Transport and the Economy

Phil Wilson Excerpts

Tuesday 28th February 2012 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I want to take this opportunity to raise the issue of declining rural bus services, especially in County Durham and in Sedgefield.

County Durham is a rural area and home to many villages, most of which had a colliery at one time. When the collieries were open, people did not have very far to travel, but now that the collieries have closed many people find that they have to travel a long way, and many miles, to get to work, so a reliable public bus service is a necessity.

The bus service is required not only for work, but by young people who want to go to college; by the elderly, who might want to go to hospital or to a medical appointment; by the same groups of people to see friends and family; especially by young people just starting out on their career, who may not have the money to buy a car and need the bus to get to work; and by people on low incomes. We need to think also of the unemployed, who might see a job in the newspaper or in the jobcentre that they would love to do, but who know that they cannot apply for it because there is no bus service to take them to the factory or the office.

Concerns about local bus services have risen up the political agenda not only in areas such as Sedgefield over the past couple of years, but in the rest of County Durham. I have a steady flow of complaints from constituents who are incensed at the cuts to services, especially by Arriva, which pulls services at the last moment, without any notification or consultation. Any cancellation of a route is not well advertised. On more than one occasion, whole villages have been left without any services whatsoever. When I compare the services that Arriva has in County Durham with those that it has in London, I think, yes, we should have an excellent public transport service in the capital city, but we need something equivalent in our rural areas as well, with regulation to ensure that there is a social obligation on privatised bus companies to ensure that people can get to work.

Bus services are being cut in our rural areas as part of the expenditure cuts to address the deficit. There has been a 28% fall in funding for councils, combined with the ending of ring-fencing of grants for bus services, a 20% cut in the bus service operators grant paid to bus companies, and a shake-up of the free travel scheme for pensioners. Pensioners now often say, “What is the point of a bus pass if there are no buses to catch because they have been cancelled?” As a consequence of all these cuts, Durham county council has withdrawn £322,000 in funding from subsidised public transport routes, leaving many villages with few or no services in the evening or at the weekend. My postbag has been full of letters and petitions about the repercussions of the changes brought about by spending cuts originating in Whitehall.

Let me explain what this has meant in practice for people needing these services in the rural communities of Sedgefield—villages such Bishop Middleham and Fishburn, as well as Middleton St George, which is in the south of the constituency. One local constituent can no longer get to work without the help of friends, and others can no longer catch a bus and so have to use a taxi, which obviously inflates the cost of getting to work.

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

I sympathise with the hon. Gentleman’s constituents who face a problem with bus services, but does he accept that this is not a new phenomenon? Rural bus services have been poor in many areas for a long time, and the previous Labour Government did nothing about reintroducing any sort of regulation in areas such as County Durham.

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[Phil Wilson]

There may have been a lack of regulation, but we had a level of subsidy that had not been cut to the extent that it has been since, and some subsidies that were made available have been paid back to the Treasury.

[Angela Smith]

Does my hon. Friend recognise that the Local Transport Act 2008 brought back a level of regulation, but it was opposed by the Conservative party with which the hon. Member for Manchester, Withington (Mr Leech) is in coalition?

[Phil Wilson]

We can see from the lack of people on the Liberal Democrat Benches that this issue is not of particular importance to them. Whatever they said before the election, they are saying exactly the opposite today.

I have a constituent called Mrs Hardy who lives in Bishop Middleham. She has asthma and a heart complaint and has worked at the same place for 34 years. Now she cannot get a direct route to work and arrives an hour late, and the return journey that she has to make does not take her back to her own home. She is quoted in The Northern Echo as saying:

“I am now in the stressful situation of having to beg lifts from friends, colleagues and family and don’t know how I am going to get to work from one day to the next.”

Her story is not unique. However, with the help of Durham county council, I have been able to get Arriva to put on a couple of buses on workday mornings so that people like Mrs Hardy can get to work. That new regime starts on 19 March. Likewise, by applying pressure on Arriva, we have been able to redirect buses around Fishburn. However, that only partly solves the problem and is not the whole answer. There must be many more employees in my constituency who find themselves in such a position.

I have raised this issue with the Department for Work and Pensions. If somebody resigns from their job voluntarily because they can no longer get to work, they can no longer claim benefit because they are deemed to have resigned. The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) responded:

“The Jobseekers Act (1995) provides that JSA will not be paid for a period between 1 week and 26 weeks to anyone who has lost their employment as an employed earner by leaving voluntarily without just cause.

The law does not provide guidance on how just cause should be interpreted because the circumstances in which employees leave employment are so varied.”

The Government need to do a bit of joined-up thinking on this issue because it affects many people in rural areas around the country, who we are perhaps not finding out about. This situation needs urgent attention. The Department for Transport needs to liaise with the DWP to find out the extent of the problem in rural areas. The problems with the buses in my constituency came to a head in the new year.

Last week, we found out from the Transport Committee report on the expenditure of the Department for Transport that the money was there to maintain the subsidy, but it was handed back to the Treasury. To use the Select Committee’s word, how “slack” is that? The Select Committee was surely correct to state in paragraph 11:

“Money voted by Parliament for expenditure on transport should be spent on transport, not handed back to the Treasury.”

My question to the Minister is whether, because the money has been there in the past, it will be there in the future. Will his Department push for extra funding for subsidies so that additional bus services can be provided in areas such as County Durham? There is a lot of talk about the need for growth in the economy. I respectfully suggest to the Government that it is a fundamental prerequisite of any economic growth strategy that employees are able to get to work.

The lack of understanding in this area does not promise much for the future. There seems to have been a fundamental failure in basic arithmetic. The Department has imposed deep cuts to bus grants, leading to the axing of dozens, if not hundreds, of bus routes and to steep fare hikes, only to end up with £543 million to spare. As a consequence, Durham county council and other local authorities are getting the flak for the cut in bus subsidy and the resulting cuts in bus services. My constituents have great difficulties in getting to work, to the hospital, to college or to see friends. The Department for Transport lost £543 million down the back of the sofa, just to find it and hand it back to the Treasury. Will the Minister therefore apologise to Mrs Hardy and the many others who are having difficulty catching a bus today because of his Department’s carelessness?

The letter from the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell also states:

“The matter of poor public transport in Sedgefield and County Durham”—

at least the DWP acknowledges that transport in Sedgefield and County Durham is poor—

“is a matter for the Department for Transport. I have forwarded a copy of your letter to that Department so that Ministerial colleagues are aware of your constituents’ concerns.”

Will the Minister tell me what his Department and the DWP are doing to alleviate the situation of poor public transport in places such as Sedgefield and County Durham? Is there any joined-up thinking in Government to alleviate this problem? Finally, what plans does the Department have to re-regulate or regulate more thoroughly bus services in rural areas around the UK so that people who have jobs can get to them?

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[Angela Smith]

I wholly concur. In fact, if we are to maximise the agglomeration benefits of HS2, I would argue that the economies—from the far north to London and the south—that are linked by the HS2 line must have clear strategies in place for economic development in order that the transport investment represented by high-speed rail can perform to its full potential.

[Phil Wilson]

It is obviously vital that the HS2 route eventually reaches the north-east of England. I do not know whether my hon. Friend is aware of it, but Hitachi is building a train-building facility in Newton Aycliffe in my constituency. It has already said that if this project goes ahead, it will be bidding for the rolling stock.

[Angela Smith]

That illustrates my point about the need to have clear plans for economic development in place alongside plans for transport investment.

The report is also important because it points out very clearly that there is a lack of transparency and consistency in the decision-making process at the Department for Transport. Finally, it is important because it points out that the removal of regional structures created by the last Government risks creating a vacuum in effective planning for transport infrastructure.

I want to focus particularly on the report’s recognition that the Government should produce a White Paper explaining explicitly how their plans for transport investment will be linked to their plans for the economy more generally, and in particular explaining their plans for rebalancing the UK economy. Rebalancing is important not just to the economic development of areas such as the north-west and Yorkshire but to the whole country, including London and the greater south-east.

We need transport investment to maximise the potential for a more dynamic set of relationships between economies across the country. HS2 is a case in point. According to The Northern Way, its potential impact of £13 billion would deliver at least £3 billion of economic impact to the north. The point is, however, that its economic impact will affect the whole country, and therefore potentially benefits everyone.

What do we need if we are to rebalance the economy in transport terms? I believe that we need three things. First, we need more transparency and greater consistency in decision making, so that we can hold the Government to account in relation to their stated aim of rebalancing the economy. Secondly, we need political bravery: we need to use investment to maximise economic development in areas such as the north of England, and to remove barriers to growth in those areas. Thirdly, we urgently need to know more about how the Government will develop sub-regional, regional and even cross-regional structures enabling them to produce sound, well-thought-out strategies for the delivery of transport infrastructure.

The removal of the regional development agencies and, by definition, The Northern Way group of RDAs, has left a vacuum in regional planning, especially—as the report points out—in the context of their role in supporting regional economies. Moreover, the local enterprise partnerships have not been thought through. How will these new structures working at sub-regional and city-regional level work structurally across LEP boundaries to deliver what our regions need?

The north of England is a perfect example. As a result of The Northern Way and its superb work in developing arguments and strategies relating to transport, the case for the northern hub has been clearly made and accepted even by the coalition Government. The northern hub is needed, of course, to tackle congestion on the northern rail network, thereby helping to remove barriers to economic growth; but it is also needed in the context of the decision to go ahead with HS2. It is important that we deliver both projects in order not just to reduce congestion on the network but, as I mentioned earlier, to maximise the potential benefit of HS2.

If we are to maximise the potential of HS2 to make the relationship between the economies of the north and London more dynamic, we must also ensure that those agglomeration benefits are spread across the north. If that is to happen, the Government must recognise the importance of transport infrastructure in supporting economic development plans. In particular, they must recognise our great northern cities as hubs for economic development. They must recognise the importance of greater connectivity—not only with London, on a north-south axis, but on an east-west axis, between the northern urban centres, and with international gateways not just at Heathrow and Gatwick but at the mouth of the Humber and Mersey rivers.

We need regional planning. As the report says, without it there will be a risk that choices will be made on a basis that discriminates against weaker economies. There is already an example of that in the form of the Government’s decision to electrify the Leeds-to-Manchester cross-Pennine route, which discriminates against what I call the third point of the golden triangle of the north: the city of Sheffield.

We need the Govt to recognise the broader context of an economic policy that involves stimulation of the economy and the role that transport could play in it. Long-term infrastructure projects should be brought forward, as outlined in Labour's alternative plan for jobs and growth, but instead we are seeing significant cuts in investment, such as the £759 million cut on top of the £528 million efficiency savings supported by Labour.

We also need the Government to recognise the spending disparity between the north and the south. The Passenger Transport Executive Group has produced some interesting figures. In 2010-11, transport spending per head was £774 in London and £276 in Yorkshire and the Humber. The source of those figures is the most recent version of a public expenditure spending analysis from Her Majesty’s Treasury. I ask the Minister to respond to them, and to demonstrate by way of a full written explanation—

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[Lilian Greenwood]

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

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

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

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

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

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

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

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

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

[Phil Wilson]

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

[Lilian Greenwood]

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

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

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

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

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