HC Deb 16 July 1970 vol 803 cc1851-66

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew.]

Mr. Speaker

May I remind the House that a record number of hon. Members wish to participate in the Adjournment debate. I hope that I shall be able to call a number of them.

9.42 p.m.

Sir Anthony Meyer (Flint, West)

This House in its wisdom does not accord to hon. Members the privilege of a second maiden speech. But since I have the opportunity I should like to place on record a tribute to my predecessor, Mr. Nigel Birch, whose wit and wisdom made him such a notable ornament of the House. We are glad that he is still serving the public in another place.

I am grateful for this opportunity to draw attention to the mounting discontent in my constituency, and indeed throughout North Wales, at the recent severe increases in the charges of the Crosville Bus Company. I have in my hand a petition signed by no fewer than 500 inhabitants in the town of Prestatyn alone. Crosville is the nationalised and monopoly passenger carrier throughout the whole of North Wales. Ever since 1965 the company has applied for and been granted an annual increase in fares. The last such increase was in January of this year.

Now the pace has quickened, as indeed the pace of inflation has speeded up throughout the economy in the nine months of the now happily deceased Labour Government. Instead of an annual increase in fares, we have the bus company seeking an increase in fares only six months after the last increase was granted and being awarded the increase by the Traffic Commissioners. On 2nd July the Traffic Commissioners for the North-West Traffic Area granted an application by the Crosville Company in full, subject only to the most derisory of abatements. The company asked that the children's fares should be increased by 50 per cent. of the full fare to 75 per cent. and were told that they could charge only 66 per cent. Apart from that, the application was granted in full.

Most concessional fares have been abolished, and the majority of cheap fares have gone, including all weekly tickets and contract tickets. Return fares are now based on single fares, plus 90 per cent., and single fares are based on a charge of 5d. a mile. The end result seems to be that we in North Wales lose on the swings and on the roundabouts.

Crosville is pretty well a local monopoly over the whole area and therefore is not subject to the local competition which might have served to keep down fares, at any rate on journeys which could be made to yield a profit. But Crosville is not merely a local monopoly. It is part of the National Bus Company, a national monopoly. As such, it is required by law, notably by Section 41 of the 1968 Transport Act, to earn sufficient profit not merely to cover its operating costs but also to cover depreciation and the renewal of assets.

The Company has to provide services on a large number of sparsely populated routes, and it is required to provide a surplus of no less than £800,000 annually. I gather that there is some mystery as to how that figure is arrived at. However that may be, it seems an excessive and an excessively inflexible requirement. That is our loss on the swings.

It might have been supposed that, since Crosville is part of a national monopoly, there would be some approximation to equality of conditions between it and the other companies which form part of that monopoly, and that there would be some system of internal compensation whereby the profit margins fixed for the separate companies took account of the earnings potential of the regions which they serve.

That is far from being the case. If there is one single journey in my constituency which should be able to be made to operate at a profit, it must be the journey between the two largest centres of population, Rhy1 and Prestatyn, which are only three miles apart. That three-mile journey covers a built-up area, with the possibility of picking up fares on the way. The single fare over that distance is an almost unbelievable 2s., and there is no reduction on the return fare. It is 4s.

Until recently, I have been living in Sunningdale, in Berkshire. The other day, I took a bus run by the nationalised Aldershot and District Company a distance of four miles to Egham, the nearest railway station. The charge for that four miles was 1s. 3d. I confess that I did not ask what the return fare would be. Here, we have a 1s. 3d. charge for a four-mile run in the prosperous South-East and a 2s. charge for the three-mile run in North Wales. That is why I say that in North Wales we lose both on the roundabouts, and on the swings.

A nationalised monopoly means that there is no local competition and no undercutting. It also means that our monopoly is compelled to try to achieve a target which may be attainable elsewhere but certainly is not attainable in relatively sparsely populated areas. I shudder to think what the situation must be in Mid-Wales.

I hope that I have made it clear that what I blame in all of this is the system. But, even within the present highly unsatisfactory system, I am sure that it would be possible to make better arrangements. The last Government issued a White Paper (Cmnd. 3481) in December, 1967. Paragraph 98 of that contains the following passage: In many cases services to outlying villages can best be provided by private operators, who may well run a bus service in conjunction with other activities; and the service may be best provided with a relatively small vehicle. The Government itself is experimenting on some postal services with the use of minibuses which will at the same time carry a few passengers. I cannot help feeling that if ideas of this kind had been followed through with more imagination and flexibility, Crosville, and perhaps other companies similarly placed, would be quit of its loss-making country routes and could afford to keep down fares on other routes. But flexibility and imagination are the last things to look for in a monopoly.

I am sure that the people who run the Crosville Company are overflowing with the milk of human kindness and that there is nothing they desire more than to provide the people of North Wales with a frequent, punctual and cheap form of public transport. The plain fact is that they have not provided a transport system at all, but a sort of brontosaur—a creature which took eight minutes to send a message from its head to its toes—a prehistoric monster doomed to extinction because of its inability to adapt itself to a changing environment; a cumbersome monster, what is more, which inflicts cruelty and suffering not out of malevolence but out of sheer incompetence and clumsiness.

So we get the old and the sick unable to afford the fare to the doctor, to the hospital, to the chemist, or to visit their friends. So we get families unable to afford the bus fare to send their children to school. We get cases such as I have had described in a letter from a constituent—

Mr. Wyn Roberts (Conway)

rose—

Sir A. Meyer

—of children being put off buses a long way from their destinations, in one case five miles.

Mr. Wyn Roberts rose—

Mr. Speaker

Order. If the hon. Gentleman seeks to intervene, mere standing will not do it. He must ask his hon. Friend whether he may intervene.

Mr. Wyn Roberts

Perhaps I may intervene. Does my hon. Friend realise the full impact of these bus fare increases on school children? I refer to the 1944 regulation which requires that a child under eight travelling less than two miles or a child over eight travelling under three miles to school has to be paid for by his parents and—

Mr. Speaker

Order. The hon. Gentleman is a fully fledged Member of the House now. Interventions must be brief.

Sir A. Meyer

I am obliged to my hon. Friend for his illustration of the hardship being caused to families with school children and of the need for measures to take account of that hardship.

I have great confidence in the ability of the present Government to slow the rate of inflation. In the years to come enterprises, whether public or private, will no longer be compelled to put up their prices year after year as they have in recent years. At least, I hope not. But I feel sadly certain that, even in a world of stable prices, Crosville and other such enterprises will be coming back year after year applying to increase fares. This monopoly, like other monopolies, is a chronic dweller on slippery slopes.

The process is familiar and inexorable. It cannot get enough passengers to pay its way, so it raises its charges. The fact of raising charges drives passengers away, so its revenue falls still further. So it raises its charges again and it gets fewer passengers; and so the charges go up again, and on and on, and down and down. The passengers club together. They go by bicycle. They walk. They get together with their workmates to buy a second-hand car. They do anything rather than pay what they regard as the exhorbitant fares of the bus company. So it is doomed to a process of extinction, and there seems no way of stopping it.

We are already a very long way down the slippery slope. Even if there is a change of heart; even if Crosville and other companies are given the courage and the incentive to attempt the opposite policy of reducing fares and offering special concessions such as cheap off-peak fares for the young and the old, of restoring all the concessions which any well-managed enterprise would find it profitable to provide, as I hope they will be, it will still be a very long time before it becomes possible to provide a decent public transport system at a realistic charge.

Until then I fear that it may be necessary to provide subsidised concessions; concessions subsidised out of taxation; concessions subsidised out of the rates. I have a strong prejudice against all forms of subsidy, and it is only with the greatest reluctance that I shall find myself shortly pressing the Flintshire County Council to subsidise cheap rates for school children and old-age pensioners. It is a very expensive business. I am told by the county council that even to provide concessionary fares for old-age pensioners over 75 will cost £30,000 per annum, and nobody will pretend that merely to provide concessionary fares for the over-75s is anything approaching a satisfactory solution.

I would not mind so much the idea of a subsidy if I saw some prospect of the subsidy being self-terminating; if by subsidising a bus company we could so improve its services that it became self-supporting. I suspect that it is too late for that, but it may not be. It is perhaps worth making the effort, but I do not believe that the long-term operation of putting public transport back on its feet can succeed as long as we continue on the present basis.

I accept that in very sparsely populated areas competition is just not feasible. Let us hive off these routes. Let us follow the suggestions in paragraph 98 of the White Paper. Let us have post buses. Let us have private operators combining the delivery of goods with the carriage of passengers. Let us waive the insurance provision, or whatever it is, to make this possible.

But once we have taken away from Crosville and such companies their most unprofitable routes and left them with routes on which it is possible to earn a profit, let us then expose them to competition along these profitable routes. It must be possible to carry passengers the three miles from Rhyl to Prestatyn and still make a profit at a fare much lower than that now charged.

We know that public transport is a difficult matter and that we in North Wales, or elsewhere, cannot expect to win both on the swings and on the roundabouts, but surely we could have a try at breaking even on one or the other? I believe that if we put the needs of people first and used a bit of imagination and flexibility we might even find that if we provided a decent service at a decent price it could make a modest profit.

I am not asking my hon. Friend to give me an answer tonight. This is clearly a matter about which he will have to think. What I beg of him is to consult his right hon. Friend the Secretary of State for Wales. Let them put their fresh and excellent minds to this matter and in the course of time come up with a much better solution than that which we have now.

9.59 p.m.

Mr. Barry Jones (Flint, East)

I thank the hon. Member for Flint, West (Sir A. Meyer) for raising this issue of bus fares with such alacrity, and I congratulate him on his appointment as P.P.S. to the Chief Secretary to the Treasury.

I do not agree with the hon. Gentleman's strictures on this nationalised bus company. After all, the recently announced increase in the price of petrol will, I suppose, make it even more difficult for companies which run buses to keep fares down. In my constituency, which is the neighbouring one to that of the hon. Gentleman, it is obvious that feelings are running very high indeed. I have had shoals of protests. I know that 200 parents in Connahs Quay, a township in my division, have signed a petition of protest, and the general opinion is that the Traffic Commissioners have perpetrated a shocking decision. They are penalising a hard-working community and, in effect, undermining the living standards of young families and aged persons. We feel that it is monstrous, unjust, unreasonable and even downright Draconian to burden my constituents with such increases.

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]

Mr. Jones

It would help me to put my point if I read a brief letter from a constituent which would shed light on the dilemma that many people face in Flintshire, where bus fares have been raised. My constituent writes: Dear Sir, I am writing to ask you if you could please assist me with the bus fare for my three children who go to the Roman Catholic School in Shotton … She gives the names of the children, one of whom was born in 1961, another in 1962 and the third in 1964. She says: They have been going on the school bus till now but the bus company have raised the fares from 6d. each way to 10d. each way for the youngest two, to 1s. 3d. each way for the elder child who goes to the top school, making 14s. 2d. a week increase, which I cannot afford. It will make it £1 9s. 2d. altogether, plus dinner money of £1 6s. 3d. From tomorrow they will have to walk in the mornings and as this is such a long way they will have to leave the house at 8.15 a.m. I cannot take them because I have two younger children at home, one of three years and one of eight months. I do not like to beg, but if you are unable to help me I am afraid they will be having days off school during bad weather and I will keep them at home rather than change their school. That sad letter is an instance of the effect that this rise in bus fares is having on people in East Flintshire.

A letter from a parent in my own village of Hawarden reads, With reference to the recent increase in Crosville bus fares I wish to draw your attention to the fact that my daughter, a pupil at Deeside High School, is now obliged to pay 2s. 10d. daily. As I feel this is an unreasonable amount to pay I would be grateful if anything could be done to relieve this situation. There are many other instances of letters of protest, all of which make a case for saying that these fare rises are far too great. Although I have the documentation here I am aware that other hon. Members wish to speak in the debate and I therefore draw my remarks to a close.

10.4 p.m.

Mr. Geraint Morgan (Denbigh)

I am grateful for the opportunity to intervene shortly in this debate, which raises a matter of great importance to all the inhabitants of North Wales, particularly in the rural areas. I thank my hon. Friend the Member for Flint, West (Sir A. Meyer), whom I am delighted to welcome back to the House as my political neighbour, for raising this matter, and I associate myself entirely with what he has said.

My constituency of Denbigh, which covers an area of nearly 600 sq. miles is probably affected more than any other area in North Wales by these extremely severe fare increases, which fall very heavily upon old-age pensioners and parents of school children whose fares are not paid by the local authorities. In the Denbigh division we are particularly hard hit because we were denuded of practically all our railways under the Beeching Plan about six years ago.

My hon. Friend said that he shuddered to think of the conditions in Mid-Wales. He need not penetrate that far into Wales to see the effect of these increases. In view of the number of hon. Members who want to speak I shall raise only one point. During the recent General Election campaign I was handed a letter from the Traffic Manager of Crosville Motor Services to a constituent of mine, living at Henllan, near Denbigh, which stated that, in so far as old-age pensioners were concerned, the company was ready to enter into schemes with local authorities. I should like to know from my hon. Friend, when he replies to the debate, whether any such schemes have been entered into, and to be given any relevant information on that point.

10.6 p.m.

Mr. John Golding (Newcastle-under-Lyne)

I regretted very much the increases granted by the Traffic Commissioners in East Flintshire, because they created a precedent for the Crosville Bus Company asking for increases in North Staffordshire. The present system of control is totally inadequate. I have been disappointed with the replies from the Government on the questtion of bus fares. Like other hon. Members, I had been misled into believing that there would be rather more stringent control on nationalised industry prices. I should have thought that, on coming to office, the Government would have looked very carefully at the problem of increasing bus fares, made worse by the increase in petrol prices. But this has just not happened.

Many hon. Members have asked that the increases be referred to the Prices and Incomes Board. Many are concerned with the situation in their divisions. But the answer always is that this is a matter for the Traffic Commissioners. Yesterday, I appealed before the Commissioners against increases demanded by the Crosville. I have been told that the Commissioners are independent and that the Government have no control over them. I was told that the Commissioners were not even taking into account the demand by the National Bus Company for that rate of return from Crosville which has been mentioned. It appeared that the Commissioners were acting as a law unto themselves, taking only the necessity for the bus companies to earn what in their opinion was a reasonable rate of profit—whether 5½, 6 or 6½ per cent.

This is something which the Government must look at very closely. Either they must abandon the pretence to be controlling prices in the nationalised sector or they must do something about rising bus fares. It is intolerable for the Government to tell us that they will restrict price increases and refuse to refer this increase to the Prices and Incomes Board or to take direct action themselves. It is totally unacceptable to us to leave it, as it is left at present, to the Traffic Commissioners.

Sir A. Meyer

When the party opposite were in power, these increases in Crosville bus fares were awarded annually.

Mr. Golding

When I appeared before the Commissioners yesterday, I was appealing against two increases this year, one ow which was for an increase of 25 per cent., which the bus company was justifying, and which the Government have refused to intervene on.

The situation is getting worse. This is the situation that I hope the Government will face. It is sheer hypocrisy for them to be talking in terms of price control and keeping down the cost of living and at the same time indulging in their present masterly inactivity on the issue of bus fares.

10.10 p.m.

Mr. Wyn Roberts (Conway)

I am grateful for this second opportunity to enter the debate. I wish to make the point as strongly as I can that these bus fare increases are tempting parents to fail to comply with the law governing the sending of their children to school. I refer to the requirement dating from the 1944 Act that a child under eight is not required to walk more than two miles to school, or a child over that age more than three miles. In practice, this has come to mean that transport within those distances has to be paid for by the parents, and, such is the cost of transport now for certain parents in my constituency—as much as 14s. 2d. per week per child—that it is becoming prohibitive and is tempting them to keep their children away from school.

I submit that the two-mile and three-mile limits in those rules are anachronistic in the present context and, in today's circumstances, they should at least be reviewed, if not abolished, so that transport to and from school is free, particularly for children in rural areas.

10.11 p.m.

The Parliamentary Secretary to the Ministry of Transport (Mr. Michael Heseltine)

It would be an impertinence for me to congratulate my hon. Friend the Member for Flint, West (Sir A. Meyer) on a maiden speech. It is obvious that the skills for which he was reputed when last a Member have in no way deserted him in the period he has been absent from the House, and we are delighted to see him back.

I am sure that my hon. Friend and all other lion. Members who have spoken will understand that I am not able to follow them in the detailed examination and discussion of this increase tonight. The reason is that the independent Traffic Commissioners have only recently decided the case, and it may yet be the subject of appeal to the Minister. I think that the hon. Member for Newcastle-under-Lyme (Mr. Golding) did not fully appreciate that. There is a right of appeal to the Minister for local authorities and transport operators in the area, and the date on which the time for appeal runs out is 19th July. The matter may yet, therefore, come before my right hon. Friend.

If there were an appeal, the Minister would have to decide it in a quasi-judicial capacity. He would appoint an independent inspector to hold an inquiry and to report to him, and he would then decide the case strictly on the basis of the evidence which the Commissioners had already heard and the submissions subsequently made to his inspector. I regret, therefore, that I am not in a position to go further in discussing the merits and implications of this case than I have gone in merely stating the legal position in which my Ministry finds itself. Perhaps it may, however, as a matter of factual record, help if I put some of the points in a wider national context. I very much hope that we may on a later occasion have an opportunity to discuss this problem of the provision of bus services throughout the country.

The Crossville application was intended to raise the gross revenue of the company by 15 per cent., with varying effect on the individual fares depending on the scales then introduced. This was granted by the Traffic Commissioners, after examination, with only the amendment mentioned by my hon. Friend, that the children's fare was increased from half the adult rate to two-thirds, as opposed to the three-quarters originally requested.

My hon. Friend is right to draw attention to the disturbing upward trend in bus fares generally. The main reason which bus operators have currently been giving for the fare increases which they have been seeking throughout the country has been the considerable additional costs which have come from substantial wage increases negotiated earlier this year. This is a labour-intensive industry, and labour costs account for about 70 per cent. of the operating costs of bus operators. Therefore, the opportunity for more productivity is limited. There is a certain amount of scope in one-man operation, which is one of the most promising fields. I am sure that both sides of the industry will do everything in their own interests to pursue this avenue with the vigour at their command, together with any other measures they find that will help to meet the problem of manpower shortages.

Mr. Elystan Morgan (Cardigan)

Does the hon. Gentleman appreciate that if his Government had not at the beginning of last week with such alacrity killed off the Welsh Rural Development Board in the areas within the boundaries of that Board, applications could have been made for subsidies to support these bus services in exactly the same way as applications have been made within the area of the Rural Development Board in the Pennines?

Mr. Heseltine

I shall come to this point in a moment.

My hon. Friend rightly said, and all hon. Members who have spoken have stressed, that the increases bear particularly hard on the elederly in the areas affected, and he asked about the prospect of concessions for them. I do not see how bus operators can reasonably be expected to provide such concessions out of their own revenue in present circumstances. To give the concessions would entail making the fares still higher for other members of the travelling public.

Sir A. Meyer

That may very well be so, but the point I was trying to make is that such concessionary fares might have the effect of attracting custom back to the bus services and might in the end not reduce their revenue but positively increase it.

Mr. Heseltine

I am coming on to this argument and to speak of the opportunities that exist. There are wide powers now available to all local authorities to arrange such concessions on any bus operator's services in their area. This has been traditionally available for many years for municipal bus undertakings, but under the 1968 Transport Act this concessionary power was made available throughout the general provision of bus undertakings.

Mr. Elystan Morgan

I was deliberately referring not to the grants payable by local authorities but to grants payable by the Rural Development Board. For many poor local authorities in Wales the payment of a 50 per cent. grant would be too heavy an impost on their finances.

Mr. Heseltine

The matter does not stop with the payment of a 50 per cent. rural bus grant, because the balance of the 50 per cent. which is expected to be paid by the local authority is grant-aided. Therefore, there is a substantial additional benefit available. There are these opportunities for local councils, if they wish, to apply for local subsidies for various services which they suggest to the undertakings in the area, but it is for the local authorities to take the initiative.

The powers granted in 1968 have been little used by local authorities. The subsidies were available, and the grant aid is available on top of the subsidies. Therefore, it is perhaps surprising that local authorities have not made more use of them. It is for the hon. Members who have raised the point to take it up with the local authorities in the first place, to name the rural bus services they think could be the subject of grant aid, and see whether they can persuade the local authority to put it forward.

On a national basis, subsidies are already going to the bus industry at large. There is the fuel tax rebate, worth about £21 million a year, £5½ million provided through the 25 per cent. grant for the purchase of new vehicles, and an additional grant on capital projects, such as bus stations, of 25 per cent. or 50 per cent., amounting last year to £368,000. All these measures of financial help are already available from the Exchequer.

My hon. Friend has rightly drawn attention to the bus licensing system, and suggested that the monopoly position by which the large operators are protected should be reviewed. My right hon. Friend the Minister has already said in reply to a Question from my hon. Friend the Member for Brighouse and Spenborough (Mr. Proudfoot) on 9th July that he will examine the working of the licensing system. Within that examination, we will also want to deal with the experiments in mini buses and so on which have now been going on for some time and which we will take into account in whatever we decide.

But it is only fair to say that it is not as simple just to say that we will abolish the licensing system or dramatically amend it. There is not the slightest doubt that the whole subject requires a careful approach. It is the regular operators whom the licensing system deliberately protects. It was designed in the 1930s to protect regular and substantial operators and to protect networks of existing services, both profitable and unprofitable. If it is modified, or abolished, the profitable routes may be better served, but there would be a possibility that the unprofitable routes would suffer in a way which was unacceptable. It may be true that, as a result of smaller overheads for operators on the profitable routes, something could be done about fares on those routes, but one must not lose sight of the consequences which could result for the unprofitable routes, which might lose their services.

As my right hon. Friend has already announced, we will look at the whole of this problem to see what degree of flexibility may be introduced, but everybody understands that the provision of public transport is causing dilemmas which have not been found easy to solve, and I do not believe that there are easy solutions. We shall give the subject the best examination we can. This has been a valuable debate in stirring our determination to achieve the results of which we are capable.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes past Ten o'clock.