Saturday, 20 July 2013

On the Buses

The Liberal Democrats are obsessed with buses. I saw this first when I spent time at Cambridge County Council as the local party in the County spent 2/3rds of their allotted time talking about buses. Indeed from what I was told this was not unusual (see for a Blog Piece I did when I was at the County Council). So now the Lib Dems are proposing that under 16s have bus journeys for free despite the fact that we have a massive deficit caused by paying people extra benefits.

I say the Liberal Democrats are oddly attracted to buses because they could spend this money on other things. The reasoning behind this move is not a bad idea on the whole. Nick Clegg has said, although he is denying it now for some reason, that this will be good "to help families with their high cost of living." But surely Cleggers should be supporting those who are on the lowest wages in instead of spending money on something fairly niche. I find the choice of spending bizarre. 

The Lib Dems like a good bus. 

There is one big reason why this policy should not happen. It's very easy to say '"et's spend more on this to help out" but not realise that this will be piling on to the debt. Cleggers will thus not be helping families they will have to pay for this scheme when some are really struggling to pay bills. It would also be the case that a free bus scheme to the under 16s will cost more than if families paid for a bus pass because it would have to be subsidised by the government. A huge loss of money would occur from those who do not take advantage of scheme when offered it. Thus extra money will go to the bus companies despite their being spare capacity. In London where this takes place bus subsidy is the highest in the country at £690 million in 2010 or 56p per passenger. The costs for such a bus subsidy nationwide are going to be in the billions of pounds. I thought as a Coalition there was an agreement to cut benefits and subsidies, obviously not?

We still have a Big Debt and Deficit, we should not be looking to increase benefits.

Nick has said that this should be done as a counter act to the Conservatives Marriage Tax Break but this would be a better investment of money because there will be a greater tax return. I'm no big enthusiast of having tax breaks for married couples except for the fact it's a tax cut. Nick will also find that tax cuts pay for themselves. If you look at the recent cut to the 50p tax rate, which Nick Clegg did not like, the government took in more money to spend on public services. The less people pay the more tax money comes in because the economy grows. This would not be the same with benefits because, although there could be an extra passengers on the buses, the subsidies will cost more and thus there would be a net loss. As an added bonus tax cuts allow independence of spending; not everyone will want to buy a under 16 bus pass. People want different things.

 The reduction of the top rate of tax to 45p brought in more money that it ever did at 40p. More money to spend on helping people or pay of the debt the previous government shafted onto them.

It seems the Lib Dems are just launching this policy to come back at the Conservatives over the planned marriage tax cut and because they like buses so much it is only natural they would go into this area. But Nick should learn that extra benefits mean extra debt and that tax cuts give independence and more money for the government.

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