Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 397 - 399)




  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.

Mr Morgan

  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.

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