A commuter train pulls into a London station. Photo: Getty Images
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Transport subsidies are an inequality issue. No, really

What government chooses to subsidise - trains - and what it chooses to cut - buses - says more about its commitment to reducing inequality than any number of press releases and warm words.

With the Budget fast approaching there is widespread speculation over government spending plans and where the promised cuts will fall. We know further education, public health and other areas are seeing their funding greatly reduced, in some instances fueling intense debate. But other areas are receiving comparatively little attention.

The latest records show the government spends £5.4bn on public transport subsidies. That’s more than double the amount spent on NHS A&E services across the country, so hardly small change. And yet the value of this subsidy seems to have gone unchallenged. In fact transport subsidies have effectively been guaranteed for the future with promises to freeze rail fares.

Transport is often seen as an unglamorous area of policy and it’s never likely to generate the same headlines as our health and education systems. But beyond the crowded commuter services and rising fares there is another important and worrying story not being told. The way we subsidise transport is increasing inequality. In our new report Taken for a Ride the Equality Trust shows just how transport subsidy is spent and exactly who benefits. In total the richest ten per cent of households receive £978 million in transport subsidy; over three times more than the £297 million received by the poorest ten per cent. When broken down by household, and you adjust for the fact that different households are different sizes, the richest ten per cent still gain nearly double the subsidy of the poorest, £294 per year per household compared to just £162.

One of the reasons this happens is that the government spends large amounts on subsidising rail travel in London and the South East. For the rail system alone a household in the richest ten per cent benefits from over three and a half times as much subsidy as one in the poorest ten per cent. And a household in London benefits from almost four times as much rail subsidy as a household in Wales. On the other hand the benefit from subsidy for bus travel is much more evenly distributed across income groups, but is much smaller than the subsidy for rail travel.

The consequences of this uneven subsidy are profound. The poorest are effectively being locked out of access to good jobs, schools, health services and cultural activities. We’re spending an awful lot of money to get relatively wealthy people into good jobs, but not so much helping those in real need.

This inequality of travel subsidy is not a recent development either, for most of the last 20 years the richest ten per cent has received over four times the level of subsidy of the poorest ten per cent. However, it’s far from being a necessary part of our transport system, and there are many better options open to the government which wouldn’t perpetuate existing inequality. It could use the money earmarked for subsidies to invest more in transport infrastructure in poor areas. In doing so it could help rejuvenate these areas rather than spending more in places that are already wealthy. It could invest more in types of transport used by people on lower incomes (like the bus network) and less on transport that people on low incomes can’t afford even after it’s been heavily subsidized (like rail). Or it could even give the subsidy directly to people on low incomes for use on transport.

The fact that these sorts of solutions haven’t been sufficiently considered is largely due to a failure of public policy making. The process for considering new projects fails to ask the important question of what the projects effects will be on existing inequalities. Largely because the Government and its constituent departments in turn fail to consider the large and growing evidence base of the harmful social and economic effects of inequality.

A project which doesn’t harm the poorest, but involves boosting the incomes of the richest, is seen as a net positive because the question of increased inequality simply isn’t asked.

Our transport system is vital to us all. It’s how we get to work, send our kids to school, how we shop and generally move around. It literally binds the nation together. But despite this it is still failing many of our poorest. The only way to avoid this in future is for Government to embed inequality reduction into all of its decisions from transport, to education to healthcare. Until that happens, we’re on a road to greater inequality. 

Tim Stacey is Senior Policy and Research Adviser at the Equality Trust. 

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Why Clive Lewis was furious when a Trident pledge went missing from his speech

The shadow defence secretary is carving out his own line on security. 

Clive Lewis’s first conference speech as shadow defence secretary has been overshadowed by a row over a last-minute change to his speech, when a section saying that he “would not seek to change” Labour’s policy on renewing Trident submarines disappeared.

Lewis took the stage expecting to make the announcement and was only notified of the change via a post-it note, having reportedly signed it of with the leader’s office in advance. 

Lewis was, I’m told, “fucking furious”, and according to Kevin Schofield over at PoliticsHome, is said to have “punched a wall” in anger at the change. The finger of blame is being pointed at Jeremy Corbyn’s press chief, Seumas Milne.

What’s going on? The important political context is the finely-balanced struggle for power on Labour’s ruling national executive committee, which has tilted away from Corbyn after conference passed a resolution to give the leaders of the Welsh and Scottish parties the right to appoint a representative each to the body. (Corbyn, as leader, has the right to appoint three.)  

One of Corbyn’s more resolvable headaches on the NEC is the GMB, who are increasingly willing to challenge  the Labour leader, and who represent many of the people employed making the submarines themselves. An added source of tension in all this is that the GMB and Unite compete with one another for members in the nuclear industry, and that being seen to be the louder defender of their workers’ interests has proved a good recruiting agent for the GMB in recent years. 

Strike a deal with the GMB over Trident, and it could make passing wider changes to the party rulebook through party conference significantly easier. (Not least because the GMB also accounts for a large chunk of the trade union delegates on the conference floor.) 

So what happened? My understanding is that Milne was not freelancing but acting on clear instruction. Although Team Corbyn are well aware a nuclear deal could ease the path for the wider project, they also know that trying to get Corbyn to strike a pose he doesn’t agree with is a self-defeating task. 

“Jeremy’s biggest strength,” a senior ally of his told me, “is that you absolutely cannot get him to say something he doesn’t believe, and without that, he wouldn’t be leader. But it can make it harder for him to be the leader.”

Corbyn is also of the generation – as are John McDonnell and Diane Abbott – for whom going soft on Trident was symptomatic of Neil Kinnock’s rightward turn. Going easy on this issue was always going be nothing doing. 

There are three big winners in all this. The first, of course, are Corbyn’s internal opponents, who will continue to feel the benefits of the GMB’s support. The second is Iain McNicol, formerly of the GMB. While he enjoys the protection of the GMB, there simply isn’t a majority on the NEC to be found to get rid of him. Corbyn’s inner circle have been increasingly certain they cannot remove McNicol and will insead have to go around him, but this confirms it.

But the third big winner is Lewis. In his praise for NATO – dubbing it a “socialist” organisation, a reference to the fact the Attlee government were its co-creators – and in his rebuffed attempt to park the nuclear issue, he is making himeslf the natural home for those in Labour who agree with Corbyn on the economics but fear that on security issues he is dead on arrival with the electorate.  That position probably accounts for at least 40 per cent of the party membership and around 100 MPs. 

If tomorrow’s Labour party belongs to a figure who has remained in the trenches with Corbyn – which, in my view, is why Emily Thornberry remains worth a bet too – then Clive Lewis has done his chances after 2020 no small amount of good. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.