A Victoria line train. Photo: Wikicommons
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Lessons transit authorities shouldn't be learning from TfL

Like "fare hikes are a good thing". 

On Monday, the US website CityLab ran an interview with Shashi Verma, director of customer experience at Transport for London, under the headline “5 Lessons US Transit Systems Should Learn from London”. The gist of the piece was that running the transport system like a for-profit private company was the best best thing to happen to Londoners since Boris Bikes or sliced bread, and those in the US should be green with envy.

Tonight at 8pm, London Underground power workers from three different unions are due to stage an eight-day walkout in protest against working conditions and pensions plans. While this doesn’t necessarily contradict everything Verma said, it does at least highlight the downside of a (his words) “relentless push” to increase revenue and lower operating costs.

There are aspects of TfL’s £50m restructuring plan, announced last November, that impress: 24-hour weekend services and the possibility of unmanned trains are the biggies. But Verma’s attempt to portray the closure of ticket offices as a positive, rather than something that’s caused widespread protest from staff and passengers alike, is little more than spin.

What’s even odder is his success in re-framing constant inflation-busting fare rises as A Good Thing. The CityLab piece names “Make fare increases routine” as an apt lesson for US Transit authorities, explaining:

There are loud objections over there just as there are here, but the critical difference is that TfL has set an expectation in the minds of travellers, not to mention politicians, that fares must rise on an annual basis.”

Londoners may be rather less convinced that this is a lesson worth exporting. This graph pits consumer price inflation against the percentage year-on-year rise of the price of a single cash ticket (that is, those not paid for via the Oyster automated ticketing system) within zones 1-4. (We know most commuters don't pay cash fares, but due to the Oyster's short history they're the most easily comparable figures.) 

 

Two big rises – of a pound each, in 2007 and 2011 – account for most of the overall increase. If you stack those percentage rises on top of each other, the concession to a minimal, inflation-level rise for this year doesn’t look so impressive. The CityLab piece applauds London's gradual fare increases, as opposed to US Transit Authorities' tactic of holding off until fares take a big jump, but this graph shows that this isn't always the case. We’ve gone from £3 for a single in zones 1-4 in 2004 to £5.70 in 2014. And, last week, the National Union for Rail, Maritime and Transport Workers (RMT) claimed that fares will rise another 24 per cent by the end of the decade; that’s over a third faster than the expected rise in earnings.

Don’t get us wrong – some of TfL’s flashy improvements, such as those fancy screens on bus stops or contactless paymens, are great. And it would be handy to get the tube home after a messy night out in Camden.

But the story’s just a little bit more complicated than Shashi Verma would like to make out. Contrary to what he might like American transport bosses to think, Londoners are not exactly delighted with the tube, either. 

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.

Photo: Getty
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Love him or loathe him, Britain needs more Alan Sugar

Big business is driving down wages, failing to invest, and funnelling rewards to the richest.  Entrepreneurs - and the state - need to fill the gap. 

The business baron who loves a bust-up has just been hired by Her Majesty’s Government to tour the country inspiring the next generation of apprentices. And he’s got his work cut out for him.  

Britain is loads more enterprising than it used to be - but the truth is, we’re miles behind our rivals. The good news is that Britain boasts nearly two million more firms than at the turn of the century. Over 40 per cent of Europe’s “unicorns” (new firms worth over $1 billion) are UK based. And by the next election, there will be more self-employed people than public service workers. 

But, here’s the bad news. Globally, we’re only 48th out of 60 in the global enterprise league table - and of the top 300 companies created in the last thirty years, only a handful are British. The only two British websites in the global 100 were actually founded in America - google.co.uk and amazon.co.uk. Worst of all, according to new House of Commons library figures which I commissioned this week, over a million people have left entrepreneurial activity in the last three years. 

Yet in my new history of British capitalism, Dragons, published today, I show how we’re a nation built by some of the greatest entrepreneurs on the planet. They were the buccaneers like Robert Rich, who built the trading companies and colonies of north America. The traders like Thomas Diamond Pitt who built old multi-nationals like the East India Company. They were industrial revolutionaries like Matthew Boulton who perfected the steam engines, and capitalists like Nathan Rothschild who built the bond market. Down the ages, there were of course great rogues and fraudsters, slavers, opium dealers and imperialists, like George Hudson, William Jardine and Cecil Rhodes. And through the centuries, women were in particular, were frozen out of the power structures of the market. 

But, throughout our past, great visionaries like George Cadbury, William Lever and John Spedan Lewis not only created new wealth but invented new ways to share it, from Port Sunlight to Bournville, to the board rooms of the John Lewis Partnership. 

Theirs is the entrepreneurial spirit we are going to need to rebuild Britain. Why? Because we can no longer leave the task to big business. Big business is driving down wages, failing to invest, and funnelling rewards to the richest. Today, UK firms are sitting on an extraordinary £522 billion in cash. And that’s after they lavished out £100 billion in share buy-backs in 2014. According to Larry Fink, the head of Black Rock which is the world’s biggest investment manager, the gargantuans of the global economy are simply failing to invest in the new jobs and industries of the future. 

So we’re depending on our entrepreneurs to turn new ideas into new industries and new industries into new jobs - whether it is in big data, cyber-security, driverless cars, the internet of things, or genetic medicine. It’s not just good for progress. It’s good for jobs. In fact, if our young people today were as entrepreneurial as their counterparts in Germany or America, its estimated they would create an extra 100,000 jobs. 

The big lesson from 600 years of the history of capitalism is simple: entrepreneurs make history - by inventing the future. So we need the government to start doing an awful lot more for the enterprise economy; spreading enterprise education, investing more in science, shifting government contracts to small high growth firms, and sorting out the banking system. But if we want a better future for Britain, we need an awful lot more entrepreneurs to do well. And so we need AlanSugar to succeed.  

Dragons: Ten Entrepreneurs Who Built Britain is published by Head of Zeus today

Liam Byrne is Labour MP for Birmingham Hodge Hill, cofounder of the UK-China Young Leaders Roundtable and author of Turning to Face the East: How Britain Prospers in the Asian Century.