When business wants to pay up

James Crabtree finds an unusual consensus in London: the transport system needs more money, and even

You wouldn't think that the Crab Neighbourhood Association, the Greenwich Hindu Temple, the Tamil Action Committee and the University of the Third Age would have much in common. But they, along with the London Chamber of Commerce, the CBI and the Association of Local Government, have joined a campaign to persuade the Chancellor, Gordon Brown, to provide more money for transport in the capital.

Transport policy is usually a divisive issue, with business set against environmentalists, and commuters at odds with local residents groups. But it is hard to find any group in London that doesn't think the Chancellor should give the Mayor, Ken Livingstone, more cash in his upcoming spending review. What explains this unusual consensus? And if the Mayor gets his wish to control more of London's transport spending, will Ken's coalition fall apart?

Livingstone came into office with a reputation as a divisive figure, but begins his second term as an exemplar of Blairite big-tentism. The battle over the public-private partnership for London Underground apart, there was no significant infighting in his first term. The Mayor's early days were particularly notable for his courting of London's business community. And nowhere do the pews of Ken's new broad church seem fuller than his campaign to secure more money for London transport.

Some time in July, Brown will unveil his comprehensive spending review. The result of more than a year of tense negotiations between government departments, lobby groups and the Treasury, this document will decide who gets how much of the public spending cake for the next three years. The results will have a significant impact on London's public transport.

Nearly half of the £4.3bn budget of Transport for London (TfL), the quango that controls most of the capital's transport, comes direct from Brown's coffers. But the omens for increases are not particularly good. The last couple of such spending reviews provided transport in particular, and almost everything in general, with extra money. But continued spending increases for the NHS and less money from tax revenues make significant increases unlikely this time. And as Peter Robinson, chief economist at the Institute for Public Policy Research, put it: "One of the golden rules of the public finances is that when things get tight, the transport budget gets hit first."

Both the Mayor and TfL spotted early that their future plans depended on bucking this trend. Earlier this year, a flurry of articles appeared in London's newspapers claiming that £900m was needed to ensure the city could cope with continued growth over the next decade. They expressed concern that a £200m cut in the block grant for TfL and a further £200m overrun in the cost of financing the Tube PPP could, in the words of the London Business Board, "create an unacceptable situation".

And what does all of this have to do with the Tamil Action Committee and the University of the Third Age? At first glance, it isn't clear why a lobby group in favour of independence for northern Sri Lanka or an international organisation promoting the education of those in "active retirement" would care about transport investment. But Transport for London had different ideas.

In October last year, realising how important the spending review process would become, it launched "an extensive information exercise . . . to explain the government spending review process to stakeholders and its implications for transport in the capital". Its lobbying effort included mailing 3,000 interest groups, and cold calling 2,000 more. Its targets ranged from business organisations and politicians to churches and residents' associations. And the Tamil Action Committee, the University of the Third Age and 159 other voluntary and community groups signed up.

Transport for London claims that this grouping is "unique" in its short history. It is certainly true that the support is unusual, both in its breadth and its diversity. But getting community groups to act in support of a lobbying campaign is by no means unique. What in particular catches the eye about London's campaign has been the broad range of business backing.

Elsewhere in the UK, business leaders tend to be more circumspect about large-scale investment in public transport. Rarely do you find business and environmental groups, for instance, agreeing so readily that public investment in public transport is the best way forward. Even more unusually, this is now often the norm in London.

The consensus is based on two broad agreements. First, London is different. Its density and population require special treatment. Its road congestion is significantly worse than in other areas of the country. More people use public transport, and proportionally many fewer drive into the centre of London than elsewhere. And most importantly, London's transport problems are economically damaging, depressing growth and investment in the city at the heart of the British economy.

Second, London has historically enjoyed less money for transport than elsewhere, while needing more. The phrase "decades of underinvestment" is a familiar part of the public transport lexicon. But this makes it no less true for London. It has been easy for successive governments to scale back transport investment in London, particularly given that any such investment tends to involve projects that are both cripplingly expensive and highly complex.

Creating agreement on these two points took time. For London's business community and others, they stem from a much wider rethink of transport investment beginning as far back as 1989. In that year, the Conservatives published their "Roads for Prosperity" white paper, promising the "biggest road-building project since the Romans".

This approach collapsed five years later when a combination of Swampyism and Nimbyism culminated in protests at Twyford Down. With this car-friendly policy discredited, the government rethought its strategy. Over the next decade, a new consensus - that it is impossible to build your way out of congestion - emerged.

The results of this rethink, and the beginnings of the coalition now lobbying Brown, were clearly visible during debates about the London congestion charge. Such an explicitly "anti-motorist initiative" could have been highly contentious for business.

In fact, there was broad agreement from the CBI, the London Chamber of Commerce and other business groups that the charge was necessary to reduce overcrowding on London's roads. And similar agreement between business, environmentalist and civic groups has been true for other London projects, including Crossrail and extra investment for London's buses.

So everyone agrees that London needs more money for transport. And Ken's coalition awaits the results of Brown's deliberations, hoping that its case for more investment will be answered. But will the coalition last? Yes, so long as the politics of London transport consist only of demanding more money from Whitehall. It is easy for Londoners to argue that London should get a fairer deal from the Treasury, not least because Londoners themselves don't have to pay directly for any increases.

But what if some of this extra money were to come directly from the pockets of London's taxpayers or businesses? Then the various members of Ken's coalition, be it the CBI or the University of the Third Age, might think twice before putting their name to the Mayor's future plans.

James Crabtree is a visiting research fellow at the Institute for Public Policy Research