Sadiq Khan condemns Government proposal for Transport for London funding that would hit Londoners with 'triple whammy' of higher costs

Sadiq Khan has today hit out at a Government proposal to provide Covid19 funding for Transport for London (TfL) by hitting Londoners with a triple whammy of higher costs.

The Mayor called on the Government to reconsider its 'ill-advised and draconian' proposal and warned their plan would 'punish Londoners for doing the right thing to tackle Covid-19'.

Ministers want to extend the £15 Congestion Charge Zone to the North and South circular roads in 12 months' time. This would see the zone expanded to cover approximately four million more Londoners – on top of the condition in the previous funding deal in May which required an increase to the charge level and and operating days and hours of the current zone.

The Government also wants to increase TfL fares by more than RPI+1 per cent – well above the inflation rate. This is despite the fact that Ministers last month gave the failing private train operators an 18-month blank cheque funding deal with profits. Government is also doubling down on their demand to remove free travel for under-18s and are now also proposing the removal of the 60+ photocard.

A further Government proposal is to introduce a new council tax precept charge in the capital ­­– effectively increasing council tax by an as yet unspecified amount for all Londoners, regardless of whether they use public transport. Council tax is generally seen as a regressive tax needing fundamental reform and significant increases to pay for essential transport services at this time of national emergency would be considered to be particularly unfair as they would disproportionately hit people on lower incomes.

The Mayor called on Ministers to publish the taxpayer-funded review into TfL's finances they commissioned from KPMG, which has only been shared with TfL with heavy redactions – preventing a transparent discussion about funding options to date.

Sadiq refuted Ministers' repeated suggestion that new charges were necessary to ensure taxpayers in the rest of the country do not subsidise transport in London. He pointed out that London's net contribution to the Treasury of £38.8bn last year means that Londoners and the capital's businesses are not only paying for transport services in the capital, but heavily subsidising those in the rest of the country too.

The Mayor of London, Sadiq Khan said:

"I simply cannot accept this Government plan, which would hit Londoners with a triple whammy of higher costs at a time when so many people are already facing hardship.

"The Government should be supporting Londoners through this difficult time – not making ill-advised and draconian proposals which will choke off our economic recovery.

"Ministers already forced TfL to bring forward proposals to increase the cost and hours of the congestion charge in May – now they want to expand it to cover four million more Londoners.

"They also want to significantly increase fares in London and hit all Londoners with a regressive new tax.

"It is clear that difficult choices lie ahead to plug the huge gap the pandemic left in TfL's finances. I have been ready to talk with Government about how the necessary funds can be raised – but a proposal which singles out Londoners for punishment is completely unacceptable, as well as making no economic sense.

"I urge Ministers to come back to the table with a revised proposal which does not punish Londoners for doing the right thing to tackle Covid-19 – and to publish their review into TfL's finances in full. I remain ready to talk."

ENDS

• Since 2016, Sadiq Khan had succeeded in putting TfL on a stable financial footing ­– cleaning up the mess inherited from the previous Mayor. TfL’s cash balances increased by 13 per cent – having been on track to increase by 31 per cent had the pandemic not struck.
• Like all transport authorities and the private train companies, TfL's income has reduced significantly as a result of falling passenger numbers as Londoners worked from home and travelled less during the pandemic. During lockdown, ridership on the Tube dropped by an average of 95 per cent and bus journeys by 85 per cent, and is still around 65 percent and 35 per cent lower respectively, than at this time last year.
• Since Boris Johnson, as Mayor, and George Osborne, as Chancellor agreed in 2015 to phase out the Government operating grant for TfL worth hundreds of millions of pounds annually, TfL has been reliant on fares income to fund its services. Alongside advertising income and other charges, fares make up around 72 per cent of TfL's operating budget. Passenger numbers ­– and as a result fares income – are now unlikely to increase for some months as the Government has advised employees to work from home wherever possible.
• This is in stark comparison with MTA in New York, and the IDFM in Paris where Fares make up 38 per cent of income.
• In May, the Government agreed a £1.6 billion, six-month funding deal in exchange for TfL urgently bringing forward proposals to increase the cost and hours of the Congestion Charge, committing to increase fares by RPI +1 per cent next year, and temporarily curtailing free travel for Londoners under 18. City Hall does not want the burden of paying for young people’s journeys shifted on to councils and parents during this crisis, and Sadiq Khan has repeatedly called on the Government to drop their demand to suspend free travel for under 18s in London.