Chamber
Meeting of the Parliament 17 March 2011
17 Mar 2011 · S3 · Meeting of the Parliament
Item of business
Bus Services Regulation
Our previous full-scale debate on local bus services was way back on 12 June 2008. That is not to say that Labour has not campaigned relentlessly before and since for various improvements for bus users. Throughout this parliamentary session, we have fought for free bus travel for people who are on the lower rate of disability living allowance. We have fought for demand-responsive transport operators, such as community transport groups, to be admitted to the free bus travel scheme. Our campaign to force the Scottish Government to emulate the previous United Kingdom Labour Government’s pioneering success with a green bus fund was a triumph.
On two of the aforementioned issues, and on the wider regulatory issues, I consulted on a member’s bill to regulate Scotland’s bus services. Of the 95 consultation responses that were published in late 2009, only four were opposed in principle, but my subsequent bill proposal fell because of a lack of cross-party support.
Historically, Labour has led the Parliament on responses to the concerns of bus users. Indeed, Sarah Boyack’s Transport (Scotland) Act 2001 provides for statutory quality partnerships on individual bus routes and for statutory quality contracts, which is to say, franchise packages of routes that, for the first time since the deregulation of 1986, legally provide for the possibility of cross-subsidisation of socially necessary but unprofitable local bus services from the profits of more lucrative routes. However, no statutory quality partnerships or statutory quality contracts have been signed since 2001. It would appear that, for Scotland’s bus operators, partnership with the public sector has its limits.
It is not that bus operators mind accepting public money. The minister’s amendment reminds us of the figures. Approximately £255 million goes from the Scottish Government to bus operators for various purposes. That is not to mention the tens of millions of pounds more from local authorities for subsidised bus services and for school transport. The Scottish Government’s own figures point to a gross level of public financial support for Scotland’s bus industry that is not all that dissimilar to the level of public financial support for Scotland’s rail industry, but rail is, rightly in my view, heavily regulated. Why should local buses not be regulated as well? The Tory amendment says that it is because market forces are working well for local bus passengers. However, since 1986, many parts of Scotland, such as the Borders and the Highlands and islands, have had no commercial local bus services to speak of. The few local bus services that exist in rural Scotland are usually subsidised by the council.
So where in Scotland’s bus landscape are market forces operating classically? After a five-month study of UK local bus markets outside London and Northern Ireland from August 2009 to January 2010, the Office of Fair Trading referred the industry for a full-scale market investigation by the Competition Commission. Among other things in its published reasons for the referral, the OFT said:
“We found that markets tend to concentration (monopoly or near-monopoly) at the route, local and regional level.
We found that there were a number of barriers to entry to local markets that make it difficult for new operators to get into these concentrated areas.”
“We also found that operators with a strong market position charge nine per cent more than operators who are challenged by a large well resourced rival.”
The Competition Commission will report by the end of this calendar year on its investigation. Many Scottish stakeholders were quick to make representations to the commission on those issues, and I make no apology for quoting their submissions extensively to help build up a picture of the bus market in Scotland today.
In its submission to the commission, Strathclyde partnership for transport complained that prices of its intermodal ticket, the ZoneCard, were being forced up by bus operators
“in comparison with operators own multi-journey tickets and this encourages own-brand loyalty”.
SPT also said that it was
“aware of recent examples of tendered services being lost by the incumbent who then commercially registers the service for some of the journeys included in the tendered service ... thereby frustrating the company winning the bid.”
In its submission, West Lothian Council said:
“commercial bus services are constantly changing as operators seek to improve their financial and operational performance. As well as creating constant changes to services for users this is affecting our resources, especially when commercial services are withdrawn and require contract service replacement.”
Fife Council said:
“We believe geographic segregation is a significant issue in Fife. It is disappointing that competition isn’t materialising, especially as we are surrounded by many potential operators.”
It went on to say:
“Fife Council is concerned at the increasing costs of providing tendered services.”
The well-known and well-respected Scottish Association for Public Transport, the president of which is a Scottish National Party MSP, said:
“Despite having duties to improve air quality and amenity, local authorities have limited powers over bus services ... subsidy supports competing services on many routes, but does nothing to encourage integration, good connections and smart multi-modal ticketing.”
The woman with daily involvement in what limited regulation exists of Scotland’s local bus services, the traffic commissioner for Scotland, Joan Aitken, said:
“Scotland is similar to the rest of the UK in that the major cities have a near monopoly bus provider with the immediate surrounding hinterland having a near monopoly bus provider—a city and county pattern.”
On two of the aforementioned issues, and on the wider regulatory issues, I consulted on a member’s bill to regulate Scotland’s bus services. Of the 95 consultation responses that were published in late 2009, only four were opposed in principle, but my subsequent bill proposal fell because of a lack of cross-party support.
Historically, Labour has led the Parliament on responses to the concerns of bus users. Indeed, Sarah Boyack’s Transport (Scotland) Act 2001 provides for statutory quality partnerships on individual bus routes and for statutory quality contracts, which is to say, franchise packages of routes that, for the first time since the deregulation of 1986, legally provide for the possibility of cross-subsidisation of socially necessary but unprofitable local bus services from the profits of more lucrative routes. However, no statutory quality partnerships or statutory quality contracts have been signed since 2001. It would appear that, for Scotland’s bus operators, partnership with the public sector has its limits.
It is not that bus operators mind accepting public money. The minister’s amendment reminds us of the figures. Approximately £255 million goes from the Scottish Government to bus operators for various purposes. That is not to mention the tens of millions of pounds more from local authorities for subsidised bus services and for school transport. The Scottish Government’s own figures point to a gross level of public financial support for Scotland’s bus industry that is not all that dissimilar to the level of public financial support for Scotland’s rail industry, but rail is, rightly in my view, heavily regulated. Why should local buses not be regulated as well? The Tory amendment says that it is because market forces are working well for local bus passengers. However, since 1986, many parts of Scotland, such as the Borders and the Highlands and islands, have had no commercial local bus services to speak of. The few local bus services that exist in rural Scotland are usually subsidised by the council.
So where in Scotland’s bus landscape are market forces operating classically? After a five-month study of UK local bus markets outside London and Northern Ireland from August 2009 to January 2010, the Office of Fair Trading referred the industry for a full-scale market investigation by the Competition Commission. Among other things in its published reasons for the referral, the OFT said:
“We found that markets tend to concentration (monopoly or near-monopoly) at the route, local and regional level.
We found that there were a number of barriers to entry to local markets that make it difficult for new operators to get into these concentrated areas.”
“We also found that operators with a strong market position charge nine per cent more than operators who are challenged by a large well resourced rival.”
The Competition Commission will report by the end of this calendar year on its investigation. Many Scottish stakeholders were quick to make representations to the commission on those issues, and I make no apology for quoting their submissions extensively to help build up a picture of the bus market in Scotland today.
In its submission to the commission, Strathclyde partnership for transport complained that prices of its intermodal ticket, the ZoneCard, were being forced up by bus operators
“in comparison with operators own multi-journey tickets and this encourages own-brand loyalty”.
SPT also said that it was
“aware of recent examples of tendered services being lost by the incumbent who then commercially registers the service for some of the journeys included in the tendered service ... thereby frustrating the company winning the bid.”
In its submission, West Lothian Council said:
“commercial bus services are constantly changing as operators seek to improve their financial and operational performance. As well as creating constant changes to services for users this is affecting our resources, especially when commercial services are withdrawn and require contract service replacement.”
Fife Council said:
“We believe geographic segregation is a significant issue in Fife. It is disappointing that competition isn’t materialising, especially as we are surrounded by many potential operators.”
It went on to say:
“Fife Council is concerned at the increasing costs of providing tendered services.”
The well-known and well-respected Scottish Association for Public Transport, the president of which is a Scottish National Party MSP, said:
“Despite having duties to improve air quality and amenity, local authorities have limited powers over bus services ... subsidy supports competing services on many routes, but does nothing to encourage integration, good connections and smart multi-modal ticketing.”
The woman with daily involvement in what limited regulation exists of Scotland’s local bus services, the traffic commissioner for Scotland, Joan Aitken, said:
“Scotland is similar to the rest of the UK in that the major cities have a near monopoly bus provider with the immediate surrounding hinterland having a near monopoly bus provider—a city and county pattern.”
In the same item of business
The Presiding Officer (Alex Fergusson)
NPA
Good morning. The first item of business this morning is a Labour Party debate on motion S3M-8177, in the name of Charlie Gordon, on transport.09:15
Charlie Gordon (Glasgow Cathcart) (Lab)
Lab
Our previous full-scale debate on local bus services was way back on 12 June 2008. That is not to say that Labour has not campaigned relentlessly before and ...
Robert Brown (Glasgow) (LD)
LD
I am intrigued by Charlie Gordon’s direction of travel. He complains about market failure, but he seems to be suggesting that he is looking for market monopo...
Charlie Gordon
Lab
Not for the first time, Mr Brown is wrong. If he listens for a bit longer, he will learn.The traffic commissioner continued:“Thus, Edinburgh has Lothian Bus ...
The Minister for Transport and Infrastructure (Keith Brown)
SNP
Will the member take an intervention?
Charlie Gordon
Lab
I am sorry, but I do not have time: maybe later. I pressed Mr Swinney at that meeting by asking:“Are you now saying that the deal that was done”—that was the...
The Minister for Transport and Infrastructure (Keith Brown)
SNP
Today’s debate provides a timely opportunity to discuss the bus industry, assess its current status and consider what improvements can be made to ensure the ...
Karen Gillon (Clydesdale) (Lab)
Lab
What?
Keith Brown
SNP
It is on record.Earlier this year, we agreed changes to the reimbursement rate with the Confederation of Passenger Transport that make the scheme more sustai...
Jackson Carlaw (West of Scotland) (Con)
Con
I was intrigued when news filtered out that Labour was to set aside the whole of this morning’s debate—the last major debate of this parliamentary session—fo...
Patrick Harvie (Glasgow) (Green)
Green
Will the member give way?
Jackson Carlaw
Con
I do not think that I will, today.Scotland’s bus industry is an important private sector contributor to our gross domestic product at a time when there is ar...
Alison McInnes (North East Scotland) (LD)
LD
As Jackson Carlaw said, we have been here before. It is a bit like groundhog day.Charlie Gordon has revisited a proposal that he knows has no majority suppor...
Keith Brown
SNP
Does Alison McInnes acknowledge that the bus route development scheme was not abolished, but was given to local authorities and mainstreamed into their funding?
Alison McInnes
LD
It has been disaggregated to the point at which it is of little value to anyone. It is not enough to roll out new services and it has not been used in that w...
Karen Gillon (Clydesdale) (Lab)
Lab
I thank Jackson Carlaw for his comments, as I have seldom had so many compliments in one speech. However, for the record, I am more of a Cliff Richard girl t...
Stewart Stevenson (Banff and Buchan) (SNP)
SNP
Let me declare a personal interest in the debate: I am a bus card holder. I note that the only bus card holders who are likely to participate in the debate a...
Elaine Smith (Coatbridge and Chryston) (Lab)
Lab
The issue of transport, and in particular buses, is extremely important to people in my constituency and in similar communities throughout Scotland that rely...
Stewart Stevenson
SNP
Will Elaine Smith take an intervention?
Elaine Smith
Lab
No, thank you—Stewart Stevenson had the opportunity as a minister to put guards on the trains.In a transport debate, I cannot miss the opportunity to mention...
The Deputy Presiding Officer (Alasdair Morgan)
SNP
Order. I hope that Elaine Smith will return to buses, which seem to me to be the subject of the motion.
Elaine Smith
Lab
I certainly will, but we need to consider transport in the round to see how important buses are.The number of trains from Coatbridge to Edinburgh on the new ...
Rob Gibson (Highlands and Islands) (SNP)
SNP
For the avoidance of doubt, the question of bus regulation was not ever in the SNP manifesto.In the debate, we are trying to look forward to find ways to ens...
Robert Brown (Glasgow) (LD)
LD
I am grateful to Charlie Gordon for focusing on bus travel in the last party debate before the election. However, as I said in an intervention, there is a co...
Charlie Gordon
Lab
I cited the transport commissioner, who described most of the bus scene in Scotland as a monopoly and near-monopoly city and county arrangement. Does the mem...
Robert Brown
LD
No, I am trying to put the issue into context and to explain the deficiency at the heart of the member’s proposition.I will say a little more about Glasgow. ...
Keith Brown
SNP
Could Robert Brown explain how his party’s policy of doing away with concessionary travel support will help more women to use the buses?
Robert Brown
LD
Perhaps the minister should read the policy. We have certainly said that there is a need to consider whether people such as me are entitled—as Stewart Steven...
Des McNulty (Clydebank and Milngavie) (Lab)
Lab
A fortnight ago, we had a by-election in Clydebank—in the Duntocher, Faifley and Hardgate ward. The key issue in that by-election was buses, specifically the...
Christopher Harvie (Mid Scotland and Fife) (SNP)
SNP
I declare that I am president of the Scottish Association for Public Transport, which has provided a memo for members setting out a useful range of pragmatic...