My Lords, I am grateful to have the opportunity to talk about this subject today. I promise that I shall say something different in the next debate, which has been fixed for the first day when we come back after the holiday. It is a mistake—I do not know whose mistake it is—but I shall make sure I do not repeat myself, and I am sure the Minister will not either.
I was persuaded to put down this subject for debate because of the launch by the Secretary of State on 9 March of a big investment plan in
“transformational transport schemes over the next 2 financial years across the country”.
I thought that was rather good, but when I looked into it, I had the feeling that there is lots of talk and lots of big figures—which we hear not just in transport but from many other people—but I want to question whether those schemes actually happen on the ground, where people want them to happen.
On the £40 billion over two years, it was confirmed in a Written Answer I received, HL6611, that it was the same budget over two years, and that included an extra £200 million for potholes—I am sure that is welcome. As for the rest of it, is the transformation growth or a cut? On the railways, the Midland main line electrification to Sheffield has been cancelled or postponed. For major roads, the statement says that they have cut £8 billion. We can have opinions on all this, but is it “transformational”? I am told that active travel has been cut by £3 billion, and lots of bypasses are referred to in the press release as being cut.
On buses, which are really important and on which I want to concentrate to a large extent today, the Confederation of Passenger Transport says that grants will now be 20% lower in real terms than they were 10 years ago. It may be that HS2 is mopping up all the budget, but leaving that aside, do all these cuts deliver for the customers?
I want to explore what the customers want, who they are and how they will benefit—this is transport customers all the way through. People need to travel—short, medium and long distances, and several times a day sometimes—to school, college, work or shopping, and sometimes once a year for a holiday. They also need to travel for important things such as doctors and hospitals, to visit friends or for caring et cetera. They are very similar to the needs that the NHS provides for. Many of those transport journeys are pretty essential.
We can walk, cycle or use scooters—I will leave that aside—but public transport is what everybody else will use for distances greater than the smallest ones if they do not own a car or cannot afford to run it. It needs to be safe, affordable and reliable.
It is always my impression when travelling around Europe that the charges and reliability of public transport are very much better than in this country. Some of it is very cheap. It seems to be the best way of getting around safely—and towards net-zero carbon—but we do not seem to care so much about those with no access to a car.
My Lords, I thank the noble Lord, Lord Berkeley, for securing this debate. It is a vital area for us. Those of us who live in the south-east of England are aware of the huge strains that are being put on ordinary people’s lives day by day, and on our businesses, through the problems with our transport system, not least with public transport.
I am also aware that this matter touches so many other areas of concern at the moment, such as our desire to work for a net-zero carbon future and the question of how we can get people off the roads as much as possible and on to good, fast, efficient public transport. I am aware that this means having a long-term policy on active transport; we need to work out how to get a sea change in what we expect and what we can offer. I was therefore pleased to hear the announcement by His Majesty’s Government of the provision of additional funding for transport in the recently published Statement. However, as has already been pointed out, it raises an awful lot of questions, not just about what was in it but what was not in it.
I declare my interest as president of the Rural Coalition. I want to focus my comments mainly on the rural dimension of public transport policy. Nearly 10 million of this country’s 67 million people live in rural areas—one in six of us. Sadly, there was little in the Government’s announcement to bring cheer to rural inhabitants. I and others who care about rurality and the long-term sustainability of the countryside entirely accept that we cannot expect anything like the levels of public transport and roads that our urban colleagues take for granted.
However, it is deeply disappointing that the recent Statement made no specific mention of buses and bus routes, as the noble Lord, Lord Berkeley, pointed out. In my diocese of St Albans—which is, compared with many shire counties, not that rural; by and large, we have large villages and are pretty much a commuter county—buses provide a vital lifeline to rural communities, especially for those on low incomes, pensioners and those with disabilities who cannot drive themselves or afford disabled-friendly vehicles. Therefore, such people are almost entirely reliant on rural bus routes to carry out their daily activities. According to Age UK, one in three older households in rural areas have no access to a vehicle, leaving them entirely reliant on bus routes or expensive taxis—if they can get a taxi. We moan in our urban areas that it is sometimes difficult to get a taxi; it is much worse in rural areas where, sometimes, there simply is no taxi available.
My Lords, I thank the noble Lord, Lord Berkeley, for again giving us the opportunity to debate important transport issues, and I am grateful for the topic today. By virtue of the Statement of 9 March being a Written Statement, it was slipped out in a way that suggested that it was not an important one, but of course it was.
HS2, which is Britain’s big on-again, off-again project of the 21st century, is once more in serious doubt as a proper project. The delays hollow it out. It seems that it will be truncated at both ends. Let us start with Euston. Will the Minister clarify exactly what the plans are here? There was discussion that suggested that there would be long delays to the completion of Euston. There was a suggestion that it might terminate at Old Oak Common, which was probably not a bad idea to begin with but, since Euston is now a building site, it is really beyond the point where it is sensible to think that it is not going to be the terminus. But having cast doubt on whether HS2 would eventually go to Euston, the Prime Minister earlier this week suggested that it would. But the latest evidence, as the NAO points out, is that it will not be ready until 2041, or even 2043. That is a long time to live in a building site.
The NAO also points out that costs have ballooned, and refers to £1.5 billion spent on land purchases and preparation work—but £100 million was written off because the original Euston designs were scrapped. The NAO is scathing about the dither and delay that has led to a doubling of costs. We would welcome clarification.
There is also the fact that it is clear now that HS2 is unlikely to go beyond Birmingham, which basically turns Birmingham into a part of the commuter belt for London—hardly the economic reset for the north of England that was intended. With the state of rail services in the north of England currently beyond dire, it is unacceptable that there is no hope in sight of a decent long-distance railway service—which, as we all need to emphasise, would in turn take pressure off existing lines and enable them to work more effectively.
My Lords, I too thank my noble friend Lord Berkeley for securing this debate. Bus networks across England are fundamentally broken, and railway operators are breaking records for delays and cancellations. The Statement on 9 March does not solve this. In fact, there was no mention of buses at all. The bus network is used by twice as many people as use trains, yet a lack of reliability across England is holding back the economy and causing misery for millions.
I therefore begin by asking the Minister: does she agree that this is a result of Britain being the only country in the developed world where private bus operators set routes and fares with no say from the public? Fares have consistently risen twice as fast as wages since this Government came to power. While we can all recognise the value of the £2 bus fare cap in England, its time-limited nature, and the fact that many providers have chosen not to take part in the scheme, means that it falls far short of expectations.
Only a new system that gives local communities a say over routes and fares can make the network fit for the future. Mayors across England have been using their devolved powers and funding to bring down the cost of living and put more money in people’s pockets. With greater authority, they could achieve so much more. Will the Minister therefore bring forward new legislation to devolve further powers across England, put the public back in control of the public transport they depend on and end the ideological ban on municipal bus companies?
I was chairman of London Buses for two years, during which time I came to realise what buses mean. More than any other form of transport, they are engines of social change. They carry the old, the young, the poor and the weak. We should be debating not profit but the value they bring to communities, in particular their weakest parts.
On the future of the railways, the Government have again rewarded failure by handing Avanti West Coast an extension. It is the worst-performing operator on the rail network, but its problems are not isolated—TransPennine Express has caused misery across the rail network, with dozens of cancellations every day. After more than a decade of this Government, railways in the north and the Midlands are broken.
My Lords, I am very grateful to all noble Lords who have contributed. As ever, I will reflect carefully on those contributions. I am grateful to the noble Lord, Lord Berkeley, for once again giving noble Lords the opportunity to discuss buses. It is a subject close to my heart, and I think we all agree that we want the same thing; we are dealing with how, on the pitch that we are on, we can achieve the sorts of services that we would like to see.
Let me start by commenting on the announcement on 9 March. Essentially, the £40 billion set out in that Statement was the capital investment for transport over the next two financial years. Sometimes it is easy in transport because the figures get very big very quickly, but it is a significant amount of money that we are going to invest in our transport systems—that is across all modes—and it does not include the further funding that is committed for revenue support in terms of the services as well.
I shall try to focus my reflections today on rail, both high-speed and traditional, and local transport. I accept that there were some comments on active travel and roads, the responses to which I may put in a letter after the debate—certainly, the figure given for the reduction in active travel funding I just do not recognise.
When we restated the amount of funding that will be forthcoming in the next two financial years, we did so in the face of two quite significant challenges. The first is the overall decline in the number of passengers on the railways and on buses, as well as a change in the nature of travel, because fewer people are going to work —indeed, we have seen a welcome rise in the amount of leisure travel taking place. The second is financial. There has been significant inflation within the construction sector. That is not a homogeneous situation; some things are inflating at a higher rate than others, and it is time to reflect on the impact of that inflation and to consider how we can de-risk the investments that we want to make.
The six-monthly updates will continue to be laid before Parliament as they have been previously. We will of course endeavour to put in every single update as much information as we have at that time. We will not have all the information immediately, because various things will be worked through at a different time.
We confirmed that the first stage of HS2 will be delivered as planned between Old Oak Common and Birmingham Curzon Street by 2033. Sometimes, I am mildly disappointed by the noble Baroness, Lady Randerson, making comments such as “serious doubt about the project” and “unlikely to go beyond Birmingham”. I am not sure where such observations have come from, because we have been quite clear in our plans.
On the rail system more generally, as the Secretary of State said during his Bradshaw address,
“operating the railways is currently financially unsustainable and it isn’t fair to continue asking taxpayers to foot the bill”.
We have to be very careful about the costs, thinking particularly about the depressed revenue that we are seeing at the moment.
I will of course look very carefully at the National Audit Office report. I do not know that it is saying that it believes that the line is unlikely to go beyond Birmingham; again, I would not know where its evidence would come from for a statement such as that.
We have an opportunity to improve the rail and local transport networks and to adapt to the needs of passengers today. There is a rare chance of some sort of redesign so that the system is fit for the future, because, as I said at the outset, I think all noble Lords want the same thing.
I will now turn to comments about HS2. The Transport Secretary has been very clear that Old Oak Common will act as a temporary London terminus while Euston is completed, but I do not think that any noble Lord should be under the impression that this will somehow be substandard. It will be probably the best-connected and largest new railway station ever built in the UK; it will have 14 platforms—six high speed and eight conventional—and it will be a transport superhub, providing connections to Heathrow via the Elizabeth line and, of course, high-speed rail services through to various parts of the country.
It was already planned that Euston would open later than Old Oak Common. However, we have decided not to proceed to full construction of Euston station in the next two years, which is the period that the Statement looked at, due to affordability and profiling issues. There is an opportunity to look again at the Euston station design to ensure that it is affordable and delivers for both the local community and passengers.
Following this debate, I will set out in a letter as much as I can about the phasing for the different elements of High Speed 2, including going to Crewe and beyond. It is important to put that on record.
I am grateful to the noble Baroness for her offer to write a letter. Will she also comment on the lack of a firm design for not the station itself but the approaches to Euston? My information is that there is no option that is actually safe to build, and that is quite critical.
I will certainly include that in the letter. I do not have anything with me today.
I turn now to buses, which, as many noble Lords have pointed out, are the absolute backbone of our public transport system. The national bus strategy, which we published back in March 2021, is a long-term strategy. It is important to understand the role of the BSIPs—bus service improvement plans. We asked all local transport authorities to prepare one, which they did, and we used them to look at how to prioritise funding. To a certain extent, there was no bidding process: we did not ask for bids but to review all the bus service improvement plans.
Noble Lords may ask themselves, “Where did these bus service improvement plans come from? Who inputted into them?” We were clear in the national bus strategy that they must have the input of local people; there had to be a passenger board, or whatever they wanted to call it. Listening to the input of local people and businesses allows the bus service improvement plan to have local accountability. I have heard two different things today: that we need to give more powers to local authorities but also that national government should take control of the bus network, as some noble Lords have suggested. Local accountability is really important.
Funding is absolutely key. The Government are spending an additional £3 billion. This is the largest investment in buses in a generation, and it is on top of funding that still goes out to local transport authorities or bus operators to support fares, such as the bus service operating grant of £250 million a year, and the concessions payment of about £1 billion a year. Local transport authorities also get funding in the block grant for tendered services. Unfortunately, some local authorities, particularly rural ones, decide not to use that money on tendered services. That is a disappointment, and local people should be holding those councils to account for those things.
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I welcome the Government’s new bus plan, as far as it goes, but to some extent it is another short-term fix. It does not enable people to plan where they might go to school, shop, work or live, and it does not cover all of England. When people want to use buses, they need certainty. The Transport Committee report published this morning commented of the bus service improvement plans:
“Local areas were asked to be ambitious, but the Department has not matched this level of ambition in the funding it has made available, pitting local areas against each other for a share of an inadequate pot.”
It also says that half the country has missed out. I hope that is not the case; perhaps the Minister has an answer to that.
One really bad example of the failure of buses is the community transport Dial-a-Lift funding in Northern Ireland. I know that the Minister is not responsible for transport there, but she could advise her colleague who is. They have cut the funding for Dial-a-Lift completely from the end of April and all the staff have probably been given the sack. This is because of the trouble with the Windsor Framework; I will not go into that, as we heard plenty about it yesterday, but it is a serious problem.
I will give an example. A young single mother in south-east Fermanagh has a 52-mile journey to hospital with her acutely ill six year-old son. She has no money or car; there is no public transport and the taxi service is a £60 to £65 fare. What happens to the child if she does not get there? A female wheelchair user had the same problem; a return fare in a taxi would cost £100. Previously, community transport provided all this. I have a bit of experience of this in Cornwall. The community transport people are really good; they are an essential part of the lives of people who do not have a car and cannot afford one. They reminded me that the Northern Ireland scheme was set up 25 years ago, which is a significant date in the Northern Ireland calendar. I hope the Minister can follow that up with her colleague and make sure that it does not happen here.
Our real challenge is in spending money on the railways, which I will not say much about. The National Audit Office has suggested that there needs to be a reset button on Euston; I suggest it should be a “Delete” button and send everyone to Old Oak Common, which everyone knows is a much better place. The key for railways is that there needs to be a much greater improvement in the services that people want to use every day to get to work, school, shopping or whatever. I have always had an ambition that this country would have a network of local services in the Midlands and the north as good as what we have in the south-east of England. But we do not have that yet, or any budget for it. It is very sad that HS2 seems to be swallowing all the money.
In conclusion, we need a long-term bus strategy. Who will provide it? That will depend on the next election. The Labour Party has produced some really excellent ideas about who should own it. The key is that it should be reliable, affordable and properly funded, delivered locally but with one consistent policy, and not dependent on how well the local authority has submitted its application—they are strapped for cash and time. It needs to provide a service for those who need it and do not have a car or do not want to use one—it is good for the environment, anyway. We need a long-term plan for the railways in the Midlands and the north, as many of us have said for a very long time.
I wonder whether some of the problem with transport is that politicians—we are all politicians—whether local or national, need to understand the needs of their electorate for local, cost-effective public transport and to put their regular daily journeys into a better state, rather than going once a week or once a month to places such as London.
These bus routes continue to be relied on by our rural communities, with statistics showing that over a quarter of bus passenger journeys in England outside London are made in rural areas. It is therefore very concerning to see the steady reduction in rural bus services. Since 2017, there has been a 56.5% reduction in bus mileage in Hertfordshire, and many of our “lifeline” routes such as the 84 service between Potters Bar and New Barnet have been phased out and only partially replaced.
Funding for rural transport has long been an issue. Most rural bus routes are not commercially viable if it is simply left to the market. They tend to be used by fewer people and to involve much longer journeys. They are not sustainable without local government support. Further, as noted by the Government’s Statement, the pandemic has, certainly in the short and medium term, reduced the number of passengers hugely. The problem with cutting bus services is that the chance of rebuilding them as we try to emerge into whatever new society we are to have will be difficult; it is more or less being forced on people.
I am grateful that His Majesty’s Government have been funding the £2 cap on bus fares in England; I note that this was extended for a further three months recently, and for that we are grateful. However, as transport economists have been quick to point out, if and when the subsidies come to an end or are removed, it is likely that hundreds of rural bus services will be cut.
One of the major concerns for rural areas is the Government’s Bus Back Better strategy, which requires that local authorities develop a local bus service improvement plan and apply for funding. Of the 79 local authorities that submitted those improvement plans in 2021-22, only 31 are set to receive central government funding to deliver their plans. The Campaign for Better Transport has highlighted that this strategy leaves out rural authorities, which have often much smaller transport teams and advisers and simply lack the resources and expertise to successfully apply for and win government funding. That is an extraordinary irony, whereby the communities most in need of government support do not have the capacity or the skills to apply for it, with some notable exceptions.
Good public transport networks are vital to all communities. As we are trying to work out a long-term strategy for sustainable rural communities, we need those networks to allow people to connect to their workplaces, families, local shops, doctors’ surgeries and so on. A report by KPMG estimated that for every £1 invested into local communities for bus networks, you could expect to see an economic return of £4.48. Therefore, I conclude by asking the Minister: what steps will His Majesty’s Government take to ensure that rural authorities are not left out of the local bus improvement plan funding in future?
Of course, there is also the Department for Transport document that is doing the rounds which makes it clear that the delays to HS2 as a whole will increase costs and cause job losses. It also casts doubt on whether HS2 will even call at Stafford, Macclesfield and Stoke. The Government have now had time to reflect on that document, on which they refused to comment because it was leaked—but no one suggested that it was a forgery. It is damaging investor confidence, so I invite the Minister to clarify the Government’s intentions, for the economic good of the north of England.
Another issue that I have raised before in this respect is the Barnett consequential for HS2 funding. Scotland and Northern Ireland were awarded Barnett consequential money but not Wales, the reason apparently being that Wales was going to benefit because HS2 was going to Crewe and would improve services in north Wales. But HS2 is not going to Crewe—or it is unlikely to go there while we are still active politicians. Therefore, it is really time to look at this again in all fairness. Even if the Government will not give Barnett consequential money to the Welsh Government, they need to invest a very large amount of money in Welsh infrastructure directly. We are talking about £5 billion-plus that Wales is missing out on.
The vast majority of passengers travel by bus, which was not mentioned on 9 March. Noble Lords who have spoken so far have made some excellent points. Bus passenger numbers outside London have been in freefall for many years, with a 15% reduction between 2009 and 2019 in the number of bus routes—and that was intensified in the pandemic. The market has failed; there is little competition for new routes and fares have increased beyond inflation. Buses are so important because they are relied on by the poorer, the younger, the older, the disabled, and by women rather than men. They unlock education for young people and jobs for the unemployed. In other words, they are fundamental to levelling up—as well, of course, to decarbonisation and improved air quality.
Bus Back Better is a good strategy but, unfortunately, there is no strategic funding to go with it. I add to the points made already about the importance of a review of the way in which bus funding is allocated. These separate pots of money, subject to the bidding process, are chaotic and are no way of improving bus services. They discourage bids from those local authorities where bus services are already skeletal or non-existent. There needs to be a much more comprehensive approach and support for those areas that are no longer in a position to improve bus services because they do not have any.
The Department for Transport does not have a good record of picking winners. Bus operators have no certainty for the future, and neither do local authorities. This morning, during Oral Questions, the Minister accepted that the June cut-off date for current funding was a problem. This needs to be addressed, and very soon. I am sure that the Minister will point to lower passenger numbers, but we have to accept that we have gone beyond being able to point to Covid as the ongoing cause of this problem. There is lots of evidence that passengers have not returned because of reduced services and poor reliability. A more strategic approach is needed in order to overcome that.
Before I finish, I do not know if the Minister will have had time to look at the Secondary Legislation Scrutiny Committee’s 35th report but, as a member of that committee, I would like her to take note of its recommendation that the Government need to look beyond a review of concessionary bus fares and beyond Covid at other aspects of why people are not using the buses.
I again thank the noble Lord for doing something that we all should have done, which is to put a focus on the importance of passengers. We talk too often in this House about the infrastructure, without emphasising passengers at the heart.
Despite fares rising, performance remains unacceptable and promised investment is not being delivered. The scaling back of Northern Powerhouse Rail, coupled with the scrapping of the eastern leg of HS2, is a betrayal of the promise made to the north. This scheme alone could have sparked a rail revolution and created tens of thousands of jobs. Given that the Government based their decision not to go ahead with Northern Powerhouse Rail on seat capacity and time savings, will they now commission that independent assessment so that the north can finally get the rail network it deserves?
Among the minor updates and tinkering in last month’s Statement, the most significant announcement was the confirmation that HS2 is delayed and set to cost the taxpayer even more. This latest announcement appears to confirm that HS2 trains will stop at Old Oak Common for up to 10 years. Is the Minister aware that the Government’s own review and assessment found that this would evaporate time savings, detonate the business case, overwhelm the Elizabeth Line and cost £30 billion in growth?
The railway has now been in chaos, to a greater or lesser extent, for at least a decade. We need to grip its challenges. The Government have a plan with Great British Railways. It seems to me that it is the only plan in town, so why cannot we get ahead with it, to a position where we can hold a single body to account for the railways and their improvement?
A £1 billion cut to the active travel budget was confirmed as part of the announcement, as well as the mothballing of major roadbuilding schemes. What assessment have the Government made of the impact of this on rail and buses? Does the Minister expect that it will increase demand?
The piecemeal announcements on 9 March fall far short of people’s ambition for buses and rail. We need the Government to put passengers back at the heart of our railways and bus networks and build the infrastructure fit for the century ahead, unlocking jobs and growth. I hope the Minister will reflect on the comments made during this debate and that the Government will reassess their investment plans.
The Transport Secretary’s statement set out which sections of HS2 the Government are prioritising to deliver as planned and which sections need to be rephased to take into account that inflationary pressure on the cost base. Cost estimates for each phase of the programme will be published. His announcement clearly requires officials to work through the consequences with HS2 and the supply chain to firm up the information that we have.
Therefore, with the bus service improvement plans and subsequently the enhanced partnerships, which are a partnership between the transport authority and the bus operator taking into account what has been said by the passengers, that is how bus networks are planned locally. So it is not quite right to say that it is left to the market, because local transport authorities have quite a significant amount of leverage over the bus operators in agreeing what the enhanced partnerships should say, and 75% of enhanced partnerships have now been “made”—that is, they are in existence. Of course, if the enhanced partnership is not working or it is not what the local authority wants to do, it is at liberty to start franchising, and we know that places such as Greater Manchester have already done that. So there are many ways in which local transport authorities can exert power over the bus network to provide what their local people want.
I accept, as I did earlier today in the Oral Question, that the funding is short term at the moment, until 30 June, and that there is an enormous amount of analysis to be done: the impact of the £2 bus fare cap will be important—but also some of the BSIP funding, the revenue side of it in particular, is being used to support fares in places such as Manchester, Liverpool, West Yorkshire and Lancashire, so that will be important. The capital spending from BSIP will take slightly longer to come in, because that is all about bus priority, bus lanes and all those sorts of things, so we need to give that a little more time. However, the market is still in transition, so we are analysing where we are and looking at what any long-term future support might look like.
I know that the right reverend Prelate is a great champion of rural areas, and he was concerned that rural authorities would not have the resources to be able to do the BSIPs that we ask them to do. In fact, we gave them the money to provide the resources for that. We gave them £23 million to work up their BSIPs and enhanced partnerships and, subsequently, we gave all the local authorities that were not successful in getting funding—about half of them—£11 million to make sure that they could roll out the bus service improvement plans that they had. There are many things that they could do to improve services which do not necessarily require funding.
The right reverend Prelate will have heard me speak before about demand-responsive transport in rural areas—the bus fare cap is very good for rural areas, particularly on longer routes—and the BSOG really supports fares in rural areas as well. In addition, community transport is important in rural areas, which is also taken into account in any BSIP.
I am very conscious that I have 45 seconds in which to do rail. I recognise the expertise of the noble Lord, Lord Tunnicliffe, in this area and his great interest in rail, and from a DfT perspective we recognise that performance needs to improve across the system. We have had numerous conversations about Avanti and TPE, and we know the impact of removal of rest-day working there. However, at the heart of it are the passengers, and GBR, the transition team for Great British Railways, is looking at that 30-year vision for our railways. We continue to invest billions of pounds in our railways for the sorts of local railways that the noble Lord, Lord Berkeley, wants to see. Now we have to look through the RNEP, make the correct decisions based on current passenger numbers, which again are not the same all over the country—some areas are seeing higher passenger return then others. Therefore the RNEP is being reviewed by Ministers at the moment and that will be published; the investment will continue, and that is part of the £40 million.
I note that I have gone over my 12 minutes. I know that there are many things that I have not been able to cover but I will certainly write a letter. Once again, I am always grateful to talk about railways and local transport—both subjects that are very close to my heart.