Clause 96

Local Transport Bill [ Lords ] – in a Public Bill Committee at 1:45 pm on 8th May 2008.

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Power of ITAs to make charging schemes

Question proposed, That the clause stand part of the Bill.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

On a point of order, Lady Winterton. The Prime Minister recently announced a new Government initiative of listening and learning where there is public concern. The Bill was published before that policy announcement was made and before a recent poll, carried out by the Automobile Association, which showed that 90 per cent. of all motorists did not trust the Government in respect of road charging. In view of that, I wondered whether as part of the listening and learning process the Minister had decided not to move any of the clauses relating to road charging.

Photo of Ann Winterton Ann Winterton Conservative, Congleton

That is clearly a point of debate and not a point of order.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

The reason I wanted to speak on clause 96 is that it brings us into a new part of the Bill that concerns local and London charging schemes, which we need to examine in some detail. The Government were once wedded to a national road pricing scheme. The then Secretary of State for Transport made positive noises and the then Prime Minister appeared to support it; the new Secretary of State appointed by the new Prime Minister then started to withdraw from that view and it seems to have disappeared, so the Government have dithered. We then had 1 million people voting on the Downing street website against national road pricing in the poll to which my right hon. Friend refers.

Photo of John Leech John Leech Shadow Minister (Transport)

I am well aware that the Government’s policy on road pricing and congestion charging is somewhat confused, but will the hon. Gentleman explain Conservative party policy on congestion charging and road user pricing?

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I know that you look forward eagerly to my speeches and, of course, you will be getting that full explanation towards the end of my speech. For exactly the reason you have stated, it is important—

Photo of Ann Winterton Ann Winterton Conservative, Congleton

Order. I am not eagerly looking forward to anything at all, other than perhaps the end of this Committee.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I apologise profusely, Lady Winterton. I have managed to get through nine sittings without making that error. The point that the hon. Gentleman was making was that the Government’s position is confused, which was the point that I was starting to outlay. It is only fair that at the start of this major new part we explore the Government’s position and ask the Minister for clarification. I do not know what the Government’s policy is, and the hon. Gentleman has just said that he does not know either.

More Machiavellian figures than I might wonder whether part 6 is nothing more than an attempt by the  Government to reintroduce national road pricing by the back door, by allowing integrated transport authorities to make charging schemes singly. Evidence for that view is that the recent round of applications to the transport innovation fund was available only to local authorities that had plans to implement a road charging scheme contained within their bid. Whether or not a local authority wanted a road charging scheme or thought that it was appropriate, it had to include one in its bid if it were to receive any funds. I fail to see that investment in a local transport infrastructure should necessarily be linked or dependent on a road pricing scheme.

The second piece of evidence of an attempt at national road pricing by the back door is that there are several clauses in the Bill where the provisions could be used to impose road user charging on local authorities, even if they decided that they did not want it. Here at the outset, it would be helpful for the Government to lay out their position in some detail. I often find when discussing the whole aspect of road user charging that there is a confusion between road user charging and congestion charging or low emission zones. The former, road user charging, is a continuous toll on a road, the latter allows for variable rates at variable times of travel. We want to be clear that, if the Government are going to introduce blank road user charging, they must ensure that it is cost-effective.

In London, where the initial scheme was set up, 47 per cent. of the revenues go to the cost of running the scheme. The Evening Standard produced evidence last year that adding together the operating expenditure and the capital expenditure repayments, together with the depreciation, accounted for 97 per cent. of the revenues. One needs to be pretty cautious. The hon. Member for Manchester, Blackley will want to talk later about the scheme in Greater Manchester, but that scheme was clearly dependent upon the first point that I made—it came about as a result of the need for TIF. That position seems to be put forward regularly by various local authorities in that area.

I am also clear that we need to be absolutely certain about the definitional aspects of road user pricing, congestion charging and low emission zones. I am absolutely clear—for the benefit of the hon. Member for Manchester, Withington—that there should not be a national road pricing scheme. I am absolutely clear that local schemes, be they road user pricing, congestion charging or low emission zones, need local validation—consent—before they are introduced. I am also clear that if there is the possibility at local level of using road user pricing to supplement or increase funding, or in conjunction with the building of local transport infrastructure, then that road user pricing should also have local validation.

I hope that is a clear exposition of my party’s position. As I started out by saying, the Government’s position seems entirely muddled. It is only fair to the Committee, at the start of this important part of the Bill, that the Minister give us some indications.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe 2:00 pm, 8th May 2008

Does the hon. Gentleman not accept that if public validation in some form had been required for the congestion  charge scheme in London, the public would probably have voted against the scheme? Now the scheme is in place, most people would probably be in favour of it.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

The hon. Gentleman is absolutely right. When we discuss amendment No. 14, with which I have a lot of sympathy, he will see that I have followed his line of argument—there is a problem with referendums as local validation. However, in other countries, they allow validation to be at the time of, or at some stage within a certain period after, the introduction of a charging scheme. In some cases, after the introduction of a scheme, when the validation process has been sought by referendums, the scheme has remained in place, while in other places it has been taken away. I want to explore that point more when we discuss amendment No. 14. However, it is probably only fair that I now give the Minister a chance to reply and to explain in detail and with clarity the Government’s position on national road user pricing.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

I support my hon. Friend in what he has to say about those charging schemes. One can perhaps acknowledge that the Government are at least being honest—they have dropped all reference to “congestion”, and have simply included a number of clauses giving councils power to introduce charging schemes. I, too, am interested to know where the Government now stand in respect of that policy.

On 6 May The Times carried a report with the headline “Manchester polls deal blow to congestion charge expansion”. The report stated:

“Plans to extend congestion charging to cities across Britain are in disarray after the policy’s strongest supporter lost his council seat to an anti-charging candidate. Roger Jones, the Labour chairman of the Greater Manchester Passenger Transport Authority, was pushed into third place in Salford. His seat was won by the Community Action Party (CAP), which ran a campaign based on opposition to the £5 daily peak period congestion charge that was proposed by Mr. Jones. With the Conservatives coming second in what was a safe Labour seat, the result will make other councillors cautious about supporting congestion charging.”

The report quotes Mr. Jones, who said:

“I have got to get myself a job because I’m unemployed for the first time since I left school.”

It is clear that there is overwhelming public opposition to further charging schemes.

I heard what the hon. Member for Sheffield, Attercliffe had to say—that such opposition should never be the sole test when assessing new policy initiatives. To be fair, he has a point; there are other issues that one should take into account, but at the end of the day, we have to remember that we are democratically elected politicians, and if we go so far in one direction against the wishes of those who elect us, we cannot complain if we are turfed out on our ear for so doing.

Perhaps the hon. Gentleman should spend some time in the centre of Sheffield speaking to people there, some of whom may not be his constituents but visitors to Sheffield wanting to spend their money and create wealth and jobs in the city. He could then find out what they think of the proposal to introduce widespread road user charging. It is a betrayal of the pledge that the House gave when it introduced vehicle excise duty.

The argument used when vehicle excise duty was introduced—I think it was in 1908—was that motorists were fed up with having to pay tolls and charges as they moved around the country. The duty allows motorists to pay up front a flat fee in tax to the Government for the privilege of using their vehicles on our roads. The new policy runs counter to that pledge.

Photo of John Leech John Leech Shadow Minister (Transport)

Would the right hon. Gentleman not accept that a charging scheme could be introduced if people around the country thought that there would be some significant benefits? For instance, a cost-neutral charging scheme could be introduced under which there would be a significant number of winners as well as some losers. If we introduced the polluter pays concept, people who used their car on an irregular basis on uncongested roads in towns, villages and rural areas could benefit financially from the introduction of a national road user pricing scheme.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

I do not want to stray too far from the provisions in the Bill, but the hon. Gentleman’s intervention was very sensible.

If a national user charging scheme were to replace other taxes—for instance, if fuel duty was cut and vehicle excise duty was abolished—there are arguments in its favour. It would encourage people to use the roads at different times of day and thereby reduce congestion; for example, by making it cheaper to drive in the evening than in the early morning. A national road pricing scheme would have some attractions if it replaced other motoring taxes.

I understand that such a policy would be supported by the hon. Member for Manchester, Withington. However, we are dealing with the power to introduce charging schemes with no rebate on other motoring taxes. In other words—I will use the phrase—it is a stealth tax. That is what the Committee is being asked to support. If the charging schemes were coupled with local fuel duty reductions, one could make a good fist of a case for introducing them, but the Government propose no such thing. Some people may say, “Ah, but we must think of the environment. If we exempt electric cars, it will further help in our campaign against emissions.” To those who might put forward that argument I say, read the recent report published by Professor David Newbery of Cambridge university. He looked at the question of the environmental cost of motoring and concluded that if motorists were asked to pay for their share of the emissions they caused they should be paying tax at the rate of 20p a litre of fuel. Tax is currently 60p a litre.

Photo of Angela Smith Angela Smith PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury

I invite the right hon. Gentleman to do what my hon. Friend the Member for Sheffield, Attercliffe does weekly—if not daily when he is in his city—and come to the centre of Sheffield. He will see that the problems with traffic congestion are not just about emissions levels but that congestion damages Sheffield’s economy. That is why the Sheffield chamber of commerce is demanding action to deal with the problem on economic grounds, if nothing else.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

I am happy to accept the invitation. I am probably the only Conservative Member of Parliament who has appeared at Sheffield Attercliffe working  men’s club— a few years ago when I played the drums in a band. I know Sheffield quite well. I regularly visited the Fiesta club when it existed. I am happy to go back and have a guided tour.

There are various ways to attack congestion. My objection to the Government is that they seem to think that the only way to deal with congestion is to attack the motorist and impose higher taxes on him or her.

Photo of Angela Smith Angela Smith PPS (Rt Hon Yvette Cooper, Chief Secretary), HM Treasury

Could the right hon. Gentleman outline some of the alternatives to road charging to reduce congestion on our roads and in our big cities?

Photo of Greg Knight Greg Knight Chair, Procedure Committee

Birmingham city council had a very good idea for reducing congestion. Two of its most congested roads were where one lane had been taken out of action because it was marked as a bus lane. The council removed the bus lane, to local delight and joy, until the then Secretary of State for Transport, who is now Chancellor of the Exchequer, threatened Birmingham city with a loss of grant unless it reinstated the bus lanes. There are many innovative ways to deal with congestion. The Americans

Ms Smith rose—

Photo of Greg Knight Greg Knight Chair, Procedure Committee

I am answering the hon. Lady’s first question.

Photo of Ann Winterton Ann Winterton Conservative, Congleton

Order. Before the hon. Gentleman gives way—if he intends to—we should return to the matter in hand and not go as wide as the Committee is going at present.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

I am happy to write to the hon. Member for Sheffield, Hillsborough listing a few other initiatives that have been tried in America and which do not involve imposing extra tax on the motorist.

Over the past 10 or 12 years, I have not normally quoted from TheTimes,because it has been a Labour party-supporting newspaper. However, early last year on 20 February it carried a report with the headline, “Make a start on road pricing or ‘lose out on £1.4 billion’”. It stated:

“The Government is attempting to ‘blackmail’ local authorities into introducing congestion charging by refusing to fund public transport schemes unless they are linked to a new tax on motorists. The Department for Transport has established a £1.4 billion fund for investment in local transport but has told councils that any bid for a share of the money must include congestion charging”.

Taking that report together with The Timesreport I quoted earlier about what happened to Mr. Jones in Manchester, Labour Members ought to reflect, before they cast their vote on this part of the Bill, on what might happen to them if this unpopular scheme goes ahead. On the sort of swings we have seen recently, the hon. Members for Stafford, for Sheffield, Hillsborough, for Derby, North and for Bristol, East, as well as the Minister, could be in danger. All those seats could go if the public react in the same way to road charging in  their constituencies as happened in Manchester, so I hope that to save her throat and her seat the Minister will get up and say that she is dropping this part of the Bill.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe 2:15 pm, 8th May 2008

I am glad that the right hon. Member has just confirmed that the Conservative candidate for Sheffield, Attercliffe has no chance in the next election.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

I recall saying no such thing. I said that I was happy to come to the constituency to meet local people there. If I do, I would certainly expect to meet the Conservative candidate, who I anticipate will be the next MP there.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

To move on to the matter in hand, I accept some of the right hon. Gentleman’s points. It is a difficult issue to convince the public about. I am in no doubt about it. I have been vocal in Sheffield about my support for examining the possibility of introducing a congestion charging scheme. I have gone public with it and written articles in the local paper. Generally, the letters in response are not terribly supportive and sometimes not very complimentary. That is because the public are not convinced and think that, somehow, they are being done down and will simply be charged. It is hardly a stealth tax as it is such a public issue.

In this instance, we are talking about a power for ITAs to be able to introduce a scheme if they think it appropriate for their areas. It is right that that power should exist, because if the right hon. Member feels that there are other measures for dealing with congestion, this clearly is one potential method that will have to be considered properly.

I am in no doubt that it will not come about quickly in cities such as Sheffield because the reality is that not merely my Labour colleagues but the party that now has a majority in Sheffield, the Lib Dems, are committed to opposing any congestion charge scheme, probably because they both believe that it will be politically unpopular. They are probably right, but sometimes there is a responsibility on politicians, as democratically elected representatives, to try to give a lead.

My hon. Friend the Member for Sheffield, Hillsborough raised the point about the local economy. The fact in Sheffield is that congestion does real damage. We want people to come to Sheffield to work, to shop and to enjoy the leisure facilities and the magnificent new city centre, but they cannot get in and out easily at peak periods. I take the point that a scheme for charging people for the use of roads can be a way of switching the tax on motorists from licence or fuel duty to charging for roads, but it can also be a means of raising money that should be hypothecated for improving public transport—there is a package there. However, we will probably have to improve public transport before we bring the scheme in.

We have done some road building recently to try to improve the inner ring road but if one talks to the highway engineers, there is spare capacity at peak periods—it varies slightly—of around 10 to 15 per cent. We know that traffic is growing at about 2 per cent. per year. It does not take a genius to work out  that at some point the roads are going to be full. That has happened over the past two years—there were one or two vehicle breakdowns in the city centre at key points, the whole city was gridlocked and it took people an hour to move a couple of hundred yards.

There is no solution in building more and more roads to get us out of that. The only solution is to try to ensure that people switch to public transport or travel at different times when they can. The power to bring in congestion charge schemes, which I accept ought to be variable—people will not be charged the same amount for travelling at off-peak periods as at peak periods—linked to some improvement in public transport is the right way forward.

Photo of Greg Knight Greg Knight Chair, Procedure Committee

The weakness in the Government’s case is that there is to be no remission in other taxes paid by motorists. We would accept a good deal of what the hon. Gentleman said if this was not an additional tax.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

That is a reasonable point, but my first priority would be to make a scheme work that reduces congestion and gets the traffic moving. That means trying to get people on to public transport. Where the public transport is inadequate, as it is in many of our cities, which is why we were talking about quality contracts earlier——the two go together—then we need to invest more in public transport, in schemes such as guided buses and trams, of which I am very supportive. One can anticipate the proceeds of a congestion charge by tax income and funding, which the new local government network has been arguing for, and put a package together, but it must be a total package. Improving public transport alone might have attracted people out of their cars 20 or 30 years ago, but I do not think that it would anymore. There have to be two sides to it: improve public transport to attract people, but at the same time impose a penalty for travelling at peak periods in congested areas. I just do not see any other solution.

We at least have to have the debate, and it is our responsibility as elected Members, even if things are not immediately popular or obvious with the public, to raise the issues and bring the arguments forward. On this occasion, we should vote to give powers to ITAs to use where they think they are appropriate to address the needs of their areas.

Photo of Ann Winterton Ann Winterton Conservative, Congleton

Opposition Members are getting over-excited, because these are not major changes. Local authorities already have the power to make local road-pricing schemes under the Transport Act 2000. The difference here is that, at present, they have to get permission from the Secretary of State to make one. We are changing that so that if local authorities believe it is best for their area, they will be able to do it. The change also allows ITAs to make schemes jointly with, for example, metropolitan councils, if it is felt to be necessary for establishing an integrated transport system.

Finally, the provisions allow revenue from any scheme not just to be put back into public transport for the first 10 years of a scheme, but during the whole life of a scheme. This is not about forcing local authorities to introduce road pricing but about enabling them if  they feel it is best. Opposition Front Benchers do not want local authorities to be able introduce statutory partnership schemes, they do not want them to be able to introduce quality contracts schemes, and now they do not want them to be able to introduce road pricing schemes. Basically, the policy of the Conservatives is the status quo: there is no problem, let us just bury our heads in the sand and pretend that congestion is not any part of the problems in our urban areas. Frankly, I think the public will see straight through that. The Conservatives are bereft of ideas and out of touch.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

After last Thursday, the Minister is in a very dangerous position accusing anybody of being out of touch. She should not continually do what she has done several times, which is to completely misrepresent our position, which is clear. We have said that we support statutory partnerships, completely contrary to what she said. Our position on quality contracts is clear, because I prefer partnerships, and we have gone down that road. I suspect Lady Winterton is just about to tell me not to go down that road again. Finally, as I set out at the beginning, we support the ability of local authorities to make congestion charging schemes, or road-user schemes—they are different—providing that they have local validation. What the Minister is saying is nonsense and a complete misrepresentation of the official Opposition’s position. I hope she will acknowledge that point.

Furthermore, the Minister just said, as if it were a good thing, that the Secretary of State will no longer have to confirm such schemes. It be a good thing if that scheme were one subject to extensive local consultation, local validation or tested and validated by an independent inspector. She may have opened up the problem that we are going to discuss in a few minutes’ time in clause 104, that without the Secretary of State confirming it, local authorities may impose these schemes on local electorates without any consultation whatsoever. That is the possible consequence of her Bill as it stands.

Photo of Ann Winterton Ann Winterton Conservative, Congleton

That simply is not true. The hon. Gentleman knows that local authorities will be expected to consult on schemes; that is absolutely without doubt. I do not think there is much point pursuing further the alternatives that the Opposition parties are proposing, because I do not think they are offering any alternatives. As I have said, this is not an enormous change to the current position. There is no question of forcing local authorities to take forward pricing in their areas. Through the transport innovation fund, we have made additional funding available to local authorities to explore whether road pricing, complemented by improvements to local transport, would be the right approach to tackle congestion in their areas. I do not think there is any problem with doing that. It is about innovation. It is about looking at new ideas, but the transport innovation fund is not the only source of funding for local transport. This Government have invested very heavily in local transport. That is something we can be very proud of and I hope the Committee will support clause 96.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

What the Minister signally failed to do, of course, is explain the Government’s position on road pricing. She signally failed to say whether she accepts the Opposition’s view—a view shared, I  suspect, by some Labour Members—that these local schemes require local validation. She signally failed to make any response to my right hon. Friend, who said that there is the potential for this to be just an additional tax on motorists. And, despite saying that consultation is “expected”, she has signally failed to answer the point that, as the Bill is currently structured, local authorities may only be “expected” to consult.

People are expected or hoped to do all sorts of things. The fact of the matter is that, as the Bill currently stands, by removing the power of the Secretary of State to confirm a scheme, local authorities are not obligated to consult. Therein lies a flaw. Local authorities are not obligated to validate. I accept the Minister’s point that the power is already there. We support that power, and we would support this power if there were local validation. I had intended not to make a great issue of this. I had certainly not intended to press the point, but the Minister’s arguments have been so inadequate that I think it is time to make this point. We fully accept that local authorities should have the right to make congestion schemes, rather than the road user schemes that the hon. Member for Sheffield, Attercliffe was talking about. Congestion schemes are undoubtedly one weapon that can be used to reduce congestion. We fully support that, and we fully support that local authorities should have the chance to do that, provided that there is local validation. We are going to come on to that in a moment. But the Minister also failed to give any assurance that the funds that might be raised by such a scheme as the hon. Gentleman talked about could be reinvested in local matters.

Photo of Ann Winterton Ann Winterton Conservative, Congleton

I was absolutely clear about that. I said that the change that would be made by the Bill is that it would not just be for the first 10 years, but for the whole life of the scheme.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

What you were not clear about—

Photo of Ian Stewart Ian Stewart Labour, Eccles

Lady Winterton was not clear?

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I am sorry. Lady Winterton is always clear. I am occasionally not clear, but I am absolutely clear on this: the Minister has not answered my point. Making the point that we absolutely support both the powers of the Transport Act 2000 and local authorities’ ability to create charging schemes with local validation, I am minded to ask my hon. Friends to vote against this clause.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 10, Noes 5.

Division number 18 Nimrod Review — Statement — Clause 96

Aye: 10 MPs

No: 5 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 96 ordered to stand part of the Bill.