The Con-Dem government’s cuts could hit the bus industry hard. Transport faces 25 percent cuts in the 20 October spending review. It’s possible up to 40 percent of its £20 billion budget will go.
A key government subsidy to the bus industry is the Bus Service Operators Grant (BSOG), which is a rebate on 80 percent of the duty (tax) on fuel bus operators buy. It may be frozen, phased out or abolished completely as part of the transport cuts. In 2009-10 BSOG was worth £454 million to the bus industry.
Buses are the most used form of public transport. The poor and elderly are particularly dependent on them. They are most heavily used by households with incomes under £10,000.
Despite this, other industries get far greater subsidies. For example aviation gets 100 percent fuel duty rebate, worth £6.5 billion a year!
Cuts to BSOG will be used by the operators to justify cuts to services and jobs, and increases in fares. Rural services, weekend services and late night running could be hardest hit.
Subsidies themselves make a mockery of privatisation. The bus operators make fat profits while receiving hand outs from the tax payer.
Lib-Dem transport minister Norman Baker recently criticised the huge profits made by the “big five” operators – Arriva, First Group, Stagecoach, National Express and Go-Ahead. He admitted that the cost of bus travel had risen by 24 percent since de-regulation in 1987.
But the danger is that cuts to BSOG are passed on by the operators in the shape of lost jobs, worse services, higher fares and wage freezes. Unite has to organise resistance to such moves.
If Baker really wanted to deal with the bus operators subsidised profits then he should take bus services back into public hands. If governments can nationalise banks why can’t we have a publicly owned bus service run for need and not for profit.