Clause 4

Concessionary Bus Travel Bill – in a Public Bill Committee at 4:00 pm on 5th June 2007.

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The national concession: journeys beginning on London bus network

Photo of Paul Rowen Paul Rowen Shadow Minister, Transport

I beg to move amendment No. 21, in clause 4, page 4, line 4, at end insert—

‘(1A) In subsection (1) for “subsection (3) below” substitute “subsections (1A) and (3) below”.

(1B) After subsection (1) insert—

“(1A) The London Authorities shall enter into arrangements with Transport for London under subsection (1) above in respect of journeys falling within section 241(2) below.”.’.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

With this it will be convenient to discuss the following amendments: No. 22, in clause 5, page 4, line 25, leave out subsection (2) and insert—

‘(2) For subsection (1) substitute—

“(1) If immediately before 1st January in any financial year it appears to Transport for London that the arrangements under section 240(1) for travel concessions for the next financial year—

(a) do not meet the requirements of section 242 below as to scope, and

(b) do not meet the requirements of section 243 below as to uniformity,

Transport for London shall notify the Secretary of State, and the arrangements for the current financial year shall be carried forward with such adjustments as the Secretary of State may in writing specify for the purpose of ensuring that travel concessions are preserved for all eligible England residents and that additional travel concessions are preserved for eligible London residents.”.’.

No. 23, in clause 5, page 4, line 30, after ‘(2)’, insert—

‘(a) for “a particular local authority or” substitute “the”;

(b) ’.

No. 24, in clause 5, page 5, line 2, at end insert—

‘(5A) Omit subsection (5).’.

No. 25, in clause 5, page 5, line 4, leave out subsection (7) and insert—

‘(7) Omit Schedule 16 to the 1999 Act (the London free travel scheme).’.

No. 19, in schedule 1, page 13, line 18, at end add—

‘(7) After paragraph 5(7) insert—

“(8) Where a London authority considers the amount notified by Transport for London under paragraph 5(1) to be excessive—

(a) the authority may within 7 days of being notified by Transport for London apply to the Secretary of State to review the proposed charge; and

(b) if the Secretary of State agrees that the proposed charge is excessive, then he shall notify both Transport for London and the authority of an alternative lower amount.”.’.

Clause 5 stand part.

Schedule 1 to be the First schedule to the Bill.

Photo of Paul Rowen Paul Rowen Shadow Minister, Transport

We now come to a specific group of amendments, which deal with London and the London boroughs. Members will have had representations from the London boroughs about the current operation of the concessionary fares scheme. Most Members will be aware that London is unique in that the arrangements for reaching a decision about the funding of the London scheme do not allow the boroughs to use an appeals mechanism if they, Transport for London and the Mayor fail to reach agreement. That is an anomaly, and the amendments would ensure that the funding of the freedom pass for London runs along the same lines as the scheme that exists in the rest of the country.

When the amendments were discussed in the other place, the Mayor of London made all sorts of ridiculous statements to the effect that, in seeking to put London on the same footing as every other authority, we were in some way or other opposed to the freedom pass, but that is not the case. We seek to ensure that the London boroughs and Transport for London can arrive at an orderly and fair agreement as to the costs of the scheme. If no annual agreement is reached, we want to ensure that there is a mechanism similar to that in the rest of the country and to extend it to involve the Secretary of State, so that there can be some form of appeals mechanism. Notwithstanding that, amendment No. 22 would ensure that the current scheme, as agreed and funded, continues while the review takes place. That is only right and fair.

The London boroughs have no say over how the scheme operates, while the Mayor has total freedom to impose any changes that he wishes. We fundamentally believe in devolving decision making as far down as possible, and giving one person the right unilaterally to impose a policy on 20-odd democratically elected London boroughs is, in our view, not satisfactory. As with the other parts of the Bill, we are talking about regularisation and a national scheme, and I hope that the Minister will see that the funding situation in London is an anomaly. We want the appeal mechanism for the London boroughs to be on the same basis as those for other authorities and passenger transport authorities. I am sure that the Minister will agree that that will be a right and proper way to proceed.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I rise to support what the hon. Gentleman has said about the inequities in the scheme in London. I want, too, to mention amendment No. 19, which gives the Committee the opportunity to revise an iniquitous section of the Greater London Authority Act 1999, namely, the reserve free travel scheme, which is imposed on London boroughs when Transport for London or the Mayor cannot agree the annual increase. Effectively, TFL has the upper hand in negotiations and extremists can hold London boroughs to ransom. Although the scheme has never  been invoked, its existence weighs too heavily in favour of TFL in negotiation and is heavily resented by the London boroughs. Indeed, all hon. Members will have received a briefing to that effect from London councils.

Since TFL was formed seven years ago, the cost of providing the pass has risen by some 52 per cent., resulting in cuts to services elsewhere and higher London council tax. TFL is now attempting to use that power to hold London council tax payers to ransom over its takeover of the north London line. TFL wants almost to double the cost of providing the pass on that line. The Association of Train Operating Companies is paid £600,000 by London boroughs, and TFL wants £1 million for the same service. Again, I venture to suggest that that will be iniquitous and will result in cuts in services and higher council tax.

The Mayor of London will claim that anyone who wishes to affect the reserve free travel scheme has some evil plan to abolish the freedom pass. Any sensible person knows that that is complete nonsense. Indeed, on Second Reading I raised the issue and the Mayor suggested in a press release that I wanted to see the pass go. That was clearly not so, and we made that point clearly. However, sometimes truth and reality do not seem to strike the Mayor. We want value for money and a better deal for Londoners, which are something that the free-spending, profligate Mayor all too often fails to understand.

Elsewhere in the Bill the Minister has introduced proposals, which we support, to ensure that disputes between operators and travel concession authorities are equitably decided. Indeed, the operators have been granted an extra 28 days to appeal if in dispute. In London, TFL—the operator—can impose the cost on those who pay, namely, the boroughs. On Second Reading, the Secretary of State said that he had no clear plans to change the reserve free travel scheme. However, in the spirit of fair-mindedness, the Minister must recognise that the arrangement is iniquitous and unacceptable.

Amendment No. 19 would give London authorities the right of appeal against the imposition of an increased fare amount that they consider excessive. As the Minister grants and extends that right elsewherein the Bill, it would be pernicious and unfair not to extend the same rights to London authorities. Amendment No. 19 would give a period of only seven days for a London authority to register its appeal, while elsewhere others get the advantage of 56 days. The Secretary of State or his delegated authority, rather than TFL, should then decide the cost of the scheme if no agreement is reached in the negotiation period. Although it would impose some extra duties on the Secretary of State, it would bring London into line with the rest of the country. That can only be fair, justifiable and equitable.

The Joint Committee on Human Rights has already expressed some concerns about the robustness of the appeal process outside London, whereby an operator can appeal to the Secretary of State if it believes that the amount that it is awarded for carrying concessionary pass holders is inadequate. I guess that that is partly recognised in the increase in the appeal period to 56 days.

As there is no mechanism in London whereby the boroughs can appeal if they consider the amount that  TFL determines, as an operator, excessive, this matter must be considered of even more concern than the issue that the Joint Committee was raising in the first place. Therefore, I urge the Minister to confirm to the Committee that the Government will reconsider the matter and offer support to the amendment that stands in my name and that of my hon. Friends. If she is unable to give us reassurance, I should like, with your discretion, Mr. Bayley, to find some way of testing the Committee’s view on the matter.

Photo of Gillian Merron Gillian Merron Parliamentary Under-Secretary, Department for Transport

These amendments bring us to the thorny issue of the London reserve free travel scheme. Lord Davies of Oldham, representing the Government in the other place, discussed it in considerable detail during debates on the Bill. I hope that hon. Members will forgive me for echoing much of what has already been put on the record, because the Government’s position has not changed.

The purpose of the reserve free travel scheme is to guarantee concessionary travel in London in situations where there is no agreement either among the London boroughs, or between the boroughs and Transport for London about how best to provide and to fund the national minimum.

Amendment No. 21 seeks to alter section 240 of the Greater London Authority Act 1999 to replace a discretion for London boroughs and TFL to agree arrangements to provide travel concessions with an obligation to agree arrangements that include the national concession. That would be a significant change. Arrangements for concessionary travel are different in the capital. The 1999 Act secures that the boroughs are able voluntarily to agree schemes with TFL. The voluntary arrangements are underpinned by a safety net: the reserve scheme. If the voluntary arrangements do not meet certain minimum requirements, the reserve scheme is triggered. That system has successfully delivered uninterrupted concessionary travel in the capital over the past eight years.

The effect of the amendment would be somewhat contradictory. The ability to enter into arrangements implies that all parties do so voluntarily and by agreement. The amendment would force the parties to agree. How do we force parties to agree? Officials have designated that as a shotgun wedding of an agreement. What would happen if the parties did not agree or if an agreement or contract is breached and that leads to termination of the agreement? Simply stating baldly that something will happen is, I fear, not the same as putting in place a framework to ensure that it does happen.

There is clearly an intentional link with amendment No. 22. That introduces the idea of replacing the reserve scheme as the fallback arrangement for London with a rolling over of the current arrangements. Hon. Members will not be surprised to learn that I am also concerned with that idea. As there is no guarantee that these arrangements would be in place, and given that we could not roll over arrangements that did not exist, we would effectively have no guarantee of concessions in London. I suspect that that is where the true purpose of amendment No. 21 lies. The logic of all this is complicated. If we force the parties to agree, there are arrangements in place, but if those arrangements are not up to scratch, we trigger the safety net. What is the  safety net? It is rolling over those arrangements, but they may not be up to scratch.

Amendment No. 22 proposes that the Secretary of State would be able to specify the terms of the arrangement, but we need to pause for a moment. Has the Secretary of State not already specified the terms of the safety net? Is that not laid out clearly in legislation? In my view it is. It is called the reserve free travel scheme—the very scheme that the amendments seek to remove and replace.

Amendments Nos. 23, 24 and 25 are consequent upon the principles embodied in amendments Nos. 21 and 22, thus I do not propose to refer to them in detail. Amendment No. 19 brings a new element to the equation: the specific issues of cost. The amendment provides for the addition of new paragraph 5(8) to schedule 1 to the 1999 Act in relation to the London reserve free travel scheme.

Paragraph 5 of schedule 1 to the 1999 Act allows TFL to stipulate the charge per pass payable by London authorities to cover the costs to it of providing the concessions under the reserve free travel scheme. The amendment would allow London authorities to appeal to the Secretary of State when they consider the charge to be excessive, and for the Secretary of State to determine a lower amount if appropriate. However, paragraphs 5(3) and 5(4) of schedule 1 to the 1999 Act already specify the costs that may be included in calculating the costs of the reserve free travel scheme and any further matters that must be taken into account.

TFL will already be aware that if it is not reasonable in its assessment of costs and charges, London authorities will judicially review the determination and may even refuse to pay while a review is under way. I understand that there are genuine concerns among the London boroughs about the reserve free travel scheme and its perceived inequity. However, as we have heard—I hope in the points that I have made—it is a complex area in which, I fear, no one solution will please all people.

The Secretary of State said on Second Reading that until the London boroughs and TFL can agree a way forward with any potential change to the reserve scheme, we are not convinced of the case, which the amendments partially make, for removing the guarantee of a minimum standard of concessionary travel throughout the capital.

There has been a reference to the comments of the Mayor of London, who, of course, is able to look after himself. However, looking at the press release, the concern is the exact point that I have made. The amendments call for the abolition of the Mayor’s guarantee of the freedom pass. London Councils transport and environment committee agreed on 14 September 2006 in a briefing that it should lobby for the abolition of the London reserve scheme. In doing so, it is not surprising that for the 1 million older and disabled people in London who benefit, there are immense concerns.

Organisations such as the London Older People’s Strategies Group, Independent Living Alternatives and Counsel and Care have all expressed their members’ concerns that they should continue to receive the worthy, worthwhile and appreciated benefits of the freedom pass.

I am sure that hon. Members will agree that a Bill proposing a national concession for England that did not guarantee for all concessionaires resident in England the statutory minimum level of concessionary travel in London would be a very strange Bill indeed. The reserve free travel scheme best guarantees the continuation of concessionary travel in London for all people who currently benefit. With that in mind, I hope that the hon. Member for Rochdale will withdraw his amendment. I also commend to the Committee clause 5 and schedule 1.

Photo of Paul Rowen Paul Rowen Shadow Minister, Transport 4:15 pm, 5th June 2007

I heard what the Minister said, and I reiterate that we do not wish to remove the freedom pass—we want the situation in London to be the same as that in the rest of the country. I shall withdraw the amendment in favour of amendment No. 19, which would provide a safety net that meets the legitimate concerns of the London boroughs. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 4 and 5 ordered to stand part of the Bill.