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Transport for London is in crisis but the Conservatives have no right to blame Sadiq Khan

The collapse in fare revenue owes more to the global pandemic than to the Labour mayor.

By Jonn Elledge

In news that will come as no surprise whatsoever to followers of London politics, Shaun Bailey is wrong about something. It’s impossible to know the contents of the Tory candidate for next year’s mayoral election’s heart; so for the moment we shall give him the benefit of the doubt, and assume him to be merely ignorant, rather than mendacious.

Anyway, the thing that Bailey is wrong about is why the cost of driving into the centre of the capital is about to go up. “Sadiq Khan bankrupted TfL”, he tweeted on 3 June, wrongly. “The Government had to bail him out. And now he wants to raise the Congestion a [sic] charge to pay for it.”

Bailey is not only wrong, here: he’s wrong in three separate ways. Firstly, he’s wrong that the Congestion Charge going up is actually bad: discouraging people from driving into central London is, on balance, a good thing. That one is a matter of opinion, though, so let’s move on.

Something that isn’t a matter of opinion: Bailey is wrong that Khan bankrupted Transport for London (TfL). The mayor’s term has not been marked by its commitment to fattening TfL’s revenues, it’s true: he’s frozen certain fares, he’s reduced the price of bus travel, Crossrail is running late, and so on. 

But the reason TfL came so close to running out of money a few weeks ago is not because of anything Khan has done, but because TfL receives the vast majority of its income from fares (up from around 60 per cent in 2013-14 to around 75 per cent by the start of this year). 

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In normal times, being able to operate with minimal government subsidy is no bad thing, but these are not normal times: hardly anyone is travelling and fare income has collapsed, taking TfL’s balance sheet with it. Khan could have spent the last four years managing London like Ebenezer Scrooge manages Bob Cratchit: TfL would still have gone bankrupt, and since allowing a world city to grind to a halt is both economically and politically impossible, the government would still have had to bail it out.

(A subplot in all this, incidentally, is that TfL’s growing dependence on fare revenue has come about because the Tory government has increasingly expected the capital to fend for itself, and in 2015 agreed to scrap the grant from central government altogether. There are two schools of thought on this: one says that devolving control over business rate revenues more than made up for the lost grant; the other that the deal was nothing but short-sighted stinginess. Either way, it’s worth noting that the chancellor who offered this deal is now editor of London’s biggest local newspaper, and the mayor who agreed it is now prime minister. Funny how things turn out.)

The third way in which Bailey is wrong is that Khan wants to raise the Congestion Charge. Actually, Khan has shown precious little interest in pursuing this wise policy: the charge has stood unchanged at £11.50 since June 2014, two years before he took office.

More to the point, the terms that the national government attached to the bailout explicitly require TfL to raise the charge. The letter from Transport Secretary Grant Shapps to Khan, dated 14 May but unpublished until this week, notes that the deal is conditional on “the immediate reintroduction of the London Congestion Charge, LEZ and ULEZ and urgently bring[ing] forward proposals to widen the scope and levels of these charges”. In other words, whether you think a higher congestion charge is a long overdue change or a breach of your human rights, it isn’t Khan who’s responsible for it: it’s Shapps.

That’s not all. The end to free travel for the under-18s; the restrictions on the Freedom Pass, which means that retirement age Londoners will no longer be able to travel at peak hours for free; the hike in fares is from next January. Some of these things might be worth doing, but all are likely to be unpopular. And all are policies that a Tory government is imposing on London, and which it’s all but certain the Tories will attempt to blame on London’s Labour mayor. 

It might work, too: it did with austerity. Which is why I feel we have a responsibility to make clear, whenever necessary, that Bailey is wrong, and that these conditions have been imposed on London not by its mayor but by the Conservative government. 

Incidentally, TfL’s problems haven’t gone away. The bailout is meant to last until mid-October. Beyond that, a new settlement, more appropriate for a world in which pandemics can shut almost everything down without warning, is still going to be necessary.

That letter from Shapps promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, due to report by the end of August. Whether the negotiations that follow will be made easier or harder by politically-motivated attacks on London’s mayor remains to be seen.