Road Safety

Louise Ellman Excerpts

Thursday 25th April 2013 Westminster Hall

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I will start by setting out the current situation.

The most recent annual report on road casualties was published last year and provides detailed information for 2011. In that year, there were 203,950 reported casualties on the roads of Great Britain. What is notable about the 2011 statistics is that they represent the first annual increase in the number of people killed in road accidents since 2003. The number of fatalities increased by 3% to 1,901. Fatalities increased for car occupants by 6% to 883 and for pedestrians by 12% to 453.

The number of people killed or seriously injured also increased by 2% to 25,023. In particular, those figures increased for cyclists, by 15% to 3,192, and motorcyclists, by 8% to 5,609—those are very sad figures. Despite that increase, our report recognises that the number of people killed or seriously injured in road accidents still remains lower than in any year since national records began, with the exception of 2010. The 2011 figures, however, represent a worrying departure from the long-term trend of decreasing road casualties, which raises questions about the Government’s road safety strategy. The figures should be a wake-up call for the Government to provide stronger leadership on road safety.

We asked the Government to explain why they think road deaths increased in 2011. The Department for Transport’s response stated that there were a number of factors that may have contributed to the year-on-year increase in road fatalities from 2010 to 2011, particularly given that

“2010 saw the highest ever fall (17 per cent) in a single year.”

The main reason for that change put forward by the Department was that periods of extreme winter weather in 2010 may have reduced the number of road fatalities in that year, as there would have been much less traffic than usual and those motorists who ventured out would have driven more slowly and cautiously. What other reasons does the Minister believe might lie behind that increase?

[Kate Green (Stretford and Urmston) (Lab)]

I am pleased that this debate is taking place, and I apologise for not being able to stay for all of it, but it means a great deal to my constituents. The Safer Trafford Streets campaign is bringing together a range of local people and local organisations to campaign for improved road safety. Does my hon. Friend share my concern that, in light of the figures that she has just revealed, councils, including Trafford council, are cutting road safety posts? We have lost one of our two local road safety officers as a result of council cuts, which obviously creates a further risk that the figures will decline.

[Mrs Ellman]

My hon. Friend points to the importance of local campaigning and the impact of cuts in local government spending on the ability of local authorities to address road safety. I will return to those points. It would also be helpful to know whether the Minister has any provisional information on whether the winter weather earlier this year led to fewer fatalities.

Political leadership is a major factor in road safety. For many, the presence of targets under previous Governments was a sign of that leadership; targets help to focus attention on road safety and to prioritise resources. The current Government, however, have decided to adopt a different approach. When the Government published their strategic framework for road safety in May 2011, they decided against the use of road targets. Instead, they have replaced targets with an action plan and an outcomes framework, consisting of a number of indicators to be measured and a set of casualty forecasts. If the forecasts turn out to be inaccurate, the Department has indicated that it will look at the statistical data and consider its policy options. Perhaps the Minister will elaborate on those options.

Localism, as mentioned by my hon. Friend the Member for Stretford and Urmston (Kate Green), is a key theme of the Government’s strategic approach to road safety: decentralising power and funding will allow local authorities to be more flexible and innovative in tackling it. Strong leadership and a clearer vision, however, are required from the centre to communicate the importance of road safety to local decision makers and other agencies. We concluded in our inquiry that, under conditions of reduced local authority resources and a loss of skilled road safety personnel, the Government should not sit back and assume that road safety will remain a priority. There remains a responsibility for central Government to do all that they can to keep local authorities, the police, other agencies and indeed the public fully focused on delivering significant and sustained improvements.

Our inquiry found considerable variation among local authorities in their performance on road safety. There were certainly examples of good practice, but there were also cases of local authorities not improving their road safety performance in recent years. The Department indicated that it had plans to name and shame the worst performing local authorities; we asked for further information about how that might be achieved and the possible impact, and we were told that the Department had commissioned a local road safety comparison site to pull together a number of metrics that would allow members of the public to be aware of their local highway authority’s road safety performance. The Government believe that making that information available will help the public, lobby groups and council officers and members to identify where there is room for improvement. On launching the website last month, the Minister explained in a written statement that it will help the public and road safety professionals to compare the road safety performance of local authorities.

I have, however, received a number of expressions of concern about the efficiency of the website. I am told that it does not allow comparison of different authorities in any meaningful way. For example, comparisons using annual data can be misleading due to large fluctuations in some of the information, and a considerable amount of work would need to be done by someone looking for comparative data. In addition, there does not appear to be an opportunity to compare the performance of neighbouring local authorities alongside one another on the screen. Can the Minister tell us how much it cost the Department to get the website up and running and whether he is satisfied that it will work effectively as a comparison tool? Furthermore, how does he intend to use it to improve road safety? Having that information will be extremely helpful.

I will mention a number of areas of particular concern in road safety, the first being the safety of young drivers. It is not a new area of concern, and the Transport Committee has looked at it a number of times; the first report of the Select Committee that I was involved with was completed in July 2007. Today, I welcome the report by PACTS—the parliamentary advisory committee for transport safety—which again draws attention to this important issue. The figures are startling: a fifth of people killed or seriously injured on our roads in 2011 were involved in a collision in which at least one driver was aged between 17 and 24; 148 young drivers died and 412 people were killed in accidents involving young drivers, accounting for 22% of all road deaths; 4,894 people were killed or seriously injured in reported accidents involving young car drivers, including 1,552 young car drivers themselves, 936 passengers of young car drivers and 2,406 other casualties, such as occupants of other vehicles or pedestrians; and 27% of 17 to 19-year-old males are involved in a road collision within the first year of passing their test. Those are shocking statistics, and behind every statistic lies a human tragedy. Improving the safety of young drivers must be a priority and must be addressed urgently.

I was disappointed that the Government did not accept the Committee’s recommendation to initiate an independent review of driver training. Instead, the Department intends a Green Paper on improving safety and reducing risks for young drivers. Is the Department considering measures such as a minimum learning period and is it learning from lessons on the motorways to reduce young driver crashes? When will the Green Paper be published and what are the expected time scales for consultation and implementation? Implementing new policies inevitably takes time, so it would also be helpful to get an update from the Minister on specific action by the Department to improve the safety of young drivers and their passengers. What proposals does he have to encourage work with young people, perhaps before they drive, to change their attitude, which is the all-important issue? We do not want young new drivers, young male drivers in particular, to start driving with an attitude of bravado and without realising that a car can be a lethal weapon. The Government are concerned, but we need some urgency. Furthermore, are the Government looking to support voluntary organisations such as car clubs which can assist in this important area?

Cyclists are particularly vulnerable on the road: in 2011, 3,085 cyclists were killed or seriously injured. During our inquiry, The Times newspaper conducted a major campaign on the issue and gave evidence to the Committee. One criticism made by witnesses during our inquiry was about the lack of leadership from the Government on cycle safety. The Department told us that it had set up a cycling stakeholder forum, which was working on a list of ideas and actions to propose to Ministers. How often has that forum met over the past year and, as a result, what actions are being taken forward by the Department? Information from the Minister on that will be helpful.

I welcome the Government setting up the £40 million cycle safety fund, to improve road layouts in particular. The Government were reacting to concerns expressed, which is commendable, but there is a great deal more to do. Cycle safety could be improved in a number of different ways, including training, fitting heavy goods vehicles with sensors and providing infrastructure. Can the Department consider how to encourage the greater adoption of HGV sensors that might make cyclists more visible to lorry drivers? The Department told us that it was not in a position to support mandatory fitment of proximity sensors in HGVs and that the mandatory introduction of any new vehicle technology would need to be agreed at European Union level, so will the Minister update us on his discussions at EU level and whether there is support for such EU-wide regulations?

Motorcyclists are another vulnerable group; they accounted for 1% of traffic but 19% of deaths on Britain’s roads in 2011; 5,609 motorcyclists were killed or seriously injured, with 74% of those accidents involving another vehicle, and 69% of the casualties resulted from accidents at junctions. The Department continues to promote motorcycle road safety through its Think! campaign. The Department said in its response to our report that a review of the motorcycle safety advertising campaign was under way to inform the development of the new campaign plan for 2014. I would be grateful if the Minister told us what lessons were learned from that review and how they have informed the new Think! road safety initiative to encourage motorcyclists to improve their defensive riding skills.

On motorcycle safety, we also sought in our report an update on the changes to the motorcycle test, another area that the Transport Committee has looked at in the past. It has also expressed great concern about the new European motorcycle test. The Department told us that research is being undertaken to evaluate the standard, suitability and safety of the proposed revised motorcycle manoeuvres. We were informed that phase three of the research was due to conclude at the end of last year, and that a full public consultation would follow. Will the Minister update us on that?

Finally, I want to discuss speed limits and their role in making our roads safer. Local authorities have found that 20 mph zones are useful in improving road safety, particularly by reducing pedestrian and cyclist casualties. There is evidence of significant public support for these zones. Indeed, this is another area of policy that is being implemented for which the Transport Committee made strong recommendations when it considered transport safety in the past.

I welcome the fact that the Government have recently updated their guidance to help local councils to implement more consistent speed limits on local roads.

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

Does the hon. Lady agree that as a result of Government action it will be significantly cheaper for local authorities to implement 20 mph zones, and that the excuse that local authorities often used for not doing so is now significantly diminished as a result of that action?

[Mrs Ellman]

I welcome the Government’s measures in this area. One reason for the slow progress in some local authorities in the past was the cost of that and other measures that they had to implement at the same time. I am pleased that the revised guidance incorporates recent changes and that that creates more flexibility for authorities to implement 20 mph limits and zones.

The Government have been less clear about their views on motorway speed limits. During our inquiry, we heard a range of views on the possibility that the Government might raise it to 80 mph. We heard from many witnesses who are worried that the proposals would result in more deaths on the road.

[Mr Leech]

I supported the Government position on the 20 mph limit, but I certainly do not support the suggestion that motorway speed limits should be raised to 80 mph. When I was a member of the Transport Committee, it was made fairly clear that there was no evidence that additional resources would be given to the police to ensure that they would enforce an 80 mph speed limit. One argument for trialling an 80 mph limit in the first place was that if it were introduced it would somehow be enforced. That will never happen.

[Mrs Ellman]

The hon. Gentleman makes an important point. He was a member of the Committee when we conducted our inquiry, and I clearly remember him raising the matter in his questioning. The views that he expressed in the Committee are on the record, as his comments today will be.

We were informed during our inquiry by the then Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), that a consultation period would begin soon. However, to date there has been no formal consultation on this proposal and there have been rumours in the media that the Government no longer wish to pursue that policy. Will the Minister update us on the Government’s position? I would be grateful if he also told us what work the Department has carried out to assess the impact of trialling this proposal, which was one suggestion. Will he assure us that any decision to increase the speed limit will follow a debate in the House on a votable motion, as the Committee requested?

In conclusion, road safety is a vital issue. Behind every casualty statistic is a human tragedy. Road safety is a matter on which the Government should show more leadership. It is immensely regrettable that 2011 saw the first annual increase in the number of people killed in road accidents since 2003, and that the number of people killed or seriously injured also increased in that period.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I am sure the hon. Lady wants to put on the record the fact that, although she is absolutely right that the figures for 2011 are entirely regrettable and unacceptable, the provisional figures for 2012 show a welcome drop back to the trend that we saw before the blip caused by the bad weather in 2011.

[Mrs Ellman]

I am aware of the provisional figures. We need to see the official figures so that we can analyse them properly and ensure that they are the start of a return to the trend over a number of years of reducing the number of people killed or seriously injured on our roads. I know that the Government are firm in their commitment to bring more safety to our roads and to reduce casualties, and I look forward to hearing more proposals about how they will put their commitment into practice.

[Hugh Bayley (in the Chair)]

I should tell colleagues that I am expecting Parliament to prorogue this afternoon, probably around 3.25 pm, and it might be helpful to have an informal understanding that we will seek to finish the debate by that time. We can continue until prorogation, but when it happens I must immediately call an end to the debate. We should ensure that the Minister has no less than 10 minutes to respond.

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 28th February 2013 Commons Chamber

[Stephen Hammond]

Since the closure at Clyde, local geographical knowledge has been retained and improved, principally in the new management structure of the volunteer coastguard rescue service. Strong relationships and the working arrangements prior to the closure ensured that knowledge was transferred. Of course my hon. Friend will be aware of the new, improved mapping technology that is being put in place at the new co-ordination centres.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

A number of hon. Members have raised the issue of Clyde, and I share the concerns about having the appropriate number of staff available, staff morale in the Maritime and Coastguard Agency and the application of local knowledge to saving lives under the new structure. When the Minister looks at the specific situation of Clyde, will he also look at any possible ramifications for other coastguard closures?

[Stephen Hammond]

I give the assurance, as I gave the hon. Lady’s Select Committee, that we will ensure that local knowledge is transferred post-closure through the pairing arrangements that are in place prior to a closure. I intend to ensure that if there are any lessons to be learned, we learn them so that that local knowledge is passed on.

HGV Road User Levy Bill

Louise Ellman Excerpts

Tuesday 29th January 2013 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I, too, welcome the Bill and I agree that it has been a long time coming. The Transport Committee first looked at this issue midway through the last Parliament, which is quite a few years ago. We continued in the present Session, and we looked at the issue in two ways. First, we looked at it in relation to the haulage industry, including fair treatment of and fair competition for the British haulage industry. Secondly, we looked at it in relation to road safety. As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) has said, we noted the high proportion of accidents caused by lorries from the continent. We attributed that to lower safety standards, and noted issues that we felt needed to be addressed and action that should be taken.

The Transport Committee in the last Parliament certainly shared the frustration that no action was taken. It did appear at one stage that a Bill would be brought forward on the subject, but it did not happen. I am pleased that the matter has been taken up in this Parliament. It is important that the Bill should have been looked at in such detail in Committee, and it is stronger as a result. I give it my full support, and to those who question the worth of Select Committees, I say that it might have taken at least two Parliaments and many years, but we have got there in the end.

High Speed Rail

Louise Ellman Excerpts

Monday 28th January 2013 Commons Chamber

[Mr McLoughlin]

I am grateful to my hon. Friend. I announced my proposals for Scotland last October, but I have been concentrating on the proposals I have set out today for the moment. However, my right hon. Friend the Minister of State spoke to members of the Scottish Government about the scheme and they are keen to be involved.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I welcome today’s statement, which represents important investment for the future, but will the Secretary of State confirm that that will be part of investment in an integrated national rail system so that areas that are not on the high-speed line will benefit, too?

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 17th January 2013 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Siemens was announced as the preferred bidder for Thameslink rolling stock in June 2011. The contract has still not been completed. One of the consequences is a delay in the cascading of rolling stock from Thameslink to the north. When will that cascading now take place?

[Mr Burns]

I accept that there have been delays. A part of that is because this is a complex procurement process, and it obviously has to be done correctly and within the rules. In direct answer to the hon. Lady’s question, we expect the Thameslink contract to be finalised by the spring of this year, so that things can then move forward.

Local Bus Market

Louise Ellman Excerpts

Thursday 10th January 2013 Westminster Hall

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Walker. I am pleased to launch this debate on the Transport Committee’s most recent report on bus services, “Competition in the local bus market”, which we published in September. It follows our previous report on bus services after the spending review. I intend to follow up some of the issues that we raised.

Bus services are the Cinderella of public transport. They are a lifeline for millions of people, enabling them to get to work, school and college, and to hospitals, shops and vital amenities. More than 5 billion passenger journeys were made by bus in 2010-11, more than three times the number of journeys made by National Rail, yet bus services receive less subsidy and a fraction of national attention.

Our reports focus on bus services in England outside London. Buses in Scotland, Wales and Northern Ireland are the responsibility of the devolved authorities, and London has a more regulated bus system than the rest of England: services are provided under franchise arrangements set out by Transport for London. Bus services in London receive more local authority subsidy than the rest of England put together. It is perhaps not surprising that London bus services are regarded as an example of successful public transport provision, and that bus use in London grew by more than 50% in the decade to 2010 and continues to grow. By contrast, bus usage outside London fell.

It is sometimes forgotten that buses are the most popular form of public transport. Some 4.7 billion passenger trips were made in 2011-12, and half of those were in London. The amount of bus travel has grown, particularly concessionary bus travel. In 2011-12, holders of concessionary bus passes for older and disabled people made an average of 109 bus trips each. The number of fare-paying trips outside London, however, has fallen by more than 5% in the past five years. Bus demand outside London fell in the second half of 2012. Does the Minister think that that is the start of a new downward trend as funding cuts bite on fare levels and the number of services, or does he regard it as simply a blip?

Buses play a vital social and economic role. More than 50% of bus trips are made by people in the lowest two income quintiles, and more than half are made by people aged under 20 or over 60. Our earlier inquiry into bus services after the spending review received numerous letters and e-mails from people across the country telling us about the direct impact on their lives of reductions in bus services due to cuts in funding. Our inquiry was much strengthened by evidence from users of bus services who told us in great detail how important bus services were to them and how they had been affected by their withdrawal.

About 80% of bus services outside London operate on a fully commercial basis. The remainder are supported by local authorities. That includes many evening and weekend services, as well as many rural services, which provide vital support to local communities. Our earlier report drew attention to the combination of funding cuts that seriously affected the provision of supported services. Cuts in central Government funding to local authorities are having a major impact. Not only was local authority funding reduced by 28% overall from 2011-12, but the subsidy provided to bus operators—the bus service operators grant—has also been reduced by 20%. That is likely to have made some previously commercial services unviable.

The Campaign for Better Transport has recently published research showing that local authority support for 20% of tendered bus services was reduced or withdrawn in 2011-12, 41% of local authorities made cuts to spending on bus services and 10% cut spending by more than £1 million. Can the Minister confirm whether the Department for Transport knows how much local authorities are now spending on bus services, following cuts in central Government funding to those authorities? Can those data be put in the public domain? It is not satisfactory to have to rely on data extracted from local authorities by freedom of information requests, as did the Campaign for Better Transport research. We need to know the full national picture.

The Minister spoke to the Committee about promoting examples of good practice where local authorities have found innovative ways to provide services despite funding cuts. What examples can he give us? How has the Department set about promoting good practice? What effect has the cut in BSOG had on both commercial and supported bus services? Has it led to more pressure on budgets for supported services? The Government recently consulted on reforms to BSOG, including the possibility of paying some of it to local authorities rather than operators and using some of it to support the better bus areas fund in future. When will decisions on that be announced?

Our September report considered the recommendations of the Competition Commission aimed at improving competition in the local bus market. It is a difficult matter, as there is little evidence to suggest that more head-to-head competition between bus companies on routes will provide better service. Where such competition exists, it has often been detrimental to passengers; it has not made bus travel more affordable. Between 1997 and 2010, the cost of motoring increased by 32.5%, while bus fares increased by 76.1%. The reality is that passengers tend to benefit from partnerships rather than on-route competition between local authorities and operators.

During the course of our inquiry, we visited Oxford, where a voluntary partnership has led to significant improvements. Services have been rationalised, improving the city’s environment and traffic flow, timetables have been co-ordinated and a smart card has been introduced that can be used on any service. Passenger numbers have increased. Partnerships are the way to improve bus services. If possible, they should be made by voluntary arrangement.

The Government have a role to play in promoting best practice, encouraging local authorities and operators to work together and ensuring that the competition authorities do not block or inhibit sensible arrangements that benefit passengers. The Competition Commission has done some valuable work, but its focus is narrow. It puts far too much emphasis on head-to-head competition and misses the wider context of what passengers seek from bus services and the impact of deregulation. Our report questioned whether the Competition Commission had pulled its punches when it came to challenging major firms’ dominance in certain areas. The concept behind bus regulation was that it would lead to competition on all routes, which would improve passengers’ experience and reduce fares. However, the evidence shows that, in practice, five major bus companies dominate the whole bus service.

It might not be possible to make voluntary arrangements to improve bus services across the country. That reality was anticipated by the last Government, which is why, during the last Parliament, legislation was introduced for statutory partnerships and franchise arrangements known as quality contracts that put the emphasis on local authorities to specify what they want bus operators to provide. This Government have kept that legislation on the statute book. When we spoke to the Minister about it during Committee sessions, he assured us that the statute would remain in place, but it is unclear how far the Government are committed to encouraging local authorities and local transport authorities to use that legislation.

In our report, we discussed the problems of being the first authority over the line in setting up a quality contract. The Government seem determined to provide no assistance to such a local authority, and I would be pleased if the Minister clarified their position on statutory partnerships and quality contracts. In what circumstances would the Minister encourage a local authority to pursue such options?

The creation of the Government’s better bus area fund is very welcome. The Campaign for Better Transport has shown that the fund has mitigated some of the impacts of cuts in some areas. The Government have linked the provision of that funding to the development of partnerships, but local authorities wishing to set up quality contracts are not eligible for it, which looks like a strong signal from the Government for them not to go down the road of using quality contracts. I hope that that is a misreading of the situation and that the Minister will confirm that, if a local authority wishes to use the Local Transport Act 2008 to set up a statutory partnership, it would be eligible to bid for better bus area funding.

The introduction of multi-operator ticketing is another important aspect of any bus partnership. We recommended that local authorities should have the power to implement a multi-operator ticketing scheme where a voluntary agreement cannot be reached. The Government have said that they will clarify guidance on the use of such powers under the Transport Act 2000 and consider the need for further legislation. Will the Minister clarify the time scale for that work and say how he will decide whether new legislation is needed? Should it be needed, is there any prospect of new legislation being enacted during this Parliament?

Another important issue relates to what happens when a commercial service ceases and the local authority decides to support that service to enable it to continue. The operator of that commercial service has a significant advantage over its competitors, because it knows the revenues and costs associated with running the service. The Competition Commission estimated that the resulting reduction in effective competition for tenders costs local authorities between £5 million and £10 million a year.

Information on those services could be provided voluntarily by bus operators, but they have so far refused to disclose it, citing commercial confidentiality. The Government are exploring that situation, but the Committee recommended that they should set a deadline for operators to agree to disclose the information and introduce legislation if operators fail to do so. Will the Minister tell us what progress is being made on that issue, and does he contemplate introducing legislation to force companies to disclose the relevant information?

The disclosure of data is also an important consideration in other areas. Passenger Focus is doing important work in surveying passengers’ views of services. Overall, satisfaction levels are relatively high: on average, 85% of passengers are satisfied with their service, but that global figure hides considerable disparities between operators. We want more disaggregated data to be available, so that the performance of operators in individual areas—and, indeed, that of individual operators—can be properly assessed. That will require more work on the collection of underlying data. Does the Minister share our view that more information on customer perceptions will help drive up service levels, and will he support Passenger Focus in getting the necessary funding and assistance to undertake that work? More could be done to publish data on operators’ performance—for example, on punctuality and cancellations. Far less information is available for bus services than for trains. We did not sense that the Government are seeking the disclosure of data, so will the Minister explain and elaborate his view?

As part of our inquiry, we took evidence from the senior traffic commissioner, Beverley Bell. The traffic commissioners play a vital role in regulating the safety and punctuality of buses. Ms Bell told us that the performance of some bus operators was so poor that they ought not to be in business. The Competition Commission has recommended that the traffic commissioners should draw up a code of conduct for bus operators to prevent buses from engaging in anti-competitive behaviour on the road. Ms Bell told us that she did not have the resources at her disposal to do that satisfactorily. Has progress been made with the code of conduct? Is the Minister concerned that the traffic commissioners may lack the resources necessary to do their job effectively?

It is worth reflecting that the Office of Rail Regulation, which regulates rail services, spends about £29 million a year on staff and office costs, compared with the £15 million spent by the traffic commissioners. The seven traffic commissioners in Great Britain, who are responsible for the safety and punctuality of the whole bus industry, are supported by 138 staff, of whom a substantial proportion are devoted to the licensing of goods vehicles. The Office of Rail Regulation has 280 staff, with additional rail regulation and safety staff at Network Rail. That indicates the contrasting approaches to regulating bus and rail services, and therefore to protecting the interests of bus and rail users.

We recommended that the roles and resourcing of the traffic commissioners should be reviewed before the next spending review. Will that review take place, and will the wider review of non-departmental public bodies mentioned in the Government response to our report cover such issues? Will that review be made public? In our report, we compared the limited resources available to the traffic commissioners and the much more generously resourced Office of Rail Regulation as another example of how buses can be characterised as the poor relation of rail. The subsidy for bus services is lower than that for rail, even though it unambiguously helps the least well-off. The leadership in the bus industry is also less visible than that in the rail industry, particularly since the formation of the Rail Delivery Group. Stronger leadership—for example, in driving the introduction of new ticketing technology—would benefit both bus companies and passengers.

In conclusion, these are potentially troubling times for the bus industry, and therefore for bus passengers. Services are under threat, demand outside London is dropping and there are significant funding pressures. There is uncertainty about the regulatory environment, with quality contracts and statutory partnerships being unused and the traffic commissioners struggling to cope with their work load. The Competition Commission has offered helpful recommendations, but they do not address the key issue of the need for partnership. Indeed, the Government’s strategy for buses is unclear. I hope that the Minister will offer some reassurance that he has a positive policy for buses and that there is more to Government policy than funding cuts and voluntary initiatives. Millions of bus users across the country deserve better.

--- Later in debate ---

[Norman Baker]

That is not fair, and I have already listed some of the extra money that the Department for Transport has made available to help buses. In a moment, I will go on to what we are doing. Moreover, many councils are not making cuts, which demonstrates that there is flexibility. Some have chosen not to make cuts, although there have been reductions across the patch, not only in local councils but in Departments. I do not wish to rehearse the Budget position, but there was a general recognition that reductions in Government expenditure were necessary. Indeed, the hon. Lady’s party was also committed to a large swathe of cuts had it been returned to power in 2010. In the Department for Transport, we are doing what we can to protect bus services, and I hope that local councils have the same objective—some appear to be discharging it well, others less so.

We are doing our bit to help, and we remain committed to supporting local bus markets through direct operator subsidy, through DCLG funding of local government and through our targeted investment packages. That includes £70 million on better bus areas, which was a bolt out of the blue and a windfall that the bus industry was not expecting, with more to come for those places that successfully apply for full devolution of bus subsidy. That also includes around £200 million in capital funding for major projects in Manchester, Rochdale, Bristol and elsewhere, and many of the 96 projects made possible by the £600 million local sustainable transport fund, which is a brand-new Government initiative and provides a major increase in spending on sustainable transport compared with that of the previous Administration.

Many of the 96 projects include improvements related to bus services. In addition, I recently announced a further £20 million for a new, fourth round of the green bus fund, on top of the three previous rounds worth £75 million. Many of those buses will be built in Britain, helping British manufacturing and jobs as well reducing our carbon impact from buses. Such funding, therefore, is not insubstantial and not a bad deal for the bus industry. It comes in spite of the tough financial climate and the need to reduce the structural deficit.

As I have made clear before, however, with such significant amounts of public expenditure invested in the bus market, it was only right for us to consider whether it has been delivering the best service for bus passengers and best value for the taxpayer. That is why we are engaged in a series of reforms to facilitate competition and to increase local accountability for spending on bus services. We are reforming how bus services are subsidised, providing guidance on ticketing and tendering for contracts, and making regulatory changes to encourage more on-the-road competition where the market supports it.

On bus subsidy and the reform of BSOG, I am considering the response to last year’s consultation and will have final proposals before Easter. That will include the treatment of areas where quality contract schemes are planned, which is clearly and understandably of interest to the Committee. Guidance for local authorities that wish to apply for better bus area status will be out later this month.

[Mrs Ellman]

I am trying to interpret the Minister’s welcome comments. Is he saying that he will be able to give a clear answer about whether local authorities could secure public support for embarking on statutory partnerships?

[Norman Baker]

That issue was raised at the Select Committee, to which I gave evidence, and it has been raised again today. Local councils want to understand the relationship between better bus areas and quality contracts; that is fully understood. I will not give a definitive answer today. The matter has been subject to consultation, as the hon. Lady knows. The responses to the consultation are being carefully considered, and I will discuss those matters with my ministerial colleagues in the Department for Transport, but I accept the need for clarity, and I intend to provide that so that everyone knows where they stand.

I am pleased to note that, by and large, the Committee’s key findings and recommendations complement and support the coalition Government’s policies that were set out last year in “Green Light for Better Buses”. I have a lot of time for the Chair of the Committee, but I thought she was uncharacteristically unfair when she said that there needed to be more to our policy than funding cuts. That was a gross distortion, and failed to note the direction of travel that is clearly set out in “Green Light for Better Buses” and our proposed changes to funding arrangements. That constitutes a policy that we believe will help to deliver better arrangements for our buses. Combined with our response to the Competition Commission, it sets out a clear policy. The hon. Lady may disagree with it, but it is a clear policy. In fact, the Committee’s findings suggest that she does not disagree with much of it.

We have made it clear that partnership is a highly effective way of delivering quality, affordable bus services, and I welcome the hon. Lady’s endorsement of partnerships as a good way forward. Our better bus area proposals are indicative of that. The purpose of such areas is to ensure that councils and operators work together, because that is more successful than a council wanting to drive forward policies, perhaps for good reasons, when the bus industry is not interested. Similarly, if the bus industry has good ideas, but a council is unresponsive, those ideas will not be delivered. The proposal to financially incentivise two groups of people to come together is entirely sensible, and can only work to the benefit of the public.

We will support the integration of services when that is in the public interest, and we will encourage the roll-out of smart, multi-operator ticketing. We will monitor local authorities as they develop their partnership agreements, liaising with the Office of Fair Trading when necessary—the Chair of the Committee made this point—to ensure that competition law does not become an insurmountable barrier to sensible service improvements.

--- Later in debate ---

[Mrs Ellman]

It is a pleasure to serve under your chairmanship, Mr Bone. I thank the Minister for his full response. I note his positive approach to many of the issues that have been raised, and I acknowledge the positive support that he has given the bus industry, in so far as he has been able to do so within the constraints of Government policy. I look forward to pursuing these issues and particularly how we can enable local authorities that wish to become involved in statutory partnerships to do so. The Committee will pursue these issues further. I thank the Minister for his positive approach.

Question put and agreed to.

Rising Cost of Transport

Louise Ellman Excerpts

Wednesday 9th January 2013 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Transport is a vital issue. It is essential for people to get to work and to get to social amenities. That is why it is so important that we debate not just the provision of transport itself, but the cost—because transport has to be affordable if it is to be put to best use. I shall confine my comments to the rail service, and I shall refer to some of the findings of the Transport Committee’s report on rail, which was recently published. There will be an opportunity tomorrow to debate the Select Committee’s report on bus services, and I hope there will be the same number of Members in Westminster Hall tomorrow afternoon as there are in this Chamber today.

It is important to note that rail is, in fact, increasingly popular. The number of people travelling by rail has doubled in recent years, while the amount of freight carriage has increased by about 40%. There is rising concern, however, about fare levels. I assume that that explains why the Government’s proposal to increase regulated fares by an average of RPI plus 3% was reduced to RPI plus 1%—because of the public outcry and concern about increased fares. It is also true that the Government are implementing a policy—indeed, they inherited it—whereby passengers were expected to pay an increasingly higher percentage of the cost of rail than the taxpayer. Important issues remain about how this policy is applied, about the cost of running the railways, about how efficiencies can be achieved and about how costs and the allocation of subsidies can be assessed.

[Kwasi Kwarteng]

The hon. Lady made an important point in saying that both the Conservatives and Liberal Democrats in government and Labour decided to shift to some degree the cost of rail transport from the taxpayer to the passenger. The hon. Member for Garston and Halewood (Maria Eagle) did not comment on the issue from the Front Bench, so I was wondering what level of subsidy and what proportion of the cost should be borne by the passenger?

--- Later in debate ---

[Mrs Ellman]

At the moment, the overall distribution is about 60% for the passenger and 40% for the taxpayer. In the breakdown of how the funds are allocated on different types of services, however, there are very stark differences. It is in respect of the allocation of the cost and the resultant proportions of contributions made by taxpayers and passengers where further major questions need to be asked. That is why the Select Committee report highlighted the need for more transparency about the cost of different types of services and where the subsidy goes.

The Committee’s main conclusion was that the Government should rule out demand management that would lead to even higher fares at peak times. It made the important point that many people have to travel at peak times in order to get to work.

[Mr Andrew Turner (Isle of Wight) (Con)]

We must all acknowledge that at peak times the demand placed on the rail network can far outstrip supply. How does the hon. Lady think demand can be prevented from exceeding supply? Does she not agree that more should be done to encourage investment in local areas, outside the major cities, in order to remove the need for most of us to commute?

[Mrs Ellman]

People often travel at peak times because those are the times when they have to get to work. They have no choice. However, there are other ways of addressing the question of demand, and I shall say something about them later.

The report also talks of the importance of achieving efficiencies, although we think that the aim of making efficiency savings of £3.5 billion by 2018, as McNulty recommends, is a challenging one. The bringing together of different parts of the rail industry in the Rail Development Group, and through other means, is welcome, but it is important for the industry then to work in the interests of passengers and the taxpayer, not just in its own interests. It is also important for it not to cut corners and put safety at risk in order to achieve efficiencies. We have high safety standards which should not be jeopardised, and strong regulation is particularly important for that reason. The regulator needs to be able to act firmly and decisively.

Members have mentioned other means of achieving efficiencies and reducing fares, or at least reducing the rate of increase in fares. We need to think about smart ticketing and innovation, and about introducing more flexibility in the way in which fares policy is drawn up and implemented, which has been sadly lacking. There should also be more transparency in the use of public funds. It is extremely important for the rail service to receive a public subsidy, because it is a public service, but it is equally important for the £4 billion public subsidy going into the system this year to be dealt with in a way that people understand, so that they can assess whether it is being used effectively. Not all the information that we have at present enables them to do that.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Lady give way?

[Mrs Ellman]

I am sorry, but my time is very limited.

Some information has been published about the subsidy for the London North Western route, which, we are told, amounted to £1.2 billion in 2010-11. That is a significant proportion of the £4 billion that is going into the overall system. The area covers wide expanses, including the west coast main line run by Virgin and Cumbrian rail services run by Northern Rail. We have been given an overall figure—a very major figure—but we do not know how the subsidy is allocated between different services, or indeed between different parts of the country. That is just one example of the need for more transparency so that we can assess whether subsidies are effective.

I welcome Network Rail’s recent announcement that more than £35 billion will be invested in the next control period, 2014-19. However, the Committee will look at the figures in detail and consider what they actually mean, and the rail regulator will look at them as well before anything is finally approved. It should be noted that although the announcement of more much-needed investment in the rail system has been welcomed, passengers have expressed the fear that they will have to pay for it through even higher fares, which renders the need to look again at a policy on regulated fares even more urgent. The Committee has asked Ministers to do that.

In due course there will be an opportunity to discuss the Committee’s complete findings, and we will do more work on rail franchising and rolling stock acquisitions, another important area in respect of savings. I hope my comments this afternoon have helped to inform the debate. Rail is increasingly popular and a good service is currently offered, but there is increasing concern about fare levels, and we must address that.

West Coast Rail Franchise

Louise Ellman Excerpts

Thursday 6th December 2012 Commons Chamber

[Mr McLoughlin]

As I think I said to my hon. Friend when I made my first statement on this matter, there are obviously serious questions to answer. The present permanent secretary took his post in April, when many of the incidents to which we are referring had already taken place.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The Secretary of State acted decisively when he became aware of these issues, but the standing of the Department has been severely damaged by this episode. Three franchises were postponed and the £40 million is simply the first stage of the cost to the public purse. What lessons does the Secretary of State take from this incident for future ministerial responsibility?

[Mr McLoughlin]

I am grateful to the hon. Lady and I know her Committee will see Mr Laidlaw and no doubt others during their deliberations on this subject. There are a number of lessons not just for Ministers but for the civil service as a whole and on closer reading of the report they become apparent. I hope that this sort of episode will not happen again to any Government.

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 29th November 2012 Commons Chamber

[Mr Burns]

It will make a significant improvement because it means enhanced rolling stock along the whole east coast main line from London to Edinburgh, which I believe will make journey times from Edinburgh to England about 15 minutes quicker overall. However, we should also take into account the improved quality of the service and the improvements to the track on the east coast main line.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The resolution of the west coast main line franchise issues will be important in enabling improvements to services in those areas. When did the Minister decide to postpone the publication of the Laidlaw report on the franchise fiasco?

[Mr Burns]

I would like to reassure the hon. Lady that there is no question of postponing publication of the report; we hope to publish it shortly.

Air Travel Organisers’ Licensing

Louise Ellman Excerpts

Thursday 22nd November 2012 Westminster Hall

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Williams. I am pleased to present two Transport Committee reports for debate. Both are on aviation, and although they deal with complicated matters, they are vital to the public. The first debate is on the reform of Air Travel Organisers’ Licensing, or ATOL.

[Mark Lazarowicz]

Before my hon. Friend proceeds, does she agree that, although we are discussing the first report, it is particularly important that we have a Minister here to hear what is said about the second report? Important negotiations are going on in Europe about flight times, and many of us have constituents working in the industry who have contacted us about the matter. It would be amazing if we did not have the opportunity for a Government response on this important topic.

[Mrs Ellman]

I agree with my hon. Friend. I certainly wish Ministers to listen to what I have to say, and I have numerous questions to pose to them, but the proceedings have started, so I must continue. I hope that the Minister will arrive before I have proceeded much further.

The ATOL scheme was introduced in the 1970s, a decade in which there was a dramatic increase in the number of people travelling abroad on package holidays. ATOL is a Government-backed insurance scheme that protects holidaymakers flying abroad from the effects if travel firms go bankrupt. Holidaymakers can be reimbursed for the cost of holidays and repatriated where necessary. Over the past three years, 250,000 people have received refunds as part of the scheme and 100,000 have been repatriated.

Firms covered by the ATOL scheme charge each passenger £2.50 to cover the cost of ATOL. However, at the time of our inquiry, the Air Travel Trust Fund from which payments are drawn was in deficit to the tune of £42 million. That deficit is now decreasing. I would be grateful if the Minister could tell us the latest figure, as it is important to have. The deficit is falling because the charge per passenger was recently increased from £1 to £2.50, but the scheme remains controversial. Currently, only about half of holiday bookings are covered, an issue at the heart of ATOL reform.

The situation is complicated. Traditional package holidays sold by travel agents and tour operators are covered by ATOL. Holidays sold by agents or firms defined as acting as agents for the consumer, particularly online, are not. Firms selling holidays not covered by the scheme have a competitive advantage, because they do not have to charge for ATOL cover. However, it is not clear whether consumers are aware of that difference. There is also the problem of who pays for repatriating travellers stranded abroad by the bankruptcy of an airline or agent not covered by the scheme.

The Government are in the process of changing ATOL. Two reforms have already been made. First, “flight-plus” holidays—in which a flight plus another part of the holiday, such as a hotel booking or car hire, is bought within a 48-hour window—sold by existing ATOL operators are now covered. Secondly, customers buying holiday packages covered by ATOL must now be issued with a certificate telling them that that is the case. Those two changes are an advance.

The extension of ATOL to certain flight-plus holidays is estimated to bring some 6 million additional holidays into the scheme, ensuring that 60% of holidaymakers are covered. The extra revenue brought into the scheme by those extra travellers should help reduce the charge per passenger, but operators have challenged the Government’s figures, claiming that the travel industry will find ways around the new regulations.

[Jim Fitzpatrick]

My hon. Friend is outlining clearly the background to the ATOL scheme and illustrating the details. She mentioned the changes. On Tuesday, we had the opportunity to debate in the Chamber the Lords amendments to the Civil Aviation Bill, and the Minister moved amendments to improve the ATOL scheme. Will she be referring in her remarks to how those amendments improve the scheme? They relate to what she is discussing, and they go part of the way towards what she wants addressed, which is the 21st-century way of booking holidays.

[Mrs Ellman]

Yes, I will be referring to that point. I would like some information from the Minister on what has happened in practice since the scheme was changed in April.

Our other concern about the extension of ATOL involved the lack of consumer input into the changes. The Government’s consultation on the change attracted just four responses from consumer groups, which I find pretty amazing, because I have had responses from constituents concerned about the scheme as it was operating. The responses from those four consumer groups hardly seemed to feature in the Government’s analysis. Only one consumer group, Holiday Travel Watch, submitted evidence to our inquiry, opposing the extension of ATOL to flight-plus holidays.

The Committee was concerned, as was I, about the minimal consumer response. We need to know what consumers think about the proposed changes and how they are working, and what further changes consumers want.

[Jim Fitzpatrick]

Having read the recommendations from my hon. Friend’s Committee and the Government response, one of the questions that I will be asking the Minister later—reinforcing what she is asking at the moment—is about the Government’s saying that the responsibility for ensuring protection against the collapse of a holiday lies with the consumer. Part of the great difficulty is that consumers do not pay enough attention to whether they are insured and, if they get stranded, the taxpayer picks up the bill.

[Mrs Ellman]

My hon. Friend’s comments reflect views that the Committee has heard over a long period—we have been looking at the issue for a number of years. Particularly when people are stranded on holiday and have problems, we realise that those consumers simply did not know what they were covered for or indeed whether they were covered. That has to be a key issue for the Government. They have partially addressed it, but I will say later how I think that that is proceeding.

The Government were well placed to overcome the problem of that relative lack of formal reaction from consumers and consumer groups by commissioning their own research into whether consumers understood the concept of ATOL cover and whether they wanted it to apply to packages that they assemble themselves online. We must remember the changing nature of the way in which people organise their holidays, because individual consumers organising their own holidays and assembling packages online is a growing trend, so it is important for us to know what consumer views are and about the type of insurance that they think most appropriate. Up until now, however, the Government have not done that. The extension of the scheme has not been based on explicit consumer research, and I want the Minister to tell us why the Government did not do more to find out specifically what consumers want.

The Committee welcomed the introduction of the ATOL certificate, which will increase clarity for consumers about their cover. We have found a consistent issue over the years to be that passengers and holidaymakers simply do not know what they are covered for. There is a risk, however, that consumers who buy holidays that are not ATOL protected will not realise that. Owing to the Government’s positive action, the people who are now ATOL protected will know that they are covered, but the ones who are not covered will not know, because they will not have a certificate. Do the people without a certificate realise that that means they are not covered by ATOL? We simply do not know.

More could be done to inform consumers not covered by scheme of their position and options. The Government agreed to consider our suggestion, perhaps by introducing a voluntary scheme for airlines to inform customers of their protection—or lack of it—when buying a flight. Can the Minister tell me what progress has been made in taking that suggestion forward?

[Mark Lazarowicz]

That is important because, as my hon. Friend said, normal people make their holiday arrangements, effectively, by putting together their own packages, which raises the issue of what cover there should be in the event of an airline-only arrangement falling through if the airline goes out of business. There are clear difficulties with doing something at UK level only, as well as issues of practicality, but the report highlights the importance of voluntary agreements and discussion in the industry up to a European level. Does she think as I do, it important for the Government to be able to show that they are actively pursuing the possibility at European level? That is another point to which the Minister needs to respond when we reach the appropriate point in the proceedings.

[Mrs Ellman]

I agree with my hon. Friend that the matter needs to be pursued in the European arena, because the nature of air travel is such that it is likely to involve travel outside this country. We need to know from the Minister exactly what is happening and what progress, if any, has been made.

As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned, the Civil Aviation Bill includes clauses that will make more fundamental change possible. Such changes will be implemented, we are told, at a future date. Will the Minister say what the timetable for that implementation is? As my hon. Friend said, there was a debate on the subject yesterday, and amendments to the Bill were discussed, but we need to know the timetable so that we can monitor progress. During the Select Committee inquiry, the then Minister was asked how the Civil Aviation Bill would affect holiday insurance cover, and it was clear that there would be major changes. We need to know the detail of such changes, as well as the timetable for implementation of the Bill.

In future, packages sold by airlines and by those designated as agents for the consumer, will be included in ATOL. The Committee supports that change, because it is an anomaly that a holiday package sold by a travel agent has ATOL protection while the same package sold online by a firm operating as an agent for the consumer—for which there is a specific definition—is not covered. That is extremely confusing for the consumer, and one reason for the reform is to provide greater clarity for the consumer, as well as more comprehensive cover, and to create a more even playing field in the industry. When we conducted our inquiry, we spoke to a range of people, including those from the travel industry and its different sectors. One point made forcefully to us was that different parts of the industry would be affected in different ways, and a strong view from some was that there should be an even playing field for the travel industry itself. The Government are addressing that situation, but we need to know how the proposals will change it. We need to know what progress has been made on providing appropriate cover, clarity and even-handedness for the consumer, and on creating a more equal playing field in the travel sector.

There have been calls for the Government to go further than they propose and to bring all international flights within ATOL, providing passengers with protection from airline insolvency. In our inquiry, we found different views in different parts of the travel sector. ABTA, the Association of British Travel Agents, has argued strongly for that, pointing out that tour operators often fail because airlines have run into financial difficulties. On the whole, the airlines oppose such calls, arguing that there is a significant difference between a holiday package and a flight. They suspect that the change would mean their being asked to bail out the air travel trust fund, which, they argue, has been emptied because of what they allege to be badly managed tour operators going bust. Those were the points made to us in our inquiry, although we did not get a unanimous view from those who came to speak to us.

On balance, it would be helpful to see international flights covered by ATOL. The additional cost per ticket would be small, consumers could be confident of repatriation in the event of an airline becoming insolvent, and the scope for operators to find loopholes in the ATOL rules would be reduced; quite a number of the witnesses to our inquiry felt that if a scheme for partial cover was proposed, part of the industry would find loopholes to get around the new regulations. The European Commission is looking hard at the question, and my hon. Friend the Member for Edinburgh North and Leith was right about the importance of looking at the issue across Europe. When a decision is taken in Europe, it is not taken just by another body with no reference to the United Kingdom Government. There is a process, and the Government and specifically the Department for Transport in this instance have a way of influencing what happens, and should advocate what they believe is best for our travel industry. Will the Minister update us on what is being discussed at European Union level, and on the Government’s view on the matter? It is important to know what the Government, through the Department for Transport or any other appropriate part of Government, are doing to pursue what they believe is the right way to proceed on travel insurance, and getting the best deal for British consumers.

[Mark Lazarowicz]

That is particularly important because in the few instances of airlines going out of business in recent years, most have been pretty small, and passengers have been picked up by other, larger airlines. However, low-cost budget airlines are now operating throughout the European Union, and many are based in other countries where a UK operator might not feel inclined to offer a replacement flight if it had no connection with the UK. Is that not an important reason for addressing the matter at European level, and why the Government must show that they are actively pursuing the issue to try to get an appropriate solution for consumers?

[Mrs Ellman]

My hon. Friend makes an important point. One issue raised during our inquiry was that the European travel package regulations are being renegotiated, which may take some time. That makes it particularly important that our Government, through the Department for Transport or whatever part of the Government is thought to be correct, advocate during the long-drawn-out discussions on that package, what is correct for UK consumers. It is an ongoing process, and it would be helpful to know what the Department is pursuing in this area at European level, what stage those discussions have reached, and how it will be involved as they proceed and before the extensive European travel package regulations are finalised.

The charge of £2.50 per passenger to pay for ATOL is unfair, because it is not linked to the value of the holiday booking or any assessment of risk. Someone booking a cheap package deal with an established operator pays the same for protection as someone buying a luxury trip to a far-flung country with a niche provider. That is unfair, and the situation would be even worse if flight-only bookings were included, because the ATOL charge could be a high proportion of the cost of a cheap flight. The Government have agreed to re-evaluate the level and the basis of the charge. Will the Minister say what progress is being made with the review?

On the long-term options for ATOL, we considered whether it should be scrapped altogether and replaced with private insurance. We concluded that that was not possible. Few insurance policies are available to provide the same level of protection, and the Government cannot avoid their responsibility swiftly to repatriate people stranded abroad because a travel firm has failed. The EU package travel directive requires the UK to provide a financial protection scheme for holidaymakers.

Nevertheless, there is scope for further reform, particularly when the scheme’s deficit has been cleared. In the Committee’s view, a reformed scheme must distinguish clearly between financial protection for consumers, which might sometimes be covered by private insurance, and repatriation, which is unavoidably an issue for the Government. The scheme should be industry funded, not reliant on Government guarantees as at present, and perhaps it should be managed by the industry. Consumers should have a greater say in deciding what is covered, and there should be more research on what consumers want. There must be more clarity and more public information, so that consumers are clear about when they are covered and when they are not. The Committee would like the cost per booking to come down, and be proportionate to the price of the package. If that were done, much of the controversy about the scheme might fade away.

In recent years, the internet has enabled some people to bypass travel agents and tour operators, and to put together their own package holidays. The ATOL scheme has not kept pace with that development. It has run into financial difficulties, and there is now confusion about who is covered by the scheme and who is not. The Committee welcomes the Government’s steps for reform, but there is much more to be done. I look forward to hearing about further proposals for change.

The nature of the leisure industry and holiday bookings has changed. Travel protection needs to reflect those changes and consumers’ needs. The Department has started to address that, but a great deal more needs to be done, and I look forward to hearing from the Minister what steps are being taken, and what the Government’s plans are.

[Hywel Williams (in the Chair)]

I call Jim Fitzpatrick.

--- Later in debate ---

[The Minister of State, Department for Transport (Mr Simon Burns)]

It is a pleasure to serve under your chairmanship, Mr Williams, and I am pleased that the Transport Committee has secured this debate on a very important subject.

Before I get to the detail of the points that have been raised and of the Government’s approach, both to the Committee’s report and in terms of our response to the recommendations, I must make an abject apology—not only to you, Mr Williams, but to the hon. Member for Liverpool, Riverside (Mrs Ellman); to the shadow Minister, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick); and to others who have come to the debate—for the fact that I turned up late.

I was under the impression—totally wrongly, as it happens—that the debate would start at half-past 2, and I had planned on that basis. What had not been taken into account was the fact that we have, of course, modernised our hours since the middle of October and that debate starts at 1.30.

I am very, very sorry about that. I am furious with myself that I have been discourteous to the Transport Committee and to the Chamber. I can guarantee you, Mr Williams, that this will never happen again, as it affects me, and I hope that, in that spirit, you and hon. Members will accept my apology. There is no excuse whatever.

[Mrs Ellman]

I completely accept the Minister’s apology. At times, we all get caught out by changes in the timetable. Until relatively recently, I thought the debate was at 2.30, then I discovered that it was to start at 1.30. It is perfectly understandable.

[Mr Burns]

I am extremely grateful to the hon. Lady, who is being remarkably generous in the circumstances. Although I appreciate her kindness, there is no excuse for what has happened. I should have been here at 1.30, but I do thank her.

It is clear that the hon. Lady’s Committee has taken a keen interest in ATOL reform and I am glad to have the opportunity to discuss it further following the Committee’s report, which was published in April. Since the Committee reported on ATOL reform, significant changes to the scheme have come into effect that have greatly improved its functioning. Reform of the ATOL scheme is necessary to increase consumer clarity, ensure its efficient functioning and, in the longer term, put it on a self-sustaining financial basis.

On 30 April, the same day as the Committee’s report was published, the Civil Aviation (Air Travel Organisers’ Licensing) Regulations 2012 came into force, bringing flight-plus holidays into the scope of the ATOL scheme. A flight-plus holiday is one where the consumer requests to book a flight and accommodation or car hire within a two-day period. That change gives consumers greater clarity and covers many more people. It means that, essentially, if one buys something from a travel agent or tour operator that looks like a package holiday, including a flight, one should be protected by ATOL.

The Civil Aviation Authority has reported that in 2012-13, 2.5 million more holidaymakers can be covered, thanks to that single change. The flight-plus reform has enjoyed broad support from industry, consumer groups and other stakeholders. As the Committee and our analysis have suggested, it is critical that consumers are aware of their coverage. Flight-plus has gone a long way towards clarifying the ATOL scheme and reducing the chances of consumers mistakenly thinking that they are covered, but further to address that, on 1 October, we introduced the ATOL certificate, which is a standardised document given to every person booking an ATOL-covered holiday. It sets out the coverage and says what to do if things go wrong.

The introduction of the ATOL certificate has been widely welcomed by the travel industry and consumer groups alike. On its launch, it received favourable coverage in the travel industry and national press. The travel trade has worked hard to get ready for all the ATOL reforms, and I applaud its efforts to do so. The CAA has also done a very good job in supporting the travel trade in its preparations. Receiving the ATOL certificate shows that holidaymakers and travellers are covered; equally, not receiving an ATOL certificate with a booking indicates that people are not covered. It removes any uncertainty and gives holidaymakers and travellers peace of mind.

To make the changes effective, the holiday-buying public must be aware of them. To that end, the CAA is preparing for a publicity campaign in the next few months to increase awareness of the changes. Fortunately, that will coincide with a significant period when people are preparing for and buying their summer holidays, immediately after Christmas. That is a relevant and appropriate time to start getting the message across.

We are pleased with what we have achieved with the ATOL scheme thus far. It goes a long way towards addressing a number of the points in the report. We intend to address some of the remaining issues in the ATOL scheme using new powers in the Civil Aviation Bill, which completed its progress through Parliament earlier this week and will receive Royal Assent in due course.

[Mr Burns]

I am extremely grateful to the hon. Gentleman, and I will certainly come back to him because I also want to deal with a number of points raised by the hon. Member for Liverpool, Riverside.

Before the hon. Gentleman’s valid intervention, I was about to say that we are pleased with the achievements that the ATOL scheme has so far realised. We believe that they go a long way to addressing a number of the points in the report. We intend to address some of the remaining issues in the ATOL scheme using the new powers in the Bill. For example, holidays sold by airlines are not required to be ATOL protected. That creates a regulatory inequality and potential confusion for holidaymakers. It is important to have a consistent regulatory framework for businesses selling holidays, including a flight, as far as is consistent with EU law.

Further, some consumers are not protected when buying a holiday because that holiday was procured on an “agent for the consumer” basis. That means that, rather than selling a holiday to the consumer, the travel agent technically buys one on the consumer’s behalf, as we discussed on Tuesday in the main Chamber, which means that it is outside the scope of the current ATOL scheme. The powers in the Bill will allow that method of avoiding the scheme to be removed.

Some companies might claim that they are merely facilitating a purchase of a flight, but neither buy on the consumer’s behalf nor make available or sell flight accommodation to them. Thus, they might argue that they are outside the scope of the ATOL scheme. That business practice is a potential avoidance approach. The Bill will give my right hon. Friend the Secretary of State powers to require such businesses to hold an ATOL licence.

The Bill is awaiting Royal Assent. Our intention is to create a level competitive playing field and to avoid holidaymakers mistakenly thinking that they have protection when they do not. Holidays including a flight that look like package holidays should be protected like package holidays under the ATOL scheme. These further reforms will go a long way towards ensuring that.

Of course, before taking further steps, we will consult widely. Subject to parliamentary processes, we expect to produce an impact assessment and launch a consultation on draft regulations in 2013. Our decisions will be based on the outcome of that consultation.

[Mrs Ellman]

I am reassured by the information that the right hon. Gentleman is now giving us, but can he say when he anticipates that a new scheme or the new regulations will be operational?

[Mr Burns]

I would very much like to do so, but that would give too many hostages to fortune at this stage, because, as I said, we are going to base our decisions on the outcome of consultations. The consultations will be on draft regulations. Obviously, that is a due process, with time scales. Once we have had a consultation, we will have to consider fully the responses to it and any lessons that we may learn from it—any points that arise. Therefore, I hesitate to give a precise timetable that I could be held to, because often, for the best reasons and intentions, one does not keep to a precise timetable, which then leads to further problems. However, I can assure the hon. Lady that we are determined to do this because we want to get protection for those who deserve and should have protection. We want to get it right, effective and appropriate, and we will do it without cutting corners as soon as it is practically possible to do so.

Let me return to the intervention from the hon. Member for Poplar and Limehouse about the figures. This information may be helpful to him. As I understand it, ATOL coverage is now at about 50% for leisure trips abroad by air. We expect flight-plus reforms to increase that to 55%. No estimate has been made at this stage of further increases from reforms that will be made by the Civil Aviation Bill. However, we expect that to be included in the consultations next year, so that when we move forward with our precise proposals to tackle these problems, we may be in a better position to upgrade the second of the figures that I gave the hon. Gentleman and anticipate the increase in the coverage percentage as a result of the proposals that we will bring forward. I hope that that was of some help to the hon. Gentleman.

--- Later in debate ---

[Mr Burns]

The hon. Gentleman makes an extremely valid point. For any scheme, a crucial element, apart from its effectiveness, is people’s understanding and knowledge of what they may—or, more importantly, may not—have protection against.

I have every confidence that companies, whether tour operators or airlines, will do all they can to make potential customers aware that they are covered by the scheme, because that is a positive selling point for customers and gives them peace of mind. However, as I said earlier, the CAA will also publicise the scheme proactively to ensure that people are generally aware of their protections if they make purchases from those covered by the scheme or from those who, in due course, will be brought within its ambit through our use of the powers contained in the Civil Aviation Bill.

It will become part of people’s mindset that the protection exists, and they will want to know whether they are protected because of the possible implications if they are not. This is slightly off the subject, so I will keep the comments brief, but that is like people going abroad under their own initiative, who may not get the health card for the reciprocal health arrangements in Europe if they travel there, or private health insurance if they travel further afield—to the United States or wherever—although, if they are taken ill or have an accident and need medical treatment, they will face catastrophic bills that could, for instance, completely change their family’s financial position.

The more publicity there is and the more that people are aware of what the situation is and what protections they have, the more the consumer will be interested and concerned to find out exactly what they are buying.

[Mrs Ellman]

Does the Minister know when the CAA intends to embark on the advertising and the promotion of information? Will the CAA do that with the industry itself, and will the advertising relate to the consumer needs that we have already identified? One feature that has been constant, certainly over the many years that the Committee and people elsewhere have looked at the issue, is the confusion in the customer’s mind about whether they are insured, and about what they are covered for and when.

[Mr Burns]

I am grateful to the hon. Lady for that intervention, because it raises an important issue. As I said earlier, we expect the campaign to be launched by the CAA immediately after Christmas. That is when many people consider purchasing holidays for the summer, so it will be relevant at that time. It will seek to make people aware not only of the ATOL scheme—for those who are not aware of it, and I fear that many are not or do not fully understand what it is—but of the changes and improvements made during this year. It will also provide clarity, so that the message gets across to those who are purchasing a holiday, flights or whatever, that as well as looking for value for money and so on, they should check whether their purchase is ATOL-protected and what that protection means.