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.

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.

London mayor Boris Johnson on a visit to Hong Kong in 2013. Photograph: Getty Images.

Alexander Jan is a consultant at Arup.

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New Digital Editor: Serena Kutchinsky

The New Statesman appoints Serena Kutchinsky as Digital Editor.

Serena Kutchinsky is to join the New Statesman as digital editor in September. She will lead the expansion of the New Statesman across a variety of digital platforms.

Serena has over a decade of experience working in digital media and is currently the digital editor of Newsweek Europe. Since she joined the title, traffic to the website has increased by almost 250 per cent. Previously, Serena was the digital editor of Prospect magazine and also the assistant digital editor of the Sunday Times - part of the team which launched the Sunday Times website and tablet editions.

Jason Cowley, New Statesman editor, said: “Serena joins us at a great time for the New Statesman, and, building on the excellent work of recent years, she has just the skills and experience we need to help lead the next stage of our expansion as a print-digital hybrid.”

Serena Kutchinsky said: “I am delighted to be joining the New Statesman team and to have the opportunity to drive forward its digital strategy. The website is already established as the home of free-thinking journalism online in the UK and I look forward to leading our expansion and growing the global readership of this historic title.

In June, the New Statesman website recorded record traffic figures when more than four million unique users read more than 27 million pages. The circulation of the weekly magazine is growing steadily and now stands at 33,400, the highest it has been since the early 1980s.