2nd October 2005

Stagecoach Manager, Anthony Evans rejects the argument in a previous letter to the SNJ, that buses should be brought back into public ownership, but I urge him to reconsider (28/09/05).

The National Bus Company was privatised in 1986, broken into 70 chunks and sold for £1 billion. The Conservatives said it would bring more choice and cheaper journeys but deregulation has meant prices soaring, less routes and a third fewer customers with companies fighting over the most profitable routes. The industry is now dominated by Stagecoach and four other big players (i) keen to see profits from this public service - Stagecoach exceeding expectations with £108 million profit for 2004/5(ii).

We have the least subsidised and most expensive public transport fares in Europe. Fares are up 80% in the last 25 years, while in contrast total car motoring costs have remained flat and indeed gone down since 1997(iii). It is no surprise that traffic and CO2 emissions are increasing. It doesn't have to be this way. London buses are not de-regulated and investment in services there shows we can deliver improvements, significantly increase passenger numbers and ease congestion (iv).

Anthony Evans asked how some form of renationalisation can be funded. Well we can start by transferring large chunks of the £30 billion for road building and ending aviations' annual £9 billion in tax breaks and hidden subsidies. Such a move would also mean profits reinvested rather than going to shareholders.


Ivi Szaboova-Baxendale,
Stroud District Green party

Notes:

(i) After a few years of bus wars, in which dozens of companies designed timetables to pip each other's services, competition has eased. The industry has settled into an oligopoly between five dominant players - FirstGroup (23% of the market), Arriva (15%), Stagecoach (15%), Go-Ahead (8%) and National Express (5%). They overlap to a minimal degree - for example, services in north Manchester are largely operated by FirstGroup, while Stagecoach dominates the south of the city.

(ii) Liberalised buses have been a massive money-spinner for entrepreneurs. Brian Souter, a former bus conductor, began buying local bus companies when they were sold off in the 1980s. His company, Stagecoach, employs 30,000 people, and his combined wealth with his sister is estimated at £159m. But customers are among Britain's poorest: 60% of journeys are made by people without a car. Among the lowest income fifth of the population, 90% of all travel is by bus. Taxpayers subsidise the nation's bus services £1.2 billion a year.
Details of profits:
http://business.scotsman.com/topics.cfm?tid=539&id=687742005

(iii) See: http://www.transport2000.org.uk/

(iv) In London the Assembly prescribes routes, fares and timetables, paying operators a flat fee to run each service and hand over the ticket receipts. Elsewhere, any operator can run any bus on any route for any fare it likes. The only power available to elected officials is to fund additional routes to areas of social need, such as services to schools, hospitals and remote areas. The Passenger Transport Executives Group, which represents seven local authorities, claimed in 2003 that the Conservative's brave new world of free competition has been a failure. It states that fares have risen by a third since 1985, while bus use outside London has dropped by a third.