Transport and the Economy

John Leech Excerpts

Tuesday 28th February 2012 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I want to take this opportunity to raise the issue of declining rural bus services, especially in County Durham and in Sedgefield.

County Durham is a rural area and home to many villages, most of which had a colliery at one time. When the collieries were open, people did not have very far to travel, but now that the collieries have closed many people find that they have to travel a long way, and many miles, to get to work, so a reliable public bus service is a necessity.

The bus service is required not only for work, but by young people who want to go to college; by the elderly, who might want to go to hospital or to a medical appointment; by the same groups of people to see friends and family; especially by young people just starting out on their career, who may not have the money to buy a car and need the bus to get to work; and by people on low incomes. We need to think also of the unemployed, who might see a job in the newspaper or in the jobcentre that they would love to do, but who know that they cannot apply for it because there is no bus service to take them to the factory or the office.

Concerns about local bus services have risen up the political agenda not only in areas such as Sedgefield over the past couple of years, but in the rest of County Durham. I have a steady flow of complaints from constituents who are incensed at the cuts to services, especially by Arriva, which pulls services at the last moment, without any notification or consultation. Any cancellation of a route is not well advertised. On more than one occasion, whole villages have been left without any services whatsoever. When I compare the services that Arriva has in County Durham with those that it has in London, I think, yes, we should have an excellent public transport service in the capital city, but we need something equivalent in our rural areas as well, with regulation to ensure that there is a social obligation on privatised bus companies to ensure that people can get to work.

Bus services are being cut in our rural areas as part of the expenditure cuts to address the deficit. There has been a 28% fall in funding for councils, combined with the ending of ring-fencing of grants for bus services, a 20% cut in the bus service operators grant paid to bus companies, and a shake-up of the free travel scheme for pensioners. Pensioners now often say, “What is the point of a bus pass if there are no buses to catch because they have been cancelled?” As a consequence of all these cuts, Durham county council has withdrawn £322,000 in funding from subsidised public transport routes, leaving many villages with few or no services in the evening or at the weekend. My postbag has been full of letters and petitions about the repercussions of the changes brought about by spending cuts originating in Whitehall.

Let me explain what this has meant in practice for people needing these services in the rural communities of Sedgefield—villages such Bishop Middleham and Fishburn, as well as Middleton St George, which is in the south of the constituency. One local constituent can no longer get to work without the help of friends, and others can no longer catch a bus and so have to use a taxi, which obviously inflates the cost of getting to work.

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

I sympathise with the hon. Gentleman’s constituents who face a problem with bus services, but does he accept that this is not a new phenomenon? Rural bus services have been poor in many areas for a long time, and the previous Labour Government did nothing about reintroducing any sort of regulation in areas such as County Durham.

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

I should like to begin by congratulating the hon. Member for Liverpool, Riverside (Mrs Ellman), the Chair of our Select Committee, on securing this debate and opening it this afternoon. The contributions so far have been varied, covering a wide range of transport issues from up and down the country. I want to concentrate on the specific elements of the Committee’s “Transport and the economy” report that deal with the role of transport in rebalancing the economy.

During this time of economic uncertainty, transport must be a key factor in stimulating growth. To their credit, the coalition Government have learned from the mistakes made by previous Governments during economic downturns and prioritised investment in transport infrastructure. While other Departments saw an average reduction in capital expenditure of 29%, the transport capital programme was reduced by only 11%, with Treasury forecasts that by 2014-15 capital investment would be higher in real terms than it was in 2005-06. This has meant that a number of capital schemes have been able to go ahead that would almost certainly have faced the axe in previous economic downturns.

As a northern MP representing south Manchester, I welcome the Government’s commitment to economic rebalancing and reducing the north-south divide. This received a cautious welcome, I would say, in the Select Committee report. Transport funding has consistently favoured London and the south-east to the detriment of areas of the north and the south-west. If we are to see a rebalancing of the economy, this needs to be reflected in current and future transport funding.

[Fiona Mactaggart (Slough) (Lab)]

On that issue, I share the view of the hon. Member for Wimbledon (Stephen Hammond) that some projects in the south are essential to UK inward investment. More specifically, I would say that Heathrow is the only hub airport in Europe that does not have a rail link to its immediate hinterland. It has one to London, but nothing to the Thames valley, which is the most productive area for inward investment in the UK and is obviously essential to get growth in Britain.

[Mr Leech]

I thank the hon. Lady for that intervention. It is fair to say that the Government have prioritised some schemes in London and the south-east—the Crossrail project, for instance, which has received an enormous amount of money. Other parts of the country have certainly received significantly less funding over a long period.

There are some encouraging signs, however. In Manchester, rail capacity and journey times will benefit greatly from the additional electrification work, including that of the TransPennine Express, and the funding for the Ordsall chord. Congestion will be eased with the completion of the airport link road—a scheme for which my hon. Friends the Members for Cheadle (Mark Hunter) and for Hazel Grove (Andrew Stunell) have been campaigning for many years. Metrolink extensions have also been given the green light and are under construction, including within my constituency.

From a Manchester perspective, two projects hold the key to whether the Government’s commitment to rebalancing the economy will be followed through to its conclusion. The first is high-speed rail, and the second and more urgent is the funding for the northern hub, which I am sure the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), will be sick of me raising with him on so many occasions.

The debate about high-speed rail will drag on, with supporters and opponents making arguments and counter-arguments about whether the real economic benefits are predominantly for London and the south-east. However, what cannot be disputed is the fact that the north will see the greatest possible level of benefit only once high-speed rail reaches Manchester and Leeds. I welcome the Government’s commitment to the next phase of the high-speed rail network, but I want to know what the Government are doing about bringing forward the timetable, so that we do not have to wait another 20 years before we reap the full benefits.

I recognise that for once the Government are looking towards our transport needs for the next 100 years rather than for the next 10 years, but we need to do more to bring forward the time scale so that the regions can benefit as soon as humanly possible.

From Manchester’s perspective, however, the real test for the Government will be whether or not funding will be forthcoming for the northern hub. With £80 million already secured for the Ordsall chord, the complete hub scheme will cost only £560 million in total—and possibly less, given that some elements of the project are already included in other committed individual schemes. We should compare this to the billions of pounds that the Government have committed for Crossrail.

In a Westminster Hall debate in January, the hon. Member for Blackley and Broughton (Graham Stringer), who is not in his place this afternoon, calculated that three months of Crossrail payments would pay for the whole of the northern hub. I am not sure how accurate the hon. Gentleman’s maths is, but it certainly puts into perspective the difference in funding levels for the two schemes. At a cost-benefit ratio of 4:1, with an estimated 20,000 to 30,000 new jobs and a £4 billion boost to the economy, the northern hub is the opportunity for the Government to show their commitment to rebalancing the economy.

I questioned the Minister of State, Department for Transport during the Select Committee inquiry, and she said that the northern hub

“must be a really strong contender for support in the next railway funding settlement control period.”

She went on to confirm the Government’s intention to try to close the prosperity gap between the regions, saying:

“One of the ways in which we could do that is by targeting our transport spending on projects which will generate growth in different regions.”

Well, I could not agree more. If the Government are serious about economic rebalancing, they need to confirm the funding for the northern hub, and not just in a piecemeal way. The Government need to come up with all the cash in control period 5.

In the short time left, I should like briefly to raise two other issues mentioned in our report. The first relates to the dependence of transport priorities on local circumstances. A one-size-fits-all or a Government-know-best approach will not work. In line with the coalition Government’s localism agenda, there needs to be more local determination of what works in each local area. National Government is not well placed to decide what is best for an individual area and what will best support economic growth. Metrolink has been a massive success in Manchester, driving economic growth and stimulating regeneration to areas such as Salford Quays and Eccles, as well as encouraging modal shift in areas such as my constituency.

The need for local decision making was reflected in the report’s conclusions—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

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[Lilian Greenwood (Nottingham South) (Lab)]

I welcome the opportunity to debate the Select Committee’s report on transport and the economy. It has given many hon. Members the chance to raise constituency concerns, which I hope the Minister will respond to when he sums up.

I was going to say that it was noticeable that almost all the speakers in the debate were MPs representing towns, cities and rural areas in the north, but then we had contributions from the hon. Members for Rugby (Mark Pawsey) and for Stroud (Neil Carmichael), which broke the flow somewhat. None the less, I am sure the Minister will want to reflect on the implications for Government policy of the concerns expressed by northern MPs and the fact that good transport links are demanded by the north.

The Select Committee report looks at the big picture and asks some searching questions of the Government, which the Minister must answer. At the heart of the report is the Committee’s conclusion that Ministers have failed to explain how their decisions on investment in transport will deliver the economic growth and rebalancing they say are needed. Of course that could be a failure of communication, but I think it is a failure arising from the absence of any strategy or joined-up thinking from this Government.

People throughout the country know that the biggest and most pressing problem we face is the lack of jobs and growth. There are 2.7 million people on the dole—the highest number for 17 years—representing a huge cost to the economy in benefit payments and lost tax, a huge cost to the individuals affected and their families, and a cost to their local communities, many of which, especially in the north, are all too aware of the long-term scarring effects of unemployment. The Government should have a laser-like focus on using every aspect of policy to turn things around by creating jobs, supporting industry and getting our economy moving.

Transport should have a key role to play, but time and again we have seen this Government take decisions that send us in the opposite direction. It is not just that they have cut spending too far and too fast, but that they have made the wrong choices. Labour has not opposed £6 billion of difficult and painful cuts to the transport budget—two thirds of the cuts proposed by Ministers—but we would have made different decisions about how to spend the remaining money to protect passengers and deliver the maximum benefit to our economy. Labour would have protected additional investment in the rail and road network as part of a five-point plan for growth and jobs.

[Mr Leech]

From what the hon. Lady has said, a Labour Government would have been forced to cut capital spending even further.

[Lilian Greenwood]

No, I think the hon. Gentleman misunderstands me. As I said, we have not opposed £6 billion of difficult cuts to the transport budget, whether that is capital or revenue funding, but we would have maintained a further £3 billion and we would have spent it in different ways, as I will set out.

We would have protected £500 million for road schemes vital to economic growth, providing a much-needed boost to our construction industry. We would have made sure the £435 million needed for essential road maintenance went ahead, saving the taxpayer money in the long term, according to the National Audit Office. Labour would not have cut £759 million from the rail budget; we would have put passengers first and tackled affordability. We would not have allowed the private train operating companies to boost their profits with eye-watering fare rises of up to 11% this January, 5% more than the RPI plus 1% that the Government told passengers they could expect, which means that some people are spending more on their fare to work than they do on their mortgage or rent. That is not helping to make work pay; it is just adding to the cost-of-living crisis that households are already facing.

Labour would put working people first by taking on the vested interests. We would not have given back to train companies the right to fiddle the fare cap, so that when we said that fare rises would be limited to inflation plus 1%, the public would know that that was the maximum rise they would face at the ticket office. We would also have been able to bring forward the much-needed electrification of the midland main line that, as my hon. Friend the Member for Leicester South (Jonathan Ashworth) and my neighbour, the hon. Member for Broxtowe (Anna Soubry), who is no longer in her place, pointed out, is so important to improving connectivity between London, Northamptonshire and four of the largest cities in the country: Derby, Leicester, Sheffield and, of course, my own city of Nottingham. We would have started the electrification of the great western main line, but we would have gone right through to Swansea, rather than stop at Cardiff.