Buses can be quite political. Local politicians are often campaigning to save bus routes or keep a lid on prices, so the chance to have greater control over their neighbourhood bus network could reap them political capital. And this is why investors in bus operators stocks need to pay attention to the Buses Bill announced in this year's Queen's Speech.
The Bill, if made law, would curtail the autonomy of commercial bus operators to select routes, the frequency of services and the price of tickets. The way would be open for local authorities to regain control of their bus networks. A detailed note by broker Liberum said there had been an assumption in the bus industry that last year's decision to pass franchising powers to Greater Manchester would be a one-off. But now Sheffield and Cornwall look set to receive similar powers, suggesting, the broker says, that commercial, deregulated operations are no longer the default option.
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