17 March 2011

S3M-8177 Bus Services Regulation

The Presiding Officer (Alex Fergusson): 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.

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Stewart Stevenson (Banff and Buchan) (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 appear to be on the SNP benches.

Mr Gordon is clearly destined for great things in the Labour Party. He is almost unique as a front-bench spokesperson, as he is the only one who has not been kicked in a tender part of his anatomy by a forced U-turn in policy.

Of course, questions arise over the issue of re-regulating the bus industry. Sarah Boyack was the transport minister when the previous legislation went through, but she is absent today so we cannot ask her about the decisions made and about why some of the constraints are what they are. However, let us explore them. Statutory bus partnerships are likely to be at the very edge of what is legally possible under the Scotland Act 1998. The renationalisation of the bus network, via the imposition of regulation, is unlikely to come within the legal powers of this Parliament.

The Labour Party has a track record on such issues. It wishes to reduce the VAT on fuel from 20 to 17.5 per cent—entirely and blissfully unaware of European law that means that only three VAT rates may be operated within a state. The three VAT rates that already exist are 0, 5 and 20 per cent. It is simply not legal to reduce a single element of the 20 per cent VAT to 17.5 per cent. There is not the legal power to do it. However, there is the legal power to overturn the fuel duty increases that are hitting the bus industry—increases that were introduced by Labour. But of course, Labour has not joined the consensus that wants to do something about that. The Labour Party should do its research properly. It has manifestly and demonstrably failed to do that.

Let us consider the position of the bus companies. We have some regulated bus services in the United Kingdom, most notably those that are operated by Transport for London. Let me pose a question that has a rather awkward answer. We are talking about a convenient policy hitting an inconvenient fact. In a regime in which there is regulation, are the returns for bus companies higher or lower than in an unregulated regime? Curiously enough, they are higher. The bus companies would probably be quite happy with such a policy.

Furthermore, because it would in effect remove a private right from commercial interests, we would have to pay the bus companies for loss of right to operate services. What figure should be put on that? The normal rule of thumb in such circumstances is one year’s turnover. To renationalise bus services in Scotland would cost—admittedly only once—£750 million. Even for the Labour Party, that is a breathtaking financial commitment, of which it has said nothing in the debate thus far. If the Transport for London model is anything to go by, Labour would find itself paying more for bus services. I am sure that Brian Souter would be giving his money to the Labour Party if it were to implement such a policy.

Let us consider the amendments. I say in all candour that they all have some merit. Alison McInnes conceded that the abolition of the bus route development scheme has perhaps not yet happened. It is a matter for local authorities, which makes that issue a problem.

In the current environment, local bus services’ mileage has gone up by 3.8 per cent, in part because the BSOG has been increased. The BSOG has also been environmentalised. In addition, the average fare has dropped by 2.5 per cent. “If you want to get on Labour’s bus, we’re going your way”—I do not think so, any time soon.

If we nationalise bus services, we can forget local decision making. Someone will be sitting in Edinburgh, deciding which local bus services we want. That is how it will work. At the moment, the decision making is close to the point of application.

There is support for bus services. I have used them hundreds of times. I highlight the 308 from Aberchirder to Inverurie. On the most recent occasion I used the service, on the whole route I was the only passenger. I admit that it was a Sunday afternoon. Services such as the 308 are essential services that are surviving with the support of the council in Aberdeenshire—a Liberal-led council—and of course through the Government’s support for the BSOG. Yes, there is a challenge to do more in buses, but the Labour Party should not deceive the people of Scotland by imagining that what it is saying today is anything other than a £750 million commitment, no defined outcomes, 100 per cent focus on process and nothing for passengers.


Stewart Stevenson
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