Decades of bus decline and what hampers Labour’s route forward

Good morning. How worried should Labour — and we all — be about the jump in the cost of government borrowing? I don’t know. Read this excellent Toby Nangle piece for a better informed take than I can manage.

What I do know is that I have wanted to wait until after the Budget to opine on the wisdom, or otherwise, of Labour’s plan to revive bus services in England. We already knew one of its measures — to raise the current, nationally subsidised cap on bus fares in England from £2 to £3 — but that policy was hard to assess until we saw the size of the transport department’s budget settlement.

On its own, the fare cap is not a good policy. It was designed to keep bus travel affordable but it has not had a noticeable effect on passenger journeys (devolution providing a good natural experiment here, as Wales has not implemented a fare cap) and bus mileage (essentially how far your bus network goes) has actually decreased during the lifetime of the cap. (In Wales, passenger journeys have also rebounded after the pandemic and bus mileage has increased.)

I’m also unconvinced that the Department for Transport is well-placed to assess the correct maximum fare for bus services across the country — that seems something better left to private operators or local government, depending on what you are actually trying to achieve with your bus services.

One good argument for it is that it is a way to provide support with the cost of living at a considerably lower cost than doing so through the welfare system. I prefer direct cash transfers to households over interfering in how private companies operate but cash transfers are considerably pricier.

Whether scrapping or raising the cap was the right step partly rested on what else happened in the Budget. Now we know what the settlement for the DfT is and we can reach a more informed view.

Bus land fairy tales

What killed bus services outside London? There are two unhelpful myths that are currently dominant in Westminster. The first, which is popular in Labour circles, runs like this: that bus services worked fine until 1985 when Margaret Thatcher passed the 1985 Transport Act, essentially as an act of spite.

This deregulated bus services outside London and as a result, decent buses vanished overnight from almost everywhere outside London, with a few holdouts in some other cities such as Edinburgh, Manchester and Nottingham. There’s a similar version which is less party political: that bus services worked fine until a wicked, London-based central government passed the 1985 Transport Act, which wiped out essentially all decent bus services outside of That London, again, essentially as an act of spite.

There’s a germ of truth here, which is that the 1985 Transport Act was very bad indeed for bus services inside England’s cities. The 1985 Act is a really terrible bit of public policy as far as city buses are concerned.

But the important thing to remember is that in the years between 1955, when there were nearly 14bn journeys made by bus, and 1979, when Margaret Thatcher was elected prime minister, bus journeys across Great Britain sharply declined.

Maddeningly, the Department for Transport did not split out its statistics by region until 1970, though I think we can reasonably infer that the pattern looked broadly the same: the majority of that huge fall happened in non-metropolitan England. In 1970, 8bn journeys still took place by bus outside England’s cities. By the time the 1985 Act passed into law, a little over a billion did.

This really matters, because comprehensive bus networks have always required a degree of subsidy, whether from local government, central government, by a transport body using a degree of cross-subsidy or a combination of all the above.

To take Transport for London: TfL is a train company with a really, really expensive hobby running bus services. Yes, more journeys take place by bus than any other transport mode in London but it is trains (Underground, DLR and Overground) that allow TfL to turn a profit, which is then used to subsidise bus journeys.

Of course, your ability to win political consent for subsidising buses is conditional on most people using them: essentially all Londoners benefit from the buses and therefore the politics of using our Tube fares to subsidise our bus services works pretty well. It is much harder when most people in England have switched from the bus to the car to win consent for that approach.

The 1985 Act wasn’t a spiteful act of wanton destruction of bus services outside London, it was a really ill-conceived attempt to put bus services on a financial footing and introduce competition, coupled with a conscious choice to weaken local government throughout the UK. That paradoxically helped to save bus services in the capital, because London Regional Transport, the statutory body created in 1984 in order to facilitate the dissolution of the Greater London Council in 1986, was a better solution to the problem of running buses than the 1985 Act proved to be.

If you want to increase the quality, frequency and reliability of bus services outside London you need to do three things: change the underlying regulatory framework, be willing to provide a measure of subsidy, whether at a local or national level, and offer a measure of regional control.

How do the prospects for that look? Well, Labour is legislating to give English local authorities outside London powers to commission their own bus services analogous to those inside London. So on that level, progress. But the Department for Transport is one of the departments due to experience real terms cuts over the course of this parliament. Increasing the fare cap goes some way to increasing the amount of money going into some bus services, but it is still some way short of an answer on how to actually fund bus services outside London.

There is nothing in the Budget about supporting bus services and without something, whether in the form of greater fiscal devolution to local authorities or new money, the freedom to run bus services differently may well remain theoretical.

Now try this

I saw Venom: The Last Dance last night. I was in the mood for something disposable and mindless and it scratched that itch nicely, though I must confess I have already forgotten essentially everything about it.

However you spend it, have a wonderful weekend!

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