Concessionary Bus Passes

Matt Rodda Excerpts

Tuesday 8th May 2018 Westminster Hall

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to see you in the Chair, Ms Ryan. I pay tribute to my hon. Friend the Member for Cambridge (Daniel Zeichner) and congratulate him on securing this important debate, and on his knowledgeable speech. He has been a consistent campaigner on transport issues for many years. I also thank other hon. Members for their many and varied contributions. The debate is indeed timely; as my hon. Friend mentioned, it is 10 years since the then Labour Government’s Concessionary Bus Travel Act 2007 introduced free off-peak travel on local buses, nationally, in April 2008. It is right to mark that milestone.

More journeys are made on buses than on any other form of public transport. Indeed, for many people buses are the only form of public transport available. My hon. Friend the Member for Cambridge correctly says that the research shows the enormous benefits that concessionary bus passes bring to older people. For example, although it also covers modes of transport other than buses, Transport for London’s freedom pass is aptly named: it gives older people the freedom to travel locally, it increases their access to services and activities, and it reduces loneliness. I am sure we all agree that is a good thing.

My hon. Friend is also right, however, that the funding for concessionary bus passes has been contentious. Although there is a statutory duty on local authorities to provide concessionary travel schemes for pensioners and disabled people in England, there is no ring-fenced money. At a time of growing austerity, local authorities have highlighted how funding cuts have forced them to divert money from other services to continue to support the concessionary fares scheme. A recent Local Government Association briefing estimated that there is a £200 million shortfall in the moneys paid by the Ministry of Housing, Communities and Local Government as a non-ring-fenced formula grant. I am afraid that is down to a failure by the Government in devolving the cuts, giving local authorities the responsibility to deliver services while not providing the resources, or the means for them to raise funds, for that delivery. The next Labour Government, however, have committed to enabling councils across the country to provide first-class bus services for all, by extending the powers to reregulate local bus services to all areas that want them.

We have also committed to supporting the creation of municipal bus companies: those publicly run for passengers and not for profit. Municipal companies often provide cheaper services. They have higher usage and, as a result, provide much better value, both to passengers and to local businesses and services. Firms such as Nottingham Transport Group, and Reading Buses in my constituency, are indeed a model for many other areas. We would also introduce regulations to designate and protect routes of critical community value, including those that serve schools, local hospitals and isolated settlements in rural areas.

Labour will always be on the side of pensioners and will work to ensure security and dignity for older people in retirement. In our last manifesto we committed to keeping free bus passes for older people as a universal benefit, which we believe is a right rather than a privilege. However, as has been mentioned, we would go further. We are committed to concessionary travel, and the next Labour Government will extend free bus travel to under-25s across the country, in a move that would benefit up to 13 million younger people. Young people and households with children have less disposable income than working-age adults or households without children. Young people tend to be in lower-paid and more insecure work and they spend a higher proportion of their income on travel. Free buses are therefore an investment in the future of our children and young people, through improving their access to education and work. As with older people, encouraging children and young people to lead more active lives has significant related public health benefits.

The next Labour Government will provide funds for free travel for under-25s for local authorities that introduce bus franchising, as mentioned by my hon. Friend the Member for Keighley (John Grogan), or move to public ownership of local services through municipalising buses. Labour will support and incentivise such local authorities, and local municipal bus services will be run for passengers and not for profit. Research shows that removing the profits that are extracted from the bus sector would achieve savings of £276 million per year for the taxpayer.

On savings for younger people, it has been noted that they would save up to £1,000 a year through free bus travel, which would generate a lifelong habit of using public transport. We will pay for that by using just one fifth of the revenue from the vehicle excise duty, which is currently ring-fenced for building new roads. We are committed to providing additional funds for new road building to support that policy through our other borrowing from central Government.

I am interested to hear what the Minister has to say about the policy, given her previous remarks that the scheme is undeliverable, despite the Welsh Conservatives proposing a similar policy last autumn, offering free bus travel for all 16 to 24-year-olds in Wales. Perhaps the Minister will explain why a policy of free bus travel is affordable for young people in Wales but not in England.

I agree wholeheartedly with my hon. Friend the Member for Cambridge that the Minister’s announcement that the concessionary bus fare scheme is no longer subject to review is welcome. I am glad that he highlighted the immense value in our policy of free bus travel for under-25s, and I urge the Minister to join him in that.

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[Ms Ghani]

We have had the action accessibility plan, which we will respond to shortly—within the month.[Official Report, 10 May 2018, Vol. 640, c. 10MC.] We are working with the Royal National Institute of Blind People and the charity Guide Dogs. We meet regularly with them to talk about how we can make the information available on all our buses, and in the most appropriate form. Unfortunately, during a trial some passengers complained that too much information was being given out all the time, and that occasionally the wrong information was given out. We are working on that with all the charities involved with people with visual impairments.

The hon. Member for Reading East (Matt Rodda) has talked about concessions for younger people on several occasions. I draw attention to the comments made by the hon. Member for Keighley (John Grogan) that any concessions or free bus service available for younger people has to be financially robust and stand up to the rigour of examination. The Government recognise that public transport is of particular importance to young people, and that the cost of travel can cause difficulty for those seeking education, training or employment opportunities. That is why a trial extension of discounted rail travel for 26 to 30-year-olds has recently been announced. That industry-led initiative to gather evidence on a full roll-out has seen a 100% take-up. The first phase of the trial saw 10,000 railcards sold across Greater Anglia, including Cambridge.

As I mentioned, local authorities have the powers to offer travel concessions on buses to local residents, and there are many examples of that for groups such as students. As part of the Bus 18 partnership between operators and West Yorkshire combined authority, there are half-price tickets for young people up to the age of 19, and pupils wearing their school uniform will no longer have to show a half-fare bus pass. In Liverpool, the voluntary bus alliance between Merseytravel, Arriva and Stagecoach has seen a flat fare of £1.80 for young people, with growth of 140% in bus travel by young people, as well as overall passenger growth of 16%. In Hertfordshire, young people aged 11 to 18 can pay £15 for a card that entitles them to half-price fares on local services.

There is more to encouraging bus use than cost alone. A recent report by Transport Focus found that young people want better access to information about buses. That is why we introduced powers through the Bus Services Act 2017 to require operators to provide better information on fares, timetables and when the next bus will arrive. In addition, a national scheme such as that in place for older and disabled people would require a change to primary legislation, but there are no plans to do that at present. The hon. Member for Reading East will appreciate that this is a complex area and there are no quick and easy solutions. The Department continues to work with local authorities and bus operators on young people’s travel.

I return to the comments made by the hon. Member for Keighley on the robust nature of the budget put forward for free bus travel for the under-25s. Labour originally calculated that policy to cost more than £1 billion, but unfortunately, the numbers were later calculated to be closer to £13 billion. At the moment, that has not reached robust investigation in Westminster Hall.

[Matt Rodda]

I thank the Minister for her support and praise for local discounted schemes. I want to raise the report by University College London, “Social prosperity for the future: A proposal for Universal Basic Services”. Although we are not proposing this—perhaps to the disappointment of my hon. Friend the Member for Cambridge—the research by University College London estimates the possible cost of free bus travel for every person in the UK to be £5 billion per year. That suggests that the Minister’s estimate of £13 billion is somewhat excessive. Our estimate of £1.3 billion has been costed carefully.

[Ms Ghani]

The hon. Gentleman started at £1.3 billion and then moved on to £5 billion, which possibly could reach £13 billion—I am a little nervous about the true figure. We already have a concessionary programme that costs £1 billion. To announce something as available without it having been costed would do the bus industry no service.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) mentioned apprentices; the Department is considering concession options for apprentices and is completing research on a feasibility study. We will report on that later this year and it will inform the development of the policy. There are no plans to fund such a scheme but we will see what the feasibility study concludes.

Reimbursement by local authorities to bus operators is made on a “no better off, no worse off” basis. The hon. Member for Cambridge noted that reimbursement appeals have been in decline and have reached a new low. In 2006-07, there were 69 appeals, but in 2017-18 there were just 21. That means that operators are fairly recompensed for the cost of providing concessionary travel in both urban and rural areas. The reimbursement mechanism is now fit for purpose, as shown by the large fall in reimbursement appeals in recent years. EU state aid rules do not allow the Government to provide the concessionary scheme on any other basis—it cannot be used to provide hidden subsidy to operators.

Much has been said about the increase in pension age; the state pension age of men and women is being equalised. The pensionable age for women has risen gradually to reach 65 this year, and the state pension age for both men and women will rise to 66 by 2020. Equalising the age at which free bus travel applies makes the national travel concession scheme more sustainable. Finding efficiencies in this way rather than cutting back on the entitlement offer to older and disabled people is the best way to focus support on those who need it most.

It is right that Government support focuses on the most vulnerable members of society. The Government believe that local authorities are often in the best position to offer concessions that work for the people who live there. All local authorities have powers to introduce concessions in addition to their statutory obligations, including the extension of concessionary travel to those who are yet to reach the qualifying age. For example, in Cambridgeshire, the largest operator offers half-price travel to jobseekers.

I return to the point raised by the hon. Member for Cambridge about securing funding for concessionary travel schemes, which sit across many Departments. He was right to note that the Ministry of Housing, Communities and Local Government is responsible for the concessionary travel budget. The Treasury is jointly responsible for local authority ring-fencing. I work with all those Departments to ensure that we get the best that we can for bus services. We have just agreed a further two-year ring-fence for the local authority element of the bus service operators grant for the next two years.

The hon. Member for Cambridge also mentioned franchising; he will be aware that any local authority can request franchising, but will need to demonstrate delivery capability and a track record of doing so. We will see how that pans out.

I want to quickly talk about air quality and congestion, which was raised by the Chair of the Transport Committee, the hon. Member for Nottingham South (Lilian Greenwood). We have recently made some good announcements on that. The Government are committed to buses being greener, which is why we announced an extra £48 million for ultra low emission buses. That follows £30 million in funding for 300 new buses through a low emission bus scheme and £40 million for retrofitting 2,700 older buses to reduce tail-pipe emissions of nitrogen dioxide through the clean bus technology fund. We are trying to make journeys easier and more accessible, and to ensure that the concessionary bus pass remains in place.

I hope that I have demonstrated that the Government are committed to protecting the national concessionary travel scheme for buses. We are keen to do what we can to improve bus service patronage. Of course, I will meet with the hon. Member for Cambridge if he has good evidence of best practice, especially of initiatives that have taken place in other countries that we can use here, and especially if they involve new, innovative technology, to learn as much as we can to ensure that the Department is doing what it can to increase bus patronage.

We are determined to ensure that bus patronage increases as much as it can, and we are focused on delivering concessions to those who need it most, while allowing local authorities and operators the flexibility they need to support their local populations. It was interesting to hear that, as we get older, we migrate from the front of the bus to the back of the bus, and then to the front of the bus again. Hopefully, we can all wait our turn until we get hold of our concessionary bus pass. Some will have to wait a little longer than others, but it will definitely be there, once we reach our old age.