This has been a really enjoyable debate. One of the great benefits of winding up is that we are forced to sit and listen to absolutely everything. Most speeches I enjoyed, but there were one or two that I did not. It is up to hon. Members to work out whether I am talking about them.
The contributions to this debate have been enlightening, because they have exposed some clear differences of economic and political philosophy among the parties. The Liberal Democrats, one after another, argued for improved services, particularly rural services, but were less clear about how to fund them. On the Labour Benches, there was huge optimism and enthusiasm under the perhaps mistaken belief that the Bill, in itself, will improve passenger services for their constituents. The truth is that when we look at the terms of the Bill, it is clear that the focus of its reforms is not primarily on improving bus services for passengers—quite the contrary.
In the other place, Labour whipped its peers to vote against what is now clause 1, which makes the improvement of the performance, accessibility and quality of bus passenger services in Great Britain the purpose of the Bill. I send birthday wishes to the hon. Member for Dunstable and Leighton Buzzard (Alex Mayer) and make a plea on her behalf for her Whips not to be too harsh on her for her support of clause 1. Perhaps she was unaware that it was opposed by her own party in the other place.
Why do the Government not want to put performance improvement at the heart of the Bill? Because that is not the Bill’s primary intention. Labour’s true focus was set out in its background briefing to the King’s Speech. It is about
“accelerating the bus franchising process…building on the success of…public bus services still in operation.”
No mention there of passengers, performance, improvements or cost control; it is the structure of the bus providers that has excited the Government. They intend to increase the number of municipal bus companies, presumably because they think that civil servants are better equipped to run efficient bus companies than private sector operators. I can see that, in some examples, that is possible. I spoke to the managing director of the Warrington bus company last week and I was impressed by the performance figures, although they are very unusual.
However, the Government’s faith does not translate into confidence that the new municipal bus companies could win a competitive tender, as the Bill, perhaps inadvertently, allows local authorities to do away with competition. Extraordinarily, as currently drafted, it would allow any local authority to first create a new municipal bus company and then grant itself a franchise, without any competitive process. If that is deliberate, it really would be the triumph of socialist political ideology: that the state is somehow better.
Franchising is an alternative solution, potentially allowing greater co-ordination of transport provision, but it comes at a cost. It takes commercial risk away from the bus operators and puts it in the hands of local authorities. It requires dynamic contract, design and management skills. It is necessarily complex and, if done badly, risks the removal of the innovative power of the private sector, replacing it with state direction.
Let me say again what my hon. Friend the Member for Orpington (Gareth Bacon) made abundantly clear at the opening of this debate: we do not oppose bus franchising in principle. We support it, in fact, when it delivers value for money and, above all, when it improves services for passengers. But what we have seen from the Government today is a refusal to engage with the very real risks embedded in the Bill. The existing 2017 legislation has been referred to more than once during the debate. It recognises that mayoral combined authorities have the scale and resources needed to manage the development of franchise model. However, even here, political ineptitude and mayoral hubris can make a mess of things.
Andy Burnham’s Bee Network has been touted as the socialist example to follow—[Interruption.] I hear it from the Government Front Bench right now, but let us have a look at what has actually happened in Manchester. Buses that cost the private sector £180,000 cost Andy Burnham £220,000. Bus depots that cost the private sector less than £4 million cost Andy Burnham more than £12 million—in fact, nearly £13 million. Private sector bus companies train sufficient staff for their needs while Andy’s team, having failed to secure enough trained drivers, is in the absurd position of having to pay more than 400 agency staff to drive their buses at inflated hourly rates and with accommodation costs on top. The cost to the taxpayer is estimated at £17.4 million a year and rising.
Who is focusing on cost reductions in Manchester? Well, it is not the bus companies—it is not their job to reduce costs any more. In fact, the bigger the overall contract cost, the more profit they make. Require them to give above-inflation pay rises to unionised staff, as Andy Burnham has done? No problem. It goes on the bill, and they get a profit percentage on top. Require them to donate to charity, as Andy Burnham has done? No problem. Just add it to the bill, and get a profit percentage on top. Profits go up as the size of the contract increases. While Labour claims to have increased value for money because of the much-touted reduced profit percentage, the taxpayer is quietly fleeced. This is the doublespeak of Labour’s “value for money”.
What is the real cost of Labour’s return to “On the Buses”? Had Andy Burnham stuck to his own business plan, the Bee Network should have been profitable after the transition period, but because of his self-aggrandising hubris and statist ineptitude, the loss for this year alone is forecast to be £226 million and it is likely to rise further in the years ahead—that is £1 billion in under four years. And that is in a mayoral combined authority, although admittedly a Labour one.
Has this worked to increase traveller numbers? Between 2022 and 2024, Greater Manchester has experienced a 34.34% increase in ridership, according to Government figures, but let’s look at my county of Norfolk, which has a Conservative county council: its enhanced partnership has increased ridership over the same period by 43%. Let’s look at Essex—again, a Conservative-run council with an enhanced partnership, which has increased ridership by 52.3%. In the wider context, Greater Manchester has in fact underperformed.
Why does the Bill remove the crucial safeguards that ensured franchising was rolled out by authorities with at least a notional capacity to deliver? Why has Labour walked away from giving the Secretary of State the power to intervene if the worst happens and services fail? Why does the Bill not require a competitive tender process when local authorities decide to run their own bus companies? Labour appears content to let any council, regardless of size, experience, expertise or cash reserves, take on these huge financial and organisational risks. That is not empowering local government; that is setting it up to fail. And that is before we talk about money.
These franchising powers are meaningless without the money to implement them. As my hon. Friend the Member for Orpington made clear, just £243 million of the £1 billion promised by Labour is destined for actual bus services. That does not even satisfy Andy Burnham’s bus habit for a year. What about the rest of the country? Without billions—literally billions—of pounds to back up this Bill, it is just posturing. So where is the money? The answer is that there isn’t any. The Government have scrapped the Conservatives’ £2 bus fare, which was genuine financial support focused 100% on passengers, and now it is rumoured that even the £3 bus fare is due for the chop. Perhaps the Minister could confirm that. The Government tell us they have a plan for passengers, but it seems that their plan for passengers is to make them pay more.
The Bill needs to have the improvement of passenger services at its heart. It needs to encourage the innovation and efficiency of the private sector. It needs to consider vulnerable SEND children and their educational needs. It needs to recognise the huge financial risks of franchising and municipal bus ownership, and to provide appropriate oversight and support. Most importantly, it needs a Government who are prepared to think again in Committee and be open to improvements to the Bill.