View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
7 February 2014

Strike or no strike, the Mayor of London needs more power

Greater fiscal freedom would allow the mayor to champion properly the interests of hard-pressed commuters and be held accountable for delivery.

By Alexander Jan

This week, hundreds of thousands of Londoners and commuters in the rest of the South East battled strikes and main line signal failures to get to work. With considerable grit and determination many of them succeeded. It’s fair to say that George Osborne’s Christmas gift to restrict regulated fare rises is already no more than a distant memory. But on a day when the mayor could be seen to be standing up for Londoners, it is worth reflecting how limited his powers really are. Take the chancellor’s announcement as an example. TfL bosses were understandably caught off-side by the treasury’s surprise decision to limit fare rises to RPI. This forced the mayor to rework his fares in order to balance the books. The late announcement, combined with the labyrinthine system of revenue settlement, meant that new prices were delayed by weeks.  This gave some season ticket holders a rare windfall but may have cost millions at the farebox.

The stifling complexity and lack of flexibility in the system goes back to regulations put in place at the time of rail privatisation. This included a requirement in law to have a fare structure shackled to many separate train companies taking revenue risk. For certain ticket types, such as the ever-popular London Travelcard, this means that TfL and private rail operators in the south east are financially tied at the ankle – by the Chancellor of the Exchequer no less.

There is nothing wrong in regulating fares where users have limited choice. Many suburban passengers will have welcomed George Osborne’s announcement with open arms and wish that he’d gone further. But surely it would make more sense and be far better if Londoners and their home county neighbours determined how commuter rail services are provided and what they cost to use.

The present system is a reflection of over-centralised control of London’s public services and undoubtedly those of England’s other city regions. As the independent London Finance Commission pointed out last year, the present Mayor for London (and his predecessor Ken Livingstone) has just a fraction of the revenue-raising powers that his opposite numbers in other world cities enjoy. Remarkably, only seven per cent of London’s tax base is determined by the representatives elected to spend it. New York’s figure is about seven times higher than this. Other world cities enjoy much greater fiscal freedom than London, which in turn leads to greater accountability and creates a real incentive for growth and public investment.

The success London has seen in getting London Overground, DLR extensions and Crossrail underway is testament to the effectiveness of city politicians. Across the political spectrum, the mayor and boroughs have demonstrated consistently that they are capable of delivering tangible improvements to our urban infrastructure. A natural next step is handing over greater fiscal power and control for large chunks of the commuter railway. Doing so would boost city government. It would allow the mayor to champion properly the interests of hard-pressed commuters and be held accountable for delivery. Even on a no-strike day.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Content from our partners
Development finance reform: the key to climate action
Individually rare, collectively common – how do we transform the lives of people with rare diseases?
Future proofing the NHS

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU