Rail Fares

Lilian Greenwood Excerpts

Wednesday 5th September 2012 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

I join colleagues on both sides of the House in putting on the record my congratulations to the new Transport Secretary on his appointment. It is fitting that he should have made his debut in this debate. I know he is unable to be in the Chamber at the moment, but I am sure he will look carefully at all the arguments put forward by colleagues.

I listened very carefully to the Transport Secretary’s contribution, and was somewhat disappointed that he said very little about rail fare increases. Perhaps the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), will say more about them, or perhaps the Secretary of State will return to fare increases in the coming days or weeks as he finds his way in his new brief and tell us exactly what he will do to protect passengers, what he thinks about the flex system, and whether he will lobby the Chancellor to keep rail fare rises to RPI plus 1%, as the Opposition propose. The Transport Secretary has an opportunity to push for the reintroduction of a real cap on fare rises, and I very much hope he takes it.

This debate has been about the general and the particular. There is a general crisis in the cost of living. Household budgets are under enormous pressure as living costs climb ever higher. The Opposition have called today for the Government to take a particular action—a further U-turn that would be welcomed by the constituents of all hon. Members in the Chamber. The Government could reverse their decision to allow the dramatic rise in rail fares, which, for many people, have come at the worst possible time.

The Government could resist the growing burden on hard-pressed passengers. The Labour Government put in place a strict cap on rail fare rises of 1% above inflation. It is a cause of great regret, both in the House and more importantly in the country, that the current Government chose to give the rail companies free rein over regulated fares. The removal of the cap, coupled with the restoration of flex, will lead to fare rises of up to 11%. That is a real blow at a time of pay freezes in both the public and the private sectors, higher-than-expected inflation and a contracting economy. The Campaign for Better Transport has warned that the cost of season tickets will go up three times faster than salaries. Without economic growth, the pain will only increase in intensity.

My hon. Friend the Member for Wirral South (Alison McGovern), who is not in her place, clearly explained how many people, particularly commuters, need to travel at particular times and cannot shop around for cheaper fares in the off-peak or super off-peak periods. They must simply pay up and see their disposable income hit. To give just one example, when one of my constituents needs to commute from Nottingham to Leicester to go to work, a season ticket currently costs £1,672 a year. Under the Government’s plans, it is estimated that that figure will rise to £1,937 by 2015, which would represent 7.38% of the average regional salary. Pity the commuter from Leeds to Hull whose season ticket will go up from £3,732 to £4,323, an eye-watering 16.5% of the average regional salary. In the most extreme cases, a season ticket could cost up to 25% of the average salary.

As my hon. Friend the Member for Harrow West (Mr Thomas) noted—and the hon. Member for Northampton South (Mr Binley) agreed—commuters in the south-east are routinely spending 15% or more of their salary simply on getting to work, and many will be priced out of work altogether. The example given by the hon. Member for Brighton, Pavilion (Caroline Lucas) was helpful in that respect.

The issue is not just affecting commuters. As my hon. Friend the Member for Huddersfield (Mr Sheerman) said, this also hurts businesses in his constituency whose staff need to travel to London to sustain and grow future business. Meanwhile infrastructure spending is being scaled back and the Government seem set on using the McNulty report as cover to withdraw staff from stations, despite many passengers relying on them to find the cheapest fares, which—as many hon. Members have pointed out—cannot easily be done using automated ticket machines, never mind the other concerns about unstaffed stations.

The fare rises will also have a particularly serious impact on those on low incomes, including pensioners and young people, who are already feeling the squeeze as the cost of living rises. When I speak to young people in my constituency the cost of transport is one of the key concerns that they raise, and I think the high cost of train travel comes as a real shock to many of those leaving home for the first time to go to university. For pensioners, the fare rises are compounded by cuts to alternative modes of transport. Bus services have been cut back and the withdrawal of support for long-distance coach travel is hitting pensioners hard.

Before the last election, someone said:

“The fares issue will not go away. It will be the biggest inhibitor of train travel in the years to come.”—[Official Report, 25 February 2010; Vol. 506, c. 166WH.]

Those are not my words, but those of the Under-Secretary of State for Transport, the hon. Member for Lewes. In fact, we have heard many warm words on fares. Scores of coalition MPs have been telling their local papers that they opposed the rise in fares, despite voting for them in this House. They will be glad to have the opportunity to set the record straight, and I trust that all those hon. Members will join us in the Lobby today.

[Dr Huppert]

The shadow Secretary of State also suggested on several occasions that we had voted for RPI plus 3%, but I do not recall doing so. Can the hon. Lady point to the dates of the Divisions in which any hon. Member specifically voted for RPI plus 3%?

[Lilian Greenwood]

The hon. Gentleman will find that we have had previous debates on transport and the cost of living when he had an opportunity to vote for our proposals, which would have reduced the increase in fares.

[Dr Huppert]

Will the hon. Lady give way again?

[Lilian Greenwood]

Not at the moment.

We have heard many warm words on fares and coalition Members have been supportive of the Government’s position. We have been promised an end to “inflation busting fares” in a press release from the Department for Transport, and both Liberal Democrats and Conservatives promised “fair pricing for rail travel” in the coalition agreement. For all those fine words, what has been delivered? Fares will rise by 3% above inflation, flex will be reinstated, and there will be overall rises of up to 11%. The hon. Member for Cambridge (Dr Huppert) likes to pretend that that is nothing to do with his party, but it is his Ministers, including the Under-Secretary, who are imposing these measures.

The new franchises also hand operators unprecedented license over the quantity and quality of the services that they run. Ministers must mind the gap between rhetoric and reality. For too many passengers the reality of rail travel is overcrowded carriages, repeated delays and needlessly complicated pricing structures. Instead of tackling the root causes of waste in the railways, the Government are merely handing the cost on to passengers. We are keen to see a more efficient rail industry, but passengers face unaffordable fare rises now. There have been enough empty pledges from this Government. Their words are cheap, but the fares are dear, and the rail companies count the profits. There has to be another way.

Less than a month ago, the former Transport Secretary, now Secretary of State for International Development, said that she wanted to find a means of bringing

“fares down to something affordable.”

This motion offers just such a means. I hope that the new Transport Secretary will be prepared to stand up against vested interests for the public good, and I hope that Members from all parties will support this motion to help ease the burden on rail passengers.

--- Later in debate ---

[Norman Baker]

I am merely reading out the legalistic words that the previous Transport Secretary put in place stating that the policy was to be reversed on 1 January 2011. The facts speak for themselves. I have to ask, however, if the Opposition’s policy is now to end the flex, why the Welsh Assembly Government, run by the Labour party, continue to operate it. I have not heard any words from the Opposition condemning the Welsh Assembly Government. Or is it all right to have flex in Wales, where Labour is in control, but not in England, where we are determining policy for rail matters over here?

I am interested in a point that several Members made about the split of the responsibility for paying for the railways between passengers and taxpayers. The point about where that balance should lie is very important. The Opposition spokesman will know that Labour’s plan was for a 70% passenger and 30% taxpayer split. In 2010, the percentages were 64% passenger and 36% taxpayer, so one assumes that Labour wants to increase the percentage in order to reach its 70% figure. Our policy priority does not include worrying about the split per se, but is about getting efficiencies into the rail network—a point that my hon. Friend the Member for Northampton South (Mr Binley) rightly made. I can assure him that we are taking great steps to improve the efficiency of the rail network, and by and large we have adopted the report from Roy McNulty, which was a helpful contribution to the debate on the rail network, in order to bring down our costs.

Roy McNulty indicated that costs were about 40% above what they should be, and we are determined to make those savings. We have identified savings of £1.2 billion in control period 4—the present control period—and up to £2.9 billion of further savings in control period 5. There are further savings to be made through genuine efficiencies—not cuts—in how the railway is run. One, for example, is the alliance project between Network Rail and South West Trains. I am not quite sure whether the Opposition support that trial, but it is delivering real savings and efficiencies, eliminating duplication, reducing the cost of the railway and providing a better service for the people who use South West Trains. That is an example of how efficiency savings can improve services. I am happy to say that it is now happening on South West Trains.

[Lilian Greenwood]

The Minister has talked about the balance between taxpayers and fare payers. He will know that the National Audit Office said that higher rail fares might simply lead to higher profits for train operating companies. How will he ensure that taxpayers benefit, not the private companies?

[Norman Baker]

It is our intention, once the savings coming through from Network Rail are realised, to end the era of above-inflation rail fare increases introduced by the previous Government. There can be no doubt about our intention to do that.

Let me deal with the issue of ticket offices raised by Opposition Members, including the hon. Member for Hayes and Harlington (John McDonnell), for whom I have much respect when it comes to railway matters, and the hon. Member for Nottingham South (Lilian Greenwood), the shadow Minister. It is worth pointing out that in the last five years of the previous Government, Ministers approved cuts in opening hours at approximately 300 stations. The number since the coalition Government came to power is soon to be 34, so there were far more cuts to ticket office hours under the last Government than there have been under this Government. In fact, the shadow Secretary of State might want to know that ticketing hours have actually increased at a number of stations since this Government came to power. We do not hear much from the Opposition about that either.

I do not want to make my speech simply a matter of rebutting the Opposition’s motion. It is important to get rail fares down as soon as possible and this Government take that very seriously indeed. We are committed to reducing and abolishing above-inflation rises as soon as we can. To answer the point made by my hon. Friend the Member for Sherwood (Mr Spencer), I think both sides of the coalition are committed to buttercups, rainbows and daffodils. Both of us want to end the era of above-inflation increases as soon as we practically can, and the sooner we can make the savings that the Opposition are so reluctant to see—and which, by the way, they have no plan to deliver—we can end that above-inflation record, which I am sorry to say the Labour party introduced when it was in power.

Taxpayers and indeed passengers have been paying over the odds for the railway. The fiscal position demands that the high level of public subsidy for rail in recent years be reduced. As a Government, we have a duty, which we take seriously, to keep rail travel affordable for as many people as possible and to minimise the level of taxpayer support for rail by bringing forward sensible and workable efficiencies. Achieving that will depend on securing the efficiency savings that we have outlined in our rail Command Paper. That is why it is so important that the whole industry works together to a shared agenda to deliver for both passengers and taxpayers.

Opposition Members have referred to the coalition agreement. We stand by the words in the agreement about getting a fair deal for passengers, and we are determined to do so. The present Secretary of State has already indicated, in his first contribution in the House in that role, his concern about rail fares, and his predecessor, the right hon. Member for Putney (Justine Greening), did likewise. Yes, there was pressure last year to ensure that we did not have RPI plus 3%. That pressure was successful and we have committed—once savings are found and the improvement in the wider economic situation permits—to reducing and then abolishing above-inflation rises in average regulated fares.

The hon. Member for Brighton, Kemptown—[Interruption.] I beg your pardon, Mr Deputy Speaker: the hon. Member for Brighton, Pavilion (Caroline Lucas)—I should know that, shouldn’t I?—referred to fares. I do not pretend that some fares are not excessive; some of them definitely discourage people from travelling by train. That is part of the reason why we are having the fares and ticketing review. She referred to trains being overcrowded, but to be fair and put the matter in context, she needs to recognise that one of the reasons why the trains from Brighton are overcrowded—I know them very well—is that Southern has introduced a large number of cheap fares, which local people are taking advantage of. There are now people standing off-peak all the way from Lewes or Brighton to London because fares have been reduced to an attractive level. In fact, we have a selection of fares. There is an issue about peak fares—that is part of the fares and ticketing review—but many off-peak fares are very cheap indeed.

I can assure the hon. Member for Wirral South (Alison McGovern) that split ticketing will be covered in the fares and ticketing review. As for East Coast, which is currently run from the Department for Transport, as it were, through an arm’s length body, action has been taken on that point.

My hon. Friend the Member for Cambridge (Dr Huppert) was right to talk about investment for the future, which I have already mentioned. The hon. Member for Hayes and Harlington referred to complexity; that will be dealt with in the fares and ticketing review. My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) talked about the inheritance in Kent. I recognise that there are particular issues in Kent that should be looked at, and I am happy for that to be part of the work of the Department for Transport. We want to see an end to above-inflation fare rises as soon as possible, and I want to assure the House that we in the Department are taking steps to achieve just that.

Question put.

The House proceeded to a Division.