The Minister of State, Department for Transport (Mr. Sadiq Khan): I beg to move,

May I begin by saying, not only for myself but for all colleagues on both sides of the Committee, what a privilege it is to have you in the chair, Mr. Amess? It would be helpful if we began by putting the debate in its proper context, which will be familiar to hon. Members present from the recent debate on concessionary travel special grants—I know that the hon. Member for Wimbledon had some great fun there, and I make no apologies for that. The policy is huge and significant, affecting nearly every local authority, bus company and pensioner in England.

Buses are the most widely used form of public transport in this country—over two thirds of all public transport journeys are made on them. The Government recognise that buses are particularly important for some of the most vulnerable people in our society. For many older and disabled people, buses provide the only link to the places that they want to go and the people whom they want to see.

The Government are fully aware of that, and I am extraordinarily proud of our record in that area. One of the legacies of the new regulation of buses in 1986 was a postcode lottery of local concessionary travel schemes. In 2000, we addressed that matter and ensured for the first time that older and disabled people in England were guaranteed the same minimum concession of half-price bus travel for their local area regardless of where they lived. In April 2006, the minimum was further improved. Older and disabled people were able to use off-peak local buses free of charge in their local areas. In April 2008, we extended the concession again to cover anywhere in England.

The England-wide bus concession is now a hugely popular policy. It provides an opportunity for greater freedom and independence to around 11 million older and disabled people. However, the structures in place to administer concessionary travel and to reimburse bus operators for providing it have remained largely the same today as they were when a statutory minimum bus concession was first introduced in 2001. A number of problems with the current arrangements have been identified by local authorities, stakeholder groups and operators. They include scheme variations across local authority boundaries, too many negotiations with bus operators, a lack of capacity in some authorities to negotiate properly with operators, the difficulty of accurately funding so many authorities and a lack of alignment between the responsibilities of travel concession authorities and transport authorities.

We recognised those issues when we introduced the Concessionary Bus Travel Bill to deliver the new England concession in April 2008. Powers were included to enable a later transfer of responsibilities for administering concessionary travel to either upper-tier authorities or central Government via secondary legislation. To ease in the introduction of the improved concession in April 2008, the Government decided not to amend administrative responsibilities at the time. However, one year on, in April 2009, and taking into account the significant increases since 2001 in the number of concessionary trips taken and the amount of money at stake, the Government launched a consultation to consider what improvements could be made to resolve some of the problems with the current system.

The consultation considered two key questions. First, how should the statutory minimum bus concession—the free off-peak local bus travel anywhere in England—be administered? Secondly, how should discretionary concessions be administered? For colleagues who may not be aware of the difference, discretionary concessions are offered as enhancements by local authorities, such as peak-travel, companion passes and travel on other modes. The majority of respondents to the consultation were in favour of moving the administration of the statutory minimum concession to a higher tier of administration. The responses regarding who should administer discretionary concessions were more mixed.

The Government believe that it will be more efficient for both operators and authorities to keep responsibility for the statutory minimum and discretionary concessions together. Therefore, given the majority of views in favour of upper-tier administration for the statutory minimum concession, the order today will move the responsibility for administering both types of concession to upper-tier local authorities. It is worth noting that the majority of major bus operators and a number of key passenger representative groups supported the responsibility for both types of concessions being moved to upper-tier local authorities.

The Government understand the concerns expressed by some about the loss of lower-tier discretionary powers under the option that we are taking forward. However, the order does not remove the ability of district councils to consider discretionary travel schemes using the well-being powers contained in the Local Government Act 2000. Furthermore, the order does not preclude upper-tier authorities from maintaining or introducing district or local discretions—for example, where there are differing needs in different parts of a county boundary. It also does not preclude district councils from funding county councils to administer discretionary concessions on their behalf.

I am sure the Committee will agree that the changes being implemented by the order today will assist in securing the sustainability of this hugely popular scheme for the future. I commend the order to the Committee.

Stephen Hammond (Wimbledon) (Con): I echo the Minster’s words of welcome to you, Mr. Amess.

The Conservative party has always been supportive of the national concessionary bus fares scheme, as we recognise that access to public transport is particularly important to the elderly and people with disabilities.

Mr. Tom Watson (West Bromwich, East) (Lab): Out of interest, will the hon. Gentleman tell us when he last went on a bus?

Stephen Hammond: I last went on a bus two weeks ago in my constituency.

Mr. Richard Caborn (Sheffield, Central) (Lab): With or without concession?

Stephen Hammond: I know that I am looking old, but I am not quite that old yet.

We have always thought, throughout the concessionary bus proceedings, that the mechanism for funding set up by the Government was not going to be fit for purpose. Indeed, we tabled amendments to that effect when the Bill was passing through Committee, but this is the era of adult politics, so I shall resist the temptation to say, “I told you so”. None the less, since the introduction of the scheme, our fears have been realised, as a huge number of local authorities have been left with a shortfall of funding, and we have been calling for the Government to review the funding mechanisms. I therefore welcome the fact that the Government have acknowledged the problems and brought forward solutions today.

The order is one of three measures that the Government have proposed to re-order the funding mechanisms for the scheme. The first will reopen the final year of the agreed three-year funding settlement. That is most unfortunate and has led to great uncertainty in London, although we had the opportunity to debate that vigorously two weeks ago, and I shall not reopen that discussion today. The second measure that the Government proposed links the eligibility criteria to the state pension age. The third is the subject of today’s order, moving the administration of the scheme from the travel concession area to the upper or county tier. That is sensible and will help to iron out a number of local inconsistencies.

We certainly need to rid ourselves of the situation in which one lower-tier council receives inadequate funds and is left with no choice but to cut services and raise council tax, whereas the neighbouring authority has plenty. It is a complete postcode lottery at the moment, of which Lancashire is a good example. The borough of Preston was facing a shortfall of £824,000 in respect of the scheme. Down the road in Blackburn, the council had surplus funds. Half the boroughs in Lancashire were getting too much money; half were not getting enough. Therefore, moving the administration to county or upper tier should help to iron out such discrepancies. The concession areas were too small, and enlarging them will clearly benefit the funding mechanism.

I agree with the Government’s assessment that another potential advantage of the scheme is that it will remove the number of negotiations that will need to take place with bus operators. Such negotiations can become difficult for operators and authorities, jeopardising the relationship in terms of the provision of service. It is important that we lessen the burden—I am happy to see that as a by-product of the order.

I accept that savings to lower tier authorities should outweigh the cost to the upper tier, which should also be able to absorb the costs rather better, but does the revised the funding settlement take those costs and savings, and their expected flow, into account?

What will be the impact on the previously agreed reimbursement deals between travel concessionaires and bus operators? In practice, is he expecting the draft order to come in organically, as that funding deal changes, or is he expecting a change in the middle of the funding deal to the new order of upper-tier reimbursement?

I have some other points for clarification. I note that the explanatory memorandum implies that the move will assist

Will the Minister expand on exactly what the Government mean by the move’s assisting with that?

I would be grateful if the Minister told us what discussions he has had with colleagues in Wales and Scotland on the cross-border arrangements for concessionary bus passes, which are extremely controversial for a number of colleagues in such constituencies.

Dr. Brian Iddon (Bolton, South-East) (Lab): I am getting a little nervous. I am a concessionary pass holder and the hon. Gentleman is giving the impression that should—horror, horror—a Conservative Administration take over after the general election, they might abandon the scheme. Will he commit to continuing the concessionary scheme for people such as me and millions of other pensioners across the land?

Stephen Hammond: Yes.

Will the Minister confirm that the tripartite package he laid out, of which the draft order is one part, is sufficient for such an important scheme to continue and not be compromised?

Pending the answers to my questions, the official Opposition are happy to accept the draft order.

Mr. John Leech (Manchester, Withington) (LD): May I, too, say what a pleasure it is to see you in the Chair this morning, Mr. Amess? I also thank the Minister for his opening remarks.

I shall not repeat what the Minister and the Conservative spokesperson said. I am happy for Liberal Democrat support for the changes to go on the record. I am also delighted to hear from the Conservatives that they are 100 per cent. committed to the national concessionary scheme. It is good that we have support in all parts of the House for the continuation of the national concessionary scheme.

I should point out that the policy was originally a Liberal Democrat one, which was nicked by the Labour party before the 2005 general election.

Mr. Caborn: South Yorkshire was the first—indeed, Sheffield was the first city—to have the cheap fares. In fact, the policy was for free fares in South Yorkshire, so we were the trailblazers, not the Lib Dems.

Mr. Leech: I thank the right hon. Gentleman for that intervention. I am not aware of the concessionary scheme that was in place in Sheffield, which dates back many years. However, I am pleased to note that Sheffield is no longer run by the Labour party but has a Liberal Democrat administration.

I wish to put on record that the last time I used a bus was this morning, and I can confirm that fortunately I am not yet eligible for a concessionary pass. I have several questions for the Minister. Assuming that the change in administration will lead to cost savings, will it also lead to an overall reduction in the money made available for the national concessionary scheme? It has been calculated to save almost £26 million over the next 10 years, so has consideration been given to using some of those resources to reimburse local authorities that have received no recompense for having lost out over the past two years, although their budgets are increasing now?

Do the potential savings take into consideration the savings already made by local authorities that have co-operated to reduce the costs of running the administration? One of the proposed benefits of the scheme is that it will reduce the number of negotiations with bus operators. Does the Minister expect the changes also to lead to a reduction in the number of appeals by bus operators? Can he explain why the option for retaining responsibility for discretionary enhancement with local lower-tier authorities was ruled out? What restrictions will be put on those authorities when implementing travel schemes under the well-being powers of the Local Government Act 2000, as opposed to the existing powers under the Transport Act 1985?

Can the right hon. Gentleman outline the concerns raised by those consultees opposed to the shifting responsibilities? Were those simply to do with the discretionary elements of the concessionary scheme or were there objections to county councils taking control of the whole administration?

Mr. David Curry (Skipton and Ripon) (Con): It is a pleasure to serve under your chairmanship, Mr. Amess. I should declare an interest as a holder of Harrogate bus pass No. 44011932. Before anyone asks, it is for the No. 36 bus, which goes from Leeds to Ripon via Harrogate—stopping at the railway station, where no one, except geriatrics like me, gets on it. For the record, I also hold a senior rail card, No. 44950, which I use constantly to come into Westminster from Audley End. I go to the ticket office and ask for the geriatric package, which is a geriatric travel card and a permit for geriatric parking. Of course, they are not harmonised. Just to show how rail operators really help, we can get an early train using our geriatric card half an hour before we can benefit from geriatric car parking. It would help if those little anomalies in the system were addressed.

Like the hon. Member for Bolton, South-East, I am a few weeks from retiring. I am touched that he will be so dependent on his bus pass when he retires. I suppose that we are allowed to get away with some things that we might not otherwise be allowed to get away with. I accept that my party is entirely committed to maintaining the scheme. Once we have had such a huge expansion of the middle-class welfare state, we cannot take it away. My heart bleeds for all the hedge fund managers living in London aged 60 and one day, who can travel to work on the freedom pass. The munificence showered on a person when they reach the age of 60 is astonishing, given that they are unlikely to have changed massively since the day before, when they were aged 59 years and 364 days.