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Tuesday, 24 March 2009

Bandits at Twelve O’Clock!

Integrated Public Transport? Don’t make me laugh. There was only one certainty the moment John Prescott made that utterance: it wasn’t going to happen. Moreover, the actions of the previous Tory government made damn sure it wasn’t.

The most basic PT offering, seen in all towns and cities across the UK, is the humble omnibus. Yes, buses. Your reaction to this word will vary, depending on whether you live in London or elsewhere. Why so?

Because the Thatcher government deregulated the industry – but not in London. The concept, like the reviled Poll Tax later, was initially trialled on the unfortunate Scots. It was spun to the public as the bringer of choice: Thatcher and Co had been prevailed upon to ditch much of Milton Friedman’s quack doctory, but the C word was seemingly sovereign. Also, the National Bus Company would be broken up, and this, together with forcing the selling off of operations in the former Metropolitan Counties, would encourage competition among a greater number of smaller operators.

The number of companies didn’t, however, stay small for long. Soon, they were consolidating into much larger companies. And now there are just five significant players in the industry. Count them: Arriva, First, Go-Ahead, National Express and Stagecoach. The term – who coined it I’m unsure – “bus bandits” was born: nobody who has seen the way in which these companies gain and hold territory can argue that it is less than richly deserved.

And the popularity of that humble omnibus two decades on from the act of deregulation? Again, this depends on whether you’re in or out of London. In the capital, bus ridership has increased by well over 40%. Outside London, it’s fallen by a not dissimilar amount.

So why not have a system like that in London all over the country? Ah well. Today’s bus bandits are now publically quoted companies. Their shares are nice little earners for City institutions. The London system restricts operating margins to less than 7%, as against the double digit returns that are brought in elsewhere. So such a system would dent the share price, though not put any of the big five out of business. Make such a suggestion and the defence mechanism of the bus bandits comes to life, spinning in their favour and denouncing those who suggest change.

And why didn’t London have to suffer deregulation? The thought occurs that the capital was one place where to do so may have risked alienating a significant number of Tory voters. In any case, the real reason for deregulation was nothing to do with choice. Alfred Sherman, bless him, let the cat out of the bag: it was just another way to break trade union power.

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