Rising Cost of Transport

Julie Hilling Excerpts

Wednesday 9th January 2013 Commons Chamber

[Mr McLoughlin]

The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), has made a statement on that, in which he also outlined some of the requirements we expect of London Midland. He and I will be watching the performance of that franchise very carefully. It is important that we give passengers the service they rightly expect and demand. We have put in place a number of measures that will cost London Midland considerable money to put into operation, and I expect it to do so.

I am conscious of the time—time moves on when I am continually trying to help colleagues to understand where their policies have gone wrong in the past. We are looking at ways to improve our railway services. As I have said, the Labour party, which is in control in Wales, has kept exactly the same flexibility on rail fares that the UK Government have retained.

In 10 years, the Labour Government electrified only 10 miles of railways; this Government will electrify 850 miles, including the midland main line, for which my hon. Friend the Member for Loughborough (Nicky Morgan), the Whip, who is sitting on the Front Bench, has campaigned so hard.

[Julie Hilling (Bolton West) (Lab)]

Will the Secretary of State give way?

[Mr McLoughlin]

I will give way only briefly, because I am conscious of the time.

[Julie Hilling]

Does the right hon. Gentleman remember the amount of money the Labour Government had to put into the railway to rebuild it after 18 years of no investment under the previous Tory Administration?

[Mr McLoughlin]

The hon. Lady is a sadly missed member of the Transport Committee, and was there when I first appeared before it. She should be careful, however, because she was probably a member of the Committee during its inquiry on “Rail 2020”, which quite clearly shows that the worst year for subsidising the railways was 2000-01. I cannot remember what party was in government at that time, but it is true that investment went up afterwards—[Interruption.] She is looking for the page number. Page 9 simply and straightforwardly sets out the record.

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[Julie Hilling]

Will the Secretary of State give way?

[Mr McLoughlin]

I must press on. I am sorry I cannot give way to the hon. Lady. The facts I have pointed out are in the report. I will try to make progress and give other hon. Members the chance to contribute to the debate.

We are putting record investment into the railways. In the 19th century, our railway was a symbol of Britain’s innovation—including London’s underground, the first anywhere and 150 years old today. Now, the railway is experiencing an extraordinary renaissance. Last year, the number of passenger miles travelled was almost 50% higher than it was in 2000. More people are travelling by rail today than at any time since the 1920s, and rail freight has grown by more than 60% since privatisation. We have soaring demand, but limited space. Regular passengers on busy lines know only too well what that can mean—overcrowded carriages and uncomfortable journeys. That is not good enough and we are going to sort it out.

In July, we announced £16 billion of funding for the network between 2014 and 2019. Inter-city travellers will benefit from the completion of the northern hub in Manchester, a £240 million investment on the east coast main line and a further £300 million for high-value, small-scale schemes in other parts of the country. We approved a £4.5 billion contract to build a new generation of inter-city trains in County Durham, creating some 900 jobs, and we are procuring thousands of new carriages for Crossrail and Thameslink. We are also getting cracking with HS2, the biggest new transport scheme since the building of the motorways. Meeting demand, however, is only part of the problem.

While the previous Government blew the budget, the railway was allowed to grow wasteful—up to 40% more expensive to run than those of our European competitors. We have therefore had to take a hard look at the industry and have a rail reform programme to tackle the £3.5 billion annual efficiency gap identified by the McNulty report in his rail value-for-money study. Already, major savings are being found. Ultimately, this focus on efficiency will help us to deliver our goal and put an end to above-inflation fare increases at the earliest opportunity. A railway that is efficient and modern is a railway that is affordable to use.

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[Julie Hilling (Bolton West) (Lab)]

The Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), has claimed that rail passengers are getting a premium service and that rail fares are not nearly as expensive as is being presented. I wonder who he is trying to kid. My constituents who are crammed like sardines into nearly 30-year-old trains do not believe that they are getting a premium service, and even McNulty acknowledged that fares overall are high relative to other countries.

Research by Passenger Focus has shown that fares in Britain are the highest in Europe, more than four times higher than the cheapest country for medium-distance journeys and nearly twice as high as the next most expensive. Granted, if someone can purchase their ticket far in advance and specify which train they want, and advance-purchase tickets are available for that service, they may be able to find a fare that is cheaper or comparable with those of our European colleagues, but for most people travelling for business that option is rarely available. Of course, if things happen and they are unable to get on a specific train at a specific time, they cannot transfer their ticket to another train, so the only way they can get the best price is to book in advance and accept zero flexibility and no refunds, which is something that the vast majority of us are unable to do.

Witnesses to the Transport Committee suggested that the way to solve overcrowding on trains was to price most people off peak times. Indeed, the Government appear to be considering super-peak tickets that would be even more expensive than peak tickets. When the former Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond), gave evidence to the Committee, he answered a question of mine by saying that the railways are already a rich man’s toy. This Government seem to want to save some services for the super rich and price ordinary people off trains altogether. As Passenger Focus says, people should be incentivised to avoid travelling in the high peak, but not penalised even more when they cannot avoid it.

Our highly complicated fares system does not help train passengers to find the cheapest means of travel. The proposal to close ticket offices just adds to the difficulty, particularly for those who are unable to book tickets via the internet. It now costs more than £300 for my constituents to travel to London during the peak. They could get a holiday in the sun for a week, with spending money to spare, for the cost of getting to our capital city. Rail prices for long-distance travel have become obscene and mean that we are putting cars back on to roads. That surely cannot be right.

The vast majority of public transport journeys are made on buses. Since 2005, bus fares in metropolitan areas have increased by an average of twice the rate of inflation. Deregulation has produced a system where operators have been given a licence to print money at no risk to themselves. If an operator deems a service to be unprofitable, it can simply stop it and remove it from residents, unless the local authority steps in to save it. At a time when local authority budgets are being cut to the core, there is no money to support those services, and we know that services are being cut, leaving people unable to get to work and the elderly and people of limited means stranded in their homes.

Deregulation of the plethora of bus operators has also made it incredibly difficult to introduce any sort of travel card. London has had Oyster cards for nine years, but my constituents are still waiting. Although Transport for Greater Manchester is working hard to get our version of Oyster, it is finding it extremely difficult because of the various vested interests.

I spoke yesterday about my constituent Leah, who is affected by the cuts to tax credits and other benefits. Leah works 16 hours a week to earn £101, but she has to pay £18 a week for her bus fares. If she lived in London, she would pay £11.20.

The increases in train and bus fares are hitting ordinary people very hard. Wages have not kept pace with inflation and we know that people are already having to choose between heating and eating. Public transport costs are forcing many who can to travel to work in their cars and those who cannot to give up their jobs. The Government need to help local authorities to introduce quality contracts and Oyster-like travel cards and to keep bus fares down.

It seems that running our buses or trains is a licence to print money. Even though the majority of rail franchises receive large subsidies, they still take operating profits out of the industry. It is very much a case of something for nothing, which is why it was so disappointing that, after the debacle of the west coast franchise, the Government, apparently on ideological grounds, would not even consider directly operating the railway, as is the case with the east coast franchise, and putting money back into the Treasury.

Finally, I want to challenge the notion that the previous Labour Government did nothing on rail. We inherited a railway that had been starved of investment for 18 years and we needed to do some fundamental repairs, including rebuilding the west coast main line, which was already electrified. In 2006-7, the Labour Government spent twice as much as the current Government are spending, and in each year since 2003 more money was spent on the railways under the Labour Government than this Government are spending this year.

Let us agree that public transport is also a public service. It needs subsidy and, more importantly, it needs to be affordable for all, so that it is not just a rich man’s toy.