Charlie Gordon (Glasgow Cathcart) (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 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.”

Robert Brown (Glasgow) (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 monopoly on a regulated basis. Am I wrong about that?

Charlie Gordon: 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 whereas the surrounding counties have Stagecoach; Dundee has Travel Dundee ... and the counties have Stagecoach; Aberdeen has First Aberdeen and the counties have Stagecoach. Glasgow is slightly different but the dominant provider is First Glasgow with Stagecoach dominant in Ayrshire and down to Dumfries and Galloway and Arriva having a dominant presence in Paisley though with competition from McGills.”

She went on to say:

“Where it becomes difficult is when an operator registers a service to run slightly in front of an established service and the suspicion is that it is to be predatory rather than simply offering a better service to the travelling public.”

The Scottish Government did not make written representations to the Competition Commission on these matters. It obtained a formal hearing with the commission on 1 July 2010, the note of which says:

“The Scottish Government had produced detailed guidance for local authorities ... The Scottish Government said that there had been a discrete bus action plan within the National Transport Strategy. Most of the 17 actions listed had been delivered. The Scottish Government’s role had been mainly to produce detailed guidance ... The Scottish Government said that planning for bus services had been devolved to local authorities, which had been given funding to address bus priorities and provide support for local services and route development.”

In fairness to the Scottish Government, that is not its last word on the matter. By that, I am not referring to Keith Brown’s amendment, wherein he says something that he wished that he had said in the fuel debate a fortnight ago but did not. I am talking about last September, when John Swinney stepped in. Mr Swinney told the Parliament’s Transport, Infrastructure and Climate Change Committee:
“Earlier this year the Minister for Transport ... and I negotiated with the bus companies a change to the reimbursement rate for the concessionary travel scheme. That gave us protection around access to the bus network and the availability of routes”.

He went on to say:

“As part of that discussion we reached an agreement on the level of the bus service operators grant”.

I pressed him—

The Minister for Transport and Infrastructure (Keith Brown): Will the member take an intervention?

Charlie Gordon: 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 deal with the bus service operators—

“will ensure that substantially the same commercial bus network will be in place for the next couple of years?”

John Swinney replied, “Yes”, and I said—and I say again:

“We will look at that in the light of what happens on the ground.”—[Official Report, Transport, Infrastructure and Climate Change Committee, 21 September 2010; c 3274.]

Even as John Swinney spoke, Stagecoach Fife was cutting services and blaming it on the deal that the cabinet secretary had done. Since then, there have been more cuts in local bus services. In my constituency, a housing estate that has many elderly residents and which is atop a long steep hill had its service cut. More than 500 residents signed protest letters and the bus company and SPT are reviewing the situation.

Something similar happened in Dunfermline recently, but a bunch of pensioners—some of whom are in the public gallery, I believe—started a buses for people campaign, which forced the offending bus company, Stagecoach, to think again. However, those pensioners had no help from the local SNP-controlled council; I am sure that we will hear similar stories throughout the debate.

Here is Labour’s message to Scotland’s bus users, former bus users and would-be bus users. If you want local bus services that are more responsive—buses for people, if you will—with reasonable fares, through-ticketing, co-ordination with other bus services and modes of transport, and vehicles that are cleaner, greener and more accessible, board Labour’s bus: we are going your way.

I move,

That the Parliament believes that market failure in the bus industry requires legislation to regulate bus services in the best interests of the travelling public.