Cost of Living

Theresa Villiers Excerpts

Wednesday 16th May 2012 Commons Chamber

[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?

[Ms Eagle]

There is devolution in Wales, where they make the choices on the basis of the budgets assigned to them by this Government. We have been very clear that we abandoned flex and stopped it, and Lord Adonis made it clear that, because times were so tough, we were not going back to it. The current Government have reintroduced it, while pretending that they are cutting fares, which they are not. It is simply not true, as Ministers claim, that this is just an additional cost to the taxpayer. As the National Audit Office has said,

“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.”

This is a Government who are not just out of touch with the impact of these fare rises, but unwilling to stand up to the train companies and enforce even the cap they claim to have set. This is indeed a Government who are in hock to the TOCs.

The pressure on commuters is set to spiral over the next two years because Ministers have decided that next year’s fare rises are to be even higher—up to nearly 12% on the current rate of the retail prices index. That is nearly 12% in both 2013 and 2014, and the tender documents for the new franchises reveal even more pain on the way. Bidders are promised even more freedoms on fares, including the right to introduce a new super-peak fare at even higher prices, hitting hard-pressed commuters still further. Franchise bidders are promised that they can cut daily services by up to 10%. They are no longer required to improve performance over the life of the franchise and no longer required to maintain the same level of CCTV on trains.

As we exposed last month, a programme of ticket office closures has already been signed off by Ministers, but staffed ticket offices are not a waste or an inefficiency that can be cut out with no resulting impact on service. The impact will be passengers cheated out of the cheapest fares, which are not always clearly advertised or available at ticket machines. Those without access to the internet, often those seeking work or older people, are unable to get the better deals and are left to pay over the odds for their train tickets.

Ministers continue to deny that they have signed off these closures. At the last Transport questions, the Minister of State assured the House that “they are not happening”. That is what she said, yet we have seen the e-mail from the Department’s own rail fares and ticketing review, warning the Department’s press office not to deny that ticket office closures have been given the green light because

“the Minister has already decided to approve some ticket office closures…it’s just not been announced yet.”

I have a further leaked document with me. This is from London Midland, the company set to be the first to implement a closure programme—for the first of the 675 ticket offices across the country that we know have been earmarked for closure. This leaked document reveals that London Midland will save £1.25 million a year by closing 86 ticket offices—profits before passengers. It also refers to a payment of £200,000 from the Department for Transport. Perhaps the Secretary of State—or the Minister of State—can confirm when she closes the debate whether the Department for Transport is actually paying companies to push through these closures? A reference in this document suggests that that might be the case. The Minister of State can tell me now if she would like to intervene. She does not want to, so perhaps the Secretary of State will address the issue at the end of the debate. The future of rail under this Government will be higher fares, more overcrowding, less CCTV and fewer ticket offices.

If Ministers are out of the loop when it comes to what is happening to rail fares and ticket office closures, they are even more delusional when it comes to bus services. Last month the Under-Secretary of State for Transport, the hon. Member for Lewes, told the House that what had been said about bus cuts was “entirely untrue”, and claimed that

“there have not been the cuts that the Opposition are so keen to talk up.”—[Official Report, 19 April 2012; Vol. 543, c. 485.]

It is not the Opposition who are talking up bus cuts, but the major operators. Arriva told my hon. Friend the Member for Nottingham South (Lilian Greenwood) that

“with the 20% reduction in BSOG, the ongoing cuts to the concessionary fare scheme, and a reduction in tenders across the UK, this has put enormous pressure not only on Arriva, but the bus industry as a whole.”

These are real cuts. Evening and Sunday services have been withdrawn on Route 32 in Wycombe. The Saturday service has been withdrawn on Service 84 in Maidstone. Route 1 in Watford, Route X9 in Milton Keynes and Service 50 in Guildford have all been cut. In fact, one in five of all supported services have been lost, and fares are spiralling. The Under-Secretary of State should stop coming to the House and claiming, as he did during last week’s Transport questions, that there have not been any bus cuts, because there have.

The Government need to understand that not just buses but lifelines are being cut: lifelines connecting young people with colleges, parents with child care, and older people with shops and services. The loss of a bus service can have a devastating impact on those without cars, and on those in rural areas in particular. It can have a devastating impact on their lives, their chances, and their capacity to get out and about.

Like the train fare rises, the bus cuts are a direct consequence of the Government’s decision to cut the councils’ funds for local transport by 28%, and their decision to remove any requirement for what is left of that money actually to be spent on transport. At the same time, the Government have cut the subsidies given directly to bus companies by a fifth. The result is that not only are there additional pressures on family budgets, but young people are simply unable to reach their full potential.

Ministers need not take my word for that. They can listen to the Association of Colleges, which has warned of a drop in further education enrolment. They can listen to the 60% of colleges that report a drop in transport spending by their local authorities. They can listen to the Joseph Rowntree Foundation, which has revealed that 40% of young people say that their decisions on post-16 education were influenced by transport, not by courses. When students travel, on average, between nine and 35 miles to get to college, and when 72% of them rely on the bus to get them there, it is no wonder that the loss of bus services will hit them and their life chances hard.

The hon. Member for Lewes told the House that he had held discussions with bus companies about the costs of travel for young people. No doubt they delivered the same message to him as they have delivered to me when I have raised our own proposals for a concessionary fares scheme for 16 to 19-year-olds in education or training. I believe that the bus companies want to be helpful, but Brian Souter of Stagecoach told me—