives say we would like some evidence from the Government that quality partnerships will work. The Minister flies off and says there are a huge number of Conservative councillors out there—of course, there are a huge number of Conservative councillors and there will be even more after Thursday evening—who oppose what Front Benchers say. Equally, there are others who are very supportive of what we have said.

The Minister talked about the London situation. She knows full well that at present the London situation is covered by another Act, whose removal would need consequential legislation. The Minister talked about the Conservative candidate for Mayor, my hon. Friend the Member for Henley, and said that nobody in their right mind would vote for him because he would undermine public transport. Presumably she is saying that her colleague the hon. Member for Vauxhall (Kate Hoey), who said this morning that she is joining Team Boris, is out of her mind. Presumably she also thinks the Liberal Democrat candidate who said in The Times last week that he would work with Boris is out of his mind.

Dave Watts (Labour, St Helens North)

That’s right.

Stephen Hammond (Conservative, Wimbledon)

That may be so, but there we are. The Minister cannot have it all ways.

The point we have made time after time is that we support statutory quality partnerships, which we dealt with last week, and they offer the new ITAs and local transport authorities the chance to work in partnership to bring better services. There is nothing in the Bill at the moment that tells us evidentially that the imposition of quality contracts will necessarily do anything to increase ridership above what could be achieved through partnership, either voluntary or statutory.

Norman Baker (Liberal Democrat, Lewes)

I understand the hon. Gentleman’s wish to go down the partnership route wherever possible—indeed, I think he said the voluntary partnership route wherever possible—but what is his answer if quality partnerships do not work and we do not see a transformation in bus patronage in areas where they either have not been tried or are not successful? What is his solution in those circumstances?

Stephen Hammond (Conservative, Wimbledon)

As we have not yet tried statutory quality partnerships in the depth that the Bill proposes, that is what we should be doing. We continue to support that idea and we think it should be tried first. Nothing that the hon. Gentleman can say today will give us an evidential view, rather than an assertion, that quality contracts will better the travelling experience of the customer.

Angela Smith (Labour, Sheffield, Hillsborough)

The hon. Gentleman’s constituents enjoy regulated bus services, which evidentially are better than the bus services enjoyed by my constituents. What is good enough for his constituents is surely good enough for mine.

Stephen Hammond (Conservative, Wimbledon)

My constituents enjoy a good bus service. It has not yet been proved by anyone that regulation is the cause of a service being better. A huge amount of public subsidy goes into those services and it is the size of the public subsidy that improves them, rather than regulation.

Norman Baker (Liberal Democrat, Lewes)

If regulation is not the cause of the good bus services in London and it is only a matter of public subsidy, why does the hon. Gentleman not simply deregulate London?

Stephen Hammond (Conservative, Wimbledon)

We went through that argument in Committee last week when the hon. Gentleman was not present. As I said then, there are other regulated areas of the country but there is only one regulated area where bus ridership has declined in the past ten years. Regulation is evidentially not the cause.

Angela Smith (Labour, Sheffield, Hillsborough)

The hon. Gentleman said something interesting. He suggested that heavy subsidy in London is the reason for the success of the city’s bus service. Is it the position of Conservative Front Benchers or of the hon. Member for Henley that the subsidy is unnecessary, and would it continue in London during the next period?

Stephen Hammond (Conservative, Wimbledon)

It is not our position that the subsidy is unnecessary. The question for us and for many organisations, including London First, is whether the amount of subsidy being used is providing the best bus service for London and whether reorganisation of the bus service in London might provide an even better service on core and support routes in the suburbs than the current Mayor’s bus network.

Angela Smith (Labour, Sheffield, Hillsborough)

The hon. Gentleman is being extraordinarily generous in giving way. The position of the hon. Member for Henley, if I have read his comments correctly, is that subsidies to Transport for London will be cut if he becomes Mayor.

Stephen Hammond (Conservative, Wimbledon)

No. Nothing that my hon. Friend the Member for Henley or I have said implies that. It is a complete fabrication. This week’s 11 percentage point gain in the poll for my hon. Friend’s candidature shows that people in London do not believe the nonsense being said.

Several hon. Members rose—

Ann Winterton (Conservative, Congleton)

Order. Although there tremendous enthusiasm in the Committee, we are moving a little wide of the amendment. I ask Committee members to consider what they might ask Mr. Hammond, who has the floor.

Stephen Hammond (Conservative, Wimbledon)

Thank you, Lady Winterton. I give way to my right hon. Friend the Member for East Yorkshire.

Greg Knight (Conservative, East Yorkshire)

Should not the hon. Member for Sheffield, Hillsborough support my hon. Friend’s amendment, which refers to 10 per cent? I thought that she had an affinity for 10 per cent.

Stephen Hammond (Conservative, Wimbledon)

I was surprised when the Minister talked about 10p, but there we are. I have listened to your stricture, Lady Winterton.

There is huge concern about what the Bill might do to restrict trade. Several Members have said a lot about greedy bus companies and their legal redress. The point made by several lawyers is that the most likely elements of redress include the public interest test. A gentleman in Transport Times who appears to be a transport lawyer happily suggests that the easiest line of attack for aggrieved operators would be through the public interest test. The other obvious line of attack is through the Human Rights Act 1998, which the Government introduced, so they are likely to face legal redress from bus operators under measures that they put in place.

My amendments are to clause 19, which would revise the criteria that local authorities must use to decide whether a quality contract is appropriate. Doing so would amend section 124 of the Transport Act 2000. The five criteria in the Act are that schemes must increase the use of bus services in the relevant area; improve the quality of those services, bringing benefits to local people; fit in with local authority transport policies and do so in an economic, efficient and effective manner; and they must not have adverse effects on operators that are greater than the improvements to the well-being of local people and bus services.

I judge those criteria problematic for several reasons. None of the criteria is perfect, and I hope that my amendments to clause 19 would address the imperfections. The first amendment deals with the criterion that in order to implement a quality contract, a local authority must be satisfied that the scheme will increase the use of bus services in the relevant area. I have said several times that I am in favour of the partnership route, so I have proposed that the authority must be satisfied that the scheme will increase the use of bus services by 10 per cent. I am prepared to concede that 10 per cent. is an arbitrary barrier, but under the current wording of the clause, a local authority could draw up a quality contract if they thought that patronage would increase by any amount. It could be an increase of only one person—who knows what that would save? We need to be clear, therefore, that when drawing up the quality contract, local authorities or ITAs are absolutely sure that the increase in bus services that will appertain will be of an order of magnitude that makes it worth doing.

Graham Stringer (Labour, Manchester, Blackley)

Paragraph 57 of the Select Committee report, which I am sure the hon. Gentleman recalls, considers that point in great detail. We followed his logic that bus patronage had been falling. The Select Committee therefore felt that the recommendation should be changed to an increase in predicted passengers, because a local authority might want to have a quality contract in an area with a difficult market to alleviate the decline. Does he agree that what is proposed in the amendment is much too tough a hurdle?

Stephen Hammond (Conservative, Wimbledon)

I want to be absolutely clear that the increase in passenger usage will, under quality contracts, be at a level that makes it worth having a quality contract, whether or not that is based on a predicted increase. It is important that there is guidance for local authorities as to what either the predicted increase or the increase should be. The predicted increase could be whatever they think it is going to be.

Kerry McCarthy (Labour, Bristol East)

I am slightly confused because in an earlier contribution the hon. Gentleman said that the success of the London model was down to high subsidy. You are saying that quality contracts would be acceptable if the people introducing the scheme could predict that there would be an increase in passengers. On the basis of your previous argument, are you not really saying that it would need a heavy subsidy to make that work? Are you saying that quality contracts can work without subsidy or that they need subsidy?

Ann Winterton (Conservative, Congleton)

Order. May I point out that I am making no statements about what will work?

Stephen Hammond (Conservative, Wimbledon)

As I pointed out, I am concerned to test the criteria that the Government have laid down in the Bill. It is important that we see not just a negligible increase due to quality contracts, but that there is a substantial increase in ridership. That is what amendment No. 47 would do.

Norman Baker (Liberal Democrat, Lewes)

May I refer the hon. Gentleman to a later amendment that he has also tabled—amendment No. 55, which is germane to this issue? He is setting the hurdle rather higher than he is telling the Committee, because amendment No. 55 would require local authorities to provide clear evidence indicating that the 10 per cent. would be met, not simply to indicate a reason for believing that that increase would be met. That hurdle would be difficult for local authorities to jump, would it not?

Stephen Hammond (Conservative, Wimbledon)

I am not sure that it would be. The hon. Gentleman could make the assertion that his party’s candidate is likely to be the next Mayor of London, but the evidence for that is not there. I can make that assertion on behalf of my party because there is evidence for it. There should be evidence; we can all make assertions.

Earlier, I made the point that it is asserted that quality contracts will increase bus ridership, and I want to know that there is evidence that backs that assertion up. It seems to me not unreasonable that, either in my later amendment or in this one, I follow a line of logic that says that there must be a ridership increase that makes introducing quality contracts worthwhile.

Angela Smith (Labour, Sheffield, Hillsborough)

I thank the hon. Gentleman for giving way yet again. Is not the process of encouraging car users back on to buses a confidence-building measure that could take some time, given the deterioration in the services over the last 20 years? Therefore, would not arbitrarily putting a percentage increase into a quality contract be very unhelpful? In fact, is this not a wrecking amendment?

Stephen Hammond (Conservative, Wimbledon)

I do not see how the hon. Lady can say that. I think she wants to say it because she does not want to address my argument. The Government have used the phrasing that there must be an increase in bus ridership. I am saying that, for the imposition of a quality contract, there must be evidence that ridership will increase substantially. That is what the proposal would do.

If it could be shown that ridership would increase by, say, 10 per cent., it seems to me that there would be a valid argument that a quality contract might well be worth pursuing—indeed, would be worth pursuing. It would show that there would be substantially higher numbers of people prepared to ride the buses other than would do so under a voluntary or a statutory quality partnership. If that were the case, the hon. Lady could say that I was completely wrong. The point, therefore, is that we want to ensure that the imposition of the quality contract achieves significantly higher ridership than might have been possible under any other method. That is the thrust of amendment No. 47.

We could say—I guess the hon. Lady would—that 10 per cent. is too arbitrary and too high a test. We could easily have that argument, but such a number seems about right. My amendment No. 48 has the same intent as amendment No. 47. The second criteria, which would have to be satisfied before a quality contract could be introduced, is that it would

“bring benefits to persons using local services in the area to which the proposed scheme relates, by improving the quality of those services”.

Again, the point I want to emphasise is that, before quality contracts are considered, I want to be clear that all avenues of partnership have been explored. Why not look at the partnership as the route forward?

With that objective in mind, I am again suggesting the same sort of test—that the benefits of a quality contract should be substantially greater than those obtained under a quality partnership scheme. The line of logic seems to me to be absolutely clear. Partnership schemes can deliver benefits and improvements to bus services. That has been shown and proven. On top of that, there are local authorities and bus operators that work together to provide that common aim of increasing bus ridership. Only if the benefits to passengers can be shown to be substantially greater than under a quality partnership should we consider going down the quality contract route.

Clive Betts (Labour, Sheffield, Attercliffe)

Some of us might be slightly suspicious that the hon. Gentleman is trying to legislate quality contracts out of existence, but would he like to define “substantially”?

Stephen Hammond (Conservative, Wimbledon)

If I take the Minister’s word, it is what is common parlance, or common sense. I thought that “substantially” might be 10 per cent., but others might disagree, as I tried to say in one of my answers. I was trying to be a little more generous here, rather than specifying an arbitrary number.

We have heard several times in Committee an argument that a definition should be put on a word; other times we have heard that we should not. That is another reason why, later on, I have defined for such purposes “economic, efficient and effective”.

It seems also that the third criteria that the Government state must be satisfied before a quality contract can be introduced is that the scheme

“will contribute to the implementation of the local transport policies of the authority or authorities”.

My amendment follows the same logic, using the words

“substantially more than would a quality partnership scheme”.

The aim of that amendment is simple. I say it again: I think that partnerships, voluntary or quality, are preferable to quality contracts. We should encourage partnerships. We should ensure that they are the first route.

The fourth criteria that must be satisfied before a quality contract can be brought in is that

“the proposed scheme will contribute to the implementation of those policies in a way which is economic, efficient and effective”.

We have had several debates on the real meaning of that provision; for the purposes of this part of the Bill, I believe that it would be useful to include some definitions.

Norman Baker (Liberal Democrat, Lewes)

Unless I misheard, the hon. Gentleman seems to have skated over amendment No. 50, which says that there should be

“no adverse effects of the proposed scheme on operators”.

Will he explain what that means? Would it mean that a cut in profits ruled out such contracts? That is a black-and-white way to put things.

Stephen Hammond (Conservative, Wimbledon)

The hon. Gentleman is obviously enjoying my contribution, but he will have to wait for that little piece; I shall reach it in a moment. [ Interruption. ] Let me finish. It seems to me that if “effective, efficient and economic” is properly defined, the quality contract might be considered preferable to the partnership option. Again, I want to be clear that the benefits of a quality contract will be substantially greater than those that would appertain under a partnership arrangement.

Ian Stewart (Labour, Eccles)

The Conservative spokesman advocates the partnership and voluntary approaches. He will understand that the Government are fully in favour of those approaches. Indeed, no Government could have done more in the last two Transport Bills to promote those concepts.

If the hon. Gentleman is arguing for that, and if he accepts and acknowledges that the Government have practised it over the last 10 years, will he say whether it has been completely successful and whether our constituents face any problems? If they face problems, and if the voluntary and partnership approaches alone have not been able to meet them, what would the Conservative party do instead?

Stephen Hammond (Conservative, Wimbledon)

I readily accept from members of the Committee that in some areas of the country the partnership approach is not working. I assume, therefore, that the hon. Gentleman wants to ensure that the Government’s proposals for quality partnerships are given the chance to work. That is where I want to go. The new proposals for quality partnerships from Labour Ministers are the way forward. I want to see clearly that those quality partnerships are given the chance to work for the benefit of passengers. That seems to be a perfectly fair way forward.

The fifth criterion that must be satisfied before a quality contract can be brought in is, as the hon. Member for Lewes says, that

“any adverse effects of the proposed scheme on operators will be proportionate to the improvement in the well-being of passengers living...in the area to which the proposed scheme relates”.

Norman Baker (Liberal Democrat, Lewes)

That is the Government’s wording, not the wording of the hon. Gentleman’s amendment.

Stephen Hammond (Conservative, Wimbledon)

I am explaining that that is what the criterion says. If the hon. Gentleman will wait a second, I am about to explain why my amendment is going there.

The problem with that definition is that there seems to be no definition of “adverse effects”. How, then, can we define “well-being” and “benefits” for local people? I assume that the Minister has worked out a formula for measuring personal utility on that basis. I presume that the Government intend that the effects on operators will be financial and that they believe that the benefits to local residents will be related to lifestyle, but that has not yet been defined. At the moment, it does not appear that we are combining like with like.

I ask the Minister, what is meant by “proportionate”? What proportion do the Government have in mind? Who will decide on that proportion and, again, where is it defined? The Government recognise that the potential consequences of a quality contract include not only an increase in bus ridership, but the fact that some bus operators may choose to—

David Taylor (Labour, North West Leicestershire)

I remind the Committee that with this we are discussing the following amendments: No. 48, in clause 19, page 17, line 44, after ‘relates’, insert

‘, which are substantially greater than those that would pertain under a quality partnership scheme,’.

No. 49, in clause 19, page 17, line 47, after ‘authorities’, insert

‘substantially more than would a quality partnership scheme’.

No. 50, in clause 19, page 18, line 4, leave out from beginning to end of line 8 and insert—

‘(e) there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area to which the proposed scheme relates.’.

No. 51, in clause 19, page 18, line 8, at end insert—

‘(2A) In subsection (1)—

“economic” means that the cost of implementing the proposed scheme to the local authority will be no greater than implementing the same services under any other means;

“efficient” means that the proposed scheme will be no less efficient than if the same services were implemented under any other means;

“effective” means that the proposed scheme will be no less effective than if the same services were implemented under any other means.’.

No. 52, in clause 19, page 18, line 19, after ‘services’, insert ‘by 10%’.

Stephen Hammond (Conservative, Wimbledon)

Good afternoon, Mr. Taylor. At our previous sitting, Lady Winterton said that it was going to be a happy morning, and I am sure that this will be a happy afternoon.

Before lunch, I was going through the last of my amendments—No. 50—in which we ask the Minister for an indication of what she regards as proportionate. What proportion do the Government have in mind? Who decides what it will be? Where is the definition? If a service is withdrawn as a result of a quality contracts tendering process, people will lose out, so I want the Government to tell us exactly how they will measure what appears to be a potential financial loss on one side and a lifestyle benefit on the other.

Clive Betts (Labour, Sheffield, Attercliffe)

On the hon. Gentleman’s theme of how he will kill off quality contracts before they begin, let me take up the point that the hon. Member for Lewes was trying to make before lunch. Amendment No. 50 removes proportionality and instead uses the words

“there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area”.

That must mean that if any person or operator experiences an adverse effect, it will rule out a quality contract and any of the benefits to any other person or operator—one adverse effect experienced by one person or operator would rule out the whole scheme.

Stephen Hammond (Conservative, Wimbledon)

I am trying to probe exactly what the Minister means by proportionate.

Clive Betts (Labour, Sheffield, Attercliffe)

Am I right?

Stephen Hammond (Conservative, Wimbledon)

I do not know what proportionate means. If it means what the hon. Gentleman suggests, then yes, but someone must tell me what it means. We phrased the amendment as we did so that we could ask the Minister exactly why her initial criteria are phrased in such a way.

To return to my starting point, the five criteria set out in my amendments explore and define the quality contracts criteria. On that basis, I look forward to the Minister’s response.

Norman Baker (Liberal Democrat, Lewes)

Good afternoon, Mr. Taylor. I shall try to be brief, given the time that we took this morning. It is unfair of the Government Whip to accuse Labour Back Benchers of filibustering—they raised some serious points this morning, and it is only right to pay due tribute to them for doing so.

David Taylor (Labour, North West Leicestershire)

Order. We are wasting time this afternoon. Will the hon. Gentleman proceed?

Norman Baker (Liberal Democrat, Lewes)

I do not blame the hon. Member for Wimbledon for tabling his amendments, in the sense that it is perfectly proper to test the wording of the clause. If they were implemented, however, the amendments would wreck the quality contracts system, intentionally or otherwise. The word “substantially” in amendment No. 49 suggests that the hurdle would be set at 10 per cent., which would be a very high hurdle indeed. Similarly, as the hon. Member for Sheffield, Attercliffe said a second ago, and as I said before lunch, amendment No. 50 would give operators a veto, allowing any scheme to be ruled out if there were any adverse effects whatever. That is the absolute definition of a wrecking amendment, and I cannot believe that it is what the hon. Member for Wimbledon wanted—but perhaps it was.

This morning, the hon. Gentleman criticised the use of the words

“any adverse effects of the proposed scheme”

in clause 19(2)(e). He went on to ask how the Government would define adverse effects, but he uses the same words in his amendment. If he wanted to demonstrate that there would be no adverse effects, he would presumably have to define the phrase as used in his amendment.

To conclude, the amendments do not stack up, other than as a means of wrecking the quality contracts scheme in total.

Rosie Winterton (Labour, Doncaster Central)

Good afternoon, Mr. Taylor. It is nice to see you back in Committee.

As hon. Members have spotted, the amendments raise hurdles that local authorities would have to get over before they could introduce a quality contracts scheme. They would increase the burden of proof to such an extent that it would be practically impossible to meet. I shall say a few words about how the Bill amends the requirements of proof that local authorities have to meet before taking forward a quality contracts scheme.

As I said, there are circumstances when the public interest may be best served by a quality contracts scheme; for example, partnership may be failing to deliver the improvements needed, or local authorities may want to be able to guarantee a particular set of improvements to the bus network. The Government’s objective in the Bill is to make quality contracts schemes a more realistic option for local authorities, where they believe it the right thing to do in their area. We have listened to concerns that the existing legislation is too restrictive. The Bill will put that right.

The effect of the amendments proposed by the hon. Member for Wimbledon, however, would be to raise the burden of proof that the local authority has to meet to such an extent as to make it almost impossible to meet. The amendment proposing that there must be no adverse effects at all on any bus operators or any person living or working within the area of the scheme is particularly unrealistic.

I want to address the issue of proportionality, which we introduced following representations made by local authorities and others over the draft Bill. They preferred the criterion introduced to be a proportionality test, rather than a competition test. Local authorities are experienced at that, particularly in the context of other transport schemes—getting the balance right between what the financial benefits and costs of a scheme would be, and the lifestyle gain. Local authorities are used to assessing through proportionality the eventual benefits of a scheme.

I accept that in many cases quality contracts schemes may not be the answer to everyone’s problems, but as a Government we believe that they should be a realistic option for communities that want them. The amendments would take that option further away from local authorities and, for that reason, we cannot accept them.

Stephen Hammond (Conservative, Wimbledon)

I am disappointed in the Minister’s response.

I am interested in the right hon. Lady’s argument on proportionality. Will she be helpful and send us some correspondence that defines exactly what it is? She says that local authorities are well versed in proportionality, but some examples of where it has been used before, or what the Government guidelines to local authorities are, would be helpful. Can the Minister help us on that point?

Rosie Winterton (Labour, Doncaster Central)

We have said that we want to respond positively to the points made to us by local authorities. One of the suggestions of the Passenger Transport Executive Group, for example, was for the competition test to be made a more general proportionality test, as part of the proposed public interest test. Under that test, the quality contracts scheme promoter would be required to demonstrate that the effect on bus operators was justified by the public interest legitimate purpose in introducing a quality partnership scheme—a fair, balanced test. That would assist in demonstrating compliance with human rights legislation and is what we responded to. Of course, any guidance we issue will address and build on the work that local authorities already undertake when they draw up particular transport schemes. We will look at proportionality testing then. I hope it reassures the hon. Gentleman when I say that, through guidance, we will assist local authorities with bringing about that test.

Stephen Hammond (Conservative, Wimbledon)

I am grateful for the Minister’s comments. I shall look closely at the guidance on proportionality. Obviously, she has told us what PTEG would prefer. I have been trying to obtain a definition of what proportional is and although we do not have it yet, I am happy to accept that the Minister says there will be guidance on it. I do not, therefore, intend to press amendment No. 50 to a vote, as I indicated that I might wish to do.

Returning to my point, we are in favour of voluntary or statutory quality partnerships, but it must be shown that a quality contract provides a substantially greater benefit than could have been achieved under a quality partnership, so I would like to test the will of the Committee on amendments Nos. 47 and 48.

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 155, in clause 19, page 18, line 2, after ‘efficient’, insert ‘, environmentally sustainable’.

I shall truncate my comments to be helpful to the Committee—not because I feel that this is not an important amendment, but because we have already had a similar argument on an earlier amendment. Clause 19(2)(d) sets criteria that have to be met, and refers to the three E’s: economic, efficient and effective. It does not mention the fourth E, which relates to the environment. My amendment would add the words “environmentally sustainable” to the requirement placed upon local transport authorities that are drawing up quality contracts schemes. With the Climate Change Bill going through Parliament and when tackling climate change is one of the greatest priorities, it is bizarre—to say the least—that the environment is not even mentioned in the key criteria that are to be addressed.

I hope and anticipate that when the Bill is enacted, local authorities and others will seek to use powers under it relatively soon, and that they will take decisions, for example, to source particular vehicles. If they are not guided toward making sound environmental choices at an early stage, there is a real danger that the wrong choice will be made at an early stage, and we could end up with less sustainable vehicles and other environmental downsides. The amendment would prevent that.

Greg Knight (Conservative, East Yorkshire)

I can see the hon. Gentleman’s point, but does he accept to some extent the criticism that the amendment would be otiose, and that no vehicle manufacturer in the world is making new vehicles that are more polluting than a previous generation of vehicles? Every vehicle manufacturer is reducing pollution. It could be argued that if the amendment were accepted, any vehicle could be seen as environmentally unsustainable. He could be lifting the hurdle that he accused my hon. Friend the Member for Wimbledon of lifting when we debated a previous group of amendments.

Norman Baker (Liberal Democrat, Lewes)

That is a novel argument. Of course modern vehicles are less polluting—that is a good direction of travel—but some vehicles are less polluting than others. For example, electric vehicles operate in some places. I went to see some extremely efficient and good public service vehicles being produced by a company called Modec. There is a difference between vehicles that are less polluting and vehicles that are still less polluting. I wish to encourage the latter. It is not only about vehicles. It might also be about information points at bus stops, for example, which could be powered by solar cells. Other aspects of environmental performance could be affected by how local authorities address their duties under the clause.

We discussed the approvals board this morning and what power it might have to overturn decisions by local transport executives—ITAs, councils or whatever they are called in the circumstances. If a duty is not written in to the Bill to deal seriously with the environment, what is to stop an approvals board saying, “You are wrong to put all these conditions about the environment into a plan; they are not in the criteria in the Act, and we therefore think that they are not in the public interest”? If the approvals board interprets local councils’ plans, we ought to ensure that local councils have protection in the Bill. It would be sensible and far-sighted to include some reference to the environment in the key criteria in the clause.

Rosie Winterton (Labour, Doncaster Central)

I understand the hon. Gentleman’s concern and his desire to ensure that the Bill is environmentally sustainable. I wholeheartedly agree that that should be a key objective of local authorities’ policy and plans. He has probably anticipated my remarks, but for two reasons I do not think that adding his words to the criteria that must be satisfied before making the quality contracts scheme would be the best way of achieving that objective.

First, as we have discussed, the Bill includes general provisions to ensure that environmental issues are high on the agenda of local transport authorities. As I said when we discussed amendments to clause 8, we place certain duties on local transport authorities when developing and implementing transport policies, which include taking into account Government policies and guidance on the protection or improvement of the environment. An authority seeking to make a quality contracts scheme must, among other things, show that the scheme will contribute to the implementation of its transport policies in a way that is economic, efficient and effective. An authority working up proposals for a scheme would need to do so in such a way as to ensure that the scheme was consistent with those policies. It will be under a duty with regard to environmental issues in developing the policies, so such issues will be an important consideration in the development of the scheme.

Secondly, specific consideration of the environmental impact of quality contracts schemes should be included in supporting guidance, rather than in the Bill. I give an assurance that that will be the case. Environmental sustainability is a complex subject and the guidance provides a better vehicle, if I may use that phrase, for a more detailed discussion of the issues that authorities might need to consider.

A draft version of the quality contracts guidance, which is before the Committee, was issued in December. That draft already says that the scheme should take account of wider impacts on the environment. Environmental benefits such as reductions in carbon emissions and noise can be quantified as part of the economic appraisal required for a quality contracts scheme.

As I have said, we will publish revised guidance for consultation later this year, alongside draft regulations setting out the new procedures for quality contracts schemes. I assure the hon. Gentleman that we will consider in that context what more we can say regarding consideration of the environment when developing quality contracts schemes. I hope that that reassures him and that he will therefore withdraw the amendment.

Norman Baker (Liberal Democrat, Lewes)

One day a Minister will accept one of my amendments. It has been 11 years and I am still waiting for the first one to be accepted—this is a very good one, as a matter of fact. I am grateful for the Minister’s comments as far as they go. I appreciate that she recognises the importance of the environment. The difference between us is that I regard it as a first-tier responsibility that should rank alongside “economic, efficient and effective”, rather than a second-tier responsibility that is subject to guidance, which is how I perceive it to be classed. However, I made my point under a previous amendment on clause 8 and I divided the Committee then. I do not feel the need to do so again, although my reasons have not changed, so I beg to ask leave to withdraw the amendment.

David Taylor (Labour, North West Leicestershire)

I call Mr. Stringer to move amendment No. 104, with which it will be convenient to consider amendment No. 194.

Graham Stringer (Labour, Manchester, Blackley)

I am satisfied that the area that the amendment covers was debated this morning, so I am happy not to move it.

David Taylor (Labour, North West Leicestershire)

Amendment not moved.

Norman Baker (Liberal Democrat, Lewes)

On a point of order, Mr. Taylor. What is the position of amendment No. 194, which is in this group?

David Taylor (Labour, North West Leicestershire)

Does the hon. Gentleman wish to move amendment No. 194?

Norman Baker (Liberal Democrat, Lewes)

I should like to make one or two brief comments on it. I will move it for the purpose of then withdrawing it. All I wanted to be clear on was that the issues, because of the grouping—

David Taylor (Labour, North West Leicestershire)

Order. For the avoidance of doubt, I am very happy for the hon. Gentleman to speak to amendment No. 194.

Norman Baker (Liberal Democrat, Lewes)

Thank you, Mr. Taylor. The only point that I wanted to make was this. As a result of the complicated grouping of the amendments, there are issues relating to amendment No. 194 that I should like to refer to, but I think that it is more appropriate that I refer to them under clause 23 and amendment No. 157. I wanted to give you notice that I intend to do so. If there is no objection to that, I shall discuss amendment No. 194 at that point. I have no wish to press it to a vote.

David Taylor (Labour, North West Leicestershire)

For the convenience of the Committee, could the hon. Gentleman say whether he intends to speak to amendment No. 194 or not?

Norman Baker (Liberal Democrat, Lewes)

Having made those comments, I am happy not to speak to it, Mr. Taylor.

Clause 20

David Taylor (Labour, North West Leicestershire)

I call Mr. Stringer to move amendment No. 106.

Graham Stringer (Labour, Manchester, Blackley)

I do not propose to move this amendment, Mr. Taylor.

David Taylor (Labour, North West Leicestershire)

Amendment not moved.

Stephen Hammond (Conservative, Wimbledon)

I beg to move amendment No. 53, in clause 20, page 18, line 28, leave out from ‘publish’to ‘a’.

David Taylor (Labour, North West Leicestershire)

With this it will be convenient to discuss the following amendments: No. 54, in clause 20, page 18, line 31, leave out ‘and’ and at end insert—

‘( ) supply a copy of that document to—

(i) the chief fire officer for each fire area covering the whole or part of that area,

(ii) the head of the local ambulance service for each area covering the whole or part of that area,

(iii) all persons living within 150 metres of any part of the route as specified in the proposed scheme,

(iv) representatives of local groups representing disabled people,’.

No. 146, in clause 20, page 19, line 21, at end insert—

‘(4A) In subsection (3) after paragraph (f) insert—

“(g) either operators of rail services which are provided within the authority’s area or organisations appearing to the authority to be representative of such operators,

(h) any relevant rail infrastructure manager, and”.’.

No. 209, in clause 30, page 27, line 9, leave out from ‘publish’ to ‘a’.

No. 210, in clause 30, page 27, line 12, leave out ‘and’ and insert—

‘(ba) supply a copy of that document to—

(i) the chief fire officer for each fire area covering the whole or part of that area,

(ii) the head of the local ambulance service for each area covering the whole or part of the area,

(iii) all persons living within 150 metres of any part of the route as specified in the proposed continuation of the scheme,

(iv) representatives of local groups representing disabled people, and’.

Stephen Hammond (Conservative, Wimbledon)

I want to discuss amendments Nos. 53 and 54. The clause deals with the consultation document to be issued by the local authority that wants to implement a quality contracts scheme. Previously, as governed by the Transport Act 2000, such local authorities were required to issue a notice of the proposed scheme in at least one newspaper in the relevant area. The notice would describe the proposed scheme, state where a copy of it may be inspected and the reasons for wishing to make it. The authorities were then required to consult various people.

The Local Transport Bill slightly amends such requirements inasmuch as it states that the authority must now supply a consultation document to the same list of people as mentioned in the relevant section of the 2000 Act. That will have the effect of making the process in some ways more formal and defined, and certain things must therefore be included in the consultation document. My amendments would address those small, yet important, points in relation to the consultation process.

The local authority is required to publish the consultation document

“in such a matter as they think fit”.

Amendment No. 53 would remove those words, which I believe are unnecessary. The word “publish” is hardly open to misinterpretation, and surely it must mean to produce such information in either printed or electronic form. Given that the following subsections under the clause prescribe quite tightly what must be included in the consultation document, it is unlikely that an authority would be in a position to get it wrong or, indeed, to do anything other than in the manner that is prescribed, not

“in such a manner as they think fit”.

The amendment is really a tidying up proposal, and is saying that, given the high level of prescription and that we know the meaning of “publish”, the phrase to which I have referred is unnecessary.

Amendment No. 54 is important and says that the 2000 Act already sets out a list of those who need to be consulted as a result of the documentation being produced, which includes operators, other local authorities that might be affected, the traffic commissioner, the chief of police and, of course, includes the ubiquitous phrase “think fit”, which relates to other persons. The amendment is simple. Given that those people are prescribed, it would be important to prescribe in the Bill several others who must have the document. The chief fire officer, the head of the local ambulance service and people who live within 150 m of the relevant route as well as representatives of local groups for the disabled are all people who, for the sake of completeness, should be included in the consultation procedure. We have gone through the argument several times about such persons as an authority sees fit, but it is always more helpful to describe such people in the Bill. I hope that the Minister will accept amendments Nos. 53 and 54, which are minor proposals.

Norman Baker (Liberal Democrat, Lewes)

I am sympathetic to the amendments. If we are to have a list that specifies several individuals, including the chief of police, it seems odd that others are not included. I appreciate the Minister’s argument that it is up to local authorities or others to judge who they think fit, but once we have started devising a list, it is difficult to argue that some people should be on it, while others should not. I see no reason why the chief of police should be on the list, but not others.

Amendment No. 146 draws attention to the failure to mention those responsible for rail services in the area. We are creating integrated transport authorities and it seems bizarre to have an integrated transport authority without a requirement to consider the railways as part of the quality contracts process. The amendment would tidy up such matters. Consulting rail operators would ensure that rail capacity development, delivery of timetables and so on, would be taken into account when designing a quality contracts scheme. That is important because if, for example, Network Rail or a train operating company has plans to significantly enhance a service, that is a relevant factor when deciding whether a quality contracts scheme should be pursued in the way that it was originally designed. Similarly, if there are plans to withdraw services, that may drive up the need for a quality contracts scheme. What the rail industry does is important and significant when deciding what should be in the quality contracts scheme.

There are other benefits. Discussions may take place as to how buses and trains should integrate, and that should be part of a quality contracts scheme. Once discussions in the rail industry have taken place, a quality contracts scheme may have a different content from what would otherwise have been the case. It is not efficient to say that a good ITA will automatically talk to the rail industry, because it may not.

There are only 15 council areas in England and Wales without a railway station, so it is virtually certain that we will need to ensure integration between rail and bus. It is sensible to send a clear message to those responsible for consultation requirements to ensure that the rail industry is properly consulted. The Minister may say that it would be odd if they were not consulted, but it is not in the Bill. It would be odd if the chief of police were not consulted—although not quite so odd as the rail industry—but the chief of police is in the Bill, so why should not the rail industry be there?

Greg Knight (Conservative, East Yorkshire)

If I may say so, I think that my hon. Friend the Member for Wimbledon did his argument a disservice by saying that this is a minor matter. I do not think that it is necessarily so. My remarks relate to amendment No. 53 because I am concerned with the wording that the Minister invites the Committee to embrace that says,

“(a) publish, in such a manner as they see fit, a consultation document.”

That could lead to publishing occurring only on the internet, thereby disfranchising all those who do not, or cannot, use IT equipment. I am concerned about that.

The other week I had a case in one of my advice surgeries where a person who has been transporting animals for over 20 years has been told that he must take a test to continue doing so. He was told that he must take that test on a computer. He does not own a computer, he is not computer-literate and he does not want to buy a computer for the purpose of taking the test. There is a movement, not only in private companies, but also in some arms of the Government, to try to force people to use the internet when, on some occasions, they do not wish to do so.

The duty to publish in the traditional way ought to remain, as this measure could disfranchise those members of a community at the poorer end of the scale who cannot afford to purchase a computer, or those who are elderly and feel that they cannot get to grips with the new technology. I realise that the clause goes on to say that notice must be given in at least one local newspaper, but that does not necessarily guarantee that details of the scheme will get across to those who might need to know. Last week in my constituency, I went into my local newsagent to buy a local newspaper and it had sold out. I represent a tourist area, where the population doubles when the weather is fine. No newsagent can budget for the demand produced by an influx of tourists.

There is a case for requiring publishing to take place in the traditional way of being printed on to paper and made available, so that people can see the full scope of what is proposed. I hope that the Minister will take the matter seriously. I am concerned that, if this wording remains, some persons may deem it appropriate to put it only on the website and leave it up to the public to go to the site to look at it. That is not good enough.

Rosie Winterton (Labour, Doncaster Central)

As has been said, the amendments would expand the range of statutory stakeholders to be consulted on proposed new quality contracts schemes or proposals to continue existing ones. The Government recognise the importance of consulting a wide range of stakeholders. Provisions in the Transport Act 2000 already set out who must be consulted on proposals to make or continue a quality contracts scheme and those provisions are not changed by the Bill.

The existing provisions require local authorities to consult a wide range of interested parties, including all operators of local bus services in the affected area, other public service vehicle licence holders or holders of community transport permits who might be affected by the scheme; representatives of passengers, the local traffic commissioner and the chief police officer. The hon. Member for Lewes asked why the chief police officer is consulted, and not the chief fire or ambulance officer. The police have a direct responsibility for traffic management and enforcement, and that is why they have been named as a statutory consultee. However, we would expect the police service to take into account the requirements of other emergency services in their role as statutory consultee.

I take the point made by the right hon. Member for East Yorkshire. It is right that people who do not have access to the internet, for one reason or another, are not disempowered by any of the consultation processes. To come back to consulting rail bodies, it may well be that in areas where there is a quality contracts scheme that does not have any rail connections, such consultation might not be appropriate. I undertake to look into the issue that where rail is an integral part of the area there should be consultation with relevant rail operators and that when consulting, it is important for local authorities to remember and take account of the fact that not everybody has access to the internet.

I stress that there is an obligation on the local authority to consult such other persons as the authority or authorities think fit. As I said, in terms of particular schemes and depending on local circumstances, that may well include some or all of those listed in the amendment, but dealing with that issue through guidance is a better approach than the ever-expanding shopping list that we might otherwise get on the face of the Bill. Local authorities are best placed to determine who has a legitimate interest in their areas.

Greg Knight (Conservative, East Yorkshire)

The Minister has largely reassured me and I am pleased that she has responded so positively to the debate. Will the guidance be published, and therefore available for everyone to see in due course?

Rosie Winterton (Labour, Doncaster Central)

The guidance will be published and consulted upon. We have already put out some draft guidance; we shall reissue that and undertake a proper consultation on it. There is also a consultation for making regulations.

The amendments also include local groups representing disabled persons among the list of those to be consulted. Again, I completely understand the spirit of the proposal, but I draw the Committee’s attention to the fact that an amendment made to the Bill in another place that we have already discussed will broaden the obligations on local authorities to have regard to the needs of disabled persons when developing and implementing local transport policies. I would expect representative groups to be consulted about proposed schemes. Again, we can cover the matter more fully in guidance.

Ian Stewart (Labour, Eccles)

It is good to see you in the Chair, Mr. Taylor. My hon. Friend heard me pass comment on the circumstances of consultation of disabled people and people with disabled interests in Salford. I am happy that it can be dealt with in guidance, as there is good practice out there that goes some way further than what is intended in the Bill. In Salford, Mr. Jim Wheelton of Salford Disabled Motorists and other community members with an interest in organisations for the disabled do not just scrutinise what the planning committee is doing; they take part in site visits with councillors. They can be seen regularly around Eccles constituency in the city of Salford. The Bill can build on good practice such as that.

Rosie Winterton (Labour, Doncaster Central)

Once again, my hon. Friend is quite right. He is right to draw attention to best practice in his constituency, and I am sure that such examples will be helpful in drawing up guidance. On the basis of my reassurances, I hope that hon. Members will feel able to withdraw their amendments.

Stephen Hammond (Conservative, Wimbledon)

When we discussed the Channel Tunnel Rail Link (Supplementary Provisions) Bill, I had a pleasant experience. The Minister heard my comments, came forward with reassurances, took my amendments away and went one stage further to bring them back as amendments on Report. I had intended to press amendments Nos. 53 and 54 to a vote, but I am happy to hear her reassurances. I hope that she will think again, particularly about amendment No. 53. Although I shall seek the Committee’s leave to withdraw it, I shall look carefully at the guidance and, if necessary, bring it back on Report. I beg to ask leave to withdraw the amendment.

Stephen Hammond (Conservative, Wimbledon)

I beg to move amendment No. 55, in clause 20, page 18, line 39, leave out ‘reasons’ and insert ‘evidence indicating’.

David Taylor (Labour, North West Leicestershire)

With this it will be convenient to discuss the following amendments: No. 57, in clause 20, page 19, line 16, at end insert—

‘(c) an outline of the evidence of why the proposed scheme will provide a substantial improvement to the relevant service or services in comparison to the current service or services or the service or services that could be provided under a quality partnership scheme.’.

No. 211, in clause 30, page 27, line 28, at end insert—

‘(ca) a statement of the evidence demonstrating how continuing the scheme by means of a quality contracts scheme will provide a substantial improvement to the relevant service or services in comparison to the service or services that could be provided under a quality partnership scheme;’.

Stephen Hammond (Conservative, Wimbledon)

Amendment No. 55 would ensure that the consultation document is a real document that can be responded to. The Bill says that authorities must state their reasons. I contend that the wording of that measure is open to manipulation and misinterpretation. The current criteria and the word “reasons” are subjective and difficult to quantify.

It is fair that people asked to respond to the consultation document should have the chance to assess all the relevant information put in front of them. Rather than having local authorities state subjective positions, consultation procedures should be open, fair and evidence-based. I therefore propose that the word “reasons” be replaced by the word “evidence”. The effect would be that the consultation document issued by the local authority would give a clear basis for how the decision was reached rather than simply stating what that decision was. Consultation can be effective only if it is based on facts and if people read those facts to make their decision. My amendment would therefore require local authorities—

Graham Stringer (Labour, Manchester, Blackley)

Not for the first time in this or any other Committee, an hon. Member is reinventing the wheel. Why is it not good enough to get a commitment from the Minister, or even in the Bill, that the Cabinet Office guidelines on consultation must be followed? They are thorough and well understood.

Stephen Hammond (Conservative, Wimbledon)

I will wait to hear what the Minister has to say in response, but as I was saying, this would put a requirement on local authorities to justify decisions by publishing the facts and evidence on which those decisions had been made. That is a reasonable and fair amendment.

Norman Baker (Liberal Democrat, Lewes)

Does the hon. Gentleman accept that under the system proposed in the Bill, with the approvals board and the Transport Tribunal and so on, it will be in the interest of any transport authority to produce as much evidence as possible anyway, otherwise it will risk having its quality contracts overturned? Therefore, there is a self-fulfilling element to what local authorities will do here.

Stephen Hammond (Conservative, Wimbledon)

The logic of the hon. Gentleman’s argument is therefore that he should support my amendment, because he would be happy with the word “evidence”. I assume that that is what he is prepared to do. This is a reasonable and fair amendment, and I hope the Minister agrees to it.

Rosie Winterton (Labour, Doncaster Central)

Once again, these amendments illustrate the basic hostility of Conservative Front Benchers to the quality contracts schemes. The aim of these amendments is substantially to raise the burden of proof placed on local authorities to justify the reasons for proposing a quality contracts scheme in their consultation document. Government policy is to ensure that quality contracts schemes are a realistic option, and we agree that it is important to ensure that local authorities can justify the proposals to those directly affected by them and to their local communities. That is why the Bill requires an authority that proposes to make a quality contracts scheme to publish a consultation document.

The consultation document must describe the proposed scheme and the local authority must justify the proposals. In particular, the authority must explain why it is satisfied that the public interest criteria will be satisfied by the scheme. These amendments would raise that hurdle to an unacceptable level.

The intention of the Bill is to increase the range of options available to authorities to improve bus services in their area, but these amendments would increase the burden of proof in such a way as to make quality contracts an unattractive option for an authority to pursue. That would completely negate the improvements that we believe the Bill will make to the quality contracts scheme system.

The amendments show that Conservative Front-Bench Members do not believe that quality contracts should be introduced. They have said already that they would abolish them if ever there was another Conservative Government, and this is an illustration of that. We cannot accept the amendments, because they would undermine the system we are trying to introduce.

Stephen Hammond (Conservative, Wimbledon)

The Minister tells us that she wants the consultation procedure to be fair and accurate and open, but she does not want to put any objectivity into that. That strikes me as a pretty odd way to behave. I am not at all reassured by her comments, so I shall press the amendment and test the will of the Committee.

Stephen Hammond (Conservative, Wimbledon)

I rise to speak on clause stand part because I want to question the Minister on a number of issues that we were not able to tackle in our extensive discussions on the amendments.

Included in the consultation document will be a declaration by the local authority finance officer on the financing of the quality contracts. The Government say that the chief finance officer must declare the costs of the scheme and say that those costs can be covered under the authority’s budget. That is a sensible and important provision, particularly as the likelihood is that the costs will not be insignificant. I think everyone accepts that, in a number of areas, budgets will be tight.

Paragraph (e) of proposed new subsection 1A says that the chief finance officer, in making a declaration on funding, must take account of estimated fare income and of grants to be received. I understand the point about future income, but I want to tease out some of the Minister’s thoughts on future expenditure, because such schemes have the potential to incur expenditure.

In addition to the costs of implementing the scheme, as we heard this morning, many people believe that there is a threat of legal action by operators that find themselves losing out in the process. This morning, I cited an article on the subject by a leading lawyer. Local authorities are already aware of the risk that operators may launch legal challenges. Indeed, Metro, West Yorkshire’s passenger transport authority, is already planning to test its powers under the Bill. Under the draft guidance on the quality contracts, it believes that if it were to try an incremental approach it would be less likely to prompt the introduction of a challenge to quality contracts under human rights legislation.

The Government’s thinking is unclear. Comments in various articles say that under human rights legislation there is the potential for court challenges to be made to quality contracts. The courts will need to examine the substance of the schemes and any legal advice given on them. The documentation says that the chief finance officer must take account of finances. Does the Minister expect the chief financial officer to take account of other specified matters, such as associated potential liabilities?

I say that because this morning a number of hon. Members said that they would want such cases to be subject to judicial review. We have to accept that possibility. It will be a lengthy process, and the costs and awards could be large. I do not advocate any one side; I genuinely want to find out whether the Minister will say in guidance that when finance officers talk about future income and future costs they must have regard to potential litigation. If so, do those future costs have to include the costs of litigation and the sums that might be awarded to operators?

This morning, an hon. Member—I forget who—pointed out that they believe some bus companies are greedy and will consider challenging the legislation on the basis of the restriction of trade, as well as considering the possibility of challenge under the Human Rights Act 1998. That is a real possibility. Sir David Rowlands said to the Public Accounts Committee:

“Under the Human Rights Act any legal entity is entitled to the quiet enjoyment of their own property and you may only override that in the public interest”.

We discussed the public interest this morning. He went on to say that

“therefore to move to quality contracts requires a strong public interest reason; it cannot be done simply because somebody would like to have quality contracts.”

In relation to clause stand part, I want the Minister to say what the Government’s position is. They appear to be saying that there is no liability in relation to compensation because, as a result of quality contracts, the bus operators will retain their assets. Is that genuinely the Government line? If it is, it seems to ignore two things that may be relevant: the issue of economic rent, which is the difference between the value of an asset being used for the purpose for which it was started and the value for the second best use of that asset, and the fact that there is good will associated with the operation of that asset, which the Government must recognise is also an asset that could be rendered valueless.

I am asking the Minister to tell us these things. First, as she knows, the Bill states that the chief financial officer will have to make a statement of future income. Will he also have to make comments about future expenditure, and will he have to qualify or at least attempt to qualify what liability there is? Is it the Government’s position that compensation is not an issue for operators and that it is unlikely to be given? I hope that the Minister can give the Committee some guidance on that practice.

Rosie Winterton (Labour, Doncaster Central)

The hon. Gentleman makes the point that there is the risk of judicial review in certain circumstances. As he said, he read some legal advice that set out instances in which that might happen. That goes back to this morning’s discussion. We want an approvals board procedure and the ability to appeal to a transport tribunal, because that minimises the risk of judicial review. Therefore, the measures in the Bill mean that if a transport authority has properly followed the process of either making or continuing a scheme and the necessary criteria have been satisfied, we will not get into a situation in which there will be further litigation.

However, on the specific issue raised by the hon. Gentleman—whether the financial assessment of the scheme will include funding for litigation—it is probably true to say that a prudent authority will set aside some contingency funding for litigation, which might arise for a number of reasons. However, it is not reasonable to expect them deliberately to budget on the basis that they will be taken to court. It would be quite difficult to calculate the costs, and if the authority won a case it might recover all the costs.

In the circumstances, I am not sure that it would be helpful to pluck a figure out of the air and wave it in front of the public. Authorities have to take such risks in relation to litigation in many areas in which they work, but it is not necessarily appropriate for that to be put in the financial assessment of a scheme such as this.

Stephen Hammond (Conservative, Wimbledon)

I am not suggesting that the chief financial officer of any particular area should stand up and say what he expects the cost of litigation to be, but in a number of areas there is a general health warning attached to a statement. I want to understand whether there will be in the statement a general warning that there is the potential for litigation and compensation. That is what I am trying to find out from the Minister.

Rosie Winterton (Labour, Doncaster Central)

I think that authorities are aware of where there is potential for litigation. One of the difficulties with the current situation is that local authorities are worried about litigation and, as a result, feel that it is difficult for them to bring in quality contracts schemes. That is why we are trying to change the system to give greater protection to authorities in how they can make schemes, so that the risk is minimised.

As I said, I am sure that prudent authorities, when considering undertaking projects where there is any risk of litigation, will take that into account. That, frankly, is up to them. Part of how local authorities decide whether to press ahead with a scheme will be weighing up all the risks that they are likely to incur when doing so. I know that that is the process that many—or some—local authorities have gone through when looking at the issues around making quality contracts at the moment.

The hon. Gentleman asked about compensation for bus operators. We do not think that the issue is one where there should be compensation for bus operators. They will not be deprived of their assets. They will be free to deploy them elsewhere if, for example, they do not wish to tender for quality contracts or fail to win any tenders. Again, the public interest criteria that the local authority must satisfy include a proportionality test, so they will want to look at any adverse effects—for example, on local authorities—and satisfy themselves that that is proportionate to the improvements for people living and working in the area and to the achievement of the scheme objectives.

I can assure the hon. Gentleman that we will issue guidance to local authorities on applying that test. All the measures, taken together, will ensure that all operators have a fair opportunity to compete for the right to operate services in an area where a quality contracts scheme is set up. I hope that that explains the situation.

Norman Baker (Liberal Democrat, Lewes)

I want to pursue a couple of points. That aspect of the Bill is important if local authorities are to have confidence—which many of us want them to have—in the Act that finally emerges.

On the compensation point raised by the Minister, the hon. Member for Wimbledon rightly referred to good will, which is an important issue to take into account. Historically, the Government have approached it in different ways. For example, under the Hunting Bill—if I dare mention it—no compensation was provided, because people still had their horses, stables and so on. On the other hand, when fur farming was made illegal, compensation was provided because the fur farmers lost their livelihood. Two different approaches have been adopted by the Government in recent times.

Graham Stringer (Labour, Manchester, Blackley)

It was proportionate.

Norman Baker (Liberal Democrat, Lewes)

That is the answer.

It will be perfectly possible for bus operators to feel aggrieved if they have built up a route through their own marketing and efforts—attracted passengers whom they did not have before—only for it to be taken away from them because of how the quality contracts work out. That is unlikely, however, because any sensible local authority will want to build it into any system. Nevertheless, the hypothetical possibility exists of someone losing what they have built up, and they will not get compensation. Still having their buses and garage will be of little consequence to them if they have lost their route and, perhaps, their livelihood. That might be the only route they operate, for example, which is an issue.

We must first address the natural justice aspect—I would like to hear the Minister’s comments on that—but we must also address the local authorities’ point of view and give them confidence that if action is taken, a robust legal defence will be available to them that they can be confident will work in the courts.

Pursuant to that, I am interested to know—not expressly today, but in broad terms—what guidance the Department for Transport intends to provide to local authorities on dealing with potential legal issues. I am not entirely happy with the Minister’s statement that it is up to them. If local authorities or ITAs pursue quality contracts in a way that is consistent with the Government’s intentions in the Bill, it will be wrong and unfair if they end up considerably out of pocket as a consequence of legal action. In such circumstances, will the Department for Transport feel obliged to support local authorities financially? That is an important point of principle—not just in terms of natural justice, but in giving local authorities some confidence and clarity on how the legislation will unfold.

Rosie Winterton (Labour, Doncaster Central)

The point of this morning’s discussion on the approvals board and transport tribunals was that we want to set up a system that provides local authorities with greater certainty without huge cost. We want local authorities to be able to go through a process that will effectively agree that the public interest criteria and proportionality have been met.

The hon. Gentleman chose a particular instance involving an operator running down a perfectly well-running route that makes a profit and has lots of passengers. I believe that local authorities will take a sensible approach in such scenarios. That is why we have public interest criteria to ensure that schemes bring benefits to passengers and offer good value for money. If a local authority simply removes a well-running route, depriving passengers of buses and the scheme of that income, that, in a sense, would not satisfy the public interest criteria. It is about getting the balance right between the two.

To return to the hon. Gentleman’s point about the Department stumping up all the money for judicial review challenges, it is the role of the Government and the Department to set up a system that works well for local authorities, but it is then for the authorities to decide whether they wish to go down that route. As I said, it is quite difficult for local authorities. We know that judicial review can be expensive. That is part of the risk that they must take into account. I am sure that it is an incentive to ensure that schemes are robust.

No local authority will want to introduce a challengeable scheme that might cost it a lot of money. It will also not be appropriate for the Department to stand back and say, “Don’t worry, if it all goes wrong we’ll pay all the costs.” That would be ridiculous, so I cannot give the hon. Gentleman any comfort there. However, the aim of the Bill is to minimise the possibility of judicial review and to ensure that schemes are good value for money and fair to all concerned.

Clause 21

Stephen Hammond (Conservative, Wimbledon)

I beg to move amendment No. 58, in clause 21, page 19, line 36, leave out from ‘England’ to end of line 39 and insert

‘and Wales, an approvals board for England and Wales.’.

David Taylor (Labour, North West Leicestershire)

With this it will be convenient to discuss the following amendments: No. 59, in clause 22, page 20, line 3, after ‘England’, insert ‘and Wales’.

No. 60, in clause 22, page 20, line 4, leave out ‘for England’.

No. 63, in clause 23, page 21, line 3, after ‘England’, insert ‘Wales’.

No. 64, in clause 23, page 21, line 6, leave out ‘for England’.

No. 67, in clause 23, page 21, line 21, leave out ‘for England’.

No. 68, in clause 23, page 21, line 23, leave out ‘for England’.

No. 69, in clause 23, page 21, line 26, leave out ‘for England’.

No. 71, in clause 24, page 22, line 13, after ‘England’, insert ‘and Wales’.

No. 72, in clause 24, page 22, line 16, leave out ‘for England’.

No. 77, in clause 25, page 23, line 26, after ‘England’, insert ‘and Wales’.

No. 78, in clause 25, page 23, line 28, after ‘England’, insert ‘or Wales’.

No. 79, in clause 25, page 23, line 30, leave out ‘for England’.

No. 198, in clause 25, page 24, line 14, leave out ‘for England’.

No. 199, in clause 25, page 24, line 21, leave out ‘for England’.

No. 200, in clause 25, page 24, line 26, leave out ‘for England’.

No. 201, in clause 25, page 24, line 37, leave out ‘for England’.

No. 202, in clause 26, page 25, line 5, after ‘England’, insert ‘and Wales’.

No. 203, in clause 26, page 25, line 9, after ‘England’, insert ‘and Wales’.

No. 204, in clause 26, page 25, line 11, leave out ‘for England’.

No. 220, in clause 33, page 31, line 29, after ‘England’, insert ‘and Wales’.

No. 221, in clause 33, page 31, line 31, leave out ‘for England’.

Stephen Hammond (Conservative, Wimbledon)

The good news is that although there are 13 amendments in the group, 12 are consequential, so I shall not delay the Committee for long. Today and previously, we have had extensive discussions about the approvals board. I expected much discussion to take place when we debated clauses 21 and 22, but a lot of it happened this morning.

If the Minister regards the board as so important, why does it apply to England only? Why will quality contracts in England be passed on to an approvals board when those in Wales will be examined by Welsh Ministers? Is it entirely because of the status of devolved legislation, or is there some other explanation? The Minister and the Government have reassured us that the process of appeal through an approvals board will limit judicial review, so it has the chance to become an effective and independent body. It will be well suited to decide the suitability of quality contracts, and I am not sure that the Committee would wish to deny such a body to Wales, unless there was good reason to do so.

Rosie Winterton (Labour, Doncaster Central)

I certainly take on board what the hon. Gentleman has said about this being a probing amendment. It would extend the approvals board model to Wales and take away the existing role of Welsh Ministers. The Government consulted the Welsh Assembly Government on how the provisions will apply in Wales, and the Bill is consistent with their preferences, which is to say that the existing approval role will be retained by Welsh Ministers for schemes in Wales, and there will not be a move to independent approval.

In both cases, the approval process will be at arm’s length from the local authority or authorities that will approve schemes—that is a key feature of both models. However, in England, the Government see the value of having an approval process at arm’s length from the Secretary of State. As we have discussed, under the current arrangements, the Secretary of State has a quasi-judicial approval role at the end of the local authority process of scheme development. That makes it more difficult for Ministers or officials to engage with local authorities as they develop proposals for quality contracts schemes. We believe that we will work together more effectively if the Secretary of State is removed from the quasi-judicial approval process.

Obviously, Welsh Ministers take a different view, and many comments have been made on the reasons for that. There are those who have said that in Wales there is perhaps not quite the extensive demand for quality contracts schemes as there has been in England. However, it is important that it is up to the Welsh Assembly Government to ask for the process to be different if they so wish. With that explanation, I hope that the hon. Gentleman will not press the amendment to a Division.

Stephen Hammond (Conservative, Wimbledon)

I am completely satisfied with that explanation. The Minister has obviously consulted Welsh Ministers and this is what they prefer, so far be it from me to interfere with their wishes. I beg to ask leave to withdraw the amendment.

Clause 22

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 156, in clause 22, page 20, line 9, at end insert

‘, one of whom shall be a representative of users of local transport.’.

David Taylor (Labour, North West Leicestershire)

With this it will be convenient to discuss amendment No. 62, in clause 22, page 20, line 33, at end insert—

‘( ) The Secretary of State shall at all times keep a panel of persons who may be appointed under subsection 2(b).

( ) The panel shall consist of at least 15 persons.

( ) Membership of the panel shall be open to any person who is considered to have relevant experience of the bus industry, passenger user groups or local transport governance.

( ) The persons who are to be appointed under subsection 2(b) are those that the Secretary of State considers most appropriate in all the circumstances of the particular case.’.

Norman Baker (Liberal Democrat, Lewes)

We are back on the accountability or otherwise of the approvals board, and I make no apology for raising the concept of accountability yet again. The Government propose to set up a very powerful triumvirate, which in my view will be able to thwart the views of elected local councillors and the ITA. Incidentally, that situation will be remedied in a helpful manner if new clause 5, which we shall discuss shortly, is accepted, but as the Bill is currently set out, what I have described will be possible. In those circumstances, we should consider the membership of the approvals board more closely.

I support the concept of experts being able to examine some of the proposals to see whether they are robust and make sense, and to give advice. There seems to be nothing whatever wrong with that; in fact, it seems a sensible idea. The idea is that there should be a traffic commissioner, an expert in transport economics and an expert in transport planning. That seems to be a sensible mix of people who should be asked to offer views. However, it is not a complete mix of the people who should be asked to offer views. Noticeably missing from that list is anyone who might actually travel on a bus. There is no guarantee that transport economists or transport planners will travel on buses, but someone from Passenger Focus or another passenger group, whom I am suggesting should be incorporated into the membership of the approvals board, certainly would travel on a bus.

I accept that it is a worst-case scenario, but let me explain the danger we face. An ITA of elected people carefully considers and consults and comes up with proposals, which then go before the approvals board, whose members may be unaware, even if they should not be, of the particular local circumstances. They may not have travelled on a bus for quite some time and they might be unsympathetic to what the local authority or the ITA is trying to do. In those circumstances, having someone on the approvals board who has experience of riding a bus would be quite a good idea. If the Minister says that is not quite the right idea and a better way of doing it is A, B and C, that is fine, but the concept of expanding the approvals board to have wider expertise is clearly right.

Graham Stringer (Labour, Manchester, Blackley)

It is unusual in British administrative law to put people whose role is normally quasi-judicial into positions of policy making. When the Select Committee considered those matters, we thought that it was inappropriate for a traffic commissioner to be part of the process, if indeed the process will exist. On that basis, will the hon. Gentleman reconsider his remarks or address that issue?

Norman Baker (Liberal Democrat, Lewes)

I suppose that I am addressing the issue of the approvals board as I wish to see it, which is as a statutory consultee, as would be the case with the Environment Agency. That is the role that I would like the approvals board to have. If the approvals board carries on with its present powers, the hon. Gentleman makes quite a good case for looking again at the membership and whether the traffic commissioner would be double-hatted in that regard.

I shall comment briefly on the Conservative amendment No. 62. No doubt the hon. Member for Wimbledon will address it himself, but I have some sympathy with the point that he is trying to make. He seems to be addressing the same point as me, but by different means. The fact that we have come from different directions to the same conclusion should weigh heavily with the Minister.

Stephen Hammond (Conservative, Wimbledon)

I am pleased that we have reached the same conclusion. The hon. Member for Manchester, Blackley made a very good point. Should someone with a policy-making role have a quasi-judicial role? Would that person be capable of separating those two roles when asked to do so? That is a decent issue that must be addressed, because it is a concern. My amendment is similar and I have a great deal of sympathy with the hon. Member for Lewes. At present, paragraph 2 of proposed new clause 126A of the Transport Act 2000 states that in addition to the traffic commissioner, there should be two other members sitting on the approvals board, and that they will be selected from a panel appointed by the Secretary of State. Clause 22 contains no further detail about the panel, which seems a significant omission. The four further paragraphs proposed by the amendment are designed to put some detail on who would be on the panel and how it would be selected.

A panel needs a number of people from which it can select, so a panel of 15 people would provide an appropriate number from whom an approvals board can be selected. That number should ensure that there are always two members with the requisite regional familiarity, wherever the quality contracts scheme is being proposed. The panel needs to be large enough to ensure availability in all sorts of cases.

The panel should also have relevant experience, which is why I have sympathy with what the hon. Member for Lewes was saying. The Secretary of State will presumably be able to judge what is relevant, but it should entail experience of the bus industry, passenger groups or local transport governance. The Bill would be substantially enhanced if it required the panel to include such people, as that relevant experience is extremely important. When appointing the two members of the panel to the approvals board, the Secretary of State should look at the qualifications and experience that render them most suitable, in much the same way as the senior traffic commissioner appoints the most appropriate traffic commissioner—we went through that argument last week. The Secretary of State ought to be looking to appoint the most appropriate persons from the pool available.

Taken together, the paragraphs should ensure that those charged with deciding whether a quality contract should occur are appropriately qualified to make that decision. They should be aware of passengers, the local bus industry and what might happen to the local authority. They should be able to judge in an impartial manner a consultation document produced by the local authority and make a judgment on the representations. The amendment is inspired by the fact that although the Bill goes into some detail about the traffic commissioner on the approvals board, and how they might be appointed, there is a noticeable absence about how the other two members will be appointed. This is an extremely important part of the legislation and it would be wrong to leave it vague and imprecise. I hope that the Minister will accept that there is a gap in the legislation that needs filling.

Rosie Winterton (Labour, Doncaster Central)

As has been said, the Bill provides that an approvals board for England will consist of a traffic commissioner—the chair—and

“... two persons drawn from a panel of persons appointed by the Secretary of State for the purposes of this section.”

Amendment No. 156 would provide that one of the members of the panel should always be a representative of bus passengers. A lot of this goes back to our discussion earlier today about defining the remit of the approvals board.

There are two key issues when determining who should be on the approvals board for the role that we envisage. First, the board should have appropriate expertise and, secondly, the decision-making process should be fair, open and impartial. The board will be chaired by an independent traffic commissioner. We proposed in the draft Bill that it should be the senior traffic commissioner, but following the recommendation from the Transport Committee we changed it so that an approvals board would normally be chaired by the commissioner with the most appropriate knowledge of the area in question.

We also proposed that the traffic commissioner would be supported by two experts, most likely in transport planning and transport economics. We believe that the combination of the three would ensure that the board would be well equipped to do the job required of it and that it would be, and be seen to be, impartial.

I believe that the views of passengers are important and we expect local authorities to take proper account of them, both in developing their general transport policies and in drawing up detailed proposals for a quality contracts scheme. I am not convinced, however, that there would be a role for a passenger representative on the approvals board itself. That is because the board’s job would be to consider a local authority’s application to make a scheme and to reach a decision on the approval of it. In reaching that decision, the board would need to consider whether the authority had observed due process, to ensure that the consultation exercise had been carried out properly and that proper account had been taken of the views of consultees. Within that process I would of course include passengers.

The board would also need to reach a judgment as to whether the scheme as proposed by the authority would indeed satisfy the public interest criteria prescribed in the legislation. That would be likely to require analysis of the case put forward by the authority and we believe that to do that well, the traffic commissioner should be supported by appropriate experts. I am not convinced that a passenger representative would necessarily have the appropriate expertise to assist the board in the particular job that we have defined for it.

The case put forward by the authority is obviously likely to contain a detailed economic analysis, hence the need for an economist. The proposals are also likely to contain projections as to potential passenger growth and forward transport planning. That could and probably would be for a period of up to 10 years, which is why we think a transport planner would be an appropriate member. We do not, however, expect the experts on the board to undertake a separate, almost rival analysis to the local authority’s, rather their role would be to confirm that the authority’s overall analysis was credible and based on sensible assumptions. The job we want the approvals board to do is very detailed and specific.

Ian Stewart (Labour, Eccles)

I wish to express a small amount of concern about the presumption that members of user groups may not have the skills to sit on such a board. I have to tell the Minister that the Friends of Irlam station, the Friends of Eccles station—known as Freccles—and the transport users group in Swinton and Pendlebury include people who are eminent in their fields, whether that be health, economics or transport. That should be considered before assuming that people on transport user groups or from the community do not have the skills to sit on such a board.

Rosie Winterton (Labour, Doncaster Central)

I hope I can reassure my hon. Friend, because that point brings us to the panel of experts that the Secretary of State would appoint for people to be drawn from. It may well be that somebody involved in passenger user groups would also have the other areas of expertise that my hon. Friend has talked about. However, that goes back to the question of the approvals board having a specific task.

It might be difficult for local passenger representatives, who may have been involved in consultation on the scheme—we hope that would be the case—to fulfil the objective and impartial role that we want the approvals board to have. We have made it clear, as I said, that we want the scheme to be credible, and we do not necessarily want someone who might have been consulted on the original proposals as drawn up by the local authority. Indeed, to take that view might in a sense change the work of the approvals board, almost widening it beyond what we want to see. That is why, in response to the Transport Committee, we made provision for a traffic commissioner other than the commissioner for the local traffic area to chair the board, as the local commissioner might consider that his ability to act and to be impartial was impaired.

I hope that the hon. Member for Lewes understands why we cannot accept the amendment. As I said, I hope that the Committee accepts that it is not because we do not value the views of the passengers. We certainly want them to contribute to consultations on the drawing up of the scheme, but not in the position that the hon. Gentleman outlined.

I ask the Committee to reject amendment No. 62, which seeks a panel of 15 members. It is not appropriate to include that level of detail in primary legislation in case we need to change it. It could be difficult to predict how many applications to make schemes will be received. We might need to change the size of the panel, depending on its work load, and including it in primary legislation would restrict our ability to do so. However, I assure the Committee that we will be consulting on the detailed implementation of these matters later in the year, including on the draft guidance and the drafts of any necessary secondary legislation.

With that explanation, I hope that the hon. Member for Lewes will withdraw the amendment.

Norman Baker (Liberal Democrat, Lewes)

One of the TEG notes that we received with the Committee briefing states that

“No draft guidance has yet been prepared regarding the way in which an approvals board would operate.”

I assume that is still the case. I look to the Minister to confirm that it is so.

Rosie Winterton (Labour, Doncaster Central)

What the Committee has before it is the draft guidance put out in December to coincide with debates in the other place. It includes a section on quality contracts schemes, and it refers to some of the role of the approvals board. However, as I said earlier, we will be able to specify other matters in more detail, such as when the board might start considering appeals.

Norman Baker (Liberal Democrat, Lewes)

I raised that point in response because it is important. The Minister puts a lot of stress and weight on what the approvals board will do. As we continue in Committee, it seems that more and more will rest on its shoulders.

The success or otherwise of what the Government want to do will be determined by how the approvals board is asked to work and works. If the Minister is right, the board will clearly provide a bulwark and a way to facilitate and reinforce transport authorities. If those of us who have concerns are right, it will act as a blockage; it will be an unhelpful part of the process. Either way, when we are putting so much stress on the approvals board, it is difficult not having the draft guidance. It is disappointing because the Bill has been through the other place and it is now most of its way through the Commons.

The Minister did not deal with a point that I made in my opening remarks, which was that not only would none of the persons on the approvals board be elected—we have been around that subject already—but none of them might even have relevant bus experience or use a bus. I am sure that it was not her intention, but a transport planner could be someone who sits and designs the trunk road network. Someone specialising in transport economics could be a person who carries out a cost-benefit analysis of the rail network. There is no guarantee that the persons appointed will have the necessary knowledge of, or sympathy with, what the ITA is trying to do.

I am sure that the Minister intends to appoint people with relevant expertise and who would facilitate the passage of the legislation, but let us suppose that a future Government, perhaps of a different complexion, were unsympathetic to the idea of quality contracts and wanted to thwart them or see them wither on the vine. I do not want to give them ideas, but it would be easy to put people on the approvals board who would not facilitate what local authorities wanted, but who received different guidance from the Secretary of State.

Rosie Winterton (Labour, Doncaster Central)

I am sure that the hon. Gentleman has not forgotten, but I assume that he is talking about the horrific possibility of a Conservative Government. In that context, it would not matter who was on the panel because it has already been indicated that they would abolish the quality contracts anyway.

Norman Baker (Liberal Democrat, Lewes)

A Conservative Government may have second thoughts and seek to kill the measure slowly. I do not want to be unpleasant to the Conservatives but, as a matter of principle, it is a sound approach to legislation to assume that the worst can happen whether it is thought that the worst is a Conservative Government or a Labour Government—indeed, some may even think it would be a Liberal Democrat Government, but how they could reach such a conclusion, I do not know. However, we must always base the premise on ensuring that processes cannot be manipulated by the Government of the day to thwart the idea set out in the Bill when it was first designed. I want to establish that point of principle.

Stephen Hammond (Conservative, Wimbledon)

One thing that we can be sure about is that we shall not have to consider the possibility of a Liberal Democrat Government.

Given that the approvals board is so important, the lack of guidance or of a definition of that guidance in the Bill is a glaring omission, and it will be a considerable weakness unless we do something about it in Committee. I hope that the hon. Gentleman agrees with me about that issue.

Norman Baker (Liberal Democrat, Lewes)

Possibly I agree with the hon. Gentleman more than he thinks. We certainly agree on that point. It would be helpful if the Minister could publish more detailed draft guidance before we discuss the Bill on Report. I do not know whether that is possible, but it would be certainly be useful for the House to have it.

In response to the arguments advanced by the hon. Member for Wimbledon, the Minister said that local authorities will take account of passenger views. They will indeed do that, but there is no guarantee that the approvals board will. However, the local authorities would have the final say under my amendment and that would cover the point adequately. It would not be covered if we left the final decision to the approvals board.

We ought to pick up the points made by the hon. Member Freccles about user group skills. He is right that members of Passenger Focus and other user groups have considerable skills and that we should not undermine them or regard them as a second tier. If the Minister is insistent on going down the road of appointing people herself, I hope that she will take into account the sensible points that have been made and ensure that we have a mixture of people with experience of user groups. If she is not able to accept the amendment, I hope that she will be sympathetic to the idea that one of the three people will at least have user group experience, passenger experience or bus experience and thus know what they are talking about.

Rosie Winterton (Labour, Doncaster Central)

I just want to put it briefly on the record that obviously approvals boards could call other witnesses if they considered that not enough particular expertise was available to them. I assure the Committee that we want people who are expert in both transport economics and transport planning. It is difficult to prejudge every member of the panel, but of course we want them to have some expertise in the area. There is no Government desire to appoint people who do not know one end of a bus from another—that would be ridiculous.

The whole point of what the Government are trying to do is to make it easier for authorities to introduce quality contracts schemes. We would gain nothing by appointing people who are inherently hostile to them. The process is to ensure that authorities that want to go down that route will find it easier to do so. The proposals in the Bill, and the possibility of appeal to a Transport Tribunal, would give an authority the possibility of making an appeal if it felt that it had been unfairly dealt with, or that its points had not been taken into account.

Norman Baker (Liberal Democrat, Lewes)

I am not entirely satisfied but, without delaying matters, I will leave it there and beg to ask leave to withdraw the amendment.

Stephen Hammond (Conservative, Wimbledon)

I beg to move amendment No. 61, in clause 22, page 20, line 31, leave out subsection (8).

Clause 22 inserts a new section into the Transport Act 2000. We are going through the composition of the approvals board and, clearly, it is vital to ensure that the right people are on it. Subsection (2) states that a traffic commissioner will sit on the board and subsection (3) states that the commissioner will chair it. Subsections (4) to (7) state that the senior traffic commissioner will be charged with appointing the commissioner as chair of the approvals board and other such duties. All of that is fine and I have no issue with it.

This is a probing amendment, but I want to understand why subsection (8) is necessary. It states that if the senior commissioner is unable to appoint a traffic commissioner to chair the approvals board, the Secretary of State will appoint one. Given that those duties cannot be arduous, I would be interested to hear from the Minister in what circumstances she envisages such a measure would be necessary. Why would the Secretary of State be involved only in that particular duty and not in others? When we talked about the roles and duties of the senior traffic commissioner, there was no discussion about the Secretary of State being involved if and when required.

The whole thing is slightly tautologous. The senior traffic commissioner is required to consult the Secretary of State in all that he or she does. Furthermore, the Secretary of State is able to give guidance to the senior traffic commissioner, and the commissioner is required to have regard to that guidance. The Secretary of State will be involved in that work, so subsection (8) seems completely unnecessary. Will the Minister give us some explanation and examples of why she regards it as necessary?

Rosie Winterton (Labour, Doncaster Central)

The amendment would mean that, in the absence of the senior traffic commissioner, the Secretary of State would no longer be able to determine the most appropriate traffic commissioner to chair an approvals board. The Bill provides for the senior traffic commissioner to decide which traffic commissioner should chair each board, and that would normally be the one with the most local knowledge of the area in question. As we have just discussed, it also provides for the commissioner to be joined by two other members drawn from a panel appointed by the Secretary of State.

As I said earlier, the draft Bill proposed that the approvals board would normally be chaired by the senior traffic commissioner. Having considered responses to the consultation, particularly from the Transport Committee, it is now proposed that the board is chaired by the traffic commissioner who has the most appropriate local knowledge, with flexibility for another traffic commissioner to chair it if, for any reason, the local traffic commissioner is unable to do so.

The intention is that the two independent experts who sit alongside the traffic commissioner should have expertise in transport economics and transport planning to provide the right balance. The Bill will remove the Secretary of State’s role in approving applications for a quality contracts scheme, as we said earlier, but the amendment would remove the provision allowing the Secretary of State to nominate a traffic commissioner to head a particular board, which is purely a backstop provision. It exists to cover eventualities, such as the senior traffic commissioner being absent or incapacitated. If that happens, the Secretary of State rather than the senior traffic commissioner will be able to appoint a traffic commissioner.

If the provision were not included, there might be long delays in setting up a board while we waited for the senior traffic commissioner to stop being incapacitated. I cannot support the amendment. I hope that I have shed some light on why the provision exists and why we do not want it taken out.

Stephen Hammond (Conservative, Wimbledon)

I have listened carefully to the Minister.,

Rosie Winterton (Labour, Doncaster Central)

It is very complicated.

Stephen Hammond (Conservative, Wimbledon)

I am not entirely sure that it is, for a number of reasons. However, although I give notice that we may return to the matter on Report, I beg to ask leave to withdraw the amendment.

Rosie Winterton (Labour, Doncaster Central)

I beg to move amendment No. 2, in clause 22, page 20, line 38, leave out subsection (2).

Clause 22 contains provisions concerning approvals boards for quality contracts schemes in England. In particular, it sets out the membership of approvals board, which will include, as we have said, a traffic commissioner and two persons drawn from a panel of experts appointed by the Secretary of State. The clause will also amend the Tribunals and Inquiries Act 1992 so that approvals boards fall under the general supervision of the Council on Tribunals. However, under the tribunal reform process being undertaken by the Ministry of Justice, the Council on Tribunals has ceased to exist. As a result, the provision in clause 22 relating to the Council on Tribunals is redundant, and the amendment will remove it from the Bill. This is a tidying-up amendment.

Clause 23

Stephen Hammond (Conservative, Wimbledon)

I beg to move amendment No. 65, in clause 23, page 21, line 9, leave out from ‘The’ to end of line 10 and insert ‘regulations of the board shall include—’.

David Taylor (Labour, North West Leicestershire)

With this it will be convenient to discuss the following amendments: No. 66, in clause 23, page 21, line 20, leave out from ‘which’ to ‘any’ in line 21.

No. 70, in clause 23, page 21, line 41, leave out subsections (7) and (8).

Stephen Hammond (Conservative, Wimbledon)

The origin of amendment No. 65 is my concern that the Secretary of State is being given powers to interfere in the affairs of the approvals board that are neither appropriate nor required. The Minister has said several times that she believes that the approvals board should be impartial, and has discussed the fact that it should consist of one traffic commissioner and two appropriately qualified and independent persons selected from a panel. That independence should not be compromised by unnecessary interference by the Secretary of State.

Clause 23 introduces further sections to the 2000 Act, one of which will empower the Secretary of State to make rules governing practice and procedure to be followed by the approvals board. It also empowers her to make rules

“generally for the carrying into effect of the powers and duties of any such board.”

Such rules might include the procedure for making applications to the board and for the acknowledgement of such applications, the procedure for notifying the relevant parties that an application has been lodged, and the time scales within which such parties might make representations to the board.

The Secretary of State may also prescribe the deadline for the board to reach its decision. However, if the board consists of people who are seen to be qualified and experienced, it should not require such instructions from the Secretary of State. The senior traffic commissioner appoints the traffic commissioner to chair the board and the role of the chair is to guide the board through matters of procedure. He or she would not and should not need the Secretary of State to assume that role and interfere with the board.

Furthermore, the phraseology used implies not only that this is general guidance, but that there is the possibility that it might be specific. If the Secretary of State was seen to tell the board what to do and when to do it, that would reflect badly on the perceived independence of the board, particularly in individual cases. The board should define its own procedures, and the independence of board should mean that the Secretary of State is not required to do so. Subsections (2) and (3) are necessary for the efficient running of the approvals board, but I contest whether it is the role of the Secretary of State to make such measures.

Amendment No. 70 also deals with the independence of the approvals board and with ensuring that it is not impacted by interference from the Secretary of State. Subsections (7) and (8) go even further and state not only that the Secretary of State can get involved in the procedural matters of the approvals, but that they can issue guidance

“concerning the carrying out by a board of its functions under this Part in relation to quality contracts schemes.”

Of course, the board must have regard to such guidance, but there is the possibility that a wholly inappropriate intervention or interference could come from the Secretary of State. That seems to defeat any object of having an independent board.

I will be listening carefully to what the Minister says about the independence of the approvals board and the reassurances she can give on whether there will be interference from the Secretary of State in general and particular cases.

Rosie Winterton (Labour, Doncaster Central)

That is quite a helpful explanation of where the hon. Gentleman is going with the amendments. We were slightly puzzled because they seemed to be designed to eliminate the Secretary of State’s role in regulating or guiding the approvals board, which would make it entirely self-regulatory. There do not seem to be other amendments that specifically would give the approvals board a power to make regulations. All references to regulations in this part of the Bill are to regulations made by the Secretary of State by statutory instrument. We also retain the power for the Secretary of State to make procedural rules.

There are, no doubt, precedents for self-regulation, which is generally for judicial bodies. However, that is not appropriate for a body of this nature. The board will be chaired not by a judge, but by a traffic commissioner, who will have been appointed for a somewhat different set of skills from those of a judge.

The board will not be a permanent body of persons; different traffic commissioners will chair different boards and may select different board members from the panel appointed by the Secretary of State to support them. To get consistency of practice, we will depend on the Secretary of State setting out the rules and regulations that apply to the approvals board, and the Bill provides for that.

Amendment No. 65 would remove the flexibility in clause 23. Its purpose seems to be to ensure that provisions that might be included in procedural rules under proposed new section 126B(2) are included. Provisions in clause 23 will enable the Secretary of State to make rules on the practice and procedure to be followed by the approvals board and on the general exercise of the powers and duties of the board.

The legislation highlights four procedural matters that may be included. That is not an exhaustive list and it does not exclude rules being made about other, related matters should they prove necessary, nor will it be obligatory to make rules on the specified matters if, in the light of consultation, we conclude that they are unnecessary.

In short, the provision in the clause gives a strong indication of how we might wish to use the rule-making power, but there is a degree of flexibility, which would not be the case if amendment No. 65 were accepted.

Finally, amendment No. 70 would remove the Secretary of State’s power to issue guidance to the approvals board. That is intended to ensure consistency of approach between the variously constituted boards. The Department will consult on the guidance—it will not be imposed unilaterally—but placing the entire decision-making process in the hands of an as yet untried board would be an extremely great risk. It is not how we envisage the relationship between the Secretary of State and the approvals board. The measure is about not the Secretary of State dictating on individual cases, but setting general rules and guidance if necessary.

Graham Stringer (Labour, Manchester, Blackley)

I am listening carefully to my right hon. Friend. Would she care to expand on that so that I understand better precisely what she means by “consistency of approach”? Does that refer to the administration and procedures in a tribunal or to the issues before it?

Rosie Winterton (Labour, Doncaster Central)

Issues of the type that will be covered are set out in proposed new section 126B(2), which mentions

“provision about applications for approval to such a board...provision for an acknowledgement of the receipt of any such application to be issued by such person, and within such time as may be prescribed in the rules...the procedure to be followed in notifying persons consulted under section 125(3) that an application for approval has been received”

and

“provision as to the time within which any such person may make representations to the board about the application”.

In a sense, it is about the administration of the applications, but we feel that it is important to address some issues that were raised on the timing of the approvals boards and how long they might go on. It is important for the Secretary of State to be able to issue guidance and regulations, rather than leaving it to the board, as I explained.

Rosie Winterton (Labour, Doncaster Central)

I was about to finish, but I will let the right hon. Member for East Yorkshire intervene.

Greg Knight (Conservative, East Yorkshire)

I am grateful. Can the Minister envisage circumstances in which the appeals board might want to award costs? Might that be one of the powers given it? I can only see the power being used in exceptional cases, but would she give the board that power?

Rosie Winterton (Labour, Doncaster Central)

I do not think that would be an appropriate mechanism for the approvals board. The idea of the approvals board is to have the ability to go through the processes I stated. It would not seem appropriate in that situation for there to be cost implications. That would occur in more of a legal situation.

Stephen Hammond (Conservative, Wimbledon)

I appreciate that the Minister wants a consistent approach and I accept that she wants to set the parameters in which procedure may be followed. It could have been done by self-regulation, but I understand the consistency of approach argument.

Although the Minister has broadly addressed my concerns in amendments Nos. 65 and 66, what worries me is what she said on amendment No. 70, which we are also discussing. If one reads the Bill, the current wording—

“concerning the carrying out by a board of its functions under this Part in relation to quality contracts schemes”—

implies that it would allow the Secretary of State to interfere in individual cases. That is what the wording currently implies. The Minister said that she would do something more on the procedures through the guidance, but I look to her to write into the guidance that there is no way that the Secretary of State can interfere in individual cases. I will be looking for that in the guidance, and ensuring that it is there.

I leave the Minister with that thought—if the provision is not in the guidance, I will seek to bring it back on Report. However, I beg to ask leave to withdraw the amendment.

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 157, in clause 23, page 21, line 11, leave out ‘approval’ and insert ‘consideration’.

David Taylor (Labour, North West Leicestershire)

With this it will be convenient to discuss the following: amendment No. 158, in clause 23, page 21, line 16, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 159, in clause 23, page 21, line 22, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 160, in clause 23, page 21, line 24, leave out ‘reach its decision’ and insert ‘publish its recommendations’.

Amendment No. 161, in clause 23, page 21, line 25, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 162, in clause 23, page 21, line 26, leave out ‘reach its decision’ and insert ‘publish its recommendations’.

Amendment No. 163, in clause 23, page 21, line 27, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 164, in clause 23, page 21, line 29, leave out ‘reached its decision’ and insert ‘published its recommendations’.

Amendment No. 165, in clause 23, page 21, line 31, leave out ‘reach its decision’ and insert ‘publish its recommendations’.

Amendment No. 166, in clause 23, page 21, line 33, leave out ‘reach its decision’ and insert ‘publish its recommendations’.

Amendment No. 167, in clause 23, page 21, line 40, leave out ‘approval’ and insert ‘consideration’.

Amendment No. 168, in clause 23, page 22, leave out lines 1 and 2 and insert

‘“application for consideration” means an application under section 125A for consideration of a quality contracts scheme;’.

Amendment No. 170, in clause 25, page 23, line 26, leave out ‘applications for approval’ and insert ‘quality contract scheme’.

Amendment No. 171, in clause 25, page 23, line 30, leave out from second ‘the’ to end of line 31 and insert ‘authority proposing to make the scheme’.

Amendment No. 173, in clause 25, page 24, line 14, leave out ‘, or to the approvals board for England,’.

Amendment No. 174, in clause 25, page 24, line 20, leave out paragraph (b).

Amendment No. 175, in clause 25, page 24, line 26, leave out paragraph (e).

Amendment No. 176, in clause 25, page 24, line 36, leave out subsection (4).

Amendment No. 177, in clause 25, page 24, line 41, leave out paragraph ‘or (e)’.

Amendment No. 178, in clause 26, page 25, line 1, leave out subsection (2) and insert—

‘(2) For subsection (1) substitute—

“(1) Once the appropriate national authority considers the scheme, the authority or authorities who proposed it may make it, with or without modifications, at any time not later than 6 months after the date on which the recommendations of the approvals board are published.”’.

Amendment No. 179, in clause 26, page 25, line 11, leave out ‘approvals board for England’ and insert ‘authority proposing to make the scheme’.

Amendment No. 180, in clause 30, page 28, line 28, leave out ‘approval’ and insert ‘consulting’.

Amendment No. 181, in clause 30, page 28, line 29, leave out ‘section 126’ and insert ‘section 125A’.

Amendment No. 182, in clause 30, page 28, line 32, leave out ‘approval’ and insert ‘consulting’.

Amendment No. 183, in clause 31, page 28, leave out line 45 and insert ‘Section 125A (consideration of proposed scheme)’.

Amendment No. 184, in clause 32, page 31, line 20, leave out ‘approval’ and insert ‘consulting’.

Amendment No. 185, in clause 33, page 31, line 31, leave out from second ‘the’ to ‘applied’ in line 33, and insert

‘authority proposing the continuation of the scheme’.

Amendment No. 186, in clause 34, page 32, line 13, leave out paragraph (a) and insert—

‘(a)

‘(a) for paragraph (a) substitute—

“(a) requires the consideration of the scheme by the consulting authority which published recommendations on the scheme in accordance with section 125A, and”.’.

Amendment No. 187, in clause 35, page 33, line 19, leave out paragraph (c).

Amendment No. 188, in clause 36, page 33, line 24, at end insert—

‘(2A) In subsection (1)(b) for “approval” substitute “consideration”’.

Amendment No. 189, in clause 36, page 33, line 27, at end insert—

‘(aa) in paragraph (e) for “approval” substitute “consideration”’.

New clause 5—Approval of proposed scheme—

‘(1) The Transport Act 2000 is amended as follows.

(2) Omit section 126 (approval of proposed scheme).

(3) After section 125 insert—

(4)

“125A Consideration of proposed scheme

(1) If, having complied with section 125, the authority or authorities wish to proceed with the proposed scheme, they must apply to the appropriate consulting authority for its consideration.

(2) In this Part “the appropriate consulting authority” means—

(a) where the area to which the scheme relates is in England, an approvals board for England; and

(b) where the area to which the scheme relates is in Wales, the Welsh Ministers.

(3) The application must include—

(a) the authority’s or the authorities’ reasons for wishing to make the scheme; and

(b) such other information as the appropriate consulting authority may reasonably require.

(4) The appropriate consulting authority shall give its opinion on the proposed scheme within 28 days of the later of—

(a) the application for its opinion; and

(b) the receipt of any further information requested under subsection (3)(b).

(5) The appropriate consulting authority may recommend modifications to the proposed scheme.

(6) Following receipt of the appropriate consulting authority’s opinion, the authority or authorities must take that opinion into account and may then proceed to—

(a) make the proposed scheme;

(b) discontinue the proposed scheme; or

(c) make the proposed scheme with modifications.

(7) If the authority or authorities propose to make the scheme with modifications, they must first consult such of the persons they consulted under section 125(3) as would in their opinion be affected by those modifications.”’.

Norman Baker (Liberal Democrat, Lewes)

The debate is mainly about new clause 5, with the other amendments largely being consequential upon it, as are amendment No. 194, to which I referred on our debate on clause 19, and amendment No. 172 on clause 25, which only makes sense if read in conjunction with this string—otherwise it looks as though I am disempowering local authorities. It makes sense with this group of amendments. I give notice that, when we come to clause 25, I will not move amendment No. 172, because I am dealing with it here as part of this string—in my own mind at least. I also give notice that I would like to have a vote on new clause 5 in due course, which I assume will be at the end of the Bill.

I will briefly rehearse the reasons for tabling the amendments and new clause, before going on to what new clause 5 will do. The Minister and the Committee will know my concerns about the accountability of the traffic commissioners and the role that they have been given in the Bill. We still do not know how they are to be properly appointed or who they are to be—the guidance has not yet been produced. There is a question in my mind as to whether a body with that level of accountability should single-handedly make decisions about whether quality contracts schemes should go ahead. On balance, we need to try to enhance local democracy and accountability, rather than stymie it, as I fear the present Bill does. The Minister and I want to reach the same destination, but I am concerned that the system she is adopting is less democratic and, as I shall explain, too onerous to achieve the ends she wants.

My second issue of concern is that the approvals board is being asked to undertake functions for which it is not properly qualified. I mentioned in earlier amendments, last week, that I am not convinced that the traffic commissioners have sufficient experience of the day-to-day bus matters that passengers expect—whether buses are overladen and so on—which is their traditional role. The hon. Member for Manchester, Blackley raised an important point about double-hattedness in an intervention earlier.

I expressed concerns about what relevant experience might be applicable in the two experts whom the Minister wishes to put on the approvals board. I ask her to envisage, as we always should, what a hostile Minister could do with his or her powers if such a person came into office and could manipulate the system. The system that the Minister is creating will leave local elected bodies open to an unwelcome pincer movement from centralisation by the Secretary of State on one hand and an unsympathetic approvals board on the other. I do not think that is her intention, but the Bill in its present form creates that possibility.

There is also a related issue of whether it is appropriate in any circumstances for the approvals board to thwart what might be the democratic views of the elected ETA, ITA or whatever it will be called. We have discussed that, so I shall not rehearse the argument, but a parallel arose in my mind with the situation when the Governor-General of Australia sacked the elected Australian Prime Minister in the 1970s.

Rosie Winterton (Labour, Doncaster Central)

Is that a parallel?

Norman Baker (Liberal Democrat, Lewes)

It is, because there was an elected body that answered to the public at large and was mostly in line with the public, as a local council or an ITA would be, and an unelected person who nevertheless had authority over that body and exercised theoretical powers that were entirely inappropriate. That is the parallel.

The Minister has constructed a rather Heath Robinson approach of hurdles and safeguards, for reasons that we know very well—to provide legal protection to local councils, ensure that they can carry through their intentions in terms of quality contracts and minimise the risk of successful legal action. However, her proposals are flawed in this respect: bus companies that are threatened with a significant loss of revenue but have plenty of money to use at present will not hesitate to use every possible avenue to protect their position. It does not matter how many safeguards the Minister includes; they will still take that approach if they can.

Furthermore, for the bus companies it need not be a matter of winning but of holding up progress, using every legal opportunity to thwart the introduction of quality contracts and making more money in the period before the quality contract is finally approved by judicial review or other process. I appreciate the Minister’s intention of limiting that period, as she mentioned, but nevertheless I think that will be the intention of some bus companies—not all by any means, but one or two. Whatever she does, she will not achieve the end that she seeks.

Conversely, new clause 5 would not weaken the position. It would maintain the best of what the Minister is proposing in the legislation while enhancing local democracy, which many people in this room want to enhance through the introduction of better arrangements, particularly for quality contracts. The ITA will pass on to the approvals board its deliberations, which the approvals board will then have the right to thwart if it chooses. I appreciate that it might not do so, of course; it might act within the narrow confines that the Minister seeks to set. It might be entirely harmonious with the ITA, but nevertheless it can thwart the ITA if it chooses. It can interpret the public interest in a way that the elected representatives for that area do not. It may have a different view of the public interest, and it is therefore a challenge to the democratic local body. It might not take account of issues that are not written in, such as the environment and so on.

I suggest that the approvals board should be set up and that the expertise that the Minister wants to pull in should be enjoined and used productively. She spoke of the approvals board engaging in discussions with the ITA—that is right; it should be a harmonious exchange of views—but under her proposals, if a local authority proposes a scheme that the approvals board rejects either wholly or in part, the ITA might feel that it must exercise its powers of appeal and move to the next stage. That is written into the Bill in clause 22, I believe.

Under my suggestion, the approvals board would be an important statutory consultee. It would deliberate on the same basis as the Minister seeks to do, and would return its thoughts to the ITA, which would have the final decision. The parallel that I made on Second Reading, which the hon. Member for Sheffield, Attercliffe made again today, is with the Environment Agency. The Environment Agency is an important statutory consultee on planning matters. It makes recommendations to planning authorities and regional flood committees. They do not have to adhere to the recommendations; they almost always do, but if members of those authorities identify an overriding public interest issue, which they feel that as elected people they must pursue, because that is what they were elected on or for whatever reason, they have the right to override the Environment Agency—perhaps not in total, but in a particular respect that they regard as important. That option of overriding in one particular respect is not available under the Minister’s scheme; her option is an appeal to the Transport Tribunal.

Any ITA seeking to exercise the power would have to think very carefully indeed. It would have to think about the legal risk arising from not adhering to the approvals board, and the financial consequences that might flow from that. It would have to consider whether the Transport Tribunal, which would still exist under the proposed system, will take the view that the ITA has been irresponsible in not following the approvals board advice. It would have to take into account whether there would be a problem further down the line if the matter went to the courts. As an elected local body, however, it would still have the right to say that its judgment was different to the approvals board, which had in this case got it wrong. Its members could say, “We must have the right as elected local people to take the decision, whatever the risks.” They would bear the risks if they got it wrong, but it is better that they get it right, than that they do not and can be effectively controlled, if it comes to it, by the decision of the approvals board. That is the suggestion that I am putting to the Minister.

The amendment would retain the expertise that the Minister wants for the approvals board. It would make the approvals board important in terms of the advice it gives to ITAs or councils when undertaking quality contracts; it would retain the Transport Tribunal option, which is the independent appeals process that the Minister rightly said has to exist; and it ultimately would retain the High Court and judicial review process, should somebody wish to go down that road. It would also remove one of the hurdles that I fear will make quality contracts unattractive to local authorities, which neither the Minister nor I want. It would legitimise the process by having the decision taken at a democratic level by an elected body, rather than by an unelected approvals board. With all due modesty, I suggest that my proposal is the best of both worlds and I hope that she will give it serious consideration.

The Minister recognises that there are rules for local authorities, for example on road charging, which we shall no doubt come to later in the Bill. The onus on local authorities with regard to road charging is rather less than what they can do with quality contracts. They have more freedom to act on road charging, and it might be argued that it is rather odd to tie them down on quality contracts, while allowing flexibility on road charging. Personally, I would allow flexibility on both. That is a particular view, but there is inconsistency on that issue in the Bill.

The Minister said earlier that the approvals board will be able to make modifications and she used that as a justification for her scheme. Under my proposal, the ability of the approvals board to make modifications would be enhanced because it would report back to the elected body, which might say that its suggestion was sensible and would take it on board right away. As the Bill stands, the approvals board may feel reluctant to impose its will on local authorities because it is not elected. If it could refer back to the ITA or the local authority with one or two suggestions, it might feel easier about making modifications and improvements to the scheme, and the ITA might feel easier about accepting them.

I hope that I have made the case for my alternative suggestions. I am not being difficult, but the Minister will recognise that keen voices on the Labour Benches are questioning this part of the Bill and the approvals procedure. I am keen to find a solution that maintains the integrity of what she wants, but provides extra democratic legitimacy, and, with respect, new clause 5 would achieve both those ends. I hope that she will consider it sympathetically, if not today, on Report when she could, if she does not want my new clause, introduce a similar provision.

The rest of the debate is in Hansard.