Transport (CSR)

John Leech Excerpts

Thursday 25th November 2010 Westminster Hall

[Mrs Ellman]

The purpose of today’s debate is to focus on transport and the implications of the comprehensive spending review for transport services. Indeed, that is the remit of the Transport Committee, so I am concentrating on transport today.

According to the Passenger Transport Executive Group, capital funding for local transport outside London was cut by 19% in 2010-11. It is true that the outcome could have been worse, and comparisons have been drawn with other Departments, but that does not hide the severity of the cuts that will be put in place. There are to be new funds from which transport projects could be supported. The regional growth fund, which started off as a business fund to replace the budgets of the regional development agencies, has been expanded to include transport and some housing projects, and there is to be a local sustainable transport fund. There is no way in which those two funds can even start to replace some of the major cuts that are contained in the comprehensive spending review figures.

At the moment, my Committee is considering the relationship between spending on transport and economic growth. One issue it is considering is the distribution of transport investment around the country. Three times as much transport investment per head is made in London and the south-east as in the northern regions and the midlands. How will the comprehensive spending review impact on the distribution of that transport investment? Will such disparity be reduced or increased? I am very interested to know the answer and whether such an assessment is thought to be important. In relation to budgets, it is extremely important to consider the impact on places around the country as well as nationally.

Many transport schemes are strategic rather than local in nature. In the past, business-led regional development agencies, working with Government offices for the regions, have enabled local government, working with business, to decide on regional priorities and to make representations to Government. That will end. The Secretary of State for Transport has made it clear that the proposed local economic partnerships will not be sufficient on their own to replace those arrangements. He told the Transport Committee only yesterday that he thought that local economic partnerships—I do not know whether he knew exactly how they would be put together—would need to work together, or some other arrangement might be required to look at those very same projects. To my concern, he also said that he did not think that that would be achieved until the end of the Parliament. If those alternative arrangements happen and they do not take place until the end of the Parliament, will the Minister tell us how regional rather than local priorities will be determined? Will the decisions on such projects become centralised? What are the arrangements to be? We cannot wait until the end of the Parliament to know the answers.

Let me turn to roads investment. There are some big questions to raise on the implications of the Budget on roads. The budget for road maintenance is to be reduced by 20%, which is a big reduction. We are told that that will be achieved by efficiency savings rather than by cutting back on important maintenance. We all know that if routine maintenance is not done when it is required, a lot more will be required to be spent at a later date. What kind of mechanisms are in place to monitor how that reduction is to be met? Will it be through efficiency savings or will it mean that important maintenance on our roads is simply not done?

The Highways Agency’s capital budget is to be cut by around 50%. That is also a matter of great concern. Seven schemes have been cancelled and the much needed upgrade of the A14 has been sent back to the drawing board. Does that mean the end of major new road-building in Great Britain? It would be helpful to know whether the major cutbacks in that sector are to do with the problems of our times—the Government’s wish to move very quickly to remove the deficit—or a basic change in transport policy.

[Mr John Leech (Manchester, Withington) (LD)]

Does the hon. Lady accept that, at a time when money is tight, it is better to invest in public transport than in roads?

[Mrs Ellman]

It is important to keep a balance in spending. I certainly support continued and, indeed, increased investment in public transport. However, there may be particular road schemes that are very significant to particular areas or that are important to strategies to support economic development in certain parts of the country. Therefore, I would not rule out any particular type of investment, but I am certainly a supporter of investment in public transport.

The Secretary of State announced that 66 major local authority road schemes, which are due to cost £1.7 billion, are competing for more than £900 million-worth of funding. Will the Minister tell us what kind of result she expects to come from that great reduction in funding? Will priority be given to strategic schemes? If so, how will that be assessed and monitored?

Rail is a great success story. During the last decade, rail patronage has increased in a very dramatic way. More and more people want to use rail. Unfortunately, rail’s popularity has not been matched by the provision of sufficient or adequate rolling stock to meet that increased need. Therefore, while we have more and more people using rail, we also have more and more overcrowding and I think that we have seen the development of a rather complacent attitude to the health and safety issues related to that overcrowding.

This week, discussion has focused on the concerns raised about the proposed increase in train fares. The coalition agreement spoke about the need for

“fair pricing for rail travel.”

It now seems that that “fair pricing” means that regulated fares will be increased in the future not on the basis of the retail prices index plus 1% but on the basis of RPI plus 3% from 2012 onwards. The Government tell us that that is in order to fund much needed investment in rail.

The Association of Train Operating Companies presented such increases as average increases. However, average figures are meaningless to the individual wishing to embark on a rail journey. Already, increases of 13.8% and 9.3% have been reported as planned increases when the new policy comes into force. A lot more should be done also to provide much greater clarity about rail fares, with much greater openness about how cheaper fares can be obtained without the complexities and difficulties of interpreting the rules of different train companies on what constitutes peak-hour travel, so that travel can be made easier for more people.

There is a consequence to increasing rail fares beyond the difficulties it causes individuals, for example in getting to work. The Campaign for Better Transport estimates that fares could be 31% higher by 2015 than they are today. One result of what may well be pricing people off the rail network is that more people may go back to their cars, at a time when we are trying to encourage people to leave their cars and make use of public transport. Indeed, the Government estimate that there will be 4% fewer trips by rail than there would otherwise have been as a direct consequence of the planned fare increases.

Our concern is partly about the economic impact on individuals, including the specific difficulties that individuals may experience in getting to work, but we also have growing environmental concerns. The Climate Change Act 2008 has targets to reduce UK greenhouse gas emissions by 80% by 2050. In 2009, the transport sector accounted for a quarter of domestic carbon dioxide emissions, with 90% of those emissions coming from road transport and 55% from domestic cars alone.

Why, at a time when we are so concerned about environmental issues and when we now have the Climate Change Act, would we deliberately want to price people off rail and encourage them to get back into their cars? Furthermore, are we really so certain that the Government’s claim that those increased fares will lead to better investment and improved facilities on the rail network will actually become a reality? The rail structure is very complex and there are big questions to be asked about whether all of us—the traveller and the taxpayer—are getting good value for money from the investment put into rail.

Sir Roy McNulty’s report on the rail system and value for money issues will be very important, as will the decisions about rail franchises for the future. If we are to get value for money for the essential funding that goes into rail, it is extremely important that we look carefully at what emerges from Sir Roy McNulty’s study. Although I know at this stage that some preliminary conclusions have been drawn, there is no full report yet. I would be pleased to hear from the Minister her understanding of what Sir Roy McNulty might say and what she thinks might be the policy implications of his report.

I welcome this morning’s announcement about rail investment, particularly the commitment to electrification of the line between Liverpool, Manchester, Preston and Blackpool, and the electrification of the Great Western line. However, I want to be quite sure that that electrification will go together with increased provision of rolling stock and carriages on those lines, and indeed on other overcrowded lines. I would also like to know what kind of monitoring will take place of the promises that we heard this morning—promises about other schemes, as well as the two I have mentioned—to ensure that the investment goes ahead as planned and that we have more capacity, more efficient and environmentally friendly rail travel and better value for money at the same time.

I also welcome the Government’s statement on their commitment to High Speed 2 and the funding for it. However, it is very important that the benefits of HS2 are maximised and that there is no neglect of investment in the classic network.

Rail freight is also very important. Freight moved by rail accounts for about 9% of all goods moved in the UK and I welcome the Government’s commitment to improving investment in rail freight links, specifically those between Southampton and Felixstowe. When the Transport Committee visited Hull recently, to take evidence as part of our inquiry into transport and the economy, we were told about the importance of relatively minor improvements that could enhance access to the Humber port. I hope that those improvements can go ahead and indeed I hope that similar improvements can be made in the Merseyside area. When we talk about rail investment, that debate is often dominated by discussions about passenger rail. We should always remember the importance of freight on rail, too, and the importance of investing in it.

It is also important to look at investment in buses. Indeed, more people travel on buses than on any other mode of public transport. In 2009-10—the last year for which we have figures—5.2 billion passenger journeys were taken on local bus services in Great Britain. That compares with 1.3 billion passenger journeys on rail.

I am extremely concerned about the implications of the comprehensive spending review for funding local bus services. The bus service operator grant will be cut by 20%, local authority revenue for bus services will be cut and we do not yet know how effectively the Local Transport Act 2008 will work to ensure good value for money. We are awaiting the results of the Competition Commission inquiry into the setting of bus fares.

The Government say that they believe that the cuts in the bus service operator grant and other local authority funding, which could have an impact on support for local buses, will have a low impact on services. I am mystified by that and would like to know how the Government arrived at their figures. It seems to me that a 20% reduction in the bus service operator grant, a 28% reduction in local transport revenue funding and the removal of ring-fencing puts a big question mark over how many services that are essential to local people but not necessarily profitable for individual bus operators will be able to continue. I would be grateful for a response.

It is welcome that this Government are honouring their commitment to maintain the national concessionary fares scheme introduced by the previous Government, but the administration of the scheme has changed, and there are now queries about whether the funding for that scheme will go directly to the transport services. Again, I would be grateful for a response on that from the Minister.

Road safety is an important issue that is perhaps not discussed enough—it has not been discussed sufficiently in relation to the comprehensive spending review—but one of the successes of the past decade or so is the reduction in the number of deaths and serious injuries on our roads. In 2009, some 2,222 people were killed on our roads and more than 24,000 were seriously injured. Behind every one of those numbers lies a tragedy, and often a broken family, yet the figures represent an improvement on previous years: 38% fewer people were killed on our roads than in the late 1990s. More progress must be made. I am concerned that the reduction in local funding, combined with the abolition of ring-fenced grants for road safety, will halt the progress made and the decline of deaths and injuries on our roads.