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Lord Dixon-Smith: Our Amendment No. 193 has been grouped with that of my noble friend Lord Swinfen. It is directed to the point that, at present, there is an essential user rebate on fuel duty on buses that is withdrawn by Clause 153(6). As I understand it, there is what I would call a "roundabout" being put in place by which that money may come back through the local authorities and be used once again for the benefit of local services from which it has been withdrawn. In fact, there has been mention of one way in which part of this might happen in an article in The Times today, of which I was told to take no notice earlier. It refers to local authorities being able to give a fuel duty rebate of 75 per cent for "community transport services".

We have tabled this amendment to enable us to explore exactly what the Government have in mind. We tabled it long before The Times gave any hint as to what might happen. The fuel duty rebate is both important and significant to those who receive it. The concern is that the "roundabout", so to speak, will be a diminishing one and that what goes in at one end will, by the time it has been processed, be something less by the time it comes out again. That will, of course, not be to the advantage of those who would otherwise be benefiting. We tabled the amendment to explore that situation.

11 p.m.

Lord McIntosh of Haringey: It may be helpful if I begin by outlining the provisions of Clause 153, to which both Amendments Nos. 192 and 193 relate. The clause will permit us to introduce new arrangements for grants to the operators of bus services towards the operating costs of those services. When introduced the powers provided would enable the replacement of the current fuel duty rebate scheme with more flexible arrangements on grants to operators.

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I do not know what conclusion the noble Lord, Lord Dixon-Smith, drew from today's report in The Times. I shall certainly not pre-empt any separate announcements that may be made. However, I think that it will be obvious that we need to look at both the shorter and the longer term. As regards the shorter term, there are changes to the existing fuel duty rebate scheme that might be made. With the Commission for Integrated Transport we are looking at possible changes, bearing in mind the role of community buses and the help that they can provide to elderly and disabled people in rural areas and elsewhere.

In the longer term, wider options might be considered, including possibly some successor grant to the fuel duty rebate. However, we would want to know the results of the further consideration of the Commission for Integrated Transport and we would want to consult carefully before making any wider and longer-term changes. We do not have any plans for any such wider change at the moment.

As I say, we asked the Commission for Integrated Transport to consider the value for money of all aspects of public funding of bus services. Clause 153 provides flexibility for future changes to the grant arrangements if that should appear to be necessary in the light of changing requirements and of the commission's report which we expect later this year.

I want to emphasise that we recognise the value of fuel duty rebate as a grant in support of all local bus services, offsetting currently over 70 per cent of the fuel duty incurred in providing those services. Without it, operating costs would be higher and fare levels and volume of services would be affected. But we also need to consider whether changes or even a new form of grant would represent better value for money and would better serve our wider objectives.

Having said that, I stress that we have no intention of removing or changing the arrangements for fuel duty rebate before we are fully satisfied that such a change will be of benefit in terms of achieving our policy objectives, or before alternative arrangements are in place. The noble Lord, Lord Dixon-Smith, referred to the diminishing roundabout. That is not a familiar concept to me. It seems to me that you either have a proper roundabout or a mini roundabout; you do not readily move from one to the other. Therefore, I cannot fully follow the noble Lord's analogy, but if I have answered the point that he made, I hope that he will accept it as such.

I turn specifically to Amendment No. 192. This would add to the broad terms of the clause the specific point that any new grant paid under the clause may be towards the cost of improving accessibility to services. I assume that the noble Lord, Lord Swinfen, referred to impaired mobility in this regard, although it would be possible to define the meaning of "accessibility" more widely in terms of the improved availability of bus services to the public in general. The amendment is not necessary. Clause 153 is deliberately broadly drawn to provide a flexible grant- making power. Any new grant could--this is the case with the fuel duty rebate at present--be a general payment to operators

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in support of operating costs without any specific conditions attached. Such general payments could contribute to meeting operators' improved accessibility without being earmarked for that purpose. The method of calculation could be based on the characteristics of the service or its performance rather than specifically on costs incurred.

However, it would be possible, if we thought it necessary in the light of experience, to use regulations on the method of calculation of the grant to specify particular costs which would be taken into account in that calculation; or, for example, to pay a higher rate of grant to services which met certain criteria or had certain characteristics.

The advantage of Clause 153 is the flexibility it gives in using the grant-making power to meet changing requirements. It would be a mistake--it would be counter-productive--to specify in the primary legislation, as the amendment seeks to do, the particular characteristics of the grant or the specific purposes for which it might be used.

Of course I sympathise with the wish to improve the accessibility of bus services, but it is not always necessary to include these matters on the face of the Bill, as I am sure the noble Lord, Lord Swinfen, has heard many times in his career in this House. Accessibility is improving as a result of increasing investment by the industry in new vehicles and we are moving ahead with the introduction of mandatory accessibility standards for buses under the Disability Discrimination Act. The noble Lord, Lord Swinfen, would like matters to move faster than is proposed, but it is not the job of this Bill to start making changes in recent legislation. We hope to lay regulations soon which set out these standards and timescales. Implementation will be phased for different kinds of vehicles, but the first relevant date for new accessibility requirements will be the end of this year.

Amendment No. 193 seeks to remove subsection (6), which provides that the provisions of the Finance Act 1965 which currently cover the payment of fuel duty rebate will cease to have effect once the provisions of the clause are introduced. In doing this it would negate the intention that any new grant arrangements under the clause would replace the fuel duty rebate scheme rather than run alongside it. Without the subsection--if we took it out--we would be in the very odd position of having to retain fuel duty rebate when the purpose of introducing the powers in the clause would be to replace it with more effective and flexible arrangements. I have made it clear that we do not intend to introduce the powers in Clause 153 until better arrangements for the payment of grants to bus operators are in place. I hope that that will persuade noble Lords not to press these amendments.

Lord Bradshaw: I had no part in any work carried out by the Commission for Integrated Transport on the fuel duty rebate, but I have studied it very closely in academic circles. It appears to be quite an efficient way of subsidising bus use. Does the Minister agree that recent research has shown that bus fare elasticities are much higher than we believed before, and that

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within three years a real rise in bus fares will result in an equal proportion of loss of bus passengers? Bus fares are a very sensitive issue. It is important that any move which leads to a general increase in bus fares in real terms should be studied very carefully before coming into effect.

Lord McIntosh of Haringey: Perhaps I may say two things about that. First, so far as concerns price elasticity of bus fares, it would be foolish of me to express a general view in response to the academic knowledge on the subject of the noble Lord, Lord Bradshaw. Secondly, my experience in the Greater London Council in the 1970s was that bus fares were very price elastic. The 25 per cent reduction in bus fares under the "Fares Fair" policy in 1981 achieved a 70 per cent increase in ridership quite rapidly. I agree with the noble Lord on that point. That is from my experience in London, not more generally.

Lord Swinfen: I thank the Minister for his detailed response. I have been moving amendments on disability for the past 20 years--and I have been getting the same answers for the past 20 years. It would make life so much more interesting if I could receive a different answer. Even the same answer couched in different words would make a nice change. I get the feeling that the script was written 20 years ago and gets dusted down every two weeks. With those comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 193 not moved.]

Clause 153 agreed to.

Clauses 154 to 160 agreed to.

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