HC Deb 31 January 2002 vol 379 cc447-73 1.34 pm
Mr. Geoffrey Clifton-Brown (Cotswold)

I beg to move amendment No. 2, in page 1, line 5, at end insert— '(IA) In section 94(1) of the Transport Act 1985 (administration of schemes: reimbursement, etc), after paragraph (a), there is inserted— (aa) the method by which the authority is to be reimbursed, whether through the Revenue Support Grant or otherwise, in respect of any expenditure arising from the operation of the Travel Concessions (Eligibility) Act 2002.".'. The Bill is narrowly drafted and it was with only some ingenuity that we managed to table an acceptable amendment. A layman may find its purpose more clearly set out in new clause 1, which states: The Secretary of State shall reimburse each local authority for the full and actual cost of any concessionary fares scheme by special or specific grant rather than through the Standard Spending Assessment. The Bill provides for additional costs to be reimbursed through the normal SSA mechanism. The full compliance cost has been subject to debate. It was originally estimated to be £50 million. On receiving better particulars, however, the Government increased it to about £54 million, and I hope that that is the full cost.

The problem is that some small local authorities—my hon. Friend the Member for Christchurch (Mr. Chope) will raise the case of his particular authority—receive no reimbursement through the SSA system. The Government are inflicting an imposition that is one of a long list of impositions that they have placed on local authorities that are not being fully funded. The best value initiative is the most expensive, but others, such as the increased cost of pensions as a result of the abolition of additional advance corporation tax requirements, are also a problem.

The Bill imposes a requirement on local authorities and not all of them will be fully reimbursed for implementing it. That is not true of some larger metropolitan authorities. Under the SSA, a global figure is calculated for each authority and included in the rate support grant settlement each year. Whereas a large chunk of money will be allocated to the larger metropolitan authorities, a small amount, or none at all, will be allocated to smaller authorities.

Mr. Julian Brazier (Canterbury)

Is that not the story of local government across the board? Broadbrush figures are produced, as in this case; no effort is made afterwards to discover whether they are fair; and smaller and typically rural authorities almost always lose out.

Mr. Clifton-Brown

My hon. Friend is right: smaller and largely rural authorities are likely to lose out.

Having outlined the problem, let me turn to the solution. The amendment would ensure that local authorities are specifically reimbursed for the actual costs that they incur. That is a simple requirement. If the Government are to fund the scheme in full, it should be largely revenue neutral. Some larger metropolitan authorities will be overcompensated and other authorities will be undercompensated, so the net cost should be little, if any.

The Government have increased a number of special grants. Surely it would be very simple either to allocate a block of money through the SSA system and make a reimbursement afterwards, or to let authorities make an estimate at the beginning of each financial year, in which case an adjustment could be made before the next financial year on production of properly audited records of the scheme's costs.

We consider the amendment to be eminently fair and eminently workable. I shall listen carefully to what the Minister says.

Mr. Christopher Chope (Christchurch)

As was suggested by my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), my purpose in tabling the amendment was to draw attention to a gross and unjust anomaly affecting the two district councils in my constituency, Christchurch and East Dorset. The concessionary fares legislation in the Transport Act 2000, implemented last year, has required them to incur additional costs that are some £250,000 higher than the Government's so-called reimbursement. That is very unsatisfactory.

The amendment would add to the list of matters in respect of which regulations can be made under section 94(1) of the Transport Act 1985, and would enable the Secretary of State to produce regulations relating to the method by which an authority responsible for the administration of a travel concession scheme is reimbursed in respect of any expenditure arising from the operation of the Bill.

We cannot do anything in this Bill about what has happened as a result of the earlier legislation. What we can do is try to prevent the Government from making the same mistake again. Obviously, extending the scheme to cover men aged between 60 and 65 as well as those over 65 will involve an additional cost. It was estimated for the purposes of the 2000 Act that local authorities' total costs would be £54 million. At the time, the Government said that they thought it fair for Government to pick up the tab—for the national taxpayer to pay; because this was Government policy, they would reimburse local authorities.

If we ascribe to the word "reimbursement" the meaning it is assumed to have in common English parlance, it means giving back to an individual or an organisation money that that individual or organisation has spent on a particular project or for a particular purpose.

Mr. Brazier

Surely my hon. Friend does not wish to stretch the House's imagination by suggesting that the Government use English in the way in which most of us are accustomed to use it.

Mr. Chope

That is an excellent point.

It is interesting that the Minister for Transport is not replying to this debate, because he dealt with the issue in Committee. During the Committee's first sitting, he said The Government have to deal with a different dilemma—to decide the extent to which national minimum standards are set and to deal with the financial consequences of that and of ensuring that local councils do not lose money."—[Official Report, Standing Committee A, 20 November 2001; c. 26.] If that is indeed the Government's objective, they manifestly failed to deliver on it in relation to the original scheme. They already have the power to change the reimbursement system—the amendment is not necessary in that regard—but they have decided not to do so. I do not understand why, but I suspect that the councils that are losing out as a result of this new Government imposition are largely Conservative-controlled, and those which will gain disproportionately, and have already done so, are Labour-controlled.

1.45 pm

That is not an academic or pedantic point of debate; it is one of substance and may significantly affect council tax payers in my area. At the moment, East Dorset district council is spending £160,000 a year on concessionary travel as a result of the Government's minimum statutory standard, in addition to the £97,000 that it has previously spent on its local discretionary targeted scheme. There are a lot of pensioners in East Dorset—22,740, representing more than 25 per cent. of the population. How much did East Dorset district council get back as a contribution to the additional cost of £160,000? The answer is a big round zero; it got nothing back at all because it does not get any revenue support grant, just redistributed business rates. The idea that the Government are going to reimburse East Dorset district council and its council tax payers for the cost of those concessionary fares is pie in the sky.

Mr. Clifton-Brown

Is my hon. Friend aware that his small district council will be required by law to provide those schemes? The de facto situation is that it is not being fully reimbursed, so it will have to make up the difference with an even bigger increase in council tax. I believe that my hon. Friend's local authority is already proposing one of the larger rises in council tax in the country in any case.

Mr. Chope

My hon. Friend is right. East Dorset district council is not getting back any money at all from the Government to compensate for the additional statutory duty placed on it by concessionary fares legislation. Under the Bill, additional costs will be incurred and, again, the council will not receive any additional money from the Government. Ironically, the additional cost of £160,000 must be paid for by council tax payers, many of whom are pensioners. The Minister will know that the impact of council tax on pensioners is twice as severe as it is for people who have not yet reached pensionable age. As I said in the House the other day, as a result of Labour policies, more than 1 million pensioners now spend more than 10 per cent. of their disposable income on council tax. The position for East Dorset residents is getting worse as a result of those Government impositions.

The situation in Christchurch is a little better. The Minister may know that we have 14,287 pensioners, constituting 32 per cent. of our population. Christchurch borough council spent £74,000 on a targeted concessionary fares scheme before legislation was introduced. In the current year, it had to make an additional budget provision of £93,000 for the mandatory scheme, which was restricted to travel within the borough boundary. That limited and narrow scheme did not go down well with local people, who much preferred the previous scheme, which offered more generous concessions for those in greatest need. The consequence now is that Christchurch borough council is thinking about whether it can afford to introduce a Dorset-wide scheme. If it did so, however, the costs would increase from an additional £93,000 to an additional £150,000 a year. How much do you think the council received in reimbursement under the revenue support grant formula, Madam Deputy Speaker? It received £20,000 in respect of additional costs of £93,000—costs that will continue to increase as a result of the new statutory requirements in the Bill.

Mr. Bill Wiggin (Leominster)

My concern is that council tax will have to be increased most in the areas where the largest number of pensioners live and that those who win on their bus passes will therefore lose when they get their council tax bill. Does my hon. Friend share that concern?

Mr. Chope

My hon. Friend is absolutely right. The largest proportion of my correspondence is currently from pensioners on fixed incomes who are again faced with the prospect of council tax increases that are significantly above the rate of inflation and far higher than their pension increases will be. That is happening at a time when the interest on their savings and investments is declining significantly as a result of low inflation. I enthusiastically support the policy of low inflation, but it has had a devastating impact on the budgetary arrangements of a number of pensioners who had planned on the basis that their investments would produce a rather higher yield than that which they are now receiving. In order to pay for these new impositions, such pensioners are having to cut back on other items of expenditure. Council taxes are, by definition, unavoidable, so they have the first call on the limited resources of the individuals concerned.

In Committee, the Minister for Transport said: We are committed to the new burdens principle, which means that we will reimburse local authorities for the extra cost that they face as a result of local authority concessionary fare schemes requiring action under the Bill. He went on to say: If it is an existing scheme that must be amended to comply with the Bill, the Government will reimburse local authorities for the extra cost."—[Official Report, Standing Committee A, 20 November 2001; c. 30] Unfortunately, it does not appear that that will happen. The amendment gives us the opportunity to press the Under-Secretary for a commitment that she will reimburse local authorities for the extra cost. We all know that the House has a system whereby hon. Members are reimbursed out of taxpayers' money for the cost of stationery and office equipment. It would be extraordinary if, in pursuance of the principle of reimbursement, the House authorities said that some hon. Members were to receive more than they had spent and that others were to receive less or indeed nothing. If the word "reimbursement" means anything, surely it is putting the local authorities or individuals in the position in which they would have been before the new imposition. If the new burdens principle to which the Minister for Transport referred means anything, surely it should apply to each local authority on an equal basis. I cannot believe that that principle was intended to mean that the burden on one local authority would be reduced by imposing fresh burdens on another.

The Minister for Transport used opaque expressions in Committee to try to parry the probing questions of my hon. Friends the Members for Cotswold and for Isle of Wight (Mr. Turner). He said: The mechanism will be that the extra costs will be fed into the rate support grant, at the lower end of the environment protection and cultural services block. All other things being equal, local authorities will broadly receive additional funding in proportion to their current share of the EPCS local tier. My hon. Friend the Member for Isle of Wight asked: Is the Minister saying … that he will pay to authorities—broadly or otherwise—only the sum that enables them to pay for the minimum laid down by the Government? The Minister for Transport said: No. We are saying clearly that the change in legislation places an additional burden on local authorities. Accordingly, the Government will make money available to cover that additional cost. I see the Under-Secretary nodding. I hope that that indicates that she will undertake on behalf of the Government to reimburse East Dorset district council and Christchurch borough council for the additional costs of the new statutory requirements imposed by the Government.

The Minister for Transport went on to say: We are in discussion with the local authorities as regards the methodology involved, following the well-established procedure for the rate support grant. If that procedure throws up significant anomalies, local authorities, as the hon. Gentleman will probably accept, will not be backward about raising the issue."— [Official Report, Standing Committee A, 20 November 2001; c. 27–29.] I quote extensively from what the Minister for Transport said because I do not want the Under-Secretary to start using the same language. That language was no doubt designed to give the impression of reasonableness and to comfort the victims of unjust distribution, but effectively the words were a sham; indeed they were a confidence trick calculated to deceive. We know that the procedure for reimbursing local authorities under existing legislation has thrown up significant anomalies, some of which I have drawn to the House's attention already and which continue to be drawn to the Government's attention by local authorities and local authority associations. What are the Government doing about it? Absolutely nothing. That is totally unacceptable. I hope that the Under-Secretary will have some words of comfort for my local authorities and citizens in my area.

Mr. Clifton-Brown

My hon. Friend is making a compelling case for the amendment. Is he aware that the Minister for the Environment recently said that under the previous Government … more and more burdens were placed on local authorities and allegedly funded from efficiency savings. This is the important bit: We"— that is the Government— are abandoning that practice and taking the realistic view that if extra duties are imposed they should be reasonably funded. That is the Government's policy."—[Official Report, 14 January 2002; Vol. 378, c. 125.] Does my hon. Friend agree that, as the Minister for the Environment made that statement to the House, there is no reason why the Government should not accept the amendment?

Mr. Chope

I agree absolutely. The trouble with the Government is that they consistently say one thing and do another, and they use words ambiguously to give people a misleading impression. We are not talking about any additional costs to Government. All we are talking about is a fair distribution of the costs that are incurred by local authorities as a result of Government-imposed legislation and ending the two-tier system. Today the financial services ombudsman has had something to say about the two-tier system operating in the Halifax building society. The Government have been presiding over a multi-tier system for reimbursing local authorities for the costs of concessionary fares, which is totally unjust.

It is not as though we are asking the earth. There is already a system in place to reimburse London authorities for the actual costs of concessionary fares, rather than the notional or pooled costs, so there is no reason why the Government could not introduce a system that reimbursed local authorities for the actual costs of the statutory concessionary fare scheme, rather than using the formulaic system of distribution which is so unjust.

I had no quarrels with the old system, under which concessionary fares were regarded as a matter for local discretion. The local authority could decide how much money to spend on concessionary fares and what sort of scheme to operate. In so far as they were able to draw on resources in the environmental services block grant, they could do so.

2 pm

The Government changed the rules and there is now no option for local authorities but to comply with the new rigid and centrally imposed rules. It is right and proper that local authorities should be reimbursed accordingly. As I said at the outset, this gives the Government an opportunity to admit that they have made a mistake, that they are willing to learn from it, and that, from now on, they will reimburse all the local authority costs incurred as a result of the legislation. If they did so, it would enable councils such as Christchurch and East Dorset to impose much lower council tax increases next year than are currently in prospect.

During yesterday's debate on the revenue support grant and the level of the finance settlement, the Minister for Local Government said that the Government were being generous to local authorities. Some of us were left with the impression that the Minister was more generous to some local authorities than to others. Today, the Under-Secretary has an opportunity to demonstrate by her actions and words that she believes in justice and equity for local authorities and that she accepts that it is unfair that some local authorities should benefit by more than the costs they incur while others receive less than their costs. The amendment is a simple and equitable proposition and I hope that the Minister will accede to it.

Mr. Henry Bellingham (North-West Norfolk)

I support the amendment and endorse the comments of my hon. Friend the Member for Christchurch (Mr. Chope). It would be perverse in the extreme if the Government did not reimburse local authorities. As my hon. Friend said, some local authorities have had to impose inflation-busting council tax increases over the past few years. In my area of west Norfolk we have consistently had council tax increases of about 8 per cent. or 9 per cent. over the past five or six years.

This is not just a problem for Norfolk county council. My local borough council, King's Lynn and West Norfolk, has not been getting a fair deal from the Government. Interestingly, the Labour leader of the local borough council explained in a letter to the local press the other day that the council tax in our area will have to go up by so much because the Government have not given Norfolk a fair enough deal. That is why it is vital that the amendment is supported and that the Government reimburse local authorities.

Will the Minister look at the words of the Minister for the Environment, who said: under the previous Government … more and more burdens were placed on local authorities and allegedly funded from efficiency savings. We are abandoning that practice and taking the realistic view that if extra duties are imposed they should be reasonably funded. That is the Government's policy."— [Official Report, 14 January 2002: Vol. 378, c. 125.] That is a good reason for the Under-Secretary to agree with what we are saying.

I support the amendment, as do many of my constituents. My constituency is similar in many ways to that of my hon. Friend the Member for Christchurch in that there are many elderly retired people, especially along the Norfolk coast in villages and towns such as Brancaster, the Burnhams and Hunstanton. Many of them are retired couples from places such as London where they have enjoyed concessionary fares, often amounting to 100 per cent. They are disappointed to receive only a 50 per cent. reduction in my area. If they find that this Bill does not benefit them in the way that is intended because local authorities will not be reimbursed, they will be very disappointed.

Unfortunately, I say all that in the context of declining bus services—the picture throughout most rural counties. We all know that 15 or 20 years ago we saw double-decker buses trundling around country lanes with one or two people on board. Every village had a regular bus service. It is clear that those days could not continue, but unfortunately many bus companies have not shown enough imagination and have responded inadequately to the demands and requirements of local communities.

In west Norfolk, communities have been cut off as a result of reductions in bus services. I am thinking in particular of two cases that have arisen since my return to the House, one of which involves the hamlet of Gayton Thorpe, where the bus service has been abandoned completely. Only last week, I received a letter from a constituent who lives in the village of Tilney All Saints, which until recently enjoyed a reasonable bus service. Now, there are only two morning buses from Tilney All Saints to King's Lynn, and only one returning to the village in the evening, which leaves King's Lynn at 4.45 pm. The bus goes through the northern part of the village, but the constituent who wrote to me lives in the southern part. Her daughter attends the local College of West Anglia, where she is training to be a chef. On leaving the bus she has to walk more than half a mile, which is a long way for a student in the dark.

The Government are attempting to do what all of us feel is the right thing, but if they fail completely to reimburse local authorities and penalise constituents such as mine through higher council tax, they will be making a big mistake. I hope that the Minister will look at our amendment sympathetically and respond to the detailed and technical points made by my hon. Friend the Member for Christchurch, which I wholly endorse, and to some of my more general points.

Chris Grayling (Epsom and Ewell)

I begin by apologising to you, Madam Deputy Speaker, and to the Minister for arriving late for the start of this debate. Today has been rather frenetic because of the launch of the Select Committee report on the rail industry, but happily we will be discussing this afternoon another subject that is close to the hearts of me and my constituents.

Members will know that the constituency of Epsom and Ewell lies just beyond the London boundary to the south. My constituents and Surrey county council—our local transport authority—face real problems in the provision of bus transportation, which will be exacerbated if the Bill is enacted and fails to deliver full reimbursement to authorities throughout the country. It was particularly disturbing to discover in Committee that, despite being pressed to do so, the Government were unable to give a clear, unequivocal and categorical commitment that they will reimburse every local authority for all the costs associated with changing the scheme under the Bill.

I hope that the Minister will take this opportunity to make such a commitment, because without it local authorities such as mine will have, in effect, two options—to cut other services or to increase council tax. That seems a wholly inappropriate burden to place on them at this time. In the case of Surrey county council, it is especially inappropriate, given the huge disparities in public support for Surrey and neighbouring London. Yesterday, the Minister kindly sent me a letter giving details on this issue. According to it, the Mayor is allocated £714 million a year for public transport, which will rise to just over £1 billion next year. In comparison, the sums allocated specifically to bus services in counties outside London are minuscule. Even wrapped together, all the transport budgets for all other authorities in the south-east will receive only £179 million for local transport projects in 2002–03.

In other words, under the Mayor's leadership local authorities across the border in London have a sum to distribute for transport support that is more than five times greater than that allocated to the home counties. The consequences of that disparity are becoming all too clear in the provision of concessionary fare schemes and of more general bus services.

Most particularly, the disparity's consequences are evident in the loss of a number of operators running services across the boundaries into London. They have been driven out of business by competitors in London that benefit from the substantial subsidy available to them.

The problem will get worse if the Minister goes ahead with the Bill as it stands. In effect, if the Government fail to deliver full reimbursement to local authorities for the cost of the scheme, more transport money will be taken away from authorities outside London. I believe that the Government should fulfil what I believe is their duty to reimburse, as local authorities outside London will be less able to deliver the support to bus services that their counterparts across the border in London can deliver.

As a consequence, services will continue to lose out financially. Operators will find it more difficult to make money on routes, and will tend to walk away from the business. The people to lose out will not be the vast majority of my constituents who use cars, but the schoolchildren and pensioners who depend on the buses for their daily transportation. They can ill afford to see the buses disappear.

It has been a matter of great concern to me that such a large disparity exists between the public support given to bus operators in London—and to local authorities there to enable them to support the operators—and the equivalent support given to counties just outside London. I hope that the Minister will not make the problem worse through an inappropriate application of the Bill.

The failure fully to reimburse local authorities for the cost of the scheme would have consequences that go beyond the nature of the services provided. Also affected would be the ability of local authorities to deliver any sort of proper concessionary fare scheme.

It is a cause of great grief to many of the elderly in the northern part of my constituency—those who live in places such as Stoneleigh, Worcester Park and Ewell—that their neighbours just across the boundary in London benefit from the free bus passes that are available to them under local authority schemes. Those local authorities are able to deliver those free bus passes because of the extra financial support that they receive.

Surrey county council does not receive the financial support that would enable it to provide free bus passes. It has tried extremely hard to deliver a concessionary scheme that goes some way at least towards relieving the burden of costs faced by our older travellers. The council has been able to help a little financially, but my elderly constituents are only human. They look up the road—sometimes only a few hundred yards—and wonder why they cannot have a bus-pass scheme such as exists in Sutton or Kingston. The reason is that the money for such a scheme is not available.

The Bill will make it more difficult still for my county council—and I suspect for many other authorities around the country—to introduce the schemes for bus passes and concessionary fares that benefit pensioners in higher-cost areas.

Mr. Clifton-Brown

Has my hon. Friend concluded that there is a particular irony about the problem, in that the further that one gets away from London and the other major metropolitan areas, the worse the bus service tends to be? If the amendment is rejected, the effect will be that local authorities are likely to cut back on discretionary spending on bus services. That will further reduce the number of services, especially in areas such as that represented by my hon. Friend the Member for North-West Norfolk (Mr. Bellingham), and in my area of the Cotswolds?

Chris Grayling

My hon. Friend is right. Many services depend absolutely on local authority support to keep going. Such services are nowhere near the principle routes. They deliver more a social service than a commercial one, and they benefit from the support of local authorities. If local authorities get less money, there will be fewer of those services. That has to be a matter of great concern for hon. Members considering the Bill.

2.15 pm

Quite rightly, the Government have an aspiration to see concessionary fare schemes grow. Many parts of the country have nothing like the level of such schemes that are available in London. Many of the authorities in those areas would like to do more. My authority's aspiration is, at the very least, to charge pensioners a 50p flat fare for buses.

However, if the additional costs of concessionary schemes are placed, in whole or in part, on local authorities, it will be more difficult for those authorities to introduce improved schemes. Moreover, although no one could argue with the aims of the Bill, the irony is that it will make it more expensive for local authorities to introduce expanded schemes in the future. By definition, they will have to find budgets to cover people aged between 60 and 65, as well as those aged over 65. As a result, it is less likely that local authorities will be able to afford new schemes in the future.

I hope that the Minister will give the matter careful thought, and that she will consider the consequences of failing to fund local authorities in full. I hope that she will give us this afternoon a commitment to providing full funding, and that she will think about those areas in the country that do not have the sort of schemes that would be desirable. The Minister must look at the potential extra costs that will arise, as a result of the Bill, if local authorities try to improve their schemes. Moreover, I hope that the Minister, when she looks at her Department's financial planning for the future, will encourage local authorities to go ahead with fare schemes and, where appropriate, give them the financial support that they need.

In conclusion, I welcome the Bill very much, and I also commend my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) on the amendment. I hope that the Minister will accept it. If she does not, I hope that she will at least accept the principle behind it, and give our local authorities the support that they undoubtedly need to implement the Bill.

The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble)

I appreciate the way in which the hon. Member for Cotswold (Mr. Clifton-Brown) introduced the amendment. He clearly acknowledged that the form of words used is something of a device and that the intention behind the amendment is better expressed in new clause 1. I shall not talk about the new clause, but I will deal with some of the different ways to tackle the financial arrangements, as I think that that is the subject that most worries Opposition Members.

The question of funding has been a recurring theme in debates on this Bill in this House, in the other place and in Committee. I am afraid that I must disappoint the hon. Member for Christchurch (Mr. Chope) by telling him that I do not agree with his interpretation of what my right hon. Friend the Minister for Transport said. If I do not use the same words as my right hon. Friend, it is only because I cannot be as eloquent.

I appreciate the concerns about funding, and about the need to get the formula right. I shall therefore go through some of the arguments explaining why the Government chose the approach contained in the Bill.

The amendment would add another stage to the system of funds distribution. Given that the hon. Member for Cotswold admitted that it would also require an additional round of consultation, it would be inconceivable for us to get the scheme up and running even in time for the next financial year. I urge Opposition Members to think hard about that, especially as amendment No. 3 deals with commencement. In addition, the amendment could undermine the method of distribution of Government support for the expenditure of local authorities.

Before I move on to some of the other issues, I shall deal with the concerns raised by hon. Members, and make some general comments. The hon. Member for Christchurch talked about the new burdens principle and the discussions that took place in Committee. In adopting the new burdens and revenue support grant approach, the Government are utilising the usual channels for local authority financial arrangements. As a result, the scheme will be introduced in a manner that, if not super fast, is speedy and orderly. The Government's approach also allows for proper discussion of the distributive mechanism through the local government channels. That is important because of the two big issues in local government funding—the size of the cake and how it is shared out. There must be discussions with the local government associations about both issues, particularly the latter.

Mr. Chope

What system could be fairer than one which reimburses local authorities, on an individual basis, for the costs that they have incurred as a result of the legislation?

Ms Keeble

I was going to come to that point later. That would mean a ring-fenced grant, which one of the amendments suggests, but it would lead to delay. In contrast, the Bill provides for an orderly and fair distribution of the total costs between local authorities.

It is true that some time ago concerns were raised by local authorities about the fairness of the distribution. I understand that the discussions between officials and the local government associations have been successful and that the margins that were talked about, which were in multiples of a million, have been whittled down to a small amount.

The hon. Member for Christchurch, along with other Conservative Members, argues that his local authorities are losing out. All Members think that their local authority is losing out. In fact, the way in which the mechanism works means that local authorities that already have more generous concessionary fare schemes in place, such as Merseyside, Reading and the West Midlands, are more likely to be under pressure than the local authorities that started from scratch or from a lower base in introducing concessionary fare schemes. I do not accept that the hon. Gentleman's authorities have necessarily lost out, nor those of his hon. Friends. In checking with officials, they do not seem to have raised that concern with my Department. Therefore, I do not think that this system, which is the normal one, discriminates against the hon. Gentleman's local authorities.

Mr. Chope

Does the Minister accept that the two local authorities in my constituency have incurred additional costs as a result of her legislation of £250,000 a year and have got back, between them, £20,000 a year? Which local authorities have been getting the extra £230,000 that should be going to Christchurch and East Dorset? Why is that money going to the West Midlands and Merseyside which are already over-resourced?

Ms Keeble

I am sorry, but the hon. Gentleman has misunderstood me. Local authorities which are the most likely to find that they have unmet costs as a result of this mechanism have, in the past, had more generous concessionary fare schemes in place. The total cost of the new burdens are put into a general kitty and then carved up. Councils which have in the past had more generous schemes will have higher new burdens under the Bill. Authorities such as the West Midlands and Reading, rather than getting more money out of the scheme, are most likely to be under pressure.

Chris Grayling


Ms Keeble

I should like to continue, because I will come on to the concerns of the hon. Member for Epsom and Ewell (Chris Grayling). I should also like to deal with the concerns of the hon. Member for North-West Norfolk (Mr. Bellingham) about bus transport in rural areas, particularly for pensioners. He said that pensioners moving out of London would lose the valuable benefit of the free bus pass which London local authorities have had in place for many years. They kept the scheme going even when they were under acute financial pressure under the last Conservative Government. The decision to keep the free bus pass was made by Conservative and Labour councils in the teeth of considerable opposition. It was a recognition of local needs, and that is how local government should work.

We have recognised the problems of people in rural areas who need bus transport and have provided front-end support for them in the form of the rural bus challenge and a big increase in the subsidy for rural buses. We had the last round of the rural bus challenge last Friday. I believe that the hon. Gentleman's local authority, although it might not have been his constituency, benefited from that challenge.

Mr. Ian Liddell-Grainger (Bridgwater)


Ms Keeble

I should like to finish this point about rural buses. We recognise that people in rural areas do not just want to go short distances. That is why we are looking at a fuel duty rebate for coaches in return for some concessionary fares. That will be an important step and will meet particular needs.

The hon. Member for Epsom and Ewell has raised his concerns a number of times. I have heard the exposition at least twice. His particular concern is that because his constituency is just over the border of London, people feel more strongly about not getting the free bus pass. Local authorities need to look at close working across local government boundaries. That is an issue right across the country. Local authorities have the discretion to make extra provision, as the authorities in London did, for the fact that people in their area may want to travel longer distances or go into London.

The hon. Gentleman mentioned schoolchildren. There is support for children in particular circumstances, depending on how far away from school they live and how old they are.

Mr. Clifton-Brown

The Minister seems to be dismissing the arguments of Conservative Members as trivial. The Local Government Association briefing says: As well as the aggregate financial consequences of the Bill, authorities individually will be affected to varying extents depending on the type of scheme or schemes currently offered locally … the imposition of this specific new burden with its widely varying local consequences requires an innovative look at whether there can be transitional measures to ease the particular problems which some authorities may face. As my hon. Friends are urging me to consider dividing the House on this matter, can the Minister assure us that if she does not accept the amendment, she will at least continue to investigate the problem to see whether there are any mechanisms for every local authority to be reimbursed for the actual costs that they incur?

Ms Keeble

I am not dismissing the concerns that are raised. I recognise that concessionary fares are extremely important to the public and that the issue of finance is of great concern to local authorities. I am simply pointing out that some of the issues raised by Conservative Members are about non-metropolitan, rural areas and that other support is being provided for people in those areas. The concessionary fare scheme is not the last word as regards what we are doing to support bus travel. We are considering the organisation of the financing. There has been careful discussion in the local government associations—the proper way to do it—and what started out as wide variations have narrowed to quite a small sum. I am sure that those discussions will continue. By the time that the scheme comes into operation in April 2003, I am sure that local councils will feel satisfied that they are being properly reimbursed.

2.30 pm

The local authorities mentioned by Opposition Members did not raise their concerns with the Department. If those authorities provide the information, I will ensure that officials take a careful look at it.

Chris Grayling

I am sorry but the Minister has already heard my explanation two or three times. I can assure her that she and her colleagues will hear it many more times in the House and other places. She has made various references to different impacts on different authorities, but is she saying that some authorities will end up paying part of the costs of the scheme out of their current budgets, rather than new budgets?

Ms Keeble

I am sorry if I have not been clear. On the way in which the funding mechanisms work, I have been saying that we have gone through the normal channels and procedures, if for no other reason than we do not want to delay the introduction of the scheme. We want it in place by 2003.

We have recognised the new burdens principle, which is that if a new burden is placed on local authorities it has to be met. That applies to the total cost of the scheme, which we estimate to be about £50 million. That will be the new burden to be imposed on local authorities as a result of the scheme. The issue is how that amount will be divided up among the local authorities. It is to be done on a per capita basis. Local authorities would receive funding according to the size of their population. I should have thought that that deals with the concerns about the relative funding for London and Surrey. Clearly, the local authorities are discussing exactly how the mechanism should work to ensure that it is as fair to them as possible. The authorities have to discuss that among themselves.

Referring back to what my right hon. Friend the Minister for Transport said, we would expect the pressures to be on the margins. The authorities that are most likely to experience those financial pressures are those that historically have had the most generous concessionary fare schemes. I do not want to go into all the detail again, as I shall sound like a gramophone record if I do.

Mr. Clifton-Brown

The Minister has been generous in giving way. She stated that the effects of the Bill will be felt only at the margins. If she genuinely believes that—the Opposition think that it will be a bit more than at the margins—she is implicitly admitting that the revenue cost is small, if it is a cost at all. Therefore, why will she not consider implementing the amendment?

Ms Keeble

Although I am not reading the words used by my right hon. Friend the Minister for Transport, the form of words that I am using is pretty much same when I say that the pressures will be felt at the margins. The formula for cutting up the cake between the local authorities—there are more than 300 of them in England, which is why it is a substantial undertaking—is down to the discussions with those authorities. It appears that those discussions have gone well and that the areas of conflict are now very small.

As the hon. Gentleman rightly said the amendment is a peg. It refers to a different Bill and a completely different provision. The ring-fencing process that concerns him is not in the amendment. Furthermore, it would result in major delays, which would mean that we would be unlikely to get the scheme up and running by 2003. The devolved Administrations have already got such schemes up and running, so we would be lagging far behind. I shall now move on, as we have discussed that issue several times and have more or less exhausted the arguments.

At present, most Government grant to local authorities is paid by way of general grant. It is for local authorities to spend the money in the way that they consider appropriate, based on their judgment of local needs and circumstances and their overall financial priorities.

Mr. Chope

The Minister said that the grant is allocated to local authorities so that they can decide how to spend it. Concessionary travel comes into a different category, however, as the Government have decided, for their own political benefit, to announce a statutory scheme and impose legislation on local authorities. The Government have also announced the principle of burdens. Will the Minister explain how it can be fair to impose an additional burden of £250,000 on two small local authorities in Dorset, and to reimburse them with only £20,000?

Ms Keeble

I have said that we have recognised the new burdens principle. The extra funding is on that basis. The hon. Gentleman is arguing for a ring-fenced grant. In general, local authorities rightly say that they want more discretion as to how they spend their money. As the funding is part of general funding, local authorities are free to top up their schemes and to use part of their general grant to do so. There is no contradiction.

The hon. Gentleman is right to say that the Conservative party wants a special grant; it does not want the money to be part of the general grant. As I have said several times, if it were part of a special grant, further consultation would be required and the introduction of the scheme would be delayed until after 2003. We believe that local authorities should be responsible for their spending and taxation decisions and be accountable to their local communities for them.

We all recognise that reimbursing local authorities at the current cost of concessionary fares is expensive, but we none the less believe that the system is in balance, not least because we have received few complaints from authorities about it. I give this undertaking to the hon. Members for Cotswold and for Christchurch: if the information about the local authorities mentioned is provided, we will certainly consider it carefully.

In England alone, we reimburse local authorities to the tune of £490 million a year. This legislation will increase that amount by about £50 million. We are working with local authority associations to finalise the figures so that the local government settlement will cover in total the cost of the extension of the travel concession to men aged 60 to 65.

As my right hon. Friend the Minister for Transport explained at some length in Committee—including in a lengthy discussion of the new burdens principle—the basis for distributing the concessionary fares funding is in line with other transfers to local government of this size. We really do not think that there is a case for the separation of that element of the revenue support grant, especially in comparison with other aspects of expenditure. We do not think that element should be ring fenced by a special grant mechanism.

More generally, as I have said several times, we want to ensure that the system of distributing grant is as fair as possible. We are working to create a local government finance system that distributes grant fairly and effectively and which gives councils greater financial autonomy to help them better to meet the needs of their local communities. We shall be working with local government as a whole to build consensus as far as possible.

We have discussed funding at great length. I completely understand the concern of Opposition Members to ensure that their constituents receive the benefit of concessionary fares and also that their local authorities are properly reimbursed or compensated. We believe that the system is fair and efficient and that it will facilitate the orderly and expeditious introduction of this very, very important concession. I hope, therefore, that the hon. Member for Cotswold will withdraw his amendment so as not to delay the scheme; and that we can get the measure through and ensure that men aged between 60 and 65 receive the benefits of the Bill.

Mr. Clifton-Brown

The one thing on which the House can agree is that the Bill is important and that we want it on the statute book as soon as possible.

The Minister uses an interesting device to try to reject the amendment—threatening us that it could delay the implementation of the measure. She has certainly anticipated that she will not accept our amendment so that she can bring forward the implementation of the measure. That is a new parliamentary device and we may be breaking new ground. However, I hope that the Minister will keep an open mind as to the amendments that we have not yet debated.

I remind the Minister of the genesis of the Bill. As long ago as 10 October 1997, Michael Matthews took his case to the European Court. The Court hearing was on 28 November 2000, and on 17 February 2001 the Deputy Prime Minister announced that primary legislation would be introduced to amend the law so as to equalise at 60 the age at which men and women qualified for travel concessions.

The Government have had a huge amount of time to put the Bill on to the statute book, so there is no excuse for them not to accept our relatively straightforward and wholly fair amendment. Surely, if a council is out of pocket due to the obligations imposed on it by the Government, it should be reimbursed by the Government.

Mr. Don Foster (Bath)

Will the hon. Gentleman give way?

Mr. Clifton-Brown

May I make one more point?

The Minister mentioned the system of fair burdens. My hon. Friend the Member for North-West Norfolk (Mr. Bellingham) referred to the remarks of the Minister for the Environment and I repeat the Minister's words. He said: We are abandoning that practice and taking the realistic view that if extra duties are imposed they should be reasonably funded."—[Official Report, 14 January 2002; Vol. 378, c. 125.] The Opposition take the view that if the Government impose any duties on local government, they should be fully funded. If the Government impose duties, the Government should fund them.

I shall now give way to the hon. Member for Bath (Mr. Foster)—[Interruption.] He no longer wants to intervene so I must have dealt with the point that he wanted to make.

Mr. Foster

Very effectively.

Mr. Clifton-Brown

I may be damned with faint praise later, so I shall keep going while I am ahead.

Mr. Chope

Will my hon. Friend address the fallacy in the Minister's argument that the authorities under the greatest financial pressure were those with the most generous schemes? Surely, the authorities that did not have generous schemes were under financial pressure—that is why their schemes were not generous. They wanted the money that would flow from the Government under the new system to enable them to introduce more generous schemes.

2.45 pm
Mr. Clifton-Brown

I entirely agree with my hon. Friend. The Minister's argument was fallacious in that respect.

Ms Keeble

We have just heard a different version of what I said. I said that those local authorities that had traditionally had the most generous concessionary fares schemes were those that would be the most likely to be under financial pressure as a result of the Government using this formula. Those were not the authorities represented by Conservative Members—they were places such as Merseyside and the west midlands.

Mr. Clifton-Brown

Until I read the record, I shall not be entirely sure whether the Minister has repeated what she said before or whether she is saying something slightly different. The argument still sounds fallacious, so I shall need to examine the record carefully. My hon. Friend the Member for Christchurch (Mr. Chope) is right: the smaller rural authorities are likely to be most disadvantaged by the provisions of the Bill.

We have held a long debate on the subject and we need to move on. The Opposition remain dissatisfied that the Government are introducing extra burdens for local authorities—especially small authorities. Because of that and because the Minister has not wholly convinced us that the Bill would be fair, we shall seek to divide the House so that our local authorities can see that we are protecting their interests to the full.

Question put, That the amendment be made:—

The House divided: Ayes 128, Noes 262.

Division No. 150] [2.46 pm
Ainsworth, Peter (E Surrey) Bellingham, Henry
Allan, Richard Blunt, Crispin
Amess, David Boswell, Tim
Ancram Rt Hon Michael Bottomley, Peter (Worthing W)
Brady, Graham
Arbuthnot, Rt Hon James Brake Tom
Atkinson, David (Bour'mth E) Brazier, Julian
Barker, Gregory Bruce, Malcolm
Baron, John Burstow, Paul
Barrett, John Calton, Mrs Patsy
Beith, Rt Hon A J Campbell, Gregory (E Lond'y)
Campbell, Rt Hon Menzies Liddell-Grainger, Ian
(NE Fife) McIntosh, Miss Anne
Carmichael, Alistair MacKay, Rt Hon Andrew
Cash, William Maclean, Rt Hon David
Chapman, Sir Sydney McLoughlin, Patrick
(Chipping Barnet) Maples, John
Chope, Christopher May, Mrs Theresa
Clappison, James Moore, Michael
Clifton-Brown, Geoffrey Murrison, Dr Andrew
Collins, Tim O'Brien, Stephen (Eddisbury)
Cormack, Sir Patrick Paterson, Owen
Cotter, Brian Pickles, Eric
Curry, Rt Hon David Prisk, Mark
Davey, Edward (Kingston) Pugh, Dr John
Davies, Quentin (Grantham) Randall, John
Davis, Rt Hon David (Haltemprice) Rendel, David
Doughty, Sue Robathan, Andrew
Duncan, Alan (Rutland & Melton) Robertson, Hugh (Faversham)
Duncan Smith, Rt Hon Iain Robertson, Laurence (Tewk'b'ry)
Fabricant, Michael Roe, Mrs Marion
Field, Mark (Cities of London) Rosindell, Andrew
Right, Howard Russell, Bob (Colchester)
Forth, Rt Hon Eric Sanders, Adrian
Foster, Don (Bath) Sayeed, Jonathan
Fox, Dr Liam Simmonds, Mark
Francois, Mark Smith, Sir Robert (W Ab'd'ns)
Gale Roger Smyth, Rev Martin (Belfast S)
Garnier, Edward Spelman, Mrs Caroline
George, Andrew (St Ives) Spicer, Sir Michael
Gibb, Nick Spring, Richard
Gidley, Sandra Stunell, Andrew
Swire, Hugo
Goodman, Paul Taylor, Ian (Esher & Walton)
Grayling, Chris Taylor, Matthew (Truro)
Green, Damian (Ashford) Taylor, Dr Richard (Wyre F)
Green, Matthew (Ludlow) Taylor, Sir Teddy
Greenway, John Thomas, Simon (Ceredigion)
Grieve, Dominic Tonge, Dr Jenny
Harris, Dr Evan (Oxford W) Tredinnick, David
Harvey, Nick Turner, Andrew (Isle of Wight)
Hayes, John Tyler, Paul
Heald, Oliver Viggers, Peter
Hendry, Charles Watkinson, Angela
Hermon, Lady Whittingdale, John
Hoban, Mark Wiggin, Bill
Holmes, Paul Wilkinson, John
Horam, John Willetts, David
Howarth, Gerald (Aldershot) Williams, Roger (Brecon)
Hughes, Simon (Southwark N) Willis, Phil
Jenkin, Bernard Wilshire, David
Johnson, Boris (Henley) Winterton, Mrs Ann (Congleton)
Kirkbride, Miss Julie Winterton, Nicholas (Macclesfield)
Knight, Rt Hon Greg (E Yorkshire) Younger-Ross, Richard
Laing, Mrs Eleanor
Lait, Mrs Jacqui Tellers for the Ayes:
Lamb, Norman Mr. Peter Luff and Mr. Peter Atkinson.
Lewis, Dr Julian (New Forest E)
Adams, Mrs Irene (Paisley N) Blizzard, Bob
Ainsworth, Bob (Cov'try NE) Bradshaw, Ben
Allen, Graham Brennan, Kevin
Armstrong, Rt Hon Ms Hilary Brown, Rt Hon Nicholas
Atkins, Charlotte (Newcastle E & Wallsend)
Austin, John Brown, Russell (Dumfries)
Bailey, Adrian Browne, Desmond
Baird, Vera. Bryant, Chris
Barnes, Harry Buck, Ms Karen
Barron, Kevin Burden, Richard
Battle, John Burgon, Colin
Bayley, Hugh Burnham, Andy
Benn, Hilary Cairns, David
Bennett, Andrew Campbell, Alan (Tynemouth)
Best, Harold Casale, Roger
Betts, Clive Cawsey, Ian
Blears, Ms Hazel Challen, Colin
Chapman, Ben (Wirral S) Howarth, Rt Hon Alan (Newport E)
Clark, Mrs Helen (Peterborough) Howarth, George (Knowsley N)
Clark, Dr Lynda Howells, Dr Kim
(Edinburgh Pentlands) Hoyle, Lindsay
Clark, Paul (Gillingham) Hughes, Kevin (Doncaster N)
Clarke, Rt Hon Tom (Coatbridge) Hutton, Rt Hon John
Clarke, Tony (Northampton S) Iddon, Dr Brian
Clelland, David Illsley, Eric
Coaker, Vernon. Ingram, Rt Hon Adam
Coffey, Ms Ann Jackson, Glenda (Hampstead)
Coleman, Iain Jamieson, David
Connarty, Michael Jenkins, Brian
Cooper, Yvette Johnson, Alan (Hull W & Hessle)
Corbyn, Jeremy Jones, Helen (Warrington N)
Corston, Jean Jones, Jon Owen (Cardiff C)
Cranston, Ross Jones, Lynne (Selly Oak)
Crausby, David Jones, Martyn (Clwyd S)
Cruddas, Jon Jowell, Rt Hon Tessa
Cryer, Mrs Ann (Keighley) Joyce, Eric
Cryer, John (Hornchurch) Keeble, Ms Sally
Cunningham, Jim (Cov'try S) Keen, Alan (Feltham & Heston)
Cunningham, Tony (Workington) Keen, Ann (Brentford & Isleworth)
Curtis-Thomas, Mrs Claire Kemp, Fraser
Davey, Valerie (Bristol W) Khabra, Piara S
Davidson, Ian Kilfoyle, Peter
Davis, Rt Hon Terry King, Ms Oona (Bethnal Green)
(B'ham Hodge H) Kumar, Dr Ashok
Dawson, Hilton Ladyman, Dr Stephen
Dobbin, Jim Lammy, David
Donohoe, Brian H Laxton, Bob
Doran, Frank Lazarowicz, Mark
Dowd, Jim Lepper, David
Drew, David Leslie, Christopher
Dunwoody, Mrs Gwyneth Levitt, Tom
Eagle, Angela (Wallasey) Lewis, Ivan (Bury S)
Eagle, Maria (L'pool Garston) Lewis, Terry (Worsley)
Edwards, Huw Linton, Martin
Ennis, Jeff Lloyd, Tony
Etherington, Bill Lucas, Ian
Farrelly, Paul Luke, Iain
Fisher, Mark Lyons, John
Fitzpatrick, Jim McAvoy, Thomas
Fitzsimons, Mrs Lorna McCabe, Stephen
Flint, Caroline McCartney, Rt Hon Ian
Flynn, Paul McDonagh, Siobhain
Follett, Barbara MacDougall, John
Foster, Rt Hon Derek McGuire, Mrs Anne
Foster, Michael (Worcester) McIsaac, Shona
Foster, Michael Jabez (Hastings) McKechin, Ann
Foulkes, George Mackinlay, Andrew
Galloway, George McNulty, Tony
George, Rt Hon Bruce (Walsall S) MacShane, Denis
Gerrard, Neil Mactaggart, Fiona
Gibson, Dr Ian McWalter, Tony
Gilroy, Linda McWilliam, John
Griffiths, Jane (Reading E) Mahmood, Khalid
Griffiths, Nigel (Edinburgh S) Mahon, Mrs Alice
Grogan, John Mallaber, Judy
Hain, Rt Hon Peter Marsden, Gordon (Blackpool S)
Hall, Mike (Weaver Vale) Marshall, David (Shettleston)
Hall, Patrick (Bedford) Martlew, Eric
Hamilton, David (Midlothian) Meale, Alan
Hamilton, Fabian (Leeds NE) Merron, Gillian
Harman, Rt Hon Ms Harriet Michael, Rt Hon Alun
Harris, Tom (Glasgow Cathcart) Miliband, David
Henderson, Doug (Newcastle N) Miller, Andrew
Henderson, Ivan (Harwich) Mitchell, Austin (Gt Grimsby)
Hendrick, Mark Moffatt, Laura
Hepburn, Stephen Mole, Chris
Heppell, John Moonie, Dr Lewis
Hesford, Stephen Moran, Margaret
Heyes, David Morley, Elliot
Hill, Keith Mudie, George
Hinchliffe, David Mullin, Chris
Hope, Phil Munn, Ms Meg
Hopkins, Kelvin Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood) Smith, Geraldine (Morecambe)
Murphy, Rt Hon Paul (Torfaen) Smith, Jacqui (Redditch)
Norris, Dan Smith, Llew (Blaenau Gwent)
O'Brien, Bill (Normanton) Soley, Clive
O'Hara, Edward Southworth, Helen
Organ, Diana Squire, Rachel
Osborne, Sandra (Ayr) Starkey, Dr Phyllis
Owen, Albert Stewart, Ian (Eccles)
Palmer, Dr Nick Stinchcombe, Paul
Pearson, Ian Stoate, Dr Howard
Perham, Linda Stringer, Graham
Picking, Anne Stuart, Ms Gisela
Pickthall, Colin Sutcliffe, Gerry
Pike, Peter Taylor, Rt Hon Ann (Dewsbury)
Pond, Chris Thomas, Gareth R (Harrow W)
Pope, Greg Tipping, Paddy
Prentice, Ms Bridget (Lewisham E) Todd, Mark
Prentice, Gordon (Pendle) Truswell, Paul
Primarolo, Dawn Turner, Neil (Wigan)
Prosser, Gwyn Twigg, Derek (Halton)
Quin, Rt Hon Joyce Twigg, Stephen (Enfield)
Rammell, Bill Tynan, Bill
Rapson, Syd Vis, Dr Rudi
Reed, Andy (Loughborough) Wareing, Robert N
Reid, Rt Hon Dr John (Hamilton N) Watson, Tom
Robertson, John Watts, David
(Glasgow Anniesland) White, Brian
Roche, Mrs Barbara Whitehead, Dr Alan
Ross, Ernie Wicks, Malcolm
Roy, Frank Williams, Rt Hon Alan
Russell, Ms Christine (Chester) (Swansea W)
Ryan, Joan Williams, Mrs Betty (Conwy)
Salter, Martin Wills, Michael
Savidge, Malcolm Winnick, David
Sawford, Phil Woodward, Shaun
Sedgemore, Brian Worthington, Tony
Sheerman, Barry Wright, Anthony D (Gt Yarmouth)
Shipley, Ms Debra Wright, David (Telford)
Simon, Siôn Wright, Tony (Cannock)
Simpson, Alan (Nottingham S)
Skinner, Dennis Tellers for the Noes:
Smith, Angela (Basildon) Mr. Ivor Caplin and
Smith, Rt Hon Chris (Islington S) Mr. Nick Ainger.

Question accordingly negatived.

Mr. Don Foster

I beg to move amendment No. 4, in page 1, line 21, at end insert— '(4A) Subsections (1) to (4) above shall not affect the operation of any travel concession scheme more generous than that provided by section 145(1) (mandatory concessions outside Greater London) of the Transport Act 2000 and by section 242 (requirements as to scope of concessions which must be given if free travel scheme is not to have effect) of the Greater London Authority Act 1999 as amended by section 151(12) (concessions inside Greater London) of the Transport Act 2000.'. The amendment follows on logically from the important discussion that we have just had about the cost of the Government's proposals. The Liberal Democrats welcome the broad thrust of the Bill and, like the hon. Member for Cotswold (Mr. Clifton-Brown), we wish it good speed and a speedy implementation. Like the hon. Gentleman, I am conscious, however, that action on this issue should, and could, have been taken sooner. Indeed, during the passage of the Bill that became the Transport Act 2000, I moved amendments that would have had exactly the same effect that this Bill is intended to have. In other words, the matter could have been done and dusted more than two years ago, and it is a great pity that we are still here debating it.

3 pm

I want to express my gratitude to the Minister because in speaking to the previous amendment she almost made my case for me, and in a moment I shall quote her remarks in support of this amendment. When the hon. Member for Cotswold spoke to the previous amendment, he referred also to a new clause that was related to it but had not been selected. For ease of understanding, I shall follow the hon. Gentleman's sensible precedent, because I tabled new clause 2 as well as amendment No. 4, and the new clause succinctly expresses the intention of the amendment. It states: It is hereby declared that nothing in this Act shall inhibit the operation of any existing travel concession scheme, whether statutory or otherwise. I tabled amendment No. 4, which would have the same effect as those words, to be helpful to none other than Lord Falconer. In the debate in the other place, he said that it is regrettable if local authorities have taken the decision to offer their elderly and disabled people less generous schemes as a result of a statutory minimum requirement."—[Official Report, House of Lords, 18 October 2001; Vol. 627, c. 743.] The noble Lord would, rightly, be concerned if, as a result of the introduction of the minimum requirement and the further change to it now being imposed by the Bill, local authorities reduced the quality of existing non-mandatory provision.

If the money provided by the Government to recompense local authorities in the manner described by the hon. Member for Christchurch (Mr. Chope) and others is not sufficient, they may have little choice but to make up that deficit by removing money from more generous schemes already in existence. During our discussion in Committee, hon. Members gave examples of schemes that are already under threat and considerable concern was expressed on both sides of the Committee about the possible demise of more generous schemes. It was because of those concerns that Lord Falconer made his remarks in the other place.

As I said, the Minister has made it abundantly clear that she, too, is concerned about that possibility. She also made it clear, however, that there is uncertainty even as to the level of funding that the Government will have to provide to meet their existing promise. The debate on the previous amendment dealt with the rights and wrongs of the method of dividing up the pot, but there is still a debate to be had about whether the pot itself is large enough.

In the earlier debate, the Minister said that it was her understanding that debates between her officials and the Local Government Association about the funding that might be required were so successful that the difference between them had been whittled down from millions of pounds to a small amount. She later told us that the additional burdens imposed as a result of the Bill would be round about £50 million. That is worrying. We were told earlier that the figure might be £54 million and that discussions with the Department continue. I hope that when the Minister responds to the debate she will tell the House the precise amount that the Government believe is necessary collectively to compensate local authorities for the imposition of the new burdens.

In response to the amendment moved by the hon. Member for Cotswold, who was ably supported by several of his hon. Friends, the Minister clearly said that the local authorities who already provide generous concessionary schemes are more likely to be under pressure". When the hon. Member for Christchurch suggested that she had said something rather different, she asserted that such authorities are most likely to be under pressure. My concern in speaking to this amendment relates to those authorities and others.

Ms Keeble

My reference to authorities being under pressure related to the division of the cake, not the size of it, and to the previous amendment.

Mr. Foster

The Minister made that absolutely clear earlier, and I entirely accept that we are now discussing the size of the cake rather than how it is divided up. As I said, I am concerned that the cake may not be big enough fully to recompense councils collectively, and that may lead to some councils dropping more generous schemes. I come now to the point that the mechanism for distributing the cake will, according to the Minister herself, have an impact on a number of local authorities who already have more generous schemes.

Mr. Clifton-Brown

In my opening remarks on the previous amendment, I alluded to concerns about the total cost of the Bill. I do not know whether the hon. Gentleman is aware of the LGA briefing prepared for Members of Parliament. It states: The LGA is still in discussion with the DTLR about the actual level of additional costs to local authorities for providing the statutory minimum scheme set out in TA2000"— the Transport Act 2000for which the Association feels the Department may have under-estimated", even with the increase in aggregate revenue support grant provision of £54 million in England, an increase over its initial assessment of £47 million. The Minister and the DTLR are having continually to raise their estimate of the Bill's costs and no doubt will continue to do so.

Mr. Foster

The hon. Gentleman is absolutely right, and he reminds us that there are two stages to the process. First, the Transport Act sensibly introduced a statutory minimum requirement, which placed burdens on local authorities. As he said, discussions continue as to whether local authorities are being properly recompensed by the Government for those burdens. Secondly, we have the Bill, which could have been incorporated in the Act but was not. It will place an additional burden on local authorities, and discussions continue about the collective cost of that to local authorities who run such schemes.

I hope that the Minister will at least make it clear to the House where we stand with the negotiations on the costs that specifically relate to the Bill, but if she can provide any additional information about continuing discussions on the costs of the original legislative requirement under the Transport Act 2000, I am sure that the House will be pleased to receive it. However, as I have said, the problem is not only that the cake may not be enough, but that the method of dividing the cake may put pressure on certain local authorities that already operate generous concessionary schemes above the statutory minimum. Lord Falconer has made it clear in another place that he does not want such schemes to be removed.

The purpose of the amendment is to ensure that we state clearly in the Bill that nothing will reduce the quality of existing services, whether mandatory or non-mandatory. The Minister referred to several places where that may be the case. She said that Merseyside, the west midlands and Reading were most likely to be put under pressure as a result of the Government's proposals. There will also be additional pressures in London. Reference has been made already to the generous freedom pass scheme that operates in London, and there is much discussion about the operation of that scheme. I have recently corresponded with organisations that are genuinely concerned that, in an attempt to make eligibility for the freedom pass scheme uniform throughout London, several local authorities are tightening up the criteria so that some people, especially disabled people, are losing out.

The London scheme is more generous than the legislative statutory minimum requirement, so a larger number of men in the 60 to 65 age group will benefit from it and an additional cost will have to be met to pay for those people who have been added to the more generous scheme. Does the Minister genuinely believe that the additional costs in London, the west midlands, Merseyside, Reading and many other parts of the country have been taken into account in the sum that will be provided?

The purpose of the amendment is clear: to ensure that nothing done as a result of the Bill will in any way reduce the ability of local authorities to provide those existing schemes that are more generous than the legislation requires them to provide. If the Government disagree to the amendment so that the current schemes in the areas to which I refer can be whittled away—that has sadly already happened in several areas—they will reap a poor reward for their actions. I hope therefore that the Minister will support the amendment.

Ms Keeble

I appreciate all the concerns raised by the hon. Member for Bath (Mr. Foster). I do not want to have a very long discussion about the financial arrangements, especially as we have discussed them exhaustively in Committee. I suspect that I would simply end up saying what I have said previously, and we would go round the houses again. The financial figures that I have cited are those that I have been given most recently, so they cover the current state of play. I give an undertaking to ensure that hon. Members are properly notified of any further developments.

3.15 pm
Mr. Foster

The Minister gave from the Dispatch Box a figure of about £50 million, but the figure that she and her colleagues have cited most frequently is £54 million. For the sake of clarity, will she confirm that that is the current figure, agreed by her departmental officials and the LGA? Given that she said that there was a small discrepancy, can she tell us what it is?

Ms Keeble

I too have heard the £54 million figure. The figure that I have been given most recently by officials is £50 million. I have previously given an approximation of the remaining difference, which is down from the several millions that it was previously. I do not want to go back around that or to mislead anyone about the continuing discussions. It would probably be more helpful if we made absolutely sure that hon. Members received exactly the right figures, and I undertake to write to hon. Members about them when we know whether those discussions have produced any further results.

In answer to the question about the different local authorities, I said that they were the ones most likely to be under pressure. The point of the negotiations and discussions that are taking place is to ensure that they are not under pressure and that we reach the right the final formula. At the end of the day, the Bill will greatly benefit many people. Overwhelmingly, that will be its impact, and I have no doubt that the concessions that will be extended to 64-year-old men will be very welcome indeed. Of course, we have to ensure that the financial details are right, but we would be unwise to lose sight of the fact that this will be an overwhelmingly popular and practical measure that will produce real improvements for a substantial number of people.

I understand the concern that the hon. Gentleman expresses about ensuring that there is an equalising up, not an equalising down. I shall put things simply before going through my formal notes so that they are on the record. Under the Bill, local authorities will have to do for men what they are doing for women of the same age. If women get free bus passes, so must men. That is the Bill's effect; this is not a discretionary issue. If the local authority runs a half-fare scheme, men will pay half fares. Whatever scheme operates, it must be extended to men aged 60 to 64.

Of course, local authorities can introduce new schemes if they decide to do so at some stage in the future. Indeed, that is the point of local government, as the hon. Gentleman well knows; the Liberal Democrat party is totally in favour of local discretion. All the evidence shows that when people are given concessionary public transport, the pressure is to increase the concessions, not to reduce them. All the discussions about concessionary bus passes—for example, those in the west midlands and Greater Manchester—clearly show the enormous value that is placed on those facilities.

Mr. Foster

There is no disagreement in the Chamber about the enormous benefits that the Bill will produce. May I ask the Minister to turn to the specifics of the issue? For example, the hon. Member for Epsom and Ewell (Chris Grayling) said that his local authority's aspiration was to provide a flat-rate 50p travel scheme for people over the age of 60. If his local authority already had in place such a scheme, the Bill's introduction will result in a significant additional cost to that authority for providing a flat-rate scheme for a much larger group of people—men between the ages of 60 and 65—than in a neighbouring authority that was only providing the statutory minimum.

My question to the Minister is simple: will she ensure, by whatever means—let us not argue about the methodology—that that mythical local authority will not lose out and be forced to cut its more generous concessionary scheme?

Ms Keeble

I do not want to return to the finance debate, as we have had that discussion several times and I would end up saying the same thing as was said in Committee. The hon. Member for Epsom and Ewell (Chris Grayling) was talking about aspirations, although I was not sure whether he was talking about what is in place. I accept that the hon. Member for Bath (Mr. Foster) might have liked the debate to be the other way round.

This short Bill, apart from bringing enormous benefits to an important section of society, will make sure that men aged 60 to 64 receive the same benefits as women in that age group. We have undertaken to finance any new burdens that that imposes on local authorities—we have had that debate—but it will not be possible to provide men aged 60 to 64 with different benefits from those provided to women. If, at a future stage, local authorities wish to change their concessionary fares scheme, they may do so.

I have dealt with the arguments about the political realities, rather than the financial realities, of taking such a decision. That has been clearly demonstrated by the concerns that have been raised, much more in the debate about the original concessionary fares schemes than in this debate. We are aware of the concerns that have been expressed in the west midlands and Greater Manchester, and of the reality of what happened subsequently. As I understand it, in all areas, the levelling was up, not down, once the mandatory scheme was introduced.

Chris Grayling

I appreciate that the hon. Lady feels pressed on this point, but the hon. Member for Bath (Mr. Foster) has raised an important issue. Will any local authority be forced, as a result of the changes, to reduce the concessionary fares scheme that it provides for its local people, or to divert money away from other services to fulfil the terms of the Bill—yes or no?

Ms Keeble

That point came under the debate that we have just had. The Government have recognised the new burdens, we have sized and cut up the cake and made it as fair as possible.

Mr. Phil Woolas (Oldham, East and Saddleworth)

And put cream on it.

Ms Keeble

Yes, and a cherry on top, too. That is the point that we have reached.

The amendment is about making sure that schemes are not reduced as a result of the Bill. The Bill specifically says that, if a scheme is in place, it must be extended to men aged 60 to 64. If a free pass scheme is in place, those men must have free travel, as, of course, the pass must be free. If a 50 per cent. fare scheme is in place, that must be extended to men aged 60 to 64. That is what is being financed, and that will be the effect of the scheme. I have explained that repeatedly and, I hope, as clearly as possible. I shall now make progress.

At the risk of going over the same ground, the Bill will extend all existing schemes to men from age 60. Therefore, as I said, if the local authority offers a statutory minimum of a half fare with a local free bus pass—they cannot be charged for the pass—that must be offered to men aged 60 to 64 once the Bill comes into effect, which should be in April next year. Similarly, in areas where schemes that are more generous than the statutory minimum are offered, those schemes should also be extended. The Bill will therefore extend rather than reduce the existing schemes.

It is vital that we do not fetter the discretion of local authorities to operate the concessionary fare schemes that they consider best meet the needs of their areas. We do not expect local authorities to use the Bill as a reason to reduce the scope of their current schemes. We are confident that the funding that will be provided through the new burdens procedure will compensate local authorities for extending their schemes to men aged 60 to 64. We are keen to retain local democracy, and we do not want the Bill to reduce the discretion afforded to local authorities on the matter. I am sure that the hon. Member for Bath would support that. It is down to local authorities to decide, in the light of local circumstances, what type of scheme they want to operate.

Mr. Foster

The Minister seeks to reassure us that everything that the Government intend to do will ensure that the Bill does not result in a reduction of the existing, more generous, schemes. Will she add to her reassurance by providing some of the information that must be available to her? Her noble Friend Lord Falconer said in another place: We are presently undertaking a survey to measure the effects of the implementation of the statutory minimum requirement. The survey is one of a series undertaken whenever there are significant changes to the concessionary travel regime. The results of the survey, which should be available early next year, will identify whether there is a problem of concessions having been reduced or whether there are just a couple of isolated examples."—[Official Report, House of Lords, 18 October 2001; Vol. 627, c. 743–44.] Will the Minister tell us the result of that investigation?

Ms Keeble

We do not have the results of that investigation yet. There has been discussion of the impact on some schemes, and I have mentioned them. The matter has also been discussed in Committee and probably on Second Reading, too. In most instances, the matter has been resolved by the original schemes being reinstated. That is largely because of the popularity of concessionary fares. As soon as we get the results of the survey, I am sure that they will be made available to hon. Members, as they will be very important.

I understand the hon. Gentleman's concerns. They have been raised in correspondence by a number of hon. Members, and there has been a lot of discussion about them. I assure him that nothing in the Bill will cause any existing scheme to be reduced in scope or otherwise curtailed. With those assurances, I hope that he will be able to withdraw his amendment.

Mr. Foster

The Minister provides warm words of encouragement, but unfortunately she cannot yet provide evidence from the survey that she acknowledges is being carried out as to whether similar assurances were given in respect of the introduction of the earlier statutory minimum requirement, and whether its introduction led to such reductions. I note with interest that some schemes, as she rightly said, were referred to in Committee—for example, the west midlands scheme, which, although it was going to be removed, has now been reinstated. She explained that it was reinstated because of the popularity of the scheme, and one can well imagine that local councillors in those areas were put under enormous pressure. However, she did not say that the schemes were reinstated as a result of Government assurances that additional money to meet the additional cost would be made available; they were reinstated merely because of the political pressure placed on councils in the area.

Ms Keeble

I believe that those schemes were resolved in such a way. I do not want to mislead the hon. Gentleman.

Mr. Foster

So the Minister is agreeing that the resolution of the problem was not a result of Government intervention.

The point that I have sought to make throughout is that it would be far better if the Government made it absolutely clear that they will introduce systems within the Bill's purview to ensure that the problems that we have discussed do not occur again. The Minister has said in warm words that it is not the Government's intention that such problems will occur, and that they are working very hard to ensure that they will not. I promise to look closely at the matter over the weeks and months to come, but with that assurance I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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