Rising Cost of Transport

Kwasi Kwarteng Excerpts

Wednesday 9th January 2013 Commons Chamber

[Maria Eagle]

The hon. Gentleman has missed out the profits of rail and bus companies. Perhaps those ought to be looked at as well. As he knows, all Governments have to strike a balance. This Government have to do so, as did the previous one, and that will no doubt be the case for the next one too.

Because bus services outside London were deregulated, local authorities have for far too long been unable to limit fare rises or properly plan the network of local bus services in the interests of passengers and economic growth in their area. That is why the last Labour Government changed the law to enable transport authorities to use quality contracts to move to a tendered model for bus services, thereby bringing accountability over fares.

[Kwasi Kwarteng (Spelthorne) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

No.

That model means that decisions on fare rises are made by politicians, just as we have always accepted should happen for rail fares and as has happened for bus services in London. However, the integrated transport authorities that are rightly going down that route are finding that they are up against the vested interests in the private bus companies. Stagecoach is the worst culprit and has threatened to close depots, sack drivers and take buses off the road overnight. Sir Brian Souter claimed that he would rather “take poison” than enter a quality contract. His managing director accused the elected accountable transport authority of

“operating in the same camp as Marx, Lenin and Trotsky.”

Have the Government stood by transport authorities that are trying to secure a better deal in the use of taxpayers’ money? No. On the contrary, the Government are using their reform of bus funding to stack the odds even further against transport authorities. They are caving in to pressure from the bus companies and proposing to exclude from better bus area funding authorities that seek greater control over fares through quality contracts. Yet again, the Government are on the side of the wrong people and are putting the interests of the bus companies before bus passengers. The Government should think again and work with councils, not against them. Ministers should say to the bus companies, “You operate successfully in a regulated system right across Europe and you can do so here.” Instead, Ministers are cutting funding, oblivious to the impact on rising fares and reduced services, and standing in the way of local authorities that are seeking reform to deliver more for less and keep down fares.

On rail and bus services, the cost of transport is rising by well above the rate of inflation. The Government should listen to passengers, and the House should support the motion. Let this be the last year when the train companies are allowed to turn the so-called cap on fare rises into an average. The Government should restore the strict cap on fares that was introduced by Labour and that they scrapped. They should also listen to passengers about ticket offices and look at the ideas that we have set out to make fares and ticketing fairer and simpler. The Government have so far shown themselves to be completely out of touch on the rising cost of transport and the pressure that it is causing for families who are already feeling the squeeze on household budgets. Today is an opportunity for Ministers to start listening, recognise the consequences of the misguided decisions that their predecessors have taken over the past two years on rail and bus services, and act. I invite the Secretary of State for Transport to do so.

--- Later in debate ---

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Transport is a vital issue. It is essential for people to get to work and to get to social amenities. That is why it is so important that we debate not just the provision of transport itself, but the cost—because transport has to be affordable if it is to be put to best use. I shall confine my comments to the rail service, and I shall refer to some of the findings of the Transport Committee’s report on rail, which was recently published. There will be an opportunity tomorrow to debate the Select Committee’s report on bus services, and I hope there will be the same number of Members in Westminster Hall tomorrow afternoon as there are in this Chamber today.

It is important to note that rail is, in fact, increasingly popular. The number of people travelling by rail has doubled in recent years, while the amount of freight carriage has increased by about 40%. There is rising concern, however, about fare levels. I assume that that explains why the Government’s proposal to increase regulated fares by an average of RPI plus 3% was reduced to RPI plus 1%—because of the public outcry and concern about increased fares. It is also true that the Government are implementing a policy—indeed, they inherited it—whereby passengers were expected to pay an increasingly higher percentage of the cost of rail than the taxpayer. Important issues remain about how this policy is applied, about the cost of running the railways, about how efficiencies can be achieved and about how costs and the allocation of subsidies can be assessed.

[Kwasi Kwarteng]

The hon. Lady made an important point in saying that both the Conservatives and Liberal Democrats in government and Labour decided to shift to some degree the cost of rail transport from the taxpayer to the passenger. The hon. Member for Garston and Halewood (Maria Eagle) did not comment on the issue from the Front Bench, so I was wondering what level of subsidy and what proportion of the cost should be borne by the passenger?