Local Roads: Funding and Maintenance

Debate between Daniel Zeichner and Lilian Greenwood

Thursday 4th July 2019 Commons Chamber

[Lilian Greenwood]

I thank the hon. Gentleman for his question. It is certainly our intention that the Department identify where there is very good practice and share that widely, so that other local councils can take up that good practice. We hope that it will also hold to account, as will their constituents, the councils that are not currently doing a good job in keeping their roads and pavements in a decent state.

[Daniel Zeichner (Cambridge) (Lab)]

I echo the thanks to the Committee staff and to witnesses, and I also thank my hon. Friend for her skilful chairing of the Committee. Does she agree with me that the evidence we frequently heard was that the funding streams are complicated, coming from two different Departments—the Ministry of Housing, Communities and Local Government as well as the DFT—and that the confusion caused by the bidding culture means resources are not necessarily allocated to the best places, particularly when so much of local government has been hollowed out?

[Lilian Greenwood]

I thank my hon. Friend for his question and, indeed, for his contribution to our Committee, which is enormously valued. He is absolutely right to draw attention to the fact that it is not just the quantum of funding that matters; it is the way in which it is delivered. It is about having long-term certainty about the funding that is available, not wasting resources on bidding for pots of money that come at the wrong time. The bidding is in itself a cost to councils, some of which are better than others at doing it. That is why we have asked for a long-term settlement, and we have asked for a single stream of funding, rather than it coming in dribs and drabs, which simply is not the most effective way to spend taxpayers’ money.

Rail Infrastructure Investment

Debate between Daniel Zeichner and Lilian Greenwood

Thursday 17th January 2019 Westminster Hall

[Lilian Greenwood]

The hon. Gentleman is a very valued member of the Select Committee. While new traction, hydrogen and battery potentially have a place on our railway, it is clear that they are not sufficiently developed to be a proper replacement for electrification. There is some doubt about whether they will ever be a suitable replacement for electric trains, particularly on inter-city journeys operating at higher speeds. He is right to raise concerns about the time that might be taken for parts of the country to see improvements to their services, particularly if there is a continued aspiration to use bi-mode technology. While that can provide some benefits, it undoubtedly also has a significant impact on operating costs. When passengers are very concerned about their fares raising, building in long-term costs seems a wise approach.

While it is now clear that the electrification schemes that had been planned were undeliverable, the Railway Industry Association and others were convinced that, for now, electrification remained the optimal solution to train traction. The case for electrification is particularly strong on heavily used routes, balancing significant benefits to passengers with the wider environmental benefits and long-term cost efficiency. Our report called for electrification to be delivered through a long-term rolling programme in which the Department, Network Rail and the wider industry learn the lessons of earlier schemes and strive to reduce costs. Do not throw the baby out with the bath water.

A key driver of Government investment in the rail network is their commitment to reduce carbon emissions. In February 2018, the Government called on the industry to produce a vision for how it will decarbonise with an initial response due in September last year. The Government response to our report confirmed that an industry taskforce, led by Malcolm Brown, is taking this forward. Have the Government received this taskforce’s report on how to decarbonise the rail system? If so, what does it say and what are the Government doing with it? David Clarke, technical director of the Railway Industry Association, has said that to achieve the Government’s aim of decarbonising UK railways by 2040,

“electrification must be one of the prime options for intensively used routes”.

The Government accepted our recommendation that it should engage with RIA’s electrification cost challenge initiative. The Department committed to producing a report on cost-effective electrification by this summer, but has said that it will remain agnostic about the best means of securing rail enhancement and that it does not expect proposals for new enhancement to begin with a predefined solution such as electrification. I am afraid it is clear that the Government have no plans for the future electrification of the railways.

I ask the Minister to update us on the Government’s work to produce a report with the industry on cost-effective electrification. When we conducted our inquiry, we heard that there was considerable interest in third-party-funded electrification schemes on the midland main line. We recommended that those proposals should be fully considered as an alternative to the proposed bi-mode solution.

The Government accepted our recommendation and said that they would fully consider

“Any proposals made to government or Network Rail about private sector solutions on the Midland Mainline that could provide benefits in addition to the passenger benefits that are being secured by the Government.”

What discussions have the Government had with third parties about proposals for electrifying the midland main line, and how will the improvements for passengers of the enhancements that will be going ahead compare with the improvements that would be delivered by electrification?

Some hon. Members present represent areas of the north covered by the transpennine route. The upgrade of that route is expected to include some electrification, but those enhancements have been considerably reduced since the then Chancellor announced in 2016 that the Government were

“giving the green light to High Speed 3 between Manchester and Leeds”.—[Official Report, 16 March 2016; Vol. 607, c. 961.]

There are serious concerns that the upgrade will not be fit for purpose for freight trains, and that because only part of the line will be electrified, the route will need bi-mode trains, which will build in higher operating costs for years to come. Are the current proposals for the transpennine route upgrade in line with the advice from Transport for the North? If not, why not? I note the letter to the Secretary of State for Transport from the operator of Humber, Mersey and Tees ports on 7 January, which says:

“It is of increasing concern that the Department for Transport and Network Rail are undervaluing our industry in the North and undermining the economic goal and objectives of the Northern Powerhouse; it will only make the productivity gap between the North and South of England even greater and devalues further the role of Transport for the North.”

It is concerning when the industry feels that the transpennine route upgrade, as it is currently considered, will lead

“to an utter dependence upon the M62 for Transpennine freight traffic for at least another generation.”

We have talked about some of the problems experienced as a result of planned railway improvements in the past five years, which have triggered successive reviews of the planning and delivery of enhancements and led to a substantial change in the way future investment in the railways will be considered and delivered. The next five-year control period will focus on operations, maintenance and renewals, the volume of which will increase substantially, not least because of the number of renewals that have been postponed from the current control period.

Following those postponements, the greater focus on maintenance and renewals in control period 6, which starts in April, is necessary and welcome, but there are long-standing concerns in the industry that investment in renewals has been lumpy, stop-start and boom and bust. We have heard that the level of uncertainty about upcoming spending could have knock-on effects on the wider industry’s confidence to invest in its workforce, skills and innovation.

In our report, we called on the Government to work with Network Rail, the regulator and the industry to look at the ways in which investment could be smoothed out from the start of control period 6, throughout that period and beyond. The Government accepted that recommendation, so I ask the Minister, how has the Department worked with the industry to smooth out investment for the upcoming control period?

Instead of forming part of the five-year control periods for Network Rail investment, future enhancements of the rail network are now subject to a separate process. The new rail network enhancements pipeline is intended to support a continuous planning approach and move away from the overly rigid five-year cycle that was linked to railway control periods.

The Government have signalled that they expect more railway enhancements to be market-led proposals brought forward by third parties. We heard that there was likely to be interest from third parties in bringing forward such proposals, but it was not clear to us that Network Rail had the structures or culture in place to support such third parties to engage and participate in the planning, delivery, funding or financing of the railway.

[Daniel Zeichner (Cambridge) (Lab)]

I echo the earlier comments of my colleague on the Transport Committee, the hon. Member for Bexhill and Battle (Huw Merriman), about my hon. Friend’s skill in presenting her arguments and chairing the Committee. Does she share my concerns about the market-led proposals? In my part of the world, we have had some major proposals for east west rail, which has been promoted by the National Infrastructure Commission, but there is considerable confusion about whether that railway will be privately run, as the Secretary of State has suggested, or whether there is a plan B. I am not convinced that there is and I am interested in my hon. Friend’s views on that.

[Lilian Greenwood]

It is wonderful to see so many members of the Select Committee here. My hon. Friend raises an important point about what will happen if market-led proposals do not provide the opportunities that the Department hopes. I will touch on that in a moment.

In November, the Government said that they had received 30 responses to their call for ideas for market-led proposals to enhance the railway, but that they could not make an announcement about individual schemes because the proposals had been submitted in confidence. How have those market-led proposals progressed since November, and do the Government expect any of them to be delivered, including the one referred to by my hon. Friend the Member for Cambridge (Daniel Zeichner)?

There was significant support for moving enhancements planning away from the control period process, and we support the intention behind the rail network enhancements pipeline, which should ensure that the planning mistakes made over the past five years are not repeated. However, we also found a substantial risk that the rush to deliver poorly planned and scoped schemes in the current period could be replaced by a different problem—a slowdown or interregnum in new enhancement projects.

That is why we called on the Government to provide a clear set of strategic priorities for rail infrastructure investment in each region, and to outline the specific projects likely to be available for third-party investment. The Government refused to set priorities for each region, so I ask the Minister today to set out the Government’s priorities for rail enhancements over the next five years.

We were also concerned that the process outlined by the Government did not provide the reassurance and certainty on future investment that the rail industry is looking for. We said that more transparency about the enhancements pipeline and decision-making processes in the Department was needed. That is particularly true if the potential for a substantial increase in third-party investment is to be realised. The Government accepted that recommendation and said that they are

“committed to transparent policy making and intend to make clear public statements”

as investment decisions are taken at each stage of the pipeline. So far, however, we have seen no such statements.

The Railway Industry Association has said:

“The visibility of enhancements remains a major concern for rail suppliers. There is now a lack of an obvious enhancements pipeline, with no construction-ready schemes in the Rail Network Enhancements Pipeline…published in 2018.”

Last week, I asked the Department how many rail enhancement schemes were being considered as part of the rail network enhancements pipeline, and what stage each proposal was at. Again, the Minister told me that the Government

“are committed to transparent policy making”,

but failed to answer any points of my question. That means that, almost a year after it was set up, the Department has yet to reveal a single proposal being considered as part of the pipeline. We are none the wiser about what, if any, future enhancements the Department is considering, let alone planning.

In response to my question, the Minister also said:

“Network Rail…will continue to provide public updates on the progress of enhancements in the portfolio”,

but it is not clear at what stage of the pipeline proposals will enter the portfolio. Can the Minister confirm at what stage enhancements will be included in Network Rail’s enhancements delivery plan? It seems to me that it is only those that have reached the delivery section of the pipeline that will be exposed in that way, and we will not know what is in the development and design parts. Will there be any transparency of proposals before the decision to deliver them?

Although the Government have accepted a number of our recommendations, as I have outlined, their response to our report was disappointing in several regards. It seemed to show an unwillingness to engage with some of our key conclusions and recommendations.

The Association for Consultancy and Engineering agreed with our assessment of the Government’s response, telling us that the Government had

“failed to meaningfully engage with the expertise provided by industry, and the practical recommendations outlined in the report”.

It told us:

“As evidence givers, it was disheartening for ACE to see the DfT and the ORR”—

that is, the Office of Rail and Road—

“pay such little attention to the solutions proposed by the committee, including dismissing some of them outright.”

I have asked the Minister to respond today on some of the points where we felt that the Government’s response to our report was less than satisfactory. I hope that he will take the opportunity to expand on the Government’s response, for the benefit of both this House and those in the rail industry who were as frustrated as we were by the Government’s response.

To conclude, although our report welcomed much about the Government’s—

Airports National Policy Statement

Debate between Daniel Zeichner and Lilian Greenwood

Thursday 7th June 2018 Westminster Hall

[Lilian Greenwood]

The hon. Gentleman is requiring me to remember all the evidence we heard over many months from many voices. Air quality is undoubtedly one of the key challenges that the Government face in bringing forward these proposals. That is why it formed one of the most important areas in our report; we wanted to have some certainty that the UK could indeed meet its air quality targets at the same time as addressing the need for people to travel by air.

[Daniel Zeichner (Cambridge) (Lab)]

Will my hon. Friend give way on that point?

[Lilian Greenwood]

I will have to continue at some point, but yes.

[Daniel Zeichner]

The element of risk in this whole process is an important point. The Committee identified many risks. In the event of a delay or the project not going forward, would it not make sense for the Government to consider using alternative provision where there is capacity at other airports, such as Gatwick and Stansted? There is a real risk with this project and we cannot end up in a situation in which nothing happens.

[Lilian Greenwood]

My hon. Friend made a fantastic contribution to the work of the Committee in developing this report. He is right. There are two issues in relation to his point. First, the NPS is scheme-specific, so if for any reason it does not go ahead, that limits the Government’s options. Having said that, even if it does go ahead in the best possible scenario, it would not be open until 2026. That is why one of our recommendations —I will come to this later—is about the better use we make of all our regional airports and what needs to be put in place.

We welcome the overall tone of the Government’s response to our report, which was published on Tuesday. It is clear that they have, in principle, taken on board much of our report and clearly acknowledged what we were trying to achieve. The Committee still needs to do more detailed analysis of the Government’s response—we want to be sure that the substance matches the rhetoric. I do not believe that accepting our recommendations in principle is enough. Hon. Members need to decide whether we can just rely on the planning process to provide these necessary safeguards and guarantees, to protect communities and passengers. The parliamentary approval stage of the planning process is designed specifically to set the criteria for approval. It should then be up to Heathrow to meet those requirements.

I want to take this opportunity to explain why the Committee made our recommendations. First, we wanted to ensure that the supporting evidence was robust and accurately reflected in the NPS. We wanted to ensure that MPs are well informed. It is impossible to know with absolute certainty what the exact impacts of this scheme will be but, given the political gravity of the issue, we wanted to ensure that MPs were fully informed of the potential scale of costs and benefits.

Although we accepted the Government’s high-level arguments in favour of their preferred scheme, our investigations revealed that the north-west runway’s advantage over the other schemes considered was not perhaps as wide as was set out. In some cases, the comparative advantage to not expanding at all was small. The strategic case for the north-west runway rests primarily on it delivering more routes to a greater number of destinations, and at greater frequencies, than the other schemes. Our detailed analysis of the Department for Transport’s forecasts revealed that the future passenger growth, destination and route offering at the UK level is broadly similar over the longer term, compared with the other schemes. Most of the passenger growth generated from the north-west runway scheme will be accounted for by outbound leisure passengers and transfer passengers, who offer fewer direct economic benefits to the UK economy. The Government’s own forecasts show that business passenger growth is negligible compared with no expansion.

The anticipated growth in connections to Heathrow is a key reason why the north-west runway scheme has garnered considerable support from regions away from London and the south-east, but there is a concern that the Government do not have the policy levers to guarantee that a proportion of the new slots created will be allocated to domestic routes into Heathrow. Given the costs currently anticipated for the north-west runway scheme, there is a possibility that domestic routes from Heathrow would not be commercially viable. It should also be acknowledged that an expanded Heathrow would abstract growth from non-London regions, with over 160,000 fewer direct international flights each year compared with a no-expansion scenario. This is a nationally significant infrastructure project. It must work for the whole nation and not just for London.

Community Transport

Debate between Daniel Zeichner and Lilian Greenwood

Thursday 10th May 2018 Westminster Hall

[Lilian Greenwood]

I agree with the hon. Gentleman, and I hope that during this important debate, we can begin to get the assurances we need from the Minister.

The UK has taken a unique approach to community transport by legislating for a relatively light-touch, affordable regime through the section 19 and section 22 permits of the Transport Act 1985. It is widely acknowledged, including by the Government, that the regime has provided an effective framework within which not-for-profit organisations can safely provide community-based local transport services. The Government have also very broadly accepted throughout that the long-established permit regime still achieves that. Furthermore, they accept that developments in the sector that have led to the current situation have been not only supported by official guidance, but explicitly encouraged by local and central Government for many years.

Not-for-profit community organisations have been encouraged to become more professional in outlook and, in the face of growing pressure on local authority budgets, to become more financially self-sufficient. Community organisations have responded to that call by quite properly and, I stress, in accordance with the official guidance, developing their operating models to deliver services via a mix of grant funding and local authority contracts.

[Daniel Zeichner (Cambridge) (Lab)]

Does my hon. Friend agree that the changing situation in local authorities—I have seen it in Cambridgeshire—whereby mainstream services have disappeared to be replaced by not just voluntary, but professional schemes, has led to those problems?

[Lilian Greenwood]

My hon. Friend is right. Many community organisations, some very successfully, have achieved greater self-sufficiency and sustainability by cross-subsidising what can be thought of as core community transport services with income from contracts for school and social care transport, for example.

And so to the bombshell of last summer. At the end of July, in what the Department seems to have hoped would be a relatively innocuous letter from a senior official to issuers of section 19 and section 22 permits, it set out a new approach, which was contrary to the official guidance that had been applied for decades but in line with a new interpretation of EU regulation 1071/2009, which has been in force since 2011. This is the crux of the matter: there is a potential misalignment of the relevant sections of the 1985 Act and its associated guidance and practice, and EU law.

The European regulation defines three derogations from the operator and driver licensing requirements on the mainstream commercial sector: where organisations are engaged in road passenger transport services exclusively for non-commercial purposes; where they have a main occupation other than that of road passenger transport operator; and where organisations have only a minor impact on the transport market because of the short distances involved. Member states can choose whether to apply the third derogation.

The Department’s letter noted the findings of a DVSA investigation into the licensing arrangements of an individual community operator in Erewash, Derbyshire—I see the hon. Member for Erewash (Maggie Throup) is present. Essentially, that investigation, which was conducted in response to a complaint from a commercial operator, found that as the operator in question held a number of competitively tendered local authority contracts, it could not be considered to be operating for non-commercial purposes.

Concessionary Bus Passes

Debate between Daniel Zeichner and Lilian Greenwood

Tuesday 8th May 2018 Westminster Hall

[Daniel Zeichner (Cambridge) (Lab)]

I beg to move,

That this House has considered concessionary bus passes.

It is a pleasure to serve when you are in the Chair, Ms Ryan. During my three years in Parliament, it has been noticeable that although most of our fellow citizens use buses, we rarely get to discuss bus issues in the House. I am delighted to see in the Chamber my good and hon. Friend the Member for Nottingham South (Lilian Greenwood), Chair of the Select Committee on Transport, who I am sure will be putting that right in the coming months and years. Today, I shall focus mainly on the concessionary fares scheme and highlight its value and how it could be extended, but I shall also make a few observations about the problems that arise when running such a scheme in parts of the country with unregulated bus systems, and draw out possible solutions.

The national concessionary fares scheme has been a huge success. It has really changed the way older people live their lives, by increasing their freedom and, in many cases, reducing loneliness and isolation. As I think hon. Members will be aware, the bus pass in England provides free bus travel for older and disabled people during off-peak times—from 9.30 am onwards. Ironically, should anyone have chosen to use their concessionary fares pass to get here this morning, they would have been late. I can see that some of my colleagues set out much earlier—not that I am suggesting they would qualify for a bus pass. I am very pleased that so many people have made such an effort to be here at what is quite an early hour for Parliament on its return from recess.

The age of eligibility for the concessionary fares scheme has become slightly flexible. If the eligible age had remained what it was when the scheme was first announced, I might almost have qualified by now, but it seems to be slipping into the distance; I hope one day to catch it up. I think it is now 66. I hope that, in the future, many more people will be able to benefit from the scheme.

The trigger for calling this debate was the 10-year anniversary of the scheme. I congratulate the National Pensioners Convention, which made a big effort to celebrate it, including by sending birthday cards to Downing Street; I joined members to go and hand those in. I have to say that I was hoping there might be slightly more enthusiasm from the Government for celebrating the anniversary. We did have a discussion at Transport questions, and the Minister, I am delighted to say, had removed the threat of ongoing review, but I was hoping for something slightly more celebratory—a bit more Jürgen Klopp, a bit more dancing up and down, celebrating the success of the bus scheme.

[Lilian Greenwood (Nottingham South) (Lab)]

I congratulate my hon. Friend on securing the debate. He is a very long-standing supporter of buses. Will he also congratulate the TUC Midlands pensioners’ network? Its members marked the 10th anniversary of the concessionary bus pass by touring the midlands using their passes. My hon. Friend will not be surprised to hear that, when they came to Nottingham and we were talking to residents in Market Square, the overwhelming number of people did not avoid us; they came and spoke to us, and they expressed their great joy and made celebratory remarks about the bus pass for older people and disabled people, because they know what a lifeline it has been for so many people. Does my hon. Friend agree?

[Daniel Zeichner]

I thank my hon. Friend for that intervention. She is very prescient, because the TUC campaign was in the next paragraph of my speech; she has pre-empted it. She is right. Those of us who have done market square campaigning will know that we are not always a magnet for people to come and join us and enthuse, but I find that whenever we speak to older people, they are enthusiastic. I echo my hon. Friend’s congratulations to not only the east midlands TUC but Richard Worrall, who, when the scheme was initiated, set off on a tour of the country and was able to demonstrate that, using his bus pass, he could get round the whole country, which was very exciting. I am told that he is going to do that again, and certainly if he comes through Cambridgeshire I shall be very pleased to join him, although I shall be paying the extortionate fares that we suffer in rural Cambridgeshire—should we be lucky enough to find a bus. I say that because the enthusiasm to which I have referred is tempered by the fact that, in far too many areas, the Government seem to be managing decline rather than celebrating new routes. I will say a little about how that might be addressed, but first I would like to go back to the history of this scheme.

As I look around the Chamber, I see that some of us are old enough to remember that in the ’80s and ’90s pensioner campaigning was central to everything we did. I remember that, as a parliamentary candidate, I was summoned to many vibrant meetings—the pensioners’ organisations had a long list of demands at the time. That was because they compared, strangely enough, our situation in the UK with that in many other European countries and found that our European neighbours often enjoyed a whole series of things that pensioners in our country did not. One success of the post-1997 Labour Government was that they addressed pensioner poverty. I am thinking of measures such as free eye tests, the winter fuel payment and so on, and the bus pass was of course a key part of that.

However, there was not a particularly smooth path to that. We started with quite a panoply of schemes. Some places, such as London, had long had better schemes. Some of the urban areas—I have to say that they were almost always Labour-run areas—had been much more generous in the past. However, in the shires, it was much more of a battle. A kind of halfway house was introduced back in the Transport Act 2000, which gave pensioners half-price fares. That led to quite a lot of even more vexed campaigning.

I remember going to a Labour policy forum in 2004 with colleagues from adjoining counties in the rural east of England—I particularly remember the then leader of Norfolk County Council, Celia Cameron, and Bryony Rudkin from Suffolk. We sat with the then Secretary of State for Transport, Alistair Darling—this was long before he realised he was to become Chancellor of the Exchequer—and explained to him why we thought that a concessionary fares scheme of this type would be not only equitable and fair but hugely popular. I remember the look on Alistair’s face: he said, “Do you know how much that would cost?” That was actually quite a good question because, as I shall explain in a minute, the question of costs has never been properly tied down. His point, of course, was that it would be quite a costly commitment. We went away, having established the idea in principle, but with no great hope that it would necessarily be adopted, so it was with huge joy that we greeted the development a year later. I am not suggesting that it was just we who achieved this; it was a wide range of campaigners, but in the 2005 Labour manifesto a full scheme was suggested, and it was finally implemented in 2006.

The issue of funding is important because, right from the beginning, it has proved to be complicated and difficult. When I was a parliamentary candidate, I spent many a happy hour trying to work out, with my local county councillors and district councillors, who was paying for what and how much it was really costing, and, frankly, coming to the conclusion that probably no one was entirely sure.

We are told that, overall, this scheme now costs £1.17 billion per annum. Not surprisingly, the cost has increased since the scheme was introduced. We are told that, in 2013-14, 9.73 million concessionary travel passes were issued across the country; that puts the average cost at £120 per person. When the scheme was first introduced, the Government provided an extra £350 million for 2006-07 through the formula grant system to fund the cost to local authorities as they then saw it. Between 2008 and 2011, the Department for Transport provided a special grant, totalling just over £650 million, to local authorities to pay for the statutory concession.

Since 2011, however, it is the formula grant that funds the bus pass; money is no longer ring-fenced. Of course, it is a familiar sleight of hand by central Government to apparently put money into the local government grant and tell local government that it has to do this. As the years go by, it becomes less and less clear what the money is for. There is a strong suspicion that it is a sleight of hand, and particularly when councils are being so heavily squeezed, it is asking a lot of them.

Therefore, my first question to the Minister is whether she would like to have a word with the Treasury about looking again at providing proper, ring-fenced funding for the scheme to local authorities. It is not entirely clear to me that the current system of local government finance, particularly with the move away from central Government funding and, supposedly, to business rates retention, actually provides a good, sustainable model for supporting a scheme such as this.

[Daniel Zeichner]

My right hon. Friend is absolutely right. I will come on to the social and environmental benefits in a minute. This partly shows us how complicated it is to assess the long-term benefits.

Returning to the relationship between central Government and local government, local authorities were charged with coming up with a reimbursement system that left the operator no better or worse off, but they are in a difficult place, and I will come on to the reimbursement system in a minute. The Local Government Association estimates the cost to local authorities at around £760 million a year, with a funding shortfall of £200 million. I suspect that that pressure will only get worse.

The operators are not keen on the system at all. I frequently hear complaints. It is difficult to prove what it costs to carry passengers for free, in a way that observes that reimbursement rule. Putting some extra people on half-empty buses does not necessarily cost more. If there are too many extra people, however, extra services are required.

I understand that the prime task of the bus operators—the big five and many smaller operators—is to return a profit to their shareholders. That is right and proper; that is what they do. They will inevitably claim that this costs rather a lot. In the early days—this was my experience in Cambridgeshire—the bus operators did quite well, because the reimbursement cost they extracted from the county council was rather high. Over time that seems to have settled. As has been said in questions to Ministers, the number of appeals has settled down, which suggests that there is a kind of settlement in all this. I think there is a wider question, however, of how and whether the reimbursement system works.

There is a comparison to be made between London, which has a regulated system, and the rest of the country. Thanks to the Bus Services Act 2017, we hope that some of the new mayoral authorities will adopt franchising. I hope my own in Cambridgeshire does. In London, where you have gross cost franchising, it is much simpler for Transport for London to make decisions about the public good. It decides the fares and the frequency, and then it pays the operator to deliver the service. In a way, the operator has much less to worry about, provided it does not drive up usage and extra costs too far. For London, which groups pay and which do not, and how much is made up by the fare box and how much is raised in others ways, are political choices.

In the rest of the country, it is much less clear. It could be suggested that operators have a perverse incentive to put up fares, because if they know that many of their passengers will be concessionary fare holders, they will be reimbursed for that. We will see whether that gets any response from the operators. The choice over discounts and whether young people should qualify for similar fare schemes is essentially market driven; it is not a choice around social need or the social good. There is a huge opportunity, if we shift to franchising, to move to a much clearer and more efficient model. It may reduce operators’ profits, but if it provides lower fares and space for social choices for the social good, it is worth them paying that price.

I pay tribute to the work being done by the Transport for Quality of Life team, including Lynn Sloman and Ian Taylor, who have begun to look at European systems where, effectively, transport is provided for free across an urban area—it is predominately urban areas at the moment. That is not a novel or unprecedented idea, because many people take the view that public transport—like health, education, policing, parks and museums—is an essential public service that contributes to the fabric of local life. The organisation’s work—often commissioned by my trade union, Unite—shows that this is already happening in 100 towns and cities worldwide, including more than 30 in the United States and 20 in France. Dunkirk, with a population of 200,000, will apparently become fare-free in September. The largest city in the world to have made its public transport free is Tallinn, the capital of Estonia, with a population of 440,000. Free transport was introduced to residents in 2013. It has cost the city €12 million, but it believes that that has been offset by a €14 million increase in municipal revenues, as many more people have moved there, increasing the tax base.

That links to some of the work being done by my colleagues on the Transport Committee about mobility as a service. We are looking at a whole new range of ways of getting around cities. My vision is what I see when I visit an airport. Some airports are like small cities. There are travellators, lifts, shuttle metros and shuttle buses. The noticeable thing is that we do not pay to get on each of them, because it is in the interests of that community to get people where they want to go quickly and efficiently. I argue that is in the interest of all of us, in all our cities and smaller towns, to ensure that people can get around quickly and efficiently.

That is my vision for the future, but to return to the present, extending franchising beyond the mayoralty areas would allow local authorities much more control over services in their areas. It would put them in a much stronger position to maintain stability in funding the national concessionary travel bus scheme. The additional flexibility could also be extended to the community transport sector. That is sometimes a controversial issue, but it is being raised by people in the sector. If we are looking for a flexible mix of transport solutions, particularly in rural areas, I think it should be considered.

My right hon. Friend the Member for Warley (John Spellar) has already raised the social issues involved. Very good work has been done on that by Claire Haigh at Greener Journeys. She demonstrated, in research done a few years ago, that each pound spent on a bus pass generates at least £2.87 in benefits to bus pass users and the wider economy.

[Lilian Greenwood]

Like my hon. Friend, I am very familiar with “Bus2020: The Case for the Bus Pass”, produced by Greener Journeys. I noted that in responding to the Government’s decision to confirm the bus pass, Claire Haigh produced an updated figure. Greener Journeys’ research has now shown that every pound spent on a bus pass delivers at least £3.79 in wider benefits for society. That updates the case made in 2014, when Greener Journeys first published that research.

[Daniel Zeichner]

That shows why my hon. Friend is Chair of the Transport Committee—I should keep up. That is an even bigger benefit. I know it is always difficult for Government when such figures are put forward, but in straitened times, understanding the wider cost-benefits is one of the challenges. How many of us have sat on councils where we have talked about trying to pool budgets and make things work more efficiently? It is a challenge, but one worth pursuing.

As we have heard, there are also savings for social services. The social benefit is intangible, but some interesting recent research by Transport Focus has shown that the social benefit of the bus—people talking to one another as opposed to taking separate taxi journeys—has a real value. We must not underestimate these social benefits. The bus absolutely contributes to the wider social good.

[Lilian Greenwood]

My hon. Friend is being generous with his time. Does he agree that the value of the bus is not only in its social benefits, but in the opportunities for the Government to realise some of their other policy goals, such as tackling poor air quality and congestion in our cities? Does he share my concern that the Government’s figures on congestion and traffic rises indicate that by 2040 there will be a 55% rise in traffic and an 86% rise in congestion? That is why it is in all our interests for the Government to adequately support bus travel.

[Daniel Zeichner]

Once again, my hon. Friend is absolutely right. The environmental benefits are really important. I was pleased to see the Minister announce at the UK bus summit the retrofitting proposals, which I was happy to see in the Labour party manifesto last year. It is always good to see the Government adopt such things, and I will have some more suggestions for the Minister in a minute. Alongside that proposal are the very good hydrogen buses that are being developed. I suspect that other Members, like me, have been happy to go and see them. All those things add to my point that the bus is one of the important ways forward in improving the quality of life in our cities, towns and villages.

One extremely good way of promoting buses is by looking at the younger generation, who we are reading about this morning.