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Taken for a ride

Subsidies for private bus companies run into hundreds of millions and the service provided leaves a lot to be desired. Neil Clark explains why it’s time to renationalise the buses

IT’S good to see that more and more media commentators and pundits are boarding the “Renationalise The Railways Express” to join those of us who’ve been calling for such a move for many years. 

Calling for the railways to be renationalised 10 years ago had one marked down as a hard-core Marxist or political extremist. Now it’s perfectly mainstream — as even the supporters of privatisation find it hard to make any kind of case for keeping the status quo. 

However, when it comes to renationalising bus transport, it’s rather a different story. 

More people travel on buses than on trains, and bus passengers have been ripped off by privatisation just as much as train passengers have, yet despite this there’s been a dearth of articles to highlight the disastrous way that bus travel has been affected since deregulation and privatisation of the industry in the mid-1980s. 

The high cost of bus travel and the reduction of services across the country has had an adverse affect on the lives of millions, yet the issue gets nowhere near the coverage that it should. 

This week, a new report Greasing the Wheels, from the Institute for Public Policy Research by Mark Rowney and Will Straw, gives us an answer as to why that is. 

The report found low-paid workers make more than three times as many bus trips per year than the rich — which explains why you don’t see too many tweets or columns about bus fares and poor services from elite establishment journalists and wealthy politicians. Buses? — they’re those red things the plebs travel on, aren’t they? 

The IPPR report also showed us once again the  enormous price ordinary people are paying for the privatisation of public transport. 

Non-London bus fares in England rose by a whopping 35 per cent above inflation  between 1995 and 2013 and by 34 per cent in Wales and 20 per cent in Scotland. 

Unsurprisingly, given the spiralling prices and deteriorating services,  bus patronage outside London — where there has been greater regulation — has fallen by 32.5 per cent since privatisation came into effect in 1986. In some areas, for instance Yorkshire and Humberside, it has more than halved. “The bus is therefore not fulfilling its potential in terms of relieving congestion, increasing access to jobs and public services, and reducing the carbon emissions of transport,” the report says. 

Its authors  want to make it easier for local authorities to take on “regulatory powers known as quality contract schemes.” It calls for the creation of “regional transport bodies” and for the DfT to “put together a national transport strategy.” 

All very worthy no doubt, but the trouble with the IPPR report is that it overlooks the obvious solution to the problems it has identified. Its findings reveal that things were much better before deregulation and privatisation, but it doesn’t draw the logical conclusion. One very important recommendation is missing from the report: “renationalisation.” 

The fact is that bus passengers and taxpayers were by any objective assessment better served when we had a state-owned monopoly provider of bus services, namely the National Bus Company, whose various regional subsidiaries operated services across the country.

Supporters of privatisation said that it would usher in a new “golden era” of bus travel, but the golden era was actually in the years just prior to privatisation, when a record number of people were travelling by bus. 

In 1984, the last year before Thatcher’s Transport Act was passed, the number of passenger journeys by bus was 5,65 billion. In 1989-90 the number had declined to 5,074bn — by 1992-3 to 4,483bn. Bus journeys accounted for 9 per cent of all journeys in 1984, but just 6 per cent in 1990.  

Ironically, in the week of Thatcher’s death last year, ITV3 was re-showing the classic 1970s comedy On the Buses. Thanks to her government’s reforms it really has been a case of “Off the Buses” — or rather “Priced Off the Buses.”  

Yet when Maggie died, I don’t recall a single “establishment” commentator mentioning the negative impact of the 1985 Transport Act.

As with the railways, we’ve been hit three times by bus privatisation. The first hit is having to pay much higher bus fares. The second is the reduction in services. The third is the vast amount of taxpayer subsidies that go to the privately owned bus companies — a total of £2.19bn went to bus companies in England in 2012/3 according to the IPPR. 

Last year, it was revealed that subsidies account for an enormous 45 per cent of all bus companies’ revenues. Imagine running a business where almost half of your revenue came from government subsidies. And all after what was hailed as a “free market reform” to “roll back the frontiers of the state.”

It’s not just direct subsidies and funding for concessionary fares that the companies receive: under the Bus Service Operators’ Grant, they get a very generous 70-80 per cent fuel duty rebate — which is paid to them regardless of how many passengers they carry — worth bearing in mind when  you next hear a bus company spokesperson claim that the reason fares are being hiked above inflation (yet again) in your area is because of “fuel duties.”

Unsurprisingly given the huge handouts they’ve been getting, and the year-in-year-out above inflation price hikes, the profits of  bus companies who operate services in Britain continue to rise. 

In June it was announced that the operating profit of Stagecoach’s UK regional bus division had risen from £143.2m to £147.4m. Go-Ahead, London’s largest bus operator, saw their half-year bus operating profits rise by 14 per cent to £40.6m. 

It’s not just privately owned companies who have been raking it in.

While having a state-owned British bus operator is a “no-no” for neoliberals, bus companies owned by the governments of other European countries can operate services and receive generous taxpayer subsidies too. 

Last year it was revealed that Arriva — owned by the German state-owned railway company Deutsche Bahn — received £330m from Transport for London to run bus services in the capital, but despite its two subsidiaries making an operating profit of £31.6m it paid no corporation tax. 

The more one examines the figures, the more one is struck about what an almighty rip-off bus privatisation has been. But it’s not just about figures, it’s also about the disastrous impact the so-called “free market” reforms  enacted in the 1980s have had on our communities. 

Having cheap and reliable public transport is not only good for the environment as it gets us out of our cars, it’s also good for our mental health as it helps us get out and about and connect with other human beings. 

But as services are cut and prices hiked people without cars face growing social isolation.  

The IPPR report cited a study from the University of Leeds which found that 19 per cent of workers had turned down a job because of poor quality bus services.  

Pensioners have been hard hit too. “Older people in rural areas face the double challenge of having many services and amenities centralised in towns and cities that they now can’t access because they simply can’t get to them. It undermines the whole idea of providing free bus travel when there’s no bus to travel on,” says Gillian Merron of Bus Users UK. 

The answer to the problem of falling bus usage is not ploughing taxpayers money into the coffers of private bus companies in order for them to keep services going, but to end the neoliberal madness once and for all and bring bus transport back into full public ownership. 

We can do that by simply ending all subsidies to private bus operators and using the money to re-establish the National Bus Company and its regional subsidiaries. 

We had a perfectly good system of public transport in the years before ideologically blinkered Thatcherite “reformers” wrecked it and there’s no reason why we can’t have the same again. 

The benefits to our communities, to our economy and to the public finances would be considerable, so what on Earth are we waiting for?  


Neil Clark is the co-founder of the Campaign for Public Ownership. You can follow him on Twitter @NeilClark66 and the CPO on Twitter @PublicOwnership.


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