Memorandum submitted by the Go-Ahead Group
Plc
1. INTRODUCTION
1.1 The Go-Ahead Group PLC (Go-Ahead) is
one of the leading providers of passenger transport management
services in the UK. Operating in the bus, rail and aviation services
sectors, Go-Ahead employs around 20,000 people and undertakes
almost 700 million passenger journeys each year. With a turnover
in excess of £1.2 billion, Go-Ahead's customers include Transport
for London, BAA, major airlines, local authorities and the Strategic
Rail Authority. With the recent award of the Integrated Kent Rail
Franchise, Go-Ahead will become the largest London commuter rail
operator and the number of people employed by Go-Ahead will increase
to 24,000. Details of each of the companies within the Go-Ahead
Group are provided in Annex A.
2. GO-AHEAD
AND THE
ENVIRONMENT
2.1 The public transport services provided
by Go-Ahead have a very positive impact on the environment by
providing millions of passengers with a reliable and cost-effective
alternative to private cars and so massively reducing the carbon
and other emissions and road congestion that would otherwise be
generated. However, Go-Ahead also recognises that its operations
also have adverse impacts on the environment, most notably its
contribution to climate change and air pollution caused by the
carbon dioxide and other pollutants generated by its vehicles
and premises. Go-Ahead is committed to minimising its impacts
on the environment and has demonstrated this commitment by trialling
a number of alternatively fuelled vehicles and also by achieving
significant, quantifiable reductions in emissions per kilometre
travelled by its extensive fleet of diesel vehicles over several
years. Go-Ahead publicly reports on how it is managing its environmental
impacts in an annual Corporate Responsibility report. The latest
report covering the year 2004-05 and all previous reports can
be viewed at: http://corporateresponsibility.go-ahead.com/
2.2 The Go-Ahead Group welcomes the opportunity
to respond to the Environmental Audit Committee's (EAC) consultation
on Reducing Carbon Emissions from Transport as a further demonstration
of its commitment to achieve a continuous improvement in its environmental
performance.
3. EXECUTIVE
SUMMARY
3.1 The Go-Ahead Group shares the concerns
of the EAC that the objective of achieving a 20% reduction in
carbon dioxide emissions below 1990 levels by 2010 will be jeopardised
by increased levels of carbon emissions within the transport sector.
Go-Ahead believes that although technological advances will ultimately
lead to the development of low carbon fuels and vehicles, most
"techno-fixes" are long term and at best, only partial
solutions to reducing carbon emissions. With the real cost of
motoring in the UK declining, there is clearly the danger that
any reduction in the amount of carbon emitted by individual vehicles
will be offset by the ever-increasing number of vehicles on the
road. Furthermore, the current lack of any clear consensus about
which low carbon technology will ultimately "win" and
the knowledge that whatever system or systems are adopted will
be more expensive than existing petrol and diesel technologies
for at least the foreseeable future are also very serious obstacles
to the development and take up of low carbon vehicles.
3.2 This is certainly not to deny that technology
has an important role to play even in the short term. Diesel/electric
hybrid vehicles, such as the buses that Go-Ahead, in partnership
with TfL are currently trialling within London, could potentially
achieve carbon emissions reductions of between 30-50% compared
to conventional vehicles. However, Go-Ahead is firmly of the opinion
that the most significant short term improvements as well as the
ultimate long term transition to low carbon transport, must involve
changing the behaviour of the public to achieve a modal shift
away from private car use in favour of public transport.
3.3 Buses and diesel trains between them
account for less than 3% of the total carbon dioxide emissions
generated by transport in the UK, yet clearly have the potential
to significantly reduce the overall amount of carbon generated
by transport as well as reducing road congestion, by providing
an alternative to the use of private cars. Quite simply, the most
immediate and effective means by which the DfT in particular and
central and local government in general can reduce carbon emissions
from transport is to use a range of incentives, including demand
management to restrain the use of private cars, to make public
transport more attractive than the use of private cars. This approach
should be complimented by ensuring that there is adequate support
available to public transport operators to help them manage the
transition from conventional diesel vehicles to the alternatively
powered vehicles of the future. This support should include ensuring
that there is sufficient information available about the relative
costs/benefits of the various emerging technologies to enable
informed choices to be made. Diesel power is well-established
and cost-effective and any technology that replaces it will be
significantly more expensive, so fiscal measures will also inevitably
be required to encourage the take up of new, low carbon fuels
and vehicles and the associated infrastructure necessary to service
them so that operators can continue to provide public transport
that is essential for the environmental, social and economic well-being
of the UK.
4. STRATEGIC
ISSUES RAISED
BY EAC
There are several specific strategic issues
raised by the EAC when announcing their enquiry that Go-Ahead,
as a public transport operator, would like to address, including:
4.1 What realistically the DfT could achieve
by 2010 and 2020 in terms of reducing transport-related carbon
emissions, and the role that demand management should play in
doing so;
— Ensure that clear advice is available
of relative merits/costs of emerging technologies.
There is a real danger of a repetition of the
old VHS v Betamax problem with emerging low carbon transport technologies.
There are so many different competing fuels and technologies in
different stages of development that as yet, nobody can say for
sure what a low carbon transport network is really going to look
like in 30 years time. In the meantime, within the bus industry
at least, diesel is well established, proven, cost-effective technology
that through advances in engines and exhaust treatment systems
is in many respects far less damaging to the environment than
previously. Consequently, so as far as bus manufacturers and operators
are concerned, there is an understandable reluctance to embrace
the emerging technology until there is a better understanding
of where it will eventually lead—a wait and see strategy
as opposed to a possibly precipitous and career-defining punt
on the wrong option. To counter this reluctance, the DfT must
ensure that clear advice is made available on the relative merits/costs
of the emerging technologies so that manufacturers and operators
can make informed choices.
4.2 What specific steps the department should
now take to reduce road transport carbon emissions and congestion
over the next decade.
— Use fiscal incentives to reduce the
use of private cars and so encourage use of public transport.
In recent years, although the cost of fuel has
risen significantly, the overall cost of motoring in the UK has
been declining. Pricing is clearly not the only reason why people
will choose to use private cars in favour of public transport,
but it is clearly a very important reason and the DfT could influence
the behaviour of the public and encourage the use of public transport
by the use of a range of targeted fiscal (dis)incentives including:
(i) The introduction of road charging (when technically
feasible) or the extension of congestion charging schemes similar
to that in operation in central London.
Charging motorists for every mile they
drive on all public roads or to enter specific areas will clearly
redress the balance between the cost of motoring and the cost
of public transport. Additionally, the reduced road congestion
that will result from such a modal shift will enable buses to
provide a more reliable service because they will be less subject
to the unpredictable delays caused by congestion. Road or congestion
charging should not be introduced as a replacement for other transport
related fiscal measures such as fuel duty of vehicle excise duty
so that it is effectively cost neutral.
(ii) Reducing fares on public transport.
Fares paid to travel on public transport
are the most obvious cost to those using the services. Reducing
the level of these costs by direct subsidy would send a clear
message to the public that the use of public transport is preferable
to private cars, especially when seen in conjunction with the
increased costs that would apply to the use of private cars if
road pricing, congestion charging or other fiscal dis-incentives
were introduced. Subsidies are already paid to public transport
providers to operate some train and bus services but this is to
make them commercially viable. If fares were to be reduced below
existing levels to achieve additional environmental objectives,
such as reducing carbon emissions, further subsidies will be required
to ensure that these services remain commercially viable. Fare
subsidies could be paid for by re-investing revenue raised by
demand management measures.
(iii) Ensure that differentials between Vehicle
Excise Duty bands are sufficiently wide to send clear pricing
signals and influence consumer choice and exempt buses from VED.
Changing the basis of the VED system
so that charges are based on carbon emissions was clearly positive
but the existing differentials between VED bands are so small
that they have no effect on influencing consumer choice when buying
vehicles. VED band differentials should be increased significantly
so that there is a clear financial dis-incentive to purchase vehicles
that generate high carbon emissions. As buses contribute to an
overall reduction in the levels of carbon emissions, this role
should be recognised by making buses exempt from VED.
— Extend the use of bus priority measures
to minimise disruption/delay to bus services caused by congestion
and enforce existing bus priority measures.
Even low carbon buses, such as existing diesel/electric
hybrids will generate unnecessary emissions if the routes on which
they operate are so congested that they cannot operate efficiently
and spend a high proportion of their working time idling or crawling
from stop to stop. The level of carbon emissions as well as other
pollutants emitted will obviously be magnified where conventional
diesel buses are operated. The DfT, in partnership with local
authorities could achieve an almost immediate reduction in all
emissions generated by buses by extending the use of bus priority
measures such as bus lanes and ensuring that those priority measures
that are already in place are not abused by other road users.
As well as directly reducing the emissions generated by buses,
priority schemes will also ensure that the bus services will improve
because the buses will be less susceptible to delays caused by
congestion. This will in turn attract more passengers from their
cars. Two Go-Ahead bus companies, Brighton and Hove and Metrobus
have worked successfully in close partnership with local authorities
in recent years to implement bus priority measures that have both
resulted in significantly increased passenger numbers.
4.3 Whether the overall funding available
and spent in support of the strategy is adequate in view of the
environmental challenges DfT is facing.
— Increase investment in rail infrastructure
to improve reliability and capacity.
Delays, over-crowding and the general "feel"
of train stations are frequently cited as reasons for using private
cars instead of trains. The individual Train Operating Companies
have a duty to operate their services and invest in the infrastructure
for which they are responsible to maximise the number of passengers
using the services and so can address some of these issues directly.
For example, Southern is currently investing £1.2 billion
in various improvements within its franchise area that have lead
to significant performance improvements. However, carrying out
improvements on other areas of rail infrastructure, such as signalling,
electrification or to increase the capacity of the track, are
the responsibility of other industry partners, particularly Network
Rail, that are essentially funded by central government. Only
increased funding from central government will allow these bodies
to make the necessary investment to upgrade infrastructure and
increase capacity to reduce delays and improve the passengers'
experience of rail travel.
— Ensure that vehicle purchase and
associated infrastructure grants are available to offset the higher
costs of buying and operating low carbon vehicles to encourage
take up.
Low carbon buses are very expensive and in financial
terms alone cannot compete with conventional diesel buses on purchase
price or running costs and will not be able to do so for the foreseeable
future. Diesel/electric hybrids on the market at the moment cost
50% more conventional diesel buses and a prototype hydrogen fuel
cell bus costs five times as much. Although fuel costs will be
lower, these will be offset by higher overall operating costs
as well as increased infrastructure costs such as new fuelling
systems. Essentially, without grants set at realistic levels to
encourage the purchase of such vehicles there will not be a market
for them and manufacturers will not produce them. Consequently
the target of 600 (20% of current annual total) or more low carbon
buses coming into operation each year by 2012 will not be met.
Therefore, the closure of the Powershift and CleanUp programmes
as well as the delay in setting up the Low Carbon Bus Programme
sends entirely the wrong message to vehicle manufacturers and
potential buyers alike.
— Ensure that any targets or timetables
applicable to bus operators that are set for the introduction
of low carbon buses are financially as well as environmentally
sustainable.
In principle, Go-Ahead has no objection to the
setting of targets and/or timetables for bus operators to introduce
low carbon buses to replace conventional diesel buses. However,
any such targets or timetables set must take into account the
increased purchasing and operating costs that will apply so that
rate of investment that is required is financially as well as
environmentally sustainable.
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