With cost of living a major concern for under-25s, Labour’s promise of free bus travel seems like a compassionate solution. But as ever with Jeremy Corbyn, the devil is in the detail.
The primary aim of this policy is not to help young people - but to push councils to nationalise bus services (either via direct operation or franchising), since the subsidy will only be available to those that are publicly owned. This will create a two-tier service, punishing councils and passengers who refuse to comply.
This shows that Labour cares more about its ideological commitment to nationalisation than helping young people. It also shows that the party’s existing commitments to renationalisation represent the bare minimum of its ambitions - even though Centre for Policy Studies analysis has shown that the upfront borrowing cost of those existing commitments would be at least £176 billion, the equivalent of increasing the national debt by approximately 10 per cent.
The policy is also unfair. The funding for this scheme will come from Vehicle Excise Duty - in other words, Labour is asking drivers to subsidise bus-users. Given that the overwhelming majority of bus trips in England take place in the big cities - more than half of them in London alone - those in the countryside, who rely far more on cars, are being punished to fund those in cities.
Labour claims that it will make up the cost to drivers by investing in road-building via its National Transformation Fund. But this in itself involves a further £250 billion in extra borrowing - loading further debt repayments on to the taxpayers of the future.
Robert Colvile, Director of the Centre for Policy Studies, said:
“Labour’s new policy shows that they care more about the dogma of nationalisation than they do about helping young people.
“Their nationalisation plans are already set to increase borrowing by at least £176 billion - and now they want to add the bus network, too.
“By funding the scheme via borrowing, Labour are making the passengers of today pay for McDonnell’s renationalisation obsession via the debt payments of tomorrow.
“If Labour genuinely want to ease the burden on workers in terms of transport costs they should freeze fuel duty, which saves the average motorist £850 per year.”
Emma Barr, Head of Communications at the Centre for Policy Studies, added,
“This proposal will lead to those in rural areas, who have no choice but to drive, funding the travel of those in cities in like London who already benefit from excellent public transport. And it won’t affect the vast numbers of people who rely on private companies to provide their travel services.
“In the lead-up to the local elections, this feels more like a cynical attempt to win votes in those cities than a genuine attempt to help young people.”
Centre for Policy Studies spokesmen are available for interview via the Press Office on 07876 161196, or [email protected]
NOTES TO EDITORS
In January 2018 the Centre for Policy Studies report “The Cost of Nationalisation” showed the cost of Labour’s renationalisation plans would be at least £176billion. This would represent around 10 per cent of the national debt, or nearly £6,500 for every household.