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Mr. Chope: I agree absolutely. The trouble with the Government is that they consistently say one thing and do another, and they use words ambiguously to give people a misleading impression. We are not talking about any additional costs to Government. All we are talking about is a fair distribution of the costs that are incurred by local authorities as a result of Government-imposed legislation and ending the two-tier system. Today the financial services ombudsman has had something to say about the two-tier system operating in the Halifax building society. The Government have been presiding over a multi-tier system for reimbursing local authorities for the costs of concessionary fares, which is totally unjust.

It is not as though we are asking the earth. There is already a system in place to reimburse London authorities for the actual costs of concessionary fares, rather than the notional or pooled costs, so there is no reason why the Government could not introduce a system that reimbursed local authorities for the actual costs of the statutory concessionary fare scheme, rather than using the formulaic system of distribution which is so unjust.

I had no quarrels with the old system, under which concessionary fares were regarded as a matter for local discretion. The local authority could decide how much money to spend on concessionary fares and what sort of scheme to operate. In so far as they were able to draw on resources in the environmental services block grant, they could do so.

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The Government changed the rules and there is now no option for local authorities but to comply with the new rigid and centrally imposed rules. It is right and proper that local authorities should be reimbursed accordingly. As I said at the outset, this gives the Government an opportunity to admit that they have made a mistake, that they are willing to learn from it, and that, from now on, they will reimburse all the local authority costs incurred as a result of the legislation. If they did so, it would enable councils such as Christchurch and East Dorset to impose much lower council tax increases next year than are currently in prospect.

During yesterday's debate on the revenue support grant and the level of the finance settlement, the Minister for Local Government said that the Government were being generous to local authorities. Some of us were left with the impression that the Minister was more generous to some local authorities than to others. Today, the Under–Secretary has an opportunity to demonstrate by her actions and words that she believes in justice and equity for local authorities and that she accepts that it is unfair that some local authorities should benefit by more than

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the costs they incur while others receive less than their costs. The amendment is a simple and equitable proposition and I hope that the Minister will accede to it.

Mr. Henry Bellingham (North-West Norfolk): I support the amendment and endorse the comments of my hon. Friend the Member for Christchurch (Mr. Chope). It would be perverse in the extreme if the Government did not reimburse local authorities. As my hon. Friend said, some local authorities have had to impose inflation- busting council tax increases over the past few years. In my area of west Norfolk we have consistently had council tax increases of about 8 per cent. or 9 per cent. over the past five or six years.

This is not just a problem for Norfolk county council. My local borough council, King's Lynn and West Norfolk, has not been getting a fair deal from the Government. Interestingly, the Labour leader of the local borough council explained in a letter to the local press the other day that the council tax in our area will have to go up by so much because the Government have not given Norfolk a fair enough deal. That is why it is vital that the amendment is supported and that the Government reimburse local authorities.

Will the Minister look at the words of the Minister for the Environment, who said:

That is a good reason for the Under-Secretary to agree with what we are saying.

I support the amendment, as do many of my constituents. My constituency is similar in many ways to that of my hon. Friend the Member for Christchurch in that there are many elderly retired people, especially along the Norfolk coast in villages and towns such as Brancaster, the Burnhams and Hunstanton. Many of them are retired couples from places such as London where they have enjoyed concessionary fares, often amounting to 100 per cent. They are disappointed to receive only a 50 per cent. reduction in my area. If they find that this Bill does not benefit them in the way that is intended because local authorities will not be reimbursed, they will be very disappointed.

Unfortunately, I say all that in the context of declining bus services—the picture throughout most rural counties. We all know that 15 or 20 years ago we saw double-decker buses trundling around country lanes with one or two people on board. Every village had a regular bus service. It is clear that those days could not continue, but unfortunately many bus companies have not shown enough imagination and have responded inadequately to the demands and requirements of local communities.

In west Norfolk, communities have been cut off as a result of reductions in bus services. I am thinking in particular of two cases that have arisen since my return to the House, one of which involves the hamlet of Gayton Thorpe, where the bus service has been abandoned completely. Only last week, I received a letter from a constituent who lives in the village of Tilney All Saints,

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which until recently enjoyed a reasonable bus service. Now, there are only two morning buses from Tilney All Saints to King's Lynn, and only one returning to the village in the evening, which leaves King's Lynn at 4.45 pm. The bus goes through the northern part of the village, but the constituent who wrote to me lives in the southern part. Her daughter attends the local College of West Anglia, where she is training to be a chef. On leaving the bus she has to walk more than half a mile, which is a long way for a student in the dark.

The Government are attempting to do what all of us feel is the right thing, but if they fail completely to reimburse local authorities and penalise constituents such as mine through higher council tax, they will be making a big mistake. I hope that the Minister will look at our amendment sympathetically and respond to the detailed and technical points made by my hon. Friend the Member for Christchurch, which I wholly endorse, and to some of my more general points.

Chris Grayling (Epsom and Ewell): I begin by apologising to you, Madam Deputy Speaker, and to the Minister for arriving late for the start of this debate. Today has been rather frenetic because of the launch of the Select Committee report on the rail industry, but happily we will be discussing this afternoon another subject that is close to the hearts of me and my constituents.

Members will know that the constituency of Epsom and Ewell lies just beyond the London boundary to the south. My constituents and Surrey county council—our local transport authority—face real problems in the provision of bus transportation, which will be exacerbated if the Bill is enacted and fails to deliver full reimbursement to authorities throughout the country. It was particularly disturbing to discover in Committee that, despite being pressed to do so, the Government were unable to give a clear, unequivocal and categorical commitment that they will reimburse every local authority for all the costs associated with changing the scheme under the Bill.

I hope that the Minister will take this opportunity to make such a commitment, because without it local authorities such as mine will have, in effect, two options—to cut other services or to increase council tax. That seems a wholly inappropriate burden to place on them at this time. In the case of Surrey county council, it is especially inappropriate, given the huge disparities in public support for Surrey and neighbouring London. Yesterday, the Minister kindly sent me a letter giving details on this issue. According to it, the Mayor is allocated £714 million a year for public transport, which will rise to just over £1 billion next year. In comparison, the sums allocated specifically to bus services in counties outside London are minuscule. Even wrapped together, all the transport budgets for all other authorities in the south-east will receive only £179 million for local transport projects in 2002-03.

In other words, under the Mayor's leadership local authorities across the border in London have a sum to distribute for transport support that is more than five times greater than that allocated to the home counties. The consequences of that disparity are becoming all too clear in the provision of concessionary fare schemes and of more general bus services.

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Most particularly, the disparity's consequences are evident in the loss of a number of operators running services across the boundaries into London. They have been driven out of business by competitors in London that benefit from the substantial subsidy available to them.

The problem will get worse if the Minister goes ahead with the Bill as it stands. In effect, if the Government fail to deliver full reimbursement to local authorities for the cost of the scheme, more transport money will be taken away from authorities outside London. I believe that the Government should fulfil what I believe is their duty to reimburse, as local authorities outside London will be less able to deliver the support to bus services that their counterparts across the border in London can deliver.

As a consequence, services will continue to lose out financially. Operators will find it more difficult to make money on routes, and will tend to walk away from the business. The people to lose out will not be the vast majority of my constituents who use cars, but the schoolchildren and pensioners who depend on the buses for their daily transportation. They can ill afford to see the buses disappear.

It has been a matter of great concern to me that such a large disparity exists between the public support given to bus operators in London—and to local authorities there to enable them to support the operators—and the equivalent support given to counties just outside London. I hope that the Minister will not make the problem worse through an inappropriate application of the Bill.

The failure fully to reimburse local authorities for the cost of the scheme would have consequences that go beyond the nature of the services provided. Also affected would be the ability of local authorities to deliver any sort of proper concessionary fare scheme.

It is a cause of great grief to many of the elderly in the northern part of my constituency—those who live in places such as Stoneleigh, Worcester Park and Ewell—that their neighbours just across the boundary in London benefit from the free bus passes that are available to them under local authority schemes. Those local authorities are able to deliver those free bus passes because of the extra financial support that they receive.

Surrey county council does not receive the financial support that would enable it to provide free bus passes. It has tried extremely hard to deliver a concessionary scheme that goes some way at least towards relieving the burden of costs faced by our older travellers. The council has been able to help a little financially, but my elderly constituents are only human. They look up the road—sometimes only a few hundred yards—and wonder why they cannot have a bus-pass scheme such as exists in Sutton or Kingston. The reason is that the money for such a scheme is not available.

The Bill will make it more difficult still for my county council—and I suspect for many other authorities around the country—to introduce the schemes for bus passes and concessionary fares that benefit pensioners in higher-cost areas.

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