Transport and the Economy

Lilian Greenwood Excerpts

Tuesday 28th February 2012 Commons Chamber

[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.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

The hon. Lady is busy telling us about all these spending commitments, but she is also saying that she would make £6 billion of cuts, so will she identify where those cuts would be made?

[Lilian Greenwood]

I will not go through all the cuts right at this moment, but I have already said that we would not have cut £759 million from the rail budget—[Interruption.] Well, the Minister has put forward £528 million-worth of savings from the rail industry in his departmental plans, and we would not have opposed that. We would happily find the same efficiencies that he says he would find, such as the £245 million from Crossrail. We certainly agree that where there are efficiencies to be found, they should be found. I could go through his entire departmental budget, but that would detract somewhat from the debate. I am happy to do that another time.

Under Labour, there would not have been a £680 million cut in local transport funding, which is leading to a Beeching-style cull of our bus network. The Campaign for Better Transport estimates that one in five supported bus services have been scrapped. Whole communities have been left isolated, without access to public transport, and fares are rising on those services that remain. Under Labour, three quarters of local authorities would not be reviewing school transport provision, with many families being asked to pay more just to get their children to school. That increasing problem was rightly highlighted by the hon. Member for Staffordshire Moorlands (Karen Bradley) in her wide-ranging speech about the challenges facing her rural constituency. As my knowledge of Staffordshire Moorlands was previously limited to Alton Towers, I now know a lot more about it.

Time and again the Government have chosen policies that have a disproportionate impact on the very people who need their help, particularly in these austere times. My hon. Friend the Member for Sedgefield (Phil Wilson) made that point clearly and passionately. He focused in particular on the impact of bus cuts on villages in his constituency and the real problem that that is creating not only for people seeking work, but for those trying to stay in their jobs. The unemployed, 64% of whom do not have access to a car, need buses to get to interviews and jobs. How can they get back into work if there is no bus or the fare is unaffordable? What about young people, 72% of whom rely on buses to get to college? How can they stay in education or training to get the qualifications they need for the future if there is no bus or the fare is unaffordable?

Labour would be prepared to maintain investment in our much-needed bus services, but it would not be a blank cheque; we want something for something. We would reverse the cut to the bus service operators grant, but in return we would expect the bus companies to work with us to deliver a concessionary fares scheme for 16 to 18-year-olds in education or training. Many people would like to get on their bicycles because it is not only a good way to protect the environment, but a cheap way to get about. We would not only protect the road safety budget, but reallocate funding to improve cycling infrastructure and give people the confidence they need to use their bicycle.

Even for those people who do have access to a car, the situation is little better under this Government. The Chancellor’s decision to increase VAT to 20%, just when global oil prices had taken the cost of filling the tank to record levels, is a real drain on household budgets, especially in rural areas. That is why a temporary cut in VAT back down to 17.5% is a vital part of Labour’s plan for jobs and growth. It would cut the price of a tank of petrol by around £1.35 and put money into people’s pockets.

The Government claim that one of their primary objectives is to rebalance the economy, including by reducing the north-south divide. I am not sure whether Derby considers itself to be in the north—Derbyshire always feels reassuringly like the north to me—but I do not think that the Government’s claims to be rebalancing the economy away from reliance on financial services and towards manufacturing ring true with voters in Derby. The decision to award the Thameslink contract to Siemens, which will build the trains in Germany, is a real kick in the teeth for Bombardier, the only company that designs, manufactures and assembles trains in the UK. That decision put the whole future of UK train manufacturing at risk, along with thousands of highly skilled engineering jobs not only in Derby but across the midlands.

I welcome the Government’s admission that they got that wrong and their decision to amend the tendering process for Crossrail, but why, instead of spending months saying that they could do nothing about the process for Thameslink, did they not act to protect 1,400 jobs at Bombardier? Having delayed the project by a year, Ministers had the time and opportunity to restart the procurement process and ensure that wider socio-economic factors could be taken into consideration. They have proved that today.

In response to the Transport Committee’s call on the Government to explain how their policies will achieve economic growth and tackle regional disparities, the Department cites the example of HS2. There is cross-party consensus that high-speed rail is the right way to deliver greater capacity and reduce journey times between our major cities. By linking to the existing east and west coast main lines, high-speed services will serve cities including not only Manchester, Sheffield and Leeds, but Glasgow, Edinburgh, Newcastle, Liverpool, York and Durham. Once again, however, the Government have missed a trick: why are they legislating only for the first phase of the new high-speed line, from London to Birmingham, when they could have given a real boost to cities in the north by taking the whole Y route forward as one project, opening up the possibility of beginning construction in the north and the south and accelerating the benefits north of Birmingham? I hope that the Minister will respond to the pleas from his hon. Friend the Member for Manchester, Withington (Mr Leech), who asked for faster progress on HS2 to help Manchester and other northern cities.

Labour has offered to work on the same cross-party basis to tackle the urgent need for extra capacity at Britain’s airports. The Government’s failure to set out any strategy for aviation, or even a plan to do so by the end of this Parliament, is putting jobs and growth at risk across the country. Regional airports have an important role to play. The hon. Member for Stockton South (James Wharton) mentioned Durham Tees Valley airport, and I know that my hon. Friend the Member for Sedgefield has led a local campaign on behalf of the airport, so Members on both sides of the House will look forward to the Minister’s response to that call for Government support.

[Phil Wilson]

The campaign in the area is a cross-party campaign. We have already arranged a meeting with the Minister of State on 24 April to discuss the public service obligation and the way forward. One of the reasons why One North East did not apply for a PSO was the cost that involved, and I am concerned about asking the LEP to do that. If One North East did not have the money, I am sure that the LEP will not. I think that we need to be a little more sophisticated in how we raise money to go ahead with this.

[Lilian Greenwood]

I thank my hon. Friend for that clarification. He is quite right that one of the effects of scrapping our regional development agencies has been to make co-ordination more difficult.

The Government’s call for airports to be “better not bigger” is not a policy but a slogan, and the blanket ban on expansion in the south-east makes no sense, but that does not mean any backing down from our commitment to tackle climate change. Any new capacity must go hand in hand with tougher targets to reduce carbon emissions from aviation. I hope that the Minister will take forward that work on a cross-party basis.

Tackling climate change is not just a challenge, but a huge opportunity for British business, so it is deeply disappointing that Ministers have reversed their commitment to support the development of a national public recharging network for lower-emission vehicles, instead leaving the roll-out of recharging infrastructure entirely to the private sector. That is a real missed opportunity when such cars could and should be a growing industry.

Families throughout the country are paying the price for the global financial crisis of four years ago, and whoever was in power would have had to make tough decisions on spending, but that is why it is so important that every penny the Government spend delivers on their overall objectives, and that in turn is why Transport Ministers are failing: they simply do not have a strategy to address needs of the country. Not only are they cutting too far, too fast, but they are making the wrong decisions—the wrong decisions to create the jobs that the economy so desperately needs, the wrong decisions to get people back into work and to support young people in education and training, the wrong decisions to support British businesses, and the wrong decisions to ease the cost of living for hard-working families.

It does not have to be that way. Labour would make tough decisions—we accept that there have to be significant cuts in spending—but we would ensure that all our efforts were focused on getting the economy moving again and on getting people into work. That is the only way to cut the deficit and we would ensure that every penny spent on transport served that purpose.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I am pleased to respond to this debate, and I welcome the generally constructive comments from Members on both sides of the House. I shall try to answer as many points as I can in the 15 or so minutes allotted to me.

The coalition Government’s vision is for a transport system that boosts growth and cuts carbon. By investing in transport that links people with the workplace and goods with the marketplace, we are building a more efficient and effective transport network that is an engine for economic recovery and for creating jobs; and by investing in projects that promote green growth and help people to make more sustainable travel decisions we can help to build a more balanced, low-carbon economy that is essential for our future productivity. I stress, however, that there is not an either/or choice between building a stable and strong economy and safeguarding the environment: cutting carbon and generating growth are two sides of the same coin. Both are essential objectives that transport must deliver, and that is precisely what we are delivering.

On the question of investment, we are pleased that the Transport Committee welcomed the additional funding for transport which was announced in the autumn statement and in the growth review—and which was significantly higher than many people expected. The announcement was not only a clear demonstration of the coalition's commitment to growth, but a demonstration of our belief that improving transport infrastructure can be among the most effective ways to drive our economy forward.

The hon. Member for Nottingham South (Lilian Greenwood) spoke on behalf of the Opposition in a contribution that I found astonishing and lacking in some reality. She referred to allegedly wrong choices, but by wrong choices I wonder whether she is referring to the A453 improvement in Nottingham, the ring-road improvements in Nottingham, the station improvements in Nottingham, the tram extension in Nottingham, or the other projects that we have been taking forward throughout the country—in the north and the south—on behalf of the Government.

The hon. Lady started by saying that she would make £6 billion of spending cuts, but in fact all we had were indications of further expenditure to which the Opposition are committed: expenditure on a midland main line, on electrification to Swansea, on buses, on cycling and on road safety. It seems as if the Opposition have learned nothing. It was another charter for a great wodge of expenditure, and completely out of touch with the economic situation in which we as a nation find ourselves. It was cloud cuckoo land economics.

[Lilian Greenwood]

As I made clear in my contribution, we have identified £6 billion of cuts as set out in the Minister’s budget, with which we agree. I was talking about the areas where we would not cut but change the direction of expenditure in order to protect passengers and to stimulate economic growth and jobs. That is exactly what I set out, and I would be more than happy to discuss with him exactly where the cuts would be made.

[Norman Baker]

I am delighted to hear that, because my hon. Friend the Member for Cambridge (Dr Huppert) has written to the hon. Lady’s boss, the hon. Member for Garston and Halewood (Maria Eagle), the shadow Transport Secretary, asking for details of the £6 billion of cuts, and so far no answer has been forthcoming.

Our growth review package will deliver £1 billion of new investment by Network Rail, more than £1 billion to the strategic road network and £500 million for local schemes and, in particular, for schemes that can make the earliest possible contribution to economic recovery.

We recognise that spending is one thing but that spending wisely is something else, so we are determined to ensure that every pound of public money invested in our transport system is made to count. That is why, although our rail investment programme is the largest and most ambitious since the Victorian era, we are committed to reforming the rail industry in order to reduce costs significantly and to improve efficiency. Members have today welcomed the electrification of the north trans-Pennine rail route between Manchester, York and Leeds, which is part of the northern hub project, as well as other major investment processes.

The Chair of the Transport Committee referred in her opening remarks to her view that an explicit transport strategy was missing, but with respect I do not accept that point. She made it to the Secretary of State for Transport on 19 October 2011, when my right hon. Friend gave evidence, and I refer the hon. Lady to her own question, Q16, from that session. The Transport Secretary said:

“To all intents and purposes, …what you will end up with…the aviation framework…the rail reform… the work being undertaken by Alan Cook to look at the Highways Agency”

is what will produce, certainly for the medium term, a strategy. When the Committee looks at the rail reform and aviation papers, which will both be out shortly, the Chair will see that. If she is making the point that we need to look over the longer term, say over 40 or 50 years, she is making a fair point, which the Government will take on board.

[Norman Baker]

I agree, and we inherited that position from the previous Government, but I have already said that the rail reform and aviation papers are both due very shortly, and I hope that the Committee will do its usual good job of examining the documents and making comments to the Government following its analysis.

My hon. Friend the Member for Warrington South (David Mowat) was concerned about the transport business case, but my hon. Friend the Member for Wimbledon (Stephen Hammond), who is no longer in his place, made the point that we have refreshed the transport business case, and we also have the departmental plan for transport, which sets out our priorities in the short term. The transport business case does include wider aspects of economic development, which my hon. Friend the Member for Warrington South was concerned about, so the Government have now put in place a wide -ranging formula to ensure that those essential points are captured in our assessment of individual transport projects.

The hon. Member for Sedgefield (Phil Wilson) referred to declining rural bus services, a point that he had made before, but 78% of bus services are commercially run by commercial operators and are therefore not under the Government’s control, as he will appreciate. They have been affected only by the BSOG reduction, of which we gave 18 months’ notice, unlike what happened in Wales and Scotland, where bus companies were given almost no notice.

[Lilian Greenwood]

Will the Minister give way?

[Norman Baker]

I shall make some progress, if I may.

The performance of local councils across the country varies enormously in respect of buses. If the hon. Gentleman has had significant cuts in Durham, he must consider other areas, such as East Riding and so on, where there have been far fewer cuts. Local councils have responded in rather different ways to the difficult economic situation they find themselves in, and it is not fair simply to blame the Government for that. He needs to look at his local council and at the decisions it has made in its area.

I hope the hon. Gentleman will notice that, in trying to deal with the matter, we have given money to community transport, including in Durham. I have also announced a new fund, the better bus area fund, which his local authority has indeed applied for; and the local sustainable transport fund, which is worth £560 million and includes more money for the area than the previous Government invested over the same period, has provided funding for the Wheels to Work schemes, which I mention because he made a very fair point about the importance of ensuring that there is joined-up thinking between the Departments for Transport and for Work and Pensions. I have corresponded with the Secretary of State for Work and Pensions on the matter, and the discussions are ongoing because we recognise the important link between transport and work. The hon. Gentleman made a very fair point.

On regional growth, I was disappointed that the Committee Chair quoted the IPPR’s report without question because it is incomplete and partial, as she may remember I said when I dealt with it at Transport questions a couple of sessions ago. Its figures are unreliable. Of all the transport investment announced in the Chancellor’s autumn statement and in the 14 December announcement about local major schemes, 62% by value is in the north and the midlands and 35% is in the north alone. Similarly, of the strategic highway investments announced in the 2010 spending review, 63% by value is in the north and midlands and 40% is in the north alone. The spend in the autumn statement for the local authority majors totals over £3 billion of regional spending, of which 35% is in the north-east, north-west, and Yorkshire and the Humber, 27% is in the west and east midlands, and only 24% is in London and the south-east. I therefore do not recognise or accept the figures in the IPPR report.