Public Transport: Fares (Hansard, 29 April 2003)

§ Lord McIntosh of Haringey
My Lords, improvements to transport depend on sustained investment year on year. That investment will come from both public funding and fares from passengers.

§ Lord Dixon-Smith
My Lords, in spite of and, in part, as a result of these adverse price movements, it is a fact that the increase in use of public transport has had only a marginal impact on total transport demand as the economy continues to grow. The nation will therefore have to rely on and continue to expand road transport. What plans do the Government have further to expand and accelerate the use of alternative and less polluting fuels and technologies in order to reduce pollution?

§ Lord McIntosh of Haringey
My Lords, if the noble Lord, Lord Dixon-Smith, cares to look at the recent Budget, he will see that very substantial concessions have been made to less polluting fuels. Furthermore, a cut in the duty on bio-ethanol has just been announced. Additionally, changes have been made in regard to ultra-low sulphur fuels. The Chancellor recognises the value of low-polluting fuels and has acknowledged that in his Budget.

§ Lord Bradshaw
My Lords, it is an established fact that, as fares rise, one sees an almost linear fall in the use of public transport over the succeeding years. Technically, a fall in use of around 0.8 per cent is observed for each 1 per cent rise in fares. What specific plans have the Government made to ensure that fuel for bus operators is less expensive, and are they planning to do anything to help the industry to help itself, albeit that the investment comes from the private sector?

§ Lord McIntosh of Haringey
My Lords, that sounds like a statistical fallacy to me. I do not deny the 573 statistical relationship cited by the noble Lord, Lord Bradshaw, but the market and activity we are concerned with here is movement. Movement can be by private car or public transport or, indeed, by bicycle and walking. As the Question rightly implies, it is the balance between use of the private car and public transport which is determined by the costs of motoring and the costs of public transport. Therefore the relationship between fares and public transport use is merely a sub-set of that wider correlation.

§ Lord Faulkner of Worcester
My Lords, is not one of the main problems encountered by public transport operators in attracting business the perceived level of their fares against the apparent cost of petrol to cover an individual journey? Is not one of the ways of redressing that balance of perception, therefore, to encourage the expansion of congestion charging and motorway tolling?

§ Lord McIntosh of Haringey
My Lords, I am not sure about perceived costs. While it is certainly true that public transport fares, in particular bus fares, have increased in real terms over recent years, that has taken place because we are committed to very heavy increases in transport expenditure as a whole. The 10-year plan discusses expenditure of £ 180 billion, of which public transport is to take up £120 billion. Thus, as I implied in my first Answer to the noble Lord, Lord Dixon-Smith, passengers have to play some part in that. However, of course there are exaggerations in the public mind about the extent of fare increases. That is particularly the case in regard to the January increases. The newspapers always choose the particular routes and journeys on which the fare increases in percentage terms are largest.

§ Lord Selsdon
My Lords, is it true or false that the United Kingdom has the highest costs of transport for the individual by bus, by rail and by car per mile and per minute of both the European Union and the United States?

§ Lord McIntosh of Haringey
My Lords, I think there could be some dispute over what is meant by "costs". The costs cover both fares and the cost to the taxpayer. I would be very surprised if we bear the largest cost, but it is true that we do have higher fares than is the case in many European countries.

Lord Berkeley
My Lords, is my noble friend aware of recent reports stating that the Strategic Rail Authority is considering raising commuter passenger fares by 20 per cent? If so, will that encourage people to use the railways?

§ Lord McIntosh of Haringey
My Lords, I do not comment on speculation of that kind. The fact is that public intervention in fares consists of regulated fares. Around 44 per cent of all fares are regulated, and by law regulated fares are available on all routes. Such fares are extremely helpful where there is captive 574 demand, such as for commuter journeys. Regulated fares apply in particular to weekly season tickets. So we do take action on the issue referred to by my noble friend Lord Berkeley.