Against the £2 bus ticket price cap
The case for the £2 price cap on single bus routes is it will increase employment and help out with the cost of living. Well, it is doubtful it will do much to employment and government shouldn’t be smoothing out every financial bump in the road of life anyway, especially given the national debt is approaching £3 trillion. Just like motorists, bus passengers should be paying their own way for their travel, and not expecting yet another subsidy, this time at a cost of at least £500m.
At the margin it is probably true the £2 bus ticket cap will increase employment. We need to consider why however. Basically, some people will work for £400 net of travel a week but will refuse to work for £390 net of travel a week, meaning, a £2 bus cap on routes (down from £3 say) will get this person to go to work since it will just be worth it for them. These figures aren’t etched into a stone mind though; they are the result of an individual’s will. In reality then the individual is saying ‘I won’t go to work unless travel is subsidised’. The cheek! Such an individual is clearly choosing not to go to work and should not be entitled to any help as a result.
Buses are already over supplied as it is with subsidy making up 44% of bus industry income in England. What this means is some people will take a return journey for £6 because it subsidised by about £4, but were they to pay the full cost of their journey, i.e., £10, they wouldn’t. In this instance value is being destroyed because £10 of costs are being sunk into a journey with less than £10 of benefits. The £2 bus ticket cap should be opposed, yes, but so should all bus price caps and their corresponding subsidies too. Motorists don’t burden the taxpayer with masses of costs, why should bus users be any different.
Perhaps Burnham is mainly concerned with the cost of living. Well, it should be noted that even the poorest in society are far from destitute. They spend 17% of their income on leisure after all. But let us just accept Burnham’s argument. Is a price cap on bus tickets the best approach? It is not because everyone including the middle class and billionaires will benefit from it too; those who clearly don’t need any help. Indeed, if you’re an egalitarian, as Burnham is, then you’re doing an active injustice by helping the wealthy. Moreover, the poor in rural areas with terrible bus coverage will be left out. A cash grant to the poorest, which would need to be far less than £500m, would be a far better use of taxpayers’ money.
Putting aside the above, Britain can hardly afford these freebies any more. The national debt is a huge £2.9 trillion and our budget deficit is £133bn. Now some readers may be thinking this thriftiness could be applied to all spending proposals, so, it’s hardly much of a specific point against Burnham’s bus ticket cap. True. But the general point in favour of thriftiness always needs to be made! Britain really is facing fiscal disaster. Only this month the OBR found that if Britain continues in her spendthrift ways than the national debt will be 300% of GDP by 2075, with a budget deficit of 7% of GDP.
Unfortunately, it is no surprise Burnham has announced this freebie. The public at large always wants higher spending and higher taxes (though not usually higher taxes on themselves). It is as if bus users have forgotten that they can look after themselves if given half a chance. And that includes paying the full price for a bus ticket just as motorists pay the full price for a tank of petrol.
Charles Amos