Transport secretary unable to give details on how Andy Burnham's fare cap will be funded

[00:00:00]Right, let's talk about this announcement, shall we? Bus fares capped at £2. What's your idea?

[00:00:05]>> It's great news. We know that there are millions of people across the country who depend upon buses in their day-to-day lives. And we've had a £3 bus fare cap in place over the last couple of years, but we know that people are still really struggling with the cost of living. That there are people who will be sat at home at the end of the month before they get paid thinking, "Actually, I haven't got any money left in my bank account." And so, reducing that bus fare cap for single bus fares from £3 to £2 outside of London, I think it's going to make a real difference to people. Of course, when Andy was mayor of Greater Manchester, he did brilliant work with the bus network there. He capped fares. He also took control of setting the timetables, the routes, and it made a really big difference to the local economy because public transport is essential for high-performing local economies. And so, this is all about just giving people some space as well.

[00:01:02]And it comes on top of, of course, the announcement yesterday to take off VAT from energy bills, which is going to save people And look, look, it's the most popular form of public transport. It's something we don't talk about enough. I think that's completely right. Can you just explain to me how it's funded? Cuz I looked at the release, right? £400 million of the funding will come from switching investments set aside for international climate finance to loans, which will give us more flexible ways to meet our international climate objectives. In English, what does that mean? So, it means that £400 million had been allocated in the budget of the Department for Energy Security and Net Zero. And some of that that £400 million goes to funding projects in other parts of the world which can assist with tackling climate change.

[00:01:54]Now, it had initially been the intention that that money would be given as grants. So, you pay the money to fund a project in a developing country, and you don't get that money back. Um we're switching that process so that it is now a loan.

[00:02:09]Um so, that the money will then be paid back to the British government. Now, actually when you when you So, look, the detail of it needs to be worked through. Um but in order for loans to qualify as um overseas development assistance, the terms of the loan need to be uh reasonably favorable to the developing country, and it needs to contribute um to uh developing that country's economy.

[00:02:38]And so, it makes sense to switch the spending. So, instead of it being a grant, it will be a loan, and then that frees up money to spend on domestic priorities, and we can spend on our public transport. But the point that I am that I have made to you, and I will repeat, is that in order for loans to actually count towards your ODA budget, your ODA budget needs to be 100% ODA.

[00:03:00]So, if you have a loan that is 100% ODA, then you can count that towards your ODA budget. If you have a loan that is 50% ODA, then you can only count 50% of that towards your ODA budget. So, the fact that it's a loan doesn't mean that it can't be counted towards your ODA budget. It just means that it has to be 100% ODA. So, the detail of it needs to be worked through. Um but in order for loans to qualify as um overseas development assistance, the terms of the loan need to be uh reasonably favorable to the developing country, and it needs to contribute um to uh developing that country's economy.

[00:03:31]And so, it makes sense to switch the spending. So, instead of it being a grant, it will be a loan, and then that frees up money to spend on domestic priorities, and we can spend on our public transport. But the point that I am that I have made to you, and I will repeat, is that in order for loans to actually count towards your ODA budget, your count towards your ODA budget, your overseas development assistant budget, then the terms on which those loans are given do need to be reasonably favorable to the developing country. We're not wanting to fleece anyone here, but and we actually want to maximize the development potential of this money that is available. And so it is in line with what a number of other countries do on international climate finance.

[00:04:18]But you'll forgive me.

[00:04:20]>> No, no, I I apologize. I'm not I'm not actually I'm not I'm not going to I'm not going to give you the details of what I'm going to say again. I don't have the details to give you. If you'd just spoken slightly shorter answers, I could we could have more of a conversation here. That the problem I really don't want to interrupt you and I understand that completely. But I also want to try and get through some of the things I want to get through in the interview if that's okay as well. Um I don't think it's unreasonable by the way for asking for detail of the government announcement that you've given to us to talk about today.

[00:04:45]>> And I have given you information. Um I've set out that the cost of the money the new money that the Department for Energy Security and Net Zero is giving is 454 million pounds. 54 million pounds of that is an underspend within the existing budget. 400 million pounds is switching the money that was previously going to be given out in grants to climate finance projects in developing countries is now going to be given out in loans. So some of that money comes back in. The precise detail that you're asking me about the nature of interest that would be applied to those loans, I don't have.

[00:05:24]That information will be worked through.

[00:05:26]I'd be very happy to come back and speak to you again about it in the future. Um I think it's right though that we look at what the priorities need to be for the country. When we know that people are struggling with the cost of living.

[00:05:38]We know how important bus journeys are for those everyday journeys, getting to the shops, uh being able to get to see a GP, going to work. And you know, there's one in five households don't have access to a car in this country. And so, I think with Andy Burnham's uh premiership and him coming into office, he said that we need to help people. And I think on top of the changes that we've made around electricity bills, with VAT coming off electricity bills in the autumn, this is starting to give you a sense of the direction that Andy wants to take this government.

[00:06:10]>> I I I'm in absolutely no way quibbling about the importance of the cost of living measures, and buses in particular.