THE FUTURE FOR BUSES

RMTnews :: july/august 2006 :: www.rmt.org.uk 12 STAGECOACH PENSION CUTS BLOCKED RMT has reversed plans by bus company Stagecoach to make deep benefit cuts to the final salary pension scheme. The union has also negotiated to keep the fund open to existing members and to current employees upon completion of the three-year waiting period. This will mean over 5,000 employees will be eligible to join the scheme. Assistant general secretary Mick Cash welcomed the deal as a big step forward. “The initial plans to close the scheme were simply unacceptable. We have been able to protect existing benefits for current fund members and also those waiting to join,” he said. Under the deal, the three levels of pension provision, known as ‘benefit routes’ have been preserved but with increased member contributions of three per cent, to nine per cent, 12 per cent and 15 per cent respectively. Employer contributions will be increased to 12.80 per cent. Current employees at March 31 2006 will be permitted to join route one, or a new route with the current contribution rate of 6.5 per cent, when the three-year period has expired. Employees commencing after that date can join a stakeholder scheme and after three years they will be eligible to join the Stagecoach defined contribution scheme. Employer contributions will match employee contributions up to 5.45 per cent, subject to an overall employer cost, including death in service cover of four times basic pay, of 10.3 per cent. R MT recently told the House of Commons Transport Select Committee that bus deregulation had failed on every count, particularly in meeting passenger needs Excluding London, the bus industry is in decline with the number of bus passengers in England declining by 15.7 per cent over the last ten years. If private bus operators wanted to meet the needs of the public the number of passenger journeys would be expected to increase. A belief that competition can improve bus services has proved false. When a private operator enters into transport provision, the company is responsible to its shareholders. Private contractors are not accountable to the public and yet they receive subsidies from the taxpayer. The experience in London, where passenger journeys rose by 5.3 per cent in 2004/5, shows what can be achieved when a public authority which has the powers of regulation, marries investment with a reasonable fare structure. Transport for London (TfL) has shown that only a public body, unencumbered by shareholders, would also be prepared to make the necessary investment to encourage people to get out of their cars. TfL committed substantial money to fund extra buses, in advance of the extra people using them. It is inconceivable that a private operator would take a similar decision. Outside of London, authorities have no such powers and struggle to contend with transport conglomerates operating in a ‘free-market’ bus environment. Buses aid social-inclusion when lower income groups don’t have access to cars. However, those reliant on buses have faced above-inflation fare increases since deregulation in 1986. Bus regulation would allow local authorities to help social inclusion by making fares more attractive. BIG PROFITS AND LOW PAY Employment in the bus industry under deregulation is characterised by poor wages and conditions of service. RMT is still campaigning for an end to 12? hour shifts, a 37-hour week, paid meal breaks and a decent sick pay scheme. Bus drivers’ average hourly earnings of £7.71 are 57 per cent below the hourly All Occupations average earnings of £12.12. Despite dramatically increased fuel costs, the major transport conglomerates secured huge profits in the last year including £108.6 million at First Group UK bus division, £52.4 million at Go-Ahead UK bus division (12.7 per cent profit margin), £30 million at Arriva UK bus division. Stagecoach’s UK bus division delivered an operating profit of £41 million in just six months last year. As on the railway, public control would allow money to be reinvested to improve services. RMT concluded that, as a first step, local authorities should manage services and fare levels. Ultimately, only the regulatory model similar to London, supported by sustained investment, can ensure that the bus industry is fully integrated and run in the public interest. THE FUTURE FOR BUSES © John Harris/reportdigital