TRANSPORT (COMMUTING COSTS) (Hansard, 15 June 1977)

§ Mr. Geoffrey Dodsworth (Hertfordshire, South-West)
I am grateful for this early opportunity to raise a matter of pressing urgency for those of my constituents in South-West Hertfordshire who use the London Transport Metropolitan line outside the Greater London area.
522 In a Press statement on 13th May, London Transport announced special penalty fare increases outside the GLC area in addition to the increases already announced for the rest of the Underground and for London buses. Travellers in my constituency using Moor Park, Rickmansworth, Chorleywood and Croxley Green will be severely affected by these increases.
London Transport says that on these sections the services run at heavy losses, and the county councils have been unwilling to make any financial contribution. London Transport describes the increased 523 fares as premium rates. I describe them as penalty rates, and, indeed, there is a threat that this is only stage 1 of the fare increase programme. If the county council does not pay up, says London Transport, there is to be a further increase in fares.
In face of the present level of inflation and the huge increases in the cost of living now experienced by members of the public, it is outrageous that they should be told that the total increase, that is, the general increase and the so-called premium increase together, would not exceed 40 per cent. What a promise—that it would not exceed 40 per cent. It is fair to add, moreover, that there would in special cases be increases of over 50 per cent.
In the same statement London Transport said that the season ticket increases will be kept down to a maximum of 40 per cent. It is increases of that sort that people are being asked to bear out of taxed income.
The effect of these charges is to produce £300,000 a year for London Transport. I understand that the overall losses are at the rate of £600,000 a year, and I gather that the bulk of these losses in Hertfordshire lie on the section of line between Moor Park and Watford Junction, where the fare income is only 10 per cent. of operating costs.
I had the opportunity to meet the Chairman of London Transport to discuss the situation, which I regarded as one of great urgency and concern to people travelling on these lines. He was extremely sympathetic, but I cannot say that I gleaned any possibility of a change of heart, despite the fact that it is a historical accident that the Metropolitan line is part of London Transport in this part of Hertfordshire and as a result is responsible to the GLC.
If one examines the traffic on the line one finds that it is long-distance rather than local. The average length of journey in 1975 from the five stations in Hertfordshire was 13 miles, compared with five miles on average for all Underground trips. Only one-fifth of journeys are local to Hertfordshire and Buckinghamshire, whereas two-thirds are to London. Therefore, the lines mainly serve commuters to London rather than just local travel needs. On that basis, I believe that the 524 Hertfordshire commuter should be treated in the same way as are travellers on other commuter services.
By an unfortunate historical accident, the track for the Amersham line is shared with British Rail, and this complicates the track shared costs. However, this arrangement pre-dates the present financing systems, and I understand that it would be impossible for the entire operation to be transferred wholly to either British Rail or London Transport. That appears to be a logical suggestion and a logical way in which to deal with the situation, but I understand that it is not possible to do that.
The Hertfordship County Council does not feel that it should contribute to the situation.

§ Mr. Dodsworth
The county council believes that the loss on the lines should be covered by a central Government grant, as are all the British rail commuter services around London, which involve grants of over £290 million this year.
The demand of travellers from the county authority places an unfair burden on the county ratepayers as a whole, because of the anomalous financial structure of London Transport. On numerous occasions I have pointed out the unfair and partial redistribution of the rate support grant, which is already costing the Hertfordshire County Council £30 million. That is equivalent to more than 18p in the pound on the rates.
These two factors lead me to believe that the GLC thinks that it can treat the people of Hertfordshire indiscriminately and allow the county to be sucked dry. It is not true that Hertfordshire is a rich county. In fact the reverse is true. Hertfordshire represents the heartland of those who are penalised by the results of Government policy. The Government's policy has diminished income through inflation and oppressive taxation. That in turn has eroded the ability of people to pay fare increases of the size and nature contemplated.
525 My constituents believe that there is a failure of natural justice in the proposals. It is remarkable, to say the least, that the announcement about the fare increases, with a commencing date, was made prior to approval being given by the Price Commission.
I shall not detain the House with extracts from the many letters that I have received from my constituents, which describe in detail the different aspects of the issue. One such letter refers to the lack of proper facilities at the Rickmansworth station, which are caused by other services that use that line.
The situation is summed up by a resolution passed by the Three Rivers District Council at a recent meeting. The council is intimately involved in the situation and it deplored the discriminatory fare increases proposed by London Transport for all the Metropolitan Line stations in the district". It asked the Price Commission to give consideration to its views on that matter.
I have written to the Chairman of the Price Commission supporting the views of that authority, but I have not yet received anything more than a formal acknowledgment. I can understand that these matters take time.
If we find that the Price Commission is powerless to prevent the inequitable and penalty increases I believe that it is time that this useless body was disbanded. We know that it has failed dismally in other cases. For instance, it was overruled by the Secretary of State for Energy on gas prices.
In those circumstances I ask the Minister for assurances to cover two different eventualities. If the Price Commission vetoes the price increase I want an assurance that the Minister will ensure that the price increase does not proceed. If the Price Commission inadvertently accepts the increase, I want the Minister to ensure that the whole question is investigated through the machinery that is contemplated in the Price Commission Bill. That would be a suitable and appropriate remedy.

§ The Under-Secretary of State for Transport (Mr. John Horam)
The hon. Member for Hertfordshire, South-West (Mr. Dodsworth) has tonight raised an import- 526 ant and fundamental question. It is, simply: who pays for local transport services? At the heart of the matter is a dispute between the London Transport Executive and the county councils of Hertfordshire, Buckinghamshire and Essex over the deficits incurred on those sections of the Executive's Underground services. I mention the three counties although I know that the hon. Member is concerned principally with his own county.
The London Transport Executive estimates that during this year its Underground services will incur a total operating deficit of a little over £11 million, of which no less than £3½ million will result from its services in the three counties I have just mentioned. Hitherto, losses of this order on these out-county services have been borne by the Greater London Council.
Hon. Members will be aware of the restraints that have had to be imposed on public expenditure and in particular concerning public transport in the past two years. Faced with the need to reduce its own expenditure on public transport, the Greater London Council considered it should no longer have to bear the whole burden of the losses incurred on LTE's out-county Underground services. In all reasonableness—the hon. Gentleman mentioned natural justice—I think he would agree that that is a very reasonable point of view.
The LTE therefore approached the three counties concerned last year and asked them to make provision in their 1977–78 transport policies and programme submissions to the Secretary of State for Transport for the finance necessary to meet the continuing deficits on these services. The counties declined to do this, although it is worth mentioning that last year Essex County Council contributed £88,000 towards the losses incurred on the Epping-Ongar section of the Central Line.
The sum sought by the LTE from Hertfordshire County Council to meet the losses expected to be incurred this year on that part of the Executive's Metropolitan Line services operating within the county—that is, between Moor Park and Chorleywood and including the spur line to Croxley and Watford—is a total of £900,000.
527 The main line service between Moor Park and Chorleywood is served, as I think the hon. Gentleman explained, by parallel services operated by both LTE and British Rail, and because of this the county counter-claimed that at the very least losses made on the BR service should be met by the central Government. It further counter-claimed that in practice the LT Underground service in Hertfordshire is indistinguishable from other services operated by BR on its South-East commuter network and, therefore, the whole of the deficit on the Hertfordshire Underground service should also be met by the central Government. I think that this is the point with which the hon. Gentleman is concerned tonight, and I think it is generally agreed that it is the nub of the matter.
Let me deal first with the joint operation of services by BR and LT on the Metropolitan main line between Moor Park and Chorleywood. This results from an agreement between the two undertakings under which responsibility for providing the services rests with London Transport, and in contributing to them British Rail is essentially acting as London Transport's agent. All receipts that accrue from passengers using the BR trains over this section are taken by London Transport, which then pays British Rail for the train mileage provided and bears any deficit. In practice the BR trains are therefore, in all except livery, part of London Transport's operations serving this area, and it is perfectly appropriate for the LTE to seek a contribution from the county towards the overall cost of these services.
To dispel any lingering doubts there may be that the agreement between the LTE and British Rail is a one-sided business, I should explain that there are other similar agreements in and around London, in other parts of the peripheral area, for the use of shared facilities of this kind on local rail services where the same sort of arrangements apply. In the case of Hertfordshire, particularly relevant is the peak hour London Transport Bakerloo Line service to Watford Junction, where London Transport trains run on British Rail track, and it is British Rail which pays for the overall costs of the service in this case. Thus the Hert- 528 fordshire ratepayer receives a substantial benefit to compensate for the cost that he is being asked to incur on these other lines.
I turn now to the second of the county's propositions—that the whole of the deficit should be borne by the central Government because, in the county's view, the Underground services in Hertfordshire are essentially the same as the South-East commuter services operated by British Rail which are wholly supported by the central Government. It has been suggested that the Railways Act 1974, which specifically limits grant aid to British Rail, should be amended to encompass these operations of the LTE. There would, I am afraid, be very little justification for such action. After all, they are local services and an integral part of the London Transport rail network.
Local transport is a matter for local decision, and this philosophy is at the heart of the present transport policies and programme system. Central Government subsidy for losses incurred on the London Transport network, bus and rail, is, and will continue to be, provided through the transport supplementary grant. That subsidy can reach the London Transport Executive only through discretionary payments, agreed with it by each of the respective counties served by the system. It is, therefore, for Hertfordshire to decide whether and to what extent financial support for London Transport services in the county may in future be justified. If it is decided that there is a case for contributing to the costs of these services, that should be taken into account in the preparation of the county's next transport policy and programme submission, which is due in my Department at the end of next month. That will cover the next financial year—namely, 1978–79.
I understand that the county council is extremely reluctant to consider subsidising the London Transport Executive's rail services in the county because under the transport supplementary grant system at least 30 per cent. of the subsidy will need to be found from the rates and only limited numbers of people in one part of the county benefit from them. Given that up to 70 per cent. of the county's contribution would in any case be eligible for transport supplementary grant, one might reasonably ask what would be the value to the country if the council is so 529 doubtful of the value to the county of these lines.
Be that as it may, this is what local autonomy is all about. It is for the county to decide what its priorities should be and which services should have first call on its available resources. It cannot be expected to shift the burden on to the central Government because the choices are difficult and unpalatable ones.
The hon. Gentleman finally referred to the additional increases that the London Transport Executive proposes to charge on its out-county services over and above the general increase, averaging about 15 per cent., that will take place from 17th July. As the hon. Gentleman rightly said, outside London it is intended that increases for some shorter-distance singlefare journeys should be as much as 50 per cent., although at other distances the total increase would not exceed 40 per cent. Increases in season ticket prices are not intended to exceed a maximum of 40 per cent. In many instances the proposed increases will be much less, dependent upon the proportion of travel outside the London area.
Obviously, we regret that such large increases are considered necessary. However, faced with the decision of the three counties concerned not to contribute towards the losses on the Underground services in their areas, it is reasonable that the London Transport Executive should, subject as it is to the approval of the Price Commission, take action of this sort to reduce the deficit on these lines. As it is, even these increases could not be expected to contribute more than an additional £300,000 towards the losses. That would still leave a deficit of over £3 million to be funded by the Greater London Council. In equity, the responsibility of Hertfordshire, Buckinghamshire, and Essex County Councils in this matter must be recognised.
The hon. Gentleman asked me to give an assurance that, if the Price Commission took an unfavourable view of these large increases, I or my right hon. Friend would not seek to overturn its verdict. 530 Obviously, I cannot give him such an assurance in the name of my right hon. Friend. Probably he did not expect me to do so. None the less, the Commission will have clear views on the matter and we shall pay serious regard to what it says. I can give the hon. Gentleman that assurance. We expect a decision fairly shortly, and I shall be interested to see the conclusion at which the Commission arrives. Obviously it is a tricky matter.
Fare increases are of concern to everyone, particularly those in London, given the history of the past three years of cumulative increases of over 100 per cent. facing many commuters. We are very concerned about that. However, this is a situation in which the three counties should seek to look at their own responsibilities, given that the GLC has footed the bill, which is a large one, for many years. In the interests of his constituents, I urge the hon. Gentleman to approach them to ascertain what solution can be found.
It is right that the county councils should seek to obtain the maximum information about the costing of these services and the deficits incurred on them, to satisfy themselves on the figures, before making any judgments.
In the final analysis, however, we are talking about a local transport service taking commuters over short distances in some cases and longer distances in other cases, for which they have season tickets and are travelling regularly into London. These are local services, part of the London Transport system, and this is fundamentally something in which the central Government has not intervened and should not intervene with using taxpayers' money. It is a matter of local judgment. I hope that the counties will get together with the GLC and come up with some solution acceptable both to the hon. Gentleman's constituents and to the councils' wider responsibilities.