Beyond the minutiae of policy announcements and elaborate charts, Budgets represent much more. They provide an opportunity for Governments to set out their stall – to speak, as Nye Bevan put it, “the language of priorities”, and to articulate whose side they are on.
This was clearer than ever when the Government announced an increase in the cap on single bus fares in England from £2 to £3.
Things could have been even worse. The Independent reports that proposals were in place for an abolition of the cap altogether, with fares in some cases potentially rising by 650% as a result. We can thank the “fierce negotiating” of Transport Secretary, Louise Haigh, for this outcome failing to materialise.
The decision to raise the cap has been justified on the basis that funding for the policy, introduced by the Conservatives last year, had only been made available until the end of 2024. Yet, this understates the extent of the Government’s agency. Labour has willingly raised the cap, disproportionately increasing costs for low-income households, whilst continuing to freeze Fuel Duty and retaining a 5p per litre cut to the tax. What’s more, the New Economics Foundation has estimated the Fuel Duty freeze will cost the government £3 billion this year, ten times the cost of keeping the bus fare cap at £2.
These policies, put together, show the government is standing on the side of drivers at the expense of bus riders.
This is unjustifiable from a distributional standpoint. The Health Foundation has found that in 2021-22, 28.2% of households in the poorest quintile of the income distribution did not have a car, compared to only 6.4% for the wealthiest quintile. If you’re making it cheaper to drive whilst raising the price of public transportation, that is redistributing income upwards, plain and simple. The fact that these reverse Robin Hood tactics are being employed by a centre-left Labour government leaves an awfully bitter taste in the mouth.
Environmentally, too, the Government is not putting its money where its mouth is when it comes to the question of reducing emissions. In a multiplicity of respects, Labour’s climate policies, whether it be planning liberalisation or the recently announced increase in Air Passenger Duty, clearly outperform those of the Tories. But the Fuel Duty freeze bucks this trend. Carbon Brief notes the freeze, which has been in place since 2010, has left UK CO2 emissions “as much as 7% higher than they would have been” had the freeze not been instituted. If you’re looking to reduce emissions stemming from the largest contributor to them – transportation – keeping the freeze in place whilst discouraging bus ridership is simply not it.
A preliminary evaluation of the £2 cap conducted on behalf of the Department for Transport found the policy had a “potentially positive impact” on bus ridership and may have reduced living costs. With the rise in the cap, the Government is not only disproportionately increasing the expenses of those on low incomes, but limiting their ability to access friends, family, and employment by making travel more costly. The latter is particularly ironic, given Labour’s protracted emphasis on getting more people off welfare and into work.
There are some caveats, however. More extensive studies of fare cap schemes, such as Germany’s €9-a-month ticket scheme, found they increased public transport ridership but did not cause travellers to shift from cars to public transport. Partly on this basis, The Centre for Cities, a think tank focused on urban policy, has argued that policies such as the £2 fare cap “are unlikely to bring about long-term change in passenger behaviour” – potentially limiting the policy’s ability to reduce emissions and traffic congestion.
More broadly, the fare cap does not address broader structural issues within England’s bus network. Declining ridership has plagued the bus industry ever since the 1950s – with ‘80s-era bus deregulation arguably making the problem worse by creating private bus monopolies that charge extortionate prices in the absence of government intervention. More broadly, there are other factors discouraging people from bus ridership, such as poor frequencies and in some cases the wholesale scrapping of bus routes. Neither of these issues will be redressed without higher levels of government investment and changes to the way the bus network is regulated. Policies such as public control of bus services, currently in place in London, could go a long way towards improving both fares and the quality of provision – through allowing stronger regulation, facilitating cross-subsidy of poorly patronised routes, and by enabling integration of the bus network with other forms of public transport.
Yet, it will take time for policies such as this to be implemented across England. And once the implementation process begins, it will take even longer for the effects of these root-and-branch reforms to materialise. In the interim, if we are interested in making sure buses are affordable and accessible for the many, policies like the £2 capped fare are likely to be essential.
In that sense, the Government’s decision to raise the fare cap is immensely disappointing, and the fact that it has chosen this path whilst padding the wallets of car drivers is even more so.
Image: Flickr/HM Treasury (Lauren Hurley)
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