Labour's planned bus reforms are 'financially illiterate' and could see taxes soar, Tories claim

Labour's plans for overhauling the bus network were branded 'financially illiterate' yesterday as the Tories warned they would force town halls to hike taxes or risk going bust.

Louise Haigh, Labour's transport spokesman, unveiled the party's plans to effectively nationalise many services across the country during a visit to the West Midlands. 

Ms Haigh was accompanied by Labour deputy leader Angela Rayner during the trip to Perry Barr bus depot in Birmingham.

Labour claims its blueprint will not require additional central government money, although it does rely on funding from cash-strapped councils and mayors.

Passenger groups welcomed the proposals, but cautioned that any plan would almost certainly require extra Whitehall funding. However, Labour failed to say where this money will come from. 

The Conservatives said it meant shifting loss-making bus services on to the balance sheets of already-struggling local councils, without giving them any extra money for doing so.

Transport Secretary Mark Harper said: 'It's clear for everyone to see – taxes will need to rise to pay for Labour's obsession with nationalisation, taking us back to square one. 

Just like their unfunded £28 billion-a-year decarbonisation promise, they don't have a plan to pay for their transport pledges – making councils pay for loss-making bus services, but with no money to support them.

'Without a plan to pay for their promises, it means one thing: taxes will rise on hard-working people.'

By contrast, he said, the Tory Government has scrapped the northern leg of HS2 from Birmingham to Manchester to save £36 billion, pumping some of the money into the bus network.

A government source added: 'Labour's plan is a recipe for disaster, with council tax hikes and council bankruptcies across the land.' 

A similar model adopted last month by Labour's West Yorkshire mayor, Tracy Brabin, came with estimated transition costs of more than £100 million.

A meeting of the West Yorkshire Combined Authority heard that the estimated cost would require a one-off transition investment of £15.1 million spread over four years, as well as an £85.5 million investment in depots. 

The Tories warn that were this replicated across the country it could collectively cost town halls billions.

Under Ms Haigh's plans the party would pass a Better Buses Bill to remove legal barriers to other local authorities taking over privately run routes, giving them powers like Ms Brabin's.

Ms Haigh claimed her blueprint will create and save up to 1,300 bus routes and allow 250 million more passenger journeys a year.

'For too long, people across the country have been denied a say over their bus services,' she said.

The legislation will apply to England only because bus services are devolved matters in Scotland, Northern Ireland and Wales.

In Manchester it took six years to bring bus services back under public control. But Labour claims it will reduce this to as little as two.