Theresa Villiers
Main Page: Theresa Villiers (Conservative - Chipping Barnet)Department Debates - View all Theresa Villiers's debates with the Department for Transport
(12 years, 11 months ago)
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Maria Eagle
If the hon. Gentleman will allow me to finish answering the last intervention, I might get around to giving way to him. As the previous Labour Transport Secretary made clear, we would not have given back to train operating companies the power to fiddle the fares by hiking them by more than the cap on the most profitable routes and getting away with it by introducing much lower increases on the routes that do not rake in the cash. That is something we put a stop to in government once times got tough.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
Will the hon. Lady give way?
Maria Eagle
I will give way to the Minister, who I expect will be winding up the debate, and then to my hon. Friend.
Mrs Villiers
The hon. Lady claims that Lord Adonis, a previous Transport Minister, would have continued the suspension of the fares basket, but the reality is that he did not renegotiate that with the train operators; he negotiated for a one-year contractual suspension. If he had intended to carry on with that, he would have negotiated the period into the franchises, but he chose not to.
Maria Eagle
The right hon. Lady is wrong to say that there was no intention to continue with that. She can try to rewrite our policy as much as she wishes, but my noble Friend Lord Adonis made it perfectly clear in oral and written evidence to the Transport Committee that the ban on flex would continue into subsequent years, and that remains our policy.
Maria Eagle
I am aware of that and thank my hon. Friend for making that point. At least Labour’s candidate understands how hard it is for ordinary, hard-pressed commuters to afford the kind of fare rises that the Government are not only allowing, but promoting. It is no good Ministers hiding behind the deficit, because this is not a simple case of bringing additional money into the Treasury; it is also about bringing additional money into the profits of private train companies. The National Audit Office report on the Department for Transport’s spending settlement warned:
“There is a risk that the benefit of the resulting increase in passenger revenues will not be passed on to taxpayers fully, but will also result in increased train operating company profits.”
High fares equal increased profits in an industry that relies on subsidies of more than £4 billion of taxpayers’ money every year. It is no wonder passengers in Britain are paying three and a half times more for their rail tickets than those in France, Germany and Holland, all countries that do not have the costly and fragmented rail industry structure that is the legacy of the Tories’ botched privatisation of our railway industry. The French, German and Dutch state railways are so successful that they are now bidding for and winning franchises to run rail services in Britain. The Government are step by step nationalising our rail services—it is just that it is not our nation. The profits will be helping to keep down fares in France, Germany and Holland for their own domestic passengers. It is no wonder that fares are so high under our broken system.
Therefore, we would enforce a strict cap on fare rises, but I believe that we need to go further and make fares fairer. Because the system has lost all credibility, passengers feel ripped off and know that they are being ripped off. They feel that the system does not work in their interests and that it is designed to catch them out. That is what I have been told by passengers as I have travelled across the country over the past year. In addition to getting spiralling rail fares under control, here are five other ideas that passengers have said would make a real difference. First, why is there no single national definition of peak time? Why are train companies allowed to set different rules so that passengers have to know precisely which company they are travelling with or risk facing a fine for travelling on the right ticket at the wrong time? Why are the companies allowed to chop and change peak time, stretching it out simply to hike their profits?
Mr Harris
I am sure that the hon. Gentleman, who also sits on the Transport Committee, is as much of an expert as any other Member, and I will agree to consider his comments.
The Prime Minister was wrong today and failed to give the facts about the policy of the last Labour Government and the policy of this Government. Even if it was for only one year, Lord Adonis managed to challenge the rail industry on the so-called basket of fares and whether the RPI plus 1% policy should apply to individual fares or to a basket of fares. He got a lot of support on both sides of the House for insisting—against the arguments of his own officials and the resistance of the industry—that that policy should apply only to individual fares. As we know, if it is applied to a basket of fares, some can go up by 6%, instead of 1%. Whether or not that was a temporary agreement for one year, surely when a new franchise is let the Minister has a responsibility to challenge the industry and set such an arrangement in stone at the very start.
When the railways were first privatised, the policy—it was then RPI minus 1%—was applied to a basket of fares, as agreed with Ministers. That was what Lord Adonis succeeded in challenging, but sadly only for one year. Will the Secretary of State give a commitment that, in future new franchises, the Adonis approach will be applied to fares to protect fare payers and to ensure that train operating companies take money out of their own pockets, rather than the pockets of fare-paying passengers?
Mr Harris
I only have six minutes and the Minister will have plenty of time to wind up at the end of the debate.
I hope that the Secretary of State will not take the same path as has been followed in Scotland, where the SNP Government—for the first time since the 1960s and Beeching—are threatening to close stations, including Kennishead in my constituency, even as passenger numbers are increasing there and throughout the network. That is a disgraceful approach for any so-called progressive Government to take, and I hope that the Secretary of State will make a commitment that she will not close stations or lines in the rest of the country.
It is too easy to criticise rail services and forget some of the major advances that have been made since privatisation, but at the crucial interface between train and customer, there is a growing crisis of affordability—on the personal level, rather than the national taxpayer level.
Owen Smith
I am grateful for that intervention, which gives me the opportunity to say that it was, of course, the Labour Government who managed that franchise, such that we called in Great Western and demanded the changes that it made and that it adopt special measures.
Mrs Villiers
The Labour Government did make some attempt to fix the problems, but they created them, because they let the franchise in the first place.
Owen Smith
In truth, the problems we have with the railways are in large measure precisely due to the fragmentation that resulted from the botched privatisation of our rail industry. That is the reality.
The way we have debated this issue today—in particular, the way the Secretary of State took the opportunity, uncharacteristically perhaps, to make a lot of heavy-handed party political points—does not serve our constituents and rail travellers well. This is too important an economic issue, as she will know from her time on the Treasury Bench, for us to play knockabout politics with it. The key issue that the Opposition are raising today is affordability. Very simply, given that it is so important for many of our constituents that they are able to take advantage of the improved, more efficient and cleaner train services that are now available, those services must be affordable. That is why we are concerned about the large fare increases in the recent round, although Arriva Trains Wales has commendably kept down a lot of its fares across parts of my patch to RPI plus 1. On the Great Western line, however, there has been a worrying increase of 10% in the cost of travelling between Cardiff and London, as my hon. Friend the Member for Garston and Halewood (Maria Eagle) said. That will make businesses and commuters think hard about whether they can continue to travel on that vital line for commerce and commuting.
It is important that the public understand that this Government took a decision to repeal the ban on flexing fares that the Labour Government put in place. That measure was introduced as a result of the economically straitened times in which we found ourselves in 2009. Lord Adonis made that decision to try to address the issue of affordability, and it is party political point scoring to suggest that the fact it was negotiated as a legal contract for one year was indicative of a longer-term intention. There is no read-across in that respect, and the Secretary of State would do well to take Lord Adonis at his word when he put it in writing to the Select Committee that he intended to continue the practice while we remained in economic difficulty.
What has changed since 2009? People are harder up than they were. Things have not got easier for my constituents or for those of the Secretary of State; they have got harder. That is why the Government should have thought long and hard about how they could justify taking a decision that might be in the interests of the train operators but is not in the interests of the travelling public. That was fundamentally the wrong decision for them to take.
I welcome the common sense that we have heard from my hon. Friend the Member for Garston and Halewood today about the need for a cross-party review of our rail services. The fares are too complicated, and the system is too complicated. The flexing at peak times across different parts of the country is also too complicated. Many people end up paying higher fares than they ought to, because the system is engineered in such a way that they cannot access the cheapest fares. We have seen this with the energy companies as well. They rig the market in their favour by making it utterly impenetrable to ordinary people, and it is the same on the railways. My hon. Friend is absolutely right to say that we must look into those issues, and at the underpinning question of the nature of the structure—the ownership principles—of the railway industry. We cannot simply say that there is no alternative, and we cannot get into a tawdry, tedious knockabout over whether this or that issue represents a spending commitment. That is just point scoring, and we need a much more fundamental discussion about the nature of our rail services. We need a Government who are going to act in the interests of the people, not just those of their people.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
Time is too short to refer to every contribution to today’s debate, but I welcome all those that have been made.
The hon. Member for Glasgow South (Mr Harris) criticised a fares system that he presided over as rail Minister. My hon. Friend the Member for Wimbledon (Stephen Hammond), along with many others, pointed out that RPI plus 1 and above-inflation fare increases were introduced under the Labour Government and did not start under the coalition.
The hon. Member for Pontypridd (Owen Smith) commented on the Government’s continuation of a major investment programme and called for a simpler ticketing system. My hon. Friend the Member for Cambridge (Dr Huppert) also welcomed our commitment to a programme of rail improvements that is probably the biggest since the Victorian era. He welcomed the fact that we had been able to prioritise it despite the deficit because of the difficult decisions that we have made in other areas. My hon. Friend the Member for Milton Keynes South (Iain Stewart) welcomed the progress on East West Rail and made some important points about how fares operate.
The hon. Member for Bolton West (Julie Hilling) made a moving speech about the hardship that her constituents are feeling. As for buses, we are of course doing all that we can within the constraints of the fiscal straitjacket created by the deficit that we were left by Labour. Within those constraints we are of course striving to help those who are facing hardship with the cost of living.
My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) pointed out the impracticalities of having a single uniform peak throughout the country and that the Opposition transport team appear not to have read the speeches made by their leader or the shadow Chancellor. I particularly liked my hon. Friend’s reference to the game of policy Twister that they have unfortunately had to play today.
The hon. Member for Lewisham East (Heidi Alexander) commented on the concern about the effect of inflation and fare rises. That is exactly the concern that the Chancellor responded to in his autumn statement in putting the limit on the average rise in national rail, tube and bus fares at RPI plus 1. That help for people struggling with the cost of living was welcomed by my hon. Friends the Members for Fylde (Mark Menzies), for Cambridge and for Milton Keynes South. We ought to pay tribute to the Secretary of State for her role in that. We were able to do that at the same time as delivering a major investment programme only because of savings made elsewhere in government to tackle the deficit—the kind of spending reductions that Labour has consistently opposed.
Mr Tom Harris
“Many families are feeling the pinch because of stratospheric fare increases—racing ahead of inflation—inflicted by the Department.”—[Official Report, 24 July 2007; Vol. 463, c. 691.] Those are not my words, but those of the Minister in this House. Can she point out any improvements that have been made since then?
Mrs Villiers
The former rail Minister has made my point for me. The Opposition must be suffering from collective amnesia if they think that this problem suddenly appeared in May 2010 when the coalition took over. In 2006, a Labour-dominated Select Committee described the Labour Government as “breathtakingly complacent” on value for money in fares. The truth is that concern about rail fares has been growing for years, as my hon. Friends the Members for Bexleyheath and Crayford (Mr Evennett), for St Albans (Mrs Main) and for Milton Keynes South have said.
A major reason for the increases is that under Labour the cost of running the railways spiralled and hard-pressed passengers and taxpayers were left to foot the bill. It is fair that passengers contribute to the cost of running the railways and to the massive programme of upgrades that we are taking forward, but neither fare payers nor taxpayers should have to pay for industry inefficiency. This Government understand how vital it is to get the cost of running the railways down and to tackle the legacy of inefficiency that we inherited from Labour. That is the long-term, sustainable solution to delivering better value for money for taxpayers and fare payers.
Lilian Greenwood
The point that we are seeking to make is that when the Government say that fares will go up by inflation plus 1%, that is what they should go up by, not by up to 11%, which is what many people face this year as a result of the Government’s decisions.
Mrs Villiers
The hon. Lady need not worry as I will come on to the fares basket in a moment. Before I do, it is crucial to say that we are determined to deliver our goal of ending the era of above-inflation fare rises. The only long-term, sustainable solution to delivering better value for money for taxpayers and fare payers is to get the cost of running the railways down, not the short-term, uncosted, poorly thought-through proposals that we have heard from the hon. Member for Garston and Halewood (Maria Eagle) this afternoon.
We have started reform already, with the reform of the franchising system and our commitment to further electrification to reduce costs. We are also determined to see the rail industry working together better, with a strong shared incentive to reduce costs and deliver better outcomes for passengers.
Another key plank of getting the cost of the railways down is making working practices on the railways more efficient. When Labour was in charge, pay in the rail sector rose more than twice as fast as it did in the economy more widely. Difficult decisions may lie ahead, and I do not believe Labour is capable of taking those decisions where the interests of the unions conflict with the goal of getting better value for money for passengers.
Mrs Villiers
No.
Labour failed to deal with the problem in government, and its heavy dependence on union funding would make it utterly incapable of dealing with it if the country were unwise enough to return a Labour Government. If the Opposition were really serious about getting better value for money for passengers, they would not be making glib announcements in the House; they would be remonstrating with their friends in the rail unions about a responsible approach to pay, from the boardroom to the platform.
I turn now to the fares basket and the flat cap on prices. Frankly, the shadow Secretary of State was in all sorts of trouble on the matter. The claim made by her and the Leader of the Opposition that the suspension of the cap was an ongoing policy, representing a dramatic change of heart by Lord Adonis, is simply not borne out by the facts of what Lord Adonis did in government.
Mrs Villiers
No. The hon. Gentleman did not do anything about the flat cap in his entire time as a rail Minister, so I will not take his intervention on the matter.
Lord Adonis inserted in the franchise contracts a one-year suspension of the flat cap. That conflicts with what the shadow Secretary of State said today.
Mrs Villiers
No.
More important, the shadow Secretary of State has given us no indication of just how much it would cost to repeal the fares basket provision. Amazingly, she did not even seem to understand that it would have a cost. I can assure her that it would. She has given no credible explanation of how Labour would pay for the change, and whether it would come from higher fares, higher taxes, cuts in services, the cancelling of extra carriages or upgrades or more borrowing.
Just one day after the Leader of the Opposition finally acknowledged that dealing with Labour’s deficit means that there is no more money left to spend and said that the Opposition would take a more responsible approach, the shadow Secretary of State stood at the Dispatch Box making spending commitment after spending commitment on rail fares, concessionary bus travel, local government funding, school transport, VAT—the list goes on and on. She and the shadow Minister, the hon. Member for Nottingham South (Lilian Greenwood), made several billion pounds of commitments today.
The truth is that when it comes to the cost of living and the economy, Labour just does not get it. It must be just about the only political party in the world arguing that the way to get out of a debt crisis is by borrowing more money. Whether it is a credit card bill or the international gilts market, that simply does not work. There is no way that interest rates could have stayed at today’s low levels without the action that we have taken to deal with the deficit and avert the crisis enveloping other European countries with public finance positions almost as bad as ours.
In government, Labour brought this country to the brink of bankruptcy, leaving Britain with one of the biggest structural deficits in the developed world. Today’s debate demonstrates that, contrary to what the Leader of the Opposition said, Labour has learned nothing in opposition. The biggest threat to the cost of living in this country is the spiralling interest rates that we would get if we gave way to the demands that Labour makes every single day in the House for more and more spending.
It is clear that if Labour had won the last election—thankfully it did not—it would have utterly failed to take the tough decisions needed to get the deficit under control. That would have had disastrous consequences for the cost of living for millions of families right across the nation. I urge the House to reject the motion.
Question put.