PARLIAMENTARY DEBATE
Bus Services Bill [Lords] - 27 March 2017 (Commons/Commons Chamber)

Consideration of Bill, as amended in the Public Bill Committee
Brought up, and read the First time.

Although some local authorities still provide concessionary fares for young people, many do not. Local government is already under huge financial pressure—hence the cuts to supported bus routes and services that the Campaign for Better Transport has identified. Unfortunately, the number of local authorities able to provide a discretionary young person’s pass has dropped from 29 to just 16 since 2010. That is why we want the Government to publish a national strategy for buses, and to include proper consideration of a concessionary scheme for young people.
Ultimately, there is not a word about funding in the Bill as it stands, yet cuts to local authority budgets mean that thousands of routes and services have been withdrawn since 2010, and young person’s concessionary fare schemes have been cut, while large operators have experienced generous profit margins.

There will, of course, be a bare-knuckle fight. This is not just about having a rational look at how best to provide bus services. Because there has been no accountability, a small number of people who have set up what are more or less monopolies in our great conurbations have made a huge amount of money. The Souter family, the owners of Stagecoach, have become billionaires. I am not against people who make a profit, and I do not suggest that people who innovate should not be rewarded for that, but I am against people who game the system and are parasitic on public money while those whose responsibility it is to look after that public money do not say what should happen.
The new clause may well not be accepted today, but I think that in the fairly near future, when the Bill becomes an Act and the benefits of re-regulation are seen, we will move towards regulation throughout the country.

Brought up, and read the First time.
Question put, That the clause be read a Second time.
Brought up, and read the First time.

The cost of membership of CIRAS is in no way, shape or form prohibitive. It is relatively modest and based on a bus operating company’s turnover. A bus operating company with a turnover of less than £1 million would have an annual fee of only £300 to pay. For a very big operator with an annual turnover of, for instance, £200 million, the fee would still be only £25,000. The fees are low and modest, and they are unlikely to present a serious obstacle.
If the Government are not willing to consent to the new clause, I hope that Ministers will agree to make regulations or at least guidance in this area, or to consult all bus companies throughout the United Kingdom—not just those that participate in a franchise or quality partnership scheme—on signing up to CIRAS. The consultation should indicate Government support for signing up to CIRAS.
The amendments would ensure that employees working under local service contracts and not covered by TUPE protections could not be employed on terms and conditions less favourable than those provided by TUPE. There is a concern that in anticipation of changes in local provision, a bus service operator might curtail a route, rendering the drivers on the route redundant, and another operator might start up the same route only a week or 10 days later. As the Bill stands, those drivers would not have automatic TUPE protection, although I am sure that their representative unions would fight for it. Workers’ terms and conditions should be no worse for the duration of the franchise, and new employees must not be employed on terms worse than those of existing employees.
There are precedents for such agreements. For example, with Government support, the contracts for the public-private partnership for the tube protected workers’ conditions. More recently, the Scottish Government’s contracts for rail and ferries provided similar protections. For ferries, an additional protection was provided by stipulating that the successful bidder could not make savings by reducing staff jobs or conditions.
Not only would the amendments prevent a race to the bottom in conditions, but they would aid recruitment and retention within the industry and thus help to secure a high-quality, stable workforce, the lack of which blights many franchise areas. Since the introduction of privatised franchises, I have been on many buses where, frankly, the driver did not know the route and had to ask passengers which way to go. Legislating or regulating that out is not beyond the realms of possibility.
More importantly, the amendments would prevent a further worsening of the bus driver shortage, which has affected services. BusMark, the bus and coach benchmarking club of the professional logistics and transport body the Chartered Institute of Logistics and Transport, has published its findings from a survey about addressing the current driver shortage in the industry. Out of 15 reasons given for the problems with recruitment and retention, the three most cited, by some distance, were poor pay, poor conditions and industry image. If the Government are not willing to concede the amendments, I hope that Ministers will agree to consider making regulations or, at the very least, giving some guidance to the industry.
Amendment 10 would automatically make the dismissal of an employee for the sole or principal reason of introducing a franchising scheme an unfair dismissal, and amendments 12 and 13 would automatically make the dismissal of an employee for the sole or principal reason of the award of a contract under an enhanced partnership scheme an unfair dismissal. There is concern about the potential for a company that has lost a bid to run a franchise or that does not wish to participate in the franchising process simply to abandon its route, as has happened on numerous occasions. For a company to do so, it needs only to deregister the route by notifying the traffic commissioner. We want the Bill to protect workers and passengers from a company conducting itself in such a manner, and we are also concerned about workers slipping outside the protective net of TUPE.
If a company abandons a franchise, the passengers who rely on the bus service day in, day out will often be left without the means of getting to and from their place of work. Transport Ministers have criticised rail unions about disruption that has had an impact on the ability of people to get to and from their places of work, and they should equally be concerned about the scope for a bus franchise owner to abandon its franchise for business reasons. Given the particularly loose way in which the bus sector is currently arranged, there is an elevated risk of that occurring.
At the moment, the Bill provides TUPE protection only at the point of transfer, or earlier if agreement is reached with the successful bidder. These amendments mean that the termination of a worker’s employment for a reason connected with the introduction of a scheme or a transfer to a new scheme would automatically be considered unfair dismissal. Not only would the amendments protect bus workers jobs, but in doing so they would help to ensure the continuity of the service if the bus service operator sought to stop providing services or to reduce services because of the threat of a franchise or because it did not win the bid for a franchise.
The Manchester Evening News of 21 March showed that bus companies in Manchester are already cutting services in readiness for the Bill, no doubt as a show of strength in advance of negotiations on bus franchising. Indeed, we have been reliably informed that the whole timetable for the Bill is being driven by Manchester as part of the devolution deal. My right hon. Friend the Member for Leigh (Andy Burnham) mentioned that on Second Reading.
Again, if the Government are not willing to concede these amendments, we hope Ministers will agree to make regulations or, at the very least, to issue guidance to the industry.

Bus operators are required to give 56 days’ notice of their intention to vary or cancel a bus service. The Bill contains provisions to enable authorities to extend that notice period to a maximum of 112 days, to enable the authority to take steps to ensure that services continue to operate. That is an important point in relation to the amendments tabled by the hon. Member for Gateshead (Ian Mearns). Bus operators of all sizes will still be able to compete when a franchising system is implemented, if that is what is decided locally. Competition will take place off the road for contracts, rather than on the road at bus stops, but competition will still exist. Generally, only operators that choose not to compete or do so unsuccessfully will no longer be able to run services once a franchising model is implemented, and in any event they are free to register new services elsewhere.

Amendments 10 and 13 address potential dismissals. Again, I have some sympathy with the intention behind the first two proposed subsections, concerning redundancies of employees before or after the introduction of a local service contract, but the scenario that they seek to address is unlikely to occur. I very much doubt that any employer would choose to dismiss an employee and bear the redundancy costs if it were able to transfer them under TUPE instead. In any event, employment law already deals with the unfair dismissal of employees.
For similar reasons, I cannot accept amendments 7, 8, 11 and 12, which would broaden the Bill’s provision so that TUPE protections apply where a new operator begins providing local services sometime after the previous service ceased. The Bill already enhances employee protection by prescribing that TUPE and pension protections will apply in particular circumstances. We strike the right balance in that regard, and it would not be appropriate to broaden the provisions further. Indeed, one of the first things we established in preparing the Bill was for TUPE and pension protection in the event of franchising.
The hon. Member for Gateshead also proposes in new clause 4 to require bus operators to subscribe to a confidential reporting system in order to participate in any bus scheme provided under the Bill. The new clause would require operators to collect and monitor bus casualty data and make them available for publication. I assure the House that I take road safety very seriously. Although the number of pedestrians killed or seriously injured outside London in incidents involving a bus or coach is falling, we cannot be in any way complacent. There have been a number of debates on that matter, both in Committee and in the other place. Although I can agree with the objective of this new clause, it is not appropriate to mandate it in primary legislation.

Sitting suspended.
On resuming—