Labour Party Conference - Phil White, Chief Executive of National Express Group

As spoken on 27th September 2004"A number of people have asked me ’Phil, what on earth are you doing in Brighton today speaking at a Fringe Meeting on bus regulation, alone, alongside the likes of Graham Stringer, Roger Jones and Graham Stevenson’ You must be crazy, you simply can’t win.Well, the reason is quite clear. I’ve been in the bus industry for 30 years - both on the PTE side for 10 very happy years and latterly as an operator. I’m here because I CARE. I care about my customers, my people and my business and, I have a passion for National Express and our bus services.I know that today I’m probably pretty well alone in my views on bus regulation. Also, I’m going to tell you something you don’t want to hear...And what is this?Well the fact is our passengers choose whether to travel by bus or not to travel by bus for a multitude of reasons - but none of them have anything at all to do with regulation or controlled competition. It’s all about Quality and Reliability.Let’s just take a look at London - a highly regulated market and a great success story - passenger growth of over 30% - they should be congratulated for it.But what’s created this success?Talk to Peter Hendy of Transport for London and see what he says. It’s all down to courage, cash and choice - not regulation or controlled competition.Firstly, London had the courage to introduce congestion charging and spend £50m each year on bus priorities to make bus services more reliable.Secondly, London has the commitment to invest cash in supporting buses - nearly half a billion pound a year in London now, compared to nothing, absolutely nothing, in 1998.And thirdly, people in London don’t have the same degree of travel choice - people simply don’t have the choice of driving - congestion charge, parking restrictions or simply the period of time it takes to get around - driving is simply not an option.In Birmingham and the West Midlands, where we at National Express Group provide the majority of bus services through our Travel West Midlands company - it’s a fully deregulated market. So what can I tell you about it?* Firstly, it’s the largest single run integrated bus network in the UK* Buses run 18 hours a day, 7 days a week* It’s the most heavily used bus system outside London carrying 1 million passengers every working day * 9 out of 10 people live within 250 metres of a bus service* 70% of services run at less than 10 minute intervals* The average fare is less than 60p per journey* And 98% of our bus services run without subsidyYes, there is a very generous concessionary fares scheme but that doesn’t benefit us. Concessionary fares are a subsidy to the passenger not the operator. Compensation payments are calculated on the basis that operators are no better off. They have no effect on our bottom line.Today we run each year the same level of miles - 70 million miles - as we did in 1985 before deregulation. The subsidy cost of the network in 1985 was £23m per annum... equivalent to about £40m today. This year the level of bus subsidy will be only £6m (£6m compared to £40m 20 years ago) for the same level of service.And yes, we make a profit, but profit is not a dirty word - it funds change and it funds investment and it provides good jobs and benefits our 5,000 employees in the West Midlands. It’s not how much you make, it’s how you make it and what you do with it - that’s investment - for example in the West Midlands today nearly �� of our fleet are new low-floor, easy access vehicles. Our employee relations record in the West Midlands is probably one of the best in the country. The harmony and stability of our partnership with our people is reflected in our current unique 5 year pay agreement with the T & G - Graham Stevenson’s trade union.This is the model where everyone wins - the deregulated integrated network.Passengers win - a quality service at value for money - at no cost to the Government - with solid returns for the operator to re-invest in fleet and infrastructure enhancements as well as employee conditions.We believe that we run a good quality bus service but there is still lots to do - cleaner buses would be nice! But there are two things missing from our model which they have in London.The first is growth in patronage, and the second is the courage of local authorities to introduce bus priorities.Despite all our investment in new buses and value for money fares, we have difficulties in attracting new customers. We cannot get growth. Why - because, unlike London, as I’ve just said, there is no courage to implement congestion busting schemes. And if you think a regulated environment always brings patronage - think pre deregulation when patronage levels weren’t impressive. The West Midlands is one of the poorest metropolitan areas in the country in terms of bus priorities. Only 5% of our main road network contain them.No courage, no investment, no bus priorities, no progress - no growth. It’s as simple as that -whether regulated, deregulated - controlled or uncontrolled.But today we’re not here to look back - we’re here to look forward.Not to enter into intellectual and academic arguments about the market - not to bicker and waste time talking about regulation, but to look forward. We must plan on getting a much better product for our customers and get growth back into buses.Operators need local authorities and local authorities need operators. This is not a game. Last week even the Prime Minister charged us with reducing car use in the country to reduce pollution. But none of us are perfect - neither the operators, LAs or PTEs. But let’s work together - work in partnership - with each other not against each other - to deliver the quality of service our passengers really deserve."

Published 4th October 2004