Examination of Witnesses (Questions 397
WEDNESDAY 1 NOVEMBER 2000
397. Good afternoon, Mr Clayton and Mrs Palmer.
We heard you had a wee bit of difficulty getting here, we heard
it was because you were travelling by bus.
(Mrs Palmer) We got here early, we came by bus.
398. I was given a bum steer there. We have
been talking to people over the last two days across the gamut
of British industry, people who sell oil, who use it, who are
involved in a variety of things. We are trying to get a broad
picture of the impact of fuel taxation on the services that people
provide. We thought it would be very useful to get evidence from
people like yourselves who are heavily dependent upon fuel, albeit
through rebates you do get some mitigation, nevertheless we are
conscious you have had problems as a consequence of the price
rises and the taxation. We were wondering if so far your members
have been able to discern any loss of business as a consequence
of the fuel taxation policies? For example, do you see people
who hitherto have used the bus now using the car? What has your
experience been over the last couple of years?
(Mrs Palmer) Perhaps as an opening statement
I can say that about 70 per cent of people who use public transport,
that includes train and air, use buses, so it is a very important
part of the economy and sometimes that is a fact that is overlooked.
We also are very conscious of the important role we can play in
environmental issues. We are working very closely with the Government
in delivering their programme of integrated information, integrated
ticketing, investing about £14 million in this. This is a
very important contribution that we make. We are also a very competitive
industry because we receive perhaps the lowest subsidy of any
other country in Europe for running public transport. Those are
just key points that it is important to make. I would just like
to make one other point. People talk about rebates in general
but I think it is important to understand that we get 75 per cent
rebate on the tax for local services, they are essentially buses
that run local services. We now pay in tax on buses and coaches
over £300 million a year as opposed to £100 million
seven years ago. School transport does not get any rebate, any
concession on tax. Inter-urban services do not get it and neither
do works contracts. It is only just for local services. There
are a whole lot of important elements of the community that do
not benefit from the rebate. To come to your question, I am going
to talk about the coach side and I will ask my colleague, Mr Clayton,
to talk about the bus side. We have tried to quantify the number
of people who have been affected by rising costs in producing
services. We have estimated that over the last year something
like five per cent of coach operators have ceased trading, that
is about 350 companies, all due to financial problems. It would
be wrong of me to suggest that is entirely due to the cost of
fuel because labour costs are an important element of that, but
fuel cost is an important component.
399. What exactly is the difference between
a local service and an inter-urban service?
(Mrs Palmer) It all comes down to where you get a
rebate on the fuel. It has to be a journey that stops every 15
miles in order to get a rebate on the fuel. Essentially it is
local running bus services. If you are running a coach non-stop,
let us say, from Newcastle to London you do not get any. If you
are like an operator I know who runs works contracts in Doncaster
and takes 400 people a day down to North Lincolnshire, they get
nothing on that. They are not going to stop every 15 miles to
manipulate it because they are going to a factory and workers
want to get there and it is a factory hired bus.