Examination of Witnesses (Question 420-439)
MR TOM
HARRIS MP AND
MR BOB
LINNARD
12 DECEMBER 2007
Q420 Chairman: Minister, is there
something you want to tell us before we start?
Mr Harris: Yes, please, I have
a very short statement. At the risk of being accused of trying
to curry favour with you, can I begin by wishing you a happy birthday?
Q421 Chairman: Do you realise I am
seven today?
Mr Harris: I was not going to
mention the age! Can I first of all thank you for the opportunity
of appearing here on my first official appearance in front of
the Transport Committee. I think the subject of your inquiry is
very welcome to us. The Government sees ticketing choices as being
absolutely crucial to the travelling public because we believe
they should be fair, they should be transparent and importantly
passengers should be absolutely confident that they have made
the right choice in the product they have bought. It is the Government's
job to make sure that the structures are in place to make sure
that that all happens. Smart ticketing, which I know is part of
your inquiry, is already a reality in five of the rail franchises
in terms of ITSO requirements being built into them and all future
rail franchises that come up for renewal will also have those
requirements put in them. As you know we are working with Transport
for London to integrate ITSO and Oyster cards across London. The
English Concessionary Bus Travel Scheme is encouraging the roll
out on a massive level of ITSO cards because, as you know, all
of the concessionary cards are ITSO compliant. I believe that
is going to help create the commercial case for the roll-out of
further ITSO products. More generally on the concessionary scheme,
I think this is going to be of huge benefit to millions of eligible
people who will qualify for a card. I should also point out that
the Act itself does allow for changes in the structure and administration
of the scheme at some point in the future if that is required.
You will also know that the Department is working closely with
the Association of Train Operating Companies to provide a brand
new structure—we hope a very much simplified structure—of
rail fares which will take effect next year in fact. That is basically
where I am starting from.
Q422 Chairman: Thank you for that,
Minister. You will not be surprised to learn that there has been
a lot of praise for the impact of the concessionary fare scheme
on people's lives in the quality of the passing of their days,
but I do think that there is one question that we really do have
to ask you before we start and that is: does the department have
an overall strategy on how it wants all these different schemes
to work? Has it thought through the implications of some of the
different schemes working alongside one another? What are your
views of where you want to end up with these schemes?
Mr Harris: When you say "these
schemes" do you mean the local authority base concessionary
schemes?
Q423 Chairman: The evidence we have
taken has been very interesting because we have taken evidence
both about the difference between the Oyster cards and the areas
around London but we have also taken evidence from some of your
immediate predecessors about the impact that this is having on
some domestic rail lines and all sorts of other schemes. You realise
the complexity of this; what we really want to know is whether
you have a very clear view of what you want out of this scheme,
where you are going, how you are going to get there and what you
want at the end of it?
Mr Harris: I think there are two
aspects to it and I think the general social benefit of the concessionary
fare schemes is one area that you might want to come back to.
The other side is the technical implementation of it. Because
they are ITSO compliant (you know that ITSO is the integrated
transport smartcard organisation although it does not stand for
that any more) all these local authority schemes are actually
compliant because it is a national scheme anyone with an ITSO
concessionary card can move from one scheme to another physically.
Q424 Chairman: I am going to stop
you there. I am very happy that the Committee should discuss the
implementation but frankly I need to know what your basic strategy
is. Tell us how you see the overall future and implementation
and particularly what your policy is in relation to these schemes.
Tell us that first and then we can actually put you through the
wringer on the way you make your mistakes.
Mr Harris: Essentially our vision
is to allow as seamless as possible a local transport experience
from buying the ticket in the first place to saying what product
you want until right through to arriving at your destination.
That will increasingly mean doing it on a cashless basis although
it would not necessarily be cashless but a lot of people prefer
not to use cash, to use smartcard technology. If we are going
to encourage people to use more modes of transport to make their
journeys rather than use their private car then one of the keys
to that is to make it as accessible as possible and that does
not just mean physically it means a seamless transaction. Crucially
it not only has to be seamless, we have to provide a product and
an experience that people understand how it is working. If it
is not transparent I feel that people are not going to trust that
they are paying the right amount of money on a particular product.
They have to be reassured that it is transparent and that it works
very, very efficiently. No doubt I will have an opportunity to
come back later on to the technological side of that because that
is absolutely crucial.
Q425 Mrs Ellman: You spoke about
cashless transport, what about the people who want to use cash
and just go and buy tickets? Is there going to be any room for
them in the future?
Mr Harris: Yes, absolutely, as
there is at the moment in London, if you do not want to use an
Oyster card.
Q426 Chairman: It will cost you a
hell of a lot if you want to stick with your commitment to cash.
Some of us have this strange, old fashioned commitment to the
pound, shilling and pence as were.
Mr Harris: Indeed.
Q427 Chairman: We like the feel of
it.
Mr Harris: To answer Mrs Ellman's
question, I do not foresee a position in the future where it will
not be possible to use local transport without a smartcard. There
will be an opportunity to use cash. Obviously in London, as you
say Mrs Dunwoody, there seems to be a premium on using cash. I
do not want to make predictions about how that situation might
be rolled out for the rest of the country and I would not want
to set any hares running or newspaper reports that say that the
Government supports a scheme where you spend far more money using
cash than smartcards. That is what has happened in London, but
I just do not see the situation arising where you would not be
allowed to use cash.
Q428 Mrs Ellman: What is the Government
going to do to ensure that that is the case? We have had evidence
that operators might find it cheaper not to have cash and want
to make booking facilities more difficult? Is the Government going
to do anything to restrain that?
Mr Harris: On trains the Government
has a lot more influence, as you know, than as far as buses are
concerned. Buses are completely deregulated outside London.
Q429 Chairman: "Piratical"
is the word you are finding difficult to find, Minister.
Mr Harris: That may be a word
you are comfortable using, Mrs Dunwoody; I will stick to "deregulated".
The Government has little or very little influence on the level
of fares charged by bus companies outside the capital. In terms
of guarantees that I can offer, I could not, with hand on heart,
tell you that we can offer a cast iron guarantee that that would
not happen in terms of bus operators. The Local Transport Bill
which I probably should have mentioned in my introductory comments
will allow new structures in place where local authorities will
have to a certain degree more influence over local bus operations
and that may well include fares in a quality contract context.
As far as trains are concerned, obviously we do not foresee any
change to the regulation of train tickets that currently exists
up to the end of the next control period in 2014; decisions beyond
that will obviously be taken in the next few years.
Q430 Mrs Ellman: Will the Government
maintain any instructions on the availability of ticketing for
people who want to pay cash or pay on the day? Would the Government
put any regulations on that?
Mr Harris: I do not want to perjure
myself in front of the Committee by saying that we can offer that
guarantee. At this stage, although I do not foresee a situation
where people will be forced to use a smartcard, I am not aware
of any mechanism that the Government actually has to enforce that.
Q431 Chairman: Mr Linnard, you always
get the difficult ones.
Mr Linnard: There is on the railway
something called the Ticketing and Settlement Agreement which
governs a number of technical issues about the availability of
tickets, including things like the opening of ticket offices.
One of the things that the Government would not agree to would
be changes in that that reduced the availability of the ability
to pay cash for tickets unless it was quite clear that that was
not going to disadvantage people.
Q432 Mrs Ellman: We have had evidence
from local authorities and the PTEs saying that it is difficult
to introduce integrated ticketing and smartcards in the deregulated
environment. What difference do you think the Local Transport
Bill is going to make to that?
Mr Harris: The Local Transport
Bill will eliminate some of the obstacles that local authorities
and PTEs across the country are having to navigate at the moment
if they want to move to quality contract. This Committee will
know far better than I some of the complaints and problems that
local authorities have had trying to move towards quality contracts.
The Local Transport Bill grew out of an awareness in Government
that that situation should not go on. Obviously we have never
said and we do not intend to go back to the situation pre-1986;
I do not think anyone wants us to go back to that particular era.
However, I do hope, not just in quality contracts, that the fact
that local authorities and PTEs will be able to get a quality
contract more easily than at the moment will serve as an incentive
to some bus operating companies to cooperate more fully with local
authorities. Even before the Local Transport Bill comes into effect
and becomes an act there is quite a lot of movement among the
bus operating companies in terms of cooperating with local authorities,
with Passenger Transport Executives to produce more integrated
ticketing. Obviously that has to be done in cooperation with the
Competition Commission because it is illegal for bus companies
to talk to each other and set fares together; that is why we have
the block exemption from the Competition Commission, but where
that happens there is actually quite a lot of cooperation between
bus companies and between those bus companies and Passenger Transport
Executives. However, you are right, things will improve I hope
with the Local Transport Bill.
Q433 Mrs Ellman: How much do you
expect them to improve?
Mr Harris: I am sorry, I am not
going to offer you a hostage to fortune; I think it will be significant.
Q434 Mrs Ellman: What can be done
to make it easier to have bus tickets that enable people to travel
on different buses instead of keep having to get different tickets?
Mr Harris: In January this year
I was invited to launch not PlusBus but it was the advertising
campaign for PlusBus. PlusBus—I am sure you have dealt with
this already—is an add-on to a train ticket so that when
you are travelling to one of the 220 different towns throughout
Great Britain, if PlusBus is operating in the town or city you
are going to you can be offered a £2 add-on to your train
ticket and that allows you to use bus services at the end of your
journey. It is the only such system in Europe which is completely
organised, paid for, administered by the private sector. In that
respect I do not foresee the Department for Transport trying to
elbow in on that; I think it is actually a good product. My only
reservation about this—I raised this with the Association
of Train Operating Companies just yesterday—is that you
could perhaps lay a criticism at the train companies that this
is a tick box exercise, they have ticked the box saying they do
integrated transport. The reason I am saying that they are vulnerable
to that accusation but I am not actually making it myself is because
the marketing budget for PlusBus is between £40,000 and £60,000
a year, which is almost nothing, and yet if you look at the take-up
of PlusBus it has increased by more than 100% in the past year,
so there is a market there. I am not sure that the Association
of Train Operating Companies are properly exploiting that market.
Chairman: Heaven forbid, Minister, that
you should suggest that the Association of Train Operating Companies
do not take up commercial challenges; I cannot believe you could
make such an unwarranted slur on these entrepreneurs.
Q435 Mr Leech: Do you think that
this could be extended to include trams in areas where trams are
in existence, like Manchester for example?
Mr Harris: In principle I have
no problem with that at all, but as I said at the beginning this
is and will remain a completely private sector initiative.
Q436 Graham Stringer: In your introductory
statement and once or twice since you have said that there are
enormous benefits from concessionary travel, it is always a benefit
if you pay nothing or you pay less. What other benefits are there?
Mr Harris: In terms of social
inclusion, in terms of saying to a group of people who perhaps
did not feel they could afford to travel before, to say that you
can now travel from A to B completely free of charge. I know from
personal experience pensioners who are taking up the opportunity
this scheme has afforded to them in Scotland who are making journeys
that they would never have considered before. It is incredibly
popular among those who qualify and I just think that in terms
of social inclusion that is by far and away the highest benefit.
Whatever you may consider the drawbacks of its administration—you
might want to come back to that—I think the principle of
offering pensioners, older people and disabled people free bus
travel is one which is very difficult to criticise.
Q437 Graham Stringer: I just wondered
whether the Government is moving or has thought of moving or would
move beyond the sort of anecdotal evidence available—social
inclusion, pensioners getting out who were housebound previously—to
some measurement, some objective research that might be related
to social inclusion, it might be related to health, it might be
related to education. Have you looked at that or is the Government
just relying on anecdotes?
Mr Harris: Going back to smartcard
technology, it is actually very difficult to calculate the precise
number of people using a particular concessionary travel scheme
unless you have smartcard technology to back it up. An awful lot
of the evidence that you are looking for about movement of people,
about numbers of people, is something that you will be able to
glean far more effectively once ITSO is being used nationwide.
Q438 Graham Stringer: I was thinking
of something more than movement of people. When those people move,
apart from them moving, is their quality of life either in health,
education or in other ways, is the Government looking at measuring
that?
Mr Harris: To be honest I am not
aware of specific bits of research that the DfT have made in this
case.
Q439 Graham Stringer: That is slightly
surprising, is it not? There is a billion pounds being spent on
concessionary fares, or thereabouts, more than £200 million
nationalising the scheme, would it not be normal to look at a
cost benefit analysis to look at the benefits of what is happening?
Mr Harris: We will do once the
2008 scheme is fully implemented.
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