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Bus services are being undermined by 'grant'
10:00am Friday 27th April 2012 in Letters
On April 16, you published an ‘In Brief’report headed “Bus operators get £5.6m back”. You correctly called the Bus Services Operators Grant a rebate on bus fuel duty but omitted that, on April 1, the Government reduced it by 20 per cent. You thus created a misleading impression that the Government has given bus operators a big handout, when in fact it has sharply cut their rebate.
Combined with this year’s 3p increase in diesel fuel duty, this has increased the annual cost of running buses in Oxfordshire by £1.1m.
For 37 years, the payment was “Fuel Duty Rebate” but in 2002 New Labour misleadingly renamed it a “grant”. Giving back a company some of its own money can be a rebate or perhaps a tax allowance, but to call it a grant is wrong.
However, New Labour did increase the rebate to 81 per cent. Now the Coalition has reduced it to 65 per cent – its lowest level since Old Labour introduced the rebate in 1965. It was 100 per cent until 1994, when John Major’s government reduced it to 67 per cent.
Aviation fuel is duty-free and train fuel is almost duty-free. It is anomalous and wrong to charge bus operators any fuel duty. This Government claims to be the greenest ever, but is undermining the most local and most frequently used form of public transport.
HUGH JAEGER Oxford chairman, Bus Users UK Park Close Oxford
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