Check against delivery
Introduction
A couple of weeks
ago MPs were sent a Climate Change Toolkit which listed policies ‘shown to be environmentally effective’.
For transport, it suggests ‘Taxes on
vehicle purchases, registrations, use and motor fuels, road and parking pricing
‘. It adds: ‘effectiveness may
drop with higher incomes’.
In other words,
these measures are regressive. They rely on increases in cost as a mechanism to
change behaviour. Consequently, if we’re honest, they are likely to change only
the behaviour of those who find the cost of living a day to day challenge.
It’s this tension
that has always been at the heart of the environmental challenge – it’s one we
weren’t always sensitive enough to in government. And, if we are going to gain
the trust and support of the 71% of the electorate who rejected Labour at the
last election, it’s one we have to take more seriously as we work through our
policy review.
Of course, we must
take the steps necessary to effectively tackle the very real crisis of climate
change. But unless we can demonstrate that we understand the cost of living
crisis facing families, we will not secure the support we need to take the
measures that need to be taken to tackle the environmental crisis.
The challenge of climate change and transport
Without immediate
action we know we face a risk of global warming of more than 2 degrees with
appalling consequences for human welfare and ecological systems.
The Committee on
Climate Change’s 4th Carbon Budget requires a commitment to a 50% cut
in emissions by 2025, on 1990 levels, putting us on track to achieve an 80% cut
by 2050.
Transport remains a
major contributor to CO2 emissions. Around 22% of UK emissions come from
surface transport, 97% of which is from our roads and 60% from cars alone.
Around 6% is as a result of aviation, although forecasts of a potential growth
in air passenger numbers of 200% by 2050 would see this percentage increase
without action.
So the question is
not whether the transport sector must experience major change but how that change should be brought about.
The cost of living crisis and transport
The challenge for
Labour is how to bring that change about in a way that also addresses the
increasing financial pressures on families caused by the policies being pursued
by this Tory-led government.
People are seeing
their standards of living decline, as costs continue to rise while wages remain
stagnant. A lot of the focus has been on mortgage or rent payments, energy
bills or food costs – but the increase in transport costs has been a major
factor in the cost of living crisis facing households.
We class those who
have to spend just 10% of their income on household energy as living in fuel
poverty – I think it’s time we started talking about transport poverty as well.
Because ONS figures show that the average household now spends more on
transport than on food and energy.
For most people,
transport means the car and for those on average incomes the cost of running
their car has reached 13% of household expenditure. For the lowest income group
it now makes up a quarter of their monthly budget. A survey out this week
suggests that the annual cost of running a car has soared by 21.1% in the last
twelve months alone.
The cost of fuel is
of course the major factor – reaching an all time high this year with prices
topping £1.30 a litre: a doubling of the cost of fuel in a little over a
decade. And the Tories showed just how out of touch they are with their
decision to increase VAT on fuel – a tax that, thanks to fuel duty, is actually
– in part – a tax on a tax.
But it isn’t just
fuel costs, it is huge rises in insurance premiums– up 74% in the past year for
a small family car. Breakdown cover: up 19%; Servicing costs: up 7%; Even the
cost of a new tyre has doubled on a year ago.
Not surprisingly, a
fifth of people say their level of car use has had to decrease in the past
year, mainly due to a loss of employment or rising costs.
And the problems in
rural areas are more severe, where fuel prices can be as much as 10 – 15 pence
per litre higher, while wages are often lower.
And, for many, the
cost of motoring is prohibitive to even owning and running a car in the first
place. Amongst those on the lowest incomes, less than half of households have a
car – rising to 80% of those out of work. In contrast, half of all households
in the highest income bracket have two or more cars, especially for young men.
The proportion of
those aged 17 to 20 bothering to even learn to drive is falling with the main
reason given being the cost of learning (now £1,426 on average), the cost
of buying a car and eye-watering insurance quotes.
So what you might
say? If the focus is to just be on the environmental challenge then surely all
of this is good news? Fewer drivers, driving fewer miles, with less car
ownership.
But for Labour, we
feel a responsibility to tackle both the environmental crisis and the cost of
living crisis. Because the consequence of not being able to drive has a real
impact on people’s lives.
Take the difficulty
faced in taking up employment opportunities, often requiring accepting jobs a
distance from home. And with negative equity an increasing problem, many people
are not able to easily move to where new their new employment is based.
ONS figures
released only last week show the correlation between ability to travel and
earning potential – those travelling an hour to work earn on average double the
amount earned by those who work less than 15minutes from home.
Again, rural areas
face particular barriers to people taking up employment and education
opportunities. Department for Transport figures show only 51 per cent of rural
households are within a 13 minute walk of a bus stop with at least an hourly
service, in comparison to 96 per cent of urban households.
Even having just
one car can severely limit the opportunities for families where more than one
person will increasingly want, or even be expected by government, to work.
It’s really
important to remember that the world outside London is very different from the
one in which most policy makers –and even campaigning organisations – often
sit. We casually talk about those who choose to drive, or those who
should be encouraged to make the shift to public transport. Yet, for many
outside London – certainly outside our major cities – the luxury of that choice
just doesn’t exist. It’s why 90% of people in rural areas have a car, but only
46% of Londoners do.
And even where it
has previously existed, the choice is being removed by policies being pursued
by this government.
Bus services are
facing the axe in communities across Britain thanks to front-loaded cuts of
more than a quarter to local transport spending with what remains being un-ring
fenced. This, combined with changes to the way concessionary fares are
calculated, is leading to unprofitable but essential bus services facing the
axe, particularly in rural areas. And next January the situation will get worse
still with the cut of a fifth in bus fuel cost subsidies.
I have visited a
number of FE colleges as part of our policy review and heard the same message
from young people across the country – thanks to the loss of local bus
services, and the spiralling cost of alternatives – especially after the axing
of EMA – they are just not going to be able to complete their A-Level or
vocational courses. In surveys, 40 per cent of young people say that their
decisions on post-16 education had been influenced by transport issues.
And at the other
end of the age spectrum, it will cause increased social isolation. David
Cameron’s election pledge to pensioners that he would protect their free bus
pass is pretty hollow when he’s taking away the bus.
And for those who
commute by rail, they too are being priced out of the employment opportunities
that can come from the ability to travel further to work. Some season tickets
now cost 25% of the average salary and for some it is now the biggest single
item in the monthly budget, bigger even than rent or mortgage payments. The
Campaign for Better transport calculates that fares will be 28% higher in 2015
than they are today- while wages will be only 15% higher.
So of course, more
affordable trains and more reliable bus services can make an impact on the need
for a car. But it will always be the case that for a vast number of people, the
locations in which they live, study, work and have childcare will mean the car
remains the only option. Don’t forget – while 40% of London commuters use
public transport, outside London that falls to just 10%.
And it really doesn’t
matter how much we lecture from London about the need to switch to public
transport, when both parents have to get to work in different parts of town,
and two kids need to get to schools in different directions, and the nursery is
in another place altogether – it just isn’t understanding people’s need to
juggle complex day to day family lives to tell them they don’t need a car. The
fact is, they do.
Now I also include
aviation in the cost of living issue. Of course, it doesn’t rank as highly in
terms of accessibility to education or employment, but it is a fairness and
quality of life issue. Not surprisingly there is a direct correlation
between income and frequency of flying. According to DfT figures, over a
million people were priced out of flying as a result of an increase in Air
Passenger Duty.
Again, some might
say, surely this is a good thing? We need fewer people flying? I’d ask a
different question: where is the fairness in those on lower and middle incomes,
who spend the rest of the year working themselves into the ground, and working
increasingly long hours, from taking the family off for a once a year cheap
package deal?
Labour in government 1997-2010
This poses a very
serious challenge to us as we take forward our transport policy review. And it
requires us to take a hard look at the direction we were taking in government.
I believe we have a
record to be proud of in terms of investment in improving public transport over
the past decade. After a slow start, we delivered significant improvements to
our rail network that saw greater reliability, faster journey time and more
passengers than at any time since the 1940s. But we never got to grips with the
cost of travelling by train.
And, outside
London, with a few exceptions in the areas where we introduced PTEs the impact
of bus deregulation continued to be felt. And too often, investment was
focussed on major schemes rather than the sort of small local investment which
can really make a difference to modal shift.
And we often
pursued the politics of behaviour change, extolling the virtues of shifting
from road to rail for longer journeys, car to bus or bike for shorter journeys
such as the school run. And in my view we too easily reached for
increasing cost as the way to drive that change. And where we did so, it was in
a way that allowed people to perceive that we were more interested in raising
money for the Treasury. Which is why, with the exception of in London, where
voters were given the choice people have rejected any move to increase the cost
of driving. And even in London, the victory of a Tory Mayor was in part on the
back of his campaigning against an extension to vehicle charging.
The fact is the
consequences of using fuel duty escalators or ratcheting up APD is not felt
evenly up the pay scale. Where they do change behaviour, they do so at the
lower and middle end of the income bracket: pricing a family out of their one
foreign holiday every couple of years, or making it unaffordable to take up
education and employment opportunities. But more often than not, they don’t
change behaviour, they just speed up the point in the month when the bank card
gets declined.
Attitudes to tackling climate change
Any political party
out of office – especially one rejected by 71% of the electorate – needs to
ensure that any review of its policies starts from where people are at, not
where we wish them to be.
And when it comes
to the environment, and the willingness to pay more to tackle the contribution
that transport makes to climate change – the most recent ONS survey on public
attitudes presents us with some serious challenges.
The proportion of
adults who were at least ‘fairly concerned’ about climate change has fallen
from 81% in 2006 to 70% in 2010 – that is a fairly sizable drop in just four
years. And not surprisingly there is a link between the level of concern about
climate change and individual willingness to change behaviour.
And even for the
half of respondents who were willing to reduce their overall level of car use,
there was 82% net opposition to being forced to pay more, or be taxed or
charged more. Not surprising with incomes as squeezed as they are.
Over 85% of drivers
were willing to switch to purchasing a car with lower CO2 emissions, but again
cost prevents them making that leap, along with concern at the lack of charging
points.
The impact of cost
is evident in the awareness of electric cars, which increases with income. 34%
of those earning less than £16,640 had at least some knowledge, yet this went
up to 60% for those on £26,000 or over – for those on lower incomes, they just
don’t see the relevance to their lives of such ‘choices’.
The same opposition
to paying more extends to aviation, the other form of transport where we need
to tackle emissions. A majority not surprisingly oppose increasing fuel tax or
other charges to encourage people to fly less.
The challenge for Labour
So we have a Carbon
Budget that sets tough deadlines for reducing the CO2 emissions from transport.
And we have a cost of living crisis that I believe must now sit side by side
and be tackled alongside the threat from climate change. And we have a population
increasingly sceptical about climate change, and as a combination of the
effects of this scepticism and the cost of living crisis, are unwilling to
change their transport behaviour if it involves greater cost – that’s for those
that have a choice. For most, they simply have no choice.
The challenge for
Labour is to learn the lessons from our time in government and find the
policies that enable us to cut transport’s contribution to climate change
without increasing the costs on families who are already struggling.
And it is possible.
Take one example – the changes we made to the structure of Vehicle Excise Duty.
By exempted from this tax those cars with the lowest emissions, while hiking
the tax for the real gas-guzzlers (which also happen to be the most expensive
vehicles), we enabled families to go green while cutting their household
budgets.
That’s the sort of
thinking we need to apply to the environmental challenges we face within the
transport sector. It doesn’t mean, and I cannot guarantee today,, that a future
Labour government will be able to avoid a single change in any tax, charge or
cost related to transport. But what I can promise is that we will not start
from an ideological desire to use an increase in costs as a way of changing
behaviour – particularly where in reality there is no real choice available to
people.
What I can do
today, is to set out three policy conclusions that are emerging from Labour’s
transport policy review:
The first is that we must give a greater priority to the public transport
that is actually used by most people, which is the bus.
A larger proportion
of public spending on transport goes to road and rail travel than to bus
services. Yet over 22.7 billion passenger miles are by bus every year. It’s
time to look at the support we give to bus services and powers that local and
passenger transport authorities have to direct services. And we need to look at
whether we could deliver a concessionary fare scheme to those staying on in
education post 16 or seeking employment.
Government spending
on transport, unlike that for education, housing and health, is strongly biased
towards higher income groups. According to the Sustainable Development
Commission, the richest 10 per cent of the population effectively receive four
times as much public spending on transport as the poorest 10 per cent. Poorer households travel less and
tend to use buses while richer households travel much further and tend to use
private cars and the train. I think we should look at whether that balance is
right.
Second, we must place affordability at the centre of rail policy in a way
it hasn’t always been placed.
The percentage of
income we are requiring commuters to spend on travelling by train is not
sustainable. If our trains are not to become the preserve of the better off
then we have to get a grip on fares. At the same time the railways require a
subsidy of £5billion – a figure that has to be brought down. The Tory answer is
giving the train companies more powers to set fares, fewer staff on board
trains, at stations and in ticket offices. At the same time, more fragmentation
with infrastructure broken up and packaged up into franchises – putting profit
back in the driving seat, not just of train services, but rail, stations and
maintenance.
An alternative
starting point would be to seriously look again at the fragmentation that
remains the legacy of privatisation and sees hundreds of millions leaving the
industry in profits. And look at ways to put communities in charge of local
rail services so that they can be planned, alongside buses, trams and cycling
in a joined up integrated way.
Third, we must achieve the game changing move to a post-carbon age for
the car in a way that incentives rather than penalises – and targets support
lower down the income level.
The scale of the
challenge is vast. The Committee on Climate Change’s advice to government is
that, by 2030, low carbon vehicles must make up 60% of all sales – and even
then conventional cars would still responsible for 70% of all miles driven. To
get anywhere near solving the contribution that cars make to climate change we
would need to reach 100% sales of pure electric cars within the next 25 years.
To put this in context, hybrid, electric or gas/LPG powered cars currently make
up less than half of one per cent of all licensed cars today.
The reality is that
knocking £5k off an electric car is a good way to kick-start the market, but
with a price left to pay of nearly £20,000, it’s not of much use to those
without a decent size pay packet. We have to get those costs down and look
again at whether we are targeting subsidies in the right way. We certainly won’t
succeed with the lack of support from the current government that has seen the
fund to bring down the costs of electric cars cut from £230million to just £43million.
We need to work
with industry to narrow the cost gap between petrol and electric cars, but we
shouldn’t rule out repeating the approach we successfully took with the switch
to unleaded petrol, by agreeing a clear date by which we will restrict what is
permitted to be sold.
The mass switch to
green technology in cars, rather than putting the cost of driving every further
out of the reach of many young people, or eating further and further into the
monthly budget for families has to be the way forward.
In the same way, it
is a combination of alternative fuels, aircraft design and air traffic
technology that must play the significant part in reducing the emissions from
flying, rather than just ending the annual family holiday aboard for many.
Conclusion
There is an
exciting opportunity here. The prize is more affordable trains, more reliable
local transport services and lower cost motoring thanks to the switch away from
oil.
I fully sign up to
the Committee on Climate Change’s Carbon Budget and the contribution that
transport must make. Unlike the current Secretary of State for Transport who
argued that the government should not do so.
I believe there is
no need to make a false choice between sustainability and social justice. We
can tackle the climate change crisis and the cost of living crisis.
That way, we can
help families to go green while staying out of the red.