The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, I am very grateful to all noble Lords who have contributed. As ever, I will reflect carefully on those contributions. I am grateful to the noble Lord, Lord Berkeley, for once again giving noble Lords the opportunity to discuss buses. It is a subject close to my heart, and I think we all agree that we want the same thing; we are dealing with how, on the pitch that we are on, we can achieve the sorts of services that we would like to see.
Let me start by commenting on the announcement on 9 March. Essentially, the £40 billion set out in that Statement was the capital investment for transport over the next two financial years. Sometimes it is easy in transport because the figures get very big very quickly, but it is a significant amount of money that we are going to invest in our transport systems—that is across all modes—and it does not include the further funding that is committed for revenue support in terms of the services as well.
I shall try to focus my reflections today on rail, both high-speed and traditional, and local transport. I accept that there were some comments on active travel and roads, the responses to which I may put in a letter after the debate—certainly, the figure given for the reduction in active travel funding I just do not recognise.
When we restated the amount of funding that will be forthcoming in the next two financial years, we did so in the face of two quite significant challenges. The first is the overall decline in the number of passengers on the railways and on buses, as well as a change in the nature of travel, because fewer people are going to work —indeed, we have seen a welcome rise in the amount of leisure travel taking place. The second is financial. There has been significant inflation within the construction sector. That is not a homogeneous situation; some things are inflating at a higher rate than others, and it is time to reflect on the impact of that inflation and to consider how we can de-risk the investments that we want to make.
The Transport Secretary’s statement set out which sections of HS2 the Government are prioritising to deliver as planned and which sections need to be rephased to take into account that inflationary pressure on the cost base. Cost estimates for each phase of the programme will be published. His announcement clearly requires officials to work through the consequences with HS2 and the supply chain to firm up the information that we have.
Baroness Vere of Norbiton (Con)
The six-monthly updates will continue to be laid before Parliament as they have been previously. We will of course endeavour to put in every single update as much information as we have at that time. We will not have all the information immediately, because various things will be worked through at a different time.
We confirmed that the first stage of HS2 will be delivered as planned between Old Oak Common and Birmingham Curzon Street by 2033. Sometimes, I am mildly disappointed by the noble Baroness, Lady Randerson, making comments such as “serious doubt about the project” and “unlikely to go beyond Birmingham”. I am not sure where such observations have come from, because we have been quite clear in our plans.
On the rail system more generally, as the Secretary of State said during his Bradshaw address,
“operating the railways is currently financially unsustainable and it isn’t fair to continue asking taxpayers to foot the bill”.
We have to be very careful about the costs, thinking particularly about the depressed revenue that we are seeing at the moment.
Baroness Randerson (LD)
Can I invite the Minister to look carefully at the National Audit Office report?
Baroness Vere of Norbiton (Con)
I will of course look very carefully at the National Audit Office report. I do not know that it is saying that it believes that the line is unlikely to go beyond Birmingham; again, I would not know where its evidence would come from for a statement such as that.
We have an opportunity to improve the rail and local transport networks and to adapt to the needs of passengers today. There is a rare chance of some sort of redesign so that the system is fit for the future, because, as I said at the outset, I think all noble Lords want the same thing.
I will now turn to comments about HS2. The Transport Secretary has been very clear that Old Oak Common will act as a temporary London terminus while Euston is completed, but I do not think that any noble Lord should be under the impression that this will somehow be substandard. It will be probably the best-connected and largest new railway station ever built in the UK; it will have 14 platforms—six high speed and eight conventional—and it will be a transport superhub, providing connections to Heathrow via the Elizabeth line and, of course, high-speed rail services through to various parts of the country.
It was already planned that Euston would open later than Old Oak Common. However, we have decided not to proceed to full construction of Euston station in the next two years, which is the period that the Statement looked at, due to affordability and profiling issues. There is an opportunity to look again at the Euston station design to ensure that it is affordable and delivers for both the local community and passengers.
Following this debate, I will set out in a letter as much as I can about the phasing for the different elements of High Speed 2, including going to Crewe and beyond. It is important to put that on record.
Lord Berkeley (Lab)
I am grateful to the noble Baroness for her offer to write a letter. Will she also comment on the lack of a firm design for not the station itself but the approaches to Euston? My information is that there is no option that is actually safe to build, and that is quite critical.
Baroness Vere of Norbiton (Con)
I will certainly include that in the letter. I do not have anything with me today.
I turn now to buses, which, as many noble Lords have pointed out, are the absolute backbone of our public transport system. The national bus strategy, which we published back in March 2021, is a long-term strategy. It is important to understand the role of the BSIPs—bus service improvement plans. We asked all local transport authorities to prepare one, which they did, and we used them to look at how to prioritise funding. To a certain extent, there was no bidding process: we did not ask for bids but to review all the bus service improvement plans.
Noble Lords may ask themselves, “Where did these bus service improvement plans come from? Who inputted into them?” We were clear in the national bus strategy that they must have the input of local people; there had to be a passenger board, or whatever they wanted to call it. Listening to the input of local people and businesses allows the bus service improvement plan to have local accountability. I have heard two different things today: that we need to give more powers to local authorities but also that national government should take control of the bus network, as some noble Lords have suggested. Local accountability is really important.
Funding is absolutely key. The Government are spending an additional £3 billion. This is the largest investment in buses in a generation, and it is on top of funding that still goes out to local transport authorities or bus operators to support fares, such as the bus service operating grant of £250 million a year, and the concessions payment of about £1 billion a year. Local transport authorities also get funding in the block grant for tendered services. Unfortunately, some local authorities, particularly rural ones, decide not to use that money on tendered services. That is a disappointment, and local people should be holding those councils to account for those things.
Therefore, with the bus service improvement plans and subsequently the enhanced partnerships, which are a partnership between the transport authority and the bus operator taking into account what has been said by the passengers, that is how bus networks are planned locally. So it is not quite right to say that it is left to the market, because local transport authorities have quite a significant amount of leverage over the bus operators in agreeing what the enhanced partnerships should say, and 75% of enhanced partnerships have now been “made”—that is, they are in existence. Of course, if the enhanced partnership is not working or it is not what the local authority wants to do, it is at liberty to start franchising, and we know that places such as Greater Manchester have already done that. So there are many ways in which local transport authorities can exert power over the bus network to provide what their local people want.
I accept, as I did earlier today in the Oral Question, that the funding is short term at the moment, until 30 June, and that there is an enormous amount of analysis to be done: the impact of the £2 bus fare cap will be important—but also some of the BSIP funding, the revenue side of it in particular, is being used to support fares in places such as Manchester, Liverpool, West Yorkshire and Lancashire, so that will be important. The capital spending from BSIP will take slightly longer to come in, because that is all about bus priority, bus lanes and all those sorts of things, so we need to give that a little more time. However, the market is still in transition, so we are analysing where we are and looking at what any long-term future support might look like.
I know that the right reverend Prelate is a great champion of rural areas, and he was concerned that rural authorities would not have the resources to be able to do the BSIPs that we ask them to do. In fact, we gave them the money to provide the resources for that. We gave them £23 million to work up their BSIPs and enhanced partnerships and, subsequently, we gave all the local authorities that were not successful in getting funding—about half of them—£11 million to make sure that they could roll out the bus service improvement plans that they had. There are many things that they could do to improve services which do not necessarily require funding.
The right reverend Prelate will have heard me speak before about demand-responsive transport in rural areas—the bus fare cap is very good for rural areas, particularly on longer routes—and the BSOG really supports fares in rural areas as well. In addition, community transport is important in rural areas, which is also taken into account in any BSIP.
I am very conscious that I have 45 seconds in which to do rail. I recognise the expertise of the noble Lord, Lord Tunnicliffe, in this area and his great interest in rail, and from a DfT perspective we recognise that performance needs to improve across the system. We have had numerous conversations about Avanti and TPE, and we know the impact of removal of rest-day working there. However, at the heart of it are the passengers, and GBR, the transition team for Great British Railways, is looking at that 30-year vision for our railways. We continue to invest billions of pounds in our railways for the sorts of local railways that the noble Lord, Lord Berkeley, wants to see. Now we have to look through the RNEP, make the correct decisions based on current passenger numbers, which again are not the same all over the country—some areas are seeing higher passenger return then others. Therefore the RNEP is being reviewed by Ministers at the moment and that will be published; the investment will continue, and that is part of the £40 million.
I note that I have gone over my 12 minutes. I know that there are many things that I have not been able to cover but I will certainly write a letter. Once again, I am always grateful to talk about railways and local transport—both subjects that are very close to my heart.