Mr. Eric Martlew (Carlisle): Would the Conservatives provide more money for this scheme? [concessionary bus regime]
Stephen Hammond: That is not the point. I am happy to talk about the Opposition's plans, but I and the Liberal Democrats pointed out over several sittings of the Committee considering the Concessionary Bus Travel Bill that neither the amount of money on offer nor the funding formula were likely to be sufficient to meet the Government's commitment to fund the new regime in full. The short answer to the hon. Gentleman is that the debate will show that the Government have not met the commitment that they made.
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Mr. Martlew: The hon. Member for Kettering (Mr. Hollobone) suggested that the Conservatives would take the responsibility for the concessionary fare away from the districts and give it to the county. Is that the policy of the Conservative party?
Stephen Hammond: My hon. Friend the Member for Kettering suggested that it might be simpler to do so in terms of reimbursement. What I said in response, as the hon. Gentleman will know, is that the current structure was always likely to be inherently difficult to administer, and to cause problems when it came to ensuring that the funding followed the journey, as the hon. Member for Cambridge (David Howarth) pointed out. It is clear that there are a number of ways in which local authorities and districts run the schemes, and we have not said that we would change that. We have pointed out that the way in which the Government chose to structure the reimbursement made it highly likely that there would be problems with ensuring that revenue followed the journey, and clearly those problems are occurring.
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Mr. Martlew: The hon. Gentleman is generous in giving way. He said that about 50 per cent. of the councils responded. Does he think that the other 50 per cent. are doing well out of the scheme, and wanted to keep quiet about it?
Norman Baker: For the record, what I said was that more than 50 per cent. of councils responded, and almost half of those said that they were underfunded. It is perfectly possible that within the allocation given by the Government, some authorities are doing very well indeed, and keeping quiet about it. That is perfectly true. I believe that overall the scheme is probably underfunded by about £60 million. It should be around £270,000 million. Some authorities are doing very well from the allocation, but many are doing very badly indeed. It is crucial that the Minister reconfigure the scheme in the light of experience and take account of factors which, with the best will in the world, she may not have been aware of when the scheme was put together. She and her officials have probably done their best, but the reality on the ground is that local councils up and down the country are telling us that the scheme is underfunded for them. They cannot all be wrong. We have heard the list from the hon. Member for Wimbledon (Stephen Hammond).
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11.36 p.m.
Mr. Eric Martlew (Carlisle) (Lab): May I take it from that contribution that the Liberal Democrats' policy is to put more money in? At least we know where we are with them. The hon. Member for Wimbledon (Stephen Hammond) refused to say that the Conservatives would do so, and refused to say that they would change the mechanism by which the money was given to the local authorities. I understand that he is in a difficult position.
Stephen Hammond: May I just correct the hon. Gentleman? The first part of his point was correct. I said that the Government were saying that they were fully funding the scheme, but that that did not appear to be so. I also said, however, that we would look at the funding formula.
Mr. Martlew: I accept that, but when the hon. Gentleman was asked whether he was in favour of dealing with the issue at county level instead of through the 342 different authorities, he had no answer.
Won't 1 April 2008 be a great day, when 11 million pensioners and disabled people will be able to cross borders and enjoy life more - [Interruption.] I voted for devolution, but I am not sure about those on the Opposition Benches. There are bound to be differences. The reality is that the scheme will be very popular in my constituency. I can see my constituents going to the Lake district, or perhaps to the Metro centre in Newcastle. I can see them catching the train to Blackpool, then using the buses in Blackpool. We have heard people going on about tourist areas, but those areas will be getting more custom, as people will be spending money in those constituencies. That should have been pointed out.
Mr. Sanders: There is one important point that seaside resorts have been extremely concerned about. They might get extra custom, but they will also incur additional costs that they cannot recoup from the visitor. That is a problem for every seaside resort.
Mr. Martlew: Is the hon. Gentleman saying that people should stay away from his constituency? It sounds like that to me.
The reality is that the scheme will provide free travel for pensioners and the disabled, but £1 billion is going to the bus companies, and I worry about that. In my constituency, Stagecoach has cynically put up the single fare by 7.5 per cent. Many of us believe that that was done to offset the amount that it will lose through concessionary fares.
Norman Baker: Does the hon. Gentleman not recognise that that factor alone represents an increase for local authorities up and down the country, through the increase in bus fares, that cannot have been factored in by the Government?
Mr. Martlew: I actually think that there should be challenges to the bus companies. They are not supposed to make a profit from the concessionary fares, because under EU rules, that would be seen as state subsidy and would therefore not be allowed.
The main point that I want to make is that we need to move as quickly as possible from funding the scheme on a district basis to funding it on a county basis. We know that that cannot be done overnight, and we know the reason for that, but it has not been mentioned. A lot of district councils receive a lot more money than they spend on concessionary fares, and they spend it on other things. If we take that money away from those councils their MPs will start carping, and if we do it immediately, council tax will increase or services will be reduced. That is because some local authorities could have introduced concessionary fares, but decided to spend the money on other things. That must come to an end.
Carlisle has been mentioned. Carlisle city council has said that it is underfunded - but it would say that. It is controlled by the Tories and Lib Dems, and before the previous election it made a pledge that it would give free cross-border travel throughout the day, but then said, "We're going to cut it now - it's got to be the national scheme, starting at 9.30." That was fortunate, in a way, because the individual who used his vote to clinch that decision - there was only a majority of one - happens to be my Conservative opponent at the next election, and I do not think that the pensioners of Carlisle will forgive him for that.
Then there was a row among the Conservatives. They came back and said, "No, we're going to give it to the disabled now. They can have free travel all day, but the pensioners can't." I had an old lady ring me up and say, "I've got a pass here that they've sent me. I'm a pensioner and I'm disabled, but now I've got a letter saying I have to send the pass back, then they'll send me another one because I'm disabled." That is the sort of council that we have in Carlisle - a council that can't make decisions and breaks pledges. I make a prediction that the Conservatives will lose control of the city council at the local elections. Labour will control Carlisle because of that issue.
Julia Goldsworthy: Is the hon. Gentleman suggesting that it would be an improvement if the Government scheme ran from 9 o'clock in the morning, too?
Mr. Martlew: No, I am not suggesting that at all. I am suggesting that local authorities should keep their promises. I forgot to say that the other person who voted against the scheme was the Liberal Democrats' prospective candidate for Carlisle. We should have known that they would vote against it.
To be serious and to return to the major issue, if we are to have a truly nation-wide scheme that does not have winners and losers, we need to move quickly to a countywide basis. We have heard the arguments from Derbyshire and various other authorities; it could have been Somerset where it was argued that one of the authorities was no longer part of the loop. The scheme is not working, and we really need a system funded by the counties. If that happens - we will have to let councils have time to adjust - the Government will no longer have to put in any money at all, because the money is there, but in some cases has not gone to the right authorities. [Interruption.] That is true, and I have explained why. In the case of Carlisle, the money has gone to the local authority; it has just not been spending it.
Norman Baker: If the hon. Gentleman accepts that some money has been misallocated and gone to the wrong authorities - I agree with him on that - does he think it wrong for the Government to have a three-year funding arrangement? Should they not review it after a year?
Mr. Martlew: My view is that the hon. Gentleman should perhaps have listened more carefully. The system has to be put on a countywide basis. It is no good adjusting the system in three years. We have to move to a totally different system. If we do that, we will have a better system, as well as larger authorities to negotiate with the likes of Stagecoach, First Group or National Express. The idea of my local authority arguing the case against Stagecoach frightens me, because to be honest I do not think that it is up to the job. We need large authorities to do that.
Let us return to the main point. The scheme is a great success. The Labour Government have promised to do this, and they are doing it. People will get the benefit in my constituency, and up and down the land, on 1 April this year. If it had been left up to the Opposition parties they would have talked about it forever, but they would never have found the money.
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Ms Rosie Winterton, Minister of State, Department for Transport: I have only three minutes left, and I want to mention the important points made by my hon. Friend the Member for Carlisle (Mr. Martlew), particularly his point about the boost to the economy given by people coming into an area. The Liberal Democrats, and perhaps other Opposition Members, appeared to be saying "Our town is closed to visitors." I am sure that the shopkeepers and restaurateurs in their areas will not be very pleased to hear that they do not welcome people from outside.
My hon. Friend mentioned the 7 per cent. fare increase imposed by one bus company. This is an issue that some Members overlooked in their speeches. Local authorities must take into account not just one increase but the whole basket of fares in reaching agreement with bus operators on what constitutes a fair reimbursement.
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