HC Deb 01 April 1977 vol 929 cc815-27

3.31 p.m.

Mr. Tony Newton (Braintree)

I beg to move, That this House is increasingly concerned by the hardship caused by the rising costs of travel to work, especially in the context of recent pay policy and the burden of income tax and rates; notes that many of the communities worst affected are suffering also from a serious decline in public road transport and from the failure to provide public services matching the expansion of their population; deplores the Government's actions on the distribution of financial help to local authorities, which will exacerbate these problems; and calls for a Members who believe in Europe and hon. Members who wholly object to it, hon. Members like my hon. Friend the Member for Handsworth and hon. Members like myself, who are fairly lukewarm, who did not like it when we went in and do not like it much better now, but who realise that it is there and that we must cope with it and do something with it.

I very much hope that the motion will receive overwhelming support, that the Government's amendment will be voted down, and that we can for the first time set up a Committee system that can sensibly scrutinise and sensibly declare its opinion on matters, so that European MPs like myself, as well as the Government, can go to Europe knowing exactly what the House of Commons thinks.

Question put, That the amendment be made:—

The House divided: Ayes, 0, Noes, 28.

Division No. 99] AYES [3.18 p.m.
TELLERS FOR THE AYES: Mr. Thomas Cox and Mr. Ted Graham.
Atkinson, Norman Marten, Neil Stanbrook, Ivor
Bottomley, Peter Mendelson, John Stewart, Rt. Hon. Donald
Callaghan, Jim (Middleton & P.) Page, Rt. Hon. R. Graham (Crosby) Tuck, Raphael
Douglas-Hamilton, Lord James Price, C. (Lewisham W) Weatherill, Bernard
English, Michael Price, David (Eastleigh) Wise, Mrs. Audrey
Finsberg, Geoffrey Rees Davies, W. R. Young, Sir G. (Ealing, Acton)
Grant, Anthony (Harrow C.) Rooker, J. W.
Jay, Rt Hon Douglas Silverman, Julius TELLERS FOR THE NOES:
Kelley, Richard Silvester, Fred Mr. Sydney Bidwell and
Kerr, Russell Sims, Roger Mr. John Lee.
McCartney, Hugh Spearing, Nigel

thoroughgoing review of Government policies towards these areas and the people who live in them.

First of all, I should like to express my grateful thanks to my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew), who was fortunate in the Ballot for Private Members' motions only a few weeks ago. In those circumstances he has collaborated with me and has done a deal, as it were, that we should raise the same subject and that he would leave me to move my motion.

I wish to make clear my hon. and learned Friend's association with me in my remarks and his own very keen interest in the problems of his area and the commuters who live there. Had there been longer time for this debate, he would have hoped to catch your eye, Mr. Deputy Speaker. I also refer to my hon. Friend the Member for Gillingham (Mr. Burden), who has returned to the Chamber, although I fear that there may not now be time for him to catch your eye. I am grateful to my hon. Friend for taking the time to support me, in marked contrast to the hon. Members for Rochester and Chatham (Mr. Bean) and for Gravesend (Mr. Ovenden).

Thanks to the amount of time taken up by our European friends, I have much less time than I expected. Therefore, I shall have to curtail the remarks that I had intended to make. My motion was deliberately drawn in very broad terms. Had I had the opportunity at the end of my speech to do so, I should have liked to go much wider than the problems of commuters and rail services.

I shall make simply the general point that, by and large, the problems faced by commuters in commuter areas are closely associated with a whole range of other problems, most of them arising from the expansion of population. The expansion in population which, on the whole, creates the growth of commuting has not been matched by any comparable growth in public services.

In my part of Mid-Essex, for example, and in many other comparable areas the growth in hospital provision, road facilities, sports facilities and public facilities of all kinds has not in any way been commensurate with the increase in population. That is an important part of the problems of commuter areas.

Had I had the time, I should have wanted to say some very critical words about the disgraceful way in which these areas have been treated under the rate support arrangements, which will exacerbate these problems. I should also have wanted to say something about the way in which the transport supplementary grant has been treated, which is equally disgraceful and for the same reasons.

Authorities which took the trouble to keep within the Government's guidelines are now finding themselves penalised in the amount of money being handed out by the Department. In Essex, the transport supplementary grant amounted to £2½ million last year but this year it is only £36,000. I am told by the county that this is primarily because it has fallen below the threshold of benefit for the transport supplementary grant. This comes about because the authority did what the Government asked. Now it is finding that the benefit is going to authorities which carried on being profligate.

I should also have wanted to say something about the really disastrous increase in motor taxation, which again is adding to the problems of these areas. I also wanted to refer to the distribution of resources for health services, which are critical in any area like mine with a rapidly expanding population where there has been no major new hospital building since the war, a situation that is a scandal and a disgrace.

I also wanted to say something about the problems of rural transport and to tell the Minister to get off his behind, stop conducting experiments and come forward with a policy. We have had years of experiments. We do not want a lot more experiments. We want action to save at least some of our rural and suburban bus services. That is a sketch of what I should have liked to talk about at much greater length.

I shall turn to the specific problems of commuters, which are an important part of the debate that I had hoped to have today. I want to describe to the Minister what has happened for commuters from the main railway stations in my constituency. The cheapest journey is from Chelmsford to Liverpool Street. Less than three years ago the cost of an annual second-class season ticket was £167. Now it is £390. In less than three years it has increased by £223, or over 130 per cent. The most expensive journey is from Braintree. Less than three years ago the cost of a season ticket was £195. Today it is £453, an increase of £258, again more than 130 per cent. For other stations such at Witham and Hatfield Peveral the cost is between the figures for Chelmsford and for Braintree, but the increase is of a similar scale—130 per cent. or more in less than three years. It is almost unbelievable.

That is not the end of the story. No doubt some commuters can walk to the station from their homes and to their offices from Liverpool Street, but many may have to drive up to 15 miles, using perhaps a gallon of petrol, to get to and from the station, or pay bus fares, which have been soaring, or travel on the Underground, which is becoming more and more expensive. Those costs may easily add another £2 to £5 a week to what commuters spend.

There can be few of my commuter constituents who do not have to earn gross before tax at least £750 simply in order to pay their travel-to-work bills. For many of them the sum must be over £1,000 in gross pay to enable them to travel to work. That would be bad enough. When put in the context of pay policy, mortgage interest rates and taxation, the situation becomes catastrophic.

A few weeks ago I asked the Treasury for comparisons on what had happened to the real income of various representative families between the second week in January 1975 and the second week in January 1977. The answer appears in columns 239 and 240 of the Official Report for 20th January. The assumptions which I set for the Treasury were a man with a wife and two children under the age of 11—a standard family—with a 20-year mortgage of twice his annual income, a fairly standard mortgage. I suggested as an assumption that the man had had two pay increases in the period exactly equivalent to the maximum allowable under the pay policy.

Of the many figures in the answer, let me take the man earning £4,000 a year in January 1975 and turn the figures into weekly terms. In January 1975 his gross income, including family allowance, was £77.82. After paying tax, national insurance and mortgage repayments, his net income was £37.36. Two years later, in January 1977, his gross income had increased to £88.42. His net income had increased to £42.63 after allowing for extra tax, extra national insurance and extra mortgage increase—an increase in his net income of about £5 a week. In January 1977, however, £42.63 was worth only £30.83 at January 1975 prices. Therefore, in 1975 price terms, his net income after tax and mortgage, instead of rising, had fallen by £6.43 a week, or 17 per cent. That was before he had paid his increased rail fares. The weekly season ticket from Witham had increased by £6.

The comparison becomes mathematically complex because of the different price bases and the fact that transport is to some extent allowed for in the retail price index. Therefore, I shall not attempt to give a specific figure. What I will say is that that commuter's real income must have fallen by about £10 a week. His standard of living has fallen by that much, which affects what is left over after he has put a roof over his head and paid his travelling expenses. He has that much less left to look after his family. This is at a time when the standard of living of everyone has been falling. This cannot continue. Many of the people affected cannot tolerate it.

I had intended to quote some letters from my constituents. Instead, I will confine myself to one which brings home the point in graphic terms. This deals not just with the hardship involved but with the consequences for one man who has been writing to me since last December. In December he wrote saying that two years ago he and his family had moved from London into council accommodation. He had a good job in London and at that time the fare was £7 a week. He added that as from 2nd January the same journey would cost him £15. He told me that he was seriously wondering whether he could afford to carry on.

At the beginning of January he wrote to me saying: First of all, I must inform you that since I wrote to you last I have found myself in such dire financial trouble that in order not to get in any deeper I have reluctantly handed in my notice.

He goes on to refer to his reasons for doing so. He says: First, to save myself from getting £5 per week in debt".

A fortnight ago I had a letter from him in which he said: My present situation is that I am still unemployed, despite having had several interviews which have proved unsuccessful. I have applied to go to a training opportunities scheme for another trade but, as with everything else, there are long waiting lists.

That is the consequence for one man. He has been forced to give up his job. He can no longer afford to work in London. He must be better off staying at home, unemployed, than carrying on with his job in London, after allowing for travelling costs. He is unemployed and in that sense a net loss to the community.

It cannot make sense to allow that sort of thing to happen. If the Minister wonders why so many people have been offended by the implicit or explicit suggestions of Ministers that commuters are among the better-off section of the community and can afford such travelling expenses, he has to look no further than such a case. I have received many similar letters, as no doubt have other hon. Members.

I do not believe that Ministers have appreciated the scale of this problem. I do not entirely blame them because many represent closely-knit industrial areas which do not suffer the same problems. But Ministers are supposed to understand these problems. There can be no excuse for the apparent complacency which they have shown. So great is the complacency that, if I recall correctly, in the one major debate on transport policy that we have had this year the Secretary of State barely allowed the word "commuter" to pass his lips.

Mr. F. A. Burden (Gillingham)

Does my hon. Friend remember that on 19th March last there was a debate on commuters, when pressure was put on the Government to provide information and help? Is he aware that this has never again been referred to? Nothing has been done.

Mr. Newton

I endorse my hon. Friend's remarks. This issue is becoming a disgrace. Certainly it has been noted by my constituents, who observe what little concern and understanding there appears to be for their problems. These are problems which Ministers ought to appreciate and take more seriously.

So far, I have concentrated on the personal implications for commuters and their families. I want now to deal with the broader matter of planning policy. This again is something which Ministers have not appreciated. I quote a couple of extracts from the latest "Strategy for the South-East: 1976 Review" published by the Joint South-East Joint Planning Team last October. Page 27 states: the effect of the large increase in rail fares on the location of population and employment is not discussed"— that is, in the Government's transport consultative document— nor are the far-reaching consequences for the many relatively low earners who commute to central London from cheaper housing areas with poor local employment opportunities and who would suffer considerable hardship. The ultimate decision on this matter should not be taken in isolation from the widespread housing and employment issues which are raised for the present generation of commuters and still more for the next generation. All hon. Members who represent commuter areas will say "Hear, hear" to that several times.

The review goes on to say: While, historically, convenient rail travel has encouraged the continuing movement of resident population from London, it is unlikely that this outward trend would be significantly reversed by a rise in rail fares. The more probable effect would be to encourage the decline of employment in central London. There is evidence to suggest that any further deterioration in the attractiveness of central London arising from a major escalation of commuter fares would further undermine London's long-term employment prospects. If that is right, it makes utter nonsense of everything that the Secretary of State for the Environment has said in recent months about stopping the flow of jobs out of London. It runs flat in the face of that. People will not move back into London. Firms will be forced to move out. Unless the Government deal with the situation, they will build up a bigger and bigger inner city problem.

I shall refer to the evidence that we now have on the decline in rail traffic. Since time is short, I shall pick out figures which appeared in an article in New Society on 17th March about a station in my constituency. It is evidence of the decline in the number of people taking out season tickets from Romford in the period 1973–76. In that period the number of season tickets fell from 8,037 to 7,001. Over 1,000 commuters have stopped buying season tickets. Figures for many other stations in the South-East reveal the same picture. We do not know what has happened to the season ticket holders. Some of them may be paying for tickets in another way and some may have got local jobs. Others will have begun to use their cars, which is flatly counter to Government policy and to anything that makes sense in national transport terms.

Having made observations about the problem, about the way it is growing and striking at the Government's strategy and, above all, about the sheer hardship that it is causing, I turn to what we should do about it. I reject the notion that commuters are among the better off. If they are better off when they start, they are not better off by the time they have paid their rail fares. I reject the standard Treasury argument about commuters having chosen to live in a cheaper area and, therefore, they must pay higher rail fares. That might have been true in the past, but it cannot now be fair after a period in which the costs of living outside London have moved up faster than the costs of living in London. There has been a dramatic shift in the balance. When talking of real people, that academic Treasury argument cannot be allowed to stand.

There are three courses that should be taken. First, the Government must have a further look at the implications of their consultative document for the phasing out of subsidies. In its commentary on the document, British Rail has suggested that, to meet the obligations that are implicit in the document, suburban commuter fares will have to rise by an average of about 7½per cent. a year in real terms between 1977 and 1981.

If that is allowed to happen, the situation for my constituents will become absolutely intolerable. I can see that my hon. Friend the Member for Gillingham agrees with me. At the very least, there will have to be a commitment to limit any increase in fares. If there is to be a pay policy, it will have to include a specific limitation on increases in rail fares to the limit set in the pay policy. If the pay policy is X per cent., the increase in commuter fares should be limited to X per cent. If there is not a pay policy, perhaps it would be possible to take the average rise in incomes. But I do not think that in practice it will be possible to allow subsidies to be phased out at a rate which will produce that result.

In the next phase of the incomes policy, specific consideration should be given to allowing employers to introduce schemes, apart from any pay increase, to assist their employees with the cost of travelling to work. In the long term it may be the most sensible way of tackling the problem. In many ways it is a cost of employment. Probably it should fall on employers, and it would be deductible at the corporation tax rate, which would channel tax relief to commuters. I think that that is something to be considered. I hope, too, that the trade unions, which must have many members affected by these problems, will make sure that it is considered in the next phase of the incomes policy.

The third possibility is some tax relief for the costs of travel to work. Whatever else is done, there is a strong case for tax relief. I have indicated already that I reject some of the arguments against it. We know that it is done in Europe, so it cannot be impossible. It is said to be administratively difficult. But, if the Revenue can find administrative ways of taxing benefits in kind, I do not see why it should not devote some of its administrative ingenuity to allowing expenses of employment as well as its present efforts of taxing the benefits of employment.

I accept that any tax relief would have to be for all travel to work and not just for rail commuters. It follows from that that, to avoid a mass of tiny claims, a threshold of, say, £100 or £200 of expenditure a year would have to be set with tax relief applying to amounts in excess of that. We might need a simplified way of deciding how the tax relief should be assessed. It might be done by way of a chunk of tax relief relating to a band of expenses for travel to work.

I do not think that the administrative objections could not be overcome if there were the will to overcome them, nor do I believe that a scheme along the lines I have suggested, with a threshold, would cost the huge sums of money that are sometimes suggested.

On 16th July of last year, a Treasury Minister said in answer to a Written Question asking him the cost of allowing all travel to work expenses: I regret that the information needed to make a precise estimate is not available, but the cost could be expected to exceed £200 million.'—[Official Report, 16th July 1976; Vol. 915, c. 325.] If we assumed that £200 million was about right for that, on the basis that I have suggested the figure would be significantly less. That is not a large sum in relation to current tax revenue, and it would be an excellent way of channelling tax reduction to some of those who have been hit hardest by what has happened in recent years.

I apologise for having taken up a good deal of the remaining time, but I do not apologise for having spoken strongly and for having returned to a subject which has been raised in the House before. It is important, and it has still not been fully taken on board by the Government. If I can do anything on behalf of my constituents and those of my hon. Friends the Members for Gillingham, for Orpington (Mr. Stanbrook) and for Chislehurst (Mr. Sims) to air this problem, it will have been a few minutes well spent. At the very least I want what we have not yet had, which is a sense of feeling that the Government recognise the problems and have some idea of what to do about them.

3.55 p.m.

The Under-Secretary of State for Transport (Mr. John Horam)

I congratulate the hon. Member for Braintree (Mr. Newton) on his speech, which, as usual, was succinct and clear. He was in danger at one point of talking out his own motion, but he marginally avoided that. However, the cost is that I have only a short time in which to reply.

The hon. Gentleman was long on problems but short on answers. The answers that he managed to give would be very expensive when considered in terms of the public expenditure constraints to which the Opposition say they attach so much importance. However, that is a different matter. The hon. Gentleman wanted from me really an assurance that the Government care about commuters.

Perhaps I might quote the remarks that I made in a debate on rail commuters on 20th December last year. In reply to the hon. Member for Chichester (Mr. Nelson), I said: I can well understand the use by the hon. Member for Chichester of such words as 'desperation' 'victimised' and 'bewildered' about the attitude of commuters faced with these enormous increases. The figures are startling. Since 1974, fares have increased by about 90 per cent. on a cumulative basis, and if one adds the 12½per cent. expected in January, there is a considerable cumulative total for anyone to have to face in about two and half years. That is a much faster growth than the general rate of inflation."—[Official Report, 20th December 1976; Vol. 923, c. 349–50.] Whatever the hon. Gentleman may have read about what the Secretary of State has said, he can see from that quotation that we both take on board, and have done since we have been at the Department of Transport, the real problems which face commuters. We are well aware of the strong feelings which are engendered.

I accept also that many people of poor means are commuters. They are not all better-off people coming from Brighton or somewhere. They include people travelling over long distances, on very different means. Of course they are hard hit by the sort of increases in fares that we have seen over the last two or three years.

But why were those increases so startling? I noticed that the letter that the hon. Gentleman quoted related to precisely this period. He must admit that one reason was the price restraint policies of the previous Conservative Government. That simply shows once again that, if one tries to hold prices down in an artificial and unrealistic way against the trend of costs, one is bound to be in trouble later on, because they must be made up by excessive price increases concertina'd together in such a way that people cannot make rational decisions about their jobs and homes.

It is much more helpful to people if we face the facts about costs of rail commuting and therefore, if we have to make increases, grade them over suitable periods, not lumping them all together by ignoring the problem for two years so that we have to solve it all at one go. That is the problem which the previous Government left us.

Mr. Norman Fowler (Sutton Coldfield)

Will not the Minister concede that wage inflation was the major cause?

Mr. Horam

Of course there is an element of wage inflation, but is the rail-man to have a poorer standard of living than other people? Of course not. He must have the same opportunity as everyone else to increase his standard of living. One cannot expect him to subsidise the commuter.

But if one faces the problem of increasing costs, which is partly caused by the general problem of inflation, one must try to help the commuter by staging increases sensibly and reasonably over as long a period as possible, not trying to hold fares down artificially for a year or two, knowing that at the end of that time the dam will burst and all the decisions that the commuter makes—the hon. Member was very eloquent about the sort of important decisions that a person has to make on the basis of what it will cost him to get to London to work—are put out by enforcing fare rises which should have been staggered over a longer period. That is something to which we should pay attention.

The hon. Member for Braintree made some suggestions about tax help for the commuter and more subsidies. Despite the increases in fares over the last two years, there is still a subsidy of £80 million a year to the London and South-East commuter lines. That is considerable, and it comes directly from the taxpayer's pocket. To increase that substantially would again raise questions of public expenditure, which the Opposition are constantly pushing down our throats.

I am surprised at the hon. Gentleman for putting that point so strongly. He must know the irony of the situation, that it is the Tory Party which consistently makes the point about public expenditure yet it is that party which wants more money for subsidies and more tax relief for commuters. Both factors enter the argument.

Mr. Newton

There will always be a lot of noise on this issue if the decline of London continues at the present rate.

Mr. Horam

There is that point. What we must try to do—

It being Four o'clock, the debate stood adjourned.