---

Concessionary Bus Fares

I congratulate my hon. Friend the Member for Manchester, Blackley (Graham Stringer) on securing the debate. It is timely that we recognise a successful and important Government policy initiative, although we should highlight certain potential and existing problems. I shall reinforce some of the comments made by hon. Friend, and perhaps elaborate on one or two. I welcome the Government initiative of having local free fares for pensioners and the proposal to extend that to a national scheme next year—they are among the benefits of a Labour Government with a policy of tackling disadvantage and social exclusion. Furthermore, the scheme can be paid for because we have a Labour Government who have created a successful economy. That has produced the financial wherewithal to ensure resourcing of the scheme. On the subject of the existing scheme, not only are there local arrangements of the type that the Government have funded in South Yorkshire, but a Labour-controlled passenger transport authority means that there is also an extended scheme operating over a greater time. Pensioners can use their free passes from 9 am—the same situation as that which applied under the old concessionary reduced fare scheme. The free fares apply to the trams as well as to the buses—that has also been agreed at local level. Furthermore, cross-border agreements with West Yorkshire mean that pensioners can travel between South Yorkshire and West Yorkshire on the free fare scheme, and on the same basis certain routes into Derbyshire can also be accessed, which is important for my constituents as my constituency abuts the border, so there is a certain amount of cross-travel. Those are all welcome and important local extensions of the existing scheme, and I seek reassurance from the Minister that, on the move to the national scheme, the ability to have local scheme additions will remain available to local PTAs—particularly the earlier start and the extension to the tram. When the Government initially proposed the new scheme and indicated that it would apply only to buses, rather than to trams as well, I received enormous numbers of letters from constituents saying, ““What are you going to do about us? We like the tram and we use it, and we want to make sure that we are not disadvantaged.? That has certainly been achievable at local level in Sheffield and South Yorkshire. I have certain worries about the scheme funding, particularly the subsidy element, and I want to emphasise the points made on that by my hon. Friend the Member for Manchester, Blackley. It cannot be a coincidence that, around the time that the Chancellor made his announcement of funded free fares for pensioners at local level a couple of years ago, First Group, the major bus company that provides services in my constituency and throughout Sheffield, managed to have three fare increases in a 12-month period. The basis of funding and subsidising of operators for the concessionary scheme is that they should be neither better nor worse off commercially as a result of the scheme. However, it just so happens that whether they are better or worse off depends on the comparison with off-peak fares, and who sets off-peak fares but the bus companies themselves. In certain circumstances, we have almost given operators the ability to write their own numbers on a cheque. Again, it cannot be a surprise that when First comes to look at its fare increases this year, some of my constituents face double-digit increases—increases far in excess of inflation or any reasonable increases in costs that operators have. Some people have to pay those fares: they have no choice but to ride on a bus and will pay the fare anyway. Pensioners riding on the bus at times when free fares are available will not really be concerned about what the level of off-peak fare is and how much money that will cost the passenger transport executive to pay over to the operators. They will simply get on the bus because it is free, and the operators will get extra money for them, having put fares up that people do not have to pay anyway. There is something slightly wrong about that system. Let me explain my real concern. The PTE’s budget was, understandably, £18.3 million in the last financial year to pay for concessionary fares for pensioners. There was a more than 100 per cent. increase on the previous year, and we understand why—because the fares were free, rather than 40p, as they previously were. This year, however, there is a further increase of 5.66 per cent., which, given that the overall PTE budget is not expanding by the same amount, means that to fund the increase in fares that the operators are putting on at off-peak periods, which gives them an increased subsidy for the concessions for pensioners, other aspects of the PTE budget are starting to be squeezed and the ability to deliver other concessions to other groups that are in need of concessions will be affected, or the ability to fund tendered services will be squeezed out. The price of tendered services is already rising because there really is not competition for those, either. I have supported in the past, and my hon. Friend the Minister will not be surprised to hear me again extol the benefits of, a move to quality contracts and to a franchise system for local bus services, because that is the right thing to do in order to be able to regulate the service and to deliver a real public service. It is not that I want to go back to where we were before the free-for-all was brought in by the Conservative Government. Rather, I would like to bring an element of real competition into the delivery of concessionary services. At present, the bus operators, by being able to determine fare levels themselves, while recognising that many people who have to pay for them will have no choice but to use the buses and that no one will be put off getting on a bus if they have to pay nothing for that anyway, can almost name the increase in subsidy that they want each year, by putting off-peak fares up. It is no surprise, either, that the price of single off-peak fares in my constituency has on average gone up more than that of weekly tickets, which are often bought by people who make a decision to pay for a local bus service and to get on it. That is because the local weekly ticket and the cost of it do not relate back to the subsidy for the concessions that the bus operators get. They put up those fares that will directly ensure that they have an increased subsidy at the end of the process, to compensate them for the concessionary passengers they carry. However, as my hon. Friend the Member for Manchester, Blackley mentioned, if we moved on to a franchising basis and there were a competition for the franchises between different operators, that would cover the delivery of service not only to fare-paying passengers—people who hand money over weekly, monthly or on the bus as they undertake individual journeys. It would also be a tender and a competition to deliver the concessionary travel at the same time. Under the arrangements in London, we do not have all this business of operators and PTEs having to sit down and argue with one another about what the real value of the concessionary travel is—what is the point at which the operator does not make a gain and does not make a loss from concessions? We do not have the issue of appeals going through and the decision being taken out of the hands of locally elected councillors or their appointed officials in the PTEs. The matter is determined by the tender that is put in for the franchise by the operators. They tender for a package of services. I am arguing strongly that we must retain the concessionary scheme and bring in the national scheme and we must have the ability to retain, even when the national scheme is introduced, additions at local level such as we have in South Yorkshire, but we must also consider the business of how operators can be properly compensated, not overcompensated, as I believe many are at present. When we move to transport authorities and transport executives being able at local level to decide what the best way is to run bus services in their locality, if they choose to go to quality contracts, that will mean that we have a proper element of competition in the entirety of local bus services—we do not have much now, because in most parts of Sheffield, one operator runs the services full stop. There will also be competition for the concessionary element of those services. It will stop the nonsense of operators simply putting up fares to get an increased subsidy for the concessions. It will stop all the nonsense of trying to arbitrate between the views of PTEs and of operators about what the actual and proper subsidy is. That will be a much better arrangement for the future. I welcome what the Government have done so far. I welcome the extensions. Clearly, I would like to hear the Minister’s answer to some of the problems with the national scheme in relation to the introduction of smart cards and cross-border travel that my hon. Friend the Member for Manchester, Blackley has already put to her. I also hope that we move as quickly as possible to allowing a choice in favour of quality contracts and franchising at local level, because that will mean that there is a much fairer way of reimbursing operators for the cost of the subsidy, and ensure that we get proper value for public money, which I am not sure that we are totally getting under the current arrangements.