News that Alexander Dennis is to make some 160 redundancies, citing the impact of competition from overseas bus manufacturers which, it claims, are beneficiaries of state aid, will inevitably spark a fresh round of debate about the merits or otherwise of buying new zero-emission buses from Chinese manufacturers.
Already, Paul Sweeney, the Labour MSP for the Glasgow region, has tabled a question in the Scottish parliament on the issue and has called on the Scottish Government to revise its social value conditions on public funds being used to subsidise foreign bus manufacturers.
The Government’s answer highlighted, of course, that bus operators are free to choose the manufacturers from which they want to buy buses and reminded us that Scottish ministers are required to comply with the terms of the Subsidy Control Act, which prohibits the favouring of domestic over non-domestic manufacturers.
UK manufacturers also benefit from government grants and loan guarantees
The answer to Mr Sweeney’s question also stated that Alexander Dennis has been in receipt of more than £23 million in research and development grant funding since 2020 to support the company’s ability to secure new orders for ultra-low and zero-emission buses. And nobody seemed to mind, not least the business itself, when Alexander Dennis had a joint venture with BYD, thereby benefiting from the Chinese manufacturer’s battery and chassis technology to help it win many orders, especially in London.
An ongoing issue
I’m quite sure this issue isn’t going to go away. From time to time, MPs in Westminster and MSPs in Holyrood table questions and secure parliamentary debates to bemoan the purchase of new buses from Chinese manufacturers, complaining that they benefit from Chinese government aid, thus placing UK manufacturers at a disadvantage, while also citing concerns over the Chinese government’s human-rights record.
I’m not going to enter into a debate about the rights or wrongs of operators buying buses from Chinese manufacturers. It’s not a straightforward issue. I want to see UK companies succeed, of course. But I also want to see a competitive market and I am not sure that the wider geopolitical issues around trade with China is one for bus operators to be influenced by.
UK government aid
However, when I hear UK bus manufacturers complaining about unfair competition, with their Chinese rivals benefiting from state aid, I remind myself that UK manufacturers also benefit from government grants and loan guarantees now and again.
Now, if the Chinese manufacturers do benefit from support from their government, it may well be that this is on a scale way in excess of that which UK manufacturers receive from our Treasury. I just don’t know the answer to that.
But the support that UK manufacturers receive is not insubstantial — something that needs to be borne in mind. As I say, now that Alexander Dennis has announced its redundancy plans, I’m sure we can expect renewed debate on the issue both in Holyrood and Westminster.
Franchising changes
Meanwhile, the Department for Transport (DfT) has laid an Order, or Statutory Instrument, before parliament which, when passed, will remove the requirement for non-mayoral authorities to secure the approval of DfT to make a bus franchise scheme. Nevertheless, these authorities would still need the Department’s approval to make the initial assessment of a franchise scheme, something that can only be removed by primary legislation rather than a simple Statutory Instrument.
Quite why ministers felt the need to make a separate Statutory Instrument to remove the requirement to gain approval to set up a franchise scheme rather than wrap everything up together in the Buses Bill, which is coming soon, I’m far from clear. After all, no non-mayoral authority is now suddenly going to rush ahead to make a franchise scheme anyway. So, what’s the point? I guess Transport Secretary Louise Haigh just wanted to do a bit of sabre-rattling and show that she was getting on with things.
Ms Haigh’s bold claim
At least she is trying to be good to her word that, as she said in her speech to the Labour Party Conference, she will “move fast and fix things”.
This is understandable political rhetoric from a new government, but it’s dangerous rhetoric too because, if the travelling public don’t see much difference in the quality and reliability of their public transport services in, say, a year’s time, this claim of moving fast and fixing things will come back to bite her.
If, in a year’s time, no new bus franchise scheme has been made, and if the performance of those rail franchises which are under public sector control hasn’t markedly improved, I wonder what the travelling public, let alone the electorate, will make of Ms Haigh’s bold claim that she will “move fast and fix things”.
For example, Northern Rail, which was brought back under state control in March 2020 has a cancellation rate four times higher than in 2014 when it was under private ownership. Network Rail, a nationalised body under the direct control of DfT, is responsible for some 70% of all delays and cancellations on the railways.
Ministers need to be careful about making bold claims when many of the factors that affect bus and train performance aren’t under their control
My point is that, tempting as it may be, especially for a new government that’s been in opposition for so long, ministers need to be careful about making bold claims when many of the factors that affect bus and train performance aren’t under their control.
The good news for Ms Haigh, for now at least, is that, while the Conservative party is going through its protracted leadership contest, there is no real scrutiny of the government’s performance — at least in political and parliamentary terms. All the scrutiny today is from the media, which seems to be falling out of love with Labour remarkably quickly.
Once the Conservatives have their new leader in early November and a consequential reshuffle of the shadow cabinet and shadow ministerial team has taken place, we can expect — or should expect — renewed political scrutiny of Labour’s policies and performance in government. Labour is discovering, I suspect, that being in government is a whole lot more difficult than being in opposition.
