HC Deb 01 February 1983 vol 36 cc195-202

Amendment made: No. 1, in page 1, line 14, leave out 'in England or Wales'.—[Mr. Eyre.]

7.15 pm
Mr. Robert Hughes

I beg to move amendment No. 2, in page 2, line 6, at end insert— '"revenues" includes sums received by way of revenue grants, payments made in accordance with the power contained in section 138 of the Act of 1968 or section 40 of the Act of 1969.'.

Mr. Deputy Speaker

With this we may take Government amendment No. 3.

Mr. Hughes

It is important to note the way in which the amendment has been drafted. The comma is important, because it seeks to make it clear that revenue grants are distinct from payments made in accordance with the powers under section 138 of the 1968 Act or section 40 of the 1969 Act—those being the sections under which payments can be made for concessionary fares.

One reason why we need a proper definition of the word "revenues" is that the Government failed to define it properly when they originally drafted the Bill. As we are dealing with a Bill that seeks to clarify the law, we wonder how much it does that when a basic concept such as revenues cannot be properly defined in primary legislation. It does not say much for the Government's control over the parliamentary draftsmen or their scrutiny of Bills presented to the House. They should have produced a Bill that adequately defined "revenues".

We understand that payments made for concessionary fares must appear somewhere in the accounts of a PTE. They cannot be left out—for bookkeeping purposes, if for no other. If they do not appear, the accounts will not balance. The difficulty is that once the payments for concessionary fares are brought into the accounts, how will they be protected from threat or attack?

The Government have repeated ad nauseam that nothing in the Bill affects concessionary fares for the elderly, children and young persons, the blind and the disabled. We believe that the Bill is a threat to concessionary fares and, indeed, to the services to those for whose benefit there is a payment on concessionary fares.

In the first instance, there will be pressure on the PTA's budget by the Secretary of State's setting of the protected expenditure level. If payments on concessionary fares are regarded as grants, the Secretary of State will have an influence on the amount of money provided for concessionary fares. I understand and accept in good faith that it is not the right hon. Gentleman's intention directly to influence the amount of money that can be paid for concessionary fares, but, nevertheless, the actions that he will take under the Bill will squeeze local authority funds for concessionary fares.

No one in the House or in the country is beguiled by the Secretay of State's statement that he is seeking to clarify the law for local authorities. That is not the purpose. The aim of the Bill—the Secretary of State has been clear about it—is to compel the PTAs to push up fares. The purpose is to cut the amount of money they give to revenue support, which, if it is done, means that they must increase the fares. That is his intention. If fares are increased, and since in many cases the support for concessionary fares is paid by district councils, it will mean that the higher the fares the greater the amount of money the district council will have to find. The concessionary fare is decided at a certain level, and the difference between that level and the scheduled bus fare must be met by someone or other. If that money is increased, it must come from somewhere.

We are not dealing with transport in isolation from what is happening in other local authority services. Under the fiduciary scheme of the former Secretary of State for the Environment, who has been now transposed to Defence—heaven help us—local authority finances are being squeezed as every year goes by. They are severely limited in the amount of money that they can spend. If they are under threat, they are bound to ask, "Can we afford the amount of concessionary fares?" That is one way in which the authorities could be squeezed.

The Secretary of State could say that in his view the amount of concessionary fares is too low. He need not say that he has no right to advise or guide the PTAs or the PTEs in that matter, because clearly he has. The Bill says that they must take into account any guidance that he gives them on any matter. Clause 4(6) states: The matters by reference to which the guidance of the Secretary of State under subsection (5) above may be given shall include—

  1. (a) what appears to him to be the appropriate national level of expenditure by Authorities on revenue grants;
  2. (b) the benefits which would result from the making of such grants; and
  3. (c) the levels of present and past expenditure by the Authority on such grants;"
The Secretary of State will be able to interfere with everything that a PTA seeks to do and every policy decision that it seeks to make. As one of the major policy decisions that it will have under review is the level of concessionary fares, we believe that as long as it is not clear that payments under section 138 or section 40 are separate from the protected expenditure level, again, the dead hand of the Secretary of State will fall and will compel the reduction, if not the eventual elimination, of concessionary fares.

I know that the Secretary of State has objected to and that some of his hon. Friends have shown considerable ingenuity in remaining in order by quoting, leaflets that have been distributed, but we are not scaremongering on this issue. As the Bill stands, the Secretary of State can tell a PTA that its concessionary fare is too low and that it is not generating revenue from pensioners or the blind and disabled. If that advice is given and is challenged in the courts, it may be that that advice will be the difference between a PTA being within the law and outwith the law.

Amendment No. 2 would remove the threat to concessionary fares. I urge the Under-Secretary of State to make a name for himself, protect the good name and reputation of his Government and accept our amendment.

Mr. Eyre

I am surprised that the hon. Member for Aberdeen, North (Mr. Hughes) spoke as he did about concessionary fares. On many occasions in Committee we discussed this matter at great length and it has been explained many times to the hon. Gentleman that concessionary fares are not affected by the Bill.

Anxiety has been expressed that concessionary fares for the elderly and disabled will have to be withdrawn as a consequence of the Bill. Tyne and Wear county council, in a misleading leaflet given to members of the public, has claimed that concessionary fares are threatened by the Bill. That must have caused great concern among the elderly and disabled. The remarks of the hon. Member for Aberdeen, North this evening come into that category because they, too, will cause concern. The allegation is completely untrue.

I should like to make the position clear once and for all. The powers under which authorities pay for the concessions for the elderly and disabled are not affected by the Bill. The Government fully accept the need for concessionary fares. That is why, when the power of the GLC to provide concessionary fares was thrown in doubt by the House of Lords judgment, the Government took immediate steps to provide it with the necessary powers.

Mr. Robert Hughes

The Minister is reading from a six-month-old brief when he says that the Government took immediate action. The Government did not take immediate action. When the Opposition said that the House of Lords decision threw into question the ability of the GLC to make concessionary fares, it was denied time after time and only when pressed did the Government fianlly introduce legislation. We applauded the Government when they did so but they did not do it immediately.

Mr. Eyre

I shall not go over the history with the hon. Gentleman but the Government moved rapidly to deal with the problem in London and introduced legislation specially to correct the position. I maintain that my claim was altogether fair.

We have drafted the Bill so that it does not affect the powers of authorities to provide concessionary fares. Payments by authorities for concessions under existing powers will remain entirely a matter for the authorities. These are social payments aided by the Government to the rate support grant system. They are therefore not eligible for transport supplementary grant. There will be no need for authorities to change their concessionary fares on account of the Bill.

Tyne and Wear's document was a deplorable effort. The way in which the document alleges publicly that the Bill will mean the end of concessionary travel for senior citizens, the blind and the disabled is completely misleading and inaccurate. I should like to refer more specifically to the amendment.

7.30 pm
Miss Maynard

The point we are trying to make is that concessionary fares are part of the local authority's expenditure. The question of subsidy is obviously part of that consideration. The Bill will establish guidelines under which concessionary fares may well be affected.

Mr. Eyre

This matter was discussed a number of times in Committee. I would not accuse the hon. Member for Sheffield, Brightside (Miss Maynard) of using weasel words. The hon. Lady is, however, expressing an unreasonable concern. I have emphasised that concession-ary fares and the arrangements about them are outside the Bill and are not affected by the Bill. They are social payments which are supported by the rate support grant. Payments of money in that respect are outside the protected expenditure level to which the hon. Lady was referring. They provide funds additional to the protected expenditure level.

The purpose of the Bill is to clarify the law and to stabilise the situation by creating an area of certainty for transport expenditure, thereby freeing local authorities from the danger of challenge in the courts in respect of that area of certainty. The Bill gives an opportunity for consistency and for the provision of transport services on a stabilised basis. This is as much in the interests of the elderly and the disabled as of any other group of passengers. I reassure the hon. Lady as strongly as I can that the fears which she has expressed are not justified and that the Bill does not affect concessionary fares.

The amendment is unnecessary and unwise. The revenues of an executive include all payments properly credited to the revenue account. The term "revenues" clearly includes payment for services provided to the elderly and disabled mentioned in the amendment. If we start identifying particular payments as being part of the revenues, we shall cause confusion, not remove it. It would cast doubt on the status of items that are not mentioned, of which there are many.

I should now like to refer to Government amendment No. 3. The Government promised in Committee, in response to concern expressed by Opposition Members, to table an amendment on Report to remove any possibility of uncertainty that revenue grants, as defined in clause 1, are part of the executive's revenue. The grants are part of the revenue for the purpose of the new financial duty. This is normal accounting practice. Such treatment has always been our intention. We promised to remove any uncertainty. I hope that Opposition Members find the clarification helpful.

Mr. Booth

One can understand why the Under-Secretary of State argues that the provision of concessionary fares covered by section 138 is outwith the protected expenditure limit. In the strictest of legal terms, that is so. However, the hon. Gentleman cannot elevate that argument into a claim that the Bill sustains and stabilises the provision of concessionary fare services. It is clear from the guidance already issued by the Secretary of State that those metropolitan authorities that have offered the best concessionary fare services to people within their areas who need them will be those that will have their revenue grant support most severely restricted.

I take South Yorkshire as an example. It has a record of expanding services and a substantial payment for operating concessionary fares. It is clear, according to the definition of revenue in amendment No. 2, that those keeping the books of the passenger transport executive must include within revenue the payments made under section 138 for concessionary fares. While payments of revenue grant, subject to the PEL, will be an additional or separate item on the income side, the ability of the PTE to run the services required, including those for people who pay concessionary fares, is controlled to a substantial degree—I would argue to a crucial degree—by the total amount of revenue grant.

It does not matter whether the revenue grant contains the section 138 payments within its definition. What is far more important is that the total revenue available to the PTE to run services should be stabilised, maintained or expanded. It has been made clear by the Secretary of State that he has no intention of sustaining that overall figure in the operation of the Bill if it becomes an Act. On the contrary, the right hon. Gentleman has made it clear that he will cut the figure. He intends to slash it. There will be only a limited number of options open to those authorities placed in this situation.

One option will be to cut the services to a point where they could be sustained with reduced revenue under current fares policy. That will, of course, strike at concessionary fare users. They will suffer from the drop in service levels. Another option will be to attempt to press up fares to try to recover the loss of revenue grant. However, all the evidence suggests that there will be such a drop in ridership among travellers who do not benefit from concessionary fares that authorities, like others that have attempted to follow this course, will be forced into a cycle of cutting services.

The issue before the House is not one of narrow legal definition. When metropolitan authorities say to those living in the area—in my view, justifiably—that the services for concessionary farepayers are at risk, this is not because the Government are including, within their definition of revenue grant, matters that exclude section 138 payments, but because the authorities are far more concerned about the practical issue of their ability to maintain the services. It is undeniable that, under this legislation, the ability to maintain services, especially by those metropolitan authorities with the best record, must be gravely undermined, weakened and, in many cases, reduced to such an extent that they will not be able to retain those services.

Mr. Les Huckfield

I want to reinforce a point made by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth). I am sure that the Minister will recognise its particular significance in the west midlands and his constituency. He will know that during the reduced fares period, before the West Midlands High Court case, there was a study of the increase in ridership during that period. It was a study not just of the increase in ridership occasioned directly by the decrease in fares, but of the increase in ridership because of the 2p concessionary fare that had been made available to children and old-age pensioners.

I take it that the Minister has read that study. It was done by two interested academics from the university of Aston in Birmingham. It established clearly that it is not just the overall decrease in fares that is important in attracting an increase in overall ridership, but that a big increase in ridership is occasioned by childrens' and old-age pensioners' concessions. He has the evidence from the west midlands to prove that.

I do not want to go into all the comments made in that survey, but it shows—if I may use an economist's phrase—that the elasticity of the demand is high with old-age pensioners and children's concessionary fares. There is evidence to show that with a small reduction in fares there is a big increase in ridership.

If my right hon. Friends and I are perhaps a little too assiduous, in the Minister's eyes, in pressing that point, it is because we realise that it is a valued fares concession. There is another reason why we seek to hammer home the point again tonight. Following the judgment in another place on the GLC's "Fares Fair" policy, I recollect, and I am sure that the Minister can, that his right hon. Friend the Secretary of State said two things. First, he said that we had no need to worry about concessionary fares, that they were all right, protected and not affected by the judgment; and, secondly, that we need not worry about the metropolitan county councils and passenger transport executives in other parts of the country because they were wholly different.

At that time, various of my right hon. and hon. Friends made the point that the Government would need to introduce legislation to protect concessionary fares. We said that the judgment that had been given in another place affected provincial metropolitan county councils. That was pooh-poohed by the Government. They said that concessionary fares were all right and not affected by that judgment and that metropolitan county councils were covered by different legislation and therefore we need not worry.

In the end, the Government did not just have to introduce a Bill to protect concessionary fares in London. They have been forced to alter their ideas on legislation governing the metropolitan county councils. It became worse, because to continue with any fares policy in London the GLC had to have a letter from the right hon. and learned Gentleman the Attorney-General saying that it was all right in his eyes for it to continue with a fares policy after "Fares Fair".

All hon. Members who know the Minister, know that he is sincere. He also reads his briefs well. I do not doubt that he has come to the Dispatch Box with the most accurate and reliable information at his disposal, but, unfortunately, so did his right hon. Friend the Secretary of State following the "Fares Fair" judgment in another place.

We are pressing the amendment because we are still uncertain and want to protect the revenue grant for concessionary fares beyond doubt and peradventure. I recognise that the Minister and the Secretary of State have gone a little way towards doing that in their amendment, but the Secretary of State has felt the need to start writing publicly to people up and down the country because he can see that they are worried.

All my hon. Friends from Tyne and Wear, Merseyside and Greater Manchester know that the Secretary of State has been forced to write his celebrated open letter to the local press and local Conservative Members saying that there is no need to worry about the concessionary fares. However, there is a great deal of anxiety felt about the lack of protection which, in some people's eyes, the Bill affords to concessionary fares.

I hope that the Minister will understand that, having had a fair old argument in Committee about this, many Opposition Members are still not happy with the form of the amendment that he has presented. We still feel that it needs to have the kind of "belt and braces" substance that is contained in our amendment. I hope that the Minister understands that he still has a long way to go to satisfy my right hon. Friends and myself.

7.45 pm
Mr. Martin Stevens (Fulham)

I wish to comment upon the latter words of the hon. Member for Nuneaton (Mr. Huckfield) in advancing his proposition. The Minister is always charming, emollient and overflowing with good faith, but I propose to be a little more tart and thorny in my comments upon the metropolitan authorities' conduct.

It became necessary for my right hon. Friend the Secretary of State to introduce legislation on concession-ary fares, because the lawyers advising the GLC took a different view of the significance of the House of Lords decision from that taken by the lawyers advising London Transport or those advising my right hon. Friend.

Disputes between lawyers may lead us to take the view that we need to wear a belt and braces. At all events, my right hon. Friend introduced his measure to ensure that there would not be a scintilla of doubt about the law's meaning. Conservative Members are in no doubt that the attitude of the leaders of the GLC was mischievous and tendentious. They were not acting in good faith. They were seeking to pick an unnecessary quarrel to make a cheap, divisive political point as a result of which the citizens of London have come off worse.

The advice that my right hon. Friend gave the House about concessionary fares resulting from the House of Lords decision was, in my view, perfectly correct. It was necessary to legislate only because the GLC chose not to accept what was manifestly the thrust of the House of Lords judgment.

Mr. Robert Hughes

As to the speech of the hon. Member for Fulham (Mr. Stevens), the least said, soonest mended. He knows perfectly well that the only reason why a legal challenge was mounted against the GLC was that a couple of drunken Tory golfers got together in a club in Bromley and started arguing about whether the scheme was legal. The leader of the Tories in the GLC did not challenge the legality of the "Fares Fair" policy when the matter was debated. If we are in a mess with the House of Lords, it is because of historical accident.

Mr. Stevens

The hon. Gentleman has been rather strict with me, so I can be rather strict with him. It does not matter how many drunken Tories, although I refuse to accept that such a species exists, brought actions against the GLC or anyone else. What matters is what the law says, and in this case, in three courts, seven out of nine judges or nine out of 11—the overwhelming majority—concluded that the GLC had acted illegally. That was neither political nor, I hope, were they drunk. It was the operation of the law that Opposition Members rejected.

Mr. Hughes

I cast no aspersions on the sobriety or otherwise of the judges in any court. Unfortunately, this Bill does not clarify the law. Far from producing legislation where there is not a scintilla of doubt, there is a rolling fog of doubt about where the law stands. That has worried us throughout the debate. The trouble is that we must take the Secretary of State at his word. We know that the constraint under which the passenger transport authorities are operating is that the transport supplementary grant has been cut this year. They are receiving less this year than they did last year. Faced with those circumstances, there is no doubt that concessionary fares are threatened.

So certain was everyone of the law that it was only in Committee that the Government discovered that the metropolitan counties had no power to grant concessionary fares, although they had been doing so for a long time. Someone forgot to include it in an Act. The Under-Secretary of State cannot say with such certainty that the law is now absolutely clear and that no one need bother about where it stands.

I listened carefully to what the hon. Gentlemen said, and I believe that, legally, the payment made for concessionary fares is additional to the protected expenditure level. In the interests of time, therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 3, in page 2 line 11 at end insert ',and accordingly references to the revenues of an Executive include references to sums received by way of revenue grants'. —[Mr. Eyre.]

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