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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Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.