Cost of Living

Maria Eagle Excerpts

Wednesday 16th May 2012 Commons Chamber

[Dr Huppert]

Let us consider the railways, as the Minister suggests. We know about the cuts. The length of our railway network has halved since 1950, but ever since 1980 the number of people using the network has doubled, resulting in a crippling downward spiral in which fare rises have been used to prop up a creaking system while services have declined. British railways are now 30% less efficient and 30% more expensive than their European counterparts. Under Labour, fares rose significantly above inflation year on year. The shadow Secretary of State for Energy and Climate Change did not seem to know the figures when I challenged her on this earlier, so let me give them to the shadow Secretary of State for Transport. Rail fares during Labour’s 13 years in government went up by 66%—inflation over that period was 17% in real terms—which is a huge increase. Even now their policy has not changed; it is still to have rail fares going up above inflation. Even the amendment to the motion calls for rail fares to go up 1% above inflation.

[Maria Eagle (Garston and Halewood) (Lab)]

Will the hon. Gentleman give way?

[Dr Huppert]

I would be delighted to hear the shadow Secretary of State say that Labour accepts that fares are too high but, if she will not, will she confirm that her policy is still to have rail fares going up above inflation?

[Maria Eagle]

The hon. Gentleman fought the last general election on a promise to cut rail fares. His party and the Government whom he supports now support rail fare rises of 3% above the retail prices index. He voted for that. He is being just a tad hypocritical.

[Dr Huppert]

I am sorry that the shadow Secretary of State is not prepared to defend her party’s record in government or the fact that it is still calling for fares to rise above inflation. I would like them to go below inflation—[Interruption.] If the hon. Lady listened more and spoke less, she would hear what I am going to say. I think that rail fares need to come down, but we do not have a majority Government. As we heard earlier from the hon. Member for Gainsborough, this is not a pure Conservative Government, but it is not a pure Liberal Democrat Government either.

--- Later in debate ---

[Dr Huppert]

The hon. Gentleman is absolutely correct, as he so often is on rail matters. The Labour Government failed on trains and, rather than trying to patch it up now, are looking for short-term political advantage.

Let me move on from trains to buses. We talk a lot about trains, but buses are used hugely. What is Labour’s record on buses? Bus fares during Labour’s years in government went up by 76%—24% in real terms—which is a huge amount, and that affects the cost of living for people who try to travel by bus. We know that there is a different socio-economic distribution for people who take buses, compared with those who take trains, so this is very tough.

In 2008, Dr Iain Docherty of Glasgow university and Professor Jon Shaw of the university of Plymouth reviewed Labour’s 10-year transport strategy and said that it was a failure. Bus services were described as “poor” compared with the rest of Europe. They said that the Government had pursued the

“wrong kinds of transport policies”.

To their credit, we saw some success in London, but that was the only part of the country that saw the sort of devolution and innovation that we would like to see across the country. Outside London, from 1997 to 2008, when the report was written, the number of bus trips fell by 10%, which is not exactly a resounding victory for Labour’s centralising 10-year plan, and something that the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), is taking steps to change.

We all know that our roads are utterly unsustainable. We have not yet managed to decarbonise our cars adequately. We failed to support the basic principle that road users should have to pay to use the roads, and the tax system has problems. Treasury Ministers are already nervous about how they will fund road infrastructure in future as we manage to reduce the use of fossil fuels.

I am proud of much of what the Government are doing on transport, although not absolutely everything, and pleased about the work being done by the Under-Secretary on issues such as cycling and bus use, which I will say more about later. I am also proud of the work being done by the other Transport Ministers. However, we need more radical and liberal thinking to heal our sclerotic transport network. What we need are bold reforms, but I am sad to say that what we have from the Opposition is short-term politicking, not long-term and evidence-based public policy making.

Let me give an example. The shadow Secretary of State made an interesting series of comments to The Guardian recently. She said that she accepted two thirds of the coalition’s transport spending cuts. I think we all agree with her when she said:

“Labour will not be elected unless it has credibility on the deficit and recognises the new economic reality.”

She said that she was committed to two thirds of the cuts. The interesting question is this: which two thirds? It is a nice game to keep whichever third of things seems politically sensible and cut the things that are not popular. I have been trying to find out from the hon. Lady—

[Maria Eagle]

I have replied to the hon. Gentleman’s letter, but I can tell him that Labour supported the entire £1.7 billion of efficiencies that Ministers have required across the transport expenditure. We have not opposed cuts beyond those efficiency savings in the Highways Agency totalling £3 billion or in Transport for London totalling £1.7 billion, a total of £4.7 billion, so we have not opposed £6.4 billion of cuts, which is more than two thirds of the efficiencies and cuts that the Government are making. But we would not have made the other £3 billion of cuts, which would have given us extra money so that we could cap annual fare rises, protect local bus services and deliver additional investment. Our plan is quite clear.

[Dr Huppert]

The hon. Lady is absolutely correct. I wrote to her in February asking for the figures and it took her over a month to respond—

--- Later in debate ---

[Dr Huppert]

Thank you, Mr Deputy Speaker. It took the hon. Lady over a month to direct me to a speech in which a shadow Minister outlined some of those figures. I do not know how much was made in the London election about the fact that Labour proposed taking £1.73 billion out of the TfL budget, which is interesting, but the key point is that she is yet to reply to a letter I wrote to her a month ago asking, of the £3.36 billion that she would take out of the Highways Agency’s budget, as opposed to the half a billion she would leave in, which—

[Maria Eagle]

Will the hon. Gentleman give way?

[Dr Huppert]

I will if the hon. Lady lets me finish my sentence. Which half a billion pounds would she leave in, and which £3.36 billion would she take out? She has not responded to the letter, but she can respond now.

[Maria Eagle]

I promise to respond in great detail to the hon. Gentleman when he gets his ministerial team to reply to letters from me and to answer parliamentary questions properly.

[Dr Huppert]

I am flattered by the shadow Secretary of State’s faith that I have the power to control the ministerial team. She can certainly control when she responds to letters, and I think that a delay of over a month is rather poor. I am sure that she thinks she has better things to do, but I would still love to hear how Labour would fund the rest of its budget on this area.

If the Opposition are truly concerned about the cost of living, surely one way of addressing that is to let people keep more of the money they earn. Raising the income tax threshold puts money back into people’s pockets and lets them spend it on whatever they want: rail fares, fuel for their car, a new bike, bus tickets, training, or whatever it is that they would like to do with that money. Of course, that is something that Liberal Democrats campaigned for and it was on the first page of our manifesto, and it is exactly what Liberal Democrats in government are doing and which, for reasons I simply do not understand, the Opposition voted against. I simply fail to understand why they are against giving money back to people who earn £10,000 a year. It makes no sense to me. I assume it was some sort of error, like the fact that they failed to vote on various aspects of the Budget which they said they would vote on.

In my view, this tax cut, combined with the uprating of unemployment benefits and the triple lock in pensions so that pensioners get a better deal than the 75p that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) offered them, is exactly the right mix of measures. It allows people to keep their money and spend it as they please when times are tight. It is a responsible, liberal approach, and one that we need to take further, as I am sure we will do during the rest of the Parliament, but it is there—[Interruption]—and it has been supported by the Conservatives, as the hon. Member for Mid Norfolk (George Freeman) reminds me.

But let me return to rail fares. I passionately believe that rail fares are too high and need to be lower, and, unlike Labour and the Conservatives, both of which have argued for above-inflation increases, we in the Liberal Democrats believe that they are too high and should not be made any higher. I am delighted that we managed to persuade our coalition colleagues to reduce the most recent rise by 2%, and I have to say that Conservative Transport Ministers supported it.

I hope that we can do the same or better in the years to come, but it cannot be a one-off measure; it has to be part of the kind of serious structural reform that the McNulty review will bring. If it is true that the McNulty changes will save £1 billion a year, half of it should be used to reduce rail fares and half to invest further in rail infrastructure, although this Government are already investing massively in our railways—more than any Government since Victorian times.

We have committed to electrifying more than 800 miles of track. How much did Labour manage? The answer is less than 10 miles, in 13 years: less than 1 mile per year. The Victorians would not have been impressed by that rate. The Liberal Democrats in government are firmly committed to getting people and freight on to our railways so that they do not take up space on our roads, and that applies to my local road, the A14, where we have to ensure that as much freight as possible is put on to railways in order to avoid the congestion that we see. We need to invest in services to make them cheaper, more affordable and more attractive. That is the right thing to do.

What about buses? We believe firmly that the way forward is devolution, community involvement and more effective funding. Services have to be local for them to be popular and effective, and communities must have their say in the governance of local buses. I believe, from what the shadow Secretary of State says, that the Labour party is finally looking at ways of devolving bus services. We have argued for that measure for decades, so I am delighted that Labour agrees, and I hope that we will be able to deliver it. We have had less than two years with very little money to spend; Labour had 13 years, so I am delighted that it is finally coming around to the idea and I hope that we will be able to deliver it. Indeed, I hope that Labour supports the reforms that we are implementing, such as the local sustainable transport fund, which is delivering £500 million to local communities. Just before the Queen’s Speech my hon. Friend the Under-Secretary announced new funds for better bus areas and green buses: a £120 million boost for buses which will enable people to take affordable buses more easily.

By trusting communities to do what is best for themselves, we are revolutionising bus travel. Already since 2010 we have seen bus patronage rise outside London and throughout the country, and seen funding for 439 low-carbon buses, helping us to be a much greener Government. That is a fantastic achievement after a decade of decline and without spare money to slosh around.

Of course, if we really want to reduce the cost of living, we will find that there are even cheaper forms of transport. A huge number of journeys could be taken on foot or by bike, and that really would save people money. More people should do that. This Government have invested millions of pounds in promoting cycling, from the local sustainable transport fund, to Sustrans funding for new routes, bikeability training and new cycle-rail links, and they have also taken other steps to promote safe cycling by, for example, making it easier to introduce 20 mph zones.

We have heard much from the Opposition about the lack of a Bill in the Queen’s Speech to deal specifically with the cost of living, but we have heard also from my right hon. Friend the Secretary of State for Energy and Climate Change about the steps being taken with the Bills that are in the Queen’s Speech, and in any case the Opposition should know that it is not necessary to announce a Bill in a Queen’s Speech in order to help with the cost of living. Not everything needs legislation.

--- Later in debate ---

[Maria Eagle (Garston and Halewood) (Lab)]

It is good that the Transport Secretary has made it here for the debate—indeed, she made it from the beginning. We have all enjoyed her attempt to revive the 1970s-style public information films, with her call to the public to re-route, re-mode and re-time their travel. The Opposition were worried that “re-moding” would mean she might have still be en route from Putney, but she was here right from the beginning—so congratulations to her. I am even more pleased that she is closing the debate, because had it been the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), he would probably have sent a DVD, as he now frequently chooses to do—presumably to avoid having to face the outside world. That probably explains why he is still using expressions such as, “Get into the groove”, as he does in this now infamous film.

The debate has focused on the cost of living crisis. We have managed to get 23 Back-Bench contributions into the debate, which is a decent number. It has been a wide-ranging and excellent debate, and we have heard good and powerful speeches from Members on both sides of the House, but particularly from my right hon. and hon. Friends on the Opposition Benches—especially from my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman), who declared himself a devout Keynesian before uncompromisingly demolishing the record and credentials of both parties in government. I particularly enjoyed that speech.

We have heard excellent contributions, including on social care from my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), on consumer issues and in particular payday lending, from my hon. Friend the Member for Makerfield (Yvonne Fovargue). On transport issues, I enjoyed hearing from my hon. Friends the Members for Sedgefield (Phil Wilson) and for Lewisham West and Penge (Jim Dowd). We heard interventions from my hon. Friends the Members for Ashfield (Gloria De Piero) and for Bridgend (Mrs Moon) and a speech from my hon. Friend the Member for Darlington (Mrs Chapman). We heard interesting contributions on fuel costs from across the House.

As my right hon. Friend the Member for Don Valley (Caroline Flint) set out so well at the start of the debate, the Government’s legislative programme for the year ahead contains not a single measure to address the rising cost of living. Just as the Government have shown that they have no practical answers to address the rising energy bills facing households, nor do they have any solutions to tackle rising rail and bus fares or to reduce the pressure on motorists. The truth is that this is a Government completely out of touch with the impact that rising transport costs are having—on household budgets; on families struggling to make ends meet; on those who want to work or stay on in education or training; and on pensioners who want to stay active rather than becoming isolated.

The rise in transport costs is happening not in isolation from the decisions that have been made by this Government, but as a result of them. Cutting investment in the rail network too far and too fast, creating a black hole that has to be filled with inflation-busting fare rises; cutting funding for local transport too far and too fast, forcing local authorities to reduce their support for bus services, with one in five supported services already lost and with fares rising too; increasing VAT, which has contributed to prices at the pump reaching record levels—these are choices that have been made by the Chancellor and the Transport Secretary because they are out of touch with the pressures that families face and with the consequences of their decisions. It simply is not good enough for Ministers to use the deficit as a catch-all excuse for rising costs—as they seek to do all the time—because the decisions they have taken will make it harder to reduce the deficit. Indeed, they have already led to the Government having to borrow £150 billion more than they had planned.

There is no joined-up government, and making the wrong choice comes at a price. For example, the Government are telling young people to stay on in education post-16, yet many young people are no longer able to take up college courses because the bus into town has been cut or the concessionary fare scheme has been axed.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My hon. Friend is making a superb case in respect of the bus services to college. Let me give her an example from my constituency of a barmy outcome of bus deregulation. We now have different bus companies operating the buses going to the schools from those operating the buses coming back, which means that parents are having to pay twice for their children’s bus fares.

[Maria Eagle]

My hon. Friend is correct, of course. The Government have said that those who are out of work should be willing to travel for up to 90 minutes to take up a reasonable job offer or lose their jobseeker’s allowance. The Secretary of State for Work and Pensions has said:

“The truth is there are jobs. They may not be absolutely in the town you are living in. They may be in a neighbouring town…We need to recognise the jobs often don’t come to you. Sometimes you need to go to the jobs.”

Not only is he out of touch about the extent to which there are actually jobs, but he seems to have no concept of the cost of travel under his Government. Those on the minimum wage will have take-home pay of just over £10,000 a year, but a season ticket for the 90-minute journey between Newark Northgate and King’s Cross would cost more than £8,000. Under the Government’s policy, therefore, they expect someone to spend up to 77% of their take-home pay just to get to work. Coming into London from Braintree would cost someone in a minimum wage job 46% of their take-home pay. There are other examples. The cost of transport is making it harder for people to take up jobs or to stay in education, as my hon. Friend the Member for Sedgefield made clear in the examples that he gave.

Of course we need to bring down the deficit, but we need the right balance between a plan for reducing spending and a plan for jobs and growth. That is why I have supported more than two thirds of the Government’s cuts to transport spending—difficult cuts, which we would have had to make in government as well, to the Highways Agency, Transport for London and major transport schemes. However, £6 billion is two thirds of the reductions in expenditure planned across this Parliament. We would not have cut support for rail and local transport services so far or so fast. We could then have relentlessly focused on keeping down the cost of transport, helping households through tough times and not adding needlessly to the pressures that they face. We would have held fare rises at 1% above inflation during this Parliament, and without the need to cut one penny from the investment in the network that the Government are rightly taking forward. We could also have protected local bus services and kept fares down.

Of course, Ministers are so out of touch that they claim that those fare rises and cuts to services are not actually happening. In his autumn statement, the Chancellor claimed that he had succeeded in keeping increases in rail fares at just 1% above inflation. He said:

“RPI plus 3% is too much. The Government will fund a reduction in the increase to RPI plus 1%...It will help the millions of people who use our trains.”—[Official Report, 29 November 2011; Vol. 536, c. 810.]

Why did fares rise in January by as much as 11% on some commuter routes? What the Chancellor perhaps forgot to mention was that the Transport Secretary—not this one, but her predecessor—had given back to the train companies the right to add up to a further 5% increase on top of that cap. [Interruption.] That was banned when we were in government once times were getting tough. By not cutting the rail budget so far and so fast, we would set the minimum—[Interruption.] If the Minister of State, Department for Transport, the right hon. Member for Chipping Barnet (Mrs Villiers) wants to intervene, perhaps she would like to do so properly instead of chuntering from a sedentary position. By not cutting the rail budget so far and so fast, we would not only set the maximum fare rise at 1%—

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The point I was making is that if the hon. Lady has such a problem with fares basket flexibility, why are her Labour colleagues in Cardiff still applying it in Wales?

[Mr MacNeil]

A good man.

[Maria Eagle]

He is a controversial man. Anyway, he told me,

“we do not believe we could fund this as BSOG is being cut by 20% next year”.

Let us be clear about the fact that it is the policies of the two parties on the Government Benches that are preventing us from reaching agreement with the bus companies on such a scheme.

Ministers should consider the impact on school transport. They should listen to the Campaign for Better Transport, which has demonstrated that almost three quarters of local education authorities have made cuts in school transport. As a result, parents are struggling to afford the fuel costs of the school run, or to juggle their jobs with getting the kids to school. The Government’s actions are adding to the burden on families. They should also take account of the impact on older people, and listen to Age UK and the National Pensioners Convention, which have said in a letter to the Prime Minister:

“Cuts to bus services will hit the poorest and most vulnerable hardest—contrary to the Government’s message that the cuts will be socially fair”.

They are not fair. The Prime Minister may think that he has stuck to his election pledge to protect free bus passes, but up and down the country pensioners are asking, “What is the point of a free bus pass if there is no bus?”

For motorists, too, the Government have created higher costs. Despite all the pre-election promises, they have failed to tackle the cost of fuel. Those on average incomes have seen the cost of running their cars reach 13% of household expenditure, and it now accounts for a quarter of the monthly budgets of those in the lowest income group. That is before we consider the huge rises in insurance premiums in the past year—up 74% for a small family car. Yet all the Government’s claims to have cut fuel duty have been wiped out by a VAT hike that has pushed up the price at the pump by more than 3p a litre: the wrong tax at the wrong time, hitting families and businesses hard, and all because Ministers stubbornly refuse to stand up to the banks and repeat the bank bonus tax that we imposed in government.

So on rail fares, on bus fares, on fuel costs, this is a Government out of touch with the impact of the rising costs of transport. Fare increases are outstripping wage increases several times over—if people are fortunate enough to see a wage rise at all. There are families now paying more on commuting than on the mortgage or rent. That is the cost of living crisis facing households up and down the country—families feeling squeezed across the board, energy and water bills rising, the cost of transport rising, nothing in the Budget to help, and nothing in the Queen’s Speech to help. Whether it is the energy companies or the train companies, this is a Government unwilling to stand up to vested interests. We will do so.